Winners and Losers: The Global Economy After COVID

The COVID-19 pandemic has transformed the world economy in ways that will be debated by pundits and future historians for decades to come. Yet, as hard as it is to predict a disrupted future accurately, the pandemic (not to mention its probable successors) looks likely to produce clear economic winners and losers. The top digital companies—Amazon, Apple, Tencent, Microsoft, Google, Facebook, Ant, Netflix, and Hulu—have thrived during quarantines and the ongoing dispersion of work. These are the most obvious winners in what leftist author Naomi Klein has called a “Screen New Deal” that seeks to create a “permanent and profitable no-touch future.” Since 2019, Facebook, Apple, Amazon, Microsoft, and Google have added over two-and-a-half trillion dollars to their combined valuation, and all enjoyed record breaking profits in 2020.

But it’s not just the tech oligarchs who have benefited from the pandemic disruption. Companies that keep the basic economy functioning—firms dealing in logistics, for example, or critical metals or food processing—have become, if anything, even more important. With the shipping supply chain disrupted due to the pandemic, logistics giant Maersk is set to increase its inland-based operation with the acquisition of the Swiss-based broker KGH Customs Services. The company reported its best quarter ever in the first quarter of 2021, launching a $5 billion share buyback scheme. And although the developing world has been hit hard by declines in tourism and investment, mining giants such as Glencore are investing billions to challenge China’s market dominance in rare earth minerals. The global market for cobalt is expected to double by 2025 and has launched a new “scramble for Africa,” which is also raising moral questions about whether or not the green oligarch’s love of the planet outweighs human rights abuses such as the practice of child labor in the Democratic Republic of Congo.

Even some high street businesses which have taken major hits are finding new niches. Many small businesses may never return to pre-COVID levels, as people have become used to the convenience of online purchases. Nevertheless, some are finding new uses for redundant malls, and have discovered new ways to reach more customers using social media and technology. Lower property prices are also opening up potential opportunities for entrepreneurs in pricey places such as Manhattan, San Francisco, or London. Pestilence re-shapes economies.

In his 2017 book The Fate of Rome: Climate, Disease, and the End of an Empire, historian Kyle Harper argues that plague, as well as climate change, undermined the Roman empire, creating conditions that boosted the barbarian warlords who would later become the Medieval aristocracy. The lethal plagues of the Middle Ages likewise disrupted the great Mongol empire, at the time the largest in history, and in conjunction with cooling temperatures, undermined the stability of the great Silk Road and ended the Pax Mongolica. This opened the door to the Age of Exploration and Europe’s maritime conquest of the world. Within Medieval Europe, the Black Death killed as much as 40 percent of the population, but also precipitated the rise of the Third Estate, and in some places raised wages for scarce labor. “People were fewer,” noted historian Barbara Tuchman, “but they ate better. The pandemic also led to greater emphasis on long-distance navigation.”

During the current crisis, disintermediation has been the primary driver of the post-pandemic economy. The novel coronavirus forced businesses to adapt quickly to new circumstances, and as with all economic crises, created winners and losers. The lockdowns accelerated the use of digital technology for work, retail, and entertainment. This has not only helped the big firms but also produced a whole crop of new startups, many of which address the shift to online work. The tech oligarchies now face competition from decentralized networks based on blockchain technology which is less vulnerable to domination by giant firms with algorithms that are designed to eliminate the incentive structures that lead to central node control and promote monopolistic behavior. Domains such as Lokinet, Ethereum, Odysee, and Urbit seek to give users ownership of their own data. Even Google’s near-monopoly of web browser supremacy is set to be challenged by data-privacy-conscious alternatives such as DuckDuckGo, which has seen a 62 percent growth in search results in 2020. Users are clearly becoming more conscious of privacy and data ownership.

Read the rest of this piece at Quillette.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Hügo Krüger is a Structural Engineer with working experience in the Nuclear, Concrete and Oil and Gas Industry. He was born in Pretoria South Africa and moved to France in 2015. He holds a Bachelors Degree in Civil Engineering from the University of Pretoria and a Masters degree in Nuclear Structures from the École spéciale des travaux publics, du bâtiment et de l’industrie (ESTP Paris). He frequently contributes to the South African English blog Rational Standard and the Afrikaans Newspaper Rapport. He fluently speaks French, Germany, English and Afrikaans. His interests include politics, economics, public policy, history, languages, Krav Maga and Structural Engineering.

Homepage photo: Steve Jurvetson, via Flickr under CC 2.0 License.

A Middle Class Rebellion Against Progressives is Gaining Steam

A specter is haunting America, a great revolt that threatens to dwarf the noxious rebellion led by Trump. The echoes of a another potentially larger pushback can already be heard in progressive America. But it’s not towards socialism, as many suggest. It’s the opposite: a new middle-class rebellion against the excesses of the Left.

