Temperate Climates and Human Capital Development

Today in Nebraska we are enduring a winter storm, with near blizzard conditions in many areas. This kind of weather tests our coping abilities. Visit a grocery store and you will find depleted inventory, as people stock up for what is likely to be a day or two of isolation. This kind of weather reveals the malleability of human preferences in the face of potential scarcity. What a great country where we ordinarily get so many choices!

These formidable challenges of living in a temperate climate may also produce higher economic output and development as compared with easier climates – at least in the case of our ancestors. Thomas Sowell outlines some of these advantages in his latest book, Wealth, Poverty, and Politics (Basic Books 2015).

Dr. Sowell explains how geography affects access to trade and the attendant flow of ideas, which foster human progress. For example, having navigable rivers and deep water ports makes transportation economical, facilitating travel and trade. Areas of Western Europe enjoyed these advantages, while many areas of Africa did not. Interaction and trade translate into opportunities for learning and innovation.

Temperate conditions in these areas also contributed to human capital developments in other ways. Surviving the cold required the development of skills, such as diligence and foresight, in order to ensure that food production was begun on a timely basis and continued during opportune conditions. Saving was essential to adapt to winter scarcity. “Make hay while the sun shines” resonates with us, in that opportunities need to be seized before Nature snatches them from us. Waiting until tomorrow is a luxury that we could not often afford. According to Dr. Sowell, developing “a sense of urgency about time, and the discipline to adjust to its requirements – qualities that were not nearly so necessary in places where food could be grown year round” were human traits fostered in temperate soil.

They also proved highly adaptable to other climates. According to Dr. Sowell, people groups from these temperate climates were also able to thrive when they moved to more tropical environments. Skills they had developed allowed them to make better use of the natural environment than native peoples, who had not had the advantage of being pushed by their climate into developing them. For example, Europeans and Chinese moving to tropical environments such as Australia or Southeast Asia were able to thrive, often surpassing natives who would otherwise be expected to have a home-court advantage.

So, before you knock the cold weather and move to Florida, give thanks for the challenges of a temperate climate. Having returned from a recent trip to South Florida, I can assure you that the folks who have already moved there are adapting to new challenges. No one can afford to sit still in the modern world, where change and adaptation are occurring with great speed. More to come on these topics, which relate to research I am doing in the area of technology and innovation in payment systems.