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 Saturday at 06:14 AM 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 Saturday at 03:50 PM by aurum

[Davino]

@Sandroew I'm not an economical thinker, I'm an ambitious philosopher. I don't plant to solve capitalism but surely NDEs present a refinement of the system.

The problem with capitalism is that it puts money at the centre and not in the service/product, making it less efficient. If you focus on the product/service itself, then capitalism forces the advancement of humanity, instead of the enrichment of a few.

Again this is just my first legit insight in this realm, so take it with a grain of salt.

[Davino]

On 27/12/2025 at 3:36 PM, Bjorn K Holmstrom said:

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.

The good thing about NDEs is that actually they have competitive advantage over extraction, because that money is reinvested.

If both company A and B have a profit of 10$ but company A is forced to give 5$ to stakeholder and reinvest the rest, but company B is able to reinvest the 10$ that gives them competitive advantage. That was the beauty of the insight, to find a way to solve this fundamental systemic problem.

The catch-22 is who will give millions to company B. Investors will give it to company A to rig their starting position and make themselves filthy rich. But again, that's caring about the money which is indirect, instead of caring about the thing itself.

On 27/12/2025 at 3:36 PM, Bjorn K Holmstrom said:

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.

That sounds interesting. Thanks for sharing 

[Davino]

On 27/12/2025 at 4:24 PM, aurum said:

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

They are technically different a non profit is usually designed for charity and literally does not care about profit but about social service. An NDE can be extremely profit focused and make millions, it's just a system that doesn't allow those benefits to spill out of the company, it must be reinvested.

On 27/12/2025 at 4:24 PM, aurum said:

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.

All companies do, it's just a matter that those who grow more are the ones which reinvest and receive fresh money continuously.

Quote

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

Indeed.

What is the next evolution of a company that survives better than the current ones?

Given enough initial capital boost, it may be NDEs.

[Sandroew]

48 minutes ago, Davino said:

I don't plant to solve capitalism but surely NDEs present a refinement of the system.

Yeah, i understood that, but only afterwards i made my comment.

And i agree, its definitely a step up from stage orange pure capitalistic values. I imagine a society with a stage green base would be chock-full with projects that arent for maximising profit or to enrich the leaders.

[aurum]

47 minutes ago, Davino said:

They are technically different a non profit is usually designed for charity and literally does not care about profit but about social service. An NDE can be extremely profit focused and make millions, it's just a system that doesn't allow those benefits to spill out of the company, it must be reinvested.

Non-profits DO care about profit and ARE extremely competitive amogst themselves. The distinction between charity and "normal business" is also not clear, because it's always about survival value. And it's always funded by someone.

The only difference is they just don't hold onto their profit at the end of the year.

Non-profits are usually weak compared to for-profit firms, unable to compete with them.

47 minutes ago, Davino said:

All companies do, it's just a matter that those who grow more are the ones which reinvest and receive fresh money continuously.

And so why don't they reinvest more?

Because having shareholders is more competitively valuable than reinvestment.

47 minutes ago, Davino said:

Given enough initial capital boost, it may be NDEs.

Where is that initial capital boost going to come from?

If it's comes from shareholders or banks, that's just a for-profit corporation.

If it comes from donations or government grants, that's essentially just a non-profit.

None of which get us anywhere new.

No one is going to give your business free money, it's going to have to come from somewhere. And those that give it to you will expect something in return. No amount of utopian, alt-economics will change this.

Edited 8 hours ago by aurum

[Staples]

One aspect us lefties often ignore about capitalism it the limits of our own technology. How is it possible supermarkets and restaurants throw out tons of food when millions are left starving around the world? It is not a production problem, but one of distribution and coordination. It's a mistake to blame all of capitalism's woes on human nature.

It is possible that capitalism is the best we can do with our level of technology. Not just logistical technology, but financial technology. The way we think about capital itself might be incompatible with any superior system. Crypto was the first (and in my opinion, failed) attempt at this. 

