Economic Revolution
There is only one solution for today’s economy.
It will be a “Velvet Revolution.” Much like the one in 1989 in Czechoslovakia. There is no need to change, abolish, forbid, or nationalize anything. Every user, every company, every region, and every state will voluntarily decide whether to join the project.
What is needed? A complementary currency—an internet-based, local currency with programmable convertibility. Not a decentralized currency like Bitcoin. There will be no need for mining. It will be distributed through Universal Basic Income (UBI).
The point? Utilizing local resources. With an influx of money, a region prospers; with an outflow of money, it declines. This ‘Klondike effect’ — where money rushes in and creates a boom — has worked unfailingly for centuries. Always and everywhere. We just need to harness it. For that, we need the right tools. Prosperity in a region is driven not by reforms, innovation, or quality education — nor by taxation — but primarily by the circulation and retention of money. Classic local resources include land, labor, or a factory. Today, energy has been added to that list. Robotization, automation, AI, 3D printing, and modular manufacturing are the local resources of the future. The immediate future.
Money needs to flow into regions—and more importantly, stay there. This is not possible with dollars. That’s why we need a local currency. In every region, there are unused capacities capable of production. And there is a willingness among consumers to buy local products. What is missing is the glue—money.
A fully convertible currency? That’s precisely where past local currencies have failed. Programmable convertibility? Yes. The currency must allow for payments in a London pub as well as in a small shop in the Peruvian Andes. If a region has a positive trade balance, the volume of payments outside the region will increase. And vice versa.
UBI? What else? It is the simplest and fairest way to distribute currency. When inflation is low, UBI can increase; when inflation rises, UBI automatically decreases. Simple. Multiple “inflation brakes” built into the system. Furthermore, there are natural brakes. Once material needs are met, savings begin to grow. And then there is the natural ceiling of consumption. No one buys 100 loaves of bread a day. And you don’t buy 100 cars—unless, of course, you have a private desert to store them in.
Prosperity will be entirely in the hands of local residents. Will UBI be so high that people stop working? Demand-pull inflation will arise, and UBI will automatically decrease. Inflation indicators will allow for daily monitoring and precise identification of its sources—down to the specific company and product. If inflation does not rise, within 14 years, UBI will reach the level of the average wage in that region.
Will it be complicated? Not at all. Implementation in the first district will take a matter of weeks. All it takes is a single fintech platform. The consumer will have an account, as will the companies. Companies will also have their own storefronts.
Theoretical basis? MMT (Modern Monetary Theory). The inflation control mechanism is described above.
GDP is rising — so why this ‘comedy’? Because GDP has become a Potemkin village. It serves to hide the problems of the bottom half of employees—the voters and consumers. This half — and even the decile above them — lives paycheck to paycheck. If we forget about them, they will remind us at the ballot box by supporting extremes. That is the political reason.
The economic reason is the loss of purchasing power. The great products and services devised and sold by well-paid innovators, marketers, and managers will have no one to buy them.
The West and the USA can push for innovation, reforms, and better education all they want. A more innovative company will simply replace a less innovative one. The ranking of companies will change; nothing more. For “half the employees plus one decile,” nothing will change. On the contrary, they will lose out to robots, automation, and AI. Higher taxation and higher wages? Companies will leave for lower costs. Fighting for UBI? Keep dreaming. States are drowning in debt, and there is no money for UBI. Taxing robots? Companies will laugh and move to other countries. No one will need your labor anymore.
All it takes is a single district in the world where this model starts working. Gradually, other districts, people, and companies will join. A global network of internet-based local markets will emerge.
This model offers a solution for the Rust Belt — and for all the rust belts of the world. It addresses poverty in Africa, Latin America, and Asia. It needs your support and the spreading of this idea. It needs a movement exactly like the one created for environmental protection.
The slogan: ECONOMIC REVOLUTION.