One can argue if this was right or wrong, but one cannot argue that it didn’t give rise to Hitler and his party. Below is a letter from a family in Germany to their family that emigrated to the United States. It was translated by AI, and even Artificial Intelligence seems to find it fascinating. The family name has been removed.

I post this only to show how actions sometimes have unintended, and horrific, consequences.

A Letter from Nazi Germany

[Place], October 15, 1936

My dear ones!

We received your dear letter with thanks. It makes us so happy when something comes from America, and yet we become somewhat sad when one reads how you are being incited against our Führer, who is the best and most glorious person in the world. We are all raised Catholic and still all go to church, but as German people we reject that our clergy stand at the pulpit and talk politics. Where was the church before the seizure of power? Sunday only [they did this?], and today they want to finish with us. For that the clergy are not there — in no country on earth, I believe, are they paid as well as with us, and can walk the streets so peacefully. Here the swastika flags wave peacefully from the roofs of the churches; in other countries they lie in rubble and ashes. That we can live in such peace, we owe only to our Führer. God has protected him and also visibly blessed him.

And the conflict with the Church — it had to come, because our clergy no longer knew that they were the representatives of Christ. Instead of guiding people to heaven, they managed to make it so that Sunday after Sunday thousands of people stopped going to church. You may never understand all this, because you did not experience it, and it is told to you as if a great religious war has broken out in the German Reich. And you know not at all how peacefully we also live here regarding the Church. We only reject it as German people that our pastors concern themselves with things that are none of their business. They should prepare people for eternity, as God demands of them, and when they do their duty in that regard, then they have such a field of work that they no longer find time to worry about matters that only concern the state.

We also have a radio, and thus sometimes have the opportunity to tune into a foreign station — then one’s heart becomes bitterly pained when one hears this Judenhetze [she means: foreign criticism of Nazi antisemitism, which she considers “incitement”] and how brothers and sisters abroad imagine our new Germany. And that is why we write to you and ask — we gladly give you information about everything.

We all want to help the Führer toward mutual understanding. Our Adolf Hitler wants only peace with the world, and nothing else. And those who proclaim otherwise are the ones who want to turn our now so proud Fatherland into a heap of rubble. They have not succeeded, and they will not succeed — that is their bitterness, and so they know nothing else but to incite against us. And if it comes down to it that the whole world boycotts us, they can go ahead and do it calmly. Against the iron will and diligence and sense of duty of the new German people, they will bash their heads in.

Regarding the clergy, I wanted to write this one more thing: it may well be that your clergy are quite different, and therefore you cannot understand well how things looked here when the Führer came to power. We had only the political Catholicism in the Reich, and the gentlemen received salaries that were excessively high, and because of that they have degenerated.

I make a suggestion: you do have children — send one over to us sometime? We would be so happy. We would travel through Germany with them; they would return to you with the same enthusiasm as every foreign travel group that visited our country this year — and many American groups were among them.

One could speak with a foreigner as much as one wanted; always there was only one voice: “Oh, if only we also had a Hitler.”

In September we again had the Reichsparteitag [Nazi Party Rally] in Nuremberg; my husband goes there every year. It is an experience, and then they all draw new strength for continued work. This year Adolf Hitler announced the further Four-Year Plan, and the whole days stood under the sign of the battle cry against Jewry and World Bolshevism — there the mask was again torn from the face of Communism. I am just curious whether you over there also get this to read. I come again with the request that someone come to us. Travel is so fast nowadays, and you have no idea how happy we would be. On November 15th is the Ringhuse Kirmes [village fair], then the whole family comes together again. We have always talked about you, and this year we will take the letters along — everyone will be happy.

Otherwise everyone is still doing well; in Obersgegen everything is also still well. In the house there is still Uncle Matti, that is the eldest son of my grandfather Mattias <Name>, who was your stepbrother. Uncle Matti is a journeyman with him; yes, his sister-in-law, the wife of his brother Jakob who fell in the war, is living there with her son. They have a very nice business, the house completely newly renovated, a new barn built — they are doing very well. With us the prices are fixed in agriculture; the Third Reich is supposed to become a farming empire, and you can already see it quite clearly, the progress in everything, because when the farmer has money, the whole world has it. How progressive the <Name> farmer has already become, you cannot imagine.

And I believe when you drive to Obersgegen to see, you would not find your way around anymore. The poplars are no longer there; they had to be cut down because of the construction of an Autobahn, which I also didn’t know well, because as a schoolgirl I always spent the holidays in Obersgegen. The brother of Uncle Matti, that is Uncle Wilhelm, is married in Ruwer near Trier. He has a large blacksmith workshop; he has 10 children. Except for a couple, all are already provided for. Two boys are blacksmiths, one is in the navy, the second is now also supposed to join the navy, and one he has in the monastery — he is supposed to become a priest. The girls are all married except for one. Before the seizure of power, the whole business had been lying almost completely idle; those were bad years for Uncle, but since 1933 they are working again with 5 men. It is a joy to watch, and how this whole family stands united behind the Führer! The uncle says: we have felt it in our own experience what it means to be unemployed, and then one day to have work again.

I ask you, dear Uncle, be so good and send this letter also to Uncle Michel — I hope it arrives.

And in closing, I ask you to pray with us to dear God that He blesses our Führer and his work, so that the whole world recognizes that he only wants peace. Keep faith with us, the German people. Even if you are far from us, we do not forget you either. With us in [Pax?]weiler there is every year an “Auslandsdeutscher”[Germans Abroad] day, and then everyone is stirred up and made aware of his sisters and brothers beyond the border.

To all of you a thousand heartfelt greetings, and hoping for a soon reunion with someone from you. Writeto us — we are happy to give you information about everything.

With the German greeting,

HEIL HITLER

I remain yours,

Maria

Historical Summary (from AI)

This letter, written on October 15, 1936, from a German Catholic woman named Maria to her relatives in America, is a striking primary source document from Nazi Germany. It reveals:

• Complete absorption of Nazi propaganda — Hitler portrayed as a saintly peacemaker

• Tension between Catholic faith and Nazi loyalty — resolved by blaming the clergy

• Dismissal of foreign reports about antisemitism and religious persecution as “lies” and “incitement”;

• Economic gratitude — the family directly credits Hitler for ending unemployment

• Eager invitation for American relatives to visit and see “the truth”

• Reference to the 1936 Nuremberg Rally and the announcement of the Four-Year Plan

• Family news interwoven with political messaging

• Closing with “Heil Hitler” — even in a personal family letter

Written just three years before WWII began, the letter captures how deeply Nazi ideology had penetrated ordinary German life.

Key Historical Context (also from AI)

The 1936 Nuremberg Rally: The writer’s husband attended the annual Nazi Party Rally, where Hitler announced the Four-Year Plan — a program to make Germany self-sufficient and ready for war within four years.

“Judenhetze” (Jew-baiting): Remarkably, Maria uses this term to describe what she hears on foreign radio stations — inverting reality by portraying accurate foreign reporting about Nazi antisemitism as anti-German propaganda.

Church-State Conflict: By 1936, tensions between the Nazi regime and the Catholic Church were real and growing. The writer blames the clergy, not the regime, claiming they overstepped by involving themselves in politics.

Swastika Flags on Churches: The writer presents this as a sign of peaceful harmony between Church and State, rather than as the forced political conformity it actually was. She contrasts this with churches “in rubble and ashes” elsewhere — likely referring to the Spanish Civil War.

“Auslandsdeutscher” Day: A Nazi-era event meant to maintain connections with ethnic Germans living outside Germany and promote loyalty to the Reich.

Economic Recovery: The family directly credits Hitler for ending unemployment. Uncle Wilhelm’s blacksmith shop, idle before 1933, now employs 5 men. This economic improvement was a major source of Nazi popular support.

The Autobahn: The writer mentions poplars being cut down for highway construction — the Nazi regime’s highway-building program was both a public works project and propaganda achievement.

Note: Some words in the original letter were unclear due to image quality and are marked with [?]. Place names and some proper nouns have been preserved as best as could be determined from the handwritten/typed original.

I share this because I believe it is important to understand that consequences of actions that seem reasonable at the time. After WWII, the actions of the allies were very different. Land was taken, but the allies worked hard to rebuild the economies of both allied and enemy countries. (See my post on The Marshall Plan.)

Skopje was the capital of the Yugoslavian province of Macedonia (now the independent country of North Macedonia). Yugoslavia was the first country to adopt a Soviet-style socialist system but later left the Warsaw Pact. In 1948, the Yugoslav leader, Marshal Tito, broke with Soviet Leader Stalin. Under Tito, Yugoslavia worked with Western countries and accepted aid from the United States. This was a 180-degree change from 1947, when Yugoslavia and other Eastern Bloc states declined Marshall Plan assistance under pressure from the USSR’s Stalin.

So, by the early 1960s, Yugoslavia was a socialist country that the United States wanted to succeed in both economic and political terms. Aside: It is interesting that the other country we might have tried this same tactic with was Cuba, but instead, we forced them into the Soviet camp. But back to Skopje.

On 26 July 1963, an earthquake tore through the city of Skopje. Homes, public buildings, streets, and landmarks were damaged or destroyed, and tens of thousands of people were left without shelter. For Skopje, the earthquake was not only a natural disaster. It became the moment when the city’s future had to be imagined almost from scratch.

What followed is one of the most remarkable rebuilding stories in modern Europe. Help came from across the world, and Skopje became a kind of shared international project. The Yugoslav government, the Municipality of Skopje, the United Nations, UNDP, UNESCO, and local planning institutions all played a role. There was a practical need to house people and repair infrastructure, but there was also a bigger ambition: to rebuild Skopje as a modern city, one that could represent recovery, solidarity, and a belief in the future. And then there were the ambitions of the Cold War Powers, both the United States and the Soviet Union wanted to prove a reliable friend to Yugoslavia.

In 1965, the Japanese architect Kenzo Tange and his team won the international competition for Skopje’s new city center. Tange brought with him ideas linked to Japanese Metabolism, a movement that imagined cities as living systems that could grow and change over time. His proposal for Skopje was bold, almost cinematic. It centered on two big ideas: the “City Gate” and the “City Wall.” The City Gate would act as a dramatic entrance and transport hub, while the City Wall would frame the center with housing and public functions. Even if you know nothing about planning, the names alone suggest the scale of the dream.

But Skopje was never just Tange’s project. The reconstruction brought together a wide network of international and Yugoslav architects, planners, and advisers. Participants included both internationally and domestically renowned architects.[1] That international mix matters, because the rebuilt city was not simply imported from abroad. It was shaped by outsiders, local professionals, political realities, and the urgent needs of people who had to live there.

This is why the architecture of post-earthquake Skopje felt so powerful. So much of it is concrete, heavy, expressive, and unapologetically modern. The railway station, the telecommunications and post office complex, university buildings, housing blocks, and cultural institutions were not designed to be quiet background buildings. They were meant to say that the city had survived and was moving forward. Brutalism is often dismissed as cold, but in Skopje it can also be read as emotional: architecture trying to hold a wounded city together.

Brutalist Architecture

Of course, the grand plan was never completed exactly as imagined. Money ran short, priorities shifted, politics changed, and rebuilding a city is messier than drawing one. Some parts of Tange’s vision appeared in altered form, while others remained as plans, models, or fragments. That incompleteness is part of what makes Skopje so interesting. It does not feel like a polished architectural manifesto. It feels like a city still negotiating with its own past.

Since then, Skopje has changed again and again. After the breakup of Yugoslavia and North Macedonia’s independence, new questions of identity entered the city’s architecture. The most visible and controversial change was “Skopje 2014,” a state-led project that added neoclassical façades, statues, bridges, fountains, and monumental public buildings to the center. For some people, it made the capital more decorative, legible, and digestible for tourists. For others, it covered over the modernist legacy of the 1960s with a theatrical version of history. I took a tour of the city in 2022 and was gobsmacked by the changes. The guide showed that much of the new granite facing was actually faux-granite panels tacked onto older buildings. You could knock and hear the hollowness.

Faux Classic Architecture

Skopje traded the Brutalist style for a garish neo-classical mashup of Greek / Roman / Empire architecture. Skopje has also decided to become a city of statues. Unfortunately, many of the statues aren’t real marble, but concrete above the line where you can touch them. Without laying blame at everyone’s feet, there were people in the government who seemed to have cut a lot of corners and absconded with the funds. Some of the neoclassical government buildings leak, and the marble up high is plaster, sprouting mold.

This doesn’t spoil the beauty of some changes, but it does give a visitor a bit of architectural whiplash.

Statues

Depending on your outlook, that contrast makes Skopje feel either layered or Disneyfied. You can move from the Ottoman bazaar to socialist-era concrete, from the fortress above the city to new monuments along the Vardar River. The city does not present one clean story about itself. Instead, it shows its arguments in public: between old and new, memory and invention, international modernism and national symbolism, trauma and display.

For me, that is why Skopje’s architecture is so compelling. It is not just a collection of styles. It is a record of people trying to decide what a city should become after a disaster. The 1963 earthquake opened a painful blank space, and architects from Japan, Europe, Yugoslavia, and international agencies tried to fill it with hope, structure, and imagination. The breakup of Yugoslavia in the late 1980s was another major change in Skopje’s fortunes. Later generations added their own symbols, sometimes in harmony with what came before and sometimes in conflict with it. Skopje today is changed, contested, and unfinished—but that may be the dynamic which makes it memorable.

I had a fantastic visual time in the city. I had a lot of fun too, but that isn’t what this is about.

A New Kind of Cathedral: Church of St. Clement of Ohrid

[1] ( AI gave me this list) Constantinos Doxiadis from Greece, Adolf Ciborowski from Poland, Jo van den Broek and Jaap Bakema from the Netherlands, Luigi Piccinato from Italy, and Maurice Rotival, the French-American planner. Ernest Weissmann, connected to UN planning work, was also part of this larger modernist conversation. Local and Yugoslav architects were equally important, including Aleksandar Đorđević, Slavko Brezoski, Edvard Ravnikar, Radovan Miščević, Fedor Wenzler, and the Institute for Urbanism and Architecture in Skopje.

Over the past two decades, American roads have seen a dramatic transformation. Where, in days of yore1, sedans and compact cars dominated streets and parking lots, now sport utility vehicles (SUVs) of all shapes and sizes fill the landscape. This shift from traditional cars to SUVs is not merely a matter of style or fleeting consumer fancy; it is the result of industry strategies, regulatory pressures, and evolving consumer preferences. In this post, we’ll explore the reasons behind the SUV boom, the impacts on industry and safety, and how this trend appears to be self-perpetuating.

“But Scott”, I hear you say, “What does this have to do with the intersection of geography and economics?”

The geography and iconography of the United States place the vehicle at the pinnacle of accomplishment in our nation. We are the nation of the open road.

As a country, we have devoted a massive amount of political capital and physical resources to keeping our car industry afloat, and dependent on gasoline (petrol). The unintended consequences of this have led to our fixation on the SUV.

Before we start, I admit I have a (hybrid) SUV myself. There are good reasons to despair of the move to SUVs, but I love my SUV and more than understand why people have them. They are safe, have great visibility, great versatility, and are a pleasure to drive. More importantly, they don’t make good hatchbacks anymore2. This post examines how we got to the point where SUVs and light trucks dominate American roads.

Automaker Shift: From Cars to SUVs

The rise of the SUV can be traced in part to automakers’ response to government regulations. In the late 20th century, U.S. fuel economy standards became a major factor in vehicle design and sales strategy. The Corporate Average Fuel Economy (CAFE) standards, established in the 1970s, required automakers to meet fuel-efficiency targets across their fleets. HOWEVER, these standards treated trucks and SUVs differently from passenger cars, allowing higher fuel consumption for the former.

As consumer tastes leaned toward larger vehicles, automakers recognized an opportunity. By focusing on SUVs—which were classified as light trucks—they could meet regulatory requirements more flexibly while offering vehicles that aligned with growing public interest in size, space, and versatility. This resulted in basically switching the idea of a family car from 1970s sedans to 2000s SUVs.

Since light trucks and SUVs have lower MPG targets (Miles Per Gallon) than “cars”, it is easier to meet these targets with SUVs. The illustrations show how US car makers initially built small cars to bring down their average MPG, while the larger sedans remained unchanged. But as car makers switched from “family sedans and station wagons” to “family SUVs”, they needed fewer compact and small cars to bring down their average MPG.

Profit Margins and Regulations: The Economic Case for SUVs

The shift toward SUVs was also driven by straightforward economics. Traditional sedans and compact cars typically yield lower profit margins for manufacturers than SUVs and trucks. Building SUVs on shared truck platforms allowed companies to streamline production and maximize returns. For example, while a midsize sedan might yield a modest profit per sale, automakers could earn several thousand dollars more on each SUV, even at similar price points. Regulations also played a role: because SUVs were held to less stringent fuel-economy standards, automakers could produce larger, heavier vehicles—often with higher sticker prices and more lucrative optional features—without facing hefty fines or penalties.

As producers moved away from sedans, they needed to sell fewer economy cars to lower their average mileage. Car makers had been selling compact cars at a steep discount to bring down overall MPG rates, but with SUVs exempted from this metric, cr makers no longer had to sell nearly as many.

