Insights into Post-Capitalism: Why the Next Dominant Firm May Be Non-Distributing

[Davino]

Note: Due to the complexity of the topic and being English not my main language, AI was used to better articulate my own insights.

 

For years I tried to picture what is the next evolution beyond late-stage capitalism: one that is grounded and doesn't fully rely on the progressive evolution of collective values. My sticking point was structural: even if society’s values shift towards stage green of spiral dynamics (e.g. care, inclusion, sustainability), a profit-maximizing firm would still tend to get the upper hand because it can extract surplus (profits) for owners, raise capital aggressively, and scale faster. In a market engineered around maximization, “being nicer” is not a winning strategy; it’s a competitive disadvantage, unless the rules of the game change.

After years of no success, some days ago I had my first important insight: there is no need for a challenging systemic-market disruption. It requires the dominant enterprise structure to evolve.

The most plausible evolution of a post-capitalist economy is not the abolition of firms, not communism, not central planning, and not a stage green utopian shift in consumer ethics. It’s the rise of non-distributing enterprises: organizations that can compete in markets and generate surpluses, but cannot legally distribute those surpluses to private owners. Any excess is reinvested into developing their mission, strategic vision and value delivery.

This single constraint of 'no private extraction' changes everything and shifts money-centric capitalism to product-value-centric capitalism. It flips the organizing principle of the firm from “maximize profit for owners” to “maximize value delivered to stakeholders while remaining financially self-sustaining.”

 

A non-distributing firm (NDE) can still sell products, pay strong salaries, attract world-class talent, run cutting-edge Research & Development, and become operationally excellent. The difference is what happens to the surplus: instead of leaking upward as dividends and buybacks, it becomes fuel for a compounding reinvestment: higher wages, better tools, better service, lower prices, more R&D, deeper trust, longer horizons. This would give a competitive edge to NDEs over purely profit orange-based companies. So Cocacola would not be a good stock investment but a movement towards making the best beverages.

This changes the game because many publicly traded firms are structurally compelled to prioritize shareholder returns, even when doing so conflicts with long-term stakeholder value. In an NDE model, the same cash flows can be redirected into the core activity (e.g. product quality, reliability, innovation, and societal benefit) without requiring a global green value transformation from the collective, as well as bad actors.

The main drawback of NDEs is initial capital formation (bootstrapping): as they scale less through equity upside and more through retained earnings, debt, revenue-based financing, procurement, and mission-aligned capital. If those pathways mature, a post-capitalist economy can emerge organically: markets remain, competition remains; but extraction becomes structurally harder, and compounding reinvestment becomes the default.

The two greatest risks of non-distributing enterprises are corruption through conversion and decay through complacency. As organizations accumulate value, internal and external pressures push relentlessly towards making that value privately extractable; success itself becomes the danger (e.g. OpenAI). At the same time, removing profit incentives and takeover threats risks dulling ambition, especially at the executive level, replacing excellence with comfort. If unaddressed, these forces ensure that either the most successful organizations betray the model, or the most faithful ones underperform. For post-capitalism to scale, non-distribution must find cases of great success, and performance pressure must be consciously regenerated through culture, reputation, purpose, real accountability, excellence and love for the product rather than profit alone.

Post-capitalism, then, is not a rejection of markets, ambition, or competition, but a refinement of what they are optimized for. The shift towards non-distributing enterprises does not depend on a rejection of money, but on whether these organizations can remain attractive places to build, create, and excel while keeping surplus aligned with their purpose. In that sense, post-capitalism would not arrive as a rupture, but as a quiet selection process: where the firms that endure are those designed to compound value for society rather than convert it into private exit.

This is my prediction for the next macroscale stage of the global economy, and the structural foundation upon which stage green can realistically take root and endure over the coming centuries.

[Sandroew]

Im very happy to read about this. My whole life i was thinking about how to improve society, even before i discovered Leo and his work, this was my favorite topic to think about. And capitalism is the single biggest factor in shaping our society.

Currently im in the process of familiarizing myself with Peter Joseph and his work. He is brilliant in his definition of weak points and pitfalls of capitalism, however i was astonished to learn how childish and juvenile his solutions are at the end of his second movie Zeitgeist: Addendum. (Im assuming here you know of him and probably saw the movie as it was very popular some time ago and Leo shared his more recent work in his blog. If you arent familiar i highly recommend looking into him, start with the brilliant analysis from him Leo shared on the blog recently - its on page 2 or 3 now.)

I completely agree with you that a new system has to evolve from our current one, instead of tearing it down to build something new from the ground up.

However my first impression of your idea is that its not thorough enough to solve the fundamental flaws of capitalism, but i’ll have to contemplate more before i can adequately discuss it with you.

Edited 14 hours ago by Sandroew

[Bjorn K Holmstrom]

This is a brilliant analysis, @Davino. You have correctly identified the structural bottleneck of stage orange capitalism: the extraction imperative. As long as the primary function of a firm is to extract value for external shareholders, conscious capitalism will always be out-competed by ruthless maximization.

I am currently working on the architecture for exactly the kind of post-capitalist infrastructure you describe (a project called Global Governance Frameworks), and I want to offer a piece of the puzzle that addresses your concerns about decay through complacency.

You wrote:

"The two greatest risks of non-distributing enterprises are corruption through conversion and decay through complacency... removing profit incentives... risks dulling ambition."

The solution to this isn't just changing the entity (firm), but changing the energy (currency).

If an NDE holds its surplus in standard fiat currency (which is designed to be hoarded/extracted), the temptation to capture that pile of money is immense. But if the NDE operates on a currency with demurrage (a negative interest rate over time), the physics change.

We are building a protocol called Love Ledger where the currency (Hearts) has a built-in decay (e.g., 0.5% monthly).

Anti-hoarding: The firm cannot just sit on a pile of cash (complacency). It literally loses value if it sits still.

Forced flow: The firm is structurally incentivized to reinvest continuously, in R&D, in higher wages, in community projects, because spending it is the only way to retain the value.

Resilience: This turns the economy from a battery (store of value) into a grid (flow of value).

You are describing the hardware (the NDE structure). But for it to work without corruption, it needs new software (demurrage currencies and transparent reputation metrics).

I'm piloting this in Sweden with a crisis coordination app called Stuga, which acts as a primitive NDE: a community node that coordinates resources without extracting profit. The profit is the survival of the neighborhood.

You are spot on that this won't happen via revolution. It will happen via selection. The firms/communities that adopt this resilient/non-extractive architecture will simply out-survive the fragile, extraction-maximized firms when the next global crises hit.

Great post.

[aurum]

@Davino you are essentially just describing non-profits. Those already exist, and they cannot outcompete the current capitalist system.

If firms could just reinvest their surplus into the company, many of them would do that. The problem is they can't. They need capital from shareholders.

Survival is the bottleneck. Not structure. Structure bends around survival.

Edited 5 hours ago by aurum