Human capital flight, or brain drain, occurs when skilled workers emigrate from their nation of origin, usually for financial or political reasons. Human capital flight can put tremendous strain on any nation, because they lose their best and brightest who would otherwise go on to be great leaders in their respective fields. We need to find ways to financially incentivize these talented people to stay and help build their nation into something great. Could a decentralized monetary system such as cryptocurrency ease human capital flight by cutting political red tape and freeing the flow of money to developing nations?
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People will always flock from low income areas to places where they can make more money or live a better life, it's in our nature. Brain drain was a term coined by the Royal Society when they were describing the human capital flight which occurred from post World War 2 Europe to North America. This phenomenon sees the best and brightest individuals leave their homelands and head for countries of opportunity and wealth, often to have their professional skills underutilized in their new country. If presented with an opportunity to immediately live a better life, you can hardly blame them when they choose not to stick around and contribute to the rebuilding process of their ruined country.
When income disparity grows and a country's middle class shrinks, people will generally go to greater lengths to reach the land of opportunity. Highly skilled workers in developing nations become more willing to settle for menial positions in wealthy nations. Something isn't right when these people can make more working at a fast food joint in a developed country, than they could as a doctor in their nation of origin, where they provide the community with a vital service. Remittance payments sent home by these foreign workers are often unable to offset the social and fiscal impact of their absence from the local economy.
According to the World Bank, the average global remittance cost is 7.6% and there will be $601 billion in remittance payments this year. That means an estimated $45.7 billion is going into the pockets of middlemen when it could be helping the less fortunate. Fees on transfers of decentralized money such as cryptocurrency cost a mere fraction of those imposed by today's major remittance payment facilitators. That extra money could be the difference between life and death for those who need it the most.
If the world adopted a decentralized monetary system, economic migration would be less desirable than it is with our current centralized monetary system because there would not be a central source of wealth to which huddled masses would flee. Ontario, Canada, a hub of Canadian wealth, provides those living below their means with welfare payments ranging from $7872 CAD to $21,492 annually. In 2014 doctors in Cuba earned a mere $26 USD to $67 per month. We spend millions of dollars sending our doctors to volunteer in countries that are losing their doctors to 'brain drain'. These displaced doctors usually end up working low status jobs because their training isn't sufficient to work in our healthcare system, and they're beat out by intense competition. A study conducted several years ago by researchers from Toronto's St. Michaels Hospital found that only about half of international medical school grads end up finding work as a doctor in Canada.
Cryptocurrency can help stem human capital flight by removing monetary restrictions imposed by remoteness, borders, and government policy. We may free individuals to work from their country of origin while earning a globally competetive wage, which enables them to pass on invaluable experience to their community and nation. Encouraging residents of developing nations to start businesses and accept cryptocurrency could help to immediately include them in the global economy.