Regenerative Capital Theory: Beyond Debt, Equity, and Grants

This paper introduces regenerative capital as a distinct paradigm of economic organisation: non-extractive, non-depletive, multi-cycle capital that strengthens institutions over time. It generalises the logic of Perennial Social Capital (PSC) — a zero-interest, non-liability, soft-repayable, indefinitely recyclable capital class — and unifies its behaviour across public finance, philanthropy and institutional economics. The argument rests on a taxonomy of what each incumbent class takes. Debt extracts a payment and converts operational volatility into financial stress; equity extracts a surplus and with it a claim on direction; grants extract nothing while consuming the principal. Regenerative capital removes all three simultaneously, and that absence is what permits the same base to be deployed across many cycles. It therefore stands orthogonally to debt, equity and grants rather than between them, and it inherits PSC's formal apparatus: capital evolution, social value productivity, the System Internal Rate of Return and the System Value Multiplier. âš ï¸ The pool still declines. At R