Milanovic, B. (2016). Global Inequality. A New Approach for the Age of Globalization. Cambridge: Harvard University Press.

Abstract

Branko Milanovic's work, "Global Inequality: A New Approach for the Age of Globalization," is monumental in delving into the complexities of economic disparity in the contemporary era. With sharpness and erudition, Milanovic presents a multidimensional approach to understanding inequality, integrating aspects of globalization, social mobility, and economic policies. This comprehensive analysis challenges conventional expectations about globalization and its impacts on equality, revealing the gap between optimistic forecasts of past decades and the current reality of growing economic disparities.

Numerous studies have attempted to coherently explain the rise of inequality since the 1980s in the broader context of globalization. Forecasts related to this phenomenon have been unconvincing, especially considering that in the 1960s and 1970s, it was anticipated that globalization would generate more egalitarian landscapes as development progressed. This apparent contradiction has motivated various social scientists to address the issue from different disciplines, such as history, economics, and sociology, in an effort to resolve this complexity.

Milanovic's central thesis is clear from the beginning of the book: globalization has transformed the structures of inequality worldwide and requires a new analytical approach. The author aims to unravel the complexities of this phenomenon, exploring the connections between globalization, income, and wealth distribution. His goal is to provide a comprehensive perspective that transcends the limitations of conventional approaches to inequality. Thus, he structures his analysis based on a wide range of economic and social data, using rigorous methodologies to assess global inequality. He combines historical data with contemporary information, adopting a longitudinal approach that allows identifying patterns and trends over time. Additionally, he proposes an innovative measure: the Elephant Graph, to visualize global income disparities, highlighting the divergent experiences of different strata of society.

The author masterfully addresses the roots and ramifications of inequality, exploring how factors such as technology, migration, and government policies contribute to economic gaps. His focus on the Palma index adds a unique dimension to the analysis, shedding light on income concentration in the higher echelons of society. This is a testament to the strength of the book, residing in Milanovic's ability to translate complex economic theories into accessible concepts. He not only stays within theoretical reflections but also examines the practical implications and social consequences of global inequality. To do so, he implements narratives of specific cases, guiding the reader through an intellectual journey that sheds light on the underlying forces shaping global income distribution.

Going beyond theoretical reflections allows him to explore the tangible consequences of inequality in society, analyzing how it affects social cohesion, mobility, and political stability. In doing so, he provides a comprehensive view of the complexity of this global phenomenon, highlighting the urgency of addressing these disparities to build a more equitable future. Therefore, among the broad spectrum of scholars who have addressed this issue, Milanovic stands out for his focus on waves or cycles of inequality, challenging criticisms from other theorists like Thomas Piketty. He critically evaluates thinkers such as Wilkinson, Pickett, Stiglitz, Bauman, Therborn, Atkinson, Bourguignon, among others, and notable institutions like the OECD, arguing that they have coincided in pointing out that inequalities tend to decrease in extreme situations such as wars, epidemics, and other global calamities. However, they recognize the paradox that these tragedies can also be a consequence of a prior increase in inequality, funded with considerable amounts of wealth, and unfortunately, at the expense of millions of human lives. Hence, he partially agrees with Kuznets that post-industrial capitalism reduces inequalities.

His historical perspective and his ability to break down inequality at the national and international levels provide a comprehensive understanding of the issue. Thus, he advocates addressing the roots of inequality through one of his notable achievements: his proposed solution based on what he calls asset predistribution and access to education; distinguishing it from approaches focused on high taxes and spending. Following his historical analysis, Branko Milanovic highlights the simultaneous rise of the middle class in developing countries and the global plutocracy, contrasting with the decline of the Western middle class and the neglect of the most disadvantaged. This approach allows him to outline a general perspective of global inequality, breaking it down into detailed studies at the level of each nation-state and between them. This allows him to argue that the levels and dynamics of inequality are transforming democracy in the West, leading state spending to shift its focus from providing services to funding police and security measures aimed at protecting the wealthiest. This phenomenon leads to the axiomatization that autocratic regimes disguised as democracies are increasingly proliferating.