Consumer Acceptance: Why Buyers Prefer SUVs

Of course, industry strategy alone doesn’t explain the SUV’s dominance. Consumer preference has been a powerful engine behind the trend. Many buyers cite a range of perceived advantages: increased cargo space, greater passenger comfort, enhanced visibility, and the impression of improved safety. Marketing campaigns have reinforced the idea of SUVs as vehicles that can handle both daily commutes and adventurous getaways. As a result, families, urban professionals, and even retirees have gravitated toward SUVs, often at the expense of traditional sedans or hatchbacks. In recent years, the introduction of smaller crossover SUVs—combining car-like handling with SUV styling—has further broadened the appeal to those who previously would have purchased a sedan.

Safety and Road Impact: Challenges for Smaller Cars

While SUVs offer advantages to their occupants, their rise has created new challenges—especially for those who continue to drive smaller cars. One major concern is the safety disparity between SUVs and standard passenger vehicles. Studies show that in collisions involving an SUV and a smaller car, the occupants of the smaller car are at a significantly higher risk of serious injury or death. The higher ride height and greater mass of SUVs often mean that, in a crash, their bumpers and frames strike above the protective zones of smaller vehicles, sometimes overriding crumple zones and side-impact airbags. For example, in a 2019 Insurance Institute for Highway Safety (IIHS) analysis, fatality rates for car passengers in collisions with SUVs were notably higher compared to car-to-car crashes. These risks are compounded in urban areas, where SUVs’ larger blind spots and longer stopping distances can lead to more frequent and severe accidents involving pedestrians and cyclists as well.

The Self-Reinforcing Cycle of SUV Popularity

The growing popularity of SUVs has also created a feedback loop that perpetuates their dominance. As more people switch to SUVs, those remaining in smaller cars may feel increasingly vulnerable, prompting them to consider buying an SUV themselves for greater safety. This “arms race” effect means that each new SUV on the road nudges others toward making similar choices—further boosting SUV sales and shrinking the market for traditional sedans. The automotive industry, recognizing this trend, invests more in SUV development and marketing, while reducing offerings of smaller cars. Over time, this reduces consumer choice, leaving even buyers who might prefer a sedan with little option but to join the SUV bandwagon.

Some Surprising Economic Effects

This move to SUVs has had unexpected economic effects.

• The car-only market is now almost completely dominated by “foreign” producers

  • Honda, Toyota, and Nissan dominate the affordable car market, and there is almost no American competitor.

  • BMW, Mercedes, and Lexus dominate the luxury car market. The American producer Tesla has also performed very well in this market.

• The traditional US car makers now offer only TWO cars

  • Ford still produces a Mustang, and Chevrolet produces a Corvette - that is the total of US companies’ non-SUV cars.

• European markets have started shifting towards SUVs, but typically at smaller sizes, as tastes shift from cars to SUVs.

ASIDE - What is up with the Suburban?

This may seem odd, but there is an added layer that is worth discussing. The American tax system allows for heavy trucks and farm machinery to be depreciated over time, which is great for tax reasons. The intent behind this is to allow businesses that need heavy trucks, construction vehicles, etc to depreciate them as an asset. For example, you don’t replace a farm truck like the family car.

However, the GMC / Chevy Suburban can be configured to weigh more than 6,000 pounds (like the GMC Hummer, Cadillac Escalade, and Lincoln Navigator), making it tax advantageous if used for business. These are now the default autos for limousine services, replacing the Lincoln Town Car. Independent business owners, like real estate and contractors, can use these large SUVs and get that tax advantage.

Conclusion: Implications for the Future

The rise of SUVs over traditional cars is a complex phenomenon shaped by regulatory frameworks, industry economics, and consumer psychology. Automakers have responded to fuel economy standards and profit incentives by prioritizing SUVs, while buyers have been drawn to their practicality and perceived safety. However, the growing prevalence of SUVs has also introduced new safety risks for those in smaller vehicles and contributed to a self-reinforcing market cycle that is difficult to reverse.

The negatives of SUV ownership are primarily external costs to the community, not to the owners. For example, SUVs weigh more and cause more road wear and tear. SUVs are much less safe for pedestrians. SUVs use more fuel than cars, although in many cases the emissions are not much worse.

Without regulatory changes, which would be very unpopular, SUVs and light trucks will continue to dominate new-vehicle purchases. Even much higher oil prices, or higher MPG requirements would probably only accelerate the move to hybrid or electric vehicles, not the production of cars.

A Possible Change

The only real possibility of changing our market comes from a movement to charge taxes based on mileage & weight, instead of gasoline taxes. This is being looked into because electric vehicles don’t buy gas, but are often much heavier - and therefore harder on roadways. Taxing by weight and usage might bring back smaller, lighter cars. But Americans are pretty adamant against this type of tax. But as the current administration loathes EVs, they might actually consider it.

I find this topic particularly interesting given my work history. I started in software testing and second-level support at Xerox in the 1980s. These are two areas that migrated offshore decades ago. Since then, I have managed offshore teams for Xerox, Thomson Reuters, and Citibank. I have managed teams that did customer support, technical support, product testing, application development, and integrated development. These teams have been in India, Japan, Singapore, China, Belarus, and Mexico. For many workers today, this is normal. We forget how unusual it was before 2010, and what enabled it.

Introduction: Defining Offshore Development

Offshore development is the practice of relocating business processes or technical work to another country, typically to benefit from lower costs and access to specialized talent. There is a tradeoff decision in doing this. It is normally done because the resources used to create the service or software are cheaper in foreign countries. However, there are costs in communication, the difficulty of managing these distant people, and the potential job loss at home. The decision to offshore some work tries to balance these positives and negatives – not always successfully.

There are also areas where offshore teams have amassed significant experience and resources. For example, ATM Software development is now mainly done by outsourced offshore teams for American, Canadian, and European Banks and financial institutions.

Origins: When and How Offshore Development Began

Offshore manufacturing development has a long history. Starting in the 1970s and 1980s manufactured products where unskilled labor could be trained quickly migrated from high-wage America and Europe to low-wage countries, primarily in Asia. Textile manufacturing, garment, and shoe manufacturing hollowed out industries in the more developed world. But services and software offshoring took longer.

It was the internet that really made offshoring services and software possible, first by driving an explosion in communication. Major companies laid out cabling infrastructure that was exponentially faster and more reliable than it had been just a few years earlier. In the illustration, look at the “ISP” lines. This stands for Internet Service Provider; these are the companies that provide access between individuals (or companies) and the rest of the internet.

If you look at telephone communication, even as recently as 2000, people paid large charges for phone calls. A “long-distance toll call” was still a thing. At the beginning of dial-up access, in some cities, people had to pay for local telephone calls. But the explosion of bandwidth allowed changes to happen.

I am going to take two examples of my work to illustrate how much the world has changed since the 1990s.

In 1995 I was working for Xerox in international printer development. We made software for local laser printers. For a new software release, everyone had to store their software and changes on a server. A single person then went in and compiled all the parts into a single release. Then they had to burn that software onto disks to load the software. These disks were then copied and physically sent from Los Angeles to New York, Europe (London and Lille), Tokyo, and Brazil to be loaded onto physical printers there. I actually flew once to Lille with a set of 14 floppies for launch in January of 1996. This was a bottleneck that limited international offshoring.

Now, of course, software is sent electronically and nearly instantaneously. Floppy disks are gone and international teams can work together in real time.

I had another job in 1999 with an internet startup. We were an ISP that provided internet access to major players. At one point, we provided nearly all access to the country of New Zealand. The entire country accessed the international internet via one of three “T-3” lines. Each T-3 line could support about 48 Mbps of service. For comparison’s sake, that is about 50%-90% slower than your home 5G Wi-Fi.

All this speed is impressive and now enables seamless, fast communication between teams separated by international borders. Transportation costs dropped dramatically after airline deregulation at the end of the 1970s. Cheaper and more regular international service supported the offshore boom. Not only could remote teams be easily hired, but they could also be remotely managed and routinely visited by American or European managers.

Early Offshored Services:

What Moved First

Initially, the services most commonly sent offshore were data entry, basic software coding, and customer support. These tasks required minimal face-to-face interaction and could be managed remotely, making them ideal for early outsourcing efforts. They didn’t require much remote management.

Where Jobs Were First Offshored

India quickly became a leading destination for offshore services due to its large English-speaking population and competitive labor costs. Other countries, such as the Philippines and Ireland, also started attracting outsourced work, particularly in areas like call centers and IT support.

The introduction of the call-tree and then offshore customer support changed customer support for nearly all consumers. (Yes, I know, not in a good way.)

English was critical for customer support work. It is also an advantage in software development. Nearly all internationally used coding languages are based on English. Therefore, software developers in ex-English speaking colonies, like India, Singapore, or the Philippines, often find learning a coding language easier than non-English speakers.

Current Offshored Services: Today’s Offshore Landscape

Today, offshore development encompasses far more than basic tasks. High-value services like software engineering, research and development, digital marketing, and financial analysis are routinely offshored. Companies now leverage global talent for complex projects and innovation-driven work at the cheapest price.

Even companies that want to hire more locals, like many in the United States, may find limited options in fields with high competition for workers. It is often easier to outsource than to hire locally. The major offshoring corporations also offer the ability to place foreign workers in the United States.

Major Offshore Countries and Companies

India remains the largest offshore destination, especially for software and IT services. The Philippines has become a powerhouse for customer support, while Eastern European countries like Poland and Ukraine are known for skilled technical talent. China, Vietnam, and Mexico have also emerged as significant players in manufacturing and digital services.

Offshoring now uses middlemen to employ the foreign workers. It is rare for a US company to employ the offshored workers. Normally, US- or European-based companies use a secondary company, such as TCS or Infosys, to set up an offshore location and manage the workforce.

For many companies, offshoring provided the tools and experience to allow remote work during COVID. These companies had already worked with remote teams and had the processes in place to expand remote access. Although remote work and offshoring are not the same, the supporting infrastructure is often the same.

Trends and Movement: Shifting Offshore Development

Offshore development trends shift as countries develop new expertise, costs rise, and technology evolves. Automation and remote work have changed the types of services companies offshore, while nearshoring—moving work to nearby countries—has grown in popularity for improved communication and time zone alignment.

Some of the nearshoring movement is in response to the process bottlenecks during COVID. But the offshoring of services has not slowed down. In fact, more small businesses and entrepreneurs are using service offshoring directly. Offshoring was once an option only for large technical and consulting firms, but platforms like Fiverr, Toptal, and Freelancer make it easy for anyone.

Conclusion: Summary and Future Outlook

Offshore development has evolved from simple data entry to sophisticated technical and creative work. As global talent pools expand and technology advances, the landscape will keep shifting. Business professionals and tech enthusiasts should watch for new destinations, emerging skills, and innovative collaboration models in the years ahead.

The impact of AI on offshoring is unclear right now. Some of the work done by offshore teams can now be done with minimal people using AI. This may limit the future growth of offshoring, because AI is another option for firms looking to cut employee costs.

I also worked in Bosnia, where non-profits like ours had to watch out for unexploded landmines throughout the country. And I traveled in Cambodia, where the population was still dealing with thousands of children missing limbs. And so I wondered if the United States refusal / inability to sign many international treaties, in particular the landmine treaty, has economic consequences.

The United States, despite its role as a global leader, has often chosen not to sign or ratify major international treaties. This selective participation is driven by a combination of domestic politics, concerns over sovereignty, and strategic interests. While many nations, including China and Russia, have committed to certain global agreements, the US frequently opts out, raising questions about our commitment to international norms and cooperation.

Historically, the United States has not been ostracized by this behavior. Typical enforcement mechanisms, such as diplomatic pressure or economic sanctions, are not effective. The “name and shame” system of enforcement is useless against Americans. And, America, to date, cannot be locked out of financing as is done to Iran or North Korea. But more than the practicalities of enforcement, most US Allies believe that the US has worked in support of international norms, with or without treaties. I expand this reasoning at the end of the post.

There is also a bizarre anomaly in how the US legally signs and ratifies treaties. The President will sign a treaty, and then it is submitted to the Senate, where three-quarters of the Senate has to ratify it. For many treaties (such as the Law of the Sea), the United States may follow them, but for internal political reasons, it has not ratified them. In this post, I am more interested in the international treaties we totally reject.

Major Treaties the US Has Not Signed or Ratified

• Ottawa Convention (the international landmine treaty): The US has not signed the landmine treaty, along with countries like China, Russia, India, and Pakistan. Since 1997, the United States has pledged to comply with much of the treaty, but the option to use landmines must be retained to protect South Korea.
  The US use of these munitions in Iran belies previous commitments. The first Trump Administration informed the world in 2020 that it was reversing the Obama policies that limited landmines to the Korean peninsula. The administration has not received any internal political blowback to this decision and the subsequent use of landmines.

  

• Rome Statute of the International Criminal Court (ICC): The US has not ratified the Rome Statute, which established the ICC. Both China and Russia have signed, but neither has ratified; however, their participation underscores America’s reluctance to subject its citizens to international jurisdiction.
  The United States authorities cite concerns over who and how the prosecutions would affect. The US expressed concerns that they might be overly political, would not protect our military, and would overrule our national courts, among others.

  

• Convention on the Rights of the Child (CRC): The US remains the only UN member state that has not ratified the CRC, while both China and Russia are parties to it. This treaty seeks to protect children’s rights globally, but US opposition centers on issues of parental authority and national sovereignty.
  Some of the rights conflict with various state laws – for example, the CRC prohibits sentencing children to life without parole, legal in some US states.[1] In other cases, US Senators believe the rights conferred on children would overrule parental rights. For example, in six states, children under 15 can legally marry. Four states have no minimum age at all. In multiple states, statutory rape can be avoided by forced marriage.

• United Nations Convention on the Law of the Sea (UNCLOS): Although the US follows many provisions, it has not ratified UNCLOS. China and Russia have ratified this treaty, which governs maritime rights and responsibilities.
  The United States has not signed this treaty because of concerns over local sovereignty over seabed mining and access.[2]

• Comprehensive Nuclear-Test-Ban Treaty (CTBT): The US has signed but not ratified the CTBT, which bans all nuclear explosions. China and Russia have signed, with Russia ratifying, highlighting a divide on nuclear arms control.
  The US Department of State does note that the United States has observed a voluntary, unilateral moratorium on nuclear testing since 1992.

How Does the US Get Away With It?

The US leverages its political, economic, and military power to shape global rules and often negotiates bilateral agreements or relies on its influence in multilateral institutions. Domestic concerns, constitutional constraints, and a strong belief in exceptionalism underpin its resistance to international treaties. Additionally, the US often argues that its own laws and practices offer sufficient protections, making certain treaties unnecessary from its perspective.

With bases around the world to protect the current international system, most countries have bought into the American system as stable and workable, even if it is not preferred by many. When America demands the right to use power in ways prohibited by treaty, most nations acquiesce.

Ultimately, the US’s unique position allows it to avoid some global commitments without facing the same consequences as other nations. This selective engagement, however, frequently draws criticism and complicates international cooperation, particularly when other major powers like China and Russia have shown a willingness to participate in these agreements.

Why Does the US Get Away with It?

In this case, the “why” is more important than the “how”. I say this because the underlying assumptions for why we get away with avoiding treaties are changing.

For lack of a better name, I am going to call this the Benevolent Hegemon effect. I think of it this way. Through a series of alliances and economic chockpoints the United States guarantees the freedom of rich nations and financial transactions. And, in general, we have used these to support our allies and the world’s economy.

Up until the election of an “America First” regime – the Trump Administration – the tacit international bargain was that America stood up and protected the international system and its allies. In return, our allies and international organizations basically overlook the fact that the internal US political system is, in some ways, atypical of Western nations. For example, the use of the death penalty, the widespread ownership of guns, the use of military force, and America’s unquestioning support of Israel.

Now, however, we aren’t so benign. As America becomes more transactional in foreign policy, I don’t believe we will see as much deference to American desires and exceptions from the global norm. America will continue to defend the “best interests” of all people, but not when those interests even mildly conflict with America’s best interests, as defined by transitory administrations.

Does “America First” Change Anything Going Forward (around treaties)?

There is a short-term answer and a long-term answer here.

The short-term answer is no; nothing will really change. America will continue to sign or not sign treaties based on internal political decisions. And enforcement mechanisms will continue to have almost no impact on American political decisions. The US is simply too large and powerful to be deterred if it assumes something is not in its best interests.

The long-term answer is a yes; things are already changing. The change is to the assumption that the United States is a benevolent hegemon is being called into question by the United States itself. (Stephen Miller said, “The real world is governed by strength, force, and power.”) [3] That change means that allies will no longer support us unconditionally, and other independent nations will be less willing to enter into agreements with the US.

This change in perception will cost almost nothing to the US, as long as we are the most powerful and rich country. But maintaining the status of the most powerful and richest country will cost Americans more with less pliant allies and independent nations.

[1] https://farzadlaw.com/united-states-not-ratified-uncrc

[2] Interestingly, the right for free transit through the Strait of Hormuz is guaranteed by UNCLOS, which we have not signed.

[3] https://www.pennlive.com/opinion/2026/01/fire-stephen-miller-before-his-might-makes-right-doctrine-destroys-american-credibility-column.html

War was about taking things, usually land and its associated resources.

For centuries, the purpose of war was clear and straightforward: expanding territories and dominating other peoples. Great empires rose and fell based on conquest, with borders redrawn by victors and entire civilizations subjected to the will of the powerful. The reasons behind conflicts were essentially the same: acquiring land, resources, and influence through violence. The world map was continually shaped and reshaped by these struggles for control, often ignoring the desires or identities of those caught in the crossfire.