Capitalism was only born with the industrial revolution and the rise of manufacturing. Post capitalism might only be possible with an entirely new definition and more effective form of capital. 

Banking on purpose and excellence as a motivator for your NDEs is a lost game. No one will invest in a company like that. No one will go into the mines and do boring or dangerous work for the 'love of the craft'. Profit is the only motivator here, because the whole point of doing that kind of work is to make enough money so that you don't have to do it anymore. No one is going to go down into a mine and get black lung for free.

Edited 8 hours ago by Staples

[Bjorn K Holmstrom]

There is a mechanism that solves the capital trap (@aurum) and the motivation trap (@Staples) without requiring free money or utopian idealism: Capped returns.

We need to stop treating capital like a marriage (perpetual ownership/control) and start treating it like a mortgage (finite debt/return).

- Investors put in capital. They get paid back a fixed multiple (e.g., 3x ROI) from revenue. This is the profit motive that attracts the capital.

- Once the 3x is paid, the investor's claim ends. The company becomes self-owned.

- In a self-owned firm, the surplus that used to go to dividends now goes to the workers.

To answer @Staples: Who will go down into the mines? The people getting paid $200k/year to do it, because the mine's profit is going to the miners instead of a pension fund in New York. Profit is still the motivator; we just changed who receives it.

[Schizophonia]

@Davino You are close to Proudhon's ideas; or even Bakunin.

But there are many problems with his ideas, such as the fact that since there is always a market, it doesn't eliminate the structural problems of capitalism (it's not just the distribution of wealth; it's also and especially speculation, the crisis of overproduction, the tendency of the rate of profit to fall, the creation of monopolies...); that it is idealistic/laborious to implement (how do people create corporations/shared enterprises? It requires a great deal of organization and is automatically complicated without the state; does this concern the owners of small and medium-sized enterprises as well as entrepreneurs? They are also bosses with boss interests; are you going to force companies to restructure?) or even more simply, how do you want a society like that when the more technology and the market progress, the more it naturally monopolizes and demands firm hierarchical structures that have nothing to do with this ideal.

We might as well embrace communism; there is to drink and eat in communist philosophy.

Karl Marx and Engels, Vladimir Lenin, Leon Trotsky, Rosa Luxembourg, George Lukács, Lucien Goldmann, Antonio Gramsci, Louis Althusser... to name those I know more or less. 

Edited 8 hours ago by Schizophonia

[aurum]

7 minutes ago, Bjorn K Holmstrom said:

There is a mechanism that solves the capital trap (@aurum) and the motivation trap (@Staples) without requiring free money or utopian idealism: Capped returns.

We need to stop treating capital like a marriage (perpetual ownership/control) and start treating it like a mortgage (finite debt/return).

- Investors put in capital. They get paid back a fixed multiple (e.g., 3x ROI) from revenue. This is the profit motive that attracts the capital.

- Once the 3x is paid, the investor's claim ends. The company becomes self-owned.

- In a self-owned firm, the surplus that used to go to dividends now goes to the workers

That does NOT solve the trap.

No serious large investor would accept 3x returns. It's worthwhile for them to invest because they are looking for home-runs. Companies would also not want it because they need those huge investments.

If you try to regulate 3x returns, the regulatory apparatus itself will get captured. 

Self-owned firms are also not a solution because all the profit that was going to shareholders will now just be extracted by those inside the company.

[aurum]

Alt-economics is usually deep self-deception. You have no idea how to do things better.

Survival will crush your supposed solutions.

Edited 7 hours ago by aurum

[Bjorn K Holmstrom]

You are making two fundamental category errors here.

1. Confusing venture capital with the market

You said: 'No serious large investor would accept 3x returns.'

You are describing venture capital (which needs 100x returns to offset a 90% failure rate). VC is a tiny, loud fraction of the market.

