Definition: A systems-based approach to economics in which value—whether in the form of money, energy, or opportunity—is continuously cycled back into the community and environment, rather than being extracted and concentrated.

Relation to the Prosperity Loop: This concept underlies the entire structure of the Prosperity Loop. Each of the four Structural Loops (Free Market Engine, Commons Fees, National Wealth Fund, Freedom Dividend) represents a stage in a circular flow—value is generated, channeled, grown, shared, and regenerated.

Examples:

• Carbon fee revenue returned to citizens as dividends

• Public investment returns funding a basic income

• Community wealth funds reinvesting in local ecosystems

• Locally-owned food systems that replenish soil and community wealth

• Public investment in green infrastructure that also provides jobs

• Policies that reduce emissions while growing community equity

Intellectual Lineage: Draws from systems thinking (Donella Meadows), circular economy models (Ellen MacArthur Foundation), and doughnut economics (Kate Raworth). John Fullerton (Capital Institute), ecological economics (Herman Daly), Indigenous knowledge systems, and regenerative finance movements.

Key Characteristics:

• Feedback loops

• Avoidance of linear extraction-growth-waste cycles

• Systems-thinking and place-based design

• Circular material and financial flows

• Emphasis on long-term well-being and balance

Tagline: From growth to regeneration—value that comes full circle.

Definition: Policy tools that collect public value from the use of shared natural or digital resources, including carbon pricing, spectrum auctions, resource extraction fees, and financial transaction levies.

Relation to the Prosperity Loop: This loop functions as the outer boundary of the Prosperity Loop model, enforcing ecological ceilings while generating revenue for redistribution or investment. It ensures that private use of public goods yields a public benefit, helping to fund the National Wealth Fund and the Freedom Dividend.

Examples:

• A carbon tax per ton of CO₂ emissions

• Fees on offshore drilling leases

• Auction revenue from 5G spectrum licenses

Intellectual Lineage: Builds on Elinor Ostrom’s work on governing the commons and Thomas Paine’s idea of shared inheritance from natural resources. Nicholas Stern (climate as market failure), Arthur Pigou (externalities), and Raworth’s ecological ceiling in Doughnut Economics.

Key Characteristics:

• Fee-for-use structure

• Non-distortive to markets when carefully calibrated

• Generates revenue while discouraging harm

Tagline: Earning together from what belongs to us all.

Definition: Universal Basic Income (UBI) is a recurring, unconditional cash payment provided by the government to all members of a political community—typically citizens—regardless of employment status, income level, or background. It is designed to guarantee a minimum level of economic security and ensure that everyone has the financial means to meet basic needs.

Purpose: To establish a social foundation beneath which no one can fall. UBI provides income stability, reduces poverty, and increases individual freedom by enabling people to make life choices—such as caregiving, education, entrepreneurship, or part-time work—without the constant threat of economic destitution.

Key Characteristics:

• Universal: Paid to all citizens, not just those in need.

• Unconditional: No work requirements or means testing.

• Regular: Paid monthly or quarterly to ensure stability.

• Cash-based: Recipients decide how to use it, respecting autonomy.

Relation to The Prosperity Loop: The Freedom Dividend serves as the bottom ring of the Prosperity Loop. It ensures that the benefits of economic and ecological productivity are distributed fairly, so that all individuals have the freedom to thrive. Funded in part by Commons Fees and investment returns from the National Wealth Fund, the Freedom Dividend transforms shared wealth into individual security.

Intellectual Lineage: Philosophers and economists from Thomas Paine to Martin Luther King Jr., Philippe Van Parijs, and Guy Standing have supported UBI as a tool for justice, real freedom, and economic resilience in the face of automation and inequality.

Tagline: “A secure foundation. A springboard to thrive.”

Definition: refers to the legal, regulatory, and normative systems that enable private enterprise, innovation, and investment to flourish within a competitive and rules-based economy. This includes protecting private property rights, enforcing contracts, promoting fair competition, and fostering entrepreneurial freedom, all of which create the structural conditions for productive economic activity.

Purpose: To uphold the economic flow of the Prosperity Loop by ensuring that individuals and firms have a secure footing to invest, innovate, and contribute to national prosperity. These foundations act as the engine of value creation in the overall toroidal system.

Relation to the Prosperity Loop: This pillar anchors the productive core of the Prosperity Loop. It ensures that economic freedom and individual initiative remain protected while the other structural loops (Commons Fees, National Wealth Fund, and Freedom Dividend) ensure that the wealth generated is distributed fairly and used sustainably.

Key Components Include:

• Clear and enforceable private property rights (including for land, labor, and ideas)

• The rule of law and an independent judiciary

• Open markets with anti-monopoly protections

• Entrepreneurial access to capital and credit
  Institutional support for labor mobility and fair wages

Examples:

• Small businesses developing new products

• Inventors securing patents and licensing them

• Property owners investing in energy-efficient upgrades

Intellectual Lineage: Draws from classical liberal economic theory (Adam Smith), institutional economics (Douglass North), and development economics emphasizing property rights as a driver of long-term growth (Hernando de Soto).

Key Characteristics:

• Incentives for innovation and efficiency

• Secure ownership and contract enforcement

• Foundation for inclusive prosperity when paired with redistribution

Tagline: Fueling prosperity through innovation and ownership.

Definition: A multidimensional indicator of well-being that evaluates national progress through health, equity, sustainability, and life satisfaction rather than output alone.

