The lead article in the Jan/Feb 2020 issue of Foreign Affairs is "The Clash
of Capitalisms, the Real Fight for the Global Economy's Future" by Branko
Milanovic who is "a Senior Scholar at the Stone Center on Socio-Economic
Inequality at the CUNY Graduate Center and Centennial Professor at the
London School of Economics."
Milanovic's title is a take-off from Samuel P. Huntington's The Clash of
Civilizations, but Milanovic is in reality is dealing more with Fukuyama's
theory. That is, Fukuyama saw Liberal Democracy as representing the end of
history. Milanovic uses the term Liberal Capitalism and Liberal meritocracy
for Fukuyama's Liberal Democracy and introduces Political Capitalism as a
challenge to it - sort of.
Milanovic writes, "In the states of Western Europe and North America and a
number of other countries, such as India, Indonesia, and Japan, a liberal
meritocratic form of capitalism dominates: a system that concentrates the
vast majority of production in the private sector, ostensibly allows talent
to rise, and tries to guarantee opportunity for all through measures such as
free schooling and inheritance taxes. Alongside that system stands the
state-led, political model of capitalism, which is exemplified by China but
also surfaces in other parts of Asia (Myanmar, Singapore, Vietnam), in
Europe (Azerbaijan, Russia), and in Africa (Algeria, Ethiopia, Rwanda).
This system privileges high economic growth and limits individual political
and civil rights."
If memory serves me, Fukuyama took Political Capitalism into consideration,
saw it as taking baby steps toward Liberal Democracy, and thought it would
get there eventually. Prior to that time it would be at a disadvantage, for
Liberal Democracy with its freedom for entrepreneurs to develop whatever
they liked will always defeat (economically) economies where entrepreneurs
are more subdued. China is doing better than expected (by Fukuyama?), but
will it maintain its success in the long run against freer forms of
capitalism?
In his concluding section, entitled "Plutocratic Convergence?" Milanovic
suggests that Western capitalistic societies will not be able to move toward
"a more advanced stage" (which he doesn't define) unless "inequality" is
reduced. Thus, Milanovic is interested in seasoning Capitalistic
Meritocracy with a bit of Socialism. To make what seems to be his point I
would think he would want to show how his seasoning will enable Liberal
Capitalism to out-compete Political Capitalism. Milanovic writes that
taking the unmodified present path, "The economic elite in the West will
become more insulated, wielding more untrammeled power over ostensibly
democratic societies, much in the same way that the political elite in China
lords over that country. The more economic and political power in Liberal
capitalist systems become fused together, the more liberal capitalism will
become plutocratic, taking on some features of political capitalism. . . ."
Hmmm.
Lawrence