The real 'serious money'; pension funds, sovereign wealth, infrastructure funds, and insurance floats, manages trillions, not billions. They are desperate for stable 8-12% yields. A mechanism that offers a capped 3x return (roughly 12% IRR over 10 years) is not unattractive; it is a goldmine for the majority of global capital. We don't need to please the gamblers in Silicon Valley; we need to unlock the patient capital in Zurich and London.

2. Confusing extraction with compensation

You said: 'Self-owned firms are not a solution because the profit... will now just be extracted by those inside.'

This is semantic judo. When a worker keeps the value they created, that is not extraction, that is earnings. Extraction is when value is removed by someone who didn't create it (rent-seeking).

Your argument essentially boils down to: 'The problem with ending feudalism is that the peasants will just eat all the grain themselves instead of giving it to the Lord.'

Yes. That is exactly the point.

[Staples]

45 minutes ago, Bjorn K Holmstrom said:

To answer @Staples: Who will go down into the mines? The people getting paid $200k/year to do it, because the mine's profit is going to the miners instead of a pension fund in New York. Profit is still the motivator; we just changed who receives it.

You won't have your workers without investors.

27 minutes ago, aurum said:

No serious large investor would accept 3x returns.

Exactly. 

2 minutes ago, Bjorn K Holmstrom said:

we need to unlock the patient capital in Zurich and London.

Patient capital isn't real. That wealth is debt, which is fake. If you measure our economics in real wealth, the planet is incredibly poor.

Capitalism is the ultimate fake wealth machine. But fake wealth still beats nothing.

[aurum]

6 minutes ago, Bjorn K Holmstrom said:

1. Confusing venture capital with the market

You said: 'No serious large investor would accept 3x returns.'

You are describing venture capital (which needs 100x returns to offset a 90% failure rate). VC is a tiny, loud fraction of the market.

The real 'serious money'; pension funds, sovereign wealth, infrastructure funds, and insurance floats, manages trillions, not billions. They are desperate for stable 8-12% yields. A mechanism that offers a capped 3x return (roughly 12% IRR over 10 years) is not unattractive; it is a goldmine for the majority of global capital. We don't need to please the gamblers in Silicon Valley; we need to unlock the patient capital in Zurich and London.

The "patient" capital you describe will never invest in innovative, highly-competitive, powerful companies. You will not get the next Tesla, OpenAI or other companies that require large, long-term risk with capped returns. 

The capital you are describing will invest in safe, low innovative firms. 

Those "gamblers" in Silicon Valley are the ones that actually create innovative things. They are needed, and a society that disregards them will pay the price.

6 minutes ago, Bjorn K Holmstrom said:

2. Confusing extraction with compensation

You said: 'Self-owned firms are not a solution because the profit... will now just be extracted by those inside.'

This is semantic judo. When a worker keeps the value they created, that is not extraction, that is earnings. Extraction is when value is removed by someone who didn't create it (rent-seeking).

Your argument essentially boils down to: 'The problem with ending feudalism is that the peasants will just eat all the grain themselves instead of giving it to the Lord.'

Yes. That is exactly the point.

This shows your actual agenda, which is redistribution of resources to those at the bottom. You are assuming those at the top are parasitic, while workers are the actual value-creators and not exploitative.

This is incorrect.

[Bjorn K Holmstrom]

You are conflating management with rent-seeking, and commercialization with innovation.

1. The gambler fallacy
You claim Silicon Valley gamblers create the innovative things.
Incorrect. The gamblers package the things. The patient capital created them.
The internet, GPS, touchscreens, voice recognition, lithium-ion chemistries, and the transformer model (Google research); the bedrock of Tesla and OpenAI, were funded by state/university grants (patient capital).
VCs didn't invent the digital highway; they just built the toll booths.
We don't need 100x returns to innovate. We need 100x returns to satisfy financial bubbles. There is a difference.

2. The parasite projection
You accuse me of wanting redistribution. No. I want circulation.
You are assuming that capital allocators and shareholders are the same thing.

