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A tide of corrosive capital has swept the world over the past decade. Public and private money from authoritarian states has been flowing into fragile democracies and emerging markets. Like water flowing through cracked concrete, many of the funding deals exploit and weaken governance fissures in accountability and transparency. Numerous recipient countries are now left with unsustainable debt and expanding corruption, making them even more susceptible to external geopolitical influence. We are just starting to understand the full scope of the corrosive capital tide and its impact. Much like acidity levels, the harmful nature of corrosive capital in various countries may be assessed using a modified pH scale. Capital with lower acidity may be in the form of a private investment that takes advantage of petty corruption and weak labor standards. The most acidic and potentially damaging investments often involve funding related to key sectors of the economy, such as energy or media, that can be used to sway public opinion or political decision-making that is counter to the best interests of a nation. Russia is one of the most assertive donor nations offering funding and development assistance of this kind. Meanwhile, we see the corrosive effects of Chinese state lending mostly in the public sector and infrastructure programs of recipient nations. Many examples are at hand. Macedonia is weathering another political crisis over the government’s attempts to change the official name of the country. A recent referendum on the issue failed to garner enough voter participation to pass. It is widely accepted that Russian-owned local media was key to influencing voters to stay home. Why? The proposed name change would help move Macedonia closer to European integration. Russia also uses its ownership stakes in European energy distribution as a not-so-subtle cudgel to influence pro-Russia energy policy in the region. Meanwhile, Chinese state lending and development practices are the most visible manifestation of corrosive capital’s impact on democratic institutions. Sri Lanka has learned this through the recent loss of the Hambantota Port to Chinese control. Pakistan, now caught in a different debt trap, is appealing to the IMF for a bail out. As an organization that works at the nexus of democracy and markets, the Center for International Private Enterprise (CIPE) is extremely concerned about the effects of corrosive capital. CIPE’s global partners have identified how loans from China and their terms are often kept separate from state accounts and invisible from public scrutiny. Most are commercial loans, and unlike bilateral and multilateral loans from western sources, these loans are often collateralized with local assets. In effect, developing countries are being asked to collateralize the family silver for the international equivalent of a payday loan. The loan may be easy to get and the initial terms are agreeable, but woe unto those who fail to keep up with the payment schedule. These obligations are often taken and reported with scant regard for local laws, making a mockery of the rule of law. The lack of transparency accompanying these projects and loans leads many to speculate about the levels of corruption that they feed. Certainly, local kleptocrats are taking a “business as usual” approach to their international financial dealings. However, if non-transparent “tied aid” is a prerequisite for finance, citizens lose the ability to see where the funds are flowing when a Chinese bank makes a payment to a Chinese state-owned firm building a local infrastructure project. We know that the costs of these projects often exceed global norms; we know they exploit Chinese labor imported for the task, and we know they often use Chinese materials in their construction. What we don’t know is the true cost of these inputs. In effect, citizens in recipient countries may be paying for corrupt activities at home and in China, and when the financing comes due, they will be on the hook for these costs. Without local cost control and accountability, citizens are deprived of their right to have a voice regarding financial obligations made by the state on their behalf. What greater loss of citizen sovereignty is there? While CIPE is not opposed to the right of capital to flow, nor would the organization suggest that there is not a role for Chinese lending in development. It would be naïve to think one could hold back the tsunami of funds flowing into emerging markets and fragile economies. Corrosive capital will have to follow the rules when they are applied, so we must focus our efforts on the quality of governing regulation in recipient countries and enhancing the ability of civil society and citizens to monitor investments, as well as access information to hold their governments accountable for commitments made on their behalf. We must also recognize that ultimately our own financial markets and corporate competitiveness may be affected when global norms and accepted rules are ignored in emerging markets. There is growing evidence that western firms that play by the rules are losing out to capital from countries that do not. It is not a stretch of the imagination to suggest that we run the peril of entering into a vicious cycle where our existing ethical business norms suffer under the weight of unfair competition from corrosive capital. It is in the interest of those of us who believe in the reinforcing nature of “constructive capital” to shed greater light on the long-term pernicious impact of corrosive capital on the liberal democratic order. Simple solutions are at hand, such as accounting reform and expenditure transparency, and requires political will and business leadership to succeed. About the author: Andrew Wilson is Executive Director of the Center for International Private Enterprise (CIPE). As one of the four core institutes of the National Endowment for Democracy, CIPE strengthens democracy around the globe through private enterprise and market-oriented reform. CIPE is an affiliate of the U.S. Chamber of Commerce.

But it’s difficult to think about value when we have no buoy for understanding it outside our traditional lenses: for example, our time, our job, and what others tell us they are worth in cash. This, largely, is the world’s paradigm for value so far. But understanding what value really means changes everything—and will be at the center of the decentralized revolution in global coordination that will unfold over the next decade. So, where do we begin?

Let’s start with gold.

Gold is an inherent value. When backing a market, gold allows us to grow a balanced economy well into the trillions. But why does it allow for massive stable markets to form around it? It is gold's permanence that creates stability. We understand that gold will always have value, because it is inherent in all of us, not just in one part of the world, but everywhere, not just today, but tomorrow and for the long haul.

In the 1930s when the gold standard was removed, we learned that the U.S. dollar didn’t need gold to back its economy to flourish. We learned that it was just a symbol for U.S. citizens to decentralize their coordination around the United States economy.

