Branko Milanovic on Globalization's End, Rise of Strongmen, and Global Inequality

The End of Globalization and Rise of Strongmen

• 🌍 The era of globalization is considered over, marked by the rise of strongmen like Donald Trump, Xi Jinping, and Vladimir Putin, who are reacting against the previous high-globalization period.
• 💥 This shift is characterized by increased use of sanctions, tariffs, and a willingness of governments to intervene in markets and business strategies.

Global Inequality and the Elephant Curve

• 📈 Branko Milanovic's influential "elephant curve" illustrated how China's rise reduced global inequality but increased inequality within developed countries, contributing to political backlash.
• 💡 While global inequality has continued to decrease due to China and India's growth, the internal political consequences in developed nations have been significant.
• 🌍 The rise of China, now a major global economic power, has geopolitical implications and creates domestic income distribution challenges in richer countries.

National Market Liberalism and Political Shifts

• 🏛️ Milanovic introduces "national market liberalism" as a concept where the international component of liberalism (free movement of goods, capital, labor) is rejected, while the domestic neoliberal component (deregulation, lower taxes) is advanced.
• 🤝 This framework helps explain how figures like Trump can be supported by both those who lost out from globalization and by elites who benefit from domestic neoliberal policies.
• 🔄 The political shifts, starting around 2008 with Putin's actions, followed by Xi Jinping's consolidation of power, and Trump's election, represent a "counterrevolution" against high globalization.

China's Evolving Role and Global Inequality

• 🇨🇳 China is no longer an automatic reducer of global inequality, as its median income has surpassed the global median.
• 🌍 Future reductions in global inequality will depend on growth in large African countries, India, and Bangladesh, rather than China.

AI, Inequality, and Future Conflict

• 🤖 Artificial intelligence is expected to increase inequality by replacing human labor, leading to a higher capital share concentrated among owners.
• ⚠️ The current geopolitical landscape, with competition between major powers, resembles the pre-1914 era and carries a significant risk of conflict, potentially making inequality a secondary concern.
• 📉 While US inequality has plateaued rather than continuously increased in the last decade, the long-term impact of AI and geopolitical tensions remains a concern.