The Principle (and Wars) of Self-determination

Since the end of World War I, conflicts have transformed, a change that has sped up in recent decades. The age of imperial conquest has largely faded, replaced by a new reality in which wars are more often driven by internal divisions than by the ambitions of external aggressors. The focus has shifted from conquering territory to asserting distinct identities. Subgroups within existing states, as defined by ethnicity, religion, language, or political goals, have increasingly tried to break away from larger national entities to form independent countries. This shift began and gained momentum with the end of colonization and has continued ever since. The world has experienced a wave of civil conflicts and separations that highlight this deep change in the nature and purpose of war.

One driver of that change was the United States’ policy, as described by Woodrow Wilson after World War I. Many of Wilson’s 14 points concerned the self-determination of peoples previously ruled by Austria-Hungary, the Ottoman Empire, Russia, and Imperial Germany. The map of Europe was radically altered in order to give ethnic groups their own countries.

America's commitment to the idea of self-determination also hastened the end of the colonial system. Wars of independence were treated differently by the world community than wars of agression.

This drive for independence has continued, even long after World Wars I and II. The changing map of Yugoslavia territory below illustrates the move towards separate nation states for nationalities.

The disintegration of Yugoslavia in the 1990s serves as a powerful illustration of this transition, long after the changes from WWI were over. Once a multi-ethnic federation held together by the strong central authority of President Tito, Yugoslavia unraveled under the pressure of resurgent nationalism and ethnic rivalries after his death. The wars that erupted across the Balkans were not campaigns of conquest by foreign powers, but rather brutal struggles by Croats, Serbs, Bosniaks, Slovenes, Macedonians, and others to create sovereign states reflecting their own identities. The resulting violence was devastating, but its underlying logic was fundamentally different from that of traditional wars of acquisition; it was about redefining national boundaries from within, rather than expanding them outward.

Similar dynamics unfolded with the collapse of the Soviet Union at the end of the Cold War. The USSR, a vast and diverse empire in its own right, fractured into fifteen independent republics as constituent nations sought to assert their autonomy amid waning central control. This process, while largely peaceful compared to Yugoslavia’s original situation, reflected the same principle: the right of subgroups to self-determination, even if it meant dissolving an established state. Czechoslovakia’s “Velvet Divorce” in 1993 further exemplified this trend, as Czechs and Slovaks amicably parted ways, creating two countries where there had once been one.

The story continued in Africa with the emergence of South Sudan, though not as peacefully. After decades of civil war with Sudan, South Sudan’s people overwhelmingly voted for independence in 2011, becoming the world’s newest nation. The struggle was driven not by conquest, but by a desire among a distinct population to govern itself free from a central authority that did not represent its identity or aspirations.

More recently, ongoing conflict in Ethiopia’s Tigray region shows how battles for autonomy and self-rule still drive modern wars, often pitting local groups against national governments in deadly, prolonged conflicts. The situation in Ethiopia is exacerbated by the actions of Eritrea, which itself was once part of Ethiopia.

Against this backdrop, the war in Ukraine stands out as a notable exception—a throwback to an earlier era when wars of territorial aggression were more common. In 2022, Russia launched a full-scale invasion of Ukraine, aiming to seize land and reassert its influence. This act of external aggression ran counter to the prevailing global trend and was met with swift condemnation by much of the international community. The invasion’s reception underscores how rare and unacceptable such wars of conquest have become in the 21st century, with most nations now viewing blatant territorial acquisition as illegitimate and destabilizing.

This shift in attitudes is not merely theoretical; it is reflected in real-world responses. The international reaction to Iraq’s invasion of Kuwait in 1990 offered a clear signal of this new consensus. When Iraq attempted to annex Kuwait, countries from around the world quickly formed a coalition to repel the invaders and restore Kuwait’s sovereignty. The swift and decisive reversal of Iraq’s territorial ambitions showed that the days when conquest was an accepted outcome of war were coming to an end. Instead, respect for recognized borders and the sovereignty of states became guiding principles of international relations.

What Next?

What follows from today is a conundrum.

Disagreements, although not wars of dissolution, still simmer in the Basque Country, Catalonia, Scotland, and other areas. But none of those will rise to the level of civil war soon. As the world grows less peaceful, breaking into weaker statelets is much less appealing.

On the other hand, wars in which a more powerful country can profit by preemptively attacking another country are increasing. Russia has prevailed in carving out some of Georgia and taking Crimea from Ukraine. The United States was able to effect regime change in Venezuela. Israel has wiped out Gaza, from an economic and infrastructure perspective. Israel and the United States have conducted two wars with Iran. Rwanda has backed regime change in the DR Congo and is pushing for the dissolution of regions in the northeast.

The outcome of the Ukraine/Russia war will probably foreshadow what happens next. A stalemate, even at the present levels of occupation, might not change international norms. But if Russia significantly profits from this war, and Iran is forced to take a US/Israeli puppet regime, then the new norms are to reward successful aggression. The United States was the biggest proponent of worldwide predictability. The American commitment to a rules-based order helped sustain a long period of relative peace between nations. If the United States supports aggression-dictated changes, then war once again becomes an easier economic and tactical decision.

Zones of Influence?

There has been a lot of talk of “Zones of Influence” lately, with members of the current US Administration its chief proponents. This is a throwback to the way of looking at world politics through the lens of communism. In the 20^th century, most nations accepted that the Soviet Union was given a free hand in communist Eastern Europe and Asia, the United States was given a free hand in Latin America, and the United States / Western Europe competed with the Soviets for support in the newly independent nations of Africa, Asia, and Oceania.

Repercussions of a move to the Zone of Influence style of diplomacy can be foreseen and would be trouble. The United States has replaced the Venezuelan regime in Latin America and is now advocating for replacing the Cuban regime. Success in the short-term reinforces military solutions to problems, but over time, resentment will hobble international support.

If Russia is victorious in reintegrating parts of Ukraine with international agreement, it may look at other parts of the ex-Soviet Union to reintegrate, specifically the Baltic Countries of Estonia, Latvia, and Lithuania. Since these three nations are in NATO, actions there would probably bring nuclear powers into conflict.

China might have the most to gain from a recommitment to zones of influence, assuming it can proceed with a forcible retaking of Taiwan. On the other hand, China is one of the strongest proponents of international competition instead of Zones of Influence because it uses its economic power to expand its diplomatic reach.

In any case, returning to the international system of Zones of Influence is simply a matter of the survival of the strongest. And, to be stronger, the military takes more of a nation’s resources, at the expense of economic and human development.

Introduction

(Note: This post is not dependent on current events. The Washington Consensus has been changing and evolving well before the current administration.)

The 1980s and 1990s witnessed a major transformation in the way developing countries approached economic reform. Perhaps it would be better to say the way developing countries were required to approach economic reform. At the heart of this transformation was a set of policy recommendations known as the Washington Consensus. This emerged as the dominant framework for economic policy in the 1980s and 1990s. The Washington Consensus shaped the policy of numerous nations, especially in Latin America and beyond. While its influence has waned in recent decades, the debate over its merits, shortcomings, and legacy continues to inform economic discourse. This blog post looks at the Washington Consensus, tracing its definition, origins, principal advocates, beneficiaries, decline, and enduring impact.

Definition: What Is / Was the Washington Consensus?

The specifics of the Washington Consensus are listed below, but the “idea” was a set of economic prescriptions for ailing economies to become successful. It was a concrete set of steps, and many were often required for IMF loans or loan forgiveness.

The Washington Consensus refers to a collection of ten economic policy prescriptions considered standard reform measures for crisis-wracked developing countries. These guidelines were aimed at promoting macroeconomic stability, economic openness, and market-oriented growth. The term “Consensus” denotes broad agreement among influential Washington, D.C.-based institutions—namely, the International Monetary Fund (IMF), the World Bank, and the U.S. Treasury Department—on what constitutes sound economic policy for emerging economies, particularly those facing debt crises or stagnation.

The ten core components of the Washington Consensus typically include: fiscal discipline, reordering public expenditure priorities, tax reform, liberalizing interest rates, competitive exchange rates, trade liberalization, liberalization of inward foreign direct investment, privatization of state enterprises, deregulation, and securing property rights. While the specific details varied by country and context, these principles collectively advocated for a reduced role of the state in the economy and greater reliance on market forces.

In today’s world, we see leaders from different nations and economic systems advocating for different aspects of these solutions. Leaders also justify exceptions on the basis of real or perceived adoption by other nations. For example, the U.S. administration views nations that do not follow these precepts as free riders exploiting the U.S. openness.

Origins: Who Started It and Historical Context

The genesis of the Washington Consensus can be traced to the late 1980s, a period marked by widespread economic turmoil in Latin America. Many countries in the region were grappling with hyperinflation, mounting debt, stagnant growth, and political instability. An early indicator of the region's severe problems was Mexico's 1982 debt default. Debt problems emerged throughout Latin America in the early 1980s and in Africa later in the decade. The 1990s saw the Asian financial crisis. There were numerous defaults and threats of defaults during these periods worldwide.

In response to these crises, international financial institutions and policymakers in Washington, D.C., began promoting a unified set of policy reforms as prerequisites for financial assistance.

The term “Washington Consensus” was first coined in 1989 by British economist John Williamson. Williamson sought to summarize what he saw as the prevailing wisdom among the Washington-based policy community regarding the reforms needed for Latin American countries to recover from economic distress.

At its core, the Washington Consensus reflected the shift away from state-led development models toward market-driven approaches. This shift was heavily influenced by the broader global trend of neoliberalism, which emphasized free markets, deregulation, and privatization as engines of growth.

Key Proponents: Main Figures and Institutions Involved

Several institutions and individuals played pivotal roles in shaping and promoting the Washington Consensus. The International Monetary Fund (IMF) and the World Bank were at the forefront, often making adoption of Consensus policies a condition for their loans and aid packages. The U.S. Treasury Department, through its influence in both institutions and its own bilateral relations, was also a key advocate. This pressure from Washington was instrumental in the institutions requiring these reforms.

Among the notable figures prominent supporters included U.S. Treasury Secretaries like James Baker and Nicholas Brady, who advanced debt relief programs and structural reforms for Latin America. Leaders within the IMF and World Bank, such as Michel Camdessus (IMF Managing Director) and Lewis Preston (World Bank President), were instrumental in implementing these policies globally.

Academics and policy advisors, including economists like Jeffrey Sachs and Stanley Fischer, also contributed to the Consensus, often advising governments on stabilization and reform strategies. The collective influence of these individuals and institutions ensured that the Washington Consensus became the default blueprint for economic reform in much of the developing world during the 1980s and 1990s.

Note that these same policies were imposed on the post-Soviet Eastern European nations. Their adoption from a baseline situation in Eastern Europe started pushing modifications to the Washington Consensus.

Beneficiaries: Who Took Advantage of the Consensus?

The primary beneficiaries of the Washington Consensus were developing countries, particularly those in Latin America, Eastern Europe, and parts of Asia and Africa, that faced economic crises or sought integration into the global economy. For these nations, the Consensus offered a pathway to regain macroeconomic stability, attract foreign investment, and foster economic growth.

Countries like Chile, Mexico, and Brazil implemented substantial reforms based on the Consensus. In some cases, these measures helped to stabilize economies, reduce hyperinflation, and restore investor confidence. For example, Chile’s embrace of market-oriented reforms in the late 1970s and 1980s paved the way for sustained growth and poverty reduction—outcomes that proponents of the Consensus often cite as evidence of its success.

However, the benefits were not uniformly distributed. While some countries experienced improved economic indicators, others struggled with rising inequality, social unrest, and incomplete recoveries. The private sector and foreign investors frequently gained from privatization and deregulation, while ordinary citizens sometimes faced hardships due to reduced social spending and job losses.

Criticism and Decline: When and Why Did It Fall Out of Fashion?

Despite its initial popularity, the Washington Consensus soon became the subject of intense criticism. Detractors argued that its focus on liberalization, privatization, and fiscal austerity often led to negative social outcomes, including increased poverty, unemployment, and inequality. Critics also contended that the one-size-fits-all approach failed to account for the unique circumstances and needs of individual countries.

The 1997–1998 Asian financial crisis further exposed the limitations of the Consensus. As several Asian economies collapsed despite adhering to liberalization policies, questions arose about the wisdom of rapid financial deregulation and capital account openness. The crisis highlighted the dangers of volatile capital flows and the importance of strong regulatory frameworks—issues largely neglected by the original Consensus.

By the early 2000s, mounting evidence of the social and economic costs associated with certain Consensus-inspired reforms prompted a reevaluation among policymakers and economists. The rise of alternative models—such as the so-called “Beijing Consensus” with its emphasis on state intervention and gradual reform—further eroded the appeal of the Washington Consensus. International institutions, including the IMF and World Bank, began to acknowledge the need for greater attention to poverty alleviation, social safety nets, and institutional development.

Legacy: Lasting Impacts and Current Relevance

Although the Washington Consensus has lost its status as the dominant policy paradigm, its influence persists in various forms. Many of its core principles—such as fiscal responsibility, trade openness, and the protection of property rights—remained central to economic policy discussions worldwide. The era of the Consensus also contributed to the widespread adoption of macroeconomic stabilization programs and market-oriented reforms in both developing and developed countries.

At the same time, the backlash against the Consensus has led to a more nuanced understanding of development policy. Policymakers now recognize the importance of tailoring reforms to local conditions, strengthening institutions, and balancing market efficiency with social equity. The experience of the Washington Consensus has also underscored the need for inclusive growth, regulatory oversight, and democratic participation in policymaking.

Today, debates over globalization, inequality, and the role of the state in the economy continue to be shaped by the lessons of the Washington Consensus era. Its legacy endures not only in the policies that succeeded it, but also in the ongoing search for effective and equitable strategies for economic development.

Populist governments, including those in the United States, have pushed back against the free-trade component of the consensus. These leaders argue that the costs of free trade in jobs and expertise are not offset by the resulting price reductions. This perception is exacerbated by the fact that the positives are spread thin, but the negatives are highly concentrated and obvious - like the loss of jobs in some manufacturing sectors.

An example of this is the local car industry in Australia. Opening up to free trade also results in much lower-priced and higher-quality foreign cars, but it has destroyed the local car manufacturing sector.

Conclusion: Summary and Reflection

The Washington Consensus marked a import chapter in the history of global economic policy. Born in response to crisis, it championed a set of reforms that transformed the economic landscape of many countries. When crafted, it was believed to be a cornerstone of prosperity AND the vehicle that would allow repayment to lenders.

While it delivered some successes, particularly in stabilizing economies and promoting growth, its shortcomings and unintended consequences fueled a lasting debate about the best path to development. As the world continues to see new economic challenges, the story of the Washington Consensus serves as both a cautionary tale and a source of valuable insights.

Introduction

The G7 is often touted as one of the world’s most influential forums for international economic and political cooperation. It is a group of the strongest “Western” economies: the United States, the United Kingdom, France, Italy, Germany, Canada, and Japan. Over its decades-long existence, the G7 has played a significant role in shaping global policies, addressing pressing challenges, and often drawing attention from activists and protest movements.

Why Look At This Group Now?

The Group of 7 is an anomaly on the international scene. The talking forum has been around so long that we forget how unusual it is. It is not a group of formally allied powers, like NATO. And it is not a formal regional economic grouping like ASEAN. It isn’t open to all countries like the United Nations. Nor is it a formal organization or dedicated to a single issue, like the COP conferences are designed for climate change. It doesn’t have a permanent home or backing organization. And yet, the Group of 7 (G7) has been one of the most powerful multinational conferences for the past 50 years.

It is instructive to look at the G7 now because traditional international norms and processes are breaking down, and what will replace them is not yet clear. The G7 was once a potential model of international cooperation. But the G7 is moving towards obsolescence today, by design of the United States.

The G7 has also had its share of major successes and inconsequential resolutions, ignored directives, and infighting. This post explores the origins, evolving purpose, and current significance of the organization. Spoiler alert: my conclusion is that the G7 has become impotent over time and is now becoming nearly irrelevant.

How the Group of 7 Started

The Group of 7 is a group of unofficially aligned, rich, and generally Western nations that used to be described as “First World.” One thing to remember here is not just that these are powerful nations, but that they have created a forum for a dynamic response outside the United Nations and common international economic institutions like the World Bank or the International Development Fund.

The G7 was established in 1975 as the Group of Six (G6), consisting of the leaders of France, West Germany, Italy, Japan, the United Kingdom, and the United States. Canada joined the following year, turning it into the Group of 7. The oil and currency crises of the 1970s (see my post on Bretton Woods) prompted the first meetings of this group. These nations were hit by the oil embargo, the collapse of the prevailing monetary system, and the inability of contemporary multinational institutions to address these issues. The decisions that the G7 made and actions they took provided an orderly transition to the new system of exchange rates.

The G7 was formed because this group of powerful countries wanted to operate outside the multilateral norms. The countries justified the need to act quickly and without pressure from other nations. They ignored the United Nations when creating a group of wealthy democracies dedicated to self-preservation. From one perspective, this demonstrates flexibility in facing new challenges. It also shows that these nations, especially the United States, sometimes view multinational consensus forums as unwieldy. To outsiders, it could also seem like a way for powerful nations to impose their expectations on others. The Bretton Woods system affected nearly all countries, not just these seven, but they alone redefined the established norms.