This new middle-class rebellion isn’t rejecting everything that progressives stand for; the Left’s critique of neo-liberal excess is resonating, as is the need for improved access to health care. But the current focus on “systemic racism,” coupled with a newfound and heavily enforced cultural conformism and the obsessive focus on a never-ending litany of impending “climate emergencies” are less likely to pass muster with most of the middle class, no matter how popular they are with the media, academics, and others in the progressive corner.

And this new middle-class rebellion is being bolstered by a wide-ranging intellectual rebellion by traditional liberals against the Left’s dogmatism and intolerance. Indeed, what we’re about to see has the potential to reprise the great shift among old liberals that had them embracing Reagan in reaction to the Left’s excesses of that generation.

In a way, this should not be surprising. After all, the progressive base is limited: According to a survey conducted by the non-partisan group More in Common, progressives constitute barely eight percent of the electorate. The report also found that fully 80 percent of all Americans believe that “political correctness is a problem,” including large majorities of millennials and racial minorities.

Party line journalists may see President Biden as the new champion of the middle class, but every time he adopts central tenets of the new Left, he undermines his pitch. And this happens not infrequently: The Biden Administration has adopted elements of the “anti-racist” agenda, for example, by explicitly favoring Black farmers for subsidies, rather than focusing on all farmers in need. Race issues may be popular on college campuses and in the human relations departments of giant corporations like Lockheed and Amazon, but a recent Yale study found that language based on inclusivity around class was far more popular than one focused largely on race, even with progressive voters.

This is not the message coming out of the Biden administration, which has put a premium on diversity hiring and “equity,” despite the fact that racial quotas, in hiring or in college admissions, are unpopular with three out of four Americans, including African-Americans and Hispanics; 65% of Hispanics, 62% of black Americans and 58% of Asians oppose affirmative action in college admissions.

Read the rest of this piece at Newsweek.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Homepage photo credit: Hollywata via Flickr under CC 2.0 License

Joe Biden’s Imaginary America

After two painful recessions and ever greater national discord, there is considerable support for a new beginning, even if it takes massive federal spending. The question we must ask now is what kind of spending makes sense given the character of the country, its geography, and its economic challenges. America remains a vast and diverse place, and decisions that make sense for one locale do not necessarily make any sense in others. A dispersed country needs dispersed decision-making, not edicts issued from on high by the D.C. nomenklatura.

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The Emergence of the Global Heartland

Report: Emergence of the Global Heartland

A major shift in the demographic evolution of America is occurring, largely out of sight in the national media, but profoundly affecting communities throughout the Heartland.

The 20 state region, which extends between the Appalachians and the Rockies, has for generations been largely unaffected by the massive movement of people from abroad that has so dramatically transformed the great metropolitan regions of coastal America.

In the national media, the Heartland represented a region, as the New York Times described it, as ’not far from forsaken,’ a depopulating place where the American dream has come and gone. Others have seen the region as an unreconstructed mecca for intolerance, one that had few immigrants and poor race relations and seems destined to suffer for it. As one professor at Vanderbilt suggested recently, the region was “dying from whiteness” and that its “politics of racial resentment is killing America’s heartland.”

Perhaps it is time to change that narrative. Over the past decade, the Heartland’s share of the foreign-born population has risen from 23.5 percent in 2010 to 31.1 percent in 2019. This shift can be seen in many Heartland communities, some such as Louisville, Columbus and Nashville, have seen their immigrant populations swell more than 40 percent from 2010 to 2019, often helping to reverse generations of demographic decline. They are now growing their foreign-born populations faster than such historic immigrant hubs as New York, Los Angeles, San Francisco, Boston and Philadelphia.

The reasons include many factors also seen in our previous studies on entrepreneurs and millennials; lower costs, economic growth and better access to good schools. Perhaps the most underappreciated may be the spirit of friendliness that has been cited by the vast majority of the people we interviewed. For people who have migrated great distances, and sometimes at personal risk, the reception in the Heartland—sometimes described as a hotbed of nativist and xenophobic attitudes—often instead has been both warm and inspiring.

“Each immigrant comes with different potential and dreams,” observes Ahmed Elkhady, a half Palestinian, half Egyptian resident in Cedar Rapids, Iowa, known as the Motorcycle Imam, who works with underprivileged children. “I have big hope in this first migrant generation. They come with unique perspectives from all over the world. They come to grow in a new place they get to help create.” This shift in migration is good not only for the Heartland but also for the nation. Spreading new talent to areas that need it, it also takes the pressure off already overcrowded areas. For too long, essentially since the 1970s, the Heartland, with the notable exception of Texas, was on the sidelines in the nation’s demographic transition, leaving a large part of the country facing much slower population growth and rapid aging. It is on the sidelines no longer.

