Overview of Branko Milanovic on What Comes After Globalization
In this Odd Lots conversation, Bloomberg hosts Joe Weisenthal and Tracy Alloway speak with economist Branko Milanovic about the end of the neoliberal globalization era and what may replace it. Milanovic argues that the world is moving into a new order he calls “national market liberalism”: countries are becoming more protectionist and mercantilist internationally while preserving many market-oriented, pro-capital policies at home. The discussion ranges from China’s rise and Western anxiety over it, to elite formation, inequality, trade, security, and the possibility of a new global equilibrium.
The Big Idea: From Globalization to National Market Liberalism
Milanovic’s core thesis is that the post-Cold War model of globalization is fading.
What changed
- International economic openness is being rolled back.
- Countries increasingly prioritize:
- supply-chain security
- domestic manufacturing
- strategic autonomy
- industrial policy
- At the same time, many governments still maintain:
- low taxes on capital
- pro-business domestic policy
- labor-market flexibility
- limited redistribution
Why “national market liberalism”?
He uses the term to describe a system where:
- liberalism survives domestically
- global liberalism is discarded
- states compete in a more zero-sum, mercantilist way abroad
China as the Central Challenge
A major thread in the conversation is China’s transformation and how it has reshaped Western politics and economics.
China is both poor and powerful
Milanovic emphasizes the contradiction:
- China is still not a rich country by Western income standards
- yet it is a technological and industrial powerhouse
- it has pockets of very low income alongside world-leading sectors like AI and advanced manufacturing
Why the West is anxious
He says Western governments and elites increasingly think about China through a relative-gains lens:
- not just “Is China growing?”
- but “Is China overtaking us?”
This marks a shift away from classical economics and toward geopolitical competition.
China’s internal political economy
Milanovic argues that China’s low consumption share is not just a macroeconomic mistake:
- high savings and retained profits help fund strategic investment
- the state uses those resources for infrastructure, AI, aerospace, and global influence
- wage growth remains real, even if not as rapid as before
Global Inequality and the “Elephant Chart” Revisited
The hosts and Milanovic revisit the famous global inequality “elephant chart,” which showed:
- strong gains for the global middle class in Asia
- stagnation for many Western middle classes
- large gains for the global top 1%
His updated view
- China was once a major reducer of global inequality because it was poor and grew fast
- now China’s continued rise can actually increase global inequality, because it is no longer poor enough to pull the global average down
The key takeaway
For Milanovic, reducing global inequality depends mostly on:
- fast growth in poorer regions, especially India and Africa
Elites, “Homo Plutia,” and the New Rich Class
One of the most notable concepts in the interview is Milanovic’s idea of “homo plautia”—a new elite type in wealthy countries.
What it means
This class is characterized by:
- high labor income
- high capital income
- strong meritocratic self-belief
- defense of private property
- a sense that their wealth is deserved
Why it matters
Milanovic says this elite is historically unusual because:
- they are rich both as workers and as asset owners
- they transmit advantages to their children
- they often present themselves as “not really elite” in a folksy, understated way
The result is a more durable and self-justifying elite structure than in earlier capitalist eras.
Trump, Xi, Putin: Anti-Elite Politics, Different Outcomes
Milanovic draws a distinction between:
- the political resentment that helped leaders rise, and
- the actual policies they implement once in power
His view
- Trump rose partly by channeling anger at globalization’s winners
- Xi Jinping signals that wealthy people should not dominate the Communist Party
- Putin also represents a reaction against oligarchic power in his own way
But Milanovic also argues:
- Trump’s actual domestic policies remain deeply neoliberal
- he does not meaningfully redistribute wealth
- his appeal is anti-elite, but his governance is not anti-capital
Trade, Security, and the Return of Geopolitics
The conversation repeatedly returns to the idea that openness and peace are no longer assumed to go together.
Milanovic’s warning
He is sympathetic to the idea that:
- free trade can create dependence
- dependence can reduce sovereignty
- countries need industrial capacity for military and strategic reasons
He agrees with Hamiltonian logic: a country that cannot make key things for itself may lose power.
But he also argues
The world is now openly dealing with the fact that:
- openness was never purely economic
- it always had geopolitical consequences
- the “post-conflict” fantasy of the 1990s was never fully real
Europe’s Dilemmas
Milanovic is especially skeptical about Europe’s future.
His concerns
Europe needs:
- cheap energy
- immigration to offset demographic decline
- industrial competitiveness
But in practice, he says Europe has:
- cut off cheap Russian energy
- become more anti-immigration
- struggled under China’s industrial rise, especially Germany
His reading is that many European elites may support tougher China policy partly out of genuine concern and partly because they have no better option.
Policy Implications
Milanovic’s policy views are practical rather than ideological.
For global inequality
- prioritize growth in poorer countries
- especially India and Africa
- because redistribution alone cannot solve global inequality
For inequality within countries
He favors:
- education
- redistribution
- taxing extreme wealth
His “pedagogical tax”
He suggests a wealth tax can serve a symbolic and political function:
- signaling that the ultra-rich will not rule society
- limiting plutocratic power
- reinforcing democratic control
Main Takeaways
- Globalization is not ending with a clean replacement; it is mutating into a more nationalistic, strategic form of capitalism.
- China is the central force driving this shift, both economically and geopolitically.
- Western middle classes are losing relative status, while top earners and capital owners continue to gain.
- A new elite class has emerged that is rich through both labor and capital, and is unusually stable.
- The future may be more conflictual, unless states can rebuild a rules-based order that reflects today’s power balance.
Notable Insight
“What is happening now is that we take the entire international part, chop it off, and say, wait, these rules do not apply anymore.”
That line captures the episode’s central argument: the world is not abandoning capitalism, but it is abandoning the globalized version of it.