The Purpose of the G7

The primary aim of the G7 at its inception was to foster closer cooperation among the world’s largest advanced economies. The leaders sought to coordinate macroeconomic policies, stabilize the global economy, and provide a platform for open discussion on trade, monetary policy, and the challenges of globalization. The actions taken were successful and supported a new economic cooperation framework. The G7 claims that it has taken action to strengthen the global economy, saved 27 million lives from AIDS, tuberculosis and malaria, and supported the education of millions of children in the poorest countries.[1]

This success, coupled with a forum for regular meetings among powerful allies, led the G7 to set up annual meetings among themselves. At the very least, a yearly group photograph of world leaders conveys cooperation.

The G7 is not a formal organization with a permanent secretariat, but rather a flexible, informal grouping meant to facilitate candid dialogue.

Evolution and Changes Over Time

Since its foundation, the G7 has evolved considerably. In the 1990s, Russia began participating in meetings, leading to the formation of the Group of 8 (G8) in 1997. However, Russia’s membership was suspended in 2014 following the annexation of Crimea, returning the group to its original G7 format.

The scope of the G7’s discussions has broadened beyond economic issues to include security, climate change, development, health, and digital transformation. The G7 also began inviting representatives from the European Union and, at times, leaders from other nations or organizations to join specific sessions. The group’s influence remains rooted in its members’ combined economic power and shared values of democracy, rule of law, and human rights. This set of stated shared values is also seen as a way to exclude other nations (for example, China).

However, because the influence is rooted in the members’ combined economic power, it is reduced as other economies grow. Since the group was founded in 1975, the combined GDP has grown absolutely. However, it has shrunk relatively.

Protests and Public Opposition

G7 summits have frequently attracted protests and demonstrations, particularly since the late 1990s. Activists and civil society groups often use these high-profile meetings to draw attention to issues such as economic inequality, environmental degradation, globalization, and the perceived lack of representation for developing nations. Notable protests occurred during the 1999 summit in Cologne, the 2001 summit in Genoa—which saw violent clashes—and more recently at summits in Canada, France, and the United Kingdom.

Protesters argue that decisions made by the G7 impact billions of people worldwide, yet the group represents only a small fraction of the global population. The summits are thus seen as opportunities to challenge the status quo and advocate for more inclusive, transparent, and equitable global policies.

One change that has been made is the formation of a larger membership organization that better includes the interests of other stakeholders. The Group of 20 was originally created for finance ministers and central bank governors to collaborate in an economic effort with the G7. A decade later, in 2008, the G20 was expanded to include Presidents and Prime Ministers from around the world. The G20 specifically features representation from Latin America, Africa, Asia, and Australia, along with the pan-national economic groups The European Union and the African Union.

This change was made in recognition that the G7 no longer reflects the majority of economies and never accommodated the majority of the population.

The Present Purpose of the G7

Today, the G7 serves as a forum for addressing global challenges that demand concerted action. Its priorities now include combating climate change, promoting sustainable development, responding to health crises such as pandemics, managing technological innovation, and safeguarding international security. While the G7 does not make binding decisions, its communiqués and coordinated policies often set the agenda for broader international organizations and influence the direction of global governance.

Can the G7 (and G20) Survive the Philosophical Changes in the United States

The United States has shifted from taking a proactive leadership role in international systems to stepping back from its former leadership positions. Looking at the G7’s efforts in medical support, educational support, open economics, and human rights, the United States has withdrawn from nearly all initiatives. Since the G7 has no formal structure, most of its actions are carried out by individual members in accordance with goals agreed upon by consensus. If members, like the United States, ignore their own goals, the organization effectively becomes powerless.

Its very existence allows more powerful countries to ignore less powerful ones. For example, the United States recently boycotted the G20 because it was held in South Africa, and the U.S. administration claimed that South Africa is persecuting white farmers. It also excluded South Africa from next year’s G20 summit in Florida. This is very different from the consensus to disinvite Russia after the invasion of Crimea.

Conclusion

The Group of 7 has played a pivotal role in shaping international policy since its creation in the 1970s. While its purpose and membership have shifted over the years, the G7 has remained a key venue for dialogue among leading economies. However, if the present trajectory of the meetings is not changed, it will soon be nothing but a photo-op.

Already, the most important decisions that the G7 would try to work on have become bilateral, not multilateral discussions. Multilateral relations work when leaders believe cooperation helps all parties. The United States and Russia, among others, now act as if any benefit to all comes at a prohibitive cost to their interests. This philosophy guarantees that the G7, G20, and other multilateral groups will have diminished participation and results over time.

The G7 has become less important over time as its dominance of the worldwide economy has declined. I think that will only continue.

[1] https://www.mofa.go.jp/files/000158367.pdf#:~:text=The%20G7%20has%20supported%20economic%20development%20in,target%20agreed%20by%20the%20G7%20in%202009.

The Grand Tour is the term used to describe a journey primarily undertaken by young, wealthy (and often entitled) men of England to prepare them for full membership in the upper classes. After all, it isn’t easy being a colonial overlord. I joke here, but only a little.

Introduction: The Grand Tour—A Passport to the Past

The traditional explanation of the Grand Tour is that in the 17th and 18th centuries, the tour emerged as a rite of passage for British aristocrats and wealthy young men, opening doors to the wonders of continental Europe. Sold to their parents as more than a leisurely vacation, the Grand Tour was expected to be a transformative educational journey, where travelers absorbed art, architecture, language, and history while forging connections that would influence the cultural landscape of Britain for generations. For scholars, understanding the Grand Tour offers a window into the aspirations, motivations, and experiences that shaped the minds and tastes of a rising British elite. For those of us of a more cynical nature, it was an extended vacation to hobnob with the right people and take in some sights.

Why the Grand Tour Began

According to scholars, the origins of the Grand Tour can be traced to a period of profound change in Europe known as the Enlightenment1. Britain, emerging from political turbulence and on the cusp of imperial expansion, sought new ways to educate its leading citizens. The universities of Oxford and Cambridge provided classical instruction, but the Grand Tour promised something more: a living classroom where lessons in history, politics, and culture unfolded in real time.

There is, of course, truth in this. There is also an implied suggestion that even the more educated and modern, bright young men of England could benefit from a trip to the backwaters of Europe, areas that had long passed their intellectual prime. On the tour, one could pick up art for a song, a companion for less than a song, and a foreign guide to share the location of the best bars and brothels, all of this in order to round out your “education.”

Young men—often sons of noble families or affluent merchants with too much money and time and not enough sense —embarked on the Grand Tour to complete their education and polish their manners. The journey was intended to produce cosmopolitan gentlemen, fluent in foreign languages and sophisticated in taste. Parents and mentors hoped that exposure to the art, architecture, and social customs of Italy, France, and other European nations would cultivate wisdom, tolerance, and a broadened worldview. The Tour was also a mark of status, a way to display wealth and refinement upon returning home.

Typical Route and Destinations: Mapping a Continental Adventure

Although itineraries varied, the classic Grand Tour route began in England and traveled south across the English Channel to France, ending in Italy.

Paris

Paris, with its glittering salons and vibrant intellectual life, was often the first major stop. Here, travelers indulged in French cuisine, attended the theater, and visited the grand palaces of Versailles and the Louvre. The nightlife of Paris extended beyond salons and Masked Balls to the Operas and Pleasure Gardens, where the upstarts’ education was focused on the importance of being seen in the social hierarchy.

Once the Englishman had learned the basics of respectability and how to avoid it, the trip continued anew.

From France, the journey continued through Switzerland’s lakes and mountains, offering respite from all that partying as well as the requisite scenic beauty. Then they were on to Italy, the heart and soul of the Grand Tour.

Italy

Deep in Italy, those young men were educated in art and beauty. Florence was home to museums, churches, and houses of art and architecture of exceptional distinction. The Uffizi, the Galleria dell’Accademia, and the Ponte Vecchio Bridge were often discussed highlights, repeated like mantras of sophistication back at home. Less discussed but no less important were the lessons provided by the powerful Medicis, who rose to fame and glory through money and guile.

Rome was where one learned about the Roman Empire, naturally enough. The new intellectuals in Britain often studied the Roman Empire. They understood how it was ahead of its time. They examined the method of managing a sprawling empire, which was coming in handy in the expanding British Empire. They studied how it collapsed to avoid the same fate. A lesson they learned but did not fully take to heart.

Then on to Venice. For those of us who have only seen present-day Venice as a historical Disneyland, we are missing the Bacchanalian times of yore. The Venice Republic was on its last legs, but the rich republic still held the best parties, carnivals, and masked balls in the world. Here was the final chance for the young bucks to cut wild before going home to responsibility, a dutiful wife, and the children you rarely saw. It was the Rumspringa of the respectable class.

Most of these students then returned to the world of hard work, managing estates or workers, participating in Parliament, perhaps taking a commission in the navy, or going overseas to manage the locals and enjoy Gin and Tonics worldwide.

Notable Participants: Famous Faces on the Grand Tour

I don’t want to suggest that everyone who took the Grand Tour was a self-indulgent, spoiled rich kid. Many people were moved and inspired by their experiences. Many notable figures undertook the Grand Tour, leaving behind vivid accounts of their travels. One of the most famous was Lord Byron, whose poetry and letters reveal a fascination with Italy’s romantic landscapes and ancient history. Horace Walpole, the writer and art collector, was deeply influenced by his tour, collecting treasures that filled his Gothic mansion, Strawberry Hill. Edward Gibbon, author of “The History of the Decline and Fall of the Roman Empire,” credited his time in Rome with inspiring his definitive history.

Artists such as Joseph Wright of Derby and J.M.W. Turner traveled through Italy, capturing the grandeur of classical ruins and Mediterranean light in their sketches and paintings. Even Mary Shelley, the celebrated novelist, traveled extensively in Italy, drawing inspiration for her literary work. These and countless others returned home not only with souvenirs and stories, but with a broader perspective that would shape British literature, art, and culture.

Impact on Worldview: Transformation Through Travel

The Grand Tour was more than a journey—it was a catalyst for change. Exposure to the art and customs of Europe fostered a self-satisfied sense of cosmopolitanism among these young British men. They returned with new ideas about aesthetics, politics, and society, influencing everything from architecture (think Palladian mansions) to garden design and fashion. The taste for Italian paintings, classical sculpture, and French style reshaped the interiors of British homes and the curricula of its schools. Of course, much of it was snobbery dressed up as sophistication, but we in America can’t really judge them harshly for that.

Just like in the Gilded Age of America, many of those tourists left us with today’s treasures. Their legacy included public institutions like the libraries, gardens, and public museums. A sense of public good emerged from these times, which were shaped by the presence of these tourists. It is easy for me to make fun of these self-righteous tourists now, but they changed the world for the better, despite their pretentiousness.

Travelers, both then and today, encountered various forms of government and social organization, prompting reflection on their own societies. Many became advocates for reform and religious tolerance, inspired by what they saw abroad. In the same manner that international travel changes our own perceptions, it also changed theirs. The experience of navigating foreign languages and customs encouraged open-mindedness and a desire for international cooperation.

The Grand Tour also created the new pastime of mass tourism. The original participants stayed with friends or influential families. But as the tourists grew in acceptance, the entire tourism industry grew. Before tourism, there were some Inns where tradespeople might spend the night on their way to and from somewhere else. With the advent of tourism came grand hotels, tour guides, and possible income based on history or scenic beauty. It also brought to the forefront the idea that travel is an action with benefits in and of itself.

As an avid traveler myself, I cannot fault those who had the time and money to start this pastime. Travel expands minds and hearts, and it did the same for many who undertook the Grand Tour.

Few animals evoke the spirit of North America more powerfully than the bison. They are iconic. Massive, shaggy, and enduring, they once thundered across the prairies[1] in herds that shaped entire ecosystems and cultures. The history of the bison, often referred to as the American Buffalo, is both tragic and inspiring—a saga of abundance, near annihilation, and gradual resurgence.

Original Range and Numbers of Bison

Before European contact, the North American bison ranged across a vast expanse of the continent. Their domain stretched from the woodlands of the eastern United States to the foothills of the Rocky Mountains, and from the boreal forests of Canada down to northern Mexico. They inhabited prairies, plains, river valleys, and even mountain meadows. For most Americans, this is a surprising feature. We usually think of Bison roaming across the plains, like the images in Dances With Wolves.

Estimates of the pre-contact bison population vary, but most historians and biologists agree that there were likely between 25 and 30 million bison roaming North America in the 16th and 17th centuries. Some estimates reach as high as 60 million. The largest herds blanketed the Great Plains in a living tide that could take days to pass a single point. Bison were a keystone species, shaping the landscape through grazing and migration, and providing sustenance for a rich web of life, from grassland birds to wolves. In an ecosystem sense, the Gnu (wildebeest) of Tanzania and Kenya fit a very similar role in Africa.

Why the Bison Were Hunted: The European Hide Trade

With the arrival of European settlers and explorers, new economic forces emerged. By the early 19th century, the bison became the center of an international hide trade, mainly driven by demand from Europe. Bison hides were valued for their durability and warmth. They were also used to make heavy-duty belts that powered machinery during the Industrial Revolution. Additionally, they were used in robes, coats, and blankets that became fashionable among European elites. Commercial hunters, equipped with increasingly efficient firearms and aided by expanding railroads, slaughtered bison by the millions. A single hunter could kill dozens of animals in a day, leaving behind carcasses on the plains and taking only the hides and sometimes the tongues, which were considered a delicacy. Buyers in St. Louis, New York, and overseas paid handsomely for these products. The market for bison robes and hides became a lucrative business, and the slaughter accelerated with deadly efficiency.

By the 1870s, the great herds were collapsing. The once-continuous sea of bison was reduced to scattered remnants, their bones bleaching in the sun. In little more than a decade, the bison population plummeted to the brink of extinction.

Hunting Bison to Starve Native Americans

The devastation of the bison was not merely an unfortunate byproduct of commerce; it was, at times, a deliberate strategy in the United States government’s campaign to subdue Native American nations of the plains. For many of the region’s Indigenous peoples—Lakota, Cheyenne, Comanche, Blackfoot, and others—the bison was a source of food, clothing, shelter, tools, and spiritual significance. Their entire way of life was intricately tied to the rhythms of the herds.

U.S. military officials recognized this dependence and adopted policies designed to eradicate the bison as a means of forcing Native peoples onto reservations. General Philip Sheridan, a prominent military leader, is often quoted advocating the destruction of the bison, arguing that “the rapid disappearance of game from the former hunting grounds” would encourage compliance and end resistance. Civilian hunters, sometimes with tacit or explicit approval, followed the army into the plains, shooting bison by the thousands.

“The buffalo hunters have done more to settle the vexed Indian question than the entire regular army,” Sheridan reportedly declared. The strategy was devastatingly effective—a campaign of ecological warfare. As herds vanished, Native communities suffered from hunger, disease, and cultural upheaval. The bison’s near-extinction mirrored the enforced relocation and loss of sovereignty endured by Native nations.

Recovery of Bison Herds

By the late 1880s, fewer than 1,000 bison remained in North America. Some estimates are as low as 325 wild bison left, scattered in isolated pockets such as Yellowstone National Park. The great animal that had once ruled the continent teetered on the edge of oblivion.

However, the bison’s story did not end there. A small number of conservationists, ranchers, and Native nations began to protect the remaining animals. William Hornaday, an early wildlife advocate, sounded the alarm about the looming extinction, and efforts coalesced to create captive herds and protected reserves. Yellowstone became a crucial refuge, and small private herds, such as those founded by Charles Goodnight in Texas and Michel Pablo and Charles Allard in Montana, provided genetic stock for the species’ survival.

Gradually, the population began to recover. Today, there are approximately 500,000 bison in North America; however, most of these animals are in commercial herds and are not considered truly wild. About 30,000 bison now roam in conservation herds across national parks, reserves, and tribal lands. Many Native American tribes have led the way in bison restoration, recognizing the animal’s vital role in their heritage and in prairie ecosystems.

Conclusion

The story of the bison is one of the successes of conservation; of course, challenges remain. Issues such as habitat loss, genetic bottlenecks, and hybridization with domestic cattle continue to threaten the bison’s long-term survival as a wild species. Even so, the recovery of the bison stands as one of the outstanding achievements in wildlife conservation—a testament to the possibility of renewal after devastation.

Today, bison serve as a reminder of both the fragility and resilience of nature, as well as how humans can alter the path of wild animal populations.

For decades, preservation has relied on the efforts of a few dedicated conservationists. However, today there is an additional economic reason for conservation. Bison are a tourist attraction where they still roam. Tourists visit National and State parks in Wyoming, South Dakota, Montana, and more to see the bison. These tourists make a significant contribution to the local economy. The positive benefits are no longer offset by economic demands for their fur or the governmental priorities to drive them to extinction.

[1] For some reason bison are always said to have “thundered” or “roamed”. I think it is an unwritten rule. Apparently, Bison never ambled, grazed, or wandered.

The history of Bophuthatswana offers a look at the failures of apartheid-era social engineering and the unexpected consequences of the Bantustan policy. Far from being islands of self-determination, Bantustans like Bophuthatswana became symbols of denial, missed opportunities, and repressive governance. Their failure to produce basic necessities was a counterpoint to the idea of “separate development,” which was championed by South Africa’s apartheid government.

The Creation of Bophuthatswana: Isolation, Not Independence

These Bantustans were said to offer Black South Africans autonomy and self-governance, but the reality was far more cynical. The creation of Bophuthatswana and other Bantustans was a political maneuver to strip millions of Black South Africans of citizenship and sever their claims on citizenship in South Africa. This “independence” was never recognized by the outside world, leaving Bophuthatswana almost entirely dependent on South Africa, while its residents remained, in effect, stateless.

