Uncategorized – Page 4 – Future Economics

A Pan-Canadian NFL Team

Canada does not have a single stadium that would be suitable for an NFL franchise.

Canada does, however, have four stadiums that are not too unsuitable: Montreal’s Olympic Stadium, Edmonton’s Commonwealth Stadium, Vancouver’s BC Place, and Toronto’s Rogers Centre.

Instead of a city like Toronto spending $1 billion or so on a new stadium in order to get an NFL team of its own, Canada should aim for an NFL team that splits its eight home games per season between four existing stadiums in Toronto, Montreal, Vancouver, and Edmonton. The team – the Canada Moose? – would play in Montreal and Edmonton during September and October, then in Toronto and Vancouver during November and December.

Montreal’s stadium can seat 66,000 people, but cannot be used in the winter. Edmonton’s can sit 56,000 people, but cannot easily be used in the winter either. Vancouver’s can sit 54,500 people, plus it has a retractable roof (and a much warmer climate) that allows for winter use. Toronto’s can only sit 49,000 people, but also has a retractable roof. No other stadiums in Canada are close to as big as these. The next largest, in Calgary, seats 36,000 people.

By way of comparison, the average NFL stadium can sit 69,500 people. Unlike in Montreal, Toronto, or Vancouver, most NFL stadiums were purpose-built for football. Still, this should not necessarily be a deal-breaker for Canada, because the NFL does not actually derive a large share of its revenues from ticket sales. Rather, revenues come from TV (and increasingly, Internet) deals and merchandising — which could make a Canadian franchise profitable, as it might have one of the biggest markets in the entire league.

What about playoff home games, where would they be played? Well, to begin with, no team ever plays more than 2 home playoff games per year, so the lack of a good-quality playoff stadium is probably not as big a problem as one might think. (Canada’s current favourite team, the Bills, have not played a single home playoff game in the past 24 years). When a home playoff game does need to be played, some or all of the following options could work:

Get Montreal to shell out the estimated $200 million needed to repair its retractable roof, thus allowing it to host some playoff games. There are already plans for such repairs to take place in advance of the FIFA World Cup in 2026
Make the venue conditional on the opponent. If playing a home game against Seattle, for example, play in Vancouver. If playing against Buffalo or Detroit, play in Toronto. If playing against New England, play in Montreal (if Montreal has fixed its roof).
Play a Superbowl-style Conference Final: if Canada’s team makes it to the semi-finals with home field advantage, play the game in a massive college football venue like Ben Hill Griffin Stadium (home of the Florida Gators; capacity 88,500), to which Canadian snowbirds could flock in January. Give all Canadian citizens first dibs on tickets.

Of course, the idea of a pan-Canadian team is not without risk. Such a team might have difficulty attracting good players. Canadian patriotism might not be sufficient to win new fans to the sport. It might just be too weird to have American cities competing against an entire country (although that has not limited the Raptors’ or Blue Jays’ aggressively national marketing strategies). Combined with the lack of a good stadium, these risks are not insignificant.

On the other hand, look at the possible rewards. You get a huge market in Canada, no wasting taxpayer dollars on a new football stadium, and no direct competition with the CFL or other pro sports franchises. The NFL also gains a lot of flexibility in scheduling, since it can have west coast matchups played in Vancouver or Edmonton and east coast matchups in Toronto or Montreal.

It would also create great local matchups. Canadian games against Seattle, Buffalo, Detroit, Cleveland, and New England would be especially fun. So would Canadian games in snowbird states like Florida, Arizona, Nevada, or California around Christmas-time. Even isolated cities like Green Bay, Minneapolis, Denver, and Kansas City would be able to pull in some tailgaters from the Prairie provinces.

I think the rewards outweigh the risks. For Canada to get an NFL team, without having to build any huge new football stadiums, would be as good as Thanksgiving coming twice a year.

A New Baseline for the NBA: Staying In Bounds Behind the Net

The NBA has to decide if it wants to put its baseline courtside seats and cameramen as close to the net as they used to be before Covid. Having more open space this season may be allowing players to drive at the net with more speed and less risk of injury. But, of course, keeping that space open next year would mean that some high-paying fans will be further from the action.

I’d like to propose a compromise of sorts: not only should the NBA keep the baseline space open, it should also push the baseline out-of-bounds line back by about 3 feet. In other words, players should be able to stand behind the net without being out of bounds, sort of like how they do in hockey.

Consider the potential consequences of doing this:

there would be even more room for players to drive at the net
baseline courtside seats would still be close to the action, despite being further from the net than they were pre-covid
there would be fewer baseline out of bounds plays, and therefore fewer stoppages of play and end-of-game out-of-bounds video reviews
there could be more passing opportunities for ball handlers: just imagine what Steve Nash could have done with this space…or what a Jokic or Lebron or Doncic could do
there could be more opportunities for inside scoring, perhaps helping to combat the league’s 3-point-shooting frenzy a little bit
there could be defensive opportunities: deflecting or rejecting a ball and then grabbing it before it goes out of bounds..
there would be the occasional awesome high-arching shot over the backboard, presumably taken at the end of a shot-clock in most cases (at least, until Curry masters it and reinvents basketball again)

Back-of-the-Envelope World City

1000 square feet per person, for an apartment with a large balcony, or for a home, is very comfortable.

