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Capital after Capitalism The evolution of the concept of capital in the light of long-run sustainable reproduction of the species


Abstract and Figures

The capitalist mode of production has fulfilled a most astonishing 'historical mission' for the human species. It enabled an explosion of labor productivity gains and the discovery of new utility dimensions. But this progress came at the price of accompanying explosion of contradictions, of unequal benefits and burdens across global and local classes of humans. This paper sets out to explore what will happen if capitalism is finally ending, if its mission collapses. To do so a workable definition of the essence of capitalism is needed, I propose this to be the 'capitalist algorithm' – for a detailed treatment see [Hanappi, 2013]. The most interesting question then concerns the social mechanisms that might overcome – revolutionize – what currently dominates the behavior of large production conglomerates as well as their military arms on a global level.
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Capital after Capitalism
The evolution of the concept of capital in the light of long-run sustainable
reproduction of the species
Hardy Hanappi
Economics (Institute 105-3), University of Technology of Vienna
Invited Paper at the International Conference of the Financialisation, Economy, Society and
Sustainable Development (FESSUD) research project in Siena, 11th of November 2016.
The capitalist mode of production has fulfilled a most astonishing ‘historical mission’ for the
human species. It enabled an explosion of labor productivity gains and the discovery of new
utility dimensions. But this progress came at the price of accompanying explosion of
contradictions, of unequal benefits and burdens across global and local classes of humans.
This paper sets out to explore what will happen if capitalism is finally ending, if its mission
collapses. To do so a workable definition of the essence of capitalism is needed, I propose this
to be the ‘capitalist algorithm’ – for a detailed treatment see [Hanappi, 2013]. The most
interesting question then concerns the social mechanisms that might overcome
revolutionize what currently dominates the behavior of large production conglomerates as
well as their military arms on a global level.
Following the tradition of Hegel and Marx it can be assumed that a large part of the capitalist
algorithm simply will have to vanish. But as history shows there also always is a remainder of
a mode of production that in an inverted form (Hegel: negation, German Marxism:
‘Umstülpung’) becomes part of the next progressive mode of production. To identify what
‘Capital after Capitalism’ could be, what has to be abolished and what might survive in which
form remember the double meaning of Hegel’s concept ‘Aufhebung’ is a central
prerequisite for a proper understanding of the coming revolution of the current mode of
production. Since each step on the ladder of global social evolution is also a step in social
human consciousness, this step in understanding implies a direct impact in guiding the actions
to accomplish this turnover.
In a world in turmoil, ever larger parts of the population are experiencing that political leaders
have no answers to their vital questions, conventional knowledge in economics and political
science simply does not explain what actually happens in the world economy, living conditions
have started to deteriorate. The current way of living seems to approach its final end, the
capitalist engine that looked so superior when in 1990 the Soviet Union dissolved now, after
the disaster of 2008, seems only to be waiting for its last deadly blow.
Prophets of prosperity, promising dream worlds based on their own distorted perceptions,
are successfully winning elections in an age of alienation that allows to streamline political
attitudes of an electorate that receives all perceptions of the outside world on its
smartphones. In this cacophony the notion that we live in a capitalist mode of production that
can be understood has been lost, at least by the general public. Capitalism not only can be
understood, it can be placed in the historical role it had to play and most important - the
conditions for the further development of human societies after capitalism can be explored.
This is what this paper aims for.
In part 1 a preliminary answer to the question ‘What is capitalism?’ will be provided. The two
lines of attack to this difficult task are the historical perspective and the logical perspective.
Since any experience is finite, the straightforward next topic concerns the end of capitalism.
In part 2 the metamorphosis at the end of capitalism is investigated: when it breaks, where
will it break? Can we learn something on the pieces of the puzzle, on the mosaic that the next
mode of production can build out of the broken elements of capitalism? The answer in part 2
is positive, yes, the contours of what we could reach for are becoming visible, obscured by the
clouds of this age of global alienation, but getting clearer every month. The third part then
emphasizes what is thought to be the main characteristic of the next mode of production: the
return of time and space. This indeed easiest can be understood as an inversion of the limits
that capitalism hits in time and space. But there is more to that thought, as will be explained
in this part. The conclusion then draws together the different topics touched in the preceding
parts and expresses the hope that Thomas More’s utopia after 500 years and in modern form
will materialize.
1 What is capitalism?
British classical political economists of the 19th century experienced and identified the world
in which they lived as being different from societies of the Middle Ages. Since the most obvious
change had taken place in production methods and the way production had become a
consequence of spending money for the means of production, they summarized their
diagnosis in the statement: Capitalism is a mode of production. There are two approaches to
understand what makes capitalism a particular type of a mode of production
One possibility is to study economic history, the observed development of human societies.
In a famous statement of the classics this approach was praised by saying that ‘all knowledge
in the end reduces to knowledge about our history’. Today this approach often is called the
diachronic approach, investigating a phenomenon along the time line of its emergence.
Another possibility to understand a phenomenon is to investigate its current essential
variables and their relations. The logic found in the contemporary processes then might reveal
a general property of our society. This approach usually is called the synchronic approach to a
phenomenon, since it develops its abstraction by generalizing properties of synchronizing
processes today, occurring in the most advanced societies.
Proper social science combines both approaches, switching between the two and using
suggestions from the one to improve investigations in the other domain. A brief application
of both research streams for the concept ‘capitalism’ is sketched below.
1.1 - A diachronic synopsis to position capitalism
A possible structure for historical development of human societies has already been presented
in [Hanappi, 1986]. In the very long-run only early social forms’ and commodity producing
societies’ are distinguished. While in the first tribes of hunters and gatherers the production
of surplus output for the explicit purpose of exchange was not a common characteristic, we
now still live in a commodity producing society
. Concentrating on commodity producing
societies Karl Marx - following the mainstream of serious historians of his time suggested to
distinguish three stages of commodity producing societies: the slavery mode of production,
feudalism, and capitalism. It is intriguing to study how such different types of agents and their
relationships, each of them more or less stable for many generations, did emerge in a
relatively short time period out of the breakdown of its predecessor. I have dubbed these
deep structural breaks in commodity producing societies: metamorphosis. In the relatively
short process of a metamorphosis (the correlate in physics is called phase transition) the basics
for the longer run of the next stage are laid. Metamorphosis clearly is an open process, there
always exists a certain finite set of possible fits of the remaining and newly emerging pieces
agents, institutions, etc. with which a new mode of production is built. The study of the
history of political economy can discover how metamorphosis actually has worked.
The step from feudalism to capitalism typically could be traced backed to a general difficulty
of feudal classes to finance their territorial aspirations. In times of mainly agricultural
production growth of surplus and power was bound to take place as war for new territory. But
soldiers and mercenaries cost money, therefore finance started to play the dominant role for
social development
This distinction of approaches follows Ronald Meek’s description of the ‘logical-historical’ approach, see [Meek,
1979, pp. 299-318].
