John,
No doubt I didn’t present these matters clearly. I didn’t mean to say that
Milanovic was disagreeing with Fukuyama, merely that he was assuming Fukuyama’s
arguments (originally presented in an article in 1988-89 and then expanded in
his book published in 1992) and then advancing them in accordance with modern
events. Actually, Fukuyama has done that himself. He has been pitted against
Huntington in most discussions I’ve read and in a recent magazine article
conceded that Huntington seemed to have things more correct than he did.
Also, Milanovic wasn’t pitting China against the U.S. or even the West in his
article. He seems to be saying that in order for the Political Capitalistic
nations to continue to see such high rates of economic growth, they will
probably be required to exert more and more control over their economies which
may be counter-productive to the creativity of its entrepreneurs and thus
reduce economic growth. The West while perhaps having fewer engineers
wouldn’t be exerting such controls over its entrepreneurs and so might
outperform the Political Capitalistic nations in the long run – except . . .
And I pause at “except” because that is the area where I had a problem with
Milanovic. He concludes and I didn’t take this part of his argument as quite a
prediction, but he concludes that unless Liberal Capitalism reduces inequality,
the Liberal Capitalistic nations may become Plutocracies much like the
Political Capitalistic economies. It was that last part that I didn’t think
followed from what he previously presented.
I don’t know anything about Milanovic beyond what I read in the Foreign Affairs
article; so if I have misjudged his intent, I apologize.
Lawrence
From: lit-ideas-bounce@xxxxxxxxxxxxx [mailto:lit-ideas-bounce@xxxxxxxxxxxxx] On ;
Behalf Of John McCreery
Sent: Saturday, February 01, 2020 7:41 PM
To: lit-ideas@xxxxxxxxxxxxx
Subject: [lit-ideas] Re: Liberal vs Political Capitalism -- sort of
For what is worth, IMHO Milanovic’s predictions are more solidly grounded than
Fukuyama’s ever were. If there is one thing that history teaches, it is that
regardless of political culture elites form and cling to their privileges until
they are overthrown. In this respect there is not significant difference
between the Roman Senate that caved to Caesar, the mandarins who ruled imperial
China, China’s current leadership, the “New Class” that Milovan Djilas saw
forming in the USSR and its satellites, and the technology-enhanced plutocracy
extending its control over ostensibly democratic societies including, most
notably, the United States of America.
To this observation we must add the key material conditions underlying China’s
current rise. China accounts for a quarter of the world’s population. Its
middle class is already bigger than the total population of the USA. As Apple
CEO Tim Cook has observed, China now graduates more production engineers each
year than the USA by an order of magnitude. The global hotspot for hardware
innovation is Shenzhen. China is now a world leader in supercomputing, and its
space program is first rate. Alibaba is bigger than Amazon.
Cheers,
John
Sent from my iPad
On Feb 2, 2020, at 5:35, Lawrence Helm <lawrencehelm@xxxxxxxxxxxxxx> wrote:
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