Download the full report here (PDF).


This piece and the report first appeared at Heartland Forward. Joel Kotkin, Mark Schill, Karla López del Río, Wendell Cox, Alicia Kurimska, and Celia López del Río authored the report.

Heartland Forward is a non-partisan organization that seeks to improve economic performance in the center of the United States by advocating for fact-based solutions to foster job creation, knowledge-based and inclusive growth. Learn more at HeartlandForward.org.

Image credit: Heartland Forward, from the report

The Rise of Corporate–State Tyranny

In explaining his shift away from Maoist economics, Deng Xiao Ping, chairman of the Chinese Communist Party, described his market-oriented changes as “socialism with Chinese characteristics.” Today, American businesses, as well as the media and academic establishments that serve them, increasingly embrace what can best be described as “Chinese capitalism with American characteristics.”

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How Los Angeles Descended Into Neo-Feudalism and How to Fix It

For most of the last century, Los Angeles loomed as the next great American city, a burgeoning paradise riding the shift of world power west. It seemed posed to leave New York and London in the dust, the engines of growth inexorable. There was the city’s dominance of the entertainment and aerospace industries, which incited migration from both the rest of the country and abroad, and all this promise was symbolized by a spread of suburban single-family houses that seemed to embody the ideal American dreamscape.

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America’s Post-Pandemic Geography

Even as vaccination increases across the United States and an end to the tragedy of the Covid-19 pandemic seems in sight, the economic, fiscal, political, and geographic fallout from the virus cannot be overstated: a massive public health crisis that left more than half a million Americans dead, an economic catastrophe that caused record unemployment and small-business closures, and a seismic political event that surely helped tip the presidential election. The pandemic will pass, and the economy will revive, as it is already doing. But in geographic terms, today’s Covid-precipitated crises may well prove to be the most transformative event that America has experienced since the great migration to the suburbs after World War II. After hitting record lows, mobility is up as a result of the pandemic. Between 14 million and 23 million Americans say that they are likely to move as a result of their ability to work remotely, according to research by economist Adam Ozimek. These geographic shifts are even more critical because they point in many directions and represent less a fundamental break with the past and more an acceleration of changes already under way in how we live and work.

America’s economic geography has long been shaped by the interplay of pull and push forces. On the one hand, centrifugal forces pull some people out of cities: families seek more affordable space, backyards, and access to better schools. With the wider scope of choice that remote work affords, some are casting their nets wider and moving farther afield, not just to suburbs but also to other cities, smaller metro areas, and even rural communities. On the other hand, centripetal forces remain that push other groups and activities toward urban centers. College-educated young people in their mid-twenties to mid-thirties have accounted for roughly half the revival of close-in urban neighborhoods (those located near a metro area’s central business district) over the past decade, according to research by Joe Cortright of City Observatory. They are likely to do so, perhaps even more profoundly, in the decade ahead, propelled in part by falling urban real-estate prices. Superstar cities may regain some of their former creativity as artists, musicians, writers, and the like, many uprooted by the pandemic, can once again afford to live in them.

It’s hard to predict how this will play out in the long run, but the pandemic has placed a new burden on all communities. Big cities, Sunbelt boomtowns, small urban regions, and rural areas alike must develop effective strategies for recovery in a post-pandemic world.

The pandemic hit superstar cities like New York and London first and hardest. With their central business districts turned into ghost towns, big cities have suffered a blow from which they will need years to rebound. New York’s midtown and Wall Street still remain noticeably empty. Broadway theaters are still shuttered. San Francisco’s office district, home to many leading tech companies, stands similarly empty.

Dense cities suffered the most total fatalities largely because, as globally connected places, they were hit by the virus in its first, deadliest phase. Time and research have shown, however, that they are not uniquely vulnerable. By the fall of 2020, the second wave of infections and death had spread out across the country to smaller states and rural communities. While large urban centers and big states still have the highest overall death tolls, more sparsely populated places overtook them on a per-capita basis, with North Dakota logging the nation’s highest Covid death rate in the fall. The danger lies not in density per se, but in overcrowding: the number of people per square foot, as opposed to square mile. (See “Problem: Overcrowding,” New York City: Reborn, 2021.) A kind of “exposure density” thus seems key to the spread of the virus.

Yet superstar cities are not about to disintegrate. Cities are more resilient than in the past. The swift distribution of vaccines makes urban comebacks more likely, and far more rapid, than those of ancient cities rising after eruptions of the plague. London recovered from cholera, and New York added 2 million people in the wake of the Spanish flu. Berlin survived Hitler, World War II, and a half-century of partition. New York roared back after 9/11. Large global cities are incredibly resilient places. (See “The Enduring City,” New York City: Reborn, 2021.)