Together with the other Bantustans, Bophuthatswana (“BOP”) was meant to be a homeland for indigenous natives; for BOP, it was the Tswana-speaking people. Despite the irregular and non-contiguous borders, there was actually some promise for economic growth. A smattering of media, including Time Magazine and conservative commentator James Kilpatrick, argued for giving the new statelet a chance. However, this viewpoint was never widely held. Most leaders, including the President of the UN, spoke out against creating a system of isolation for residents of South Africa.

Missed Economic Opportunities: The Hollow Promise of Prosperity

Economically, BOP’s dependence on South Africa was total. The homeland was a patchwork of non-contiguous enclaves, mostly rural and underdeveloped, lacking the infrastructure for meaningful economic growth. Industry was scarce, education and healthcare systems were underfunded, and the economy was largely fueled by migrant labor, with many residents working in South African mines or cities. Instead of investing in development, the South African government used the Bantustans as labor reservoirs, extracting value without reinvestment. This left BOP mired in poverty and economic stagnation, a missed opportunity to uplift communities and foster regional prosperity. Even if that “opportunity” was mainly an illusion.

The Sun City Performers and Protests

Sun City was a resort in BOP that regularly hosted performances by internal stars, often paying them outlandish sums to play in the resort. Singing there during the Magnope regime was controversial since it was under a UN Cultural Boycott. These artists played at BOP’s Sun City: Julio Iglesias, Shirley Bassey, Elton John, Malcolm McLaren, Cliff Richard, Rod Stewart, Bernie Taupin, Bonnie Tyler, Beach Boys, Glen Campbell, Ray Charles, Cher, Chicago, Rita Coolidge, Chick Corea, Liberace, Barry Manilow, Johnny Matthis, Liza Minnelli, Dolly Parton, Kenny Rogers, Linda Ronstadt, Neil Sedaka, Frank Sinatra, George Benson, Curtis Mavfield, Tina Turner, Olivia Newton-John. Some, like Liz Minnelli and Linda Ronstadt, demanded an integrated audience. However, any integration was performative, usually less than 200 Blacks out of an audience of over 4,500.

To protest this, Steven Van Zandt (member of Bruce Springsteen’s E-Street Band) wrote and produced a protest song, “Sun City”. It was recorded by Artists United Against Apartheid (link). It was a major success and brought attention to the hypocrisy of Sun City performances.

Problems in Governance: Corruption and Lack of Legitimacy

Governance in Bophuthatswana epitomized the pitfalls of artificial nation-building. The leadership, headed for years by President Lucas Mangope, operated in a climate of entrenched patronage and corruption. With little democratic legitimacy and no international recognition, the government’s authority relied heavily on South African military and financial support. Dissent was often met with repression, and institutions struggled to deliver basic services. As protests grew in the 1980s and early 1990s, the government’s lack of accountability and transparency became ever more apparent, further eroding the fragile social contract.

The 1994 Civil Uprising

A depressing development occurred in 1994, as the very idea of Bantustans was being dismantled. In 1994, South Africa held its first multiracial election led by Nelson Mandela. President Mangope rejected calls for BOP residents to vote and reincorporate into the new multiracial South Africa. About 1 month before the elections were held, President Mangope unleashed the defense forces and fired on striking civil servants (full story).

Unrest spread, and the ANC supporters (Nelson Mandela’s party) protested the decision to allow BOP residents to vote to reintegrate. President Mangope invited the head of the right-wing Afrikaner Volksfront Party (who were committed to the segregated status quo) to keep the peace. As they were forced out, uniformed members shot and killed unarmed civilians blocking the road. The resulting attack on those Volksfront members made the news in disturbing images and ended the right-wing military opposition.

The idea that a Black Native President would choose to remain in power by relying on white supremacists is disheartening.

South Africa’s Failure: The Bantustan Policy Unravels

South Africa’s attempt to legitimize apartheid through Bantustans ultimately failed—politically, economically, and morally. The international community uniformly rejected the independence of BOP and other homelands. (However, BOP did have unofficial trade and governmental ties with Israel.) The people themselves saw through the promise of “self-rule,” recognizing that these entities were designed to perpetuate apartheid. After the unrest in 1994, as apartheid collapsed, Bantustans were swiftly reincorporated into South Africa. The legacy of BOP today is one of division and lost potential—a stark reminder of the costs borne by those forced to live within its borders.

In examining Bophuthatswana, the stark reality is that the Bantustan experiment was never meant to succeed on its own terms. Rather than fostering autonomy, it deepened an unfair status quo.

Since reintegration with South Africa, the region has undergone significant development, marked by the rehabilitation of the Sun City resort and the establishment of access to the Pilanesberg National Park. The unified people of South Africa have mainly forgotten the former BOP and its policies, and have moved on.

The Olympic Games stand as one of the world’s most-watched and celebrated sporting events, capturing the imagination and ambition of cities across the globe.

That is a line pulled directly from AI. But is the sentence actually true? There is a paradox in the heart of that statement. The Olympics are a festival of sporting events that stand for cooperation (sometimes). But they are also ridiculously expensive to host. They very rarely deliver on the promised financial results and are usually significantly over budget. And while the ratings are good in many countries, most do not have the nationalistic fervor that some countries (like the US and China) have that drives consistent viewership.

This post explores the economics of hosting the Summer Olympics, drawing on historical data since 1948, identifying which Games have turned a profit and how, examining the costs of hosting since 1984, and analyzing the benefits and disadvantages. It also looks at where the revenues from hosting, sponsorship, and TV rights flow, with particular attention to the International Olympic Committee (IOC).

Historical Overview: The Olympics and the Evolution of Costs

The modern Olympics have been held since 1896, but the mid-20th century marks a turning point in the scale and economics of the Games. In the early days, the Olympics were not very important and were often an adjunct to a different event. For example, these Olympics were held in conjunction with the World’s Fair of 1900 in Paris, the World’s Fair of Saint Louis in 1904, and the Franco-British Exhibition of 1908. The Stockholm Olympics of 1912 were the first games to be held without an auxiliary exhibition.

Before World War II, the financial and infrastructural demands were modest compared to today. The first postwar Games, London 1948, were dubbed the "Austerity Games" due to the UK's economic hardship. Costs were kept low, with athletes housed in existing accommodations and minimal new construction. The budget, around £600,000 (roughly $20 million today, adjusted for inflation), was largely met through ticket sales and modest sponsorships. Notably, London 1948 ended with a small profit, demonstrating that a frugal approach could yield financial success.

The Games grew in scale in the 1950s and 1960s. The 1960 Rome Olympics cost $60 million (about $500 million today) and left the city with new highways and sporting venues, though the event ran over budget. The Tokyo 1964 Olympics were transformative: Japan invested in extensive infrastructure, including the now-iconic Shinkansen bullet train, at a cost of over $1.5 billion (more than $12 billion today). While these investments left Tokyo with a modernized transport system, the immediate financial outcome was a deficit.

Which Olympics Made Money—And How?

Throughout history, there have been a handful of Olympic Games that ended in the black, some by design and others by circumstance.

Olympics that made money:

• Los Angeles 1984: The most famous of profitable Olympics, LA 1984 turned a $250 million surplus on a $546 million budget. The success came from cost controls (using existing facilities), a lean organizing committee, and aggressive pursuit of corporate sponsorships. The city’s risk aversion, after being the sole bidder, led to a deal where the IOC underwrote potential losses. Most importantly, the Games pioneered modern TV sponsorships and marketing deals. Since then, these deals have become central to the economics of the Olympics.

• Barcelona 1992: Although the organizing committee posted a small surplus, the city’s true profit lay in urban renewal. The Games catalyzed massive investment in the city’s waterfront, highways, and neighborhoods, transforming Barcelona into a tourist mecca and global city. The financial legacy is debated—while direct profits were modest, the long-term economic impact is considered a net positive.

• London 2012: London’s Olympics were expensive (more than $15 billion), but the organizing committee reported a small surplus. As with Barcelona, the greater benefit was in urban regeneration, particularly in East London. However, some argue the broader economic benefit was overstated.

Conversely, many Games have famously run at a loss:

• Montreal 1976: The Games cost over $1.6 billion and took decades to pay off, burdening citizens with a “Big Owe.”

• Athens 2004: With costs exceeding $15 billion, Athens’ Olympics have been criticized as a contributing factor to Greece’s later debt crisis, with many venues left unused.

• Rio 2016: The Games exceeded $13 billion, with many venues falling into disrepair. The expected tourism and economic boost did not materialize at the promised scale.

  

The Olympic Games which boosted the visibility of the country:

• Beijing 2008: These games announced China as a member of the World Community

• Mexico 1968: The first games in Latin America proved that the nation and region could host a major event. Unfortunately, it is remembered for a US controversy over the black power salute.

• Rome 1960: The Rome Olympics were first scheduled for 1948, but WWII intervened. The 1960 Olympics brought the image of a new and successful Italy to the world.

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The Cost of Hosting Since 1984

Since 1984, Olympic costs have soared, driven by increased security, infrastructure expectations, and the demands of the IOC. A breakdown of key Games since then illustrates the trend:

• Los Angeles 1984: $546 million (surplus)

• Seoul 1988: $4 billion (mixed legacy, but boosted national pride and infrastructure)

• Barcelona 1992: $9.7 billion (primarily for urban renewal)

• Atlanta 1996: $4.2 billion (helped revitalize downtown Atlanta, but the Games were criticized for over-commercialization)

• Sydney 2000: $7 billion (some venues became “white elephants” but boosted Australia’s global image)

• Athens 2004: $15 billion (substantial debt and underused venues)

• Beijing 2008: $40+ billion (record-breaking costs, but showcased China’s economic might)

• London 2012: $15 billion (expensive, but left lasting infrastructure)

• Rio 2016: $13+ billion (financial and social controversy)

• Tokyo 2020 (held in 2021): $15.4 billion (major losses due to COVID-19 restrictions, no international spectators)

It’s worth noting that “official” budgets often understate the actual expense, as they usually exclude long-term infrastructure or security costs.

Benefits and Disadvantages of Hosting the Olympics

Benefits

• Urban Development: The Games often catalyze infrastructure improvements—transport, housing, and public spaces—that can benefit cities for generations (e.g., Barcelona, London). Athens completes a long planned new airport with the added incentive of Olympic visitors.

• Global Exposure: Host cities enjoy a spike in international visibility, potentially boosting tourism and foreign investment.

• Job Creation: The event generates thousands of jobs, especially in construction, hospitality, and services, though these may be temporary.

• National Pride: The Olympics can unite a nation and promote cultural exchange.

Disadvantages

• Cost Overruns: The vast majority of Games overrun initial budgets, often leaving cities with debt and underutilized venues.

• Displacement and Inequality: Construction frequently displaces low-income residents, and benefits are not evenly distributed.

• “White Elephant” Projects: Many venues fall into disuse, becoming costly burdens (Athens, Rio, Beijing).

• Short-Term Disruption: The influx of visitors and security measures can paralyze city life and strain public services.

Funding Sources: Ticket Sales, Sponsorship, and TV Rights

The modern Olympics draw revenue from several streams:

• Ticket Sales: Revenue from ticket sales can be significant (e.g., London 2012 generated nearly $1 billion), but this typically covers only a fraction of total costs.

• Sponsorships: Corporate sponsorships have grown in importance since 1984. The IOC’s global TOP (The Olympic Partner) program, launched with LA 1984, brings in over $2 billion per four-year cycle. Local organizing committees also sign separate deals with domestic sponsors. However, the main sponsorship rights are held at the International Olympic Committee level, not at the national or city level.

• Broadcast Rights: By far the largest revenue source, broadcast rights are sold globally. NBC, for example, agreed to pay $7.75 billion for rights to the Olympics from 2022 through 2032. This is a major incentive for the IOC and a primary funding mechanism.

Where Does the Money Go?

• International Olympic Committee (IOC): The IOC receives most of its revenue from TV rights and global sponsorships. Roughly 90% of the IOC’s income is redistributed to National Olympic Committees (NOCs), International Federations, and the host city’s Organizing Committee for the Olympic Games (OCOG). However, the IOC maintains a substantial reserve (estimated at over $2 billion), ensuring its independence and stability.

• Host City and OCOG: Local organizing committees receive funds from domestic sponsorship, ticket sales, and a portion of global revenues (including some of the TOP sponsorship and broadcast rights). These funds pay for direct operational costs—venues, ceremonies, logistics, and security.

• National Olympic Committees and Federations: NOCs and International Sports Federations receive grants and distributions from the IOC to support athlete development and global sport.

• Local Governments: Most infrastructure costs, roads, airports, housing, fall on local or national governments, which frequently tap public funds, bonds, or loans.

The International Olympic Committee

No monetary discussion of the Olympics would be complete without a discussion of the International Olympic Committee (IOC). The IOC is the organization that determines the host cities, the TV rights, the acceptability of the various venues, the Olympic Brand, and more. The IOC was a group of men with its processes and outputs kept close. Since the Salt Lake City scandal [1], the IOC has moved towards more transparency, but it is not complete.

The broadcast rights are the most significant revenue source, dwarfing other revenue streams to the IOC. For example, the London Games brought in $2.6 billion to the IOC, out of a total revenue of $3.4 billion, which also included marketing and investment income.

Since the Los Angeles Olympic Games, the IOC has moved many of the “Olympic Sponsorships” to the IOC and away from the national or city organizing committees.

IOC sponsorship comes primarily through the Olympic Partner (TOP) Program, a global partnership tier that generates significant revenue for the Olympic Movement. Key international partners include companies like Airbnb, Alibaba, Allianz, Coca-Cola, Deloitte, Intel (though recently departed), Omega, Panasonic, Procter and Gamble, Samsung, Toyota (recently departed), and Visa, with new partners like Anheuser-Busch InBev and TCL recently joining. These companies provide cash and valuable in-kind services to the IOC, receiving exclusive rights to associate their brands with the Olympic Games in exchange.

The Olympic committee notes on its website (LINK) that approximately 90% of the revenue is returned to the wider Olympic community. However, the actual distribution is opaque and quite susceptible to mismanagement. There have been multiple scandals regarding the IOC and monetary contributions.

Conclusion

The economics of hosting the Summer Olympics is a complex tradeoff between the hosting costs and the possible benefits. It is a difficult decision because the non-monetary benefits are difficult to rationalize and document.

While a handful of cities have managed to turn a direct profit or leverage the Games for urban renewal, most face cost overruns and long-term burdens. The surge in broadcast and sponsorship revenue since 1984 has shifted the financial landscape, benefiting the IOC and, to a lesser degree, successful host cities. Ultimately, the Olympics remain as much about legacy and international prestige as about financial gain.

One significant change over the past few decades is the IOC’s openness to reusing legacy venues and not requiring new construction. Both Paris 2024 and Los Angeles 2028 made reusability a centerpiece of their respective bids.

[1] The case of the Salt Lake City Olympics and bribes is notorious. Salt Lack City Bid Scandal

Port ownership is one of those topics that is both extremely important and incredibly boring. In this post, we will focus on how ports are operated and recent contentious developments in the management of seaports.

Ports play a critical role in the global economy, connecting continents, industries, and people. The story of port ownership and management is a recent product of evolving economic interests, technological revolutions, and the growing influence of multinational enterprises.

Historical Patterns of Port Ownership

For centuries, ports were closely held assets of sovereign states, city-states, or colonial powers. In ancient times, ports such as Alexandria, Carthage, and Piraeus were directly managed by rulers who recognized their strategic and commercial value. With the expansion of empires and the rise of maritime trade, port ownership became a symbol of national power. Colonial-era ports were administered by European authorities, serving both commercial and military interests. The military aspect here was critical in the days of colonialization when nations like Great Britain, France, and Spain needed instant access for their armies.

As colonialism faded after World War II, the newly independent countries nationalized critical infrastructure, including ports. Throughout the 19th and much of the 20th century, governments maintained tight control over their gateways to the world, viewing ports as natural monopolies essential for defense, revenue, and development. Municipalities or specialized government agencies typically managed port operations, overseeing everything from customs to dock labor.

Changes in Cargo Shipping

The most significant revolution in shipping since the advent of engine power, surpassing wind power, is the rise of containerized shipping. Introduced slowly in the 1960s, containerized shipping overtook non-containerized by the end of the 1970s. The ubiquity of containers and the standardization were revolutionary for shipping. Because the infrastructure for moving containers is standardized, the methods of loading, unloading, transportation, and storage are also standardized.

The possibility of outsourcing the operations and management of the ports grew as ports shifted to containerized shipping.

The Shift Towards Outsourced Port Management

By the late 20th century, sweeping economic reforms and the globalization of trade prompted a rethinking of port governance. The rigidity and inefficiencies often of with public management, such as delays, underinvestment, and labor disputes, led many governments to explore private sector participation. The United Kingdom was among the early adopters, with the 1981 privatization of the Port of Felixstowe setting a precedent for future developments. The World Bank and other financial institutions encouraged such reforms, especially in developing regions. This support often involved both financial and technical assistance.

Outsourcing of port operations, often referred to as concessioning or privatization, gained momentum in the 1990s. Governments began offering long-term leases or concessions to private companies, who would then invest in and operate terminals under regulated frameworks. This shift sparked a transformation in port efficiency, innovation, and connectivity. Today, it is common to find ports owned by governments but managed by private consortia, often comprising international terminal operators, shipping lines, and local investors.

The breakdown of operators at the Los Angeles / Long Beach ports is an example of multiple operational management teams.

