Towards a new geographical advantage

For context, much of this assumes an understanding of the book “Why The West Rules – For Now” by Ian Morris. I recommend watching this lecture as well.

A synopsis of the book would be to say that “geography matters.” This should be an uncontroversial statement. Nobody would argue that rivers are needed for a nation to trade on rivers, or that fertile ground is needed to grow a wide range of crops – these are self evident. Perhaps we are upset that a desert or tundra results in limited food production, and thus population, and thus specialization, and thus GDP per capita. People, through no fault of their own, are born into these environments. It feels oppressive to say that geography could have such a major influence. Yet, it is dishonest to pretend otherwise. “He who neglects what is done for what ought to be done, sooner effects his ruin than his preservation” to quote Machiavelli.

I’m currently working on a piece about the battle of ought and is. But in short, ignorance to the is does nothing to benefit whatever ought you wish. So, I shall not ignore the is and its implications. Geography is a very big is.

Now, on to my point.

Geographies unlock latent advantages as new technologies arise. Some of these advantages (and disadvantages) apply to States. Some to businesses. Some to individuals.

Take agriculture.

Agricultural development required fertility and reasonably predictable rainfall. Before agriculture, fertility and rainfall were not really an advantage. But with it, it becomes an advantage. This advantage was conferred upon States. Empires were made on the basis of food surplus. New jobs were created and inventions made as fewer people were required to work in food gathering/production.

Another example is ocean trade. Advancements in ship construction unlocked this advantage. States with such construction abilities that had access to oceans and quality local timber then gained this advantage. The Swiss were not known for their navy or their sea trade; the Spanish and the Portuguese were. This is not due to some problem with the Swiss, or some cleverness of the Spanish or Portuguese. It has to do with geography.

Let’s move to more recent history. Cities.

Cities conferred an advantage to people and businesses. A metropolitan congregation of talent, knowledge, and options. Capital and knowledge labor were in abundant supply and all in the same area. The jobs were first driven to the cities that were there – in the US context, this is NYC, Chicago, LA, etc.

Individuals and businesses needed to be in a big city. That’s where the options and the mobility were. It’s where your market was, your supply, your demographic, your advertising base, etc.

The technological changes that influenced this were largely economic developments (the expansion of knowledge and capital as sources of economic development) and technological (communications networks that allowed many people to work together, effectively, in the same office and city).

We increased specialization, and businesses worked with the locality. It was easy to keep that process going as individuals and corporations kept innovating for their (very large) backyard.

Things have changed.

Just as landline phones in the 60’s made it easy to work with anyone in your area, the internet and cell phones made it easy to work with anyone, anywhere. Culture is starting to catch up (with a big push by coronavirus). But people will soon realize that talent is everywhere, and many businesses could be located anywhere. The local still matters, it always will. But increasingly, a “good environment for business” doesn’t mean rainfall, or oceans, or cities, but… something else.

If many businesses could be anywhere, and if many workers could be anywhere… then where?

What is the new geographical advantage?

My belief: natural beauty.

NYC, London, Chicago, “the cookie cutter metropolis” will lose (they aren’t naturally beautiful). Southern Chile will win. The Costa Rican coast will win. Western Washington will win. Western China will win. Small towns in the mountains you haven’t heard of will win.

As location and job become de-linked, more people will find that they actually have a better existence on a beach, or near a mountain, or surrounded by a forest. These attributes used to mean “disadvantage” as they prevented city building (which needed flat, boring terrain).

I don’t believe this will go as far as reshaping great power politics, because most great nation states have their own unknown alcoves of natural beauty. But it will reshape the destinations that businesses and labor will go to.

If there were a local policy objective, it would be this: make your town beautiful and environmentally excellent. People will come and they will bring money and opportunity.

And, if you’re the mayor in a small town in Iowa or something (I’m from Iowa, so, not meaning offense…), then you’ve got the geographical cards stacked against you.