The evolution of capitalism: Mapping the seven generations of business dynamics

Capitalism has evolved into its seventh generation. This study proposes a historical perspective in which each generation of capitalism reflects distinct political and institutional transformations. The model combines relative and absolute temporal dimensions to analyze these transformations. Relative ages help delineate phases, capturing patterns of industrial emergence and extinction. The first generation—mercantilism—began in the mid-17th century, followed by the Industrial Revolution in the late 18th century. These early generations lasted for unusually long periods. From the third generation—imperialism—to the sixth generation, each generation spans approximately 31 to 45 years. The fourth generation corresponds to the Interwar Period, and the fifth generation corresponds to the Cold War era, which was shaped by ideological rivalry and state-led industrial policies across capitalist and socialist blocs. This phase was succeeded by the sixth generation—globalism—characterized by liberalization, deregulation, and global integration. A nonlinear regression analysis and a segmented linear regression analysis estimate that the current, seventh generation—deglobalization—may last between 26.8 and 31 years. The shortening generational span indicates that capitalism is increasingly shaped by deliberate human intervention rather than evolutionary selection. The study concludes that long-term strategic planning will be essential for firms to adapt and survive future capitalist configurations.