I don't think it's a matter of total isolation, or even a new form of economics necessarily. I'll use an example I heard given by author of "Going Local", Michael Shuman about how a community could show its trust and faith in its local business: think about all of the dollars that are spent every year on retirement plans, 401Ks, IRAs, money markets, etc. by citizens in that community. Tradition holds that when I sign up for a retirement plan, all of those dollars are being invested in companies that are outside of my local community. What if we instead decided to say "let's invest our dollars locally!" I still get some reasonable return on investment for my retirement, and the local companies who are participating get this huge infusion of cashflow that was going outside of our community previously.

It's not a new kind of economy (I still have a retirement plan, the companies still have to make a return on it), it's just a new way of thinking about it. That particular example might have its own complications and I agree with you that it's easy to oversimplify, but the point is that if we think "outside the box" about things, we may discover that we don't have to be as reliant on the rise and fall of the rest of the world as we think we are.

Chris