The Great Global Transformation: National Market Liberalism in a Multipolar World Branko Milanovic Allen Lane (2025)

In the past decade or so, the realignment of global markets by politicians has transformed patterns of trade and inequality around the world. Economist Branko Milanovic maps out those changes, and what they might herald, in his latest book.

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The Great Global Transformation builds on Milanovic’s previous work to describe how inequality between countries has declined globally over the past 25 years. Collating data from the World Bank and other sources in innovative ways, he argues that globalization in the late twentieth and early twenty-first century was accompanied by then-unprecedented growth of income in both previously poor populations (notably in China) and people at the top of the world’s income distribution (especially those in the West). By contrast, relative shares of world income stagnated or were thought to have declined for wealthy nations’ middle and working classes, including in the United States.

This trend captures effectively what has become part of public discourse in the West: globalization has left behind people in the middle and working classes in rich nations, demonstrating that it is “an illusion to believe that what is good for the world must be good for everybody”.

Milanovic’s graph revealing this pattern has become highly influential. Plotted in terms of the change in people’s real earnings as a function of where those sit in the global income distribution, it is called an elephant curve because of its shape (a broad hill forms the elephant’s back, and a sharp fall and subsequent increase form the trunk). But what the graph actually shows is hotly debated. Several critics argue that the curve suggests but does not prove a causal connection between globalization and the decline in people’s wealth in some classes in wealthy nations, and that other elements might be driving the patterns.

Geopolitical shifts

The book goes on to note that globalization, in the form of increased engagement with markets and trade, did not lead to geopolitical convergence — contrary to expectations in the 1980s and 1990s. Observers at the time hoped that market expansion would lead authoritarian regimes towards democracy and the global governance mechanisms supported by the West.

But in key countries such as China and Russia, authoritarian regimes have proved resilient and have adapted to globalization. Today, the world remains multipolar, with no single superpower dominating globally. As Milanovic notes: “it is not mutual trade interdependence and its stimulation of sweet virtues of accommodation of other people’s wishes that makes the world peaceful but the harsh reality of military balance of power”.

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At the same time, opportunities for upward social mobility in wealthy nations have been transformed by an increasing overlap of people who are rich in terms of receiving income both from capital (through investments and assets) and from labour (salaries). In the United States and China, “the top class is now more elitist and its position more impregnable because it has … ‘diversified’”. This constitutes “a new moment in the evolution of capitalism”.

The rise of these new elites, according to Milanovic, ultimately explains the direction of the political shifts seen over the past few years in much of the world. In the United States, this shift has taken the form of the populist movement, led by President Donald Trump, that has identified free trade, China and migration as threats to the country. (Milanovic suggests an alternative path, which the United States hasn’t followed: increased taxation to redistribute the gains of world trade from elites to the middle class.)

Meanwhile, in China, Milanovic describes President Xi Jinping’s policies as a “purposeful change” from those of his predecessors, in “an attempt to reassert the power of the state over the capitalist sector and the rich”. And, in Russia, too, President Vladimir Putin has reasserted control of the state and security apparatus.

Economic backlash

Hence, the emergence of what Milanovic calls national market liberalism. In short, all three regimes “should be seen as part of the same ‘counter-revolution’ against global neoliberalism and the excesses of elite enrichment during the 1980–2006 era”, he concludes.

Although there are national differences, these countries have in common several of the elements that were previously encapsulated by neoliberalism and globalization. They are also committed to disciplining wealthy people and regulating free trade through various degrees of state control.

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