That drop might sound like trivia. A number on a chart. Academic bookkeeping. But here’s what makes it interesting: that same decline correlates with roughly 740,000 fewer new businesses being launched in America each year. Not cumulatively. Annually. Every single year for over a decade.

This isn’t speculation. The data comes from a collection of essays published by the Fraser Institute and the Mercatus Center at George Mason University, edited by Donald Boudreaux. The contributors include economists from NYU, The Citadel, Southern Methodist University, and various research institutions. What they found deserves more attention than it has received.

Let me explain what they uncovered and why it matters.

Start with a simple question. Why do some countries prosper while others remain poor? For decades, economists pointed to capital accumulation, labor, and technology. Save more, invest more, adopt better machines, and growth follows. The models were elegant. They were also incomplete.

Liya Palagashvili of NYU opens the collection by noting what these models failed to explain. Why don’t people in poor countries save? Why do they use technology less efficiently? Why don’t workers invest in their own development? The traditional models treated these behaviors as inputs into a formula but never asked what shaped the behaviors themselves.

The answer, as it turns out, is institutions. The rules of the game.

Here’s what that means in practice. In Tanzania, pledging your car as collateral for a business loan takes 297 days. In the semi-autonomous region of Zanzibar, such pledges don’t exist at all. Hernando de Soto documented this reality across the developing world. People own homes and cars but cannot use them to finance new ventures because the property rights systems are too weak, informal, or corrupt to support such transactions. The entrepreneurial spirit exists. The legal infrastructure to channel it productively does not.

Now consider the opposite end of the spectrum. The three countries with the highest economic freedom scores according to the 2014 Economic Freedom of the World index were Hong Kong, Singapore, and New Zealand. They averaged 17.1 new business ventures per 1,000 working-age people. The three lowest-scoring countries in the dataset, Democratic Republic of the Congo, Algeria, and Argentina, managed 0.249 new ventures per 1,000 people. That’s roughly one new business for every 4,000 adults.

The gap is not explained by cultural differences in entrepreneurial spirit. Russell Sobel of The Citadel makes this point forcefully. Every society contains creative, innovative individuals. The question is what they do with their talents. In countries with secure property rights, impartial courts, and limited government interference, these people start businesses. In countries without such institutions, they become lobbyists, rent-seekers, or worse.

William Baumol called this distinction productive versus unproductive entrepreneurship. The entrepreneur who invents a better mousetrap and sells it for profit is productive. The entrepreneur who hires lobbyists to secure government subsidies or files frivolous lawsuits to extract settlements is unproductive. Both activities require creativity, energy, and business acumen. Only one creates wealth. The other merely redistributes it, often destroying value in the process.

Sobel extended Baumol’s framework with data from US states. He constructed an index of net entrepreneurial productivity that accounts for both business creation and rent-seeking behavior. States with higher economic freedom scores showed not only more business formation but also less unproductive activity. The creative energies of their populations were channeled into wealth creation rather than wealth extraction.

This brings us to the uncomfortable part of the story. The United States.

The Economic Freedom of the World index measures five broad areas. Size of government. Legal system and property rights. Sound money. Freedom to trade internationally. And regulation. Each area is scored on a scale of zero to ten, with ten being the freest.

In 2000, the United States scored 8.65 overall. By 2012, that score had dropped to 7.81. The decline wasn’t uniform across all areas. The most dramatic deterioration occurred in legal system and property rights, where the US rating fell from 9.23 to 7.02. The specific component measuring protection of property rights dropped from 9.10 to 6.95.

To put this in perspective, Canada actually improved its property rights score over the same period, moving from 7.98 to 8.39. The United Kingdom experienced only a slight decline. The American collapse stands out.

What happened?

Roger Meiners and Andrew Morriss examine this question by focusing on the rule of law. The concept refers to governance by predictable rules that don’t depend on the whims of whoever happens to hold power at any given moment. This predictability matters enormously for entrepreneurs because business ventures often require long-term planning and investment. Nobody builds a factory if they expect the government to seize it next year. Nobody signs a twenty-year lease if courts might reinterpret the contract whenever political winds shift.

Meiners and Morriss document erosion of the rule of law through a series of government interventions. The auto bailouts treated senior bondholders differently than established bankruptcy law prescribed. Regulatory agencies expanded their authority through creative interpretations of existing statutes. The legal environment became less predictable, which means riskier for entrepreneurs.

Wayne Crews tackles the regulatory burden from another angle. He estimates that federal regulations cost the average American household $14,976 annually, or roughly one quarter of before-tax income. That figure doesn’t include state and local regulations. It doesn’t capture the businesses that were never started because the compliance costs made them unviable. It measures only the direct burden on existing economic activity.

The numbers are staggering but abstract. The mechanism deserves attention.

Regulations function as a fixed cost. Building a handicapped ramp costs the same whether you’re a small restaurant or a national chain. Installing pollution control equipment requires similar expertise regardless of your firm’s size. For large corporations with in-house legal and compliance departments, these requirements represent a nuisance. For entrepreneurs launching startups, they represent potential death.

Peter Calcagno and Sobel examined this effect empirically. As regulatory levels grow, they disproportionately harm firms with fewer than five employees. The entrepreneurial sector shrinks. The gap between established corporations and new entrants widens.

There’s also an opportunity cost that rarely gets discussed. Every hour a bank executive spends dealing with regulators is an hour not spent on customer service, product development, or employee training. As John Allison documented, the post-2008 explosion of financial regulation forced senior bank personnel to devote substantially more time to compliance and substantially less time to actual banking.

Some readers will object at this point. Regulations exist for reasons. Consumer protection. Environmental protection. Financial stability. Worker safety. Are these not legitimate government functions?

The contributors don’t dispute that some regulation serves valid purposes. Their argument is narrower. The cumulative burden of regulation has grown dramatically without corresponding improvements in the outcomes regulation supposedly ensures. Countries with heavier regulatory burdens don’t consistently show better pollution outcomes, health outcomes, or product quality. What they do show is higher corruption and larger unofficial economies, as documented by Simeon Djankov, Rafael La Porta, Florencio Lopez-de-Silanes, and Andrei Shleifer.

The 2014 Doing Business report from the World Bank found that starting a business in the United States requires on average six procedures and 5.6 days, costing 1.2 percent of income per capita. In Canada, the same process ranks second in the world for ease. American entrepreneurs face more friction than their Canadian counterparts despite operating in a supposedly more capitalist economy.

But wait. Didn’t the United States recover from the 2008 financial crisis? Aren’t stock markets at record highs? Isn’t unemployment low? Why does any of this matter?

The Kauffman Foundation provides one answer. Despite the recovery, the rate of new business creation in America has been flat or falling for decades. Population grew, but per-capita entrepreneurship didn’t keep pace. The State of Entrepreneurship Report called this trend troubling for the long-term health of the economy.

Ryan Decker, John Haltiwanger, Ron Jarmin, and Javier Miranda reached similar conclusions. Business dynamism has declined over recent decades. The firm startup rate keeps falling. The number of young firms operating in the economy keeps shrinking. This decline contributed disproportionately to employment weakness between 2006 and 2009.

Here’s what makes these findings particularly concerning. The sources of American prosperity haven’t disappeared. The country still has world-class universities, deep capital markets, a culture that celebrates entrepreneurial success, and an enormous consumer market. The human capital and the entrepreneurial spirit remain abundant. What changed is the institutional environment in which that capital and spirit operate.

Randy Holcombe of Florida State University developed a framework for understanding how entrepreneurial environments evolve. When entrepreneurs successfully exploit profit opportunities, they don’t just create wealth for themselves. They alter the economic landscape in ways that create new profit opportunities for others. Innovation breeds innovation. Discovery enables further discovery.

This process explains why prosperity tends to cluster. Silicon Valley didn’t produce one successful tech company and stop. It produced an ecosystem where successful entrepreneurs mentor the next generation, where suppliers and talent concentrate, where investors develop expertise in evaluating opportunities, where the whole becomes far greater than the sum of its parts.

But the same logic works in reverse. When institutions make productive entrepreneurship less rewarding relative to unproductive entrepreneurship, creative individuals shift their energies accordingly. More lobbyists. Fewer engineers. More lawyers filing dubious lawsuits. Fewer inventors filing patents. The ecosystem that breeds prosperity starts breeding rent-seeking instead.

Deirdre McCloskey calls this the Bourgeois Revaluation. In the 18th century, attitudes toward commerce and entrepreneurs shifted in Northwestern Europe. Business became respectable. Commercial success became honorable. This cultural change, McCloskey argues, was essential to the subsequent explosion of growth that created the modern world.

Her point cuts both ways. If cultural attitudes toward entrepreneurship matter for prosperity, then the erosion of institutional support for entrepreneurship threatens prosperity. Not immediately. Not dramatically. But persistently, relentlessly, cumulatively.

The contributors to this collection offer various prescriptions. More jurisdictional competition. Federal systems that allow states to experiment with different approaches. Regulatory reform that subjects new rules to rigorous cost-benefit analysis. Judicial independence that prevents political manipulation of property rights.

Whether these prescriptions are feasible is a separate question. What the data establish is that the problem exists, that it’s measurable, and that its consequences are substantial.

Seven hundred forty thousand businesses per year that didn’t happen. Millions of jobs that weren’t created. Innovations that weren’t developed. Products that weren’t invented. Services that weren’t provided. This is what a 0.91-point decline in an economic freedom index actually means when translated into real-world outcomes.

The entrepreneurs who would have started those businesses still exist. They’re still creative, still ambitious, still looking for ways to get ahead. They’ve just been redirected. Some became compliance officers. Some became lobbyists. Some became consultants helping established corporations navigate the regulatory maze. Some simply gave up and took corporate jobs.

The energy didn’t disappear. It was rechanneled into activities that don’t create new wealth, don’t disrupt established industries, don’t deliver the creative destruction that makes economies grow.

Frédéric Bastiat made this observation in 1850. Man can derive life and enjoyment from labor, by applying his faculties to create things of value. Or he can derive life and enjoyment from plunder, by seizing what others have created. When plunder becomes easier than production, plunder prevails.

Friedrich Hayek said something similar a century later. The proportion of people prepared to try new possibilities is more or less the same everywhere. What differs is whether prevailing institutions allow them to do so or prevent them.

The evidence suggests that American institutions have shifted, gradually but measurably, toward prevention. Property rights less secure. Courts less predictable. Regulations more burdensome. Entry barriers higher. The fundamentals of economic freedom eroded.

This erosion didn’t happen through dramatic policy changes that sparked national debate. It happened through accumulation. A new regulation here. An expanded interpretation of an existing law there. A court decision that weakened contract enforcement. A bailout that treated creditors unequally. Each individual change was small. The cumulative effect was large.

Understanding this pattern matters because reversing it requires addressing the accumulation, not any single policy. There’s no magic bullet, no simple fix, no one law to repeal that would restore what has been lost. The solution, if there is one, involves the slow, difficult work of institutional reform across multiple dimensions.

Whether that work will happen is beyond the scope of what data can tell us. What the data can tell us is that the current trajectory leads somewhere specific. Somewhere with less entrepreneurship, less dynamism, less growth, and less prosperity than the alternative.

The United States went from second place to fourteenth in economic freedom. Most Americans didn’t notice. Perhaps they should.

Sources

Boudreaux, Donald J., ed. What America’s Decline in Economic Freedom Means for Entrepreneurship and Prosperity. Fraser Institute and Mercatus Center at George Mason University, 2015.

Palagashvili, Liya. “Entrepreneurship, Institutions, and Economic Prosperity.” Chapter 1.

Sobel, Russell S. “Economic Freedom and Entrepreneurship.” Chapter 2.

Lawson, Robert A. “Economic Freedom in the United States and Other Countries.” Chapter 3.

Meiners, Roger, and Andrew P. Morriss. “Special Interests, Competition, and the Rule of Law.” Chapter 4.

Crews, Clyde Wayne Jr. “One Nation, Ungovernable? Confronting the Modern Regulatory State.” Chapter 5.

Additional sources referenced within the volume include: Gwartney, James, Robert Lawson, and Joshua Hall. Economic Freedom of the World: 2014 Annual Report. Fraser Institute, 2014. Baumol, William J. “Entrepreneurship: Productive, Unproductive, and Destructive.” Journal of Political Economy 98 (1990). Holcombe, Randall D. “Entrepreneurship and Economic Growth.” Quarterly Journal of Austrian Economics 1, no. 2 (1998). McCloskey, Deirdre N. Bourgeois Dignity: Why Economics Can’t Explain the Modern World. University of Chicago Press, 2010. de Soto, Hernando. The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. Basic Books, 2000. Decker, Ryan, John Haltiwanger, Ron Jarmin, and Javier Miranda. “The Role of Entrepreneurship in US Job Creation and Economic Dynamism.” Journal of Economic Perspectives 28, no. 3 (2014). Kirzner, Israel M. Competition and Entrepreneurship. University of Chicago Press, 1973. Schumpeter, Joseph A. Capitalism, Socialism and Democracy. Harper & Brothers, 1942.

She’s not on vacation. She’s running an arbitrage.

Not the financial kind, with stocks and bonds and split-second trades. Something older and more fundamental. She’s exploiting the gap between what a dollar earns in Halifax and what a dollar buys in Hanoi.

