Branko Milanovic: “the Social Elevator Is Not Working “

Branko Milanovic is an economist and expert on inequality and critic of contemporary society. He does not believe in the left because he thinks that it has become “part of the same”; nor on the right, which thinks that its policies only pursue the interests of society.

For Branko Milanovic there are two great capitalisms  in the world. The first is the economic one and its largest representative is the United States. The second is political capitalism, with its highest expression: China. In one way or another, they both do the same; that is, to concentrate money and power in a few hands.

In both capitalisms the same form of production is present and he does not believe that the two great poles of power, China and the United States, are ideologically confronted. In Branko Milanovic’s opinion, the only thing in dispute is the market.

Branko Milanovic and inequality

Branko Milanovic points out that both in the United States and in China inequality grows every day, as it has done all over the world. Finally, there are only elites trying to keep power in their hands, while for most mortals it is increasingly difficult to access well-being.

Like other thinkers, he claims equality as a value that must go beyond political ideologies or particular interests. Milanovic sees inequality and the concentration of power as a danger to democracy.

We are talking about a scheme in which the richest are also the biggest funders of politicians. The latter come to power with the commitment to govern to return the favor / investment made

For that reason, in many countries the laws that regulate the economy  are dictated only to favor the wealthiest. This leads to a spiral in which in the end what is formed is a plutocracy, that is, a state dominated exclusively by the wealthiest.

Democracy and the middle classes at risk

Milanovic points out that those most affected by this concentration of capital and power are the middle classes. These become weaker and tend to disappear. Thus, society is increasingly polarized: at one extreme the rich and the other the poor, with no density connecting the two points.

From his point of view, the middle class is essential for a democracy to function well. To this segment belong those who are more likely to move up socially. They constitute a qualified workforce, with purchasing power and openness in their political ideas. In general, they are the bearers of social dynamism and non-violent change.

Thus, the weakness of social class translates into weakness for democracy. The impact is very negative because this creates favorable conditions for populism and authoritarianism to break through. Both are bad for a society.

Reverse the trend

In the opinion of Branko Milanovic, it is decisive to stop the concentration of capital. Think that to achieve this there is a healthy measure: severely tax inheritances, not all, but those that exceed a million dollars. These large inherited capitals are a source of inequality, while being morally questionable.

Milanovic believes that it is healthier to impose a high tax rate on that inherited capital than to tax the capital acquired through business activity. The constant that Branko Milanovic identifies in today’s world is that the rich pay less and less taxes and, at the same time, the poor receive less and less benefits from the state.

Another decisive factor is a more equal access to higher education. Large universities, mainly those in the United States, also charge large sums to gain access to education. This reality increases inequality and deprives many people of the possibility of moving up the social ladder.

Ideally, everyone should have a similar starting point, rather than equaling them halfway. That there are the same opportunities for all is socially more acceptable than forcing to redistribute the income already achieved. Milanovic is thus another of the great thinkers who joins the clamor for greater equity in the world.