For 10 billion people to have 1000 square feet is 10 trillion square feet.

With 10-story buildings, 10 trillion square feet would require 1 trillion square feet of land.

1 trillion square feet is 92,900 square km…let’s round that up and say 100,000 square km.

Throw in an additional 100,000 square km of land for roads, parks, etc. – also a very comfortable amount, especially if you don’t waste most of it on cars – and you get 200,000 sq. km.

200,000 square km is a square with sides of roughly 450 km. It is about the size of Nebraska, or Belarus. In North America alone, there is already an estimated 230,000 km of urban land.

If you don’t like living in a spacious apartment 10 stories high, but prefer instead that your city have 5-story buildings, you would need 2 trillion square feet of land for apartments. That’s 186,000 square km of land. Double that number to add in public space and you get 372,000 square km. That’s a square with sides of just under 610 km. That’s smaller than Montana or Japan. China alone already has an estimated 520,000 square km of urban land, at least.

Whatever else we may lack, space is not it.

Earthquakes

This article is about earthquakes and other disasters. I hope it’s informative, rather than just morbid or ill-timed or pointless..

With an estimated 144,000 deaths so far as a direct result of the Covid-19 virus, this is the first disaster in the past decade to have killed at least 50,000 people. However, it is the seventh to have done so in the past 15 years. There was the Indian Ocean tsunami in December 2004, which caused an estimated 230,000 deaths, the 2005 Kashmir earthquake (~87,000 deaths), the 2008 Burma cyclone (~138,000), the 2008 Sichuan earthquake (~88,000), the 2010 Haiti earthquake (~220,000-316,000) and the 2010 Russian heat wave (~56,000). Covid-19 may prove to be by far the worst of these disasters, but for now at least it has not been the deadliest.

One obvious lesson here is the destructiveness of earthquakes and earthquake-triggered tsunamis. They caused 4 out of these 7 disasters, including the two deadliest to have occurred so far.

Financially speaking too, earthquakes have usually been the most devastating disasters. According to Wikipedia, the most expensive disaster was the Japan earthquake and tsunami in 2011, which caused approximately 16,000 deaths (2,203 of which were related to the Fukushima nuclear disaster it caused) and an estimated 411 billion inflation-adjusted dollars worth of damage. That same year, the Christchurch earthquake in New Zealand cost an estimated $44 billion, itself one of the most expensive modern disasters. Second costliest was another Japanese earthquake, in 1995 in Kobe (6,400 deaths; $330 billion). Third place was the 2008 Sichuan earthquake (88,000 deaths; $176 billion). The next five were hurricanes in America, all since 2005 (Katrina); three in 2017 alone (Harvey, Maria, Irma). Yet even the 2017 hurricane season as a whole cost less than either of Japan’s big earthquakes.

Of course, these do not come near the figures of the deadliest epidemics, such as the 1957-1958 Asian flu (~2 million), the 1968-1969 Hong Kong flu (1 million), or the AIDS epidemic (~32 million in its 60 years, for an average of 530,000 per year, with a peak of 1.7 million deaths in 2004). Nor (as we have often been told lately) do they approach the number of deaths from other horrible problems, such as car accidents (~1.3 million per year). They also don’t come near the death tolls from the very worst natural disasters, like the floods that occurred in in northern China in 1887 (~900,000-2 million, perhaps half of whom died because of a resulting pandemic and famine) or in 1931 (~400,000-4 million).

These Wikipedia statistics obviously need to be taken with a huge grain of salt. They often range widely: the death toll estimates even for the recent 2010 Haiti earthquake, for example, go from 46,000-85,000 (according to a report made by the US Agency for International Development) to 160,000 (according to a University of Michigan study) to 316,000 (based on numbers from the Haitian government). The death toll from the 1976 North China earthquake, perhaps the deadliest post-WW2 natural disaster, ranges from 240,000-650,000.

All of these estimates may also overlook indirect causes of death and destruction, and certainly they do not include the significant non-fatal consequences disasters usually cause. The 2015 Nepal earthquakes, for example, led to around 8,000 deaths, but 3.5 million people were made at least temporarily homeless by them.

Nevertheless, these numbers do show that the deadliest disasters in recent years have tended to be earthquakes. Searching online right now, I see that I am hardly the only catastrophist to wonder what would happen if “the big one” were to occur in an earthquake-prone area like Tokyo or the US Pacific Northwest in the immediate future, while the current pandemic is still going on. The probability of this happening is small, but not zero. I recommend reading this New Yorker article, which was awarded a Pulitzer Prize, about this subject.

One of the regions impacted most by the virus thus far, the Mediterranean, is also among the most seismically active, ranging from countries with a medium risk of earthquakes, such as Italy (its deadliest modern disaster was the Messina earthquake in 1908, with an estimated 75,000-123,000 fatalities), to those with a high risk of earthquakes, like Turkey. Iran too, which has suffered the most deaths from Covid-19 of any country outside of the US or Europe, is a high-risk country where earthquakes are concerned. It experienced a deadly earthquake in 1990 (50,000).