I apologize to all anthropologists for this much too rough summary of more than 80.000 years of development.
See [Gramsci, 1930] for the link from social functions to the switch of ruling classes. While the ruling class in
feudalism goes back to families particularly successful as military leaders, in capitalism the drivers are those
particularly apt to exploit and to re-invest in productivity increasing techniques (and eventually new products).
Money had already emerged before that break; it was a central feature of all commodity
producing societies. Making exchange processes independent of the mutual coincidence of
the needs of the exchanging parties, of loosening time and space restrictions, it was an
omnipresent add-on to the essential processes in earlier commodity producing societies. But
in capitalism it woke-up to become the central category, to be its own raison d'être. In
previous societies it was just a non-commodity (not consumable) enabling better exchange
processes of commodities, now the commodities became the less important accessories of
the self-amplifying process of growing money property. Money accumulation being the prime
motor of social dynamics, with commodity production becoming the dependent variable, led
to a fascinating evolution of money forms, compare [Hanappi, 2013]. And since a sign system
of social value, i.e. money, can only work if signs are understood and accepted if necessary
enforced by police money forms were paralleled by an evolution of governance forms, of
state forms. This in turn surfaced as a further, more fine-grained sequence of stages of
In a first stage merchant capitalism increased productivity by exploiting the difference
between cultures, between their products (e.g. spices and tea), between their socio-political
structures (e.g. buying slaves in Africa), and between their different technological advantages
(e.g. large cotton fields in America). Combining these differences in trade activity, e.g. the
Western trade triangle
, allowed to increase average global productivity. For the single
merchant this increase materialized as profit, as a sum of money that could be added to the
money advanced to enable the trade activity. The ships of a colonial empire were both,
instruments of trade and military units to secure political dominance of a hegemonic state.
The prime nation of merchant capitalism were the Dutch, their state, de facto Amsterdam,
was the first hegemon of capitalism. On the financial side the Amsterdam Bourse exemplified
a new institutional rule set that could handle global exchange of social values
With the metamorphosis from merchant capitalism to industrial capitalism the hegemonic
role was transferred from the Netherlands to England. The triggers for a metamorphosis can
be found by looking at the limits, the bottlenecks encountered by the temporarily stable
previous stage. In the case of merchant capitalism, a serious limit consisted in the almost
constant output of merchandise, of stagnating productivity, in the advanced colonial
hegemonic states. The second largest merchant capitalist power, namely England, was faster
in overcoming this limit by introducing systematic increase of productivity in manufacturing
what today is praised as technical innovation. This new dimension of the characteristic feature
of capitalism, i.e. productivity increase, has to be considered as an overlay on the still existing
network of merchant capitalist relations. An even more sophisticated arrangement between
the political power of still feudal circles and the new drivers of the wealth of the nation
, i.e.
the capitalist class described by classical political economists, was emerging. Class, a central
concept for the understanding of 19th century industrial capitalism, became visible to classical
Compare [Frank, 1978].
Compare [Braudel, 1979, chapter 3].
In his classic book Adam Smith emphasizes only the welfare increasing benefits of division of labour on all levels
to explain the superior role of Britain, see [Smith, 1776]. The downside of the processes constituting industrial
capitalism, like the deepening of the contradiction between the British ruling class on the one side and slavery in
Africa and the working class in England on the other side, are neglected.
political economists because poverty of masses of people occurred in front of their windows,
in England
. Politics were visibly national class politics, the strong ties across nations that
Europe’s nobility had maintained during feudalism were loosened. At the height of the
hegemonic power of the British empire its culture
, above all its restless thrive to penetrate
the whole colonial world with its economic style, laid the foundation of what till today can be
considered as the core algorithm of capitalism.
From a financial point of view London like Amsterdam a large port, showing that trade till
today mainly is sea trade accomplished and extended the art of contractual arrangements
that merchant capitalism had produced. Money needed by innovative entrepreneurs or
merchants was not lent from a rich uncle anymore, organizations facilitating the flow of
money quickly were institutionalized. It was already during industrial capitalism that a first
split between entrepreneurial activity and the financial support it needed appeared
. While
technical innovation needed time and usually was stuck within a well-defined production
process or product line, finance was a highly flexible and rapid instrument that could easily
jump from one production sphere to the next. There certainly were contractual measures
trying to fix the gaps between the two speeds, another source of the growth of the law system
and accompanying professions, but as national finance developed into international finance
the bridge between the two factions of the national capitalist class started to wobble. Today
this divide still is a main source of concern.
The rupture to the third stage of capitalism, the metamorphosis that started with World War
1, had been triggered by a coincidence of events that suddenly transformed latent political
contradictions into a full-fledged global war. A major ingredient of these contradictions was a
relatively new phenomenon in the superstructure of advanced capitalist countries:
. After the most disastrous catastrophe of WW1 the interwar period can be
interpreted as the difficult transfer of hegemony from England to the USA, from the reign of
the Pound Sterling to the era of the US Dollar. The third stage of capitalism that emerged can
be called ‘integrated capitalism (compare fig. 1).
For David Ricardo a main topic was to distinguish two groups within the ruling class: old-style rentiers and
progressive industrial capitalists [Ricardo, 1817 (1973)]. Karl Marx focussed on the conflict between industrial
capitalists and the newly emerging working class. Framing history as a history of class struggles and despite his
taking side for the proletariat as the next ruling class, he also acknowledges that the ruling class of capitalists
fulfils a necessary historical mission, namely to increase labour productivity [Marx, 1848]. After capitalism less
labour time will be necessary to produce the commodities and services for basic needs of mankind, for its primary
biological metabolism.
Compare [Hobsbawm, 1975].
Early observers of this process typically interpreted it from a socialist political perspective, see [Lenin, 1914
(1999)] and [Hilferding, 1908 (1968)]. Both had read John Hobson [Hobson, 1902].
It was not just the motivation for the assassin of heir apparent Franz Ferdinand, Gavrilo Princip, it also was a
general attitude of large parts of the population in many European states. In the Austrian-Hungarian and the
Osman empires nationalism within the empires pushed towards their fall, while German nationalism turned
outside, against the large colonial powers England and France to fight for global leadership.
Figure 1: The historic position of Capitalism
Under the lead of the USA it set out to integrate the deep contradictions that broke up in
WW1 into a new form of the core capitalist algorithm. A central difficulty had been the
exploding conflict with the national working classes that in Russia had even culminated in the
founding of the USSR. As a consequence, Western democracies enabled integration via
participation of working class representatives in national governments. This was only possible
if feudal political leadership was abolished, and this should have solved another contradiction,
namely how to overcome the conflicting territorial aspirations linked to feudal governance.
