On Democratic Economic Planning and Macroeconomic Transformation

Introduction

A vibrant academic discourse has emerged around the possibilities and conditions of democratic economic planning (e.g., Morozov 2019; Jones 2020; Hahnel 2021; Sorg 2022; Benanav 2022; Laibman & Campbell 2022; Vettese & Pendergrass 2022; Dapprich 2022; Groos & Sorg 2025). This debate holds significant importance for critical political economy amid the current organic crisis of global capitalism and its transformation. On one hand, capitalist planning forms emerging during this crisis can be better understood through insights from planning theory (Daum & Nuss 2021; Decker 2022). On the other hand, the authoritarian tendencies shaping capitalist planning and the escalating ecological crisis underscore the urgency of democratically grounded, post-capitalist alternatives, which require robust theoretical foundations (Alami, Copley & Moraitis 2023; Albert 2020).

The "New Planning Debate" has seen qualitative advancements, such as addressing theoretical foundations, developing sophisticated models, and identifying critical gaps—for instance, the societal organization of care work (e.g., Heyer 2025; Laibman 2022; Sorg 2023; Lutosch 2025). However, the debate remains focused on basic questions and models of economic planning. The issue of how to develop a democratic, post-capitalist planning system within a broader macroeconomic transformation agenda remains understudied. To bridge this "transformation gap," the article proceeds in three steps: first, outlining frameworks for a theory of post-capitalist transformation; second, developing conceptual considerations for transitioning to a post-capitalist planning system; and third, systematizing transformative instruments.

What is Transformation?

The macroeconomic shift toward a post-capitalist planning system has received scant scientific attention, despite the concept of transformation being deeply intertwined with political and academic discourse. Linner and Wibeck’s (2020) analysis of thousands of articles, government documents, and media texts distinguishes between sector-specific, gradual approaches and systemic, rapid transformation strategies. The UN’s 2030 Agenda for Sustainable Development, for instance, exemplifies a radical, systemic approach (ibid.: 223). However, mainstream debates on transformation, sustainability, and transition often neglect explicit engagement with capitalist institutions and their dismantling. Typically, both collective actors (as transformation agents) and macroeconomic systems (as transformation objects) remain underexplored (Brand 2016). A genuinely post-capitalist transformation must confront core capitalist institutions—such as the separation of wage labor and capital, competition between capitals, and the state-capital nexus—and fundamentally alter them (Decker 2020, 2025; Callinicos 2007).

Many transformation frameworks focus on economic sectors and "building blocks" (Linner & Wibeck 2020; Engler et al. 2024). This reductionist approach contrasts with an emergentist perspective, where the economy’s systemic properties arise from interconnected mechanisms rather than isolated components (Foster & Metcalfe 2012). Emergence theory is central to Marxian political economy (Pahl 2008: 121), suggesting that systemic change requires altering macroeconomic mechanisms and frameworks rather than individual sectors.

Transformation debates also lack clarity in distinguishing goals, instruments, and strategies (cf. Wright 2010; Klein 2021). While instruments may align with goals or strategies, they possess distinct materiality. For example, price controls reflect democratic coordination goals and reform strategies but function as independent policy tools. There is a need to analyze how institutional transition policies interact with systemic goals and implementation strategies.

Finally, a dynamic understanding of transformation is essential. Unlike linear models that assume a straightforward progression from initial to end states, dialectical approaches emphasize complexity, contradictions, and feedback loops (Decker 2020, 2025). Interventions in the political-economic order can trigger cascading effects, necessitating further radical changes or reversals (Patnaik 2010: 6). Gradual reforms and abrupt shifts coexist within this framework, echoing Rosa Luxemburg’s view of reform and revolution as interconnected moments in class society’s evolution (2018 [1899]: 22).

Building on these foundations, the next section addresses how an emergentist, dynamic theory of transformation can be concretized.

Political Economic Planning Under Capitalism

Under capitalism, planning occurs at private and public levels (Sorg 2023: 3f.). Firms plan to extract profit, while states plan to secure capital accumulation. Public planning is inherently contradictory, as capitalist economies depend on decentralized private decisions amid systemic interdependence. Uncertainty generates emergent "market forces," to which firms and states react through planning (ibid.; Heyer 2025; Devine 2002).