China’s Hubei province, of which Wuhan is the capital, is itself used to earthquakes. The province experienced an earthquake this past Boxing Day, just five days before Chinese authorities first told the World Health Organization that there was an unusual pneumonia in Wuhan, less than a month before much of the province went into quarantine.

Historically speaking, northern and central China have suffered some of the deadliest earthquakes, in large part because of how populous they are. Before the terrible ones in Sichuan in 2008 and Hebei in 1976, there was the Gansu-Ningxia earthquake in 1920 (273,000). [Three years after that, the 1923 Great Kanto earthquake in Japan (100,000-143,000) destroyed large parts of Tokyo and was, at the time, probably the most destructive disaster experienced by a modern industrial city]. According to Wikipedia, possibly the deadliest ever earthquake occurred in Shaanxi, in 1556, killing more than 800,000 people.

Before the horrific Indian Ocean tsunami of December 2004, other recent big, deadly disasters include the 2003 European heat wave (70,000), the 1991 Bangladesh cyclone (140,000), the 1976 North China earthquake (240,000-650,000), the 1975 typhoon and resulting Philippine dam failure (230,000) and the 1970 East Pakistan (Bangladesh) cyclone (500,000+).

There have also been a number of disasters with death tolls in the 10,000-50,000 range: earthquakes in Gujarat in 2001 (20,000), Turkey in 1999 (17,000), Iran in 1990 (50,000), and Armenia in 1988 (28,000). The only non-earthquake disasters in this range during the past few decades were a volcanic eruption in Colombia in 1985 (23,000), and cyclones in Central America and Mexico in 1998 (11,000) and Bangladesh and India in 2007 (15,000).

Certain places have been struck repeatedly by large earthquakes. The most notable of these may be Valdivia, in Chile. It experienced the most powerful earthquake on record, in 1960, an earthquake so powerful that by itself it accounted for roughly 25 percent of the world’s seismic energy released in the 20th century. (The next two biggest in the century, in Alaska and Sumatra, together accounted for roughly another 25 percent). The first really big earthquake recorded was also in Valdivia, in 1575, according to Wikipedia.

The next three big ones after that, all in the 1600s, were in Chile as well, including one in the capital, Santiago. Valparaiso (in central Chile, near Santiago) was then hit with big ones in 1730 and 1822, and Conception (on the coast between Valdivia and Valparaiso) in 1751 and 1835.

The other area to flag in this regard is the island of Sumatra, in Indonesia. It has been hit with one of the only two recent earthquakes with a magnitude of at least 9; namely, the deadly Indian Ocean earthquake and tsunami in 2004. (The other magnitude 9+ magnitude quake was the costly Japan earthquake in 2011; until then most experts had not believed that an earthquake above 8.4 was even possible in Japan). Before that, no 9+ magnitude earthquakes occurred since Alaska in 1964 or Chile in 1960. A magnitude 9 is about 33 times more seismically powerful than a magnitude 8, and over 1000 times more powerful than a magnitude 7. Sumatra was also hit by two of the three only recent earthquakes in the magnitude 8 range (in 2012 and 2005). The other was just off the coast of Conception in Chile, in 2010. Before 2004, there was no magnitude 8+ since Alaska in 1965.

Solar-Based Space Power

Hello! I hope you are all doing as well as possible right now. Since many of us are stuck inside for the time being, I’m going to try to revive this blog a bit.

For this first post, let’s talk about space-based solar power. The idea is a popular one; it is exciting (outer space!) and has some logic to it (there are no clouds, nights, seasons, or land-use-constraints in space!). Sadly, though, if you look into the topic – for example, if you read this very well-thought-out piece from Do The Math – you see that even with extremely optimistic assumptions, it seems unlikely that sending energy from solar panels located in space to earth will become economically worthwhile any time soon, if ever.

And yet, perhaps these analyses are missing something. From what I can see — with the huge, twin caveats that I haven’t looked too deeply into the subject, and that I understand almost nothing about the physics involved in it — recent discussions about space-based wireless power transmission have been limited almost entirely to the idea of generating power in space and sending it to earth in order to provide civilians with clean, reliable energy. There might, however, be alternative uses and methods for wirelessly-transmitting energy via space. For example:

sending space-based solar power to military outposts, in order to provide soldiers with power that is not reliant on vulnerable supply lines, is not bulky to haul around from place to place, and is not intermittent. This is how I first heard about the topic of space-based solar power: George Friedman discusses it in his book The Next 100 Years.
the same purpose as above, except that instead of the military outpost receiving power that is generated from space-based solar panels, it would instead receive power that is generated conventionally on earth, then ‘triangulated’: sent up to space, then back down to a different location on earth. Such a system could perhaps also work in tandem with space-based solar panels. Over time, for example, more panels could be launched, so that as the years go by the system would use more power generated in space and less power generated on earth.
If the system was located as an array of satellites in Low Earth Orbit (500-2000 km), rather than much further away in Geosynchronous orbit (40,000 km), having the system use power generated by earth-based sources might allow it to provide power 24/7, as would otherwise not be possible for a Low Earth Orbit system because Low Earth Orbit satellites’ ability to receive sunlight is often blocked by the earth
Because wars are themselves intermittent, a space-energy system built for military purposes might be able to double as a civilian system during times when military demand is low. It might be able to help provide power to remote areas in the wake of a natural disaster, for example, which might useful if the disaster (forest fires, perhaps?) is also limiting the remote area’s ability to receive power from other sources, such as from sunlight or airdrops of fuel or batteries.
If the system was built as an array of satellites in Low Earth Orbit, rather than in Geosynchronous orbit, then each satellite in the array would only pass over a given military outpost or region on earth for a very short amount of time. Most of each satellite’s orbit in such a system might be freed up for non-military uses as result.
There is also the question of how to provide satellites with energy, so that satellites themselves can be powered, both for military and non-military reasons. Militarily, for example, if satellites were to be physically attacked, it might perhaps be the case that their ability to protect themselves from any incoming projectiles or debris (the debris perhaps deliberately created by a rival military) would depend on whether or not they have more energy available to them than do the projectiles or debris, which they could then outmaneuver. Thus it might be useful for satellites to receive power wirelessly, either from earth or from other satellites. And again, once such a system is built, it might also be able to find non-military uses. And perhaps it could also be used to power locations on earth
A satellite could perhaps use power generated from its solar panels to create high-energy lasers, in order to destroy any incoming projectiles or debris. A ground-based laser might similarly be used to destroy incoming projectiles or debris threatening a low-earth-orbit satellite. The same lasers might then also be used offensively, to attack rival satellites, or to attack rival targets on earth. They might also be used to provide power from earth to a satellite, or from one satellite to another. This could perhaps be useful if the satellites that are receiving the power are following orbits that spend little to no time in sunlight. It might also be useful if the satellites receiving power are intended to be as small in size as possible (perhaps in order to provide a smaller target for debris or projectiles to hit) and so cannot have big solar panels or batteries or fuel tanks.

Obviously, I have absolutely no idea what I’m talking about here. So I’m asking, is there anything to these ideas? Are there other similar ideas that I’ve left out? How might these factors change the math when it comes to thinking about the future economics of energy in space?

Finally, if the civilians-piggybacking-on-the-military-surplus-capacity-of-triangulating-energy-from-earth-to-space-back-to-earth idea is anything other than totally ridiculous, which power sources would be best suited for it? Would solar panel companies in the Australian Outback benefit, for example, by being able to wirelessly send their otherwise-remote, Southern Hemisphere-summer energy to military and/or civilian locations in space, or and perhaps then on to other places back on earth?

2019 Year in Review: GDP Growth

An in-depth version of this article was originally published on Rosa and Roubini Associates

GDP can often be a misleading measurement, and a year can sometimes be a misleadingly short period of time to measure. A review of a past year’s GDP growth trends may nevertheless serve as a useful starting point for understanding the world’s markets. Carrying out such an exercise in economic hindsight for 2019, we might settle upon the following list of approximate growth trends:

Slowing growth occurred in all major regions and countries
Global growth in 2019 was estimated to have been 3%, down from approximately 3.5% in recent years. This trend also held at both the regional and national levels. Regionally, North America, Europe, and Northeast Asia all faced slowing growth. Euro Area growth slowed from 1.8% during 2018 to 1.2% in 2019; US growth slowed from 2.8% to 2.2%; China’s growth slowed from an estimated 6.6% to 6.2%. (Elsewhere in Northeast Asia, Japan’s growth remained low at around 1% and South Korea’s slowed from 2.6 to 1.8%). No major country saw an increase in its growth rate, except perhaps a slight increase in Japan’s.

America, China, and South Asia provided most of global growth

With European and Japanese growth little greater than 1%, and with many commodity-exporting economies struggling too, global growth was carried mainly by the United States, China, and to a lesser extent India and other countries in southern Asia. US growth was estimated at 2.2 percent, which given its size (roughly 25% of global GDP), and the slow growth of global economy, is still a substantial portion of the world’s total growth this year. China’s 6.2% growth (assuming this figure is accurate) is even more substantial. India, meanwhile, which is only around 3% of global GDP in nominal terms (7.5% in purchasing power parity-adjusted terms), experienced 4.9% growth this year. Other smaller South Asian economies grew even more quickly, such as Bangladesh (7.7%), Vietnam (6.5%), Indonesia (5.1%) and the Philippines (5.7%). Thailand, however, which is by far the largest economy in Southeast Asia apart from Indonesia, grew only 2.4%.

