From Capitalism, Alone (Branko Milanovic, 2019) p216-7
In a very abstract way, the question of how capitalism will evolve depends on whether liberal meritocratic capitalism will be able to move toward a more advanced stage, that of people’s capitalism, where (1) the concentration of capital incomes (and the concentration of ownership of wealth) would be less, (2) income inequality would be lower, and (3) inter-generational income mobility would be greater. The last point would also prevent the formation of a durable elite. In order to move there — if it is found that such a move is desirable — it is not sufficient to have incremental policies, however well meaning and well designed they are. It is important to have a clear and measurable goal in mind. If either people’s or egalitarian capitalism is the goal, the measurement of progress toward that goal becomes relatively simple and could be done using knowledge and techniques we possess today. The two most important goalposts for monitoring progress are whether concentration of wealth and income from capital is being reduced, and whether inter-generational (relative) income mobility is improving. Both are longer-term indicators, so annual changes might not mean much. But it would be possible to set a goal in this way and to measure at several-year intervals whether progress is being made.
The policies that would lead to progress toward that goal, all of which I have discussed in earlier chapters, are relatively simple and can be summarized under four headings:
. Tax advantages for the middle class, especially in the areas of access to financial and housing wealth, and a corresponding increase in the taxation of the rich; plus, the return to high taxation of inheritance. The objective is to reduce concentration of wealth in the hands of the rich.
. A significant increase in funding for and improvement in the quality of public schools, whose cost must be low enough to be accessible not only to the middle class but also to those in the bottom three deciles of the income distribution. The objective is to reduce transmission of advantages across generations and make equality of opportunity more real.
. “Citizenship light,” which would entail the end of a strictly binary division between citizens and non-citizens. The objective is to allow migration without provoking nationalist backlash.
. Strictly limited and exclusively public funding of political campaigns. The objective is to reduce the ability of the rich to control the political process and form a durable upper class.
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