The math is almost embarrassing in its simplicity. According to Numbeo, a crowdsourced cost-of-living database with nearly 2 million price entries across 5,500 cities, someone spending $4,900 Canadian per month in Halifax could maintain the exact same standard of living in Hanoi for roughly $2,500. Same quality of restaurants. Same tier of apartment. Same access to healthcare, internet, coffee shops.

Half the price.

That gap—between where you earn and where you spend—has a name. Geo-arbitrage. And while the term sounds like something invented by a Silicon Valley founder trying to optimize his tax situation, it actually represents one of the few ways globalization can tilt in favor of individuals rather than corporations.

A 2016 paper published in the IOP Conference Series by Jillian Penney and Konrad Dramowicz set out to map this phenomenon with academic rigor. They weren’t content to leave geo-arbitrage as a lifestyle buzzword. They wanted to quantify it. Model it. Build tools that could identify which countries offer the best opportunities for people with mobile income—and more importantly, which factors actually matter when you’re deciding where to live.

The findings complicate the simple narrative. Cheap isn’t always good. Safe isn’t always expensive. And the optimal destination changes dramatically depending on who you are.

Tim Ferriss popularized the term geo-arbitrage in his 2007 book “The 4-Hour Workweek,” which has since sold over 1.4 million copies worldwide and been translated into dozens of languages. His formula was seductive: automate your income, disconnect your earnings from your location, then move somewhere your money goes further. Strong Western salary minus lower Eastern cost of living equals more beer, as one geo-arbitrage blog put it.

But Ferriss was selling a lifestyle. Penney and Dramowicz wanted to build a framework.

Their research draws on an older concept called the Five Flag Theory, which describes how to strategically arrange your affairs across different countries. The five flags are your business base, your passport, your domicile, your asset repository, and your playgrounds. Each flag serves a different purpose. Your business operates where taxes are favorable. Your citizenship comes from a country that doesn’t care what its citizens do abroad. Your home is somewhere with good infrastructure and no threat of war. Your assets sit in a jurisdiction with banking secrecy. And you actually spend your time in places that make you happy.

This isn’t tax evasion. It’s geographic optimization. The same logic that leads a corporation to incorporate in Delaware and headquarter in Singapore can apply, at a smaller scale, to individuals with the right kind of income.

The researchers collected data on approximately 200 countries across fourteen criteria. Cost of living, obviously. But also quality of life, safety ratings, healthcare quality, disease risk, air and water quality, sanitation infrastructure, internet and phone access, import-export costs, biodiversity, distance from Canada, and the percentage of the population that speaks English.

That last variable matters more than you might expect. The data came from Wikipedia, which tracked English-speaking populations in 124 countries. The researchers assumed countries not on the list had few or no English speakers. For many Canadians considering geo-arbitrage, language barriers represent a hard constraint. You can adapt to different food, different weather, different social norms. But if you can’t communicate with your neighbors, your landlord, or a doctor in an emergency, the savings start to look less appealing.

Here’s where the research gets interesting. Penney and Dramowicz didn’t assume everyone values the same things. They built five different user profiles—student, IT professional, retiree, entrepreneur, volunteer—and mapped how different priorities produce radically different country recommendations.

A student might weight cost of living heavily but care less about healthcare quality, betting on youth and good health. An IT professional needs robust internet infrastructure above almost everything else. A retiree might prioritize healthcare and safety even at the expense of lower savings. An entrepreneur cares about import-export costs and communications infrastructure. A volunteer might accept higher disease risk and lower safety ratings in exchange for the chance to do meaningful work.

The same model, fed different inputs, produces different outputs. Vietnam and Laos emerge as top destinations when cost of living dominates the calculation. But shift the weights toward quality of life, water quality, sanitation, and healthcare, and suddenly Norway, Australia, and Sweden climb to the top. Those countries aren’t cheap. But if you’re optimizing for different variables, cheap becomes less important.

This is the insight that lifestyle gurus tend to skip over. Geo-arbitrage isn’t about finding the cheapest place to live. It’s about finding the place where your particular values and circumstances produce the highest return on investment. And that calculation is intensely personal.

The researchers built two prototype tools. The first uses controlled weights behind the scenes, allowing users to rank each criterion as not important, somewhat important, or very important. The second lets users assign specific numerical weights to each factor, with all weights summing to one hundred percent. Both approaches produce a list of target countries, mapped visually with detailed information about each destination.

The data sources reflect the complexity of the problem. Economic indicators came primarily from the World Bank’s World Development Indicators, one of the most comprehensive datasets available, covering 244 countries across 1,261 variables. Human development data came from the United Nations Development Program. Real-time cost of living data came from Numbeo. Safety warnings came from Foreign Affairs and International Trade Canada, which maintains a regularly updated system tracking everything from natural disasters to terrorism threats.

There’s a risk factor buried in the research that deserves attention. Currency volatility. The paper notes that strong inflation in certain countries—Russia, Argentina, Colombia, Botswana were cited as examples—can erode savings held in local currencies. But this risk can be offset by purchasing locally-priced goods like housing or food, or by taking advantage of services that are heavily discounted relative to home country prices. In other words, spend your arbitrage gains immediately rather than saving them in the local economy.

The Canadian diaspora is already substantial. Close to 2.8 million Canadians live abroad, encouraged by government programs like International Experience Canada and various work-abroad and volunteer placement services. Most go as teachers or volunteers. But the infrastructure exists for something more ambitious.

Consider the seasonal worker. Someone who earns the majority of their income from April to October and has winters free. They could identify target countries using tools like the ones Penney and Dramowicz developed, make arrangements to live abroad during the cold months, and effectively double their purchasing power for half the year. If they own property in Canada, they could rent it for more than the mortgage payment while living off the proceeds in a country where those proceeds stretch twice as far.

This isn’t permanent emigration. It’s strategic positioning. You maintain your Canadian ties, your healthcare coverage, your passport. You just spend your money where it buys more.

The prototypes the researchers developed include features designed for ongoing monitoring. Each country profile links to Numbeo’s detailed cost comparisons and to the Canadian government’s current travel warnings. Because geo-arbitrage destinations aren’t static. The political situation in some countries changes dramatically. A country that looks optimal on paper might be experiencing civil unrest or a disease outbreak that wouldn’t show up in historical data.

Jean-Marc Hachey’s guide “The Big Guide for Living and Working Overseas” provides context for why this matters. Moving abroad isn’t just a financial decision. It’s a life reorganization. The successful geo-arbitrageur needs to think about healthcare access, legal status, social integration, and exit strategies. The money saved means nothing if you’re miserable, sick, or trapped.

The Five Flag Theory emerged from offshore wealth management, but its logic applies to anyone trying to optimize across geographic variables. The insight is that different countries excel at different things. No single country is best at everything. The person who recognizes this and structures their life accordingly gains advantages that compound over time.

Globalization is usually framed as something that benefits large entities. Multinational corporations can shift production to wherever labor is cheapest and sell products wherever consumers are richest. Capital flows across borders with minimal friction. But individuals face barriers—visa requirements, language gaps, cultural adjustment, distance from family. The promise of geo-arbitrage is that some of those barriers are lower than they appear, and the benefits of crossing them are larger than people assume.

The academic contribution of Penney and Dramowicz is the framework. Before their research, geo-arbitrage was mostly anecdotal. Blog posts about living cheaply in Thailand. Reddit threads comparing rent in Lisbon versus London. Their work imposes structure on the question. What data matters? How should different factors be weighted? How do you build a decision support system that accounts for individual variation?

The answer involves tradeoffs. Always tradeoffs. The cheap countries tend to have worse infrastructure. The safe countries tend to be expensive. The English-speaking countries cluster in certain regions. Distance from home correlates with flight costs. Healthcare quality varies independently from all other variables. No country maximizes every dimension simultaneously.

But you’re not looking for the perfect country. You’re looking for the right country for you. And the right country depends on your income structure, your risk tolerance, your language abilities, your health status, your family situation, your professional requirements, and your personal preferences.

The tools exist to make this calculation. The data exists to inform it. The only remaining question is whether you’re willing to take the gap seriously—to look at the difference between what you earn and what you spend, and ask whether that difference could be working harder.

In Halifax, you spend four thousand nine hundred dollars a month to live your life. In Hanoi, you spend two thousand five hundred for the same thing.

The difference isn’t magic. It’s geography. And geography, unlike most things in life, is something you can change.

Sources

Penney, J., and K. Dramowicz. “Geographical Aspects of Geo-Arbitrage: Work in Canada and Live in Countries with Low Cost of Living.” IOP Conference Series: Earth and Environmental Science 34 (2016): 012025.

Ferriss, Timothy. The 4-Hour Workweek, Expanded and Updated. Crown Archetype, 2009.

Hachey, Jean-Marc. The Big Guide for Living and Working Overseas. Intercultural Systems, 2004.

World Bank. World Development Indicators. data.worldbank.org.

United Nations Development Programme. International Human Development Indicators. hdr.undp.org.

Numbeo. Cost of Living Database. numbeo.com.

The World Bank and radical anti-capitalist activists started saying the same things.

Both talked about participation. Both celebrated local communities. Both wanted to empower ordinary people and bypass inefficient states. Both looked to civil society as the answer.

This wasn’t supposed to happen. These are ideological enemies. The World Bank represents global capital, structural adjustment, market liberalization. Radical movements represent resistance to all of that. And yet, as Giles Mohan and Kristian Stokke observed in their analysis of this period, both camps had arrived at remarkably similar conclusions about where development should happen and who should lead it.

The local became sacred ground.

This convergence wasn’t accidental. It emerged from two very different crises of faith. Neoliberals had spent the 1980s dismantling the developmental state, only to realize that markets alone weren’t delivering growth or reducing poverty. They needed something else, some institutional glue to make their reforms stick. Meanwhile, the left was reeling from the collapse of actually existing socialism and the failures of state-led development in the Third World. Class politics seemed exhausted. Grand narratives had lost their credibility.

Both sides retreated to the local. Both found what they were looking for.

But here’s the problem Mohan and Stokke identified, and it’s one that remains relevant today. This shared enthusiasm for local participation papers over fundamental disagreements about what participation is for, who benefits from it, and what it can actually accomplish. Worse, it creates blind spots that neither side acknowledges.

The local isn’t what either camp thinks it is.

Consider decentralization, the first of four arenas Mohan and Stokke examined. When the World Bank talks about decentralization, it means something very specific. Drawing on rational choice theory, Bank economists frame decentralization as a way to make service delivery more efficient. The local becomes a functional economic space. Citizens become consumers. Participation means market transactions. As David Slater noted in his analysis of the concept, decentralization can be articulated into either a monetarist discourse or a discourse of collective empowerment and democracy. The word itself carries enough ambiguity that both meanings can coexist without ever confronting each other.

The Bank’s own policies through the 1980s and 1990s made this explicit. Competitive markets were said to permit flexibility and responsiveness while economizing on scarce administrative resources. Decentralization should be seen as part of a broader market-surrogate strategy. The political dimensions were stripped away, leaving only technical questions of efficiency.

This is not what grassroots activists mean when they talk about local empowerment. But they ended up supporting many of the same policy prescriptions.

Participatory Rural Appraisal offers an even more telling example. Robert Chambers championed PRA as a paradigm shift in development practice, a reversal of the top-down expertise that had characterized earlier interventions. Instead of outside experts imposing their knowledge on passive recipients, local people would generate their own understanding of their situations. Mapping exercises, community discussions, visual tools that didn’t privilege literacy. The methodology spread rapidly through development organizations.

The appeal is obvious. Who could argue against listening to local people? Who could defend the arrogance of experts who parachute in with predetermined solutions?

But Mohan and Stokke identified something troubling beneath the populist surface. PRA tends to treat communities as harmonious and homogeneous. It promotes a consensual view that conceals powerful interests at the intra-community level. When Nelson and Wright examined how the concept of community actually functions in development practice, they found it was more often used by outside organizations than by people themselves, carrying connotations of consensus and needs determined within parameters set by outsiders.

The danger, from a policy standpoint, is that actions based on consensus may actually empower the vested interests who manipulated the research in the first place. Pottier and Orone documented cases where local chiefs deliberately excluded the very poor from participatory exercises. Richards found that decisions made through these processes generally favor village elites.

This is not a marginal problem. It’s built into the methodology’s assumptions.

Chambers himself acknowledged that underdevelopment has many levels of causality, but he chose to focus on what he called the primacy of the personal. We are much of the problem, he wrote, meaning outside experts and their attitudes. By revealing our self-conscious appreciation of this paradox, we place ourselves back at the center of the development process.

Mohan and Stokke pushed back hard on this framing. Development is not just about attitudes but about materialities that such a discourse may do little to address. The invocation of a benign virus spreading through organizations is too voluntaristic. Strategies for affecting wider structures are rarely put forward.

There’s a deeper epistemological issue here. By valorizing local knowledge and being self-critical of Western colonizing knowledge, practitioners end up behaving as if they have nothing to offer. The populist line treats all knowledge from the West as tainted, which prevents genuine dialogue and learning. Local and non-local become discrete entities, entirely separable from each other in space.

But they’re not. They never were.

Social capital theory makes this problem even more acute. Robert Putnam’s work on Italy and America had enormous influence on development thinking in the 1990s. The concept promised to explain why some places succeed while others fail, even when they face similar macro-policy environments. Social capital refers to features of social organization such as networks, norms, and trust that facilitate coordination and cooperation for mutual benefit.