Unfortunately, political entrepreneurship in the form of Fascist movements was able to
surprise the world with a fallback to authoritarian dictatorship in Germany and Italy
. Its rise
to power to a considerable extent was owed to its capacity to provide an answer to the
question of unemployment that became extremely urgent during the Great Recession of the
30-ties. The German answer to the sharp economic downturn of the world economy was the
same as in other advanced economies: a stronger state should intervene and should provide
employment and effective demand. But in Germany the NSDAP played on the stirring-up of
nationalism and specified this public employment as the recruitment of soldiers. Economic
activity was commanded by the newly installed institutions of the NAZI-regime; it
concentrated on the build-up of weapon industries. As it turned out, the fascist variant of
‘capitalism’ that rests on military conquered territory and state terrorism is not a sustainable
A thorough discussion of Fascism goes beyond the scope of this text, for a still valid characterization compare
[Kalecki, 1943]. A decisive role certainly was played by the newly available technical devices, like broadcasting,
which enabled ‘micro-politics’: The transfer of the leader’s voice into each living room and each brain at any time
of the day.
mode of production
mode of production
mode of production
Commodity producing societies Early social forms
Merchant capitalism
Integrated capitalism
Industrial capitalism
form of governance
. The 1000 years dream broke down after 7 years, which brought the
human species close to the edge of extinction.
The same general feature of integrated capitalism, namely stronger involvement of the nation
state to eliminate emerging contradictions stemming from the working of the core capitalist
algorithm, had been applied in the USA in a completely different form. Anticipating in practice
what Keynes prescribed later in his ‘General Theory’, see [Keynes, 1936], Fordism and
‘blockbuster’ Roosevelt’s ‘New Deal’ tried to eliminate troubles of lacking effective demand
and oligopolistic inefficiencies.
What these measures incorporated and anticipated from a financial perspective is most
interesting. In a sense it is only in integrated capitalism of the American variety after the defeat
of Fascism that the concept of capital comes to its full flourishing. In the practice of economic
policy of the 25 years after WW2 Keynes ideas most visibly proved that capitalism, in its third
stage of integrated capitalism, can fulfill its historical mission. It led to dramatic welfare
increases, though only in the developed countries of Europe and North America
. It is
remarkable that towards the end of this period economic theory started to stroll away from
its former commitment to provide models that can explain actually observed phenomena.
Since the mid 70-ties integrated capitalism is on the retreat. The monetary mechanisms that
had allowed to realize profits, i.e. to sell goods and services, by letting consumers and states
going into debt, these mechanisms are successively called into question. A worldwide roll-
back of Keynesian policies, like fixed exchange rate regimes or a pro-capitalist role of state
intervention in markets, is taking place. In the mid-run this conservative revival in a few areas
could successfully iron out bureaucratic excess of state administrations; but the general
judgement certainly can only be that the force of integrated capitalism was inverted. Since 25
years integrated capitalism now is disintegrating.
Disintegration also meant that financial power now was rapidly centralizing and concentrating
in the USA. Hand in hand with this development ever more superior military might and a top
position in research could be developed there
In 1990 another external shock
, the political breakdown of the USSR and their satellite
states, was giving this process a severe twist. Without a global military challenge, the weapon
industries and related political cadres seemed to have lost their reason of existence. But after
a short period of confusion these sectors and their promoters recovered and formed a new
globally acting force. To a considerable extent, NATO today is shaping world policy again; see
[Hanappi, 2017] for a more detailed treatment.
An insightful study of the internal economic processes of fascist Germany was provided by Sohn-Rethel,
compare [Sohn-Rethel, 1973 (1987)].
In [Vercelli, 2017] this first phase of financialisation is called 1st financialisation.
The European intellectuals and scientists that fled from the fascists in WW2 had already prepared the ground
for this advantageous spurt of research in the USA.
Seen in a wider context this shock was not external. It was the coincidence of a late success of Western
propaganda via TV and an even more delayed effect of Stalin’s misconception of ‘socialism in one country’ - held
together by army and police. Both sources might be well described endogenously in a more extended
An even more remarkable turn has been taken by international finance. Alessandro Vercelli
describes it as 2nd financialisation, see [Vercelli, 2017]. Indeed, the dynamics of integrated
capitalism since the end of the Soviet Block in 1990 has to be understood in the context of the
global political economy.
The conservative roll-back in economic policy that had started ten years earlier, in 1980, was
characterized by a continuous flow of capital towards the USA; mainly due to higher interest
rates and the promise of higher profits rates that in the Reagan era were stimulated by save
state public investments in the military-industrial complex of the USA
. In Europe this outflow
of capital led to an economic downturn as interest rates started to rise too and capital cost
increased. While many SMEs went bankrupt and Europe’s big unemployment problem
started, the group of European transnational companies organized counteraction they
pushed for a powerful political representation of their needs, something that could build a
counterweight to the government of the USA. These efforts resulted in the strengthening of
the European Union in the mid 80-ties. But contrary to the USA, several European countries
were characterized by relatively strong positions of labor movement institutions, unions,
social-democratic governments, chambers of labor, and the like. As a consequence,
purchasing power did decrease moderately only - households and governments went into
debt - and Europe became the largest consumer worldwide. Across the Atlantic capital was
amassed, blue collar workers’ wages could fall to the level of the 60-ties and the inequality in
income and wealth started to explode.
Then, in 1990, it seemed that the world now had become capitalist, that the system of
integrated capitalism finally had reached its natural destiny. In Europe, this euphoric
misinterpretation led to a short boom that broke down in 1993. Since capitalism certainly is
not the final natural state into which human societies quickly return as soon as misbehaving
labor movement institutions (including Stalinist aberrations) are eliminated, ‘capitalism in 100
days’ (Jeffrey Sachs) did not happen. In fact, only little happened in the newly opened
territory, the capitalist machinery could not take hold of the deeply ingrained local behavioral
rule sets. In the long-run the most successive local political entrepreneur turned out to be
Vladimir Putin, who is playing exactly on the backward cultural traits of Russia that held back
the core capitalist algorithm. US money was more successful in finding fertile grounds in China.
The two most important developments that hold integrated capitalism alive till today are the
excessive use of exchange rate exploitation
and the emergence of global value chains
constructed on basis of the former. In both respects China is a pivotal global player. China’s
arrangements with international finance controlled mainly in the USA are a key explanatory
element for the dynamics of global political economy. As the tremendous economic upswing
Investment in war equipment is one of the few investments that does not need effective demand of consumers
with purchasing power. It is eventually ‘consumed’ by military action and paid from the state. It is thus no surprise
that a hegemonic state, which is in control of the worldwide used currency, can build-up military superiority. The
amounts needed can partly be financed by increasing the money supply. The remaining effect on money markets
then results in a rise of domestic interest rates.
