Arthur Goldhammer reviews Branko Milanovic’s Capitalism Alone: The Future of the System that Rules the World over at Democracy:
In certain quarters of the United States it is taken for granted nowadays that capitalism has failed or at the very least fallen into desperate crisis, which will soon result in its replacement by “democratic socialism.” Branko Milanovic, who grew up under Tito’s brand of socialism in Yugoslavia, is impervious to such romantic fantasies. For him, capitalism is without question “the system that rules the world.” By this he means simply “that the entire globe now operates according to the same economic principle —production organized for profit using legally free wage labor and mostly privately owned capital, with decentralized coordination.” These criteria are met not only by what used to be called the “advanced industrial economies” of the West (plus Japan) but also by China, India, Russia, Brazil, Vietnam, and many other countries, which, taken together, account for the lion’s share of global production. This, says Milanovic, an economist who holds the Maddison Chair at the University of Groningen in the Netherlands in addition to being a senior scholar at LIS and former head of research at the World Bank, is a situation “without historical precedent.”
It would not have been possible to make this assertion before 1989 and the collapse of communism, which presented itself as a viable alternative to the capitalist organization of production. But if the economic system that has emerged since 1989 in much of the non-Western world can be described as capitalist, it is not capitalist in the same way as the West. For Milanovic, the cardinal fact about today’s all-conquering capitalism is that it comes in two distinct forms: “liberal meritocratic” in the West, primarily the United States, and “state-led political or authoritarian” in Asia, primarily in China. Both are “capitalist” in the spirit of the definition set forth above, but in other respects they differ sharply. And crucially, both differ from the capitalism that prevailed in the West from the end of World War II until the fall of communism, which the author calls “social-democratic capitalism.”
More here.