ABSTRACT
This chapter aims to elucidate the theoretical underpinnings of the intriguing intellectual journey undertaken by Karl William Kapp from the early 1930s up to the final, highly elaborated version of the theory in Social Costs of Business Enterprise. It describes the enduring significance of Kapp’s highly elaborate theory of social costs for several interdisciplinary-oriented research fields in the social sciences, namely, environmental and occupational safety and health economics, neo-Schumpeterian approaches to innovation, and preference manipulation and deception as market and political failures. Kapp himself never endeavored to provide an outline of his theory as a critical theory of capital, revolving around the institutionalized mechanisms of asset-specific cost-shifting and obstruction of efficiency. Kapp always considered the causal mechanisms at the origin of social costs, their concrete adverse repercussions, and the problem of economic policy as parts of an undivided, interdependent complex whole.