Europe continued to struggle – and not just in the European Union

The EU’s growth in 2019 is estimated to have been below 1.5%. The Euro Area’s growth was even lower than that, because unlike the European Union it does not include the faster-growing East European economies, notably Poland and Romania with 4% growth and Hungary 4.6% growth. Even outside the EU growth was slow, however. Russia’s growth this year was only an estimated 1.1%, down from 2.3% in 2018. Norway’s was 1%; Switzerland’s 0.8%. Britain’s was 1.2% (that is, assuming you consider Britain as outside the EU). And Turkey’s GDP, after growing at 2.5% in 2018, did not grow at all in 2019.
Central Europe in particular experienced slow growth
Perhaps the most notable regional trend in Europe was the slow growth within Central Europe, most notably in the Germany-Switzerland-Italy corridor of nations. Germany and Italy had by far the slowest growth among G7 economies: Germany grew at 0.5% (down from 1.4% in 2018), Italy grew at 0.2% (down from 0.8% in 2018). Most countries around them also had slow growth: France 1.3%, Belgium 1.3%, Sweden 1.3%, Austria 1.5%, the Netherlands 1.7%, Switzerland 0.8%. Even the Czech and Slovak economies slowed, to around 2.5%, down from the 3-4% range they had grown at in previous years. The Central European slowdown was probably the dominant trend in the EU in 2019. The previous dominant trend, namely Southern Europe’s slow growth, did not disappear (Italy, after all, still struggled) but it was eclipsed. Spain’s economy grew at 2.1%, Greece 1.9%.

Europe’s North-South dynamic has become more complicated
There is no longer any clear divide between a sluggish South and nimble North, either within the EU, the Euro Area, or Europe more broadly defined. At all three levels, the fastest and slowest major economies in 2019 were both Southern states: Spain was the fastest, Italy the slowest. Northern Europe was divided too: major economies such as Germany, Britain, Russia, and Scandinavia (ex-Denmark) grew slowly, while others like Poland, Ireland, and to a lesser extent the Dutch and Danes grew quickly. In the ex-EU Mediterranean region there were divides too: Turkey did not grow, but the Levant grew quickly (Israel 3.2%, Egypt 5.6% for e.g.). In the Maghreb, Morocco grew at 2.5%, Algeria 2.6%.
Latin America had a rough year…
Venezuela remained in crisis, and Argentina experienced a recession in which its GDP shrank by an estimated 3.3% in 2019. The two largest economies, Brazil and Mexico, grew at just 0.8% and 0.1%, respectively. The Pacific economies that had previously been strong, such as Chile and Peru (both significant commodity exporters), slowed as well. Chile grew by 1.8%, Peru 2.6%. Colombia’s growth did rise however, from 2.6% to 3.1%.
…so did the Anglosphere
The Anglosphere is a tricky group to define. Arguably it is does not even warrant being considered as a group to begin with. Even for those who do think the concept is useful, it is difficult to know which countries it should include. Certainly, it includes countries like Britain, Canada, Australia, and New Zealand. More broadly, it could perhaps also be used to include economies such as Singapore, Hong Kong, South Africa and/or Nigeria. Wherever you do decide to draw the Anglosphere’s lines, the group had a year of slow growth. Britain grew at 1.2%; Canada and Australia at 1.6%. Singapore grew at just 0.8%; Hong Kong actually shrank by 0.3%. South Africa grew by 0.6% and Nigeria (starting at a lower income base) grew by 2.2%. Jamaica grew at 1%. Only New Zealand and Ireland had strong growth, at 2.5% and 4.2%. Ireland’s growth slowed too though, from 6.7% in 2018.
East Africa grew quickly, but Africa in general did not
Rwanda may have led all countries in 2019, with 7.8% growth. Ethiopia may have led among all large developing countries, with 7.4% growth. Uganda, Kenya, and Egypt all grew between 5-6%. There were high growth numbers in some other parts of Africa too, but in the largest regional economies, such as South Africa, Nigeria, Angola, and Algeria, growth was slow. Nearby in the Middle East, the Gulf Arab states’ GDP stalled and Iran’s shrank.

In North America, the US kept ahead of Canada and Mexico
US growth was 2.2% in 2019, compared to an estimated 1.6% in Canada and 0.1% in Mexico. This is the second year in a row that the US grew the fastest of the three. Before then, not since the 2009 recession did the US do so. And before then, not since 1999 was US growth the fastest. (The US grew at 4.7% in 1999, more than double its current pace). In contrast, as recently as 2014 the US grew slower than both Canada and Mexico.

In America and China both, heartlands outgrew coastlands
Unlike in the previous two years, US growth in 2019 seems to have occurred at a faster pace in the centre of the country – in the Rockies, the Greater Midwest, or in certain areas along the Gulf of Mexico – than it did along the eastern or western coasts. In China, somewhat similarly, the interior states in the south-west, centre-west, or central China, such as Yunnan, Jiangxi, Hubei, and Sichuan, grew faster than most of the country’s coastal states. The slowest-growing Chinese region of all was, as it has often been in recent years, the northeast: states like Heilongjiang, Jilin, Liaoning, and Inner Mongolia.

Humans, Computers, and Telecommuters

Let’s discuss two sets of three: the land-labour-capital trinity of conventional economics, and the human-computer-telecommuter set that may soon become the three main categories of labour.

To state the obvious, the key relationship during the past generation has been the “capital” of North Atlantic economies (whether that capital be military power, technological innovation, or consumer demand), chiefly that of the United States, and the labour and “land” (most notably, the fossil fuels in that land) of Asia, chiefly that of the Chinese.