The appeal to development institutions is clear. Social capital is essentially the sociocultural glue that binds communities together and ensures both political and economic progress. The language is non-threatening, full of trust and reciprocity and associations. Conflict-oriented notions of power, class, gender, and ethnicity are relatively unheard within this discourse. Everyone can communicate.

This is precisely why Ben Fine argued that social capital allowed the World Bank to broaden its agenda while retaining continuity with most of its practices and prejudices, including benign neglect of macro-relations of power and preference for favored NGOs and grassroots movements.

Putnam’s framework has a fundamental flaw. It treats culture as internally determined, locked into path dependency where initial stocks of social capital create self-reinforcing cycles of prosperity or failure. Successful regions are those that have possessed high stocks of social capital for a long time. The historical roots of the civic community are astonishingly deep.

Sidney Tarrow revisited Italian political history and found something quite different. The South of the country was held in a semi-colonial relation to the North, with economic development and associational life consciously suppressed. Contemporary weaknesses weren’t connected to initial endowments at all. They were connected to ongoing political relationships.

James Putzel added another inconvenient observation. In areas Putnam identified as having high social capital, communist trade unions were heavily involved in promoting political activism and civic life. Putnam omitted them entirely from his analysis. One can only assume he did so because these were not legitimate forms of social capital, preferring instead the more benign activities like sports leagues and choir groups.

The state disappears from this picture. So does capitalism. What remains is a culturally internalist explanation that locates the problem of underdevelopment within the victims themselves, much like modernization theory did decades earlier.

Jonathan Fox developed a more sophisticated account of how civil society actually thickens. He examined the uneven emergence of social capital under authoritarian regimes and found it resulted from the interplay of the state’s willingness and capacity to encourage or dismantle social capital, the contextual strategies of local political actors, and the effect of other organizations in enabling or disabling collective action. Patrick Heller’s work on Kerala demonstrated close links between social capital formation and the democratic state. High levels of social development and redistributive reforms were products of mutually reinforcing relations between state institutions and organized labor movements.

None of this fits the World Bank’s preferred narrative. But the Bank continued promoting Social Funds across Africa and Latin America, channeling resources through NGOs while treating social capital as a local endowment that needed building.

The fourth arena Mohan and Stokke examined was social movements and radical democracy. Here the localism comes from a different direction entirely.

Post-Marxism emerged in the 1980s as a response to what critics saw as class reductionism and economic determinism in traditional left politics. Laclau and Mouffe argued that society couldn’t be explained through a static relationship to the means of production. Identities were fluid. Political consciousness could form around multiple axes of difference, not just class. New social movements became the focus of serious analytical engagement with political agency.

In the Third World context, these movements became increasingly visible during economic crises and governance failures. Formal political institutions seemed indivisible from market needs. New movements emerged that were local, pluralistic, and sometimes linked horizontally across issues. Cultural considerations were not subordinated to economic motives.

Arturo Escobar elaborated this emphasis on culture. The development discourse, he argued, functioned as a central operator of the politics of representation and identity across the Global South. It suppressed local cultures, women, identities, and histories. Grassroots movements represented acts of cultural resistance, local knowledge against expert systems, popular power against institutional domination.

This is where things get complicated.

Mohan and Stokke noted that the literature on social movements shares the same tendencies toward essentializing the local that appear in neoliberal approaches. Civil society is conceptualized as a relatively autonomous site of resistance and empowerment. Broader material and political processes are analytically marginalized.

But consumption-based identity politics is more visible in wealthy countries. In the Third World, livelihood struggles still dominate. To characterize Global South countries as post-industrial and postmodern is to misinterpret their histories of imperialism and underdevelopment entirely.

Frans Schuurman observed that many social movements aren’t anti-development or post-development at all. They’re products of an aborted modernity project, people seeking the benefits they were promised but denied.

The relationship between social movements and the state is also far more complex than the autonomy thesis suggests. While Laclau and Mouffe don’t deny the state’s existence, they de-privilege it as a site of political struggle. This leads to downplaying state power at precisely the moment when states have become less accountable.

Judith Hellman examined the actual outcomes of political participation for social movements and found multiple possibilities. States can fulfill movement demands. They can incorporate movements into populist followings. They can absorb isolated movements into broader party-led coalitions. The notion that movements are and must remain autonomous ignores this messy reality.

Ellen Meiksins Wood offered perhaps the sharpest critique. Civil society emerged alongside capitalism and the modern state, intimately tied to private property rights. Under capitalist modernity, the market became incorporated into an arena outside the state. Political functions formerly carried out by states were performed within civil society, centered on the commodification of social life including labor.

The non-state arena may be a space of political freedom, Wood argued, but not of economic freedom. The market isn’t simply a sphere of opportunity and choice. It’s a compulsion, a necessity, a social discipline.

This has implications for identity politics. While class may not be the only political referent, it cannot be equated with all other identities. Class is irreducibly linked to capitalist exploitation. Sexual orientation, for example, is not inherently exploitative and could exist in any political-economic system. The plurality of identities and the non-fixity of social relations mean that celebrating difference could potentially endorse exploitative social relations.

In what sense, Meiksins Wood asked, could it be democratic to celebrate class difference?

The question of scale runs through all of this. Local resistance by itself cannot challenge global and national forces. The Movement for the Survival of the Ogoni People mounted a sustained campaign against the Nigerian government and Shell during the 1990s, combining environmental concerns with ethnic and political recognition demands. They achieved significant international attention and support. Then the government imprisoned and executed their leaders. The opposition waned.

What this shows is that emphasis on the local alone leaves groups exposed to defeat or destruction by not building sufficient social alliances. Resistance must be localized, regionalized, and globalized at the same time, as Chin and Mittelman argued. The linkages between scale and politics have become more complex and more crucial in an era of globalization.

The Zapatistas spread their message via the internet, picked up by activists and academics worldwide as a postmodern social movement. Subcomandante Marcos articulated a vision of global civil society, claiming to be gay in San Francisco, Black in South Africa, Asian in Europe, a Jew in Germany, a feminist in a political party, every untolerated and oppressed minority beginning to speak.

This suggests political spaces beyond the nation-state system. Global civil society recognizes states but is not state-centric. It works underneath and beyond states, just as economic globalization works outside and across them.

But if transformations of the global political economy are to happen, concerted efforts must be made to reshape global governance. Reform must move from the local upward and from the global downward, with each level playing a contributing part. The shape and substance of such reforms remain unknown.

What can we take from this analysis more than two decades later?

The consensus around local participation that Mohan and Stokke identified hasn’t dissolved. If anything, it has intensified. Community-based approaches dominate development practice. Social enterprise and impact investing channel resources through civil society organizations. Participatory methods have become institutionalized across major agencies.

The dangers they identified haven’t gone away either.

Local communities are still romanticized as spaces of solidarity and authentic knowledge, even as internal inequalities structure who speaks and who is heard. The state remains undertheorized, treated either as an obstacle to be bypassed or a monolithic other to resist. Transnational economic forces operate largely outside the frame. And both neoliberals and radicals continue talking past each other while using the same vocabulary.

What would it mean to take the politics of the local seriously?

It would mean examining how the local is produced and represented by hegemonic interests. It would mean asking who benefits when participation is defined in particular ways. It would mean refusing the binary between state and civil society, recognizing instead the multiplicity of links between actors in both spheres with varying degrees of autonomy and capacity. It would mean understanding places not as discrete communities but as constituted by economic, social, cultural, and political relations that extend far beyond any given locality.

A global sense of place, as Doreen Massey called it.

This doesn’t mean abandoning local engagement. It means being honest about what local engagement can and cannot accomplish on its own. It means building alliances across scales rather than retreating into enclaves that provide shelter from the storm. It means recognizing that the local is always already shaped by forces operating at other levels, and that meaningful change requires intervention at multiple points simultaneously.

The strange convergence between the World Bank and radical activists wasn’t a sign that both had discovered the same truth. It was a sign that both were avoiding the same difficult questions.

Those questions remain unanswered.

Sources

Mohan, Giles and Kristian Stokke. “Participatory Development and Empowerment: The Dangers of Localism.” Third World Quarterly, Vol. 21, No. 2 (April 2000), pp. 247-268.

Chambers, Robert. “The Origins and Practice of Participatory Rural Appraisal.” World Development, 22(7), 1994.

Escobar, Arturo. Encountering Development: The Making and Unmaking of the Third World. Princeton University Press, 1995.

Fine, Ben. “The Developmental State is Dead—Long Live Social Capital?” Development and Change, 30, 1999.

Fox, Jonathan. “How Does Civil Society Thicken? The Political Construction of Social Capital in Rural Mexico.” In Peter Evans (ed.), State-Society Synergy: Government and Social Capital in Development. University of California, 1997.

Laclau, Ernesto and Chantal Mouffe. Hegemony and Socialist Strategy: Towards a Radical Democratic Politics. Verso, 1985.

Massey, Doreen. Space, Place and Gender. Polity Press, 1994.

Meiksins Wood, Ellen. Democracy Against Capitalism: Renewing Historical Materialism. Cambridge University Press, 1995.

Putnam, Robert. “The Prosperous Community: Social Capital and Public Life.” The American Prospect, 13, 1993.

Slater, David. “Territorial Power and the Peripheral State: The Issue of Decentralization.” Development and Change, 20, 1989.

Tarrow, Sidney. “Making Social Science Work Across Space and Time: A Critical Reflection on Robert Putnam’s ‘Making Democracy Work.’” American Political Science Review, 90(2), 1996.

And yet.

When the United Nations convened a major oceans conference in 2017 to discuss sustainable development, diplomats informally referred to it as “the Seychelles conference.” When the most important maritime security organization fighting Somali piracy needed a chair, the international community trusted this tiny archipelago to lead negotiations among over 80 participants, including the United States, the European Union, and Japan. When the African Union drafted its integrated maritime strategy, the concepts came largely from a country with a GDP smaller than many American universities.

Something strange is happening here. And it tells us more about how power actually works in the twenty-first century than almost any case study of great power politics.

Christian Bueger and Anders Wivel set out to understand this anomaly in their 2018 study published in the Journal of the Indian Ocean Region. What they found challenges some deeply held assumptions about who gets to matter in international affairs.

The conventional wisdom is simple enough. In international relations, capability equals influence. States with big militaries, large populations, and substantial economies shape the rules. Everyone else adapts. As Neal Jesse and John Dreyer put it, “the great powers establish not only the norms and structures of the international system, but also the regional security hierarchies.” Small states are pawns. They find it hard to participate in processes that happen “above their heads,” as Carsten Holbraad observed.

Microstates face an even more acute version of this problem. They are, in the words of Kajsa Oest and Anders Wivel, “always the weak state in an asymmetric relationship when interacting with another state at the global, regional or sub-regional levels.” There is no situation where they hold the stronger hand. Denmark can be weaker than Russia but stronger than Estonia. The Seychelles is weaker than everyone.

But here is where the story gets interesting.

The Seychelles faces what Bueger and Wivel call a “quadruple predicament.” It is a microstate, so it is permanently disadvantaged in any negotiation. It is a developing country, which exacerbates those disadvantages through weaker networks and smaller talent pools. It is a small island nation with only 455 square kilometers of land spread across 155 islands, making it dependent on ocean resources it seemingly cannot protect. And it exists in a weakly institutionalized region with no Indian Ocean equivalent of NATO or the European Union to provide shelter.

By every measure that international relations scholars typically use, the Seychelles should be irrelevant. It should be seeking survival through the strategies that other microstates have adopted: becoming a tax haven, hosting foreign military bases, or simply keeping its head down and hoping the great powers ignore it.

Instead, the Seychelles chairs international negotiations.

The explanation begins with pirates.

In 2008, attacks by Somali pirates began spreading across the Western Indian Ocean. What had been a localized problem off the Horn of Africa expanded into Seychellois waters by 2009. The country’s economy, dependent on tourism and fishing, faced an existential threat. Pirates attempted to operate from the outer islands. Seychellois crew members were taken hostage.

This could have been purely catastrophic. For many countries, it was. But the Seychelles government saw something else: an opportunity.

The international community responded to the piracy crisis by deploying substantial naval forces. The United States, NATO, the European Union, India, Pakistan, Russia, China, Singapore, South Korea, and Japan all sent ships. These navies needed a place for maintenance and crew recreation. The port of Victoria on the main island of Mahe became, once again, a major port of call. The country’s airstrip began hosting reconnaissance aircraft monitoring regional waters.

The Seychelles could have simply accepted this traffic and collected whatever economic benefits came from it. Instead, the government did something clever. It volunteered to prosecute captured pirates.

This solved a serious problem for the international navies. Catching pirates was one thing, but bringing them home for prosecution created operational constraints and legal complications that most countries wanted to avoid. The result was what observers called the “catch and release” problem: pirates were intercepted, stopped, and then released because there was nowhere to put them.

The Seychelles offered a solution. It signed transfer agreements with multiple countries and became the primary prosecuting state in the region. By 2015, the country had received and prosecuted 142 pirates, as documented by researcher J. Larsen.

To make this possible, the Seychelles received substantial capacity building support. The UN Office on Drugs and Crime and the European Union’s EUCAP Nestor mission provided training, mentors, and equipment. The main prison on Mahe was fully refurbished. A dedicated courtroom for piracy prosecutions was built. Forensic equipment and computers were provided to judges, police, and coast guard.

