The core approach that competitive markets produce social efficiency was yielding diminishing returns and "has thwarted, rather than facilitated, advances in analyses of the labour process, externalities, public goods, preference development and institutional structures."
In conclusion they argued that in clarifying the reasons why traditional models were deficient they had cleared a path that suggested probable directions for an alternative paradigm.
Their next step, the formulation of a relatively detailed "full" vision of an economy based upon participatory democratic planning was their attempt to provide an answer to this challenge.
In 1991, as the Soviet bloc crumbled and capitalism emerged triumphant Albert and Hahnel published "The Political Economy of Participatory Economics", a model of an economy based upon allocation by participatory democracy within an integrated framework of nested production and consumption councils that was proposed as an alternative to contemporary capitalism, centralized state socialism and market socialism.
In terms of the current day ecological problems Hahnel acknowledges that green and pollution taxes are likely to be more effective than alternative schemes such as the marketization of natural resources using permit systems or regulatory "command and control" methods.
As disparate oppositional groups planned and unified for what were to be momentous demonstrations against the World Trade Organization meetings in Seattle in 1999, Hahnel was among the leading economic analysts educating popular movements.
Hahnel acknowledged core insights within comparative advantage theory, noting that "if opportunity costs of producing goods are different in different countries there are potential gains from specialization and trade."
However, he explained that the potential gains are realized only under specific conditions, and expounded on the many real world factors that can account for significant efficiency losses.
There is a noticeable turn in his recent work towards consideration of mid-term strategies such as global Keynesianism and living wage reforms while maintaining his long-term sights on a libertarian socialist economy based on equitable cooperation.