Who Operates the World’s Largest Ports?

The rise of global trade and containerization led to the emergence of specialized port operators with the capital and expertise to manage vast, complex terminals. The largest ports, in terms of throughput and capacity, are typically located in Asia, particularly in China and Singapore.

· PSA International (Singapore): Once a state-owned enterprise, PSA has transformed into a global port group, operating flagship terminals in Singapore and a network of facilities across Asia, Europe, and the Americas.

· China COSCO Shipping Ports (China): Backed by the Chinese state, COSCO operates major terminals in China and holds significant stakes in ports abroad, including in Greece (Piraeus) and Spain.

· APM Terminals (Netherlands/Denmark): A subsidiary of A.P. Moller-Maersk, this company manages a global portfolio, from Rotterdam to Port Said.

· DP World (UAE): Headquartered in Dubai, DP World is one of the most diversified port operators, with terminals on every continent except Antarctica.

· Hutchison Ports (Hong Kong): As part of CK Hutchison Holdings, this company manages terminals in over 25 countries, including major gateways in Europe and the Americas. It operates most ports in Great Britain

Note that Hutchinson is trying to sell its assets to TIL/MSC’s Terminal, with Blackrock as a minority partner. MSC/TIL is private company owned by the Apont Family. Multiple government regulators are holding up this transaction.

These corporations, alongside others, shape global shipping lanes and logistics strategies, investing billions in automation, digitalization, and green technologies.

Close Up: A Look at The Apont Family and MSC Terminal Investment

In investigating port operations, I discovered that among the largest port operators is the Apont Family, founders of the Mediterranean Shipping Company (MSC), based in Italy. Gianluigi Aponte, the family patriarch, began his career in shipping in the 1970s, growing MSC from a single ship into one of the world’s largest container lines. It is still privately owned, making it the only major player in this industry that remains private. Other entities are publicly owned or state-controlled.

Recognizing the importance of controlling logistics, MSC established Terminal Investment Limited (TIL) in 2000. This subsidiary invests in, develops, and operates container terminals at strategic locations worldwide, often in partnership with public authorities or other private operators. TIL’s portfolio now spans ports on every major trade route, from Antwerp and Valencia to Long Beach and Ningbo.

The Apont Family maintains majority ownership of both MSC and TIL, ensuring alignment between shipping operations and terminal management. This vertical integration has enabled MSC to optimize routes, enhance service reliability, and compete with the world’s largest shipping and logistics conglomerates.

MSC is now attempting to acquire 80% of Hutchison Ports, sparking accusations of a monopoly - see controversy section below.

What are the Key Ports in the World and the US

World

It is tough to define what the biggest ports are outside of the top 20 or so.

Most ranking equations do not consider the number of containers moved, but rather the value of the shipment. For example, a shipment of transistors is probably worth more than a shipment of appliances, which is probably worth more than a shipment of Christmas stuffed animals, which is worth more than an empty shipping container sent back to the home port. With detailed data, most measurements use the number of containers to identify the top ports.

As noted in the graphic above, the majority of shipping hubs are located in China.

USA

By counting container numbers, the largest ports in the US are: Los Angeles, Long Beach, New York-New Jersey, Savannah, Houston, Seattle-Tacoma. Vancouver, in Canada, would rank next in this list.

It is an entirely different set of ports when basing measurements on tonnage, with a focus on oil and energy shipments. The top US ports for this are: Houston, South Louisiana, Corpus Christi, New York-New Jersey, New Orleans, and Long Beach.

Controversies this year

The management and ownership of ports have evolved from closely guarded state assets to sophisticated, globally networked enterprises. In the United States and other nations, there are occasional bursts of performative “outrage” as “foreigners take over our critical ports.”

This year, there were concerns raised with:

Use of Chinese Cranes in American Ports.

In February, there were congressional hearings on the use of Chinese Cranes at American ports. These are primarily robot cranes, built in China. The concern was that the Chinese government could access these cranes remotely and cause significant disruptions. Because the US does not manufacture these types of cranes, Congress urged the ports to revert to manual systems or have them in place if necessary.

The Management of the Panama Canal.

In February, the US Administration raised an issue that the Chinese government was running the Panama Canal. The management is actually done by the Hong Kong-based, but publicly traded company, Hutchinson Holdings. Hutchinson is the company that is currently being sold to the port operator MSC.

The takeover of Hutchinson Ports by MSC Holdings (MC Mediterranean Shipping & TiL Terminals).

This would be a $22.8 billion acquisition, making it the largest vertically integrated company in the business. The primary issue is a regulatory concern about the potential monopoly that MSC would have in many regions. For example, geographically, the company would dominate the northern European ports. The lack of competition would drive up prices. It had a proposed completion date in July, but negotiations are still on-going.

Dubai Ports World Expansion

In 2006, Dubai Ports World (DP World) was set to take over the management of multiple US ports, including New York-New Jersey, Miami, Philadelphia, Baltimore, and New Orleans. There was bipartisan opposition in Congress to giving management to a Middle Eastern country due to security concerns. The deal collapsed, and most of the ports reverted to being managed by local governments.

Conclusion

The modern economic system is based on shipping. International shipping is critical to both global supply chains and the modern consumer economy. This industry will continue to migrate to independent operators despite the occasional roadblock governments may put up. To guard against risk, one way port owners can reduce dependence on a single provider is to outsource to multiple terminal and port operators.

Specialization in operations will continue to drive ports to outsource many of the services that local authorities previously provided. The homogenization of port facilities enables faster and more profitable shipping. We will never go back to the old idea of longshoremen working on an exotic dock.

[1] https://www.worldshipping.org/top-50-ports

A few people are new to my posts on the Intersection of Geography and Economics. In general, I post about where geography and economics intersect, albeit with a loose definition of my own. I post what interests me - see old posts. This site is also apolitical. Although I am a Democrat, I don’t normally view the history of places and policies as liberal or conservative. The actions to get there might have been political, but looking back (or sideways) at these stories is not political to me. In most cases, the politics are long forgotten or irrelevant to the story now.

This post is different. I apologize up front. Although I am white, in my elementary school years, I lived in Gardena, a town settled by Japanese-Americans. Most of my friends were at least 3rd or 4th generation American natives. I was in elementary school starting in 1963 (K) and stayed in Gardena through 5th grade.

We are entering a time when people are actively recreating internment camps. There are people who thoroughly approved of concentration camps for Americans in the past. Some people fully approve of these camps today. I am not one. The news out yesterday, that ICE is reopening an old Japanese internment camp to hold and process illegal aliens, has gutted me.

So, as Bugs and Daffy would say, on with the show.

Introduction

This post is about the internment of Japanese-American citizens during World War II. The internment was a knee-jerk response to the Japanese attack on Pearl Harbor and America’s sudden hatred of everything Japanese. But nearly all of the interned were American Citizens.

The internment of Japanese-Americans during World War II is seen as one of the great injustices in United States history. It was a period marked by fear, suspicion, and the abrupt violation of civil liberties. It was an episode that reshaped lives, communities, and the country's understanding of democracy and equality. The story has a moral for America never to forget. We do not forget anymore, but we don’t remember either.

The hundred thousand plus Japanese-American citizens affected included the residents of Terminal Island, California, whose forced removal and subsequent resettlement in places like Gardena, California, serve as a poignant microcosm of the larger experience.

Why Japanese Internment Happened

It is a deceptively simple story. The December 7, 1941, attack on Pearl Harbor, the United States quickly fell into a state of anxiety and wartime mobilization. Anti-Japanese sentiment, already demonstrated from decades of exclusionary laws and economic competition, exploded into open hostility. Political leaders, military officials, and much of the public feared that those of Japanese descent posed a threat to national security, suspecting them as potential spies or saboteurs. The public fear was reinforced by daily newspaper headlines based on innuendo or outright lies.

In February 1942, President Franklin D. Roosevelt signed Executive Order 9066, authorizing the military to designate areas from which "any or all persons may be excluded." This led to the wholesale removal of more than 110,000 Japanese Americans, the great majority of whom were U.S. citizens, from their homes in California, Oregon, Washington, and Arizona. They were uprooted from their communities, stripped of their possessions, and sent to remote internment camps with little warning and no recourse.

Many of those who were “threatened” by the Japanese-Americans profited greatly from the forced expulsion of the Japanese by buying their land and homes at forced sale prices. Local officials seized business and personal effects.

The Tale of Terminal Island

This will be an abridged version. For the full story of Terminal Island Japanese Community – see this LINK.1 Terminal Island is the name of the island where the port of Los Angeles / Long Beach operates. It was also once the home of a vibrant Japanese–American fishing town. It was the only tuna port and facility in Los Angeles. In the 1920s and 30s, tuna was promoted as a cheaper alternative to chicken. The Japanese, who were barred from catching abalone, changed to tuna fishing. They grew into a vibrant company town with multiple tuna plants. The community was primarily Japanese, with some Yugoslavian immigrants as well.

Here is a clip from the LA Conservancy website:

A 1917 article in Pacific Fisherman stated, “the Japanese taught the Americans and all the others how to catch tuna in commercial quantities and they are the best fishermen in the game. As a result, the packers vie with each other in providing them with attractive quarters close to their respective plants.”

Terminal Island essentially became a company town, with nearly 3,000 Japanese residents and a rich culture. Tuna Street was the center of commerce, with dozens of Japanese-owned stores and restaurants.The tiny neighborhood also boasted a pool hall, several Buddhist temples, a judo hall, Fishermen Hall, a Baptist church, a bank, and a Shinto shrine, enabling residents to practice the official religion of Japan. In 1924, the East San Pedro School was built to accommodate hundreds of children, the vast majority of which were Japanese-American, or Nisei.

After the beginning of World War II, the government decided to round up all the Japanese living in the United States proper (not Hawaii) and put them in camps. The community on Terminal Island was the first site where the Japanese-Americans were removed to an internment camp, most to Manzanar.

There are plenty of stories out there about how terrible the camps were, how people suffered with almost no possessions and tents that barely handled the weather.

It is important to understand that the internment was rarely spoken about by the Japanese-Americans for decades. Embarrassment, fear, and a culture of quietness held these stories back. The mood of the country, at that time, in the Cold War with the Soviets, actively discouraged questions about our own conduct.

Resettlement

After the end of the internment, many Japanese-Americans in the Los Angeles area resettled in the communities of Gardena and Sawtelle. I went to elementary school with the children of those interned who lived in Gardena.

Best friends, first crushes, scary parents – these are the building blocks of everyone’s youth. And those friends and community members in my area were nearly all Japanese-Americans whose parents and grandparents had been interned. Like most kids, we didn’t discuss internment of their family or the backstory of how our family came to California. But the internment was a family history that was never shared. Those whose parents who went through the internment treated it mainly as a secret, with stories coming out almost like campfire ghost stories.

It was decades before most Americans were even aware of what happened. In Southern California we learned about the internment early in state history, but most of the country was unaware for decades. For my school and other students, the internment camps were an anachronism, something that happened long before we were born. However, I clearly remember the pain and fear on my friend’s mother’s face when we would ask about their history. The subject was immediately changed and were told to play outside or given cookies.

In 1988, the United States officially recognized what happened to Japanese-Americans that were interned, and provide minor reparations in 1988. It was a token amount, but morally necessary. I say a token amount because all Japanese property, homes, business, inventory, and personal wealth were confiscated or looted. For the Japanese-American community, the acknowledgement of internment was much more important than the any monetary restitution.

Acknowledgment

In 1988, President Ronald Reagan signed House Resolution 442, or "An Act to implement recommendations of the Commission on Wartime Relocation and Internment of Civilians," which awarded restitution payments of $20,000 to Japanese-American survivors of World War II civilian internment camps.

In addition to public apology and acknowledgement of the internment, Section 1.6 of the law (Public Statute 102) says:

Section 1.6 “[this law’s purpose is to] discourage the occurrence of similar injustices or violations of civil liberties in the future; and (section 1.7) make more credible and sincere any declaration of concern by the United States over violations of human rights committed by other nations.”

It was the American story of “never again”.

And now, again. History may not repeat, but it rhymes like church bells at a funeral.

Going Forward

A year ago, I would have concluded this with the coda like, “The memory of the shame and cruelty of the moment has led those in the US Government to promise this would never happen again. We would never condemn an entire race of Americans to this treatment.”

Turns out, I would have been very very wrong.

More images from the US Description of the Internment Camps from 1942

From the 1920s until the 1960s, the prevalence of motor hotels the grew and reflected the American love affair with the open road. These roadside establishments not only shaped the travel habits of generations but also became symbols of freedom, adventure, and the evolving face of American business.

Origins: Why Motor Hotels Emerged

In the aftermath of World War I, car ownership grew rapidly. The 1920s saw a dramatic increase thanks to the mass production of affordable cars like the Ford Model T. For the first time, ordinary families could pack up and hit the road, seeking adventure or opportunity beyond the limits of home. But - but, the infrastructure for this newfound ability did not keep pace with the desire to travel. Traditional hotels were located in city centers or established resort areas, inaccessible for travellers wanting to stop along the way for a night’s rest.

It was this gap that gave rise to the motor hotel or “motel”. The very first motels appeared along major federal or state routes.” The Milestone Mo-Tel (above), which opened in San Luis Obispo, California in 1925, is widely considered the first of its kind. Unlike hotels, motels were designed specifically for motorists, offering travellers the convenience of parking their cars directly in front of their rooms—a revolutionary idea at the time. One the defining features of the motels was the lack of a traditional lobby, since they were geared towards short term stays.

The Golden Age: Economic Success and Cultural Impact

The Great Depression briefly slowed the growth of motels, but the post-World War II era witnessed their explosive expansion. Returning veterans, a booming economy, and the rise of paid vacations led to an unprecedented surge in family road trips. Simultaneously, the construction of the Interstate Highway System (launched in 1956) made long-distance travel easier than ever before.

Motels flourished along these early highways, offering clean, affordable, and accessible accommodations to a growing stream of travellers. Their business model was simple but effective: low overhead, high turnover, and prime locations near major roads. Many motels were family-owned, fostering a sense of personal service and hospitality that endeared them to travellers.

Economically, motels were a resounding success through the 1950s and 1960s. They became synonymous with the spirit of the American road trip, their neon signs and quirky architecture—sometimes themed to evoke the Wild West, Polynesia, or space-age designed to beckon weary motorists. Tourist dollars poured into small towns, fueling local economies and fostering the development of roadside attractions, diners, and gas stations.

A number of motel chains emerged during this era, such as Holiday Inn (founded in 1952), Best Western (1946), and Motel 6 (1962). These chains brought a new level of standardization and reliability to road travel, elevating the concept of the motel to a national brand.

The Great American Road Trip

In the 1950s and 60s, the Great American Family Road trip became a classic right of passage. Parents up front, children crushed in to the back and the constant complaint or “are we there yet” rang out across the country. They are looked back on as wonderful memory, albeit that they were often seemed like torture during them.

Challenges and Decline: The Eclipse of the Classic Motel

By the 1970s, however, the charms of the classic motor hotel began to dim. The very forces that had once propelled their success now contributed to their decline. The continued construction of interstate highways often bypassed the older “routes” where older motels were located, relegating them to obscurity as traffic dwindled.

At the same time, the hospitality industry began to consolidate. Large hotel chains, drawing on greater resources, started to offer more amenities - swimming pools, conference centers, restaurants - that independent motels simply couldn’t match. These new hotels were often built at highway exits and catered not just to families, but to business travellers and tourists seeking a higher standard of comfort and service.

Economic factors also played a role. Maintenance costs for aging properties rose, while competition for guests intensified. Many family-run motels lacked the capital to update or renovate. As a result, some motels fell into neglect or were converted to other uses, while others closed their doors entirely.

Additionally, changing tastes and societal attitudes led travellers to favor predictability, safety, and a certain uniformity that the big chains provided. The once-vibrant neon-lit motels came to be seen by some as relics of a bygone era—charming to a degree, but outmoded.

Iconic Callbacks

Motor Hotels and Motels still have a prominent place in the American memory. Here are some the ways that Motels have influenced the American Experience.

Movies and TV

The motor hotel holds a special place in the American (and Canadian) heart. They often appear in some of the most popular TV and movies and can instantly set a mood for the show.

The images above (clockwise from upper left) include the last chance home of the Roses from Schitts Creek, a motel projecting “a separation” from society in The Umbrella Academy, a unique form of Americana from Asteroid City, the motel featured in both Fargo and Twin Peaks that features a past that is both ubiquitous and isolating, and finally The Bates Motel from Psycho, conjuring a haunted house and out buildings with a sense of doom.

Route 66

One of the most famous of the road trips, before the Federal Interstate System. was Route 66. It stretched from Chicago to Los Angeles. It still holds a place in many hearts and is a favorite trip of Europeans. Because of its fame, many of the old hotels are still standing.

One of the reasons this road stays on the minds of so many is the song “(Get Your Kicks) On Route 66.” This song popularized the road and brought it to the attention of millions. It was originally recorded by Nat Kind Cole in 1946 and has been covered by many different artist. One of the most popular recordings was recorded in 1964 by the Rolling Stones, which brought the road to the public’s attention through-out Europe.

Because of this interest, many of the motels on the original highway still operate. US Highway Interstate 40 has replaced most of the old Route 66, but in areas that it bypassed, you can see some of the kitsch and glamour of the old drive, particularly near Albuquerque, New Mexico.