Even in recent years, this relationship between North Atlantic capital and Asian land and labour has arguably continued to intensify. Specifically, if we characterize “land” as being the type of energy production that has the greatest impact on local environments — if, for example, we define it as coal production, coal consumption, and the building of massive hydroelectric dams — then we can see that in recent years the employment of Asian “land” has continued to grow at a rapid pace relative to that of the North Atlantic economies.

This has been the result of a number of different significant trends: the growing “green economy” of Europe, the coal-to-gas electricity switchover in the United States that has been the result of shale gas production, the growth of coal and gas consumption in Japan as a result of Fukushima, the growth of hydroelectric power in China (though China’s coal industry growth has been flattening), and the growth of coal industries in southern Asia.

We know that poorer Asian populations in countries like China and India hold the weaker positions in this trade relationship. They supply the labour and “land” chiefly because the wealthier economies of the world mostly do not want to allow large-scale immigration or domestic environmental despoliation, yet are not able or charitable enough to furnish poor countries with capital wealth without demanding labour and natural resource wealth in return.

We also know that this global trade relationship might soon decrease to some extent, whether because of automation or protectionism in capital-rich countries, aging labour forces in Northeast Asia, or an attempt to reduce pollution in China.

The view of world trade decreasing because of automation and protectionism has become especially popular during the past year, because of political developments in both the US and China. Upon closer investigation, however, a reduction in trade may not actually be likely. The hitch here is the limitation of automation in wealthy economies. While computers and computer-run machines may now be excellent at doing tasks that humans are bad at — like being a grandmaster at chess or driving a truck for days without taking a pit stop — they are still terrible at a task that even human children find easy: manipulating objects.

The result of the limitation of automation may be the second set of three mentioned above: a human-computer-telecommuter division and cooperation of labour. Imagine, for example, an industrial or commercial site in the US that employs not only human labour, and not only machine labour, but instead a combination of a small number of on-site labourers, a large number of autonomous machines, and a large number of machines controlled by lower-wage labourers working remotely from poor locations in foreign countries.

In one sense, every party involved would gain in this relationship: rich countries would gain access to cheap labour without needing to outsource, poor countries would receive wages, and both would be allowed to harness the productive power of machines without having to wait until robotic technology is good enough to allow machines to replace labour altogether. Or without having to deal with the economic and social consequences of that day finally coming.

On the other hand, “telecommuters” might further income inequality within wealthy countries, by forcing labourers in those countries into even closer competition with labourers in poor countries. Moreover, it might make it more difficult to ignore the unfairness that exists as a result of real wages in rich countries far exceeding those of poor ones.

The effect of telecommuting — which includes, but is not limited to, a worker being able to control a machine that is located thousands of kilometres away — may be to make labour much more easily tradeable across long distances. Since “capital” is easily tradable too, this may leave “land” as the odd man out. Land considerations, for example the location of cheap and/or clean electricity, or of ports capable of importing natural resources from abroad, may therefore become more important, at least relative to labour considerations, when choosing where to locate a new industrial or commercial site.

A place like Iceland, for example, which has abundant and clean power, difficulty in exporting that power directly because of its island location, ports proximate to North America and Europe, and yet no real labour force to speak of, could use a combination of autonomous and remotely-controlled machines to become a major industrial or commercial production site. A similar thing may be true of economies like Quebec, Norway, Manitoba, or British Columbia.

Remote-controlled machines do not get very much press — even if you Google it, you will probably not find much, with the exception of medical tele-surgeries — when compared to discussions of a far future in which widespread, wholly autonomous machines run the labour force. What is so scary, or exciting, about the possibility of remote-controlled machines, and of telecommuting labour forces in general, is that we may not have to wait until the far future for them to become widespread.

The Lay of the Land

Imagine a map of the world in which land and sea are both drawn in the same colour, so as to be indistinguishable from one another. Imagine also that on this map areas that are inhabited by humans are drawn in a different colour than areas that are relatively uninhabited by humans. Finally, imagine that all of the oceans on this map are greatly shrunk in size, in order to account for the ease of transporting goods by sea, whereas all of the mountainous areas and hilly rainforests on the map are greatly increased in size, in order to account for the difficulty of transportation in such areas.

Such a map might reveal a great desert in the Northern Hemisphere, encompassing most of Asia, the Pacific Ocean, and the western half of North America. Within this great desert there would be a great oasis: Northeast Asia. There would also be many lesser oases, notably California. The Indian Subcontinent would also appear to be a great oasis, between the large deserts of Central Asia and the Indian Ocean, and the smaller deserts in and around Iran and Burma. Still, India would not be as remote an oasis as Northeast Asia.

This map would also reveal the key position of the habited parts of Europe and the Middle East, which would be seen as being extremely close to most of the inhabited parts of the Americas and Africa, as well as to much of the inhabited parts of Asia.

It would not now be surprising to learn that the watershed of the narrow Atlantic and Mediterranean seas is where an estimated two-thirds of global economic activity occurs. Nor would the fact that the Mediterranean economies have mostly struggled to keep up with those of the North Atlantic be surprising, given the mountains or deserts which surround the Mediterranean on all sides.

