Why Recent Election Shifts Will Not Alter Global Trade Realities
Washington, Saturday, 7 November 2026.
Despite political turnover, structural protectionism will endure as a new elite dominating both labor earnings and capital investments drives an increasingly impenetrable economic divide worldwide.
A Changing of the Guard, but Not of the Guardrails
On November 4, 2026, U.S. midterm elections delivered a Democratic victory, reshaping the political landscape just days before economist Branko Milanovic’s November 7 remarks on continuity in American foreign economic policy [1]. Milanovic, a former World Bank lead economist and current professor at the City University of New York, emphasized that structural forces—particularly entrenched protectionist sentiment and strategic competition with China, Europe, and the Middle East—are unlikely to shift regardless of party control [1][alert! ‘Milanovic’s projection is qualitative, not quantified’]. ‘I do not believe there will be much impact regarding geopolitics or this new national market liberalism,’ Milanovic stated. ‘Policies toward China, the Middle East, and Europe will likely continue, though possibly with different psychological tones in Europe’ [1].
The Rise of the ‘Homoplutia’: A New Elite Locks in Wealth
Beyond policy continuity, Milanovic highlights a deeper structural transformation: the emergence of a ‘homoplutia’—a term he uses to describe a rising global elite that simultaneously dominates both labor earnings and capital ownership [1]. This phenomenon is not confined to the United States but is observable in countries such as Spain and South Korea as well [1]. In the U.S., this elite occupies the top decile of income earners, benefiting from both high wages and substantial asset accumulation [1]. Milanovic notes, ‘There is a growing proportion of people at the top who are simultaneously in the highest decile for both capital income and labor income… This creates a new, highly educated elite that works hard, earns high salaries, and accumulates significant wealth from assets’ [1]. The result is an increasingly impenetrable economic divide, where access to both high-income professions and capital ownership is concentrated among a select few [1].
The Economic Implications: Stability at the Top, Stagnation Below
The concentration of economic power in the hands of a homoplutia has macroeconomic consequences. Milanovic warns that this structural shift could exacerbate wealth inequality, as the elite’s dual dominance of labor and capital incomes reinforces existing disparities [1]. While the elite’s high earnings and asset growth drive consumption and investment within their own circles, broader segments of the population may face stagnant wages and limited access to capital, constraining aggregate demand and economic mobility [GPT]. Milanovic’s observations align with broader trends in national market liberalism—a system where domestic neoliberal policies coexist with mercantilist foreign economic strategies [1]. Under this framework, protectionist measures and strategic trade policies are likely to persist, as they serve the interests of the dominant elite while sidelining structural reforms that could promote inclusive growth [1].
A Global Phenomenon with Local Roots
Milanovic’s ‘homoplutia’ concept extends beyond the U.S., reflecting a global trend where education and high-income professions intersect with capital ownership [1]. For example, in Spain and South Korea, similar patterns are emerging, suggesting that this is not an isolated American issue but a systemic feature of advanced economies [1]. Milanovic’s empirical work on income distribution reveals that the top decile in these countries is increasingly composed of individuals who are both highly paid professionals and significant capital holders [1]. This dual status blurs traditional distinctions between labor and capital income, creating a self-reinforcing cycle of wealth accumulation [1]. While Milanovic acknowledges that democracy can deliver higher incomes, he cautions that its benefits are unevenly distributed when access to capital is restricted [2].