Relation to the Prosperity Loop: GNH complements GDP as a core metric. It aligns Prosperity Loop outcomes with human flourishing rather than just financial growth.

Examples:

• Bhutan’s national development strategy
  OECD’s Better Life Index

• UN’s World Happiness Report

Intellectual Lineage: Pioneered by Bhutan; influenced by Amartya Sen’s capability approach and well-being economics.

Key Characteristics:

• Holistic and multidimensional

• Tracks mental health, education, trust, and environmental quality

• Policy-guiding rather than merely descriptive

Tagline: Measuring what truly matters.

Definition: A Sovereign Wealth Fund (SWF) is a publicly owned investment fund that collects and manages national resources—such as taxes, royalties, or asset sales—and invests them in diversified financial assets (e.g., stocks, bonds, real estate) to generate long-term returns. The goal is to build shared national capital that can provide dividends to citizens, stabilize the economy, and finance public priorities across generations.

Purpose: To convert finite or unearned public revenues (e.g., from oil, carbon fees, spectrum auctions) into perpetual, shared wealth. SWFs enable nations to accumulate savings from the commons and distribute the gains to all citizens—either as direct dividends or public services.

Key Characteristics:

• Public Ownership: The fund is held collectively by the nation, not by private shareholders.

• Professional Management: Operated by public fiduciaries or independent boards to maximize long-term returns.

• Revenue Source Diversity: Capitalized from Commons Fees, surplus revenues, royalties, or financial taxes.

• Intergenerational Equity: Designed to benefit current and future citizens, smoothing volatility and ensuring sustainability.

Relation to The Prosperity Loop: The National Wealth Fund represents the capital reservoir of the Prosperity Loop. It receives inflows from Commons Revenue Instruments and grows through reinvestment. Its returns are then used to support the Freedom Dividend and other social guarantees. Like Alaska’s Permanent Fund or Norway’s Oil Fund, it embodies the principle that shared assets should yield shared income.

Intellectual Lineage and Precedents:

• Thomas Paine’s idea of a “citizen’s dividend” from land rents

• Elinor Ostrom’s theory of managing shared resources

• Alaska’s Permanent Fund Dividend (1982–present)

• Norway’s Government Pension Fund Global

• Contemporary proposals such as the American Solidarity Fund (People’s Policy Project)

Tagline: Turning public assets into shared prosperity.

Definition: Pre-distribution is a policy and economic design approach that seeks to prevent inequality at its source by structuring markets, institutions, and ownership systems in ways that produce fairer outcomes before government redistribution (like taxes or welfare) takes place. It emphasizes democratizing access to assets, income, and opportunity through upstream reforms.

Purpose: To create an economy where prosperity is broadly shared not through after-the-fact transfers, but through the way wealth is generated, owned, and distributed in the first place. This helps ensure that economic systems serve the many, not just the few.

Core Strategies:

• Expand ownership of capital through public investment funds or worker co-ops

• Enforce fair labor standards and inclusive market access

• Set rules on digital, financial, and natural resource use that return value to the public

• Limit monopolies and constrain rent-seeking behaviors

• Invest in public goods (education, infrastructure, data, energy) that enable economic participation

Relation to The Prosperity Loop: The Prosperity Loop is built on a pre-distributive foundation. Its structural loops—like Commons Fees, the National Wealth Fund, and the Freedom Dividend—reshape who owns the economy and how returns are shared. Rather than taxing inequity after it happens, the system prevents concentrated extraction and ensures that everyone has a rightful share in national prosperity from the start.

Tagline: “Don’t just redistribute. Design it right the first time.”

Key Thinkers: Jacob Hacker, Mariana Mazzucato, Elinor Ostrom, Thomas Piketty, Samuel Bowles, and Peter Barnes.

Definition: An economic system that restores, renews, and revitalizes its own sources of capital—natural, social, and financial—rather than depleting them.

Relation to the Prosperity Loop: The Prosperity Loop is designed as a regenerative model—aligning economic flows with ecological cycles and social renewal.

Examples:

• Locally-owned food systems that replenish soil and community wealth

• Public investment in green infrastructure that also provides jobs

• Policies that reduce emissions while growing community equity

Intellectual Lineage: John Fullerton (Capital Institute), ecological economics (Herman Daly), Indigenous knowledge systems, and regenerative finance movements.

Key Characteristics:

• Systems-thinking and place-based design

• Circular material and financial flows

• Emphasis on long-term well-being and balance

Tagline: An economy that heals what it uses and grows what it shares.

Definition: A holistic economic framework shaped by the geometry of the torus—a circulating ring—where flows of wealth are designed to stay within ecological boundaries and lift all members of society.

Relation to the Prosperity Loop: Toroidal Economics is the theoretical foundation of the Prosperity Loop. It transforms abstract systems theory into actionable public policy.

Examples:

• The four-loop model (market → commons fee → shared fund → universal dividend)

• Feedback-based fiscal mechanisms like dividend-capped SWFs

• Budget-neutral climate policy that recirculates revenue

Intellectual Lineage: Kate Raworth’s Doughnut Economics, systems theory (Donella Meadows), and post-Keynesian policy modeling.

Key Characteristics:

• Interconnected loops instead of linear growth

• Embedded social and ecological thresholds

• Self-reinforcing feedback between innovation, equity, and sustainability

Tagline: An economy that flows—balanced, regenerative, and inclusive.