Put simply, exchange rate exploitation is based on a continuous decrease of wages (in terms of the world
currency) in producer countries due to a continuous devaluation of their local currency vis-à-vis the world
currency, i.e. the US Dollar. This mechanism uses local customs and political regimes in producer countries to
ensure persistent low consumption levels of the local population. It is essentially a modernized form of one of
the above mentioned elements of merchant capitalism.
of China shows, its government successfully managed to position itself as a middle-man, a
managing entity, in between the urgent needs for further profit promising global
opportunities that large US-based finance expresses and the possible local production
possibilities in the poor producer countries, being itself for the most part still one of them.
Integrated capitalism thus to a large extent has achieved the integration of global production.
In doing so it also has undermined the motor of its historical mission, namely to increase
average global labor productivity. This mission had the tricky feature that the private vice of
profit maximization of firms (from a catholic point of view) implied the public benefit of rising
labor productivity in the long-run less labor time and more leisure time for all would be
possible if workers would fight successfully for an adequate distribution of these benefits.
Since average global productivity growth since 1980 approaches zero and the move to a more
adequate distribution is necessarily (exchange rate exploitation!) politically blocked, the
historical capitalist mission has run out of steam. After 1990: Enter 2nd financialisation.
In the desperate search where to place the enormous amounts of money that have been
amassed in large financial pools new financial techniques cut almost all links to physical
economic property. Assets are ascribed a certain value not because they refer to a factory
producing products that are thought to represent a certain social value, they are rather priced
according to their expected selling price in an ever shorter future without too much
reference for which ‘physical entity of last resort’ they stand. The move from savings of
households that in Europe now rather are going into debt to assets held by the small group
of very rich investors is symptomatic. Expectation based bubbles in financial markets are an
immediate and necessary consequence. The ICT bubble in 2001 was a first warning, the great
financial crisis of 2008 might have been the deadly blow for integrated capitalism. Since then
the turmoil of chaotic piecemeal engineering in economic policy and finance is not ending,
and is not successful either. Substantial economic growth, i.e. capital accumulation, is not
returning. What comes next?
1.2 A synchronic description of the core capitalist algorithm
The diachronic positioning of capitalism has not been possible without some recurring
references to the logic of the core capitalist algorithm, which in turn is itself a concept derived
from the study of history. It entails what the diachronic approach reveals as essential
characteristic and translates it into a more abstract and more general model. Since it should
cover all three stages of capitalism it has to be independent of the different money forms by
which these stages differ. On the other hand, it must entail the above mentioned historic
mission of capitalism, which distinguishes this type of commodity producing society from
other such societies, like feudalism. As the previous chapter already made plausible this core
property consists of the capitalist algorithm shown in figure 2.
The entity that applies this algorithm can be a merchant, a firm owner, a transnational
company, a financial entity, or as the recent ideologues of privatization try to stipulate a
government or even each single human individual. It is evident that depending on the entity
chosen the names used in the labels of figure 2 have to be slightly modified. Note that an
essential part of this algorithm consists of producing and using a set of visions. These visions
are different internal models maintained by a social entity, which usually are easily transferred
(at least partly) in communication processes. This not only explains Schumpeter’s empirical
observation of swarming of innovations, see [Schumpeter, 1939], it points quite generally to
the utmost importance of communication processes.
Figure 2: The core capitalist algorithm
Source: [Hanappi, 2013, p. 262]
At this point of the argument it is fruitful to return to the latest developments in economic
history: With the recent surge of information technology worldwide communication
processes made a quantum jump. Media today can often frame the interpretation schemes
of the population stronger than local direct experience or face-to-face communication can do.
As mentioned in the previous chapter, the use of broadcasting to disseminate fascist
interpretation schemes has been an early warning signal of the force of centralized media
power. After WW2 financial bubbles are another obvious example. The spread of the core
capitalist algorithm as a general feature of human nature to be applied to states and single
persons has been the central assault of information power masterminded by politicians of the
conservative roll-back; there it went under the name of ‘privatization’. Its final task would be
human individuals that in their self-perception are just singular carriers of business plans, of
internal models looking like the core capitalist algorithm.
In many OECD countries this vision of conservative ideologues has already reached
considerable shares of the population. But since it is built on the use of technology, hardware
and software, which is open to other manipulating power groups too - e.g. religious
organizations, neo-fascist groups, nationalists, environmentalists and the like several
competitors for the minds and hearts of the global audience appeared on the stage. In the last
years this not only has contributed to the rise of Islam and the migration wave to Europe when
war and Islamic repressions hit Arab populations, in the sequel it also is fueling state control
of information flows within the advanced countries in the name of anti-terrorism and
Any vision of the next mode of production has to take into account this qualitatively new mode
of communication structure the next generation will live in, compare [Hanappi and Egger,
1993]. The eminent importance of this issue can be expressed by stating that we are entering
an age of alienation, where the primary metabolism of the human species can and will be
pushed in the background and interaction can and will predominately take place in the
information sphere, using symbolic objects that are alien to primary needs. A closer look at
current developments, e.g. BREXIT and the election of Donald Trump as president of the USA,
reveals that we have already entered this new age.
The core capitalist algorithm, these days more than 500 years old, since 2008 by and large
proves to be an inadequate model for the new century. Not only is it inapplicable for the huge
majority of the world population and its social institutions (including production units), in the
mid-run it is even forcing zero growth on its most optimistic proponents, the transnational
To get some ideas which features of the old mode of production will survive, and which will
disappear, the best advice can be found by looking at the most dramatic break lines, the major
contradictions of todays integrated capitalism.
2 Rupture Lines and Order Parameters
In theoretical physics the phenomenon of phase transition has been extensively studied and
today is pretty well understood. If water starts to boil, there is a small range of temperature
within which several properties of water experience a dramatic qualitative change; e.g. in the
colder state water cannot be compressed, while in the hotter state it can. The phase transition
thus eliminates some essentials (a 1st set of variables) and creates a set of new essentials (a
2nd set of variables). Moreover, it takes place along a continuous change of a third set of
variables, e.g. temperature. Physicists therefore define phase transition as a discontinuity of
the derivative of some dependent variables as the third type of variables, the so-called order
parameters, change
As explained in more detail in [Hanappi and Scholz-Wäckerle, 2017] phase transitions in non-
living systems are a very instructive metaphor for metamorphosis in political economy. The
old set of properties described by entities and their relations falls apart, at least a substantial
part of it ceases to exist. During the relatively short time of rearrangement, in societies usually
only a few decades, a small, in any case finite set of possible new arrangements for the next
temporarily stable arrangement is available. Several groups, classical political economy called
them classes, struggle, build coalitions, propose possible visions, are eventually recombining
and invent new institutions until a winning coalition is able to dominate the others
. Given
the current potential of means of mass destruction, survival of the species at no point of
metamorphosis is guaranteed. Returning to the concept of order parameters, the
corresponding index in evolutionary political economy should represent two highly significant
tendencies in the evolution of human societies: First, the tendency towards ever larger area
Second order phase transition discovered by Landau, [Landau, 1937], takes place if the second derivative
experiences a jump. In this case transition is smooth, but variables can emerge and disappear.
