EconTalk Branko Milanovic on Capitalism, Alone
May 11, 2020
Branko Milanovic, a prominent economist and author of 'Capitalism, Alone,' dives into the intricacies of capitalism in the U.S. and China. He explores the stark contrasts between liberal and political capitalism, revealing how these systems shape income inequality. Milanovic discusses the challenges of corruption in China and the nuances of individual choices that perpetuate wealth disparities. He also examines the commercialization of daily life, where familial roles are increasingly outsourced, emphasizing the broader societal implications of hyper-commercialization.
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Defining Capitalism
- Branko Milanovic defines capitalism as decentralized coordination, free labor, and private investment.
- He argues that China, despite state involvement, fits this definition due to its large private sector.
Inequality Data
- Inequality data is often misleading because it's a snapshot and doesn't reflect lifecycle changes or family structures.
- While the top 1% in the U.S. holds more income now, it's crucial to consider factors like household size.
Homoplutea and Inequality
- High inequality combined with "homoplutea" (rich in both labor and capital income) creates unequal opportunities.
- The wealthy can influence politics and create a self-sustaining upper class.
