Preface

PREFACE TO SECOND EDITION

Since publishing the previous version of The World After Capital, I have met with people across the political spectrum to discuss the ideas from the book. When I present these in person, I emphasize that the ideas are neither left nor right but forward (credit to Scott Santens who first used this phrase about Universal Basic Income). My writing, however, at times has alienated readers who identify as being more on the right. In this new edition, I am therefore making an extra effort to emphasize how both my diagnosis of where we are at and my suggestions for how to move forward do not map onto the existing political divides. Instead this is a new way of understanding our challenges and opportunities that can be the basis for movements and parties that are not trapped in industrial age ideology.

Two big factors contributing to change in the world are artificial intelligence (AI) and the climate crisis. Both already feature prominently in The World After Capital and have accelerated significantly since the first publication. In AI the scaling up of models unlocked significant new capabilities with systems that now routinely outperform humans in a wide range of tasks. Especially the so-called generative large language models, such as GPT from OpenAI and Claude from Anthropic, have surprised everyone with their performance. On the side of the climate crisis 2023 was the hottest year on record by far, and 2024 – as of this writing – is on track to exceed that.

The fundamental insights of The World After Capital have held up well. I recorded an audio version of the first edition last summer and was pleased to find that current events have confirmed the need for profound change. I am excited to be issuing this second edition with Piper Verlag in Germany (initially in German and then also in English). This will unlock new channels of distribution bringing The World After Capital to a broader audience.

ORIGINAL PREFACE

As a venture capitalist, I’m often asked: “What’s the next big thing?” People tend to ask this when they’re looking for a trend in technology and expect me to tell them about robotics or virtual reality. But that’s a boring interpretation of the question. These trends come and go as part of hype cycles that represent the waxing and waning of media interest in a particular technology. Instead I answer, “Oh, nothing much—just the end of the Industrial Age.” This momentous change is the subject of this book.

The World After Capital unabashedly tackles some truly big subjects. To explain why the Industrial Age is ending and what is coming next, I will examine such matters as the nature of technology and what it means to be human. It might seem a wildly ambitious thesis, but I argue that we are facing a transition as profound as the one which took humanity from the Agrarian Age to the Industrial Age, so nothing less than “wildly ambitious” will do.

The current transition has been made possible by the advent of digital technology, so it is essential that we understand the nature of this technology and how it differs from what preceded it. It is also essential that we take a closer look at the philosophical foundations of what we want to accomplish—after all, we have the opportunity to decide what will follow the Industrial Age. In The World After Capital, I argue that we are now entering the Knowledge Age, and that to get there we must focus on the allocation of attention rather than capital.

Markets fail at allocating attention because prices cannot exist for directing our attention to the problems and opportunities most crucial for the survival and thriving of humanity. The climate crisis, for instance, is both more severe and more imminent than most people realize, and it is a direct result of our failure to pay attention. How quickly we address this crisis will determine to a great extent the shape of the current transition. If we do not make drastic changes quickly, getting to the next age will be even more painful than the transition to the Industrial Age, which started in the eighteenth century, involved numerous violent revolutions, and didn’t conclude until the end of the Second World War.

The transition from the Industrial Age is already underway, and has caused massive disruption and uncertainty. Many people fear change, and react by supporting populist politicians who promote the simplistic message that we should return to the past. This is happening all over the world: We saw it with the vote in the 2016 UK referendum to leave the European Union and with the election of Donald Trump as President of the United States in the same year. I started writing The World After Capital before both of those events, but they underline the importance of a future-oriented narrative that shows a path forward for humanity. Going back is not a viable option and never has been. We did not continue foraging for food after the invention of agriculture, nor did we remain farmers after the invention of industry (farming is still important, of course, but it is carried out by a tiny percentage of the population). Each of these transitions required us to find new sources of purpose. As we leave the Industrial Age behind, we can no longer derive purpose from a job or an ever-growing consumption of material goods. Instead, we need to find a purpose compatible with the Knowledge Age. I feel incredibly fortunate to have found my purpose in advancing innovation through investing in startups, as well as in examining why this transition is happening now and suggesting how we might go about it.

In a strange and wonderful way, much of my life’s work so far has brought me to this point. As a teenager in my native Germany in the early 1980s, I fell in love with computers. I started writing software for companies and then studied economics and computer science as an undergraduate at Harvard, writing my senior thesis on the impact of computerized trading on stock prices. After graduating, I worked as a consultant and experienced the impact of information systems on the automotive, airline, and electric utility industries. As a doctoral student at MIT, I wrote my dissertation on the impact of information technology on the organization of companies. As an entrepreneur, I co-founded an early internet healthcare company. And as a venture investor, I have had the good fortune to back companies that provide transformative digital technologies and services, including Etsy, MongoDB and Twilio. You might be wondering why I would choose to write this book as a VC—after all, surely it’s a distraction from finding and managing investments in startups? However, working with startups gives me a window into the future: I get to see trends and developments before they become widely understood, and this puts me in a good position to write about what is going to happen. At the same time, writing about the future that I would like to see will help me find companies that can help bring that future about. I have written The World After Capital because what I see compels me to do so, but I am also confident that writing it has made me a better investor.