But the government did not stop there. In 2010, it drafted “The Seychelles Comprehensive Maritime Security Plan of Action Rolling Plan (2010-2040).” This document laid out in precise detail what capacities and equipment the country needed to fight piracy, with special attention to the coast guard, air force, and maritime domain awareness. It was, in essence, a shopping list presented to the international community.

The shopping list was filled.

India donated an offshore patrol vessel, two maritime reconnaissance aircraft, and a 5 million dollar defense grant. The UAE donated a new coast guard facility worth 15 million dollars and two coast guard vessels. The United States provided a coastal surveillance system with situational awareness functionality, target detection, and classification capabilities. The United Kingdom funded an intelligence sharing center. Denmark donated three patrol boats.

By 2015, the Seychelles had the most advanced coast guard and maritime police in Eastern Africa. A country that ranked 109th among the world’s military powers had built genuine capabilities in a specific domain by positioning itself as a problem solver rather than a supplicant.

The piracy crisis also opened doors for strategic positioning. When navies were looking for permanent bases in the region, the Seychelles made itself available. In 2011, the government invited China to consider establishing a military presence on Mahe. In 2012, reports emerged that Russia was considering opening a naval facility. Neither materialized, partly because piracy was increasingly contained by then. But negotiations with India led to an agreement in March 2015 to build military infrastructure on the remote island of Assumption. Construction began in 2017, and the project has only grown in importance as Chinese-Indian naval rivalry intensified following China’s announcement of a base in Djibouti.

The country had converted vulnerability into leverage.

When the Contact Group on Piracy off the Coast of Somalia needed a chair from the region in 2014, the Seychelles volunteered. It was the first time a regional country had taken that responsibility. Previous chairs had been major international maritime actors and industrial nations: the United States, Japan, Norway, Singapore. The candidacy was endorsed by consensus.

This was not charity. The international community trusted the Seychelles because it had proven itself a reliable partner with genuine expertise. During its two years of chairmanship, the country successfully negotiated the reform of the group and coordinated the response to a spike in piracy incidents in early 2017.

But maritime security was only half the story.

The same strategic approach that worked for piracy also worked for environmental governance. The Seychelles has a long history in ocean diplomacy. In 1979, just three years after independence, the country proposed turning the entire Indian Ocean into a whale sanctuary. The proposal failed due to great power resistance, but as researcher Sidney Holt documented, it became known among environmental policy experts as “the Seychelles proposal” and established the country’s reputation in ocean governance.

In 2011, the Ministry of Foreign Affairs began building a campaign around a concept that was just entering the international vocabulary: the blue economy. This term, referring to the sustainable development and environmental protection of ocean resources, had emerged during the Rio+20 conference. The Seychelles decided to own it.

The government gave presentations at the African Union Summit, the Tokyo International Conference on African Development, the Indian Ocean Rim Association Economic and Business Conference, and events in Abu Dhabi and London. The University of Seychelles launched a Blue Economy Research Institute. The government formed a Ministry of Finance, Trade and the Blue Economy. The Foreign Affairs Ministry published a book titled “The Blue Economy: Seychelles’ Vision for a Blue Horizon.” The president himself wrote an extended book called “Rethinking the Oceans: Towards the Blue Economy.”

As then-President James Michel explained the strategy:

“We have taken every opportunity to meet and to make representations to larger countries and international bodies. Just as the Green Economy was previously introduced to the world agenda, we have set ourselves the parallel task of bringing forward the Blue Economy. We are being remarkably successful in doing so. As a result of our advocacy of the Blue Economy, Seychelles is being invited, more and more, to share our thoughts at international conferences and political meetings.”

The campaign worked. The blue economy concept was incorporated into the African Union’s African Integrated Maritime Strategy 2050. By 2015, international reports from the Economist Intelligence Unit, the UN Economic Commission for Africa, the UN Environmental Program, and the World Wildlife Foundation all affirmed the policy importance of the concept and referenced the Seychelles as a leading advocate and innovator.

Now here is the part that the academic literature struggles to explain fully. Material factors matter, certainly. Location matters. Strategy matters. But there is something else operating in the Seychelles’ success, something that Bueger and Wivel call “Creole diplomacy.”

The Seychelles is a Creole country in a specific sense. When the French arrived, the islands had no inhabitants. They brought slave workers from Eastern Africa, traded as individuals rather than groups, which prevented them from preserving their cultures of origin. After slavery ended, workers from across Asia moved to the islands. Unlike Mauritius, where this led to distinct Indian ethnic communities, the Seychelles’ small size forced integration. French and British, African and Arab, Indian and other cultures fused into something new.

Former President James Mancham captured this in a poem that the historian Deryck Scarr quotes: “This unique blend of races / Ambassador of all cultures / Mirror resplendent of all colours / The melting pot of ethnical prejudices / The fusion-spot of every civilization / You are a sample of the world to come.”

What does this have to do with diplomacy? Quite a lot, it turns out.

Creole culture embodies two principles that transfer remarkably well to multilateral negotiations. The first is genuine openness to difference. Cultural heterogeneity is not a problem to be managed but a source of creative combination. The second is thoroughgoing pragmatism. Rather than starting from foundational principles and beliefs, Creole thinking starts from what works.

These principles make the Seychelles particularly suited to policy domains like maritime security and blue economy, which are complex and heterogeneous and demand thinking outside established boxes. They also make Seychellois diplomats effective in multilateral settings where consensus requires both appreciation of different perspectives and practical compromise.

The small size of the government, usually considered a weakness, becomes a strength in this context. With ministries in close proximity and staff moving regularly between them, coordination happens easily. Administrative stovepipes and bureaucratic culture are avoided. Information flows quickly between departments. For cross-cutting issues like sustainable development or maritime security, this enables the “whole of government” approach that larger states struggle to achieve.

The strategic implications are clear. Instead of entering formal security alliances, the Seychelles aims to maximize partnerships with everyone. As then-Foreign Minister Jean-Paul Adam put it in a 2014 speech: “The Seychelles government, since the time of the Cold War, has adopted the principle that all partners willing to cooperate with Seychelles on an equal basis in terms of maritime security is welcome to do so.”

This is a hedging strategy. The country strengthens ties with multiple states rather than allying with any single one. It has received strategic support from all major powers in the region without becoming reliant on any of them. Its openness and principle of not favoring one partner above another allows it to leverage support for wide-ranging initiatives despite its small size.

There are limits to this approach, of course. Administrative capacity sets one boundary. With a diplomatic staff of only one hundred people, there is simply a limit to how many negotiations you can participate in, let alone influence. Expertise is concentrated in a few individuals, preventing sub-specialization and requiring reliance on external consultants in many fields. If the country pursues overt interest-driven policies rather than playing the broker role, its position can easily be ignored. And the success of Seychellois diplomacy depends on working within existing great power discourses rather than challenging them directly.

The whale sanctuary proposal failed because it challenged great power interests. The anti-piracy and blue economy agendas succeeded because they contributed solutions to problems that major powers already recognized. The difference is instructive.

What does this mean for other small states? Several things, according to Bueger and Wivel.

Creole foreign policy enables going beyond traditional divisions, emphasizing holistic thinking and pragmatic problem solving. This is increasingly valuable in a world where the most important issues cut across established boundaries and bureaucratic categories. By being able to offer problem solutions and expertise in focal areas, small states can garner significant support, expand networking opportunities, and achieve a unique status that formal measures of power would never predict. By acting as innovators and experimenting with new approaches, they can maximize reputation and influence debates that might otherwise exclude them entirely.

None of this means that power does not matter or that any microstate can simply will itself into diplomatic relevance. The Seychelles had real assets to work with: a strategic location, a Creole culture suited to bridging differences, and a government capable of coordinating across departments. It also benefited from circumstances, particularly the piracy crisis, that created demand for exactly what it could supply.

But the case challenges the easy assumption that capability and influence map neatly onto each other. It suggests that in an increasingly institutionalized world, where problems require coordination among many actors and solutions emerge from deliberation rather than dictation, there may be more space for smart small states than classical theories of international relations would predict.

The Seychelles did not become powerful in any conventional sense. It remains a microstate with no ability to project force or coerce larger neighbors. What it became was useful, credible, and positioned at the intersection of conversations that mattered.

In international relations, that turns out to be worth quite a lot.

Sources

Bueger, Christian, and Anders Wivel. “How do small island states maximize influence? Creole diplomacy and the smart state foreign policy of the Seychelles.” Journal of the Indian Ocean Region (2018). https://doi.org/10.1080/19480881.2018.1471122

Adam, Jean-Paul. “The role of small states in building a global community.” Remarks at the Institute for Cultural Diplomacy, Berlin, December 20, 2014.

Holt, Sidney. “Opportunity: Needs meet possibilities. Negotiating sanctuaries for whales.” Paper presented at the First International Conference on Marine Mammal Protected Areas, Maui, Hawaii, March-April 2009.

Jesse, Neal G., and John R. Dreyer. Small States in the International System at Peace and War. Lanham: Lexington Books, 2016.

Larsen, J. “Towards maritime security in the Indian Ocean: The case of Seychelles.” Island Studies Journal 4 (2015): 50-59.

Michel, James A. Rethinking the Oceans: Towards the Blue Economy. St. Paul: Paragon House, 2016.

Oest, Kajsa J. N., and Anders Wivel. “Security, profit or shadow of the past? Explaining the security strategies of microstates.” Cambridge Review of International Affairs 23, no. 3 (2010): 429-453.

Scarr, Deryck. Seychelles Since 1770: History of Slave and Post-Slavery Society. Trenton, NJ: Africa World Press, 1999.

This is one scene from a global phenomenon most people never see.

Journalist Vittorio Longhi spent years documenting what he calls “the immigrant war”—a relentless campaign of exploitation, violence, and discrimination against migrant workers that spans four continents.

His conclusion is uncomfortable: the world’s advanced economies depend on a system that treats foreign workers as disposable, and the contradictions of this system are now exploding.

Consider the numbers. In the Persian Gulf states, foreign workers outnumber locals by more than two to one.

They built Dubai’s glittering towers, Qatar’s World Cup stadiums, Saudi Arabia’s gleaming malls.

Yet they live in overcrowded work camps on dirt roads, paid wages that wouldn’t cover a single night in the Armani Hotel occupying floors of the Burj Khalifa they constructed.

The hotel charges €700 a night.

The workers who built it earned around $200 a month for 12-hour days, six days a week.

One of them was Athiraman Kannan, a 38-year-old Indian laborer who had spent a decade in the Gulf.

In May 2011, after his employer Arabtec refused to let him return home following his brother’s death, he jumped from the 147th floor of the world’s tallest building.

Here’s the mechanism that makes this possible.

Throughout the Gulf, migrant workers operate under a system called kafala, or sponsorship, which binds them to a single employer who controls their visa, can confiscate their passport, and has the power to prevent them from leaving the country.

As the U.S. State Department noted in a report on Qatar, this arrangement “may lead to forced labour activities under conditions of slavery.”

Now here’s what gets interesting.

The same dynamic appears thousands of miles away in entirely different contexts.

In the United States, Central American guest workers on H-2 visas find themselves similarly trapped, their status tied to employers who can deport them simply by picking up the phone to immigration authorities.

David Bacon, who has spent decades covering labor issues, documented case after case of workers having passports confiscated, wages withheld, and complaints silenced with threats of deportation.

A Guatemalan laborer named Juan described the situation bluntly:

“The boss took away our passports as soon as we arrived from Mexico. If my passport lets me be here legally, what do I do to show I’m not illegal?”

The Southern Poverty Law Center investigated the H-2 program and found conditions that would be familiar to any worker in the Gulf work camps—wages well below legal minimums, squalid housing in containers and prefabs without electricity, and a system where, as their report stated, “the rights of immigrants end up being wiped out” because the employer holds absolute power.

But the story doesn’t end with exploitation. Something else is happening too.

In April 2008, nine cooks at La Grande Armée restaurant in Paris—a prestigious establishment frequented by politicians, celebrities, and President Nicolas Sarkozy himself—shut down the kitchen and went on strike. They were sans papiers, undocumented workers, and they had decided they were tired of being invisible.

The strike revealed that one of the most exclusive restaurants in Paris depended on workers without papers who had been employed for years under false documents. Raymond Chauveau, coordinator for undocumented workers at France’s largest trade union, the CGT, saw an opportunity.

What Marx had called the “industrial reserve army”—workers kept deliberately vulnerable to bring down wages—was beginning to organize.

Between 2007 and 2009, strikes by undocumented workers spread across the Paris region at a nearly monthly rate. Regularizations exceeded 6,000 in 2007, then 12,000 in 2008, then 13,600 in 2009. The employers and the Sarkozy government were caught off guard by workers who, as one Malian cook named Tama put it, wanted “to go all the way.”

Then came something larger.

On May 1, 2006, more than 1.5 million people took to the streets in 70 American cities to protest legislation that would have criminalized undocumented immigration.

In Los Angeles alone, 75 percent of companies employing immigrants came to a halt. Fruit rotted on trees in California and Arizona. Tyson Foods and Cargill Meat Solutions shut down factories.

The movement called itself “A Day Without Immigrants,” and it worked. The Sensenbrenner Bill—named for the Republican congressman who proposed making illegal presence in the country a felony—stalled in the Senate and eventually died.

