⚡️🔌 Europe's energy crisis and global migration
In the United Kingdom, 60% of manufacturers are at risk of going out of business from the rising cost of energy prices.
France may face energy rationing in the coming months.
In Europe, the energy nightmare is coming true.
Why is this happening? As a result of the Western response to the war in Ukraine, Russia has now shut off Nord Stream 1, a major natural gas pipeline to Germany, and essentially to much of Western Europe.
Whether or not countries source their energy directly from pipelines affected by war, overall energy costs have been going up worldwide.
In this newsletter, we tend to talk about global migration from a position of freedom, opportunity, and optimism. People can now use their knowledge jobs to work wherever they want — a great thing.
The sad reality is that people don't always emigrate for aspirational reasons — they may move to get away from pain, poverty, unrest, and economic strife.
We've talked previously about Ukrainian refugees who were able to keep supporting their lives and families because they could relocate to Turkey and Western Europe and continue to work remotely.
Six months from now, I wonder how many Europeans with remote-friendly careers will be looking at their energy bills and and deciding that paying for a winter of energy austerity in Germany, England, or France is just not worth it.
In a sense, this may be an initial wave in a set of climate- and energy-related migrations that will cause people to uproot themselves in the coming decades.
While tact is required here, it may be possible that certain Central and South American destinations—far from the inflamed geopolitics of Europe, and with lower living costs—will offer themselves as a destination to 'get away from it all.'
If you've ever gone through a cold winter with high energy costs and had to make trade-offs between your physical comfort and your wallet, you'll understand that the idea of somehow escaping somewhere sunny can be quite enticing.
I hope the people of Europe will be safe, warm, and able to be around their families this winter.
For those that want to get some relief, there are now choices available (e.g., Costa Rica, Mexico, Brazil, Belize, Madeira, Cabo Verde, Maldives, Seychelles, Barbados, etc.) where people can work productively, avoid strife, and get some winter warmth.
A global escape tactic that used to be available only to the solidly upper-middle-class and rich is now available to middle-class earners with incomes starting at a few thousand dollars per month.
🏘💶 The G Word: digital nomads and gentrification
The backlash is real. Cities that face an influx of remote workers are starting to push back.
In theory, a bunch of people visiting your town to spend money on goods and services should benefit the economy.
But as remote workers start to seek longer-term rentals, driving up the prices of apartments and Airbnbs, locals are starting to feel the effects of too much economic activity too fast: gentrification is happening.
Gentrification is a hot-button issue. Depending on your political point of view and where you live, gentrification can be good or bad.
One of the biggest economic concerns is a well-known conundrum that predates the remote work movement:
Locals get mad when the rent gets too damn high.
Add to this the idea that some visitors may not be paying local or regional taxes, and you have a potential societal and political problem.
In theory, the sales tax paid by visitors on goods and services should be a boon to a town that generates economic activity from hospitality, restaurants, services, and tourism overall.
But as we all know, when local rents start to go up, that is often a tipping point when people start feeling like the downsides outweigh the benefits of foreign visitors.
Expect this to be a continuing refrain from locals in the most popular nomad destinations. Some of the most permissive digital nomad and remote worker visa policies may go through iterations in the coming years to rectify perceived unfairness and help find a better balance between the needs of locals and remote workers.
I personally believe that it's counter-productive for any municipality or region to reject remote workers outright. As much as there may be some severe pains from medium-term gentrification, by rejecting immigration from remote workers, cities could get wholly left behind in a new economy that is reshaping how people travel.
🛂🗺 The dream of an Internet country
Time Magazine ran an article on a more far-out vision of the future of remote work: the potential for an 'Internet country.'
The work of Lauren Razavi at Plumia is something we have been watching for quite some time.
Lauren is playing a long game and betting/advocating that in the future, global mobility should not be based solely on the fate of whatever nation-state you happened to be born in.
Someone from Canada can travel to more countries than someone from Angola or North Korea, which is inherently unfair (people fundamentally cannot choose which country they are born into and what rights they have at birth).
Imagine, then, a borderless Internet country that provides many of the functions of a geographical nation-state (passport, welfare, pensions, identification, etc.), but whose legitimacy comes not from geographical borders in the post-1648 Westphalia model of "what a nation is" — but from a community with a shared identity whose members move throughout the world.
There is certainly a lot of idealism here, and obvious areas for immediate skepticism. As I saw someone tweet about another Internet community project:
"Praxis doesn't have a Raytheon."
Praxis is a competing community with a slightly less progressive bent than Plumia and more of a focus on cryptocurrency and libertarianism.
The quote above points out that idealistic digital nations don't have military hardware, i.e., a utopian digital country is great until you get invaded, attacked, kidnapped, or defrauded — at which point you may very suddenly want the military or legal protections of citizenship in a real nation—one with tanks, guns, prosecutors, and a police force.
Plumia is aiming to have its passport available by the early 2030s — I assume there will be plenty of time to think through the nuances and complexities of nationhood in the meantime.
Remote Work News from Around the Internet
Nomad thought leaders critique Sardinia's digital nomad plan.
The top 5 EU cities for working as a digital nomad.
The IRS considers a pilot in remote work for its growing workforce.
Banks don't want people to continue to work from home. Surprise, surprise.
Co-living takes off in Europe amid cost-of-living crisis.