by Curtis Duggan
Updated Dec 27th, 2021
The coronavirus pandemic of 2020 to 202x is a worldwide event that has accelerated a thousand trends. This piece will not even begin to try to catalog all of the various ways covid has accelerated digital revolutions, inequality, or biotech research. What it will do is examine a very specific trend that was already happening (not necessarily as a direct result of covid).
In the past seventy-five years, post-war emigration has existed within a political context where countries tend to put up significant barriers to “easy” immigration and consider the concept of non-residents performing work to be frowned upon—if not downright illegal. And before 1990, there were large swaths of the globe that were simply inaccessible because of the Cold War, from a global labor mobility perspective.
In 2020 and 2021, we have seen a trend that I think has far broader implications for society than we have truly internalized — countries like Estonia, Croatia, the United Arab Emirates, Maldives, and others are actively soliciting income-earning workers and entrepreneurs to temporarily or permanently relocate to their countries and work remotely—sometimes with very generous tax policies on income earned elsewhere. In some cases (and I think this is the interesting part) they are not insisting on any claim at all on an individual’s income for tax purposes. While at the time of this writing, covid-induced travel restrictions make it practically hard for some people to travel internationally, for the first time in history countries are actively participating in the competition for individuals who are seeking to arbitrage where they earn their income from where they live.
Enter the nomads.
Nomadland, a Golden Globe-winning film by Chloe Zhao, depicts the life of an American woman played by Frances McDormand who gives up her stationary existence for a nomadic lifestyle unburdened by a house with a bunch of stuff in it. The film does not shy away from the unromantic aspects of this lifestyle, with a possible message that Frances McDormand’s character and the many like-minded fellow travelers she encounters are the byproducts of a failure of capitalism and the American dream.
The nomad life, as depicted in the film, encompasses trailers, trucks, vans, menial jobs, unorthodox methods of relieving oneself — and stunningly beautiful landscapes.
For many Western viewers, it will simply look like a life that is too difficult, one that involves too much sacrifice of basic comforts—one that simply sucks too much. There is, however, a subtext in the film that a rootless existence, despite all of its drawbacks and challenges, might just be the life that some people choose because it suits their souls. This haunting meditation on grief captures the way many might imagine their life without their apartment or home and familiar accouterments—and obligations.
On Instagram and blogs and TikTok, on web forums, and in essays about the future of work, there is a class of wanderers far removed (at least in their glossy photos) from the characters in Zhao’s film and the 2017 non-fiction book on which it was based — "digital nomads". These digital nomads are not explicitly portrayed (or portraying themselves) as people with tortured psyches or haunted memories, like Frances McDormand's character—in fact, they are in many cases out to have fun, travel, and explore the world.
Digital nomads are workers who have taken the concept that 'most knowledge work can be done entirely from a laptop', and leveraged that fact pragmatically to remove what was once one of the core tenets of a job — that you have to travel to a physical workplace within a reasonable commuting distance, daily.
The premise: nowadays, work and entrepreneurship can be done with an Internet connection and a comfortable place to sit anywhere in the world and many people have chosen to use this freedom to work their way around the world (or simply to relocate somewhere of their choosing and set down roots in desirable locales irrespective of their office location).
References to the virtual office and “working from anywhere” may conjure up images of checking in with colleagues, bosses, and direct reports over Zoom—but this mental archetype leaves out perhaps the earliest adopters of digital nomadism: entrepreneurs. Not all digital nomads are employees who convinced their boss to let them work outside the office, nor are most digital nomads Instagram influencers whose job is to market products to their audiences. A significant portion of digital nomads, perhaps the plurality, are independent business owners who do freelancing, consulting, or run digital-native businesses as their source of income.
In 2007, Tim Ferris published The Four-Hour Workweek, kicking off a wave of thought leadership in “rethinking work.” These were the proto-digital nomad years of the late 2000s—as smartphones, 3G and 4G cellular network transitions and social networks began to connect the world. Ferris’ ethos is now old news to the technocratic Millennial generation: if you could work diligently on entrepreneurial projects, “life hacks” and optimizable systems, you could generate independent income streams and deconstruct (or discard) many fundamental aspects of modern adult life. One could point to this work and the derivative works that followed it as a Rosetta Stone or ur-text for the digital nomad movement.
