The rise of populist parties is on economic grounds, says Branko Milanović. The Economist is regarded as one of the most renowned inequality researchers. In a DW Interview, he also has ideas for a fairer world.
DW: you are in the last time very much in demand, on the evening of Monday, for example, hold a lecture in Berlin. What does that say about the world, if an inequality researcher is so in demand?
Branko Milanović: That’s a good question. This testifies to the fact that inequality has become one of the main phenomena in the West. Mainly because of the political consequences of inequality: The decline of the middle class, the rise of the Right and of the so-called populism or the shrinking importance of the West compared to China.
They claim that the rights of parties to get to because of the inequality inlet?
Yes. If you look at the changes in the political landscape of the West, including of course the United States and the former Eastern bloc countries such as Poland and Hungary, we see that the so-called populism – I don’t like the term – from the economic changes. You can say that people think because of the Migration differently and choose, or that the latent nationalism was always present. But this is an insufficient explanation.
Branko Milanović, a Serbian-American Economist
The other, better explanation is that the middle class is the most in comparison to the richest one percent, or the richest five per cent, has lost its economic power. This has caused the search for a scapegoat. What is happening in the political scene, the economic reason.
Many of the “Suspended” repeat but the worst nationalist slogans of the populist parties. What the Left is wrong, in order to reach these people?
The Left is caught in a Situation without any discernible policy. It was a mistake, the neo-liberal policy to accept even more readily than do the Conservatives.
You think Tony Blair or Gerhard Schröder.
Absolutely, and Bill Clinton. Today, it is, of course, easy to that the Left has made a mistake, but at the time it was not easy to formulate a policy against the dominant principles of globalization. Today, the social-democracy paid the price, but at the time there were not many Alternatives.
Social equality and liberal principles of capitalism are contradictory? Because often, when equality is mentioned, many Fears of what is called the Soviet Communists ‘Yравниловка’ (Urawnilowka) – the egalitarianism.
The criticism is absolutely flawed – not everyone speaks of equality, egalitarianism and communism. Equality and inequality are not binary categories. It is as with the temperature – if it is at 40 degrees to hot, it does not mean that I want to live in Siberia. So, I’m not saying that there should be no inequality, that would be anyway impossible.
The reduction of inequality does not result in communism. We had between 1945 and 1980 in the West, a time of labour parties, social Democrats, even Conservative, which reduced all of the inequality in their countries is significant, without leaving the capitalism. Capitalism and the relatively acceptable level of inequality are not contradictory. But the question is much more whether of liberal capitalism in the globalized world with less inequality compatible.
He is?
Today, it is much more difficult. Between 1945 and 1980, a growth of the inequality by powerful counter-weights has been avoided: Strong trade unions, more education, emergence of the middle class. Even the political center and right have accepted higher taxes and a welfare state. Today, you can set a limit because of the globalization of the capital flow of barely – the Rich provide the money abroad. Higher tax rates have lost in popularity, and the scepticism towards the state and the redistribution grows.
In their books and texts, some of the recipes against the inequality. You make a commitment to equal opportunities, especially when it comes to education, as well as for an inheritance tax. Why?
The middle class is no longer willing to pay higher taxes and fees – often around half of the gross income and the redistribution has come under suspicion. That’s why it needs a new policy with the aim to even out the odds. This includes a more favourable tax policy for the middle class and less tax benefits for the Rich. The estate tax reduces inequality of opportunity for the next generations.
The education must, however, be open to the public, of high quality and available to all. In Germany, this may not be a big Problem, but in the United States schools are private, dominant, better, and very expensive. The middle class can no longer find for their children good and affordable schools.
In Germany, education is generally funded with public money and yet the children from academic families to study three times more often than the other.
The complete equality is impossible, it is, except in a reversed selection, such as China in the cultural revolution – only the children could study. This is discriminatory. The offspring of the well-educated who parents will always have more opportunities to care for the formation. But the question is: is the company able to reduce these differences so that they are not more huge and dominating.
You mentioned a possible discrimination. But in an Interview, she suggested a different type of discrimination as a counterweight to globalisation: migrants should enjoy only limited civil rights. To defend this Thesis at all?
In a better world it would be good to have more Migration with simpler rules. But we do not live in this better world. Today, the inclusion of migrants in Europe is very unpopular – you may even argue that the Brexit is a result of the Migration from Eastern Europe to the UK. According to the Situation, we should find a compromise between the need for Migration that reduces global inequality and people from under-developed countries to earn more; and the willingness of the local population, the migrants.
Therefore, the idea of the so-called circular Migration. The comers could live in Germany for a few years and only if you have already found work. After that, you need to go home. This is not ideal, but my fear is that, if we refuse to accept such options, we can end up with Zero Migration.
The Serbian-American Economist Branko Milanović, born in 1953, is one of the world’s most renowned inequality researchers. He was chief economist in the research Department of the world Bank and currently teaches at the City University of New York. Milanović has published numerous books and more than 40 studies on the subject of inequality and poverty. For his book, “The unequal world Migration, the one percent, and the future of the middle class,” he received the Bruno Kreisky prize for the political book of the year 2016, and Hans-Matthöfer prize for economic journalism in 2018.