Is Society Ready to Start Truly Fixing the Economy?
Switzerland, Dubai, Singapore, and Andorra all have different stories of how they attracted wealth. The explanation for their prosperity lies in their ability to not only attract but also retain money within the state or city. Indeed, the fundamental prerequisite for prosperity is bringing money into a region and keeping it there. If a region abounds with money, it prospers. If money vanishes, the region—and its inhabitants—grow poor. This “Klondike effect” works everywhere and at all times. The Gold Rush is a textbook example of a city’s rapid prosperity followed by its decay.
Similarly, the American Rust Belt saw companies leave, followed by capital. It’s not just Detroit and Michigan that are declining, but other states in this “Rusty” corridor as well. Conversely, the famous “Taylor Swift effect” is an example of a short-term surge in prosperity, much like gentrification is an example of localized growth. In both cases, money entered the city—via fans’ wallets or the credit cards of new property owners. It is clear that using conventional methods, it is impossible to retain money, and thus prosperity, in all districts—certainly not in every single one. But can the Klondike effect be triggered and maintained artificially?
Which part of the economy is broken, why it isn’t working, why well-known solutions fail, and what needs to be done were topics I addressed a few days ago in my Substack piece: The Truth About the Economy No One Wants to Admit. To refresh your memory: the part of the economy that is failing is the one that brings no profit or generates minimal returns. This concerns the mass of low-wage employees. The Klondike effect explains why the economy fails; as money flows out, entire regions fall into poverty. In the long run, the economy cannot function correctly because the global market is a competition with 1% winners and billions of losers. That is simply the nature of competition. The right-wing emphasis on innovation, reform, deregulation, and better education is a strategy aimed at winning the competition, not at solving real problems. Conversely, left-wing demands for higher taxation or wage pressure weaken companies in the competitive struggle.
It is a stalemate—a dead end, if society continues to bow down to the current economic model. The challenges facing the Western world are reflected in elections whose results are anticipated with growing fear. The market model of the economy exhausted its evolutionary potential quite some time ago. We are in an era of revolutions, and the masses are making their discontent clear. When robotics, automation, and AI hit full force, we dare not imagine the consequences. If we want to avoid “guillotines” or “Bolsheviks,” we must start thinking about the economy in a completely different way.
Rethinking the Foundations
We must re-evaluate what we have stubbornly rejected, what we feared as “unknown,” the tools that were misused, and the opinions that influenced us despite lacking empirical backing. We need to forget the myth that “the market will solve everything” and start thinking like caretakers of the economy again. What is good for the region? How do we ensure prosperity for all? How do we use scientific knowledge for everyone’s benefit? How do we avoid global competition?
Avoiding global competition. Horribile dictu. To attack the main pillar—competition? Unthinkable. And yet, the “liberal market” is often just a slogan for the public. In the real economy, tariffs, devaluations, investment incentives, corporate subsidies, EU funds, mandatory payments, and laws protecting corporate “goodwill” from consumer complaints are used daily. Their clear goal is to protect companies from competition. The “crown jewel” of this care is the strict legal protection of intellectual property. States already anxiously protect corporate profits from competition today. Thus, considering a systemic protection from global competition is entirely legitimate. Do we want employees to have decent wages? Do we want every district to prosper? Do we want money to return to—and stay in—the regions? Protection from global competition is a vital element.
The necessary elements for a successful solution already exist. We just need to connect them correctly with one goal: bring money to the regions and keep it there.
Non-Interference — nothing in today’s economy needs to be abolished. Dollars and Euros will remain, no nationalization will occur, no companies will be shut down, and taxes won’t be raised—the proposed model doesn’t need higher taxes. Let the existing model continue to serve; no one wants to risk economic collapse.
Bringing Money to Regions — lots of it. Without money, districts decay. But where to get it? States are in debt and investors are scarce. The alternatives are simple: stay the course and accept that many regions will simply remain poor, or try a solution that has never been tested before.
Retaining Money Regionally — it’s impossible to force Euros or Dollars to stay in a district. Therefore, we need a different solution. Otherwise, money will always leak out to foreign goods and services. The alternative is to introduce money into districts that cannot be easily transferred abroad or to another region.
UBI (Universal Basic Income) — people need money. A debt-ridden state doesn’t have it, and companies cannot be forced to pay significantly above market wages. If neither the employer nor the state provides it, someone else must. The choice is between mass poverty or UBI in a supplementary currency.
Protecting Local Businesses — for a region to prosper, it needs domestic companies. They must be shielded from global, but not local, competition. If companies want to benefit from this protection, they must accept the rules of the supplementary currency. This base will actually strengthen them even for battles with external competition.
The Digital Currency and UBI
Two themes require broader discussion: Internet Currencies and UBI.
Forget Bitcoin and its speculative clones. If an internet currency is to function as a means of payment, it must have a stable value. Crucially, it cannot be guaranteed for exchange into official state currency. This is where most local currencies failed—they became redundant. If you cannot get national currency into a region and keep it there, you need a digital supplementary currency that stays in the region by design. Participation would be entirely voluntary for every district, company, and employee. This wouldn’t be just a “local” currency; it would be designed to work in a small shop in the Peruvian Andes or a pub in London, while ensuring a large portion remains in the home district through special usage rules.
Regarding UBI, many studies attempt to prove its benefits. The problem is that no state can afford it. However, if linked to a digital currency, it doesn’t have to be “mined” like Bitcoin; it can be distributed in regular, appropriate doses to regions.
What about inflation? Prevailing views suggest that distributing money increases inflation. The Bank of Japan or the ECB, after years of quantitative easing failing to meet inflation targets, might disagree. Modern economic “science” is often based on opinions rather than facts. Inflation would only rise if a region were so economically weak that it couldn’t respond to demand by increasing production. We can use safeguards: start UBI with small amounts, varying by region. Furthermore, as people reach a “consumption ceiling” (no one buys 100 loaves of bread or 100 cars daily), savings will naturally grow. This would provide universities with incredible data—anonymized transaction-level data—to develop indicators that detect and explain inflation causes in real-time.
The Technical Solution
How would it work? Technically, it could be launched within weeks. A single platform with company profiles, client accounts, a payment gateway, and standard fintech security. This platform would host a network of 53,562 regional internet markets—the exact number of district-sized regions in the world (plus 1.6 million municipalities). This is not just a vague idea; the groundwork is ready.
While a small firm can handle the technical side, the currency itself must be managed by a trusted public institution—one that understands long-term thinking. Not the state, but perhaps a university or a consortium of universities. This prevents any single private company from gaining unimaginable power.
The Vision
Imagine every adult in a district receiving 10% of the average wage monthly on their account, with the condition that it be spent only on local goods and services, and the agreement to accept part of their own wage in this currency. If half a district (50,000 people with an average income of $2,000) joins, about ten million dollars enters the district every month. Local entrepreneurs will emerge to compete for that money using local resources. After a year, that’s $120 million dedicated exclusively to the local economy.
This demand is exactly what entrepreneurs are waiting for. It will kickstart local food production, light industry, and—aided by 3D printing and AI—new manufacturing possibilities. As the economy thrives, people will return to the regions. Budgets for healthcare and roads will grow through higher local tax yields.
What needs to be done? We need a broad discussion and the interest of a university. The removal of poverty and the creation of prosperity for all is in the hands of the first team of economists who are willing to take this idea and turn it into an experiment. It can start in any district in the world. If it works, the rest of the world will follow.