Capitalism, Alone: The Future of the System That Rules the World
| Author | Zia Qureshi |
| Position | Visiting fellow, Global Economy and Development Program, Brookings Institution. |
| Pages | 64-64 |
62 FINANCE & DEVELOPMENT | March 2020
BOOK REVIEWS
End of History?
CAPITALISM, ALONE
is an ambitious and provocative
examination of the present and t he future of cap-
italism. It is a valuable, data-rich, and t houghtful
addition to several recent books examining t he
challenges faci ng this economic system.
e premise is that capitalism has beaten all
alternatives. e book review s the historical shifts
leading to this Da rwinia n triumph. For the first
time, a single economic system ru les the world.
“e domination of capitalism a s the best, or rather
the only, way to organize production and distri-
bution seems a bsolute.”
is does not, however, entail the “end of his-
tory.” e triumph of liberal capitalism has not
delivered the vision that had ma ny in its thral l in
the 1990s. Branko Milanovic ex amines the internal
strains the sy stem faces: increasing income and
wealth inequalit y within economies, decli ning
intergener ational mobilit y, mounting ec onomic
and social polari zation, and rising influence of
wealth in politics leading to the concentration of
both economic and political power in the hands
of an elite and a weakening of democrat ic polity.
Big changes in technology may exacerbate these
strains, which a re reflected in the rising popular
revolt across Western capitalist democracies.
Capitalism itself may no longer have compet-
itors; the competition now is between different
types of capita lism, the West’s “liberal meritocratic
capitalism” (with the United States as its most
paradigmatic ex ample) and “political capitalism”
(with China as the exemplar). e latter system
is mounting a growing cha llenge, on the back of
China’s economic rise. But it is beset by its own
problems: endemic corruption, weak rule of law,
authoritarian control by a political elite whose
power depends on delivering continued high eco-
nomic growt h, and rising inequality.
What does the futu re hold? Milanovic says that
while capitalism ca nnot be replaced—at lea st in
the foreseeable future —it can be improved. He
sketches areas for reform to addre ss the economic
and political dysf unction of liberal capitalism. And
his list includes deconcentrating c apital and wealth
ownership through ta x advantages that give the
middle class a bigger st ake in financial capital a nd
a corresponding increase in t he taxation of the rich,
coupled with higher taxes on in heritance. He also
calls for a signi ficant boost in public investment
to broaden access to high-qua lity education and
enhance equality of opportunity. Strictly limited
and exclusively public funding of politica l cam-
paigns to reduce the abilit y of the rich to control
the political process is a nother necessar y reform,
he says.
Such major reforms face heavy odds in a s ys-
tem where wealthy elites wield strong political
influence and will resi st change. Higher ta xes on
capital and wealth may be difficult in global ized
capital markets without significant international
coordination. Absent reform, liberal capitalism
may lurch further toward plutocrac y, with tech-
nocratic structures oversh adowing those that a re
democratic as discontent with elected governments
grows. Political capitalism, on the other ha nd,
faces existentia l risks from the inevitable slowing
of growth as economies matu re.
So the evolution of humankind ’s socioeconomic
system may not have reached its terminus. e
march of history continues.
ZIA QURESHI, visiting fellow, Global Economy and
Development Program, Brookings Institution
Branko Milanovic
Capitalism, Alone:
The Future of the System
That Rules the World
Harvard University/Belknap Press,
Cambridge, MA, 2019, 304 pp., $29.95
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