Four years later, inspired by the American movement, activists in France launched “24 Hours Without Us.”

In Italy, after a wave of racist violence culminated in a genuine pogrom against African workers in the town of Rosarno, a similar “Day Without Us” brought 300,000 people into the streets. In Brescia, where anti-immigrant local ordinances had reached absurd heights—fining a Moroccan woman for sitting at the foot of a monument, citing Asian boys for playing cricket in a park—48 factories stopped production as metalworkers, both immigrant and Italian, walked out together.

What connects these movements is something the political analyst Immanuel Ness observed about the United States: migrants are often more inclined to organize and make demands than local workers. Where native workers have been socialized into individualism, immigrants frequently bring collectivist traditions built around family and community. They organize through migration networks, churches, social media—channels that bypass traditional institutions.

This capacity for resistance surfaced in the most unlikely place.

In 2007, workers at the Haji Hassan construction company in Bahrain, mostly from Nepal, India, Pakistan, and Sri Lanka, refused to board the company buses that would take them to building sites.

For 24 hours, more than 1,600 workers stayed in their camp. It was the first major strike by migrants in the Persian Gulf construction sector.

The company capitulated. Wages increased. Overcrowding in dormitories was reduced from 9 to 5 per room. Air conditioning was installed. Most importantly, 900 more migrants immediately joined the union, recognizing that coordinated action could change conditions.

Trade unionists in the Gulf understand something crucial: the real leverage comes from building what they call a “bridge” between labor organizations in sending and receiving countries.

Nepali unions signed agreements with their counterparts in Bahrain and Kuwait.

Indian unions trained workers before departure and connected them with support structures upon arrival.

When a worker can rely on organized support from the moment they leave home until the moment they return, the power of unscrupulous employers and traffickers diminishes.

This matters because the alternative is what Vittorio Longhi documents throughout his book—bodies arriving at airports in anonymous wooden boxes, suicides from skyscrapers built by the deceased, workers beaten to death for demanding back wages.

In the Sicilian Channel alone, at least 5,962 people died attempting to reach Europe between 1994 and 2011. More than 4,500 of them are still missing, their bodies never recovered.

The former Minister of Employment of Bahrain, Majid Al Alawi, put it starkly:

“Under these conditions migrants are a time bomb, more dangerous than a nuclear bomb for the countries of the Gulf, if they do not make a start on reforms.”

He was talking about his own country. But he could have been talking about agriculture in southern Italy, where African workers pick tomatoes for €3 a box under the control of illegal labor recruiters.

He could have been talking about the Arizona desert, where more than 1,700 migrants have died trying to cross in the last ten years.

He could have been talking about the banlieues of Paris, where the descendants of immigrants live in conditions of soft segregation that exploded into riots in 2005.

The patterns converge.

Excessive restrictions on legal migration don’t stop movement—they make it deadlier, more exploitative, and more profitable for traffickers.

The contradiction between needing foreign workers and making their presence illegal creates exactly the reserve army that keeps wages down and working conditions degraded.

Noam Chomsky called it the “international assault on labor.”

Antonio Gramsci would have recognized the need for what he called a “collective will” uniting precarious workers across national boundaries.

Whatever you call it, the fight is the same one that workers have always waged against capital, updated for an era when people move across borders as easily as goods and money do.

In August 2011, African farm laborers in Nardò, in Italy’s Puglia region, decided they had had enough.

For thirteen days they refused to work, blocking roads and demonstrating in the streets.

They were demanding something simple: compliance with the provincial labor contract that guaranteed €6 an hour instead of the €3 they were actually receiving.

The strike spread. It drew support from trade unions, anti-racist associations, and local activists. Most remarkably, it succeeded.

The Puglia Region created reservation lists allowing workers to be hired directly by companies, cutting out the illegal labor recruiters. National legislation followed, criminalizing the practice of illicit labor recruitment for the first time.

When asked about the strike, the Public Prosecutor of Lecce, Cataldo Motta, said something that could serve as an epitaph for the entire struggle:

“Immigrants have given us a great lesson in civilization, showing that you need not be afraid of denouncing crimes, and when denouncement becomes unanimous, any risk disappears.”

The immigrant war is real. But so is the resistance.

And increasingly, that resistance is connecting across borders, languages, and cultures to form what might eventually become a genuine global movement.

Whether it succeeds will determine not just the fate of migrants, but the future of labor everywhere.

Sources:

Longhi, V. (2013). The Immigrant War: A Global Movement Against Discrimination and Exploitation. Bristol: The Policy Press.

Carr, M. (2010). “The War Against Immigrants.” New York Times, November 8.

Chomsky, N. (2011). “The International Assault on Labor.” Truthout, May 4.

Foucault, M. (1997). Il faut défendre la société [Society Must Be Defended]. Paris: Hautes Études Seuil-Gallimard.

Bacon, D. (2008). Illegal People: How Globalization Creates Migration and Criminalizes Immigrants. Boston: Beacon Press.

Southern Poverty Law Center (2013). Close to Slavery: Guestworker Programs in the United States.

Human Rights Watch (2011). Domestic Plight: How Jordanian Laws, Officials, Employers, and Recruiters Fail Abused Migrant Domestic Workers.

International Labour Organization (2010). International Labour Migration: A Rights-Based Approach. Geneva: ILO.

Sayad, A. (1999). La Double Absence: Des illusions de l’émigré aux souffrances de l’immigré. Paris: Seuil.

The story goes like this: workers don’t challenge the system because they’ve been brainwashed. Schools, media, and cultural institutions have convinced them that capitalism is natural, inevitable, even desirable. They’ve internalized the ideology of their rulers. The system persists through consent.

It’s a comforting explanation if you’re on the Left. It means that once you wake people up—once you pierce through the ideological fog—the revolution can begin. The only thing standing between workers and liberation is false consciousness.

There’s just one problem. The theory doesn’t work.

Vivek Chibber’s The Class Matrix offers a devastating alternative explanation. And if he’s right, it changes everything we thought we knew about why the working class hasn’t overthrown capitalism—and what it would actually take to change things.

The cultural turn in social theory began with a reasonable observation. Classical Marxism seemed to predict that capitalism would generate its own gravediggers—that the conflict between workers and employers would escalate until the system collapsed. But by the 1950s and 60s, this clearly wasn’t happening. Workers in the West were buying cars, moving to suburbs, voting for conservatives. The revolution had been indefinitely postponed.

Theorists like Stuart Hall, the Frankfurt School, and the Gramscians concluded that Marx’s framework was missing something crucial. As Hall recalled, the New Left believed that “the major transformations were not so much political and economic as cultural and social.” The problem, they decided, was that classical Marxism had neglected the superstructure—the realm of ideas, values, and meaning. To explain capitalism’s durability, you had to look at how dominant classes secured their hegemony through ideology.

This became the conventional wisdom. As Martin Carnoy summarized the view, Gramsci’s concept of hegemony meant that “neither force nor the logic of capitalist production could explain the consent that production enjoyed among the subordinate classes.” Rather, “the explanation for this consent lay in the power of consciousness and ideology.” Dominant classes maintained their rule by establishing “their view of the world as all-inclusive and universal.”

Chibber thinks this entire framework rests on a fundamental error.

Start with the claim that workers consent to capitalism because ideology tells them to. This argument requires that workers be unable to perceive the harms that their class position inflicts on them. The theorists of the cultural turn certainly recognize these harms—the exploitation, the insecurity, the loss of autonomy. But somehow, the workers who actually experience these conditions are supposed to be incapable of seeing what the theorists see.

As Chibber puts it, culturalists are “in the embarrassing position of claiming implicitly that while they can discern the exploitative—and hence unjust—character of the employment relation, the actors who are, in fact, being exploited, who are experiencing its brute facts, are not capable of doing so.”

This doesn’t hold up. Workers know perfectly well that their jobs are precarious, that their bosses have arbitrary power over them, that they work harder while their wages stagnate. They don’t need to be woken up. They’re already awake.

So if workers aren’t fooled by ideology, why don’t they organize to change things?

Here’s where Chibber’s argument takes an unexpected turn. The classical Marxist prediction that workers would inevitably organize against capitalism wasn’t wrong because it overestimated the conflict between workers and employers. It was wrong because it underestimated the obstacles to collective action.

Workers face what Claus Offe and Helmut Wiesenthal called a fundamental asymmetry. Capitalists can pursue their interests individually—each firm competes in the market without needing to coordinate with other firms. But workers can only effectively challenge their employers through collective action. And collective action is hard.

First, there’s vulnerability. Workers depend on their jobs to survive. They know that any attempt to organize can get them fired. As Adam Smith observed in The Wealth of Nations, in any dispute between employer and employee, “it is not difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage.” Employers can hold out much longer. “Many workmen could not subsist a week, few could subsist a month, and scarce any a year without employment.”

Second, there’s the problem of interest aggregation. Workers don’t share identical interests. Some have scarce skills that let them negotiate individually for better terms. Some prioritize wages, others prioritize job security or working conditions. Building a coalition requires hammering out agreements among people with partially divergent goals.

Third, there’s free riding. Even workers who want change have an incentive to let others bear the costs and risks of organizing. Why stick your neck out when you’ll benefit from your colleagues’ success regardless?

These obstacles don’t prevent collective action entirely. Labor movements have emerged throughout capitalism’s history. But they make individual strategies far more attractive than collective ones for most workers most of the time. As Chibber argues, “the class structure locks its incumbents into conflict, and it does so in a way that limits the latter’s explosiveness.”

This leads to the book’s most counterintuitive claim. The baseline condition in capitalism isn’t consent or coercion. It’s resignation.

Workers accept capitalism not because they think it’s legitimate or just, but because they see no realistic alternative. They’re not dupes—they’re rational actors responding to genuine constraints. They understand that challenging the system requires successful collective action. They also understand that collective action is incredibly difficult and usually fails. So they make peace with reality as best they can.

This doesn’t mean workers like their situation. Chibber expects their ideological reaction to be “cynicism about the system—its being corrupt and so on—and a general tendency to be very pessimistic about social change.” Sound familiar?

The implications are significant.

First, the argument from resignation explains something that the argument from consent cannot: why capitalism remains stable even when living standards stagnate. According to the consent theory, stability depends on the dominant class’s ability to deliver material improvements. When growth slows and wages stagnate, consent should erode, and the system should become unstable.

But look at the neoliberal era. In the United States, real wages have been essentially flat for two generations. In Germany and Britain, stagnation has persisted for decades. Yet there’s been barely a ripple in the political waters. Working-class resistance has grown weaker, not stronger, even as conditions have worsened. Strike activity collapsed almost in tandem with stagnating wages.

The consent theory predicts instability in these conditions. The resignation theory predicts exactly what we observe: quiescence born of perceived powerlessness.

Second, the argument reframes what it would actually take to transform society. Cultural theorists thought the key was breaking through ideological mystification—consciousness-raising, counter-hegemonic discourse, exposing the contradictions of capitalism. But if workers already know their situation is unjust, the problem isn’t their ideas. The problem is the material obstacles to collective action.

This is why labor organizing is so arduous—”precisely because employees are not blindly following the rules.” They have perfectly good reasons to be cautious. Overcoming their rational hesitation requires actually changing the risk-reward matrix they face: building organizations that reduce the individual costs of participation, demonstrating that collective action can succeed, creating the trust and solidarity that make people willing to sacrifice for each other.

In other words, the road to change runs through painstaking, institutional work—not ideological revelation.

Third, Chibber rescues structural class theory from what he sees as a misunderstanding by both its critics and its defenders. The cultural turn accused structural Marxism of ignoring agency and reducing workers to automatons. But Chibber argues this gets things backwards.

For a structure to reproduce itself, the actors within it must have reasons to play by its rules. The capitalist class structure generates those reasons by placing workers in a situation where individual compliance is more attractive than collective resistance. Workers participate knowingly, not as robots executing a program. Their agency is the mechanism through which the structure reproduces itself.

This means a deterministic process—the steady reproduction of class relations—is actually produced by conscious human choice. As Chibber puts it, “a process that is quite deterministic... is the product of fully activated social agency.” Seeking out a job, holding onto it, competing in the labor market—these require “enormous drive, creativity, imagination, and resolve.”

The structural argument doesn’t deny agency. It explains how agency unfolds in a world of constraints.

There are questions the book leaves open. If resignation is the baseline, under what conditions does it break down? What turns the exceptional moments of successful collective action into something more durable? How do we understand the periods when working-class movements did reshape capitalism—the rise of social democracy, the welfare state, the union density of the mid-twentieth century?

Chibber’s framework suggests these achievements required overcoming the structural obstacles to collective action through sustained, organized effort. And it implies they remain vulnerable whenever that organized power weakens—which is precisely what’s happened over the past fifty years.

The Class Matrix is ultimately a book about taking workers seriously. Not as dupes to be enlightened or automatons executing a historical script, but as rational actors navigating real constraints. The question isn’t why they don’t see the truth. The question is why the truth isn’t enough.

Understanding this matters because it changes what we should focus on. Not better arguments or more compelling narratives. Not piercing through ideological mystification. But the long, difficult work of building organizations capable of shifting the material balance between workers and employers.

The revolution, if it comes, won’t arrive because workers finally wake up. It will arrive because someone figured out how to change the odds.

——

Sources:

Chibber, Vivek. The Class Matrix: Social Theory after the Cultural Turn. Harvard University Press, 2022.