It turns out, common agreement is a philosophy for building shared economy.



And so it seems inherent value is a marker for us to begin exploring what the future could look like—a future beyond gold and the existing realm of credit. And so what else has inherent value? Is education as valuable as gold? What about healthcare? What about a vote that can’t be tampered with? What about an ID that can’t be stolen or erased? What about access to nutrition or clean water? You will find value everywhere you look.



It turns out, we’ve already done the legwork necessary to uncover the most elemental inherent values: The Sustainable Development Goals are commitments grown out of the drive to bring to life basic tenets of the Universal Declaration of Human Rights—the closest possible social contract we have to a global, common agreement.

We’ve already agreed, as a global community, to ensure inclusive and equitable access to quality education. We’ve already agreed to empower all women and girls, to ensure pure and clean water access for all, to promote health at all stages of life, and to end hunger.

We’ve already agreed.

Our agreements are grounded in deep value centers that are globally shared, but undervalued and unfulfilled. The reason for this is our inability to quantify intangible value. All of these rich, inherent values are still nebulous and fragmented in implementation—largely existing as ideals and blueprints for deep, globally shared common agreement. That is, we all agree education, health, and equality have value, but we lack common units for understanding who and who is not contributing value—leaving us to fumble in our own, uncoordinated siloes as we chase the phantoms of impact. In essence, we lack common currencies for our common agreements.

Now we find ourselves at the nexus of the real paradigm of Blockchain, allowing us to fuse economics with inherent value by proving the participation of some great human effort, then quantifying the impact of that effort in unforgeable and decentralized ledgers. It allows us to build economic models for tomorrow, that create wholly new markets and economies for and around each of the richest of human endeavors.



In late 2017 at the height of the Bitcoin bubble, without individual coordination, planning, or the help of institutions, almost $1 trillion was infused into blockchain markets. This is remarkable, and the revolution has only just begun. When you realize that Blockchain is in a similar stage of development as the internet pre-AOL, you will see a glimpse of the global transformation to come.



Only twice in the information age have we had such a paradigm shift in global infrastructure reform—the computer and the internet. While the computer taught us how to store and process data, the Internet built off that ability and furthered the conversation by teaching us how to transfer that information. Blockchain takes another massive step forward—it builds off the internet, adding to the story of information storage and transfer—but, it teaches us a new, priceless and not yet understood skill: how to transfer value.



This third wave kicked off with a rough start—as happens with the birth of new technologies and their corresponding liberties. Blockchain has, thus far, been totally unregulated. Many, doubtless, have taken advantage. A young child, stretching their arms for the first couple times might knock over a cookie jar or two. Eventually, however, they learn to use their faculties—for evil or for good. As such, while it’s wise to be skeptical at this phase in blockchain’s evolution, it’s important not to be blind to its remarkable implications in a post-regulated world, so that we may wield its faculties like a surgeon’s scalpel—not for evil or snake-oil sales, but for the creation of more good, for the flourishing of commonwealth.

But what of the volatility in blockchain markets? People agree Bitcoin has value, but they don’t understand why they are in agreement, and so cryptomarkets fluctuate violently.  Stable blockchain economies will require new symbolic gold standards that clearly articulate why someone would agree to support each market, to anchor common agreement with stability. The more globally shared these new value standards, the better.

Is education more valuable than gold? What about healthcare or nutrition or clean water?


We set out in 2018 to prove a hypothesis—we believe that if you back a cryptocurrency economy with a globally agreed upon inherent value like education, you can solve for volatility and stabilize a mature long lasting cryptomarket that awards everyone who adds value to that market in a decentralized way without the friction of individual partnerships.

What if education was a new gold standard?

And what if this new Learning Economy had protocols to award everyone who is helping to steward the growth of global education?



Education is a mountain. Everyone takes a different path to the top. Blockchain allows us to measure all of those unique learning pathways, online and in classrooms, into immutable blockchain Learning Ledgers.

By quantifying the true value of education, a whole economy can be built around it to pay students to learn, educators to create substantive courses, and stewards to help the Learning Economy grow. It was designed to provide a decentralized way for everyone adding value to global education to coordinate around the commonwealth without the friction of individual partnerships. Imagine the same for healthcare, nutrition, and our environment?



Imagine a world where we can pay refugees to learn languages as they find themselves in foreign lands, a world where we can pay those laid off by the tide of automation to retrain themselves for the new economy, a world where we can pay the next generation to prepare themselves for the unsolved problems of tomorrow.



Imagine new commonwealth economies that alleviate the global burdens of poverty, disease, hunger, inequality, ignorance, toxic water, and joblessness. Commonwealths that orbit inherent values, upheld by immutable blockchain protocols that reward anyone in the ecosystem stewarding the economy—whether that means feeding the hungry, providing aid for the global poor, delivering mosquito nets in malaria-ridden areas, or developing transformative technologies that can provide a Harvard-class education to anyone in the world willing to learn.


These worlds are not out of reach—we are only now opening our eyes to the horizons of blockchain, decentralized coordination, and new gold standards. Even though coordination is the last of the seventeen sustainable development goals, when solved, its tide will lift for the rest—a much-needed rocket fuel for global prosperity.

“Let us raise a standard to which the wise and the honest can repair.”  —George Washington
The views presented in this article are the author’s own and do not necessarily represent the views of any other organization.