On Democratic Economic Planning and Macroeconomic Transformation

Introduction

A dynamic academic debate has emerged around the possibilities and conditions of democratic economic planning (see e.g. Morozov 2019, Jones 2020, Hahnel 2021, Sorg 2022, Benanav 2022, Laibman & Campbell 2022, Vettese and Pendergrass 2022, Dapprich 2022, Groos & Sorg 2025). In the current phase of the organic crisis of global capitalism and its transformation, this debate is of central importance for critical political economy. On the one hand, forms of capitalist planning are emerging in this crisis phase, which approaches from the planning debate can help better understand (Daum & Nuss 2021, Decker 2022). On the other hand, forms of democratic and post-capitalist planning are becoming increasingly urgent in the context of the authoritarian shaping of this capitalist planning and the intensification of the ecological crisis, requiring scientific grounding (Alami, Copley & Moraitis 2023, Albert 2020).  

In the "New Planning Debate," a qualitative advancement can be observed, such as defining theoretical foundational problems, developing more complex models, and identifying and addressing key gaps, for example, regarding the societal organization of care work (see, e.g. Heyer 2025, Laibman 2022, Sorg 2023, Lutosch 2025). At the same time, the debate primarily revolves around basic questions and models of economic planning. The question of how or through which instruments a democratic and post-capitalist planning system, embedded in a broader agenda of macroeconomic transformation, can be developed remains underexplored. To make this "transformation gap" in the planning discourse more discussable, the article proceeds in three steps. First, with a side glance at the existing debate around (socio-ecological) transformation, it discusses general frameworks of a theory of post-capitalist transformation. In a second step, fundamental conceptual considerations regarding a transition to a post-capitalist planning system are developed. Building on this, a third step provides a more concrete presentation and systematization of the instruments of transformation.  

What is Transformation?

The macroeconomic transformation toward a post-capitalist planning system has been little scientifically investigated and elaborated, even though the concept of transformation is hardly conceivable without political and academic debates. For example, an empirical study of several thousand scientific articles, government documents, and media texts by Linner and Wibeck (2020) distinguishes sectorally limited and gradual approaches from systemic and rapid transformation approaches. The UN 2030 Agenda for Sustainable Development in this schema serves as an example of rapid and systemic transformation, i.e., a comparatively radical variant of the transformation concept (ibid.: 223). As the critical transformation debate correctly notes, the mainstream of transformation, transition, sufficiency, and sustainability debates lacks an explicit engagement with the institutions and mechanisms of the capitalist mode of production and its overcoming. Generally, (collective) actors as subjects of transformation and macroeconomic systems as objects of transformation are underexamined (Brand 2016). Transformation is only post-capitalist transformation if it addresses the central institutions of capitalism—such as the institutional separation of wage labor and capital, capitals among themselves, and the totality of capitals and the state—and transforms them (Decker 2020, Decker 2025, Callinicos 2007).  

Furthermore, many transformation approaches are structured along sectors and "building blocks" of the economy (Linner & Wibeck 2020, Engler et al. 2024). This tendency toward reductionism fundamentally differs from an emergence-theoretical approach, in which the properties or dynamics of the economy as a complex overall system are not directly reducible to its individual components (Foster & Metcalfe 2012). Emergence is an ontological foundation of Marxian political economy (Pahl 2008: 121). In this view, the properties of the system to be generated through transformation would not primarily be achieved by changes at the level of the system's elements (i.e., individual sectors or building blocks of the economy) but at the level of the macroeconomic mechanisms and framework conditions permeating the system.  

The transformation discourse also lacks an explicit and conscious differentiation between the goals, instruments, and strategies of transformation (cf. Wright 2010; Klein 2021). Instruments contain aspects of the goal or are meant to realize parts of the goal; simultaneously, they contain aspects of strategies in the sense of a means-end relationship. However, instruments are not identical to goals and strategies. Price controls, for example, carry an aspect of the goal of a democratically coordinated economy and the aspect of a specific reform strategy, but they have an independent materiality compared to the goal and strategy and should therefore be analyzed as transformation instruments in their own right. There is a lack of concrete description of institutional transition policies and their connections and contradictions with systemic goals on the one hand and implementation strategies on the other.  

Finally, the importance of a dynamic understanding of transformation must be emphasized. While a linear understanding of transformation implies a clear and straightforward progression from an initial state to an end state, a dynamic or dialectical understanding of transformation emphasizes the complexity, contradictoriness, and interactions that can arise in a transformation process (Decker 2020, 2025). In this conception, changes or interventions in the political-economic order lead to dynamic feedback effects that force further, potentially radical changes or the reversal of changes (Patnaik 2010: 6). Gradual and abrupt elements of transformation are conceived in this dialectical view as part of a contradictory whole. Rosa Luxemburg pointed to this internal connection between reform and revolution as "different moments in the development of class society" (2018 [1899]: 22).  

Building on these basic considerations on the understanding of transformation, the question arises of how an emergence-theoretically grounded theory of dynamic transformation and its instruments can be concretized. For this, fundamental conceptual considerations are necessary, which will be addressed in the following section.  