Smith, Adam. The Wealth of Nations. 1776.

Offe, Claus, and Helmut Wiesenthal. “Two Logics of Collective Action.” Political Power and Social Theory 1 (1980).

Hall, Stuart. Lectures at the University of Illinois, 1983.

Carnoy, Martin. The State and Political Theory. Princeton University Press, 1984.

Przeworski, Adam. Capitalism and Social Democracy. Cambridge University Press, 1985.

Gramsci, Antonio. Selections from the Prison Notebooks. International Publishers, 1971.

Each one used to unlock something in the United States. A house. A car. An office. The places where people built their lives. After deportation, these keys become useless. The bowl fills slowly, key by key, representing homes, families, and entire futures abandoned at the border.

This is where their stories end, legally speaking. But it’s also where something else begins.

Between 2007 and 2016, the United States deported over 2.6 million people to Mexico alone. During Obama’s eight years in office, the country expelled more people than it had in the 108-year period between 1892 and 2000. And many of those deported share something that challenges our assumptions about what it means to be American.

They grew up here.

Gina was born in Mexico, but her only memory of the country is a hazy image of falling off a donkey when she was three or four years old. Her childhood memories are American ones. Chuck E. Cheese birthday parties. Dancing at her high school prom. She gave birth to three children in the United States and celebrated countless holidays with her family, all of whom are now U.S. citizens.

When she was deported to Tijuana in 2011, everything felt foreign. The hillsides lined with makeshift shelters patched together from scrap metal. The downtown area known as Zona Norte, where deportees arrive if they walk straight from where Border Patrol leaves them, a haven for drugs and prostitution.

She experienced her so-called return to Mexico as a foreigner would.

Gina is not technically American. But she almost was. She had passed her citizenship test. She remembers hearing “Congratulations, you passed!” The next step was a swearing-in ceremony. She never made it. A domestic violence conviction derailed everything, even though she was the victim in an abusive relationship so severe that she suffered two miscarriages from beatings. She was the one arrested. She was the one convicted. And eventually, she was the one deported.

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How long does it take for the adult sibling of a US citizen, living in Mexico, to legally immigrate to the United States?

A few months? A year? Maybe two or three years?

According to a YouGov poll cited by Taylor Orth, only 1% of respondents gave the correct answer: approximately 20 years.

That’s not a typo. Two decades of waiting, paperwork, uncertainty. For someone who already has a sibling who’s a citizen.

The striking part? When asked how long it should take, the vast majority of Americans—including Republicans—said a few years at most.

There’s a gap here. A massive one. And a new study suggests this gap might be the key to something researchers have been struggling with for years: actually changing people’s minds about immigration.

Alexander Kustov at the University of North Carolina at Charlotte and Michelangelo Landgrave at the University of Colorado Boulder ran an experiment that challenges a lot of conventional thinking.

For years, researchers have tried to shift public opinion on immigration by correcting misperceptions. Americans overestimate how many immigrants there are. They overestimate immigrant crime rates, as Light, He, and Robey documented in their 2020 analysis of Texas data. They exaggerate cultural differences, as Flores and Azar showed in 2023.

The logic seems obvious: give people the correct facts, and they’ll update their views.

It hasn’t worked.

Study after study has found that even when you successfully correct these factual errors, policy preferences barely budge. Hopkins, Sides, and Citrin found this in 2019. Kustov, Laaker, and Reller confirmed it in 2021. The pattern is consistent enough that it’s become something of a puzzle in political science.

Why would beliefs change but preferences stay frozen?

Michael Tesler proposed an answer back in 2015. Some beliefs are “crystallized”—they’re woven into people’s broader worldviews, their partisan identities, their moral frameworks. You can technically update the factual belief, but the underlying attitude has roots that go deeper than any one data point.

Kustov and Landgrave had a different idea.

What if the problem isn’t that information doesn’t work? What if the problem is that researchers have been providing the wrong information?

Most Americans know almost nothing about how the immigration system actually functions.

That might sound like an exaggeration. It isn’t.

In the nationally representative survey Kustov and Landgrave conducted, they asked respondents to estimate wait times for different categories of potential immigrants. A doctor without a job offer. A famous athlete. A nanny with a job offer. An adult sibling of a citizen. An aunt or uncle of a citizen.

The average correct response rate was 25%. Random guessing would get you 20%.

Here’s the detail that stuck with me: only 8% of respondents correctly answered that aunts and uncles of US citizens are not eligible for family-based immigration at all. The question wasn’t about timing. It was about whether the path even exists.

92% of Americans thought there was a legal pathway that simply doesn’t exist.

This ignorance wasn’t concentrated in any particular group. The researchers tested for differences across age, race, education, income, party identification, and ideology. The gaps were negligible. College-educated liberals were slightly more knowledgeable—by a few percentage points. Practically speaking, everyone was equally uninformed.

As the Cato Institute’s Emily Ekins and David Kemp noted in their 2021 survey, Americans tend to assume their immigration system is much more straightforward and open than it actually is.

David Bier at Cato has documented just how byzantine the system really is. Nearly two hundred different visa categories. Application fees and legal costs running into thousands of dollars. Average wait times for visa appointments of 244 days—and that’s before the actual processing begins. Country-specific caps that mean immigrants from places like India, China, Mexico, and the Philippines can wait decades for green cards they’re otherwise fully qualified to receive.

The US immigration system is, in the language of public administration scholars like Donald Moynihan, Julie Gerzina, and Pamela Herd, administratively burdensome in ways most citizens never encounter and therefore never imagine.

So Kustov and Landgrave designed an experiment around this blind spot.

They recruited a nationally representative sample of 1,000 Americans through YouGov in May and June of 2023. Respondents were randomly assigned to one of three conditions.

One group read a neutral paragraph defining basic migration terminology. This was the placebo.

A second group read about administrative burdens: the hundreds of visa categories, the thousands of dollars in fees, the years of waiting.

A third group read about restrictions: the annual caps, the country-specific quotas, the reality that some eligible applicants wait decades.

Both treatment texts were about 150 words. Factual, verifiable, non-judgmental. No emotional appeals, no stories about specific immigrants, no arguments about whether immigration is good or bad.

Just information about how the system works.

The results were clear.

After reading about administrative burdens or restrictions, respondents were significantly more likely to believe immigration is difficult. That might seem obvious—you told them it was difficult, and they believed you. But the manipulation check matters because it confirms the information actually landed.

More importantly, respondents also shifted their policy preferences. About 13 percentage points more respondents—a 35% increase over baseline—reported supporting more open legal immigration or wanting to make the process easier.

The effect size was consistent across both treatment conditions. It held up after controlling for pre-treatment covariates. And in exploratory analysis, the researchers found positive effects across most political and demographic subgroups, including both Democrats and Republicans.

This wasn’t just Democrats becoming more liberal. The information moved people across the spectrum.

A natural question: maybe this was a fluke?

Kustov and Landgrave anticipated that. They’d run a pilot study seven months earlier using a different sample—912 respondents from Prolific, which tends to skew younger and more liberal than the general population.

The pilot used slightly different materials, including a political cartoon showing a figure lost in an “immigration maze.” Despite these variations, the results were nearly identical. Respondents who received information about immigration difficulty became more likely to believe immigration was difficult and more likely to support increasing immigration levels.

The effect replicated.

There’s a theoretical reason to expect this approach to work better than traditional fact-checking.

Alexander Coppock, in his 2023 book on political persuasion, draws a distinction between interventions that make existing knowledge “accessible” versus those that make new knowledge “applicable.”

Most immigration information experiments do the former. They remind people of facts they’ve probably encountered before—crime statistics, demographic projections, economic impacts. These facts are already floating around in public discourse. People have had opportunities to integrate them into their worldviews or reject them.

Information about the immigration process is different. Most people have never encountered it. They’ve never had reason to think about green card waiting times or country-specific caps. Their beliefs aren’t crystallized because they barely exist.

When you provide genuinely novel information, people don’t have pre-built defenses. The information can actually land.

The researchers are careful about what they’re claiming and what they’re not.

They don’t know if the effects persist over time. Immigration attitudes are generally stable in the long run, as Kustov, Laaker, and Reller documented in 2021. A short-term shift in a survey might not translate into durable opinion change or voting behavior.

They also don’t know the mechanism. Maybe people feel empathy for immigrants facing bureaucratic obstacles, as Scott Williamson and colleagues suggested in their 2021 work on family immigration histories. Maybe people perceive systemic injustice and want to align the system with American values of fairness, as Morris Levy and Matthew Wright argued in their 2020 book. Maybe people just see inefficiency and want it fixed.

The study wasn’t designed to distinguish between these possibilities.

And the sample size wasn’t large enough to detect small differences between the two treatment conditions or to identify which specific subgroups were most responsive.

But here’s what strikes me as the core finding.

For years, advocates for more open immigration have tried to persuade skeptics by arguing that immigration is good. Immigrants commit less crime. Immigrants start businesses. Immigrants contribute more in taxes than they receive in benefits.

These arguments are often true. They’re also often ineffective, precisely because they engage with beliefs people already hold strongly.

Kustov and Landgrave suggest a different framing. Instead of arguing that immigration is good, explain that immigration is hard.

Not “hard” in the sense of being a difficult policy problem. Hard in the sense that the people trying to navigate it face genuine obstacles. Hard in the sense that the system itself is more restrictive and burdensome than most Americans realize.

This reframe doesn’t require anyone to abandon their existing values. It doesn’t ask immigration skeptics to suddenly embrace open borders. It just provides context most people lack.

And apparently, that context matters.

There’s one more detail worth noting.

When asked how long various categories of immigrants should have to wait, Americans consistently gave answers much shorter than the actual wait times. This was true across party lines.

People aren’t opposed to legal immigration in the abstract. They’re operating with a mental model of the system that bears little resemblance to reality.

The gap between what Americans think the immigration system is and what it actually is might be one of the most consequential information asymmetries in contemporary politics.

Kustov and Landgrave have shown that closing that gap—even partially, even briefly—can move public opinion in a direction that years of traditional fact-checking efforts have failed to achieve.

Whether advocates, policymakers, or anyone else will act on that finding is a different question.

But now you know something most people don’t.

The next time someone tells you immigrants should “just come legally,” you’ll understand why that phrase carries more weight than it might seem.

Sources

Kustov, Alexander, and Michelangelo Landgrave. “Immigration is difficult?! Informing voters about immigration policy fosters pro-immigration views.” Journal of Experimental Political Science (2025): 1-13.

Bier, David J. “Why Legal Immigration is Nearly Impossible: U.S. Legal Immigration Rules Explained.” Cato Institute Policy Analysis No. 950 (2023).

Coppock, Alexander. Persuasion in Parallel: How Information Changes Minds about Politics. University of Chicago Press (2023).

Ekins, Emily, and David Kemp. “E Pluribus Unum: Findings from the Cato Institute 2021 Immigration and Identity National Survey.” Cato Institute (2021).

Hopkins, Daniel J., John Sides, and Jack Citrin. “The Muted Consequences of Correct Information about Immigration.” The Journal of Politics 81, no. 1 (2019): 315-20.

Kustov, Alexander, Dillon Laaker, and Cassidy Reller. “The Stability of Immigration Attitudes: Evidence and Implications.” The Journal of Politics 83, no. 4 (2021): 1478-94.

Light, Michael T., Jingying He, and Jason P. Robey. “Comparing Crime Rates between Undocumented Immigrants, Legal Immigrants, and Native-Born US Citizens in Texas.” Proceedings of the National Academy of Sciences 117, no. 51 (2020): 32340-7.

Orth, Taylor. “Support for Immigration is Much Higher among Young Americans than Old Ones.” YouGov (2022).

Tesler, Michael. “Priming Predispositions and Changing Policy Positions: An Account of When Mass Opinion is Primed or Changed.” American Journal of Political Science 59, no. 4 (2015): 806-24.

House was ahead of his time. His proposal anticipated what we now call International Development—the post-World War II project of wealthy nations transferring resources, expertise, and capital to lift poor countries out of poverty.

Seven decades later, we can deliver a verdict on that experiment.

It failed.

Not in the way most critics imagine. Not because donors were too stingy or recipient governments too corrupt. It failed because the entire premise was flawed from the start—built on a misreading of how global poverty was created in the first place.

Andrew Brooks, a geographer at King’s College London, makes this case in his book “The End of Development.” His argument cuts against nearly everything we assume about why some nations prosper while others languish. And it starts with a question that seems almost too obvious to ask.

Why is Africa poor?

The intuitive answer involves geography. Harsh climates. Poor soils. Rugged terrain. Tropical diseases. It feels right. Look at the Sahara Desert—dry, desolate, impoverished. Look at the Swiss Alps—mountainous, yet affluent. Geography must matter.

Except it doesn’t hold up.

Saudi Arabia is equally dry and desolate. Nigeria sits on more oil than Switzerland has mountains. The rainforests of Queensland are humid and tropical, yet Australians enjoy some of the highest living standards on earth. The Democratic Republic of Congo has rainforests too. It has some of the world’s most desperate poverty.

As Brooks documents, environmental determinism—the idea that nature controls human destiny—is “a popular, intuitive and elegantly simple explanation for inequalities, but one that is almost entirely wrong.”