But part of the exodus from New York and San Francisco is rooted in factors that will outlast the virus and that were already in play earlier. Both cities lost people before the pandemic, largely because of their increasing unaffordability. The rate of growth in America’s biggest and most expensive cities began to decline as early as 2015. The pandemic has worsened the new urban crisis of rampant gentrification, high living costs, and class and racial division—all sharply dramatized amid the wave of protests and riots in the summer of 2020.

Read the rest of this piece at City Journal.


Richard Florida is a professor at the University of Toronto and a senior fellow at Heartland Forward. Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University, a senior fellow at Heartland Forward, and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo: BlueRidgeKitties via Flickr, under CC 2.0 License.

Feudal Future Podcast — Biden’s Tax Plan

On this episode of Feudal Future, hosts Joel Kotkin and Marshall Toplansky are joined by Hank Adler, Associate Professor of Accounting for Chapman University, and Steven Malanga, City Journal’s senior editor, to discuss Biden’s new tax plan.

Yeomanry’s Global Decline

For much of the last part of the 20th Century, the world’s middle class was ascendant, expanding and, in most countries, firmly in control of national politics and culture. Yet in more recent decades, this process has been slowly reversed, in the United States as well as in Europe and, increasingly, East Asia.

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Could COVID Exodus Speed the Heartland Revival?

Over the past two decades America’s largest urban areas enjoyed a heady renaissance, driven in large part by the in-migration of immigrants, minorities and young people. But even as a big-city dominated press corps continued to report on gentrification and displacement, those trends began to reverse themselves in recent years as all three of those populations started heading in ever larger numbers to suburbs, sprawling sunbelt boomtowns and smaller cities and out of the biggest ones.

That shift preceded the COVID pandemic, but has rapidly accelerated with the expansion of remote work, which has undermined the economic basis for high-end urban and post-industrial economies. Meanwhile, the severe lockdowns Democratic governors and mayors favored devastated the service and small business economies that had provided sustenance to immigrant and minority entrepreneurs and workers.

The same “canaries in the coal mine” that spurred America’s urban renaissance have been leaving its big cities in growing numbers since 2014, notes demographer Wendell Cox. New York, Los Angeles and Chicago have all begun to lose population while people have flocked to new employment hubs like Austin, Dallas, Phoenix, Columbus and Nashville that have led the way in terms of both overall new jobs and high-end business and professional service jobs.

Nowhere is this shift more evident than with immigrants. The share of the foreign born settling in big coastal “gateways” has plunged from 44 percent in 2010 to barely 35 percent in 2019. Foreign-born populations, notes Cox in research for the think tank Heartland Forward, stagnated or even declined in New York, Los Angeles and Chicago as they surged in Houston (over 25 percent growth), Dallas-Ft Worth (30 percent) Charlotte (nearly 40 percent) and Nashville (a remarkable 44 percent).

Houston, in fact, is now the most diverse major metropolitan area in the country. In 1960, Harris County, which includes Houston and many of its suburbs, was 70 percent white, non-Hispanic and 20 percent African American. Today, the county’s total population is 31 percent white and non-Hispanic, 42 percent Hispanic, 19 percent Black and 8 percent Asian. The share of foreign-born Houstonians now approaches one-fourth of the population—almost twice the average for the nation’s 50 most populous metros.

More surprising still has been the equally rapid move of immigrants to smaller cities such as Fayetteville, Ark., Knoxville, Tenn,; Cedar Rapids, Iowa, Springfield, Mo., and Fargo, N.D. The fastest growth in foreign-born populations has been in areas with traditionally low immigrant concentrations. Where the foreign-born population grew by 10 percent nationally in the last decades, in states like Georgia, Kentucky, South Carolina and the Dakotas it has expanded by 30 percent.

Racial minorities, too, are heading increasingly to the sunbelt boom towns, the south and to smaller cities. The surges in Latino, Asian and African American growth are not in Los Angeles, New York, Chicago, or the Bay Area, according to an analysis by Wendell Cox for the Urban Reform Institute, but in Atlanta, Boise, Salt Lake City, Phoenix and Las Vegas.

Again, economics is a key factor. Middle-class job creation has been generally stronger in these communities and, due to less regulation and lower taxes, costs are lower. African-American real incomes in Atlanta are more than $60,000, compared to $36,000 in San Francisco and $37,000 in Los Angeles. The median income for Latinos in Virginia Beach-Norfolk is $69,000, compared to $43,000 in Los Angeles, $47,000 in San Francisco and $40,000 in New York City. The highest Asian median household incomes are in Raleigh, Jackson, Fayetteville (AR-MO) and Austin.

Read the rest of this piece at Daily Beast.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo: Brian Stansberry via Wikimedia under CC 3.0 License.