Political Economic Planning Under Capitalism

Under capitalism, economic planning occurs at private and public levels (Sorg 2023: 3f.). Enterprises plan with the goal of extracting surplus value or profit from the production process; states plan to secure overall accumulation. Public economic planning is a highly contradictory and complex undertaking, as economic activity under the dominance of the capitalist mode of production results from the sum of countless isolated investment decisions in a system of separated private production alongside universal interdependence. In this systemic uncertainty, emergent system dynamics ("market forces") arise, to which enterprises and states react through public and private planning (ibid., Heyer 2025, Devine 2002).  

Post-capitalist planning eliminates this fundamental uncertainty and coordinates investment decisions through centralized-decentralized coordination mechanisms. Emergent market forces are to be overcome, and public planning can be genuinely directed toward political goals (ibid.). A post-capitalist economic system has abolished private and uncoordinated control over capital to the extent that it no longer dominates economic activity, and the economy is thus no longer capitalist.  

For the question of establishing a post-capitalist planning system—i.e., the question of transformation—a distinction between general public planning and, in the narrower sense, political economic planning under capitalism is necessary, alongside the fundamental distinction between post-capitalist and capitalist planning. Public planning presupposes a "relative autonomy" (Poulantzas 2002: 47f.) of the state apparatuses from the interests of private enterprise planning, as the stable framework so important for private capitalist planning, which the state provides by mediating between different capital interests and compromises with wage earners, would be unthinkable under a political structure immediately tied to capital interests and thus necessarily volatile and conflict-laden (ibid., Offe 1972: 69ff., Jessop 2002: 40). In the relative autonomy of the state apparatuses, public planning is fundamentally in tension with the level of private planning by individual capitals, whose interests it must balance in a complex overall context. Public planning remains capitalist insofar as it operates within the capitalist framework and to secure overall accumulation. Simultaneously, it can enter into growing contradiction with the level of private planning by subordinating public planning to political goals and opposing the interests of individual capitals and capital factions—though this naturally has limits due to the fundamental dependence of the state apparatuses on the surplus value extraction by individual capitals. Nevertheless, forms of political economic planning under capitalism can be identified, defined by the degree to which capital interests are subordinated to political interests. Depending on the extent and concrete design of political economic planning under capitalism, one can speak of a transition or internal transformation toward a post-capitalist planning system.  

However, the full realization of a post-capitalist planning system requires a fundamentally different constitution of the political-economic order than under capitalism, which must be established through the creation of corresponding institutions (constitution, political apparatuses, and mechanisms). This can occur in several steps and need not necessarily be conceived as a revolutionary act in the sense of a short-term process (lasting weeks or months). Nevertheless, this involves an institutional reordering of the political-economic constitution of society. The implications of this reordering for the concrete "constitution" in the sense of the central state legal document raise complex and concretely discussable questions—for example, the German constitution is not explicitly committed to the capitalist economic form, yet key institutions of capitalism (e.g., property rights) are enshrined in the constitution or guaranteed by prevailing jurisprudence (Krölls 1988, Decker 2021). Political economic planning under capitalism aimed at transforming toward a post-capitalist planning system would seek to politically control and steer the investment dynamic. In this internal transformation, massive conflicts would arise, particularly with the political institutions in which capital interests are articulated. These conflicts would need to be defused and sustainably stabilized in the interest of a democratically planned, post-capitalist economic form to create an institutional framework in which a planning system can be further developed. For this, the private control over capital would need to be replaced by a public coordination of investment decisions through corresponding institutions, and a financing basis for these institutions independent of private capital accumulation would need to be created.  

Thus, a transformation toward a democratic planning system can be thought of in three phases. First, the intensification of political economic planning under capitalism. Second, the establishment of a post-capitalist institutional framework enabling advanced forms of economic planning. Third, the further development of a planning system within post-capitalism.  

Instruments and Transition Phases of Transformation

The abstract description of the transition or transformation to a post-capitalist planning system can be concretized by elaborating the instruments of political economic planning under capitalism. Public economic planning, on which political economic planning in the narrower sense builds, can classically be distinguished into fiscal and monetary forms. Fiscal policy concerns the steering of state revenues and expenditures and pursues generalized goals to secure overall accumulation (e.g., economic growth, high employment levels). Political economic planning begins where public planning moves beyond these broader economic goals and aims at a stronger influence on investment structures. Here, a distinction can be made between more direct and indirect forms of influence. Indirect forms aim to politically influence private investment decisions by altering the informational environment of enterprises and through political communication (including indicative planning) (Devine 1988: 40ff.). Private investment decisions can also be influenced by economic instruments (tax incentives, favorable credit conditions, etc.); insofar as the profit-risk profile of enterprises changes here and state fiscal policy directly impacts surplus value production, the influence on investment decisions takes on a more direct character. This intensifies through public contracts and procurement (guarantees), state-organized or funded research and development, price regulation or capping, and culminates in the immediate provision of investment funds for private investments through direct subsidies (ibid. 54ff.). Private investments can also be very effectively influenced by legal regulations, such as banning certain products (e.g., combustion engines) or re-regulating financial instruments, credit allocation, trade, or competition.  