Some of the proto-history of the digital nomad movement certainly pre-dates 2007. We can cast our minds back to almost any cultural era of ancient and medieval literature, in most of the major literary traditions, to find works that romanticize a life of wandering, soldiering, or seafaring over a life of domesticity and humdrum routine. Moby-Dick. Marco Polo. Don Quixote. Et cetera.
In the mid-twentieth century, we had the mythology of the Beat Generation and the hippies kicking off the Western counter-cultural movement of the post-war era, where millions of lives were lived on the move.
People had been leaving developed countries to hit the beaten path for a long, long time by the time Alex Garland decided to capture some of this zeitgeist in his 1996 novel The Beach. Garland is more recently famous for writing (and sometimes directing) movies like 28 Days Later, Sunshine, Ex Machina, and Annihilation. But before Garland’s Hollywood career took off in earnest, he wrote the novel that would become, in 2000, Leonardo Dicaprio’s big followup to Titanic.
The novel introduces us to an archetypal protagonist which is now so familiar to the point of cliché but was more novel in the landscape of the late ‘90s: a young, British white man eschewing "uni" and traveling on a shoestring budget through Southeast Asia.
As we’ve already covered, the ‘90s and early 2000s were not the first years that the youth ever traveled around, instead of permanently entering domestic life, but it was the dawning of a new era aided by two major trends: (1) the end of the Cold War and the end to an era of brutal wars and dictatorships in many parts of the world, including The Beach’s Southeast Asian locations, and (2) the rise of the Internet as a bulletin board, water cooler, library, and enabler of secret societies—all accessible from any personal computer terminal.
What changed in the late ‘90s was that you didn’t need to be around someone in your city or town who had been abroad to hear about the legends, stories, and secrets of how to navigate exotic Thailand or Vietnam or Prague—you could go find about it "online".
I remember as a teenager the growing buzz that seemed to permeate society as I entered young adulthood. There were stories of people who went to teach English in Asia. Stories of “staying in hostels” and meeting other people in dormitory-like settings in far-flung South American and Asian towns. Stories of travelers who had only left home a week before meeting grizzled veterans who were entering their second or third year of life on the road, swapping secrets like sailors in an adventure novel.
I am Canadian, and the characters in these stories — out there somewhere on the global traveler’s trail — were often Canadian, Australian, British, and European. Fewer Americans than you might think in these stories, and possibly because this kind of carefree travel emboldens people who are (relatively) less concerned about health insurance, student loans, and expensive college tuition payments. It seemed like by the mid-2000s, there was a new, established life choice rubric that was no longer “strange”. A young person could think about an upcoming year and pull one of several cards out of a small deck of life choices: “work”, “school”, and “go traveling”. While the practical choices certainly have more cachet, it was absolutely not strange at all for someone in 2006 to say they were going to go hang out in Vietnam and Cambodia for while in a way that may have been completely impossible, deeply impractical, and/or fundamentally dangerous in 1986 or 1976. Laptop, flip phone, cheap Internet café—voilà.
The overarching caveat, the looming catch, to all of the romanticism was that these trips came in a boom-bust cycle for personal finance. You might work a job at home for a summer to save a couple of thousand dollars. that then could be spread thin over the months bumming around a low-cost jurisdiction, maybe supplemented by local bartending, surf lessons, waiting tables, and other service industry jobs. In my home of British Columbia, there was and is a wave of young Australians in Canada who work the snow-capped ski and snowboard resorts supporting a version of their working holidays, in one version of this phenomenon.
Up until recently, for the vast majority of people, two things were true: traveling was mostly done by very young adults who were “pre-career” and real money might need to be earned elsewhere, pre- or post-trip, to fund the runway of the trip.
Years ago, this changed. In the 2010s, a new generation of post-The Social Network, post-YouTube, post-iPhone, post-Facebook Millennials, and Gen Zs, armed with digital businesses, one-person startups, YouTube creator accounts, Instagram audiences, and location-agnostic clients headed out for distant shores with a more sophisticated (and less bohemian) gameplan to support themselves at higher levels of income than the Gen X youth of Alex Garland's generation had in the 1990s.
