Capitalism as an economic system is untied to any technology, resource endowment or political arrangement. Its versatility made it capable of extraordinary morphological changes, from the late medieval ‘games of exchange’ (Braudel) to classical industrial capitalism (Marx) and its socially oriented, non-laissez faire version (Keynes), down to the late twentieth-century global financial capitalism and, more recently, its tentative retrenchment within cultural and politically homogeneous spheres. Morphological change is inherent in capitalism, and permitting its evolution in the face changing opportunities, building on cost differentials (Hicks), new trade routes, scientific and technological progress, astonishing adaptability across widely different institutional set ups and political regimes. Thanks to its versatility, capitalism has sustained the transformation from the pre-industrial to the industrial (and even post-industrial) organization of material life, with the accompanying changes of energy regimes, from the organic energy base of the pre-industrial era to the fossil fuel regimes dominant since the First Industrial Revolution.

Decarbonization is another momentous challenge for global capitalism. Will capitalistic economic systems be able to trigger and sustain it, as with previous revolutions in technology, forms of productive organization, and energy regimes?  Which changes in the morphology of capitalism may be needed to achieve that objective?  Our paper addresses those questions by reviving an unconventional, yet we believe highly promising, approach. Decarbonization involves transforming the interfaces between resources, technology, and economic organization. Those interfaces comprise manifold layers of interdependence between sectors of the economy and between the time horizons in which structural change should take place. It is impossible to visualize this complex pattern of interdependent sectors and intertwined time horizons with the standard tools of economic analysis. Microeconomics does not assign a significant role to the opportunities and bottlenecks that arise from within sectoral interdependencies. Macroeconomics glosses over the internal structure of economic relationships making it impossible to visualize the dynamic triggers and constraints that make certain economic structures more responsive than others to external conditions. It is here that the history of economic thought comes into play for it may add to conventional economic analysis by calling attention to relatively neglected yet fundamental tools of investigation.

This paper re-appraises the contribution by the French economist Albert Aftalion (1874–1956) who emphasized intermediate levels of aggregation (the “meso” approach) by differentiating between the time profiles of economic activities and their differential speeds of reaction to dynamic impulses. A characteristic feature of Aftalion’s analytical framework is the relationship between the different time layers of a given causal structure. Local reactions to factors of change may be different and may occur at different speeds across different sectors. The economic system may react differently depending on how its sectors are related to one another in each context. On the other hand, each new state of the economy is likely to generate filter-down effects that may differently affect different parts of the economy.

Aftalion provides a rigorous analytical framework for investigating this complex web of interdependencies. His approach provides invaluable tools for analyzing decarbonization paths, which are likely to affect in different ways and within different time periods various sectors of the economy (at the regional, national, and international levels). The questions raised by Aftalion in his analysis of late 19^th and early 20th centuries’ industrial fluctuations suggest new questions for the 21^st-century economies aiming at switching to non-fossil fuel energy regimes. At the core of Aftalion’s approach to industrial fluctuations is his identification of variations in the length of production processes, especially in capital-intensive sectors of the economy, as driving of patterns of structural transformation through the complex intersectoral interdependencies they create. The switch to a non-carbon economy will be subject to similar constraints on the sequencing of structural changes for different sectors while also being subject to strict requirements for implementing effective climate change mitigation. One key lesson arising from Aftalion’s analysis of industrial capitalism is that structural change occurs along multiple co-existing time horizons. Decarbonization involves a complex interplay between two different types of time horizon: the time horizons required for structural change to occur in the different sectors of the economy, and the time horizon required for decarbonization to occur at the speed needed to avoid climate crises. This interplay is central to decarbonization, and it is likely to require a new balance between the invisible hand of markets and the visible hand of states and other collective bodies.