As a full-time traveler, geographical arbitrage — living somewhere cheaper to make your money go further —and its effects on a low-cost area, is something I think about a lot.

Because if you come from somewhere like the UK or the US, almost everywhere will have a lower cost of living than your own. If you choose to move abroad or travel, you’ll be taking advantage of that whether you mean to or not.

It can cause friction. Tourists, ex-pats, and digital nomads want to experience the world, but when they do they’re blamed for a rise in local living costs.

This isn’t just a travel problem — geographical arbitrage affects everyone. People who can no longer afford the “nice” parts of town move to cheaper neighborhoods, pushing up the prices for those who live there.

If that doesn’t sit well with you, what do you do?

It’s easy to blame individuals for a country’s economic problems

When local prices rise, tourists / ex-pats / the gentrified are the first groups to shoulder the blame. But they don’t want higher prices. No one does.

Except for one group of people.

Sellers.

Jared A. Brock recently wrote an article called Hate Inflation? Blame Corporations (They’re responsible for 100% of the price hikes we’re enduring)

He nicely sums up my feelings on this point:

If you asked the average person on the street what causes inflation, they would say either: I don’t know or Government.

But the answer is so excruciatingly simple.

Do governments raise prices? No.

Do buyers raise prices? No.

So what causes prices to rise?

And the answer is…

Sellers raise prices. That’s it.

Governments and buyers don’t raise prices.

Sellers do.

So the real question is: Who are the sellers?

And the answer is: They are overwhelmingly corporations — multinational monopolies with huge unfair advantages that set the price standards everyone else is forced to follow — Jared A. Brock

Preach, Jared.

Let’s take Portugal as an example. House prices in Porto have risen 15–20% every year since 2013. Late last year I planned to spend 6 weeks in the city so I researched apartments.

Something I noticed was that the Porto short-term rental market is dominated by a handful of companies renting out sub-standard but very expensive apartments.

We went with the best value one we could find which was unfortunately via a rental company rather than a private landlord. But it was a pretty good apartment (which can be hard to come by) so when I figured I would be spending more time in the city in 2022, I contacted the company to check availability.

The apartment is available, but the price has risen by 25%.

In three months.

Corporations dominate in almost every market you can think of

And corporations only care about one thing.

Profit.

So prices rise.

Corporations then gaslight people into thinking that individuals are the problem. Apparently, individuals are the reason rent costs more this year than last, or why low-cost areas are becoming increasingly expensive.

But don’t forget…

Individuals don’t ask for increased costs of living.

Sure, salaries may be rising (for some people), but are they rising enough to cover price hikes whose sole purpose is to increase corporate profits?

Probably not.

There are arguments that tourists, digital nomads, ex-pats, and those who gentrify an area can afford the increase in costs of living, so why shouldn’t they pay more than a local? Another argument says they are in fact helping an area by plowing money into the local economy.

1. Just because someone can afford to be ripped off doesn’t mean you should rip them off.
2. How much of that money actually stays in the country or local area and how much of it is funneled to overseas investors and off-shore accounts? Foreign investors own 11.4% of real estate in Porto, for instance.
3. How can raising prices for tourists help locals when prices are pushed up across the board, therefore making it harder for locals to afford the cost of living?

Individual buyers shouldn’t shoulder the blame for the cost of living price increases.

As Jared says, the blame really lies with corporations.

And everyone is suffering because of it.

You could always bury your head in the sand

It’s sooooo easy to forget this shit exists or even matters.

You can hang out with the ex-pat group. You can find other middle-class people in your working-class neighborhood. You can sit in your lovely, affordable home, feeling very smug about your clever decision to move to a low-cost area, where life is sweet (so long as you don’t look outside the window).

I’m in Georgia (the country, not the state) right now. Last weekend I met an ex-pat group.

The conversation inevitably turned to money. Everyone agreed — if you earn Western money in Georgia, you can live an amazing life here.

And they all do.

But life isn’t that easy here, at least not for everyone:

• 10,000 families live in Tbilisi squats.
• The average Georgian salary is $356 a month.
• Although there is no official minimum salary, it seems to lie around $180 a month.

It may be cheap here. But it’s not that cheap.

It can be a comfort to curl up inside an ex-pat echo chamber, where social problems melt away as soon as you close your front door.

But burying your head in the sand will change nothing. Because…

Travelers are gonna travel

Ex-pats are gonna live abroad. The gentrified are gonna gentrify. And because of our broken economic systems, prices will rise.

So how do I on a personal level ensure I travel the world in a way that doesn’t further damage local costs of living?

I’ll turn to Jared again because he says exactly what I think:

We must purchase the world we wish to inhabit.

If you’re serious about doing your part to stop price inflation, then you have to stop enriching the corporations that cause price inflation in the first place.

You have to stop buying from multinational predator corporations.

You have to stop voting for corporate-captured political parties.

You have to spend less and spend locally.

— Jared A. Brock

That means no Airbnb.

No staying at offshore registered hotels.

No shopping at big supermarket chains.

And no Amazon deliveries.

Jared says we need to purchase the world we want to inhabit. It’s an interesting quandary we Westerners find ourselves in because many of us travel in order to find that world. We are searching for a simpler life and places that are less focused on greed and ostentatious displays of wealth.

Once we find that world, we are blamed for ruining it.

But it’s not us. Or at least, it doesn’t have to be.

This is a complex, emotionally charged issue and there is no easy way forward.

All you can do is vote with your money. After all, it’s the most powerful vote you have.