Branko Milanovic has said it plainly: there will be no return to neoliberal ideology. A new system must therefore be built. This is a welcome reflection. Yet it remains incomplete. Because no new system can be conceived without interrogating the centrepiece that economists persistently keep out of the debate: money itself.
Milanovic is right: a historical cycle is ending
Branko Milanovic is one of the most rigorous economists of his generation on global inequality. His elephant curve — showing winners and losers of globalisation between 1988 and 2008 — remains one of the most illuminating analytical documents produced by mainstream economics in the past thirty years. His work on American liberal capitalism and Chinese political capitalism moved beyond the naïvetés of post-Wall orthodoxy: capitalism is not one thing but many, and its variants do not converge toward a single model.
His latest book, The Great Global Transformation (2025), marks a further step. Milanovic diagnoses the end of a cycle: the neoliberal globalisation built since the 1980s on financial deregulation, trade liberalisation, state disintermediation and market primacy. This cycle, he argues, is over. Not because its advocates abandoned it, but because its internal contradictions undid it.
This diagnosis deserves to be taken seriously, precisely because it comes from an economist who is not a systemic critic of capitalism. Milanovic does not challenge the market. He observes empirically that the particular model of globalised market that dominated the past half-century has exhausted its political, social and geopolitical springs.
The evidence is clear: middle classes in advanced economies were the great losers of this period. Within-country inequalities exploded. Financialisation decoupled capital returns from real value creation. And the promise of universal enrichment through free trade shattered against the reality of growing polarisation — both economic and political.
Milanovic identifies what he sees as the emerging new model: national market liberalism. A market capitalism that abandons liberal internationalism to embrace economic nationalism — maintaining private accumulation logic, efficiency as cardinal value, capital primacy — but substituting blocs, selective protectionism and industrial sovereignty for globalisation. Trump is the most visible figure. But the dynamic extends far beyond any single person or mandate.
This is where Milanovic's analysis is most valuable — and also where it stops too soon.
What Milanovic sees — and what he does not
National market liberalism is a response to the contradictions of globalised neoliberalism. But it is a response that preserves the essential conceptual infrastructure. It changes the geopolitical rules of the game. It does not touch the monetary rules of the game.
And that is precisely where the blind spot lies.
Milanovic, like the vast majority of economists — even the most critical — treats money as a veil, as a neutral instrument serving real exchanges. The monetary question is referred to central bankers, technicians, currency specialists. It is not posed as a systemic, structuring, political question in the deepest sense.
This silence is revealing. It reproduces a diagnostic error that runs through two centuries of economic thought: confusing the terrain on which the economy is played with the economy itself. Debating industrial policies, tariffs, social transfers, capital taxation — all of this is debating rules that apply within a framework. That framework is the monetary system. And that framework is not neutral.
Money is not neutral: an obstinately ignored fact
Monetary neutrality is one of the most persistent dogmas of standard economics. Its strong version posits that an increase in money supply affects only the general price level, leaving real variables unchanged. Its softer version admits short-term effects but maintains that money is, in the long run, without influence on fundamental equilibria.
This thesis has been challenged many times. Keynes showed that effective demand depends on monetary expectations and that financial markets can diverge lastingly from the real economy. Minsky demonstrated that financial instability is endogenous to capitalism. Modern monetary theorists recalled that in a fiat system, the state's financing constraint is not that of a private agent. Economists like Felix Martin and anthropologists like David Graeber showed that money is not a commodity born from barter, but a social institution inscribed in power relations.
Yet these challenges remain partial. They criticise this or that aspect of the standard dogma without posing the question in its full radicality: the very structure of the monetary system determines the possibilities and impossibilities of all economic policy.
In other words: changing policies without changing the monetary framework is repainting the walls of a house with cracked foundations.
Money creates systemic incentives
Money is not a thermometer. It does not measure a pre-existing value. It constitutes a system of incentives. It orients economic behaviour by defining what is profitable, what is financed, what is accumulated.