China, in contrast, would still seem to be in an isolated position. The mountains or hilly rainforests that make up much of the terrain of Southeast Asia and the east coast of India, plus the Tibetan plateau and Himalayas, would now appear to further isolate China from India. China would now also appear to be more internally divided. China’s non-natively-Mandarin-speaking areas along its southeast coast would now seem to be further from the Mandarin areas of the north (since mountainous lands lie between the two).

At the same time, China’s coastal areas would appear to be located closer to the rest of the world (including to the world’s Chinese diaspora, which disproportionately comes from southeast China), since the world’s seas would now appear to be much smaller than before. Japan, in contrast, would appear more internally unified when looked at using this map, as all of its lands border the sea and so would now seem to be closer to one another.

Going forward

Of course, this is a very, very rough imagining of the practical realities faced by human economics, based on a number of assumptions that may be wrong, including most importantly on the idea that navigability and habitability are among the most decisive economic and historical factors. Arguably, it helps to explain some key questions – why Europe and Middle Eastern religions spread so widely, why Atlantic and Mediterranean are economies are so large, why China has often struggled with internal regionalism, etc.. Even, however, if we do accept it as a decent model of the world today, it does not tell us how the world might soon change.

If modern technology tweaks the realities of this world-map we have tried to imagine — if, for instance, autonomous vehicles make it far easier to transport bulk cargo in mountainous areas, or in hilly rainforests — that could alter what we might expect the world economy, political or financial, to look like.

“Chindia” (and Chargentina)The term Chindia became somewhat popular during the BRIC boom a decade ago. It was used to refer to the idea that East Asia and South Asia would become economically much larger and somewhat better integrated with one another, together forming an Indo-Pacific economy that would rival (even if only a friendly rivalry) that of the Atlantic world, while also allowing China and India to dilute the global power of the US.
This scenario would also put Southeast Asia, Southwest China, and Northeast India in a key position in the world, controlling the trade routes (and much of the freshwater) of East and South Asia. Overland trade between China, Southeast Asia, and India might also threaten somewhat the position enjoyed by Singapore, Malaysia, and to a lesser extent Indonesia, all three of which benefit from ships sailing a long detour through the Straits of Malacca to get from the Pacific to the Indian Ocean. But, will any of this actually happen? It has not happened yet: trade between China and India remains quite low, given their sizes. We should also not overlook the possibility of a similar economic integration between two large countries that are separated by the world’s other great mountain range, the Andes, namely Chile and Argentina. Unlike China and India, these two nations speak the same language. Their population centres, though separated by high mountains, are located quite close to one another. Chile’s largest city, Santiago, and Argentina’s fourth largest city, Mendoza, are only 175 km apart, as the crow flies. But they are separated from one another by mountains reaching over 5 km high.Greater integration between Argentina and Chile could help both to balance against their much larger, Portuguese-speaking neighbour Brazil. It could perhaps then allow (Ch)Argentina and Brazil work together towards a greater level of South American or Latin American economic or political integration. This could turn out to be as important as anything that might happen between East Asia and South Asia.2. Return of the Mediterranean(s)

In our map of the world we saw the key position held by the Mediterranean, but also that the mountains of Mediterranean countries have limited their development as compared to the flatter lands like northern Europe and the eastern half of the United States. If, however, technology allows for economical transport in mountain areas, then the Mediterranean region might regain some of the influence it enjoyed historically.

Drainage Basin (millions of square km)

So too might other “mediterranean” seas that are surrounded in large part by rugged or rainforest lands. Most notable of these, perhaps, is the American mediterranean, the Gulf of Mexico & Caribbean, which, like the real Mediterranean, is centrally located (next to the narrow Atlantic, and between continents) but has much of its nearby population living in mountainous areas, in Mexico and Central America. The Caribbean, in turn, is near another “mediterranean” basin, the Amazon River and its many navigable tributaries.

3. The Heartland

Works of “Classic Geopolitics”, notably Halford Mackinder’s book Democratic Ideals and Reality (which I recommend reading), written a century ago at the end of WW1, lays out a vision of the world that is somewhat similar to the one I have tried to describe here. It identifies Europe and the Middle East as the economically-geographically central spot in the world, and argues that, given the Middle East’s relatively arid climate (the Middle East and North Africa had a far smaller population relative to Europe in 1919 than it does today), and given the spread of railways into landlocked areas, it would be the vast flat lands of Eastern Europe that might give rise to a political entity potentially capable of dominating Europe, the Middle East, and by extension the “World-Island” (meaning the Asia-Africa-Europe supercontinent), and by extension the world as a whole.

In this view, the devastating German-Russian wars of 1914-1917 and 1941-1945 were about who would control East Europe; the Cold War, the 1917-1918 part of WW1 (when Russia left the war and the US entered it), the 1939-1941 part of WW2 (before the Hitler-Stalin pact was broken), the Russo-Japanese war of 1904-1905, or various conflicts during the 19th century, such as the Crimean War or the Anglo-Russian “Great Game” in Central Asia and the Middle East, were about peripheral powers (Britain, France, Japan, the US, etc.) preventing an East European power like Russia and/or Prussia from expanding its influence.