The described instruments are partly reflected in the new industrial policy (Bulfone 2022). Here, capital interests are not subordinated; instead, a complex reconfiguration of state and private-sector interests occurs (Abels & Bieling 2022). One can speak of a first stage of political economic planning under capitalism, where investment decisions are politically influenced but no systematic subordination of capital interests takes place. The publicly planned change in investment structures must be reconciled with the private planning of capitals and their search for profitable investment opportunities. Depending on how, for example, tax incentives are financed (e.g., through taxation of capital and private wealth) and how the investment structure concretely changes (e.g., through the destruction of fossil capital), even if subsidy policies serve the interests of certain capital factions, they can simultaneously conflict with capital interests.  

However, an internal transformation toward a post-capitalist planning system begins only at a second stage of political economic planning, which moves beyond mere public influence on private investment decisions and subjects investment decisions themselves to a form of public control. "Taken to its conclusion," this occurs through comprehensive nationalization and socialization of private capitals, particularly the banking sector, thereby directly influencing the credit structure of the entire economy. The comprehensive socialization of capitals necessarily entails the development of centralized-decentralized planning mechanisms and a corresponding transformation of the state.  

Mitigated forms of this second stage of political economic planning under capitalism are conceivable, where investment decisions remain partly private but are nevertheless dominated by public investment decisions. The "National Enterprise Board," proposed by Labour in 1974, for example, envisioned nationalizing a leading enterprise in every major sector of the British economy to use its market power to set prices and investment conditions for its private-sector competitors (Labour 1974, Warner 2022). Comprehensive investment programs through public investment funds or direct central bank investments can also, in combination with the aforementioned first-stage instruments of political economic planning, lead to dominating the investment dynamic. Public "control" or "domination" of the investment dynamic is determined not solely by ownership structures but also by the institutions and instruments of macroeconomic coordination and by powerful public narratives.  

The two "stages" of political planning and the establishment of a post-capitalist planning system within a new economic form are not to be thought of as two linear, sequential stages. As Rosa Luxemburg argues in Reform or Revolution (2018 [1899]: 61), a "peculiarity of the capitalist order" lies in the fact that "all elements of the future society first assume a form within it that does not bring them closer to socialism but distances them from it." Without adopting the definitive character of this statement, it makes the contradictory character of political economic planning under capitalism more comprehensible. Public planning, such as subsidizing geopolitically relevant enterprises, strengthens capitalist principles by securing the profits of these enterprises and driving imperialist competition; simultaneously, it raises questions about the private constitution of capitals under their increasing public financing and the political goals of the economy. To critically analyze the character of political economic planning and distinguish a politics of capitalist transformation from a politics of internal transformation toward a post-capitalist planning system, three interrelated dimensions can be analyzed: the extent of public control over investment decisions, the extent of subordination of private capital interests in investment decisions, and the extent of democratic determination of investment decisions (both at the enterprise and macroeconomic levels).  

Political economic planning under capitalism is fundamentally contradictory because the state apparatuses transforming to establish political planning remain dependent on the private surplus value production of enterprises, which they simultaneously undermine. Policies against capital interests lead, on a material level, to capital flight and capital strike—i.e., the relocation and systematic withholding of investments and credit (Sorg 2023: 4). Addressing this problem through capital controls and ultimately the comprehensive socialization of enterprises and political steering of credit structures would then already be a step that can be considered a transition to a new economic form, moving beyond internal transformation. Here, the intrastate conflict between the political structure and capital transforms into an interstate conflict between different political-economic systems (Decker 2025, Elias-Pinsonnault et al. 2023). In stage two of political economic planning under capitalism, the question of a transition to a new economic form (phase two of post-capitalist transformation) can thus arise—either partially or generally—which cannot be considered independently of the international dimension. The concrete points at which this question arises and the levels or interplay of levels at which this transition occurs are extremely complex questions requiring discussion through concrete scenarios.  

Conclusion

The article has addressed the "transformation gap" in the planning debate and attempted to lay conceptual foundations for a theory of transformation toward a system of democratic economic planning. To this end, it advocated for an emergence-theoretically grounded, dynamic theory of transformation that places the instruments of transformation at the center. Subsequently, the distinction between general public planning and political economic planning under capitalism was introduced, differentiating between three phases of transformation and two stages of political economic planning under capitalism. Concrete instruments of transformation were identified, while reflecting on the contradictory and dynamic character of transformation within capitalism.  

A more concrete understanding of dynamic transformation processes toward a post-capitalist planning system would require a detailed description and elaboration of the mentioned and further instruments, their combined application, and intended and unintended effects. A more concrete transformation model could focus on the instruments of internal transformation while simultaneously examining which conflicts arise with the existing legal framework and at which points alternative foundational policies and political institutions would likely need to be created. This connects to the question of state transformation and post-capitalist political institutions. Furthermore, the instruments of transformation, which were the focus of this article, need to be discussed more strongly in relation to the goals of transformation (i.e., planning models) and the strategies of transformation (i.e., the question of actors and power relations).

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