European cities responded to the pandemic by redesigning shared infrastructure — for example, banning cars from central Paris as they took up space, replacing them with busy bike lanes and wider pedestrian boulevards. “Roads for people”, as the slogan says, instead of “roads for traffic”.
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In the United States, on the other hand, COVID has generally pushed people in the opposite direction: into cars, rather than out of them. Cities like Boston and New York replaced some street parking with outdoor restaurants, but that’s about the scale of America’s restructuring of public spaces in the wake of the pandemic.
The impact on personal space was much more profound. Before the pandemic, urbanists like Richard Florida of the University of Toronto liked to talk about how prickly the world was: people and money and power and creativity tended to congregate in densely populated cities that had a winner-takes-all had an effect. Post-pandemic, the world was still very prickly, but noticeably less so. The location of workspaces shifted from central business districts to individual dwellings that could be anywhere. Midtown Manhattan and other places that used to have the highest density felt empty, while second- and third-tier cities like Austin or Boulder became hugely popular and more crowded than ever. Overall, we saw that both area per person and wealth per hectare were distributed more evenly than before.
This is probably good news for the United States as a whole. This means that talent no longer has to move to one of the few cities to make a big difference. More specifically, it means talent no longer has to afford to live in Boston, Silicon Valley, or New York City. This means companies are now more flexible when it comes to attracting and retaining the best work from a variety of talented potential employees. This means that local service industry professionals can make a good living in a much wider range of cities and communities. And it means that Americans as a whole — a nation where people love being able to spread out in vast amounts of personal space, especially after raising a family — now have more opportunities than ever to do just that .
There are downsides too. From an environmental perspective, all that personal space comes at a significant cost in terms of carbon footprint. The proliferation means more vehicle miles traveled, as well as more embedded carbon in larger buildings. It’s also possible that some of the density perks and randomness will be lost – although these perks could only be found in a larger number of cities for the same reason.
There will definitely be an adjustment phase in which American capitalism recalibrates itself to the new spatial realities. There are undeniable benefits to having industries in specific cities, just as there are benefits to holding impromptu face-to-face meetings or learning how to do your job better by observing the people around you.
Still, the major shakeout has made many US regional economies much more productive than they were before the pandemic, and that in turn makes the entire country more competitive on an international stage that has been severely disrupted by COVID.
The pandemic has wreaked havoc on international supply chains, erecting barriers that have been broken down for decades. In contrast, national supply chains, particularly within the United States, were significantly less affected. So a country the size of a continent like the United States had a significantly larger advantage over its smaller peers than it did before the pandemic.
For globalists, after all, the pandemic was a true tragedy that set back the internationalist dream by decades. Before COVID struck, China and Russia were deeply embedded in a single global economy on a scale unprecedented in world history. Then China introduced a zero-COVID policy, effectively barring anyone from entering or leaving the country, while Russia sealed itself off from the West by invading Ukraine. By early 2022, the dream of a single global market had been completely replaced by a new reality of onshoring and nationalisms.
Much of this is for good, especially at the corporate level. Resilient local supply chains will prove themselves many times over in times of global warming and increasing geopolitical unrest. A focus on local communities versus ill-defined global interest groups will ground institutions of all stripes and prevent a mindset that if you’re not the best in the world at something, you shouldn’t care. The shift from a world of interchangeable raw wood tables and third-wave coffee to a certain level of quirkiness is to be welcomed.
However, it would be stupid to gloss over the serious disadvantages. From the history of “import substitution” in Brazil and other Latin American countries—the region’s 1950s version of onshoring—we know that attempts to do everything domestically can be disastrous and set back economies by decades. At the global level, free trade has helped increase global GDP and reduce inequality between countries. If it is rolled back, there will be inevitable negative financial consequences.
However, there is something appealing about the idea that today’s quasi-stateless international corporations are forced to choose a country and stick to it, for better or for worse. The days when Halliburton would decide to move to Canada after Dubai or Burger King are probably over and probably won’t be mourned by many.
Globalism lies in ashes, killed by much more than just COVID, although COVID was definitely part of the deadly cocktail. The phoenixes that rise from these ashes will be many, not just one. A thousand creatures will attempt to fly, and many—possibly most—will fail, or at least look small and weak compared to the world-spanning wingspan of their predecessor.
However, I suspect that more will prove to be better. Globalism was a one-size-fits-all solution that ended up fitting almost nobody very well. The post-global world will be more resilient, diverse and – if things go well – more responsive to local needs. Global warming is the only area where the planet needs to get on the same page fast. But most problems are local problems—and local problems often lend themselves to local solutions, even if those solutions don’t scale globally. Which is a major point in favor of smaller regional phoenixes.
Adapted with permission from “The Phoenix Economy: Work, Life, and Money in the New Not Normal,” by Felix Salmon, a journalist who is the senior financial correspondent for Axios.
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