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Lost in Lisbon Part 2: The Dark Side of Nomad Capitalism


Lisbon’s namesake comes from the word Olisipo, a derivation of Ulyssipo known to us today as Odysseus. Ancient cities often have legendary patriarchs but the sea-faring Phoenicians or whomever first laid eyes on Lisboa’s coastline were undoubtedly dazzled by its bounteous beauty and propitious potential. A similar feeling attracts jet-set pioneers from the modern world – the nomad capitalist – neo-explorers not in search of El Dorado (“City of Gold”), Indian spices, or Chinese porcelain but rather a new frontier for cheap-living, untapped markets, low-taxes, and affordable real-estate. These global vagabonds (myself included) often enjoy luxury living with top accommodations in poorer countries where locals live on a fraction of First World salaries. Thus, we begin our descent into the dark side of nomad capitalism.


The term “nomad capitalism” is a complex concept with many moving parts. Stripped bare, it is a branch of global capitalism; instead of movement of goods and services through a worldwide supply network, it is the movement of human capital from richer to poorer countries. Some call it geoarbitrage, “the idea that you can locate your life in a place where you get more.” In a sense, this is not new, Filipinos, Indians, Chinese and others have been mobile laborers seeking a better life for decades. Nomad capitalism, on the other hand, tends to involve individuals from high-cost-of-living countries fleeing to cheaper ones where they can work remotely, start companies, or live comfortably off wealth generated elsewhere.


Getting More for Less


A central idea behind the move is getting more for less. Andrew Henderson – founder of the company Nomad Capitalist – professes to help wealthier clients “go offshore…to go where they’re treated best.” For Henderson’s clients, keeping money in the US or Europe is increasingly untenable because of higher taxes, political uncertainty, and endless bureaucracy making doing business harder and harder. These folks are concerned about preserving wealth as well as maximizing bang for buck. At the opposite end of the spectrum are younger millennials who are choosing the digital nomad lifestyle because they are struggling “to make ends meet in their home countries.”



A cost-of-living crisis in the US, Canada and Europe has hit the Millennial generation hard. Without enough money to move up, Millennials have delayed marriage, homeownership, many have dropped out-of-the-workforce permanently, and the onset of economic slowdown has made the situation worse. Every week, companies are announcing layoffs, hiring freezes, and mortgage rates are rising, making it impossible to afford housing (some never leave their parent’s house), escape student-debt, and keep up with rising costs of food, rent and city-living. When young people see no way forward, they jump ship looking for a better life. For many, nomad capitalism has offered a life raft to something better.


AirBnB’s, Co-work-Cafés and Visas


The prospect of leaving home for a different part of the world also brings excitement, especially for remote workers. Bali, Madeira, or Medellin offer “the lifestyle they increasingly struggle to attain at home,” and remote work gives them the freedom, flexibility and adventure that define the digital nomad credo. About half of all digital nomads are Americans, many are from Canada and the UK, others are from Germany and Scandinavia. What greets these folks upon arrival is a taste of the familiar with foreign flavor: friendly locals who speak English, economical AirBnBs equipped with modern furnishings, scores of co-working spaces, and minimalist cafés serving Ethiopian coffee, kombucha, and avocado toast, staples of the hipster diet. Best of all, there are fellow nomads from back home.



Local-governments from Bangkok to Tulum (read more here) have completely rebranded to become the port-of-call for these digital denizens but nowhere has this been done better than Lisbon. Portugal jumped on nomad capitalism early, rolling out the red carpet with visa programs, tax-incentives, and revamped transportation. As we speak, Portugal is launching high speed rail to rapidly connect citizens and nomads alike across the country’s ten largest cities. Lisbon, for example, like many US cities is supplied with scooters, EV charging stations, and ample bike lanes accessible through phone apps. The city is teaming with meetup groups ranging from crypto gatherings and yoga retreats to expat forums like InterNations.


Outwardly, the results have been impressive. According to Markus Krammer, a German entrepreneur I met at an InterNations Christmas Party who moved here in 2020, Lisbon is becoming Europe’s Silicon Valley. As he tells us, “Lisbon’s tech scene is bustling, and the city is one of Europe’s fastest-growing tech ecosystems, making a name for itself as Europe’s Silicon Valley.” Portugal has the third highest number of STEM graduates today, the Annual Web Submit, and initiatives like Startup Lisboa (a non-profit incubator) and Invest Lisboa (private-public partnerships to attract investors) backed by the city and local banks. All net positives, right?


Qui Bono?


The digital nomad lifestyle has received so much fanfare and hype from YouTubers, offshore entrepreneurs, and travel bloggers some retrospective is in order. An obvious question missing from the positive press is if - in-fact - locals are benefiting from nomad capitalism or not. Ideally, the principal beneficiaries of the infusion of capital, tourism, new business, and wealthier patrons should be Portuguese citizens and local businesses. Unfortunately, it is unclear whether they are, and beneath the surface there is palpable frustration suggesting they are not.



Has wealth trickled down? The minimum salary in Portugal is a paltry 705 euros ($750) per month, the average Portuguese salary in Lisbon is slightly higher at 1050 euros ($115). Both are substantially below US averages. Salaries are rising in skilled vocations like IT but so is the cost of living. In 2021, Lisbon surpassed 23 cities globally to become the 83rd most expensive city in the world. For locals, groceries and rent have become worryingly high and nights out in town are few and far between. Many have been forced to leave the city altogether because they cannot afford rising rents. No doubt this is affecting local businesses as well, some of which are being replaced by trendy cafés and hip bistros.


The older Portuguese population in Lisbon must look around and think – where is the country I grew up in?

The older Portuguese population in Lisbon must look around and think – where is the country I grew up in? Portuguese are stereotypically friendly, accommodating and try to speak English. Lisbon’s successful business owners applaud these efforts while less well off locals are more skeptical. Some told stories of older folks forced out of homes by land lords eager to convert units into AirBnBs. Others are worried about the preservation of Portuguese culture and language. Even the Chinese are large stakeholders in Portuguese assets. It is understandable that many fear for Lisboa's future as demographic, economic and linguistic replacement is increasingly a threat in one of Europe’s oldest cities, indeed throughout Portugal.


Preserving Portugal, Finding Home



Geographic displacement, rising cost-of-living and economic slowdown are global phenomena. The ripple effects of these headwinds have forced people to make tough adjustments to keep pace. Nomad capitalism is the consequence of a global calculus of relative gains and often local costs. Be a resident of everywhere and a citizen of nowhere is the ethos of this itinerant culture. The positives belie a tension likely to boil over in the years ahead at the dawn of a new era defined by stronger ties to home, family and community. In that new world, perhaps it will be digital nomads and international capital who must adjust, not the other way around?


The positives belie a tension likely to boil over in the years ahead at the dawn of a new era defined by stronger ties to home, family and community.

Either way, Lisboa will press on because it always has. In 1755 at the peak of imperial power, the city was devastated by an earthquake and quickly rebuilt. Half a millennia later the city was revamped yet again for the World’s Fair in 1998. The centuries of conflict and conquest in between have reshaped the city as well, in ways only Lisboetas will ever know. These harrowing experiences are detailed in the tiles that decorate the city, the Fado tunes hummed throughout, and most importantly, they are carried into posterity by the Portuguese themselves. This time Lisbon faces a completely different challenge, but like their famous football team, I expect a triumphant run at the next World Cup!

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1 Comment


tonynn1990
Mar 09, 2023

Great insight on the challenges facing the new Lisbon.

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