In an attempt to overcome the limitations of the Kuznets hypothesis and Piketty's explanation of the increase in inequality in the 18th and 19th centuries, Branko Milanovic presents three stages in the development of this phenomenon: the present, covering the last 25 years; the period of modern or preindustrial economic growth; and finally, a return that includes societies from the previous stage. Based on this structure, the author classifies the various patterns of change he has identified in both malignant and benign forces, operating in both premodern and modern societies. This involves the study of societies with stagnant middle incomes and those with rising middle incomes, providing a more complete view of the dynamics of inequality in different historical contexts.

With his extensive set of data, Branko Milan

ovic concludes his text by projecting possible future trends in inequality. This exercise not only sheds light on potential directions of this phenomenon globally but also lays the groundwork for a proposed agenda for its global reduction. While he recognizes the persistence of capitalism as an economic system in the future, he emphasizes that inequality will remain a crucial issue. Milanovic addresses the impact of inequality on democracy, noting that phenomena like populism and nativism pose a balancing challenge between globalization and these movements. This analysis suggests that democracy is threatened as inequality intensifies, highlighting the relevance of inequality in the context of current ecological concerns.

The author supports his arguments with rigorous econometric analysis and a wide range of sources, building a solid foundation for his theory. However, the text has some weaknesses, such as discursive wanderings that divert attention from the central idea and value judgments that could detract from the depth of the analysis. Additionally, the work could benefit from greater attention to crucial contemporary issues, such as climate change and the role of the financial sector in inequality. Although Milanovic projects possible future trends, the inclusion of these topics would have further enriched his proposal. This is evident in arguments suggesting that the best way to reduce prostitution is by achieving income equality or by labeling those who express concerns about global borders and limits to economic growth as hypocrites.

Another area where the study presents weaknesses is related to its attempt to formulate a general theory that encompasses societies as diverse as preindustrial and postindustrial ones. This poses a challenge, as the universalization of such a theory could generate anachronisms that distort the understanding of both the past and the present, given the complexities and specific structures of each period. An illustrative example is the limited understanding of technological changes, summarizing them into two revolutions, while historiography has identified between four and six since the late 18th century. The theoretical-historical lack is deepened as Milanovic fails to specify the description of the transition point between successive Kuznets waves of rising and falling inequality.

Regarding climate change, Milanovic barely mentions the topic, relegating it even though scholars consider it a significant economic force with an impact in the 21st century, given its catastrophic probability for income distribution at both state and global levels. Furthermore, his optimism regarding the financial sector limits his analysis of its contribution to inequality and its impact on societies. In his final recommendations, he suggests the possibility of increased migration, although he proposes relatively minor differences that must be clearly defined legislatively. This approach reveals that his ethical framework tends to overlook issues associated with labor abuse.

The author's interpretation of the relationship between globalization and inequality could also generate skepticism, as the former has been the subject of analyses that interpret it not as the direct cause of inequality but as a complex phenomenon involving multiple factors, including errors in economic policy and government interference. Such studies have argued that proposals for global interventions and reliance on government solutions could exacerbate processes of differentiation and social inequality by distorting individuals' natural choice and exchange processes. From this perspective, trust in decentralized solutions and competition between legal and economic systems is preferable since it allows the most efficient and adaptive solutions to emerge spontaneously, rather than relying on global impositions that could ignore local particularities and distort the functioning of the market.

Finally, the measurement capacity proposed by Milanovic of the Elephant Graph is questionable since, being an aggregate measure, it may not capture the complexity of individual interactions in the market. This overly simplifies reality, ignoring the diversity of situations and individual decisions that contribute to economic outcomes. However, this book is not only an academic work but also a call to action, challenging readers to question their perceptions of inequality and consider how decisions, both locally and internationally, can influence the configuration of a more equitable economic landscape. The author offers an essential contribution to the dialogue on a crucial issue that shapes the destiny of our interconnected societies. His ability to present complex concepts in an accessible manner makes this book valuable for both academics and readers interested in understanding the challenges facing our interconnected society. It not only redefines the entire understanding of global inequality but also offers insightful analysis that invites reflection and positions that need to materialize in changes, thus setting a high standard in the discussion of this crucial issue in the era of globalization.