- Active leaders/founders (management) are workers. In an NDE, they can be paid millions if they deliver value. That is healthy.
- Passive shareholders (rentiers) are the leak. They extract value they did not create after their risk has been repaid.

My model rewards the brain (innovation/management) but starves the tapeworm (perpetual extraction).
You are defending the tapeworm because you have confused it with the brain.

[aurum]

50 minutes ago, Bjorn K Holmstrom said:

The gamblers package the things. The patient capital created them.
The internet, GPS, touchscreens, voice recognition, lithium-ion chemistries, and the transformer model (Google research); the bedrock of Tesla and OpenAI, were funded by state/university grants (patient capital).
VCs didn't invent the digital highway; they just built the toll booths.
We don't need 100x returns to innovate. We need 100x returns to satisfy financial bubbles. There is a difference.

This shows a lack of understand of the role of VC and what Silicon Valley does.

The fact that some aspects of some projects might be initially funded by "patient capital" does NOT mean VC and Silicon Valley becomes irrelevant. It doesn't work like that.

All those technologies need to be mass-scale commercialized and eventually win a significant portion of the market. That requires a business with massive amounts of capital, in the hundreds of millions, to do it.

You do NOT get that money from "patient capital". It comes from investors willing to take huge risks for huge returns, i.e your "gamblers".

And how do you know what is a good investment? This itself is an extremely powerful skill that the vast majority of people don't have.

Yes, you DO need 100x returns for innovation. Because that's the only way it is sustainable when the vast majority of your investments fail. You need a small percentage to hit a massive home-run, or you're cooked as a VC.

To not understand this is a lack of holism. VCs are structurally necessary.

Do you really think toll booths aren't needed??? 

It's like you think a table only needs three legs.

50 minutes ago, Bjorn K Holmstrom said:

2. The parasite projection
You accuse me of wanting redistribution. No. I want circulation.
You are assuming that capital allocators and shareholders are the same thing.

- Active leaders/founders (management) are workers. In an NDE, they can be paid millions if they deliver value. That is healthy.
- Passive shareholders (rentiers) are the leak. They extract value they did not create after their risk has been repaid.

My model rewards the brain (innovation/management) but starves the tapeworm (perpetual extraction).

It's fine to want to plug value leaks.

The problem is passive shareholders are NOT value leaks. You need passive shareholders because you need capital to survive.

There is no moment where "risk has been repaid".

And allocation cannot be left up to workers, because their incentive structure is different.

[Bjorn K Holmstrom]

You're making a category error between function and pricing, and confusing temporary risk with permanent ownership.

1. The booster rocket problem

I agree that high-risk capital is necessary for scaling. My critique isn't that the booster shouldn't exist, it's that in your model, it never detaches.

- Efficient system: Investors fuel the launch. Once the company reaches orbit (profitability/stability), investors are paid a healthy multiple (3x-5x) and exit. The company flies free.

- Your system: The booster stays attached forever, burning the ship's own fuel long after its job is done. That's not a launch system, it's parasitic drag.

Risk isn't infinite. When you pay off a mortgage, the bank doesn't own your kitchen forever. Why should a VC own a company forever?

2. NDEs are not nonprofits

You seem to think an NDE (non-dividend enterprise) is a charity. It's not.

- Nonprofits depend on donations and grants.
- NDEs are for-profit engines that reinvest 100% of surplus into wages, R&D, and growth.

Because they don't leak 10-20% of revenue to passive shareholders, they can outcompete extractive firms on innovation and resilience. That's a competitive advantage, not idealism.

3. Patient capital already exists, at scale

Pension funds and sovereign wealth funds (managing trillions) actively seek the stable 7-12% yields that NDEs provide. They don't need the 100x casino - they need the steady city.

Capped-return investing already works in infrastructure, municipal bonds, and housing cooperatives. We're just extending that model to the productive economy.

We're not tearing down the table. We're adding a fourth leg: exit clauses.

Because a table that can't be moved isn't a table, it's a monument.

Edited 4 hours ago by Bjorn K Holmstrom