(Introduction)

Capitalism, the dominant global economic engine for the last three centuries, is not collapsing—it is metastasizing. As we step into 2025, the system stands at a critical inflection point, shaped less by pure market forces and more by technological singularity, geopolitical fragmentation, and a surging demand for social legitimacy. The era of unchecked financialization and hyper-globalization is giving way to a new, more complex and conflicted model: one defined by the "Five D's"—Deglobalization, Decarbonization, Demographics, Debt, and Digitalization.

The most immediate and disruptive force reshaping capitalism is Artificial Intelligence (AI). AI is driving a rapid shift in the ownership and valuation of capital:

• The Rise of Cognitarism: The value chain is migrating from physical production to data and proprietary algorithms. Companies that own the best models and the data to train them—the tech titans—are accumulating unprecedented wealth and power, leading to concerns about widening income and wealth inequality. AI can exacerbate existing disparities by complementing high-income workers more significantly than others, tilting the balance further toward capital returns.

• The Productivity Paradox: While AI promises massive productivity gains, the economic impact is uneven. Policymakers face the urgent task of implementing comprehensive social safety nets and retraining programs to address the potential displacement of vulnerable workers.

For decades, the core tenet of capitalism was "shareholder primacy"—maximizing returns for owners. This model is now under intense pressure, facing a fundamental legitimacy crisis driven by social and environmental concerns.

• The ESG Mandate: Environmental, Social, and Governance (ESG) metrics are moving from optional compliance to mandatory business strategy. Investors and the public increasingly demand that corporations measure success not only by financial returns but also by their impact on stakeholders (employees, communities, and the planet).

• The Green Debate: The push for Decarbonization forces companies to incorporate climate costs into their balance sheets. While "sustainable capitalism" advocates for green technology (electric cars, solar), critics argue that the inherent pursuit of exponential growth (GDP growth) is fundamentally incompatible with ecological sustainability, suggesting a necessary transition toward a "well-being economy" focused on prosperity beyond growth.

The post-Cold War commitment to an integrated global economy is waning, replaced by economic nationalism and the rise of protected trading blocs.

• Deglobalization: Geopolitical rivalries—particularly between the U.S. and China—are accelerating the retreat from globalization. Trade restrictions are soaring, and companies are shortening supply chains (reshoring or friend-shoring) to mitigate risk. This fragmentation reduces efficiency and increases inflationary pressures globally.

• The Turn to State Capitalism: In the pursuit of technological and geopolitical security, Western governments are increasingly blurring the lines between the public and private sectors. Transactions involving strategic industries (semiconductors, rare-earth minerals) now often feature direct government intervention, equity stakes, or "pay-to-play" deals, marking a significant—if quiet—turn toward a more transactional, state-influenced capitalism in the West.

In 2025, capitalism is neither collapsing nor fully renewed; it is in a state of protracted transformation and disorder.

• The Political Juncture: The system's trajectory is highly dependent on political choices. The ongoing debate centers on establishing a "next economic order" that can rein in inequality and harness the system's dynamism to address contemporary crises like climate change.

• New Metrics: To steer the system, leaders are encouraged to shift metrics away from an exclusive focus on quarterly financial returns and GDP, adopting frameworks like the U.N.'s Sustainable Development Goals (SDGs) to measure what society truly treasures.

The system that emerges will likely be less global, more regulated, more influenced by state interests, and inescapably defined by the machines that now dictate economic efficiency. Adapting to this new complexity—balancing stability with agility—is the central challenge for every corporation and policymaker today.

(Introduction)

Capitalism, the dominant global economic engine for the last three centuries, is not collapsing—it is metastasizing. As we step into 2025, the system stands at a critical inflection point, shaped less by pure market forces and more by technological singularity, geopolitical fragmentation, and a surging demand for social legitimacy. The era of unchecked financialization and hyper-globalization is giving way to a new, more complex and conflicted model: one defined by the "Five D's"—Deglobalization, Decarbonization, Demographics, Debt, and Digitalization.

The most immediate and disruptive force reshaping capitalism is Artificial Intelligence (AI). AI is driving a rapid shift in the ownership and valuation of capital:

• The Rise of Cognitarism: The value chain is migrating from physical production to data and proprietary algorithms. Companies that own the best models and the data to train them—the tech titans—are accumulating unprecedented wealth and power, leading to concerns about widening income and wealth inequality. AI can exacerbate existing disparities by complementing high-income workers more significantly than others, tilting the balance further toward capital returns.

• The Productivity Paradox: While AI promises massive productivity gains, the economic impact is uneven. Policymakers face the urgent task of implementing comprehensive social safety nets and retraining programs to address the potential displacement of vulnerable workers.

For decades, the core tenet of capitalism was "shareholder primacy"—maximizing returns for owners. This model is now under intense pressure, facing a fundamental legitimacy crisis driven by social and environmental concerns.

• The ESG Mandate: Environmental, Social, and Governance (ESG) metrics are moving from optional compliance to mandatory business strategy. Investors and the public increasingly demand that corporations measure success not only by financial returns but also by their impact on stakeholders (employees, communities, and the planet).

• The Green Debate: The push for Decarbonization forces companies to incorporate climate costs into their balance sheets. While "sustainable capitalism" advocates for green technology (electric cars, solar), critics argue that the inherent pursuit of exponential growth (GDP growth) is fundamentally incompatible with ecological sustainability, suggesting a necessary transition toward a "well-being economy" focused on prosperity beyond growth.

The post-Cold War commitment to an integrated global economy is waning, replaced by economic nationalism and the rise of protected trading blocs.

• Deglobalization: Geopolitical rivalries—particularly between the U.S. and China—are accelerating the retreat from globalization. Trade restrictions are soaring, and companies are shortening supply chains (reshoring or friend-shoring) to mitigate risk. This fragmentation reduces efficiency and increases inflationary pressures globally.

• The Turn to State Capitalism: In the pursuit of technological and geopolitical security, Western governments are increasingly blurring the lines between the public and private sectors. Transactions involving strategic industries (semiconductors, rare-earth minerals) now often feature direct government intervention, equity stakes, or "pay-to-play" deals, marking a significant—if quiet—turn toward a more transactional, state-influenced capitalism in the West.

In 2025, capitalism is neither collapsing nor fully renewed; it is in a state of protracted transformation and disorder.

• The Political Juncture: The system's trajectory is highly dependent on political choices. The ongoing debate centers on establishing a "next economic order" that can rein in inequality and harness the system's dynamism to address contemporary crises like climate change.

• New Metrics: To steer the system, leaders are encouraged to shift metrics away from an exclusive focus on quarterly financial returns and GDP, adopting frameworks like the U.N.'s Sustainable Development Goals (SDGs) to measure what society truly treasures.

The system that emerges will likely be less global, more regulated, more influenced by state interests, and inescapably defined by the machines that now dictate economic efficiency. Adapting to this new complexity—balancing stability with agility—is the central challenge for every corporation and policymaker today.