Note that standard mainstream economics, i.e. neoclassical economics, has never touched these most crucial
nodes of social evolution; despite its adherence to the simple Newtonian mechanics it uses. This reveals its
implicit mission, namely to describe the stability of capitalism, and only the stability.
and population, which a political entity commands. From small tribes, to medieval cities, to
nation states, to continents, to the global society. Second, the increasing political
participation of larger parts of the population in the political process, i.e. democratization.
While the first trend is an important element contributing to the division of labor, which in
turn frees us from necessary labor, the second tendency is the challenge to use increasing
leisure time for the rising importance and difficulty of self-governance. An index, indeed a
measure of progress, thus also is an index of consciousness of the human society. Under the
extensive perspective of the first trend, consciousness proceeds from an individual’s
consciousness, to family consciousness, to tribe consciousness, to class consciousness, to a
nation’s consciousness, to a continental unit’s consciousness, to conscious humanism. The
second trend then outlines temporary difficulties and emerging successes, i.e. the pulsation,
of the efforts to bridge the contradictions between the ever larger political entities.
Conscious intensions of the different political entities are partly contradicting and have to be
reconciled. As temporary arrangements, safeguarded by ever more centralized police- and
law-systems, institutions are providing longer periods of a peaceful working of a political
entity, in capitalism they have been dubbed ‘social structures of accumulation’ by David
Gordon [Gordon, 1980]. But during such stages contradictions slowly take on new forms
asking for new solutions, which then in a metamorphosis lead to an eruptive restructuring,
a revolution.
In capitalism the essential political agent that drives its historical mission, that increases
productivity by pushing towards new forms of exploitation, is the entrepreneur, the character
mask of merchant capital, industrial capital, and integrating capital. The capitalist algorithm
performed by all of them already shows an implicit contradiction that is related to the
concepts of social value and exploitation, a contradiction that did not disappear but was
continuously deepening. At the beginning of an accumulation step the acquired inputs have
to be bought, and since the labor time bought must be cheaper than the revenues achieved
after a successful sale of output to allow for a profit, it follows that what is rewarded to the
owners of labor power can buy less social value than the social value represented by the
revenues. This simple fact of accounting is called exploitation. Of course, also non-labor inputs
have to be bought from other owners of means of production, contributing to their revenues,
which then leads to a repeated reshuffling of profits within the capitalist class depending on
price structure dynamics. But the core principle to extract social value from labor time
remains valid. How this is done distinguishes the different stages of capitalism, and since social
value appears in the physical world as money, the different stages did breed a sequence of
money forms, compare again [Hanappi, 2013].
Capitalism can therefore be considered as the mode of production that lets money forms
change, from a simple physical carrier of social value, a symbol, to the form of credit, and
finally to its appearance as capital
. Earlier forms of commodity production already used
simple money, but only in capitalism this inner evolution of money forms was possible. Hand
in hand with this stepwise evolution a sequence of regulatory accumulation regimes took
place. What was regulated and policed by the institutions of the respective ruling class were
This process has been described as the trend of increasing financialisation by Alessandro Vercelli [Vercelli,
the flows of social values that the relevant exploitation processes and their correlated
distribution channels produced. The concepts of ‘finance’, ‘distribution’, ‘social justice’, and
the like thus all are derived from the concept of social value and a specified set of prevailing
. In each stage the typical entrepreneur added new features to its behavioral
setup: A new, innovative mode to bridge the opposition between private vice (profit making)
and public benefit (overall productivity increase) emerged. In the last two decades of
integrated capitalism this mysterious entity ‘entrepreneur’ materialized as the transnational
company (TNC). It has been able to globalize productivity increases and positive profit rates
by the introduction of global value chains. The independence from the fetters of single nation
states not only circumvents all local achievements of labor movements by the use of exchange
rate exploitation, it also leads to a new form business governance. Capital not only became
independent from a specific economic sector, now it considers itself to be independent from
any political interference
. In a sense this global reach of business governance can be viewed
as a prelude though mirror-inverted of democratic, political global governance. What now
proves to be impossible for TNCs alone, for global business governance, is to reconcile the
saved profit rates with sustainable mechanisms of social value transfers. In this last phase of
integrated capitalism, which aimed at incorporating global class contradictions in a framework
of social value transfers, vulgo money streams, this task evidently reached certain new
On the one hand the seemingly tranquilized class contradictions brought about an
underground movement of dissatisfied, confused and angry citizens in several advanced
countries. Indeed, in retrospect, the fascist movements of the 20th century can be understood
much better in this perspective. The force of these movements today as well as in the past
can be channeled into a takeover of authoritarian regimes by gifted ‘political entrepreneurs’;
a major tool being the technological media world outside democratic control. With respect
to the introduction of a new mechanism for social value streams, in mainstream economics
called ‘finance’, these authoritarian regimes typically are ultra-orthodox
in amassing public
debt to build-up police states and military, what in fashionable terms is called ‘security’. The
contradictions they were promising to solve thus are quickly transferred to exploding political
contradictions between nation states, finally leading to wars. On the global scale at which a
3rd World War certainly will take place, this is synonymous to the extinction of the species.
On the other hand, the welfare enhancing side of capitalism, spreading productivity increases
throughout the global population finally got stuck; indeed, it always has been a slow and
cumbersome process enforced by the world-wide labor movements. Process innovation as
well as product innovation have always had a political bias, though mainstream economists
stubbornly exclude it from their analysis. Their central task to reduce cost in the production
It is important to distinguish the dominant exploitation form from still co-existing older exploitation forms. E.g.
in merchant capitalism the dominant capitalist merchant acts in an environment where older exploitation forms
in other continents play an important role.
Political leaders Ronald Reagan was an earlier example are considered to be actors selling the goals of
strong groups of TNCs to a nation-wide public that actually has no influence on global dynamics.
Ultra-orthodox in this context means that the authoritarian leaders dress their national myths in a pseudo-
feudal mode of class-rule, simply disregarding already existing global financial mechanisms, and therefore
sacrifice their exploding public debt at the altar of ‘autonomy’. Aggression against neighbouring states, i.e. war,
is the typical result of such a development.
process typically goes hand in hand with technological unemployment, while the introduction
of new products, of new utility dimensions, always has to anticipate customers rich enough to
buy these commodities; in contradiction to the wages of employees, see the first task. With
these difficulties global innovation practices based on single firm profit-maximization became
a problem. To allow ‘non-effective demand’
to build-up large-scale debt means only to
postpone the harvest of profits by a class-internal transfer to banks and tax authorities. This
latter faction of the ruling class, i.e. finance ministers, have to take the heat. With the
technology induced speed-up of all financial processes such a Keynesian short-term
orientation necessarily results in a speed-up of ever larger financial bubbles. The global
financial bubbles of 2001 (ICT bubble) and 2008 were the first signs of the sclerosis of
innovation under the dictate of the capitalist algorithm.
