Branko Milanovic on What Comes After Globalization
Branko Milanovic argues the neoliberal globalization order that began around 1989 is ending, replaced by what he calls "national market liberalism": domestic capitalism stays intact (he puts Trump, Macron, and peers in the same basket here) while international trade policy turns openly mercantilist and zero-sum. He frames China's rise as operating on two levels — state-vs-state GDP competition, and a quieter erosion of Western individuals' relative position in the global income distribution — and argues the West chose to blame China rather than redistribute domestically. No tickers or price calls; the closest thing to a policy prescription is his support for a "pedagogical" tax on extreme wealth, aimed at signaling political limits rather than raising revenue.
The core argument
Milanovic, in his new book The Great Global Transformation, says he has lived through four global economic orders since 1974 and is now watching a fourth transition: from unipolar "neoliberal globalization" to what he terms national market liberalism. The domestic side of this order — free pricing, competition, low regulation — stays essentially neoliberal; he places Trump, Macron, and other current leaders in the same domestic-policy camp. What's been "chopped off" is the international liberal component: free trade, open capital and goods flows. In its place is mercantilist, beggar-thy-neighbor policy, which he calls "zero-sum game or even a negative-sum game."
The mechanism: a two-level China shock
The rise of China matters on two distinct levels, per Milanovic. The first is state-to-state: China's GDP and technological position now rival the US directly. The second, less discussed, is personal: for the first time in two centuries, lower segments of Western income distributions have slid down the global income ladder even as their national position held steady. His example: a bottom-decile Italian sat at the 70th global percentile 30 years ago; today that same relative position is around the 55th percentile — concretely, he says such a person could once afford to watch Italy play in a World Cup abroad and increasingly cannot. This dual shock — abstract state competition plus felt personal decline — is why, in his account, China anxiety spread from trade specialists into general politics.
Why the response went external, not domestic
Milanovic argues the shift toward blaming China rather than redistributing domestically was a political choice, not an inevitability — his "elephant chart" showed Western middle classes growing roughly 1% a year while the top grew 3%+ under Clinton and China grew fastest of all; governments could have taxed the rich and rebuilt public education, or could have blamed external competitors. He calls Trump's 2016 election the watershed, noting Biden's administration largely continued Trump's China policies,
Takeaways / the view: Milanovic's frame is structural, not tactical — there's no ticker, level, or trade here, but a claim that the operating rules of world trade have shifted from liberal to mercantilist while domestic capitalism stays untouched. His concrete numbers worth carrying into any China or deglobalization thesis: China's consumption-to-GDP ratio near 40-45% versus 70% in the US and 50% in India; its urban elite's income mix flipping from two-thirds state/Party-derived in 1988 to two-thirds private-sector by 2018-2023, a shift he says took the UK 150 years and China 40; and a bottom-decile Italian's slide from the 70th to roughly the 55th global income percentile over 30 years. His one policy prescription is a "pedagogical" tax on extreme wealth, aimed at signaling political limits on plutocracy rather than raising revenue, alongside growth in Africa and India as the main lever left for reducing global inequality now that China's own growth adds to it. He flags war in Ukraine and the Middle East, plus a possible new Bretton Woods giving China and India more voice, as the swing factors between a benign and a conflictual version of this new order.
On the record
| Claim | Speaker | Expression | Horizon | Hedge | At | Status |
|---|---|---|---|---|---|---|
| Milanovic argues the unipolar neoliberal globalization order that began around 1989 is being replaced by what he calls 'national market liberalism': domestic capitalism stays essentially neoliberal (he groups Trump, Macron, and other current leaders together on this), while international trade policy has shifted openly to mercantilist, beggar-thy-neighbor, zero-sum or even negative-sum terms. | Branko Milanovic | — | — | base-case | 00:07:41 | OPEN |
| Milanovic says that if the wars in Ukraine and the Middle East were resolved, it would remove the risk of a much wider war and could open the door to redesigning the international economic order via a new Bretton Woods-style settlement giving China, and India as well, significantly greater voice — his 'benign' branch of how national market liberalism could evolve. | Branko Milanovic | — | — | hedged | 00:41:55 | OPEN |
| Milanovic argues that reducing global income inequality now depends primarily on high growth in Africa and India, since China's own continued rapid growth has flipped from reducing global inequality (its historical role) to slightly increasing it, as China pulls further ahead of poor countries like Sudan, Ethiopia, and Congo; if Africa fails to catch up, global inequality will rise further. | Branko Milanovic | — | — | base-case | 00:53:16 | OPEN |
| Milanovic advocates a 'pedagogical' tax on extraordinary wealth — intended primarily to signal to the very rich that they will not be allowed to rule, rather than to raise significant revenue — without committing to a specific preferred rate. | Branko Milanovic | — | — | base-case | 00:54:07 | OPEN |