Digital nomadism and geoarbitrage
Digital nomadism is aspirational because it frees people to travel and work in beautiful locations. But living and working in a tropical location isn’t the only motivation. Money, or lack of it, is often the trigger.
Thailand and Bali, both digital nomad destinations, share more than pristine beaches and tropical backdrops. They both offer lower living costs to freelancers and business owners who might struggle to make ends meet in London or New York. If fact the key component of digital nomadism is the concept of “geoarbitrage”, which is a fancy term for wielding a western wage in a lower-cost, developing country.
Geoarbitrage was popularized by Ferriss in his book The 4-Hour Work Week, in which he proclaimed “escape the 9-5 and join the new rich”. This was one of the books that lay the foundations of the digital nomad lifestyle. Unsurprisingly the book became a bestseller. To its millions of readers, the book summarised everything that was right with globalisation: the idea that the entire world should operate as an open, free market. To others, it pointed to a nightmare.
El Salvador recently made Bitcoin legal tender
In the wake of Ferriss’s book and also Digital Nomad by Japanese technologist Tsugio Makimoto – who is widely credited with coining the term – digital nomads gravitated to tropical locations with lower living costs. Thailand and Bali were early hotspots but digital nomads aren’t sentimental. If a better place offers the right combination of visas and low living costs, or catches the attention for some other reason – as El Salvador did in 2021 by becoming the first country to classify Bitcoin legal currency – digital nomads are likely to appear, with carry-on luggage.
So geoarbitrage is a privilege which combined with holding a strong passport gives digital nomads both spending power and the power to easily cross borders. Some digital nomads acknowledge these privileges. As digital nomad activist Lauren Razavi has written:
A passport is no longer a physical document but a set of rights and inequalities programmed into a computer. To me, that means this is the moment where this has to change. In a world of remote work, this makes no sense whatsoever.
It is vital that digital nomads understand and acknowledge these privileges. More conversations about who is able to travel and live in this way need to happen.