In the light of this narrative the central question of this paper is if and how the capitalist
algorithm will survive the metamorphosis. This question cannot be answered by a simple ‘yes’
or ‘no’. As explained above, its survival is only feasible if a deep change within the algorithm
takes place. Its major goal variable, namely accumulation (‘growth’) of the mysterious variable
‘capital’ will have to be substituted. A simple substitution by growth of the equally mysterious
variable (aggregate) ‘utility’, i.e. welfare, will not shed further light on the question. The only
more instructive investigation could be the study of the currently most pressing problems of
the existing mode of production. In the phase of metamorphosis several coalitions of political
classes will try to gain hegemonic power, and the promise how to bridge these visible
contradictions, these gaps, will probably be an essential element of the struggle. Still a well-
received promise can nevertheless lead to disaster, e.g. Hitler in the mid-thirties, promised
correctly to restore employment and national pride in the short-run. Today, a positive vision
for solutions of global problems has to be scientifically grounded and long-run oriented
. This
has to be kept in mind when studying the limits of the current state of integrated capitalism.
A first limit, a breaking point, clearly is global finance. Reflecting a very special form of social
value as it is extracted from the global population and redistributed towards multi-layered
global classes, it is the central piece of the mosaic to be re-framed. In this respect a feature of
the sequence of capitalist phases comes into play that has not been mentioned so far: In the
course of time the political entities involved have become larger; from regions, to states, to
continents, to the whole globe. Finance capital today, like the global value chains it entertains,
is a global phenomenon. But the political counterpart that could control it, that could provide
its democratic legitimacy, does not exist yet. The non-existence of global governance vis-à-vis
global finance and TNCs, above summarized as business governance, thus is a contradiction
that must be eliminated. Many more fine-grained measures of democratic control will have
to be implemented too. The general thrust, more empathetically spoken the general truth,
has to be that that finance and its institutions are political elements, and not just profit
Keynes’ concept of ‘effective demand’ is a subtle hint that workers might need something but only those who
have the money to buy it can be considered as demand. The adjective ‘effective’ suggests that effects are only
those elements that play a role in the mind of the selling firm owner.
The adjective ‘sustainable’ is not used in this paper, since the concept of ‘sustainability‘ plays a more restricted
role than usual. Here sustainable only refers to the property of a program to perform correctly during the next,
temporarily stable mode of production. It therefore is replaced by the loose expression ‘in the long-run’, which
avoids the misleading connotation of being valid for eternity.
maximizing firms. In Europe the latest change of the role of Central Banks and the ECB already
signal that this transformation is on its way.
The second important limit comes from the set of problems summarized as environmental
problems. Again, most of these problems ask for coordinated interventions on a global level,
thus implicitly hinge on the existence of global governance. As for finance, some preliminary
moves in the right direction are already appearing, e.g. the new energy policy of Germany. But
for most global environmental limits, e.g. scarce water resources, the non-existence of global
governance implies non-action. The disastrous growth imperative of existing integrated
capitalism drives itself to the edge. As recent developments in the USA show, re-orientation
towards accelerated profit growth in the name of an ideology of national greatness usually is
directly linked to environmental ignorance.
The third important limit concerns political governance itself, namely its feasibility in the
above mentioned age of alienation. The danger of new, ever more dangerous wars between
nations streamlined along centrally implanted dogmas is just the other side of the coin that
could point towards the implementation of a democratic global governance. The coin is
flipped in the air by modern information and communication technologies, and ICT are here
to stay. To get from here to there, that is to arrive at global governance as it is needed for
overcoming the first two limits, the age of alienation has to be mastered. In that sense this
third problem is the hardest and the most urgent. In certain aspects it resembles the French
enlightenment and indeed several small bonfires lit by scientists worldwide are already
announcing the possibility of a second renaissance, see [Hanappi, 2015]. To unify these first
attempts a common vision of the approaching next mode of production will be a pivotal
3 The Return of Time and Space
From a more general perspective the limits reached are limits of time and space
First consider time. As noted by classical political economy all economics in the end boils down
to the economics of time. Social value, as it finally appears in the form of financial power,
originated in the production of commodities that consumed labor time. Partly this labor time
is applied in combining it with frozen labor time spent earlier, i.e. with means of production,
capital goods. Additionally, in some processes natural resources are used, some of them are
not renewable. The human population itself is finite, and so is its total supply of labor time.
But the problem today is not the finiteness of total supply of labor time but rather the facts
that (i) redistribution of the produced social value follows a successful sale of one’s labor time
to the owners
of frozen labor time (means of production), that (ii) frozen labor is so
productive that only a small part of more specialist workers can be profitably employed, and
that (iii) it is necessary to sell all commodities to receive a surplus in cash. Some financial
It looks like a joke, but the neglect of the limits of time and space is a mirror image of Kant’s early emphasis on
the utmost importance of time and space for human thought, see [Kant, 1781 (1998)]. Kant, of course, was one
of the promoters of the ideas of French enlightenment in Germany.
As Ann Davis recently showed, the evolution of property relations is a fundamental entry point to the
understanding of class relations [Davis, 2015].
instruments today help to ameliorate the difficulties arising from the divergence between
unused labor time and private accumulation of social value, e.g. transfers to support the
primary metabolism of the unemployed or the build-up of debt to solve problem (iii). This
avoids revolts and postpones the realization of already contracted fruits of exploitation to a
later date when debt has to be paid back
. But none of the existing instruments is designed
to eliminate the basic contradiction mentioned above that is the source of reappearing conflict
after each step of piecemeal engineering. A new type of time and value organization
therefore is the main task of future global finance, it only can work with a move back, from
private to public decision-making. The mechanism of global business governance sketched
above is the highest form of privatization, and it is dramatically failing to protect the species
from political and environmental disaster. The role of markets
should be cut back to the
tasks they are assigned to in the dream world of mainstream economics: as a system of
sensors for the taste of consumers, tailored to specific goods and services. This too would be
a secondary function of future global finance the relation between life time and labor time
thus could return to the command of the population, via a new type of political global finance.
The reduced average labor time for the needs of the primary metabolism of the species that
capitalism has brought about will have to be re-arranged in both spheres, in global production
as well as in global consumption. The link within and between both spheres, of course, is the
social value attributed to labor time units and consumption units. In its most biological
dimension the feasibility condition of the primary metabolism consists of the assignment of a
vector of labor time units (for different types of labor at specified dates in different parts of
the world) to a vector of quantitative consumption (goods and services at specified dates in
different parts of the world). If the available time of the population is larger than this minimum
reproduction level, then the distribution of the available total leisure time has to be decided
on. It is at this stage where communication, bargaining, new voting procedures and new
institutional solutions will enter the scene. Making time, competencies, and needs explicit is
not a task that lends itself to a central planning office, it is a multi-directional communication
process. What has to emerge is the correlate to the central nerve system of a biological entity.