Still, the "life arbitrage" cake of digital nomadism in the 2020s was not fully baked. There was still a catch. Many of these digital nomads figured out that they could work in hammocks, coworking spaces, hostels, or wherever they could get an Internet connection. They could trade tips on the right hacks to set up bank accounts without a local address, use fintech products and cryptocurrency to exchange value, and they could craft a simulacrum of a living with some of the trappings of structure that come in a more traditional domestic life.
But the entire game was predicated on a winking conceit: a considerable amount of the work done by digital nomads globally is likely in a grey area of extra-legality, with income earned in countries but not reported locally. One of the implicit rules of the game for participants is if you are just passing through a country for a month, it is basically like you are on vacation. And if you pass through six countries in a row as such, you may have strung together half a year of untaxed income.
Naturally, there is international legislation and tax treaties that make it very hard for people to be a resident of nowhere, and naturally, I am sure the vast majority of people are not tax evaders and do file their taxes in their home country or somewhere they have a connection to. But the rules of the game were and are fuzzy.
The rules are now changing. SARS-CoV-2 blew the whistle in March 2020 and called timeout on the freewheeling habits and hacks of the digital nomads who slip in and out of global borders. The temporary pause, and the gasoline it poured on the bonfire of remote work acceptance, may have been the death knell of a certain era of digital nomadism. The next era will have new institutional players.
In a dramatic shift, nations are no longer silent on digital nomadism from a policy perspective. Jurisdictions like Dubai welcome high-earners to live and work openly – and tax-free. This approach to alleviating the burden of personal taxation, a feature of the UAE in particular, may not be mirrored by all jurisdictions, but varied actors from Caribbean islands to snowy Baltic technocracies are now openly allowing non-immigrants to work their foreign job, fully above board, while visiting or living within their borders.
Why do I think this is important as a fundamental shift in human history, as opposed to simply a passing trend you might read about on Instagram or a Condé Nast magazine? It’s the creation of another dimension to the economic chessboard described to us by our political philosopher friends from the 18th and 19th centuries: Karl Marx and Adam Smith (and many, many others).
Whatever we might think about the relative pendulum swing throughout history in the eternal struggle for supremacy between capital and labor, capital has always had an unfair advantage in the liberal democratic economic universe (and nowadays in almost the entire world, with few exceptions) — state-sanctioned mobility. A US investor can wire money to Australia and receive common stock and—provided the parties are good actors are following securities laws and acting in good faith—the investor can do so without a whole lot of permission or scrutiny. Their ability to invest and receive returns does not hinge on the mood of a border guard with a visa stamp as it does when labor crosses a border.
A US worker can not simply move to Australia and start working in any job they please, even if it perfectly suits them and society as a wonderful, sensical, and rational economic decision to do so. They are at the whim of state-sanctioned visa and immigration programs, and in many cases, there may simply be no obvious legal path for them to make an economic choice to provide their labor services in Melbourne instead of Milwaukee.
It has been a rigged game for labor. State-sanctioned digital nomadism will not be available to everyone, in fact, it will still not be an option for most people. There are many, many arenas of work and labor you cannot perform from a laptop.
And now, for the first time, there will be a wave of prosperous or ambitious countries competing with each other to attract digital workers, and a great reshuffling, where we may see certain migration patterns (within urban-rural divides, between jurisdictions inside national borders, and between nations) that cut across the world differently than ever before.
In closing, a few derivative topics that I think are worth exploring as a continuation of this idea are:
- How municipal and national governments will deal with eroding tax bases, if everyone who is digitally mobile can simply relocate to “wherever the best tax deal is”
- What the post-Trump era looks like specifically for US immigration
- How entirely distributed companies will think about headquarters and where to hire
- To what extent there will be a counter-revolution to remote work. People will realize after several years that they don’t necessarily want to spend several decades isolated from the social camaraderie of the physical workplace and the friendships, physical presence, and bonding that it brings for many people