The current monetary system structurally rewards limitless accumulation — every euro lent must generate more than one euro of future value, inscribing expansionism in its very architecture. It rewards resource extraction — in a system where natural resources enter calculations only at their extraction cost, monetary signals encourage intensive use. Deforestation is profitable. Aquifer depletion is profitable. Not through malice, but through structure. And it rewards short-term financial returns over systemic robustness — the 2008 crisis was not an anomaly: it was the system's logic pushed to its consequences.
We are entering the age of robustness — but our monetary institutions remain in the age of efficiency
One of the most important theses that can be drawn from Milanovic's analysis — even if he does not formulate it in these terms — is that the shift from globalised neoliberalism to national market liberalism marks a shift in priority: from efficiency to robustness.
For two centuries, the dominant paradigm was optimisation: produce at lowest cost, eliminate redundancy, maximise productivity. This paradigm had its moment of glory. But it was applied in a particular context: a planet with apparently unlimited resources, in a geopolitically stabilised world around a hegemon.
That context has changed on three dimensions simultaneously. Ecologically, planetary boundaries are no longer projections — they are measurable realities. Geopolitically, American hegemony and liberal multilateralism are fragmenting. Socially, neoliberalism's inequalities have reached levels that generate destabilising political tensions.
Against this triple rupture, the logic of maximum efficiency has become counterproductive. A perfectly optimised but distant supply chain is a vulnerable chain. A hyper-specialised agriculture is fragile against climatic disruptions. An economy dependent on permanent growth to service its debts is an economy whose stability is conditional on something the biosphere can no longer guarantee.
Robustness — a system's capacity to absorb shocks and maintain essential functions — becomes the new strategic objective. And this shift implies a change of monetary system.
The fundamental blind spot: the international monetary system
If Milanovic's diagnosis is correct — if we are truly entering a new historical cycle — then the question that imposes itself is: what monetary system for this new cycle?
The question is almost absent from contemporary debate. Discussions revolve around international taxation, public investment, industrial policy, financial regulation. All these policies operate within a monetary framework inherited from another era.
The exorbitant privilege and its consequences
The current international monetary system rests on the dollar as global reserve currency. This status grants the United States what Valéry Giscard d'Estaing called an "exorbitant privilege": the capacity to issue debt in their own currency, absorb durable current account deficits without financing constraints, and implicitly impose a dollar constraint on the entire world through their monetary policy.
This system generates structural imbalances: the accumulation of dollar reserves by surplus countries feeds financial flows returning to the United States as Treasury purchases, financing a permanent American deficit and sustaining a global debt dynamic whose long-term sustainability is increasingly contested. It is also deeply inequitable for Southern countries, which must hold dollar reserves to protect against exchange crises — a costly insurance mobilising resources that could finance development.
Credit-based money creation: a boundless growth machine
The second pillar of the current monetary system is money creation through private bank credit. In the modern monetary system, the vast majority of money in circulation is created by commercial banks when granting loans. As a fundamental principle of banking accounting reminds us — attributed to Hartley Withers, formulated as early as 1901 — loans make deposits. Money is born from debt.
This mechanism has a major structural property, rarely questioned: it requires growth for its own reproduction. One euro lent at 5% interest must generate at least 1.05 euros of future value to be repaid. At the macroeconomic scale, total production must grow for the system to remain solvent. Current money is a money of obligatory growth.
In a world of finite resources, this property becomes a curse. Efficiency gains are systematically reabsorbed by the rebound effect — what William Stanley Jevons observed in the 19th century for coal, and what contemporary data confirm for energy, materials and digital uses.
The absence of ecological signals in the monetary system
The third major dysfunction is the total absence of ecological signals in the basic mechanisms of the monetary system. Prices do not reflect the real ecological costs of economic activities. A litre of burned petrol does not carry in its price the value of the emissions it generates. A food product from intensive agriculture does not carry the cost of soil impoverishment.
Carbon taxes and environmental market instruments are useful. But they intervene downstream of a monetary system whose deep logic remains oriented toward accumulation and material expansion. They introduce local corrections without modifying the global dynamic.
The dead end of national market liberalism as a response
Does national market liberalism provide answers to these structural dysfunctions? The answer is no.
This model changes the scale of accumulation — substituting national accumulation for globalised accumulation. It changes the privileged actors and policy instruments. But it does not change the purpose: maximise national economic growth, measured by GDP, financed by debt, organised by a banking system that creates money by extending credit. The monetary framework remains identical. The structural incentives remain identical.