The language used for these global communication processes will have to supersede
contemporary languages in several ways to master the enormous amount of information, data
and programs, involved in bargaining; and the classes
involved in the process will have to
learn how to work with new combinations of natural languages and algorithmic tools.
Language shapes consciousness. The time concept of the species transcends the very limited
time concept of its single individuals, with a new communication form, including self-
This simple consideration already reveals why austerity policy is a proposal that leads to a breakdown head-
on. It destroys demand.
A common tool in ideological warfare is to elevate ‘the market‘ to the status of an independent economic
agent. Markets are not setting prices and quantities, they only provide rules that the actual market participants,
sellers and buyers, have to observe. To be able to enforce these rules there must be a third party, usually a
political entity like the state, which possesses more coercive power than the participants. With this constellation
a large diversity of market mechanisms, of rule sets, can be designed. To pretend that markets are deciding
something only serves to obscure the actual roles of participants and political entities.
It would be naïve to assume that classes will disappear. But they certainly will not be aligned along the private
possession of means of production. There might be other demarcation lines stemming from positions in
production or consumption, or from geography.
communication on all levels, consciousness itself has to turn to the long-run perspective of a
species. This is the deeper meaning of humanism, call it vision 1.
Now consider space. The world is a finite area and the option to expand accumulation to
unknown territories has vanished long ago. Today, physical space by most people is
experienced as local space, only the electronic world provides an expansion of space. But the
latter expansion is limited by those who provide access and content of the internet. In the age
of alienation, as described above, this seemingly expanding space actually could be a
narrowing down of views. Enlarging the experienced space clearly is a main task for global
education policy. Since education is part of infrastructure it has to be financed by taxes, and
will have to result in large transfers that redistribute taxes collected in rich countries to parts
of the world where education is most backward. A similar argument has to be made for non-
renewable resources: for the scarcest of them strongest restrictions on consumption and
highest efforts on technological improvements that substitute them have to be made. If this
is carried out consistently physical restrictions probably can be brought in accordance with
human needs, call this vision 2.
But before this is possible and space can return to the agenda of the human species as a
manageable task, it is one of the most endangered elements of the current metamorphosis
similar to the threat coming from alienation. If a majority of the ruling class of contemporary
capitalism transforms itself into an atavistic authoritarian dictatorship Fascism in the 20th
century can be interpreted as just a first, failed attempt in this direction then it will
concentrate its core military power in a geographically well defended area, a specified space
on the globe. The USA is a prime candidate for this role. Nevertheless, this core will need
strong links to the rest of the world to maintain its necessary exploitation processes. And for
this scenario a different type of communication structure would be substantial: At one level
ideological influence flowing from the central space to the periphery is needed (ideological
dominance), while on a second level information on all activities of individuals outside the
core has to be collected to avoid insurgencies (secret service activities). If successful, this
organization of communication, of the ‘central nervous system’, produces a split of humanity,
of two parts with two different types of consciousness. The consequence of this vision is the
anticipation of a superior part within the human species, a superior ‘race’ exploiting the less
valuable races. Space, i.e. geographically and intellectually understood territory, will be split
into two asymmetric parts. It will not be returned to the democratically controlled sphere of
the whole human species. This vision, vision 3, too poses high demands on innovation, though
on completely different forms of new artefacts.
Visions 1 and 2 point to a new type of innovation activity, in [Hanappi, 2010] it was called
reproductive innovation, while vision 3 rather sounds like what is currently happening to keep
alive old style capitalism. The first type of reproductive innovation concerns social innovations
that enable to overcome time restrictions including the invention of democratic mechanisms.
They also should step forward to provide new dimensions of utility compatible with the new
regime. The second type of reproductive innovations will be traditional technical innovations
that adjust living circumstances in different parts of the world and take care of environmental
This type of reproductive innovations stimulated in the first two scenarios (wining over
scenario 3) then will be carried out by global governance institutions that then inherit the
historical mission of capital
. This feature of a new form of society would be ‘capital’ after
capitalism. Time and space would have returned.
Conclusion: Capital after Capitalism
As a matter of fact, it necessarily must remain a highly speculative enterprise to formulate
ideas on what happens after capitalism. The metamorphosis of a mode of production is an
extremely volatile process. The disappearing elements might reappear in a completely
different form, democratic decision making in this new technological environment will often
exceed information processing capacities of single human individuals. The age of alienation is
waiting for us with a most astonishing menagerie of artefacts if the process of
metamorphosis comes to a positive end for mankind at all. The biological record shows that
the end of a species usually can be understood as a metamorphosis that has not been
If it is indeed the end of capitalism that is approaching and not just the beginning of its next
stage and this seems to be the case then the new mode of production will center around
a new historical mission. Growth of productivity will slide to the periphery. Its major engine,
the innovative entrepreneur, will become an element dependent on the new core mission. As
far as we can see today this new core mission will have to be the mastering of living with limits
reached by the human species (in time and space), and to be able to become an organic
community along these limits. The central nervous system of this global organism already
started to exist, to exist electronically in the form of the internet. From this perspective it
today is just the necessary hardware for a conscious handling of the human species. From the
same set of technological achievements comes a stupefying ability to support and substitute
many of the management activities of humans related to their primary metabolism. From this
perspective the second machine age (see [Brynjolfsson and McAfee, 2016]) is a blessing and
not a danger for employment. Given these foundations what remains for the new mode of
production is to organize political, economic and cultural power in a way that secures
reproduction of the species without losing the force of a vibrating pulse, i.e. reproductive
innovation. Joseph Schumpeter saw that the end of capitalism is inevitable, he honestly
regretted this, and predicted a gray and boring future of large scale administrative handling
of affairs by bureaucrats
. Exactly 500 years ago, in 1516, Sir Thomas More (Morus) published
his classic ‘Utopia’
, where at the beginning of capitalism he sketched a place that is not here
the literal translation of ‘utopia’. His dream of a faraway island on which most of the
hardships of the primary metabolism have been eliminated by 500 years of ‘neither just nor
beautiful’ capitalism (Keynes) – remained alive and today gains power because many technical
preconditions have been reached. Now, the place ‘no place’ (utopia) could be here. Not on an
unknown island out in the sea, but globally spanning around the whole globe. And this is
Immediate projects to be launched would concern large global infrastructure improvements for the poorest
parts of the world.
See [Schumpeter, 1943 (2003)].
See [Morus, 1516 (1995)].