The evidence goes deeper than cherry-picked examples. Archaeological and historical research shows that before European colonization, sophisticated civilizations flourished across Africa, Asia, and the Americas. The feudal states of medieval West Africa—along the Limpopo River, in Great Zimbabwe, throughout the Upper Guinea Coast—were comparable in political complexity to medieval Europe. Chinese navigators sailed ships of 3,000 tons when Columbus’s Santa Maria displaced barely 100. The Great Wall was constructed centuries before Christ was born.

Europe did not have a head start. It had no natural advantage. What it had was something else entirely.

The year 1492 marks a hinge point in human history, though not for the reasons we typically celebrate.

When Columbus crossed the Atlantic, he initiated what historians call the Columbian Exchange—the transfer of plants, animals, and diseases between the Old and New Worlds. The ecological consequences were staggering. American crops like potatoes, tomatoes, and maize transformed European diets. Old World livestock reshaped American landscapes.

But the most consequential exchange was invisible.

European germs—smallpox, measles, typhus, plague—swept through indigenous populations that had no immunity. In central Mexico alone, the population collapsed from around 15 million to 1.5 million within 150 years. As Brooks notes, far more people died from disease than from Spanish swords.

This biological catastrophe created an opportunity for extraction on an unprecedented scale. The conquistadors didn’t just find gold in the Americas. They found labor shortages in lands suddenly emptied of workers. The solution was the Atlantic slave trade.

What followed was a global restructuring of economic geography. Latin American gold and silver flowed to Seville, then to Amsterdam and London, providing the capital that financed early industrial capitalism. Enslaved Africans produced the cotton that fed the textile mills of Lancashire. As Brooks writes, “capital from the slave trade helped to bank roll the Industrial Revolution and enriched Britain.”

The patterns we see on today’s wealth map—the familiar division between “developed” and “developing” nations—were not determined by climate or geography. They were manufactured through five centuries of extraction, exploitation, and the strategic application of violence.

This history matters because it exposes the contradiction at the heart of International Development.

After World War II, the newly independent nations of Africa and Asia were told they could achieve prosperity by following the Western model. Modernize your economies. Open your markets. Accept foreign investment. The money would flow in, the benefits would trickle down, and eventually you would join the club of developed nations.

The theory had a name: modernization. Its apostles included American academics who believed that all societies progressed through predictable stages toward an endpoint that looked remarkably like mid-century America. As the economist W.W. Rostow put it, traditional societies would “take off” into sustained growth if they adopted the right policies.

The theory also had a convenient alignment with Cold War strategy. Western development assistance promised newly independent nations a path to prosperity that didn’t require Soviet revolution. It was capitalism as liberation.

Here is where the story turns dark.

By the 1970s, many African and Latin American governments had borrowed heavily from Western banks. When interest rates spiked in the early 1980s, they couldn’t repay. The debt crisis that followed gave Western institutions—particularly the IMF and World Bank—enormous leverage over the economic policies of indebted nations.

The result was structural adjustment. In exchange for debt relief, poor countries were required to slash government spending, privatize state enterprises, remove trade barriers, and open their economies to foreign investment. The theory was that free markets would allocate resources efficiently and spark growth.

The practice was different.

As Brooks documents, structural adjustment “deindustrialized” Africa. Local manufacturing collapsed under competition from cheap imports. Governments gutted public services. Inequality widened. The 1980s became known as “the lost decade of development.”

Here is the punch line that isn’t funny at all: structural adjustment worked exactly as intended. Not as a poverty-reduction strategy, but as an expansion of global capitalism. It “opened up new territory to flows of capital by enforcing economic liberalization.”

International Development was never really about helping poor people. It was about extending the market.

The question of why some nations prospered while others remained poor has a simple answer, once you strip away the ideological fog.

Control.

The countries that escaped poverty—South Korea, China, and earlier Japan—did so by controlling their own capitalist development. They protected domestic industries. They regulated foreign investment. They prioritized education and infrastructure before liberalization. As Brooks observes, “both nations protected their domestic markets and had control over their own capitalist development.”

The countries that stayed poor were those denied this control—first by colonialism, then by debt, then by the structural adjustment programs that dictated economic policy from Washington.

A Chinese envoy to Malawi reportedly told local journalists: “No country in the world can develop itself through foreign aid. That is a fact. To develop your economy is your job, you have to do it yourself.”

The diplomat understood something that Western development experts still struggle to accept: the nations that succeeded did so by ignoring Western advice.

Today, the old paradigm is collapsing.

China’s engagement in Africa operates by different rules than traditional Western aid. The BRICS nations are reshaping global economic architecture. Local elites in African capitals navigate between competing powers, extracting benefits through what scholars call “extraversion”—using their position as gatekeepers to foreign markets.

Meanwhile, the statistics tell a story that contradicts the narrative of progress. Africa loses $58 billion more each year than it receives in loans, grants, and investment—drained through corporate profits, tax avoidance, and the costs of climate change mitigation. The richest 62 people on earth now own as much as the poorest half of humanity. Inequality hasn’t narrowed. It has exploded.

Brooks calls this “the end of development”—not the end of capitalist expansion, but the exhaustion of the Western-led project that claimed to be something nobler. The donors and development banks still operate, but their ability to shape outcomes is diminishing, and their track record offers little reason for the poor to listen.

What comes next is harder to envision than what came before.

The policy prescription that emerges from this analysis is unglamorous: regulate the market, curtail borrowing, protect domestic industries, and avoid another lost decade. It is not a revolutionary program. It does not promise transformation. It merely suggests that poor countries should have the same freedom to manage their own economic development that today’s rich countries once enjoyed.

Whether they will have that freedom is another question.

The 62 billionaires who own half the world’s wealth are not going away. Neither are the multinational corporations extracting Africa’s resources, or the international institutions that still condition assistance on market-friendly reforms. The game has not ended. The rules have simply become more transparent.

Brooks concludes that capitalism “reproduces inequality”—not as a malfunction, but as a feature. To address global poverty means confronting this reality rather than imagining that better-designed aid programs or more innovative financial instruments will somehow produce different results.

This is not an optimistic conclusion. But it has the advantage of being true. And understanding why things are the way they are is the prerequisite for changing them.

Colonel House’s vision of powerful nations coordinating to develop “the waste places” of the world was not simply premature. It was premised on a misunderstanding of how those places came to be considered waste in the first place. Seven decades of International Development later, we are still living with the consequences of that error.

The question is what we do now.

Sources

Brooks, Andrew. “The End of Development: A Global History of Poverty and Prosperity.” London: Zed Books, 2017.

Seymour, Charles. “The Intimate Papers of Colonel House: Behind the Political Curtain 1912–1915.” Boston and New York: Houghton Mifflin Company, 1926.

Blaut, J.M. “Eight Eurocentric Historians.” New York: Guilford Press, 2000.

Blaut, J.M. “The Colonizer’s Model of the World.” New York: Guilford Press, 1993.

Drake, N.A. et al. “Ancient watercourses and biogeography of the Sahara explain the peopling of the desert.” Proceedings of the National Academy of Sciences, 2011.

Arrighi, Giovanni. “The Long Twentieth Century.” London and New York: Verso, 1994.

Hart, Gillian. “D/developments after the meltdown.” Antipode, 2010.

Harvey, David. “The New Imperialism.” Oxford: Oxford University Press, 2003.

Smith, Neil. “Uneven Development: Nature, Capital, and the Production of Space.” Athens: University of Georgia Press, 2008.

Gilroy, Paul. “The Black Atlantic: Modernity and Double Consciousness.” London: Verso, 1993.

Escobar, Arturo. “Encountering Development: The Making and Unmaking of the Third World.” Princeton: Princeton University Press, 2011.

Jerven, Morten. “Africa: Why Economists Get It Wrong.” London: Zed Books, 2015.

But she’ll leave with something worth more than anything she brought.

This isn’t a story about refugees. It’s about a loophole, a war, and thousands of families who figured out how to buy time against an uncertain future.

Svetlana Ruseishvili has been watching Russians in Brazil since 2012. She’s a sociologist at the Federal University of São Carlos, and for years, the community she studied was small, unremarkable. Marriage migrants. A few academics recruited for their Soviet-era training. Musicians in the São Paulo Symphony Orchestra.

Then February 2022 happened.

Within months, her research subject transformed. New faces appeared in neighborhoods that had never seen Russians before. Telegram groups exploded with questions about rental prices, birth clinics, residency paperwork. By 2023, she and her colleague Sergey Ryazantsev were tracking a migration pattern that defied every category they knew.

The asylum numbers alone tell you something shifted. In 2019, twenty Russians applied for asylum in Brazil. In 2022, two hundred. In 2023, two hundred thirty-three.

But asylum is actually the minor channel here.

The major channel involves Article 12 of the Brazilian Constitution.

Brazil grants citizenship to anyone born on its soil. No exceptions. No conditions. A child born to two Russian tourists on a 90-day visa is, legally and irrevocably, Brazilian. That child can then sponsor their parents for permanent residency. And their grandparents. And their older siblings.

One birth. An entire family legalized.

The researchers have a term for this. They call it “strategic birth.”

The practice existed before the war, but 2022 changed its scale and its meaning. Ruseishvili and Ryazantsev found that family reunion permits issued to Russians jumped from 168 in 2019 to 633 in 2022 to 904 in 2023. A growth rate of 37 percent in just the final three years.

Florianópolis absorbed the majority. Between 2021 and 2023, 53 percent of all permanent residence permits issued to Russians in Brazil were concentrated in this single city.

Why there?

The answer requires understanding what Brazil looks like from Moscow.

Ask a Russian what they know about Brazil and you’ll get favelas, crime, carnival. Violence and chaos. One woman Ruseishvili interviewed admitted her pre-arrival knowledge consisted of a TV travel show and a reference in a Soviet novel. Another described his mental image as “favelas, high level of poverty, crime and carnival.”

Florianópolis offered an escape from this imagined Brazil.

Russian-language Instagram accounts had been marketing the city for years. European architecture. German and Italian heritage. Safe beaches. One interviewee explained his family’s reasoning with striking candor: “Santa Catarina is a state populated by Europeans, so for the most part it’s that, and it makes a difference. That’s why there’s such a difference in the standard of living.”

The pitch worked. Families who would never consider Rio or São Paulo found Florianópolis acceptable. More than acceptable. A place where they could wait out whatever was coming.

Here’s where the story gets strange.

These aren’t desperate people. The cost of a strategic birth runs around $15,000. That covers complicated international flights (most direct routes from Russia are now closed), three months’ rent in a decent neighborhood, and delivery at a private clinic. The families arriving can afford this. They have savings. They have remote income. Many work in IT.

In this sense, the migration resembles what scholars call lifestyle migration more than forced displacement. Matthew Hayes has documented North Americans relocating to Ecuador to stretch their retirement savings. Kristin Surak has tracked millionaires buying citizenship in Malta and Portugal. The Russian families in Florianópolis aren’t identical to either group, but they share something important: they’re not fleeing for survival. They’re optimizing.

And yet.

The push is political. Every family Ruseishvili and Ryazantsev interviewed spoke about the war, the mobilization, the closing down of Russian society. One respondent described the choice in stark terms: stay and face “wild tension, stress, constant survival every day” or leave and figure out the rest later.

This creates a category problem.

Forced migration scholars study the powerless. Lifestyle migration scholars study the privileged. What do you call people who are both? Who have the resources to choose their destination but are leaving because remaining has become intolerable?

The researchers settle on “war-induced migration of privilege.” It’s an awkward phrase, but it captures something real.

These families aren’t the Russian elite. If they were, they’d be in Monaco or Dubai, or they’d be buying Maltese passports for half a million euros. They’re the Russian middle class, and Brazil is what they can afford.

The US would be better. American birth tourism is the gold standard for this strategy. But it costs more, and visa restrictions make it harder. Brazil is the accessible path.

That accessibility is itself revealing.

In 2010, Brazil and Russia signed a bilateral agreement exempting each other’s citizens from tourist visas. Russians can enter Brazil and stay for 90 days, with the right to extend to 180. No approval required. No consular interview. No proof of return ticket.

This puts Russians in a privileged position relative to migrants from most of the developing world. Visa regimes, as migration scholar Mark Salter has argued, are political technologies that sort humanity into categories of desirability. Russians benefit from one of the more favorable sorting outcomes. They can show up and figure out their status later.

Most migrants cannot do this.

The contrast with Brazil’s treatment of other populations is uncomfortable. Haitians arriving after the 2010 earthquake faced a complicated humanitarian visa process. Venezuelans fleeing economic collapse received ad hoc measures that shifted repeatedly. When Ukrainians fled after February 2022, Brazil created a special humanitarian residence permit.

No such measure was created for Russians.

This makes a certain political sense. Ukrainians are victims of Russia. Russians are... what, exactly? Perpetrators? Dissidents? Neither category fits well.

So Russians fall through the existing channels. Asylum if they can demonstrate persecution. Family reunion if they have a Brazilian child. Digital nomad visa if they can prove remote income of $1,500 monthly.

Or they just overstay.

The system is permissive enough that various semi-regular arrangements become possible. You’re a tourist until you’re not. You apply for something while your 90 days tick down. The bureaucracy moves slowly, and slowness is its own kind of permission.

What the system does not offer is support.

Brazilian migration policy provides no financial assistance. No housing support. No language training. No job placement. If you arrive without resources, you’re on your own.