Hot Springs, Arkansas

Hot Springs, Arkansas has some of the best preserved – and still functional - motor hotels I have seen. It is because in Hot Springs Arkansas, many of the old motor court style hotels have been landmarked and cannot be torn down, although they are often updated.

Legacy and Nostalgia

By the 1980s, the classic American motel had largely been eclipsed by larger hotel chains and new forms of roadside accommodation. Yet, their legacy endures. Motor hotels remain etched in the American collective memory. The are celebrated in film, literature, and art for their unique place in Americana. In recent decades, some have been lovingly restored, catering to travelers seeking a nostalgic experience or a taste of mid-century charm.

Many refurbished motels are individual, quirky, and endearing. They are worth a visit.

Railways have historically symbolized progress, connectivity, and the promise of efficient, sustainable transport. Today In the United States, they now represent nostalgia at best, or a complete waste of resources at worst. Americans do not travel by train. The numbers of passengers declined, then collapsed, in the decades after World War II. Train travel is now an anachronism, confined to the Washington DC – Boston corridor as a commuter service and in other areas as a hobby or an “experience.”

However, in Europe train travel is usually swift, comfortable, convenient, and widely used. Nearly every American who has traveled by train across Western Europe is impressed by the speed and ease of travel there. The contrast between the success of trains in Europe and their relative failure in the United States has never been starker. While European cities hum with the energy of sleek intercity expresses and local commuter trains, most of America’s railways are a quiet afterthought, eclipsed by highways and air travel. (Trains in the United States and Canada are still important for shipping goods when time is not critical, but hardly register in passenger miles.)

Different people will point to different causes as to why trains work in Europe and not in America. The answer lies in multiple causes, often reinforcing each other. The answer lies in geography, history, political priorities, and public attitudes, as well as in strategic investments in new rail lines.

Historical Roots: The Diverging Paths of European and American Railways

Europe and North America both experienced explosive railway growth in the 19th century. Railways knit together the newly industrialising societies, moving people and goods with unprecedented speed. In the US, the transcontinental railroad symbolised the nation’s manifest destiny, while in Europe, state-sponsored railways forged national identities and connected ancient cities. School children used to learn about the “golden spike,” driven in when the first North American trans-continental railway was completed. But train travel is viewed almost exclusively in a historical context.[1]

In Europe much of the growth of train transportation was driven by the government, often in service of military aims. France, Russia and Germany built railroads to deliver troops and supplies to the fronts of World War I. World War II only reenforced this growth. Moving large armies of people, munitions, and equipment required trains to provide consistent supplies.

Reasons for the Divergence of Train Use

In both Europe and North America the reasons for growth versus decline are almost in direct opposition. These are the main drivers.

Age of the rail lines and trains:

Europe: As noted above most of the rail lines were used as assets in the war and therefor targeted for destruction. Rail bridges in particular were hit to stop enemy movements. After the wars, new national boundaries and the state of rail infrastructure meant that new lines had to be completed. They were laid out in ways that prioritised the movement of people.

New trains themselves also had to be built, and they were optimized for these new lines.

USA: The United States rail stock was untouched by the war. Hence, the rail lines laid out in the 19^th century are still in use – if not abandoned to rot. Most of the US system was built to transport goods from where they were mined or imported to where they were used. The movement of people was secondary. You can see this in looking at older train maps. Trains were built to transport coal to energy plants, iron to steel smelters, ore to processing plants, etc. These train lines often followed odd routes because they were designed when trains that could not travel quickly across hills, mountains, and rivers.

The American trains were used longer, and the stock was aged even before the outbreak of war. They were not replenished or upgraded after the war.

Distance

Europe v USA: The distance between cities and ports in Europe is much shorter than in the United States. Trains travelling across European countries, like France, are a fraction of the distances between American cities. This meant that train travel was, and still is, an efficient means of intra and interstate travel in European nations. Where as America moved towards air travel for long distance and buses or private cars for shorter travel.

European trains now travel between nations on very fast stock between relatively close cities. This allows train travel to be efficient. For example, much of European trains are electrified, a situation that is not true on most American train lines. Between cities in American, air travel is now the default for trips across country and car travel is the default for any trip less than about 5 hours.

Here is a simple example to see the difference.

• A trip from London to Paris to Frankfurt (all economic hubs) takes 2 hours by train for the first leg, and another 3 ½ hours from Paris to Frankfurt. By air, the trip takes about 1 ½ hours from London to Paris and another 1 ½ hours to Frankfurt. That does not count the time to check in at the airport, nor the time to get from the inner city to the airport.

• In the United States a trip from New York to Chicago to Los Angeles takes 19 ½ hours by train to Chicago and another 32 hours to Los Angeles. Compare this to air travel. It takes 2 ½ hours by air from New York to Chicago and another 4 ½ hours to Los Angeles.

The methods of travel are self-reenforcing. In Europe air travel has only gotten more difficult and train travel faster and occurs more often. In the United States, the opposite is true. Air travel has become significantly faster as train travel has gotten slower and more difficult to use.

The consumer costs associated with travel also feed into this. The least expensive way to travel in most of Europe is via train. In American, train travel is usually the most expensive way to travel, moving by air or car is often much cheaper.

One of the few places where train travel is still used extensively in the Washington – Baltimore – Philadelphia – New York – Boston (the eastern corridor) where the cities are closer together. Although, even in this corridor, air travel and driving is more common.

Ownership

In Europe most of the rail lines and trains are owned by governments or with companies with governmental backing. Service and comfort are prioritised.

In the United States the rail tracks are owned by private parties, who have few incentives to upgrade their systems. The primary users of the trains are shippers, and the speed of the shipment is less important than the cost. With regards to travel, beginning in the 1970s, passenger travel and routes were consolidated into Amtrak. Instead of improving travel, as it was designed to do, Amtrak has only slowed the obsolesce of train travel. Amtrak is consistently underfunded by Congress and still runs much older trains. They are almost no politicians who lobby to improve train service.

Culture

USA: Car culture is engrained in the United States psyche. Cars signify freedom, status, and the open road. Cars, the old Mustang, Camaro, Corvette, and now trucks, are markers of adulthood and status. Road trips are popular as our most scenic highways are stunning, and our national parks are only accessible by road.

It has been this way since at least World War II. After the war as Europe built new train tracks, the United States – under President Eisenhower – embarked on the Interstate Highway System. Originally designed to quickly move resources across country in emergencies, they opened the nation to faster and more reliable pathways for cars. American cars got bigger and used the more space that new roads allowed.

These highways enabled American cities to sprawl and created modern suburbs. Even today the “American Dream” includes a free-standing home for most of the country. Tracks and tracks of new homes need cars to be able to access them.

Europe: As America invested in autos and highway infrastructure, the same was not true in Europe after the war. Cars were a luxury in post-war Europe and so the roads were not demanded by public. Smaller roads lead to smaller cars which were seen as basic transportation, not as a lifestyle. (Note: this trend was not as true in England where cars were still inhabited a place in the national zeitgeist with MGs, Triumphs, and Jaguars.)

In Europe, smaller cars were necessary for the smaller roads both in and outside the city. In more recent times larger international highways have been constructed, but the European roads still don’t signify the same mindset in Europeans as in Americans.

Governmental Support

One key difference between the success of trains in Europe versus America is the government support, or lack thereof, between governments.

Europe: European governments usually own the train systems, and drive them to profitability, but not a demand for large returns on investment. The governments find that citizens prefer to support train travel as more equitable and cheaper than other forms of transportation. Trains are also “cleaner” than auto or air travel, helping them to reach clean energy goals.

USA: Up until Amtrak was created in the 1970s, trains that serviced the public were privately owned. The drive to reduce costs naturally lead to a stagnation of service. Train service for the public began to dry up. Amtrak was designed to consolidate the lines and to improve the baseline of service, not to innovate.

There are some suburban lines that are improved overtime. For example, commuter trains on Long Island and in New Jersey have been upgraded. However, even these improvements lag well behind European systems.

The one area where train service has been greatly improved, ironically, is the local train service to airports. These trains are often upgraded and tie into air travel business.

Cost

Both the actual and incidental cost of using a car is much lower in the United States.

Taxes at the federal, state, and local levels are used to improve, expand, and develop new roads and highways. There is no analogous support for trains.

American cities are designed for cars. Free and plentiful parking is still the norm for suburbs and many cities. Paying for parking to go the market is shocking to Americans. Shopping areas, malls, and superstores have acres of parking free to use. Conversely, in the more densely populated Europe, paying to park is the norm. Even where parking is free, it is often limited by space constraints.

The direct cost of fuel is much lower in the United States. There is a dramatic difference in the prices between the United States and Europe. This started because of easier access to oil and refining in the US. The differences accelerated during and after the 1970s oil boycotts. The price of oil was increased and European nations raised fuel taxes to reduce the auto use. By contrasted, the United States implemented milage targets without raising taxes. Today a cost of a gallon of gas is about $3.50 - $4.00 in the United States. In Germany, that same gallon would cost between $7.50 - $9.00.

Innovation

USA: In the United States, travel innovation is focused on our most used transportation methods. Planes have gotten faster and tickets cheaper. Cars are getting more efficient and growing in size to accommodate more “stuff”. You can’t by a 6-month supply of toilet paper and soda and expect to drive it home in a small efficient car. Our minor investment into trains can be seen as the fastest trains in the United States is the “Acela” line in the northeast with speeds up to 150 mph or 240 km/h. However the older infrastructure of tracks mean the average speed is 80 mph or 130 km/h. During rainstorms, the trains often can’t operate at all.

At the same time, train companies thought of themselves as “Train Companies”, not as transportation companies. It is analogous to how Kodak, even thought they understood digital cameras, missed consumer preference movement because they thought of themselves as a “Film Company” not a consumer image company.

Europe: In Europe innovation was focused on trains. The TGV, ICE, and AVE (Spain) networks regularly achieve speeds of 180 mph or 300 km/h. The European Union’s focus on interoperability and ticketing, as well as expansion into new markets, keeps the continent at the leading edge of innovation.

Asia, particularly Japan and China, have learned from American and European experience and run high speed trains across the nation.

Segregation

There is one more cause that contributed to the lack of train service in the United States - that is segregation. Train travel within and between close cities was often used by poorer minorities. The suburban sprawl self-selected a population rich enough to afford cars to access them. (I personally remember my father advocating against a rail line from Los Angeles to Orange County in the 1970s because it would let in the “wrong kind” of people.)

Jim Crow laws that prohibited mixing of races in public was much easier to enforce on train transportation. And keeping the races separate was a motivating factor for most city planners for decades after the war.

Conclusion: The Promise and Challenge of Trains

Trains are successful in Europe because of political will, dense cities, and a long tradition of public investment in rail. New lines are built to promote sustainability and cross-border unity. In the US, a cultural preference for cars, sprawling cities, and political gridlock have stymied new rail projects. Meanwhile, the stunning rise of high-speed rail in Asia and Europe demonstrates what is possible when nations prioritize railways.

The future of trains in America varies between slim and none. Despite quite a few routes that are probably viable (Los Angeles to Las Vegas, Dallas to Houston, Chicago to Minneapolis) the only high-speed line completed is from Miami to Orlando in Florida. Widespread train travel in America is seen by both politicians and the public as obsolete and not worth investing.

[1] I assume they still learn about this.

There has been a significant drop in encouraging change for the public good since the advent of the Internet. There was a time when public campaigns could be effective. With the internet and a fractured electorate that politicizes everything, national PSAs have gone the way of the Dodo.

Looking back at what worked and what didn’t with PSAs, we can identify successes and failures and try to reverse-engineer the causes for both.

Why the period from 1960 to 1990?

From 1960 to 1990, broadcast TV dominated the airwaves. The big three broadcasters (ABC, CBS, and NBC) ruled the media. During and after WWII, radio and film media provided PSAs on air and at the movies. After the War, the media landscape was changed as the War Advertising Council was changed to the Advertising Council which supplied new PSAs.

For many institutions, these ads raised both awareness and money. Television was broadcasting Ad Council campaigns for free. They raised awareness and a lot of money for non-profits like United Negro College Fund and the American Cancer Society. Television brought PSAs to a new audience of consumers.

There were a few public campaigns that seemed to work:

1) Smoking

For decades, tobacco companies dominated TV commercials until they were banned from airing in 1971. Many of the first major public service ads were aired to highlight the dangers of smoking and to remove its glamour.

The cigarette industry’s advertising dominated the airwaves, but numerous PSAs were describing the consequences and urging people not to smoke. The rate of announcements was such that there was one PSA broadcast for every three cigarette commercials.

The PSAs against smoking were the first public campaign that actually reduced our rates. For the first time ever, cigarette sales started trending downward.

2) Litter

Before the 1970s, throwing litter out of a car was just not a significant issue. Honestly. You see current images of "litter," and it is nothing compared to what it was before we made it objectionable. Throwing things out the window of a moving car was normal.

There had been periodic “don’t litter” campaigns, but they were not successful.

Littering on the roads changed only with the arrival of the “Crying Indian” ad. Today, it would be a joke or meme, but back then, with only a few TV stations, this ad was on constantly, and it was effective.

I am unsure how or if it affected adults, but I definitely remember that kids would complain when our parents did it in the car. It was one of the few complaints that made a difference because they were your kids, and there were few ways to justify it.

Then, when most people started changing, everyone else followed suit. You didn't want to be that one asshole who just threw garbage on the freeway. Yes, it still happens, but it is now less common and socially frowned upon.

3) Smokey the Bear & Wildfires

Smokey the Bear was created to remind campers to be careful and prevent forest fires. It was a simple, targeted campaign that drew attention to this issue. As a camper back then, I remember my granddad, HAM, always having me help him put out the fire before we left a site. After we extinguished the campfire, he would pour some water on it to make sure it was out.

4) Cigarette butts – Where it worked and where it didn’t.

After the success of the Smokey the Bear PSA in the West, Smokey helped launch a campaign to discourage people from tossing cigarette butts out of their cars, instead advising them to put them into the ashtray. This has effectively stopped, at least in the Western and wildfire-prone states. The tragic real-life consequences supported the public campaign. Whenever a fire was investigated and found to be caused by a discarded cigarette on the road, newspapers and TV would report this information.

It was another case where public opinion influenced actions with a few, and then group peer pressure took over.

In locations where fire wasn’t a threat, tossing cigarette butts out the window was the norm for decades longer.

5) Recycling

Recycling was introduced based on lessons learned from these two incidents. However, promoting recycling proved to be more difficult. While doing something good for the planet is generally popular, actual adoption often stalls when consumers have to put in effort or spend money. Years of PSAs about drunk driving failed to make an impact because they inconvenienced people. It was only after laws changed that drunk driving rates decreased.

Recycling supporters found that laws didn’t significantly help with implementation. However, another lesson from successful campaigns was that peer pressure can be effective. So, the recycling advocates distributed different physical bins for trash and recycling to each household. Seeing neighbors put out recycling bins made it a norm for others on the block to do the same.

Testing this behavior yourself is straightforward. Observe residential streets with various trash and recycling bins. You'll notice that adhering to the rules is simple, and peer pressure helps encourage recycling. Next, examine the multibin trash containers at a busy airport. Recycling there, in a public setting, requires effort to read all the options and properly sort your trash, often while rushing to catch a flight. Recycling is frequently overlooked in these areas. The two main lessons learned earlier were ignored: it isn’t easy, and there’s less peer pressure from strangers.

Failed Campaigns

There were many unsuccessful campaigns. These attempts to change people’s behavior ultimately failed mainly because some of the public had personal experience with drugs, guns, or masking.

When did PSAs stop working?

Broadcast Changes:

When examining why PSAs stopped being broadcast, we need to consider the media advertising landscape of that era. Before cable TV became widespread in the 1990s, broadcast television was the primary source of programming. They might have had unsold advertising slots, and stations could run promos for their other shows. They also had an incentive to run PSAs, as it was essentially “free” for the station to air a PSA instead of another promo for an established show. Additionally, airing PSAs helped the station when it was time to renew its broadcast license.

Once cable became widespread, it provided viewers with more options, and there was less unsold airtime. Infomercials aired, new TV channels broadcast all night, offering inexpensive advertising space, and cable technology allowed local businesses to promote themselves. Broadcasting Public Service Announcements now involved a cost to the station with little benefit for the station owners.

Cable also contributed to channel surfing, as viewers could easily switch between stations when they weren’t entertained. Stations had to run advertising, which might cause viewers to change channels, but they didn't have to air PSAs, which would also lead to channel surfing, so they chose not to.

Internet:

The Internet has gradually but profoundly changed the media landscape. Nonprofits can now buy smaller ads more often and target them to their websites. While it rarely works, payment is usually only made if the ad is effective.

Currently, there is almost no effective way to run a Public Service Advertisement online where the audience can respond if they agree or disagree. There are online debates about vaccine validity, along with various success stories for and against solar power, and nearly everything else.

The only somewhat effective approach is to use a social influencer, like a TikTok personality, to promote your causes. However, capitalism suggests that endorsing a product is more profitable than supporting a cause and is less likely to alienate your audience. If an influencer endorses support for either the Israeli or Palestinian cause, they risk losing subscribers. If they promote a poor perfume, people might complain, but they probably won’t lose their entire subscriber base.

Iceland has a long history spanning over 1500 years. Once an inward-facing farming society, since about World War II, it has developed into a vibrant, modern nation, forming strong alliances and building an economy influenced by both the natural environment and global events.