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... The situation in the Near East might be just a prelude to a global phenomenon. It has been dubbed the 'age of alienation' in [Hanappi, 2017a]. ...
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Innovation in theory building usually follows the prescription of 'normal science' as described by Thomas Kuhn in his account on the history of theoretical physics, see [Kuhn, 1962]. What already had been postulated by Descartes, compare [Descartes, 1637], as a signum of science, namely the systematic advance towards smaller, more specialized, partial problems that are easier to solve, this procedure still prevails in the social sciences till today. Contrary to this piecemeal engineering approach, Joseph Schumpeter made the character mask of the revolutionary entrepreneur to his hero of progress-at least as far as innovation in the production of commodities is concerned, [Schumpeter, 1911]. Of course, history shows that both forms of innovation are alternating: If the slow advance and broadening of a prevailing mainstream gets stuck and the contradictions it produces start to accumulate quickly, then it is time for a revolution-in the material world (compare [Hanappi & Wäckerle, 2016]) as well as in its scientific correlate. It is time for a metamorphosis. In which direction a theoretical innovation in times of metamorphosis shall point clearly has to remain an unanswered question. The best characterization of its general methodological form still seems to be Schumpeter's dictum. It is a new combination of (existing) elements. The existing elements typically should concern burning problems of the troubled mainstream (compare [Hanappi, 2016]), and the adjective 'new' means that they so far are not connected to each other in the stagnating mainstream approach. The global political economy as well as its theoretical reflection in mainstream theory undoubtedly currently is in a state that calls for a revolutionary metamorphosis. This paper therefore sets out to develop a new combination of three seemingly unconnected ideas, which each address a fundamental contradiction. The first idea concerns the contradiction between the rich and the poor parts of the global economy, the second idea concerns the driving force of progress of the human species and its impediments, and the third idea concerns the contradiction between syntax and semantics of the formal representation of the first two contradictions. Contrary to papers in 'normal science', which in a conclusion propose a solution for their research question, this paper avoids to pretend a finite horizon of its arguments. As is appropriate for a proposed theoretical innovation it just offers a new open-ended contribution to the rapidly evolving discourse in the middle of metamorphosis.
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The currently fashionable modelling tool agent-based simulation is characterized. The first part concerns the past. It presents a selection of the major intellectual roots from which this new tool emerged. It is important for social scientists, in particular for economists, to see that two relevant impacts came from neighbouring disciplines: biology and network theory. The second part concerns the present of ABM. It aims at highlighting the essential features which are characteristic for an agent-based model. Since there are currently several different opinions on this topic, the one presented here also includes some more epistemologically oriented ideas to support its plausibility. In particular the notion of emergence is scrutinized and extended. This part ends with a short recipe stating how to build an agent-based model. In the last part some ideas on the future of agent based modelling are presented. This part follows the sequence of syntax, semantics, and pragmatics. The syntactic challenges, like operators for pattern recognition, will be meat by a continuing variety of software packages and programming languages tailored to support ABM. The semantic aspect of future agent-based modelling hinges on the close relationship between the tool ABM and its object of investigation, e.g. evolutionary political economy. The need to model institutional change or communication processes will imply adaptive evolution of ABM. The pragmatics of future agent-based modelling are finally characterized as the most demanding – but also as the most influential – element that the new tool will bring about.
This book offers a novel interpretation of the Great Recession and the ensuing Euro Crisis as a consequence of the evolution of capitalism since the 1970s. Chapters argue that the neoliberal development trajectory pursued in recent decades is unsustainable, and posit that neither sound macroeconomics nor empirical data support the unqualified faith in free markets that inspired it. The book begins by providing a broad critical perspective on key concepts such as freedom, free market, free trade, globalisation and financialisation, before going on to analyse the long and deep recent crisis as a result of the neoliberal policy strategy adopted since the early 1980s. The alternative narrative outlined in the book provides insights into the policy strategy required to achieve a sustainable development trajectory.
This book was originally published by Macmillan in 1936. It was voted the top Academic Book that Shaped Modern Britain by Academic Book Week (UK) in 2017, and in 2011 was placed on Time Magazine's top 100 non-fiction books written in English since 1923. Reissued with a fresh Introduction by the Nobel-prize winner Paul Krugman and a new Afterword by Keynes’ biographer Robert Skidelsky, this important work is made available to a new generation. The General Theory of Employment, Interest and Money transformed economics and changed the face of modern macroeconomics. Keynes’ argument is based on the idea that the level of employment is not determined by the price of labour, but by the spending of money. It gave way to an entirely new approach where employment, inflation and the market economy are concerned. Highly provocative at its time of publication, this book and Keynes’ theories continue to remain the subject of much support and praise, criticism and debate. Economists at any stage in their career will enjoy revisiting this treatise and observing the relevance of Keynes’ work in today’s contemporary climate.
In this paper we present the major theoretical and methodological pillars of evolutionary political economy. We proceed in four steps. Aesthetics: In chapter 1 the immediate appeal of evolutionary political economy as a specific scientific activity is described. Content: Chapter 2 explores the object of investigation of evolutionary political economy. Power: The third chapter develops the interplay between politics and economics. Methods: Chapter 4 focuses on the evolution of methods necessary for evolutionary political economy.
This book offers a novel interpretation of the Great Recession and the ensuing Euro Crisis as a consequence of the evolution of capitalism since the 1970s. Chapters argue that the neoliberal development trajectory pursued in recent decades is unsustainable, and posit that neither sound macroeconomics nor empirical data support the unqualified faith in free markets that inspired it. The book begins by providing a broad critical perspective on key concepts such as freedom, free market, free trade, globalisation and financialisation, before going on to analyse the long and deep recent crisis as a result of the neoliberal policy strategy adopted since the early 1980s. The alternative narrative outlined in the book provides insights into the policy strategy required to achieve a sustainable development trajectory.
Property has been a trope in the formulation of ideal social arrangements since the compilation of the Old Testament (Nelson 2010). It has served as a rationale for revolution in Locke’s writings, and a defense of the status quo in Burke. The norms associated with property, responsibility and independence, have been alternately celebrated (Pocock 1975) and reviled, when understood differently as acquisitiveness and accumulation, in the work of Rousseau and Proudhon. The ownership of property has been the justification for representation in government, and for the separation of powers (Nedelsky 1990). The foundation of political and economic arrangements, government and market, has been based on concepts related to property. The objective of this project is to trace these meanings of property historically for a better understanding of their conceptual foundations, institutional manifestations, and normative dimensions. Ultimately, this long-term analysis of property provides a contribution to the methodology of historical institutional economics, including the history of political and economic institutions as well as the associated systems of meaning. By expanding the field of study to include debates, the most astute defenses and critiques become part of the object of study, deepening understanding of institutional specificity and ongoing changes. Such a complete consideration of property as paradigm is necessary to undertake systematic critique and consideration of alternatives.