This filters the population. The Russians who come to Brazil and stay are, almost by definition, people who don’t need help. They’re not accessing public services. They’re not competing for Brazilian jobs. They’re living in a parallel economy of their own creation.

Ruseishvili and Ryazantsev documented this economy in detail.

Beauty salons. Catering services. Car rentals. Auto repair shops. Restaurants. After-school programs for children. Yoga classes. Portuguese tutors. Immigration lawyers. Birth brokers who arrange everything from hospital tours to apartment rentals.

The brokers came first. These are mostly Russian women who migrated to Brazil years ago, often through marriage. They saw opportunity in the new arrivals and built businesses around it. For a fee, they’d guide families through the entire strategic birth process.

But the brokers’ monopoly didn’t last.

As more families arrived, information began flowing horizontally. Telegram chats accumulated thousands of members. People shared experiences, recommendations, warnings. The same questions appeared and got answered repeatedly. Where to find a Russian-speaking obstetrician. Which neighborhoods to avoid. How long the residency paperwork actually takes.

Douglas Massey called this “cumulative causation.” Once a migration flow begins, it creates the infrastructure for its own expansion. Each family that arrives makes arrival easier for the next one.

The community is building itself.

But here’s the thing Ruseishvili and Ryazantsev kept encountering in their interviews: most of these families don’t plan to stay.

“I don’t really see myself in Brazil permanently,” one woman told them. She’d been living in Florianópolis since January 2022. She had her residence permit. She had her Brazilian-born child. And she was already thinking about leaving.

“It’s kind of far away from my parents and friends. I’d still like to be closer.”

Another respondent described the calculation explicitly. The plan was to stay one year, get documents for the children and themselves, and then reassess. If Russia stabilized, maybe return. If things got worse, maybe move to Europe. The Brazilian passport opens doors. It ranks 17th globally for visa-free access, compared to 51st for the Russian passport. With Brazilian citizenship, you can apply for a US visa valid for 10 years.

Brazil, in this framing, is not a destination. It’s a platform.

The researchers found this attitude pervasive. Families were investing the minimum necessary for naturalization (one year of residence, Portuguese proficiency) and keeping their options open. Some mentioned Portugal as a future destination. Others had no clear plan beyond acquiring the passport.

But time changes things.

Ruseishvili and Ryazantsev observed an interesting pattern among families who came for strategic births before the pandemic. They’d intended to leave immediately after getting their documents. Instead, they stayed for naturalization. And by the time they got their citizenship, they’d accumulated ties they hadn’t anticipated.

Property. Businesses. Children in schools. Friendships.

One woman described the turning point: “If we leave here, we’ll never come back again. It’s too far away. It’s hard with a big family. To move, we have to close everything here and then do it all over again. I don’t want to.”

She’d gone from tourist to permanent resident to citizen to, finally, someone who couldn’t imagine leaving.

Children seem to be the key variable. The more children, the harder displacement becomes. Each child is a set of social connections, school enrollments, friendships. Uprooting once is expensive. Uprooting repeatedly becomes impossible.

The families arriving now don’t know this yet. They’re in the early phase, when Brazil still feels temporary. The plan is always to move on. The plan is always to keep options open.

Whether they’ll follow through is a question Ruseishvili and Ryazantsev can’t answer. The migration is too recent. The geopolitical situation is too fluid. The war continues. Sanctions tighten and loosen. Russian domestic politics shifts in ways that change what return would mean.

What the researchers can say is that something new has formed in Florianópolis.

Not quite a diaspora. Not quite a community. A network, maybe. A structure of mutual aid and shared information that exists mostly in digital space, occasionally in physical space, always provisionally.

The naturalization numbers are rising. Twenty Russians became Brazilian citizens in 2021. Forty-four in 2022. A hundred forty in 2023. Each one represents a decision to invest in permanence, even if the intention is to leave.

The Brazilian government has yet to decide how to process the asylum claims that have piled up since 2022. Approval would validate a certain interpretation of what’s happening in Russia. Denial would send a different signal. The Committee for Refugees is slow, and slowness is, again, its own kind of answer.

Meanwhile, the maternity wards keep admitting Russian-speaking patients. The Telegram groups keep growing. The Portuguese classes keep filling.

Argentina, interestingly, has attracted more Russians than Brazil. Estimates range from 3,300 to 9,000. Buenos Aires has become a hub for Russian cultural events, performances, lectures. The draw is partly economic. Argentina’s inflation (211 percent in 2023) makes it extraordinarily cheap for anyone earning in foreign currency.

But some families specifically chose Brazil because Argentina’s instability frightened them. They’d already fled one country in crisis. They didn’t want to land in another.

“We realized that it would probably be for a long time. So we wanted a more stable country. And Brazil seemed more stable in contrast.”

Stability is relative.

What Ruseishvili and Ryazantsev have documented is, in one sense, a very specific story. A particular legal loophole. A particular war. A particular population with particular resources navigating particular constraints.

But in another sense, it’s a story about how global mobility actually works.

Citizenship is a resource. Some people inherit valuable versions. Others inherit less valuable versions. The gap can be closed, if you have the money and the knowledge and the willingness to act.

Brazilian citizenship costs $15,000 and a pregnant woman willing to travel. Maltese citizenship costs half a million euros and a willingness to wait. American citizenship costs either marriage, employment, or decades of legal immigration process.

The Russians in Florianópolis are navigating this system with clear eyes. They’re not naive about what they’re doing. They’re acquiring an asset. They’re hedging against an uncertain future. They’re giving their children options they themselves didn’t have.

Whether they’ll use those options to stay in Brazil, leave for Europe, or eventually return to Russia is unknown. The researchers will keep watching. The story isn’t finished.

But something has already happened that can’t be undone.

A generation of Russian children are growing up Brazilian. They were born in Florianópolis, issued Brazilian birth certificates, registered as citizens of a country their parents never expected to call home. Whatever their families do next, these children will carry Brazil with them. A passport. A legal claim. A door that will always be open.

Their parents bought them time. What they do with it is the next chapter.

Sources

Ruseishvili, S. & Ryazantsev, S. (2024). Transcontinental trajectories: Exploring Russian war-induced migration dynamics in Brazil. International Migration, 62, 189–210.

Surak, K. (2021). Millionaire mobility and the sale of citizenship. Journal of Ethnic and Migration Studies, 47(1), 166–189.

Hayes, M. (2018). Gringolandia: Lifestyle migration under late capitalism. University of Minnesota Press.

Massey, D.S. (1990). Social structure, household strategies, and the cumulative causation of migration. Population Index, 56(1), 3–26.

Salter, M.B. (2006). The global visa regime and the political technologies of the international self: Borders, bodies, biopolitics. Alternatives, 31(2), 167–189.

Exodus-22. (2023). Mass exodus of Russians from the country in the context of war and mobilization: Overview analytics of two waves of military emigration.

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Not the migrants you’d expect. These were Americans and Canadians in their 60s. Former consultants, business owners, blue-collar workers. People who’d done everything right. Saved what they could. Assumed retirement would look like their parents’ retirement.

Then 2008 happened.

And suddenly, a city most of them had never heard of—Cuenca, Ecuador—became the answer to a question they never wanted to ask: Where can I afford to grow old?

Matthew Hayes, a sociologist at St. Thomas University, spent three years interviewing 69 North American migrants in Cuenca. His findings, published in the Journal of Ethnic and Migration Studies, reveal something the retirement industry doesn’t advertise.

This isn’t lifestyle migration. It’s survival strategy.

Here’s what he found.

In 47 of 69 interviews, cost of living was the primary reason for relocation. Not the weather. Not cultural curiosity. Not adventure. Money. Or more precisely, the lack of it.

One man lost 80% of his consulting business during the crash. He and his wife moved to Ecuador within a year. Another couple sold their house during the market collapse, spent over a year unemployed, watched their savings evaporate. As the wife put it, they faced a choice between living “much more frugally” or what she called “genteel poverty.”

Her husband finished the thought: “That just wasn’t attractive.”

So they left.

Forbes Magazine gave this strategy a name back in 2004. Rich Karlgaard called it “geographic arbitrage”—the practice of earning money in high-cost locations and spending it in low-cost ones. Timothy Ferriss popularized a version of this in his 2007 bestseller The 4-Hour Workweek, framing it as “lifestyle design” for digital entrepreneurs.

But the retirees in Cuenca aren’t building location-independent businesses. They’re cashing out.

Pension accumulated in San Francisco. Spent in the Andes.

Social Security check from Washington. Rent paid in Ecuador.

The math works because of structural inequality. As Aihwa Ong observed in her research on transnational mobility, this kind of “flexible citizenship” encourages people to respond “fluidly and opportunistically to changing political-economic conditions.” Hayes argues that geographic arbitrage is the retirement-age version of this logic. Privileges gained at “high latitudes” of the global economy get exchanged at higher rates of return in the developing world.

One participant described it plainly: “We could afford a housecleaner twice a week. We can afford someone that picks up and does the laundry and folds the laundry. We can afford a gardener... If we wanted to, we could eat out all the time.”

He called himself an “economic refugee.”

His pension couldn’t buy a “comfortable middle class retirement” back home.

The European literature on lifestyle migration tells a different story. Scholars like Benson and O’Reilly have documented British retirees moving to rural France or the Spanish coast. Those migrations tend to follow years of vacationing. They’re driven by appreciation of local culture, sunny climates, the search for authenticity.

The North Americans in Cuenca had often never been to Ecuador before. Many had never been to South America at all.

They found Cuenca the same way most found it: through a publication called International Living.

Of the 67 interviews where Hayes asked how participants first heard about the city, 37 mentioned the magazine directly. Another ten cited internet research that almost certainly led to content produced by or influenced by the publication.

International Living is owned by Agora Inc., a publishing house founded in 1978 by Bill Bonner. The company’s philosophy, according to its website, celebrates “the virtue of thinking independently and taking responsibility for your own life.” It publishes libertarian pamphlets, financial newsletters, and produced the documentary I.O.U.S.A., which became a rallying point for Tea Party Republicans advocating cuts to social security.

The message is consistent: your retirement is your problem. And here’s a consumer solution.

As Hayes observes, this framing has consequences. It transforms collective challenges—the erosion of pension security, rising healthcare costs, wage stagnation—into individual puzzles with private answers. Every crisis becomes an opportunity. Not for policy change. For relocation.

One migrant captured the trade-off: “Now, understand, to make the decision we made to come here, we gave up a lot, okay? But we gained a lot. We gained a lot over what we would have had.”

The key phrase is “over what we would have had.”

Not over what they’d expected. Not over what they’d planned for. Over what remained possible.

Some migrants frame this as adventure. Many genuinely find meaning in their new lives. But Hayes notes that rationalisations for transnational relocation aren’t merely post-hoc justifications. They connect what C. Wright Mills called “private troubles” to “public issues.”

The private trouble: insufficient retirement savings.

The public issue: the systematic dismantling of retirement security in North America.

Scholars like Duménil and Lévy have documented how productive investment and offshoring eroded the social benefits workers obtained from post-war settlements. Harvey traced the “brief history of neoliberalism” that restructured expectations about what societies owe their aging populations. The migrants in Cuenca are living the consequences.

As one woman told Hayes, “I would prefer to move back to San Francisco, but I can’t afford it.”

Another, a 69-year-old consultant whose work was “drying up,” put it starkly: “No one wants to bleed to death.”

The flow is accelerating. International Organization for Migration data shows that nearly half of American citizens living in Ecuador as of 2010 had arrived since 2006. In 2009-2010 alone, 4,000 showed up. Long-time residents in Cuenca remember when “Gringo Night” meant eight people at a table. By 2013, estimates put the North American population between 3,500 and 5,000.

The baby boomer generation has reached retirement age. And they’re arriving in Latin America with expectations shaped by publications promising they can “live comfortably on less than $700 a month” or “retire like royalty” on $2,500.

Hayes points out what these publications rarely mention: the impact on receiving communities.

When the local population appears in International Living, it’s usually as a source of cheap domestic labor. The gentrification effects—rising rents, transformed commercial districts, displaced locals—go unexamined. As previous research by Janoschka and others has documented, lifestyle migrants often see their impact in benign or beneficial terms. They remain unaware of how their presence restructures local economies.

The irony is structural. North Americans displaced by financial insecurity become, in their new home, the gentrifiers. Their spending power distorts local real estate markets. Their presence transforms the urban landscape. Some Cuencanos benefit. Others get priced out—and potentially begin their own migration, northward, toward higher-earning areas.

As Hayes notes, “the unequal distribution of the world’s resources continues to provide opportunities for higher latitudes to capture and colonise lower latitudes of the global division of labour, displacing people who have lived and worked there all their lives.”

The geographic arbitrageurs didn’t intend this.

But intention is beside the point.

What matters is the system that made this the rational choice. The system that transformed retirement from a collective guarantee into an individual gamble. The system that told a generation: you’re on your own.

They found their answer in the Andes. A city 8,300 feet above sea level, with more rainy days than sunshine, that somehow became one of the top retirement destinations in the world.

Not because of the weather.

Because of the math.

This post draws on research published by Matthew Hayes in the Journal of Ethnic and Migration Studies (2014), alongside cited works from Karlgaard (2004, 2006), Ferriss (2007), Ong (1999, 2006), Benson and O’Reilly (2009), Mills (1959), Duménil and Lévy (2011), Harvey (2005), Janoschka (2009, 2011), and others.