Regardless of whether or not this Mackinderian perspective is an adequate one, it does seem that the central position of Europe, Eurasia and the Middle East arguably really does exist, and may persist. Eastern Europe continues to house by far the largest state and population in this area (Russia), and the Germans still by far the largest economy. But the more mountainous states and populations in Iran, Turkey, Ethiopia, and much of the Mediterranean and/or Arab worlds are also large, oil-rich, and centrally located. How this story will unfold going forward is anyone’s guess.

Gliders, Gondolas, and Gravity

Gravity keeps us land-bound, most of the time. But there are at least two transportation technologies that work with rather than against gravity: cable-cars, which use the weight of anything they are carrying downhill to help lift anything they are carrying uphill; and gliders/parachutes, which mainly travel downhill.

The use of cable-cars is limited by their low carrying capacity (relative to trains, trucks, ships, etc.). The use of gliders and parachutes are limited by danger and imprecision, and by the fact that they must still fight gravity in order to get aloft in the first place.

New technologies may overcome these limitations, at least to a certain extent. In the case of cable-cars, low capacity can become less of a problem as a result of automation, not just in the operation of the cable-car but also in the loading, unloading, and warehousing of goods using the cable car. A cable car system could then run 24-7 (cable-cars are very quiet, so they are not annoying to run at night), with trucks being autonomously unloaded at the entrance of the cable-car and then autonomously unloaded and re-loaded onto another autonomous truck at the exit of the cable-car. Similarly, automation could allow a passenger to disembark his or her autonomous-valet-parking car or bus to get on a cable-car, then have another autonomous-valet-parking car or bus waiting for him or her at the cable-car’s exit.

Autonomous capabilities could be even more useful for cargo-carrying gliders or parachutes, helping to overcome the limitations of danger and of imprecision. The US military has been making great strides in this area in recent years in Afghanistan, with systems like JPADS (joint precision airdrop system) and research into gliders.

Of course, these systems must still use aircraft get airborne in the first place, which is not sustainable from either an economic or environmental standpoint. This is where things get interesting. What if, instead of gliders or parachutes being released from aircraft, they were instead released from cable-cars? In a mountainous or archipelagic region, this could allow goods and people to be transported during times when roads or ships are temporarily out of service as a result of snowfall, flash flooding, avalanches, earthquakes, low tides, etc.

Cable-cars might similarly be able to work well with cargo drones in general. They could serve as a sort of ferry for drones. By landing on a cable-car, drones could reduce their energy expenditure, recharge their batteries, and, as a result, reduce their battery sizes.

Everyone for Tennis?

These days, one way to sniff out a potential idea is to see if it passes the Boomer-Roomba test: if it is something that will benefit from Baby Boomers becoming senior citizens, and from the growing use of robots, you might be on to something.

One such idea, I suspect, is tennis — and also, perhaps, tennis’s more octagenarian-friendly sibling sports like badminton, pickleball, and ping pong.

Of course, tennis is already beloved around the globe, and played by young and old alike. But, the number of people playing it on a regular basis has typically been limited by at least one of the following factors:

— people participated in other sports/fitness activities instead

— people were busy with jobs or chores or raising children

— people had no tennis court easily accessible (or at least, not one that was not in use most of the time)

This last factor is particularly true for people in poorer countries; that is to say, for most people in the world. Tennis is a finnicky sport, compared to other sports like basketball, football, running, or even baseball, cricket, or road hockey. You can, for example, play basketball on a sloped driveway in front of your house, or on the road in front of your house. You can play football (soccer) in your backyard, or in a park, or in a parking lot with a surface that has been made uneven by years of being driven on. Tennis, in contrast, requires a far more level surface, and a much larger surface. Even, for example, when compared to playing full-court basketball, a tennis court can require about five times more floor space per player (if you are playing singles tennis):

Tennis courts’ size also makes tennis difficult to play indoors (indoor tennis bubble buildings notwithstanding), when compared to sports like basketball or, even more, when compared to indoor fitness gyms. (Tennis courts are even difficult to provide shade for, in comparison to, for instance, playing 3-on-3 basketball). This puts sports like tennis at a disadvantage, particularly in areas where weather gets hot, cold, or rainy—again, areas in which most people in the world live.

Anyway, back to the Boomeroomba test:

Boomers — tennis (and badminton, pickleball, etc, etc.) is more seniors-friendly than most other sports. Many Boomers (including Chinese Boomers, who are a decade or two younger than those in the West) still participate in sports like downhill skiing, long-distance cycling, or pickup basketball, but may stop or at least cut down on these sports as they age in years ahead.

Robots — robots may impact tennis in a number of ways. First, as robots are often meant as time-saving devices, and potentially as job-stealing devices, they may leave much more time for people to do things like play tennis. Second, robots may free up large amounts of commercial land, whether outdoors in parking lots or ndoors in malls or warehouses, as a result of technologies like autonomous vertical warehousing, autonomous delivery to consumers of goods bought online, or autonomous vehicles in general reducing the need for huge parking lots and making it easier for people to travel longer distances. Third, roomba-like robots can be ball boys.

So, tennis passes the test. Of course, so too might other sports — swimming, for example, or golf, or cross-country skiing or snow-shoeing, might also become common as a result of aging Boomers and of robots freeing up time and land. Moreso than tennis, however, those may be limited by their expense in many places.