Before the 20^th-century transportation revolution, Iceland was extremely isolated. Air travel was unknown, and planes couldn’t reach the nation. Transportation by boat was slow and used almost exclusively for fish exports. Even the trans-Atlantic passenger liners were limited and slow before 1900, and there was no demand to bring people to or from Iceland.

Iceland at the Dawn of the 20th Century

At the turn of the 20th century, Iceland was a Danish dependency with a sparse population, largely rural and reliant on subsistence agriculture and fishing. Modernization was gradual; there were few roads, electricity and telecommunication were in their infancy, and Reykjavik was still little more than a small coastal town. The struggle for independence and modernization dominated Icelandic politics and society for decades.

Icelandic nationalism gained strength in the late 1800s – early 1900s. After considerable debate and negotiation, the Act of Union was established in 1918. The Act recognized Iceland as a sovereign state in personal union with the Danish crown. Denmark retained control over foreign affairs and defense, and Iceland’s international presence remained faint. In some ways, it mimicked the relationship Canada had with Great Britain in the Commonwealth.

The Importance of World War II

Occupation and Opportunity

World War II marked a turning point for Iceland, altering its national trajectory. In April of 1940, Nazi Germany occupied Denmark. Iceland was left in a tough position, its foreign affairs and security suddenly in its own hands for the first time. The British, seeking to preempt a German move, launched “Operation Fork” and occupied Iceland in May 1940[1]. Iceland remained neutral even after Denmark was invaded; however, the Allies were concerned about the presence of Germans on the island. Iceland’s location meant it could potentially support a blockade of Great Britain. British forces were replaced by American forces in 1941.

Although many Icelanders initially resented the occupation, it soon became apparent that the Allied presence would have a profound impact on the country. Tens of thousands of foreign troops—at one point outnumbering the local adult male population—brought modern technologies, infrastructure investments, and cash. Roads, airfields, and harbors were built or significantly improved, accelerating Iceland’s transition into the modern era.

Looking at a world map centered on Iceland, it is easy to see how critical the nation was in terms of air and naval power between Europe and the United States. If it was occupied by Germany, getting US supplies to Britain and onto the continent would have been significantly tougher. It provided a strategic base of operations in the North Atlantic.

Independence and International Recognition

With the Danish monarchy powerless and the country occupied, Iceland took further steps toward full independence. In 1944, the Icelandic people voted overwhelmingly in a referendum to sever their constitutional ties with Denmark. On June 17, 1944, Iceland was declared a republic.

World War II not only physically modernized Iceland but also finalized its political independence. The end of the war left the country with much greater strategic importance and a new global identity.

The Impact of NATO Membership

Entry into NATO and the Cold War Era

Soon after the end of World War II, the world entered the Cold War. With this, Iceland’s significance as a North Atlantic outpost only grew. In 1949, after intense debate and public protests, Iceland became a founding member of the North Atlantic Treaty Organization (NATO). This decision—and the subsequent 1951 defense agreement, which allowed for a permanent US military presence at Keflavik Air Base—was both controversial and highly consequential.

For Iceland, which lacks a standing army, NATO membership and the defense pact provided critical security guarantees. The US base, staffed by thousands of personnel at its peak, became the largest employer in the country and a major economic engine for the southwest region. Keflavik Air Base (now Keflavik is Iceland’s International Airport) was a key monitoring station for Soviet submarine movements throughout the Cold War, and Iceland’s geostrategic role kept it firmly within the Western orbit.

Domestic Debate and the End of the Base Era

NATO membership has not been without controversy within Iceland. Periodic protests and political divisions reflected a persistent strain of Icelandic pacifism and a desire to maintain national autonomy. Nevertheless, the alliance brought Iceland security and economic benefits—military spending, contracts, and employment—while also anchoring it to the Western economic and political system.

The US military withdrew from Keflavik in 2006, marking the end of a fifty-year presence. Keflavik remains a vital backup base, should it be needed. However, the airport is now used commercially as Iceland’s main entry point for visitors. Iceland remains a committed NATO member, with its strategic location continuing to attract ongoing interest as Arctic shipping routes open and geopolitical tensions intensify. Their strategic position will only become more vital as major powers compete for control of the Arctic region.

Economic Exports Over Time

The Age of Fishing

Iceland’s economy in the early 20th century was largely dominated by the fishing industry. Cod, herring, and other North Atlantic species were the lifeblood of the nation, and fishing rights were fiercely guarded. The so-called “Cod Wars” with the United Kingdom—three confrontations between the 1950s and 1970s—secured Iceland’s exclusive 200-nautical-mile fishing zone, ensuring the industry’s survival and growth.

Fish products comprised up to 90% of exports well into the postwar era, and fishing wealth underpinned the rise of a modern welfare state, rapid urbanization, and a relatively high standard of living. However, overfishing and changes in marine stocks necessitated periodic adaptation and modernization within the industry.

Diversification and Innovation

Recognizing the dangers of relying almost solely on fisheries, Iceland launched a program of economic diversification in the late 20th century. Investments in renewable energy—especially geothermal and hydroelectric power—enabled the growth of power-intensive industries, such as aluminum smelting.

Aluminum exports, fueled by abundant cheap energy, became the country’s second-largest export sector. This growth is driven by the low-cost electricity generated from Iceland’s geothermal energy and hydropower resources. Iceland itself has no bauxite, the ore used to smelt aluminum. Raw bauxite is imported, smelted on-site, and then exported, thanks to the abundant energy, making it cheaper than most competitors.

Tourism has become a major pillar of the economy since the early 21st century, fueled by Iceland’s unique landscapes, vibrant culture, and global media exposure. Its location also makes it a convenient stopover en route to Europe. For those of us old enough to remember, Icelandair was an affordable way to travel to Europe. Younger travelers could reach Europe for a fraction of the price by stopping in Reykjavik. This was so popular that from the 1970s through the 1990s, it was often called the “Hippie Airline.” The airline still offers a competitive price, but now the required stop in Reykjavik has become a popular layover.

By the 2010s, tourism revenues surpassed fishing for the first time, attracting visitors from around the world and fueling a construction and service boom.

Iceland also exports knowledge-based services, creative industries, and specialized products such as pharmaceuticals, software, and high-tech equipment. Government policy has encouraged entrepreneurship, though the country’s small domestic market poses persistent challenges.

The Financial Boom and Bust

Perhaps the most dramatic event in Iceland’s economic history was the rise—and spectacular fall—of its banking sector in the early 2000s. A wave of deregulation and international growth led to a financial bubble, with Icelandic banks acquiring assets many times the country’s GDP.

For example, with a very strong Icelandic Krona, some banks offered higher interest rates to the British, as the Krona rose in value more quickly than the British Pound. The 2008 global financial crisis led to the collapse of the system, resulting in the failure of all major banks, sharp currency depreciation, and a severe recession. Britons lost a significant amount of wealth in the collapse of the Krona.

Although the crisis left lasting scars, Iceland’s recovery was swift by international standards, thanks to capital controls, IMF assistance, a devalued currency that boosted exports, and a resilient population. The experience reinforced the importance of diversification and prudent regulation.

Current Status of Iceland

Society and Politics

Modern Iceland is a parliamentary republic with a strong tradition of democracy, gender equality, and social cohesion. The country ranks highly on global indices of human development, transparency, and press freedom. Reykjavik, now a thriving city, is home to about two-thirds of Iceland’s population, which totals some 380,000 people.

The nation’s small size fosters a sense of community and accountability, but also creates challenges in public administration, health care, and education. Iceland has been at the forefront of progressive policies, having elected the world’s first democratically chosen female president, Vigdís Finnbogadóttir, in 1980, and legalized same-sex marriage in 2010.

As an aside, Iceland’s isolated population and great health data have been monetized. That data is now used for a variety of genetic research. Strict privacy controls are in place, and residents can opt out; however, their health information is used in research worldwide.

Economy and Environment

Today’s Icelandic economy is diverse and outward-looking. Fishing remains crucial, but tourism, aluminum, renewable energy, and tech innovation are increasingly significant. The country is a pioneer in renewable energy, with nearly all electricity and heating sourced from hydro and geothermal plants. This has attracted industries seeking low-carbon production.

Tourism, though hit hard by the COVID-19 pandemic, has rebounded robustly, continuing to drive job creation and investment. Concerns over environmental impact and sustainability have prompted tighter regulations and efforts to balance growth with conservation.

Iceland faces ongoing debates about EU membership (having applied in 2009 and withdrawn the application in 2015), environmental stewardship, and its role in Arctic affairs as the region grows in geopolitical importance.

Culture and Identity

Icelandic culture is vibrant and deeply rooted in its literary heritage, from medieval sagas to contemporary music and art. The Icelandic language, largely unchanged for centuries, remains a central pillar of identity. Annual events such as the Reykjavik Arts Festival and Iceland Airwaves draw international audiences, and Icelandic authors, musicians, and filmmakers garner global acclaim.

The island’s dramatic landscapes—geysers, glaciers, volcanoes, and black-sand beaches—continue to inspire both Icelanders and visitors. The interplay between people, nature, and tradition defines the country’s unique character.

Conclusion

Since 1900, Iceland has journeyed from remote dependency to modern, self-assured nation. The shocks of World War II and Cold War geopolitics, the opportunities and risks of economic globalization, and the ongoing quest for sustainability and identity have all left their mark. Today, Iceland stands as a testament to the resilience and adaptability of small societies, offering lessons in how to thrive on the edge of the world.

Rather than delineating the current state of Iceland, here are Iceland's rankings in quality of life, as per Google.

Specific Rankings and Metrics:

• United Nations Human Development Index (HDI): Iceland is consistently near the top of the HDI rankings, which measures a country's overall progress in health, education, and living standards, according to investinreykjavik.com. In 2022, Iceland's HDI was 0.959, placing it 3rd out of 193 countries according to countryeconomy.com.

• OECD Better Life Index: Iceland Monitor states the country is ranked second best for quality of life among OECD countries.

• Global Peace Index: Iceland is consistently ranked as the most peaceful country in the world according to Statista.

• Legatum Prosperity Index: In 2023, Iceland was ranked 8th overall, performing strongly in Social Capital and Personal Freedom.

• Women Peace and Security Index: Iceland is ranked 4th on this index.

• World Happiness Report: Iceland is ranked 3rd in the World Happiness Report.

• Gender Equality: Iceland is often cited as the most gender-equal country in the world according to Women's Agenda.

[1] Operation Fork was done with only 750 UK Marines and no resistance. The British arrested the German citizens and set up defenses on the four possible landing positions on the island.

Many of us have heard a lot about “rare earth minerals” or “magnets” recently. These items are often mentioned in connection with the tit-for-tat tariff escalations between United States and China. These rare earth resources are one of China’s most significant points of leverage over the United States. However, many of us are unaware of what they truly are or how they are utilized.

Rare earth minerals are indispensable to the modern technological world. These elements, which include a group of 17 metallic elements such as neodymium, dysprosium, and yttrium, are used in a wide variety of applications, from smartphones and electric vehicles to wind turbines and military equipment. Despite their name, most rare earth minerals are relatively abundant in the Earth's crust, but their dispersion makes them difficult to mine economically. Over the past several decades, these minerals have emerged as a focal point of geopolitical and economic competition, particularly as China's growing dominance in this field has become increasingly evident.

If it sounds odd that these elements are actually not that “rare” in the traditional sense, why does China seem to have a lock on them?

The Historical Context

Rare earth minerals were first discovered in the late 18th century. The term "rare earth" originated from the scarcity with which these minerals were initially found, particularly in a Swedish mine. For much of the 19th and early 20th centuries, rare earths were scientific curiosities rather than industrial necessities. Their unique magnetic, luminescent, and catalytic properties gradually unlocked their potential, particularly after World War II.

During the 1940s and 1950s, the United States took an early lead in rare earth production. Mountain Pass Mine in California became the world's most significant source of rare earths by the mid-20th century. These minerals were crucial to defense technologies during the Cold War, fueling advancements in radar systems, jet engines, and other applications. However, as environmental concerns and competition diminished the profitability of mining, the U.S. ceded its leadership role, allowing other nations to step in.

It is important to understand that the United States knowingly encouraged moving the production of rare earth minerals to China. The output was expensive compared to mining a processing the minerals overseas. Maybe the final straw which closed the Mountain Pass Mine was a toxic spill. It was decided by corporate owners, with the backing of the US Government, to outsource production to areas with fewer environmental laws. Production stopped in 2002. China had much weaker environmental laws and much lower wages.

In retrospect, this was an idiotic decision. Not just the idea of giving China leverage over our manufacturing base, but also allowing China the ultimate leverage over new military systems. Rare earth minerals are a resource that the United States should subsidize. I understand that subsidizing most businesses is a poor business decision, but choosing to forgo access to these minerals was even more asinine.

Applications and Their Importance

Rare earth minerals play a crucial role in modern technology and industry. Their unique chemical and physical properties make them irreplaceable in several high-tech applications:

· Electronics: Rare earth elements such as neodymium are used in the production of powerful magnets found in hard drives and speakers.

· Green Energy: Wind turbines and electric vehicles rely on rare earth magnets to boost efficiency.

· Lighting: Phosphors derived from rare earths are used in LED and fluorescent lighting.

· Military: Rare earths are critical for precision-guided weapons, drones, and advanced communication systems.

· Healthcare: Certain rare earths are used in MRI machines and other diagnostic equipment.

The growing demand for these minerals in renewable energy technologies and electric mobility underscores their pivotal role in transitioning to a sustainable future.

China's Rise to Dominance

China’s dominance in rare earth minerals is the result of strategic planning, abundant reserves, and a willingness to invest in the industry despite environmental and financial challenges.

In the 1980s, China began to recognize the economic and strategic value of rare earths. It ramped up production, leveraging its vast deposits, particularly in Inner Mongolia’s Bayan Obo Mine. By the 1990s, China had surpassed the United States in production output, buoyed by aggressive pricing policies that undercut competitors worldwide. China’s state-backed enterprises were able to absorb costs that private companies in other nations could not, effectively monopolizing the market.

China's dominance extends beyond mining; it also leads the world in refining and processing rare earths. Processing these minerals is a complex and environmentally hazardous endeavor that requires extensive investment in specialized facilities. By controlling both mining and processing, China has established itself as the supplier of choice for global tech and manufacturing industries. In such a case, China’s ability to ignore its citizens’ protests at the time was beneficial. The environmental effects can be extremely toxic.

China’s Strategy

China’s rare earth strategy is not merely economic; it is deeply intertwined with its geopolitical ambitions. Rare earth exports have been weaponized as a tool of diplomacy and leverage. For instance, during a territorial dispute with Japan in 2010, China temporarily restricted rare earth shipments, highlighting its control over this critical resource. Such actions have spurred global concerns over the reliability of supply chains and intensified efforts to diversify sources.

Chinese dominance in these resources was also a key motivator for the trade discussions over tariffs that are ongoing despite two announcements that a framework is close.

Can the United States and Other Nations Catch Up?

The U.S. and other nations are increasingly aware of the importance of reducing dependence on China for rare earth minerals. However, catching up poses significant challenges in terms of cost, infrastructure, and environmental regulations.

Efforts to Revive Domestic Production

In recent years, the United States has taken steps to revive its rare earth industry. Mountain Pass Mine in California resumed operations, but its output is still insufficient to compete with China. Additionally, much of the mined material from Mountain Pass is sent to China for processing, underscoring the gap in processing capabilities.

The U.S. government has recognized the strategic importance of rare earth minerals and allocated funding for research, mining, and processing through initiatives such as the Defense Production Act. Collaborations between private companies and federal agencies aim to develop more efficient and environmentally sustainable methods of extraction and processing.

International Cooperation

Other nations, including Australia, Canada, and those in the European Union, are also ramping up efforts to establish themselves as reliable suppliers. Australia, for instance, has significant reserves and is actively partnering with countries like Japan and the United States to diversify supply chains. The European Union is investing in recycling technologies to reduce reliance on primary extraction, while Japan has turned to deep-sea mining to access untapped reserves.

Brazil is possibly another major contributor to the world’s supply chain. Only China appears to have more rare earths than Brazil does.

Challenges

Despite domestic and international efforts, significant hurdles remain. Rare earth mining and processing are environmentally damaging, often generating radioactive byproducts. Implementing stringent environmental regulations increases costs, making it difficult for competitors to match China’s low-cost production. Additionally, building a complete supply chain—from mining to processing to manufacturing—takes time and substantial investment.

Innovation may provide a path forward. Researchers are exploring alternative materials that could replace rare earths in certain applications, as well as methods of recycling rare earths from discarded electronics. While these developments show promise, they are unlikely to eliminate the need for mining in the near future.

The Future

Rare earth minerals are essential for modern technology, renewable energy, and defense systems. China’s dominance in this field results from strategic foresight, abundant resources, and aggressive economic policies. All of this was well understood by US and other corporations and governments. However, other companies and governments took advantage of the lower prices charged by China, which undermined and then destroyed national production.

The leverage China has during the recent tariff negotiations has highlighted America’s dependence on the Chinese government. The United States and other nations are taking steps to reduce dependence on Chinese supplies. However, catching up will require significant investment, international collaboration, and innovation. In the United States, it would also require some form of indemnity for the Government and producers.

As global demand for rare earths continues to rise, the competition over these critical resources is likely to intensify. Whether through the revival of domestic industries, partnerships among nations, or breakthroughs in alternative technologies, the effort to diversify supply chains remains one of the key challenges of the 21st century. The race for rare earths is not just about economics; it is about security, sustainability, and shaping the future of geopolitics.