Branko Milanovic at ESADE: "Balancing education quality is the key to reducing inequality"

“Guaranteed access to education is no longer a magic recipe against inequality. That was years ago in Europe and the United States. What’s crucial now is not the number of years of education that a state can guarantee, but rather the state’s ability to balance the quality of that education,” declared Branko Milanović, Visiting Presidential Professor at the City University of New York Graduate Center and Senior Scholar at the Luxembourg Income Study, at the latest session of ESADE’s Big Challenges social debate series, entitled “Inequality and its Effects”. Besides Prof. Milanović – a noted expert on global economic inequality – the session also featured the participation of Javier Solana, President of the Center for Global Economy and Geopolitics (ESADEgeo).

“Today, the middle class is in crisis in developed countries and booming in developing Asian powers such as China and India. On a political level, this is considered a confrontation, which leads us to a moral problem,” commented Dr. Solana. Prof. Milanović observed: “If we interpret the chart of global wealth distribution as if it were a single country, it wouldn’t be terribly problematic. The problem is that the chart is global but policies are decided at national level.”

Towards egalitarian capitalism

Prof. Milanović stressed the need to “redefine the goals of societies from a social-democratic point of view” in order to “ensure that the various types of economic allocations are more equitable and there are no longer such marked differences between business owners and workers”. He added: “We need to achieve an egalitarian form of capitalism in which wealth is distributed more equitably and people are less dependent on the welfare state.”

Regarding the possibility of taxing the richest 1% of the world’s inhabitants on a global basis, Prof. Milanović commented: “There is no global institution that can regulate this. States must deal with this because nobody else can.”

Universal basic income: a dystopia

Prof. Milanović expressed his objection – “on both economic and ideological grounds” – to universal basic income as a means of solving the problems of inequality. “Economically, states already guarantee a basic salary under certain conditions, for example in cases of unemployment or extreme poverty,” he explained. “With universal basic income, this assistance would no longer be temporary or linked to a certain condition, and I don’t think it would be sustainable. Moreover, I don’t like the idea of a world where work is no longer a form of self-realisation for citizens. I imagine a dystopian scenario in which 60% of people don’t work and 10% are entrepreneurs with very high incomes. From my point of view, it is better to have reasonable salaries for good jobs for many people than to have a very large percentage of the population depending on a guaranteed minimum wage and a very small percentage of the population with very high incomes.”

Africa: the new Asia?

Prof. Milanović continued: “We can predict the growth of Asia and Europe. What’s very difficult to predict is what will happen with Africa. Will Africa become the new Asia? It’s a possibility. Some Nobel laureates in economics said that Asia would never develop, and they have been proven wrong. Nobody saw China coming. Nobody predicted the end of communism.” Regarding the problems related to immigration in Africa, Prof. Milanović commented: “I don’t think this is something that is going to be solved in the next 100 years. European migration policies should be designed not for a five-year timeframe but for a 100-year timeframe.”