Post-capitalist planning eliminates this uncertainty via centralized-decentralized coordination, replacing market forces with politically directed public planning (ibid.). Such a system abolishes private control over capital, ending capitalist dominance.

To analyze the transition to post-capitalist planning, we must differentiate between general public planning and political economic planning under capitalism. Public planning relies on the state’s "relative autonomy" (Poulantzas 2002: 47f.) from private capital, as stable frameworks for capitalist planning require mediating competing interests (Offe 1972: 69ff.; Jessop 2002: 40). Public planning balances private capital interests while securing accumulation, yet it can increasingly clash with them by prioritizing political goals—though constrained by reliance on capital-generated surplus value. Political economic planning under capitalism is defined by the subordination of capital interests to political priorities, marking a shift toward post-capitalism.

A post-capitalist planning system necessitates reconfiguring the political-economic order through new institutions (e.g., constitutional, legal, and political structures). This transformation may occur incrementally rather than through abrupt revolution. For instance, while the German constitution does not explicitly endorse capitalism, capitalist institutions like property rights are entrenched (Krölls 1988; Decker 2021). Political economic planning under capitalism would aim to steer investment dynamics, sparking conflicts with pro-capital institutions. Resolving these conflicts requires institutional frameworks that democratize planning, replace private capital control with public coordination, and establish financing mechanisms independent of private accumulation.

The transition to democratic planning can be conceptualized in three phases: (1) intensifying political economic planning under capitalism; (2) establishing post-capitalist institutional frameworks; and (3) advancing planning within post-capitalism.

Instruments and Transition Phases of Transformation

The abstract transition to post-capitalist planning can be concretized through instruments of political economic planning. Public planning traditionally involves fiscal and monetary policies to secure accumulation (e.g., growth, employment). Political economic planning extends this by shaping investment structures, using indirect and direct methods. Indirect approaches include altering firms’ informational environments (e.g., indicative planning) or using tax incentives and credit policies (Devine 1988: 40ff.). Direct methods involve public contracts, R&D funding, price controls, and subsidies (ibid.: 54ff.). Legal regulations (e.g., banning combustion engines, restructuring finance) also steer investments.

These instruments align with "new industrial policy" (Bulfone 2022), which reconfigures state and private interests without subordinating capital (Abels & Bieling 2022). This marks the first stage of political economic planning, where public and private planning coexist. Conflicts arise when policies challenge capital interests (e.g., taxing wealth to fund green subsidies).

The second stage involves public control over investment decisions, such as nationalizing key sectors (e.g., banking) to shape credit allocation. Intermediate forms include partial public dominance via state-owned enterprises or investment funds. For example, Labour’s 1974 "National Enterprise Board" proposed nationalizing leading firms to influence sector-wide prices and investments (Labour 1974; Warner 2022). Public control depends not only on ownership but also on coordination institutions and narratives.

These stages are not linear. As Luxemburg noted, elements of future societies under capitalism often take forms antithetical to socialism (2018 [1899]: 61). Public planning can reinforce capitalism (e.g., subsidizing geopolitically strategic firms) while raising questions about private ownership amid state financing. To assess whether planning advances post-capitalist transformation, three dimensions are key: (1) public control over investments, (2) subordination of private capital interests, and (3) democratic decision-making at firm and macroeconomic levels.

Political economic planning under capitalism is contradictory: state apparatuses depend on private surplus value while undermining it. Capital strikes and flight may follow anti-capital policies, necessitating capital controls or socialization. This marks a transition to a new economic form, transforming domestic state-capital conflicts into international systemic rivalries (Decker 2025; Elias-Pinsonnault et al. 2023). The timing and dynamics of this transition require scenario-based analysis.

Conclusion

This article addresses the "transformation gap" in planning debates by outlining conceptual foundations for a dynamic, emergentist theory of post-capitalist transformation. It distinguishes public and political economic planning under capitalism, proposes three transformation phases and two planning stages, and identifies instruments while reflecting on contradictions.

Future research should detail how instruments interact, their intended/unintended effects, and conflicts with existing legal frameworks. It must also explore foundational policies and institutions for state transformation, while linking instruments to goals (planning models) and strategies (actors, power relations).

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