Worse: in a context of geopolitical fragmentation and bloc competition, national market liberalism aggravates certain pathologies. The race for industrial subsidies creates pressure for competitive monetary creation. Monetary fragmentation reduces possibilities for coordination on global common goods, above all climate stability.
Post-growth and robustness: a new paradigm waiting for its monetary system
The paradigm suited to the era we are entering has a name, or rather several overlapping names: post-growth, degrowth, wellbeing economy, steady-state economics. These approaches converge: GDP maximisation is not a relevant objective in a finite world; human wellbeing can be improved in economies that do not grow quantitatively; planetary limits are real constraints, not marginal externalities.
These analyses are rigorous and increasingly accepted in academic and institutional circles. But they systematically run into an obstacle: they do not propose a monetary system compatible with their objectives.
This is precisely where the Gordian knot lies. A post-growth economy operating with the current monetary system — based on credit money creation and the implicit obligation to grow — would be an economy in permanent crisis. Without growth, debts become unrepayable. Banks become insolvent. This is not a theoretical conjecture: it is what we observe in stagnant economies, like Japan since the 1990s, which found no other exit than financial repression and unconventional monetary policies.
Post-growth needs a monetary system designed for it. Not adapted or marginally reformed, but architecturally rethought.
What a 21st-century monetary system should do
Accepting these premises, what properties should an adapted monetary system have? At least five can be identified.
Not encode the obligation to grow. A monetary system capable of functioning at equilibrium — without agents' solvency requiring indefinite expansion — is a sine qua non for a viable economy in a finite world.
Integrate ecological limits as structural variables. Monetary signals — prices, interest rates, credit conditions — must reflect biophysical realities. This is not only a question of environmental taxation, but of monetary architecture: who has access to financing, under what conditions, by what criteria.
Guarantee stability without requiring growth. A robust monetary system is one whose internal stability does not depend on an external condition — GDP growth — that the real economy may not be able to satisfy.
Structurally correct international imbalances. The international monetary system must include automatic rebalancing mechanisms for current accounts. Keynes proposed such a mechanism with the Bancor at Bretton Woods. It was rejected in favour of the dollar. Seventy-five years later, the absence of this mechanism remains a structural flaw.
Support international cooperation on global common goods. A monetary system fragmented into rival blocs cannot effectively finance global common goods — climate stabilisation, biodiversity, global health, food security.
NEMO IMS: a direction, not a blueprint
These five properties outline the contours of a monetary system radically different from today's. They correspond to no existing system. They do correspond, however, to the direction in which the NEMO IMS system (NEgentropic MOney International Monetary System) seeks to move.
The ambition of NEMO IMS is not to abolish markets, eliminate money or return to a sophisticated barter economy. It is to realign the international monetary architecture with the real-world constraints of the 21st century — a finite, multipolar world traversed by systemic risks that the current system amplifies rather than absorbs.
In the NEMO perspective, money ceases to be a vector of limitless accumulation and becomes an instrument of systemic steering: orienting economic flows toward the preservation of the ecological and social conditions that make the economy possible.
This is not utopia. It is the logical consequence of Milanovic's own diagnosis: if the neoliberal cycle is over and a new system must be built, that new system must address the challenges the previous one failed to treat.
The question after Milanovic's question
Branko Milanovic asks the right question: if neoliberalism is dead, what do we put in its place? His answer — national market liberalism as the dominant emerging model — is a lucid empirical description of what is happening. It is not a prescription.
Credit is due: he does not claim this new model is a solution. He observes it is the most probable trajectory under current political conditions. In doing so, he implicitly opens space for a different question: if this trajectory is insufficient — if it does not resolve the fundamental contradictions of the global economic system — toward what should we tend?
The answer to this question cannot be only political or institutional. It must be monetary.
A world entering an age of robustness, planetary limits and multipolarity needs a monetary system designed for this era. Not marginally reformed. Architecturally rethought.
This is the 21st century's great unfinished work — one that most economists, including the most lucid, have not yet opened.
It is time to open it.
Jean-Christophe Duval