Thread by @eriktorenberg

Rough summary/takeaways of "Sovereign Individual" (written in 90s):

The thesis is that the internet is going to lead to unbundling & modularizing of government.

We'll transition from being a "citizen" of gov'ts to a "customer", + the change will mirror other tech revolutions.

Agricultural revolution led to rise of Church.

Industrial revolution led to rise of nation-state, discredited the Church.

Information age will lead to rise of sovereign individuals / startup societies, will force competition among gov'ts

Zooming out:

Consider protection:

When protection is hard, we rely on others to protect us—governments for example protect us externally w/ military, internally w/ police.

When technology makes protection easier (e.g. via encryption), we rely less on gov’t to serve that existential role.

The book claims that this phenomenon is the story of our time —that technology modularizes wars (e.g. decentralized terrorist orgs) and enables us to protect ourselves—and as a result we will rely less on governments to serve this role.

Long ago, this phenomenon — technology enabled protection leading to less reliance on external security — happened with chivalry.

Chivalry wasn’t a romantic notion as much as it was practical—it was a protective mechanism against violence.

As soon as better protective mechanisms came around (i.e police, security), chivalry wasn’t needed as much anymore, and became an anachronism.

The book predicts citizenship will go the way of chivalry, and instead of being a citizen we’ll be a “customer”

Citizen: You exist to serve government. “Ask what you can do for your country”

Customer: Government exists to serve you.

This is fundamental

What happens when people become customers of gov'ts?

Gov'ts compete to serve its customers, leading to more innovation & better "service"

Market serves as natural filter -- corrupt govt's will die.

Customers can more easily leave and choose the option that works best for them.

In future we’ll choose our jurisdiction / governments the way we chose our insurance policies or religions today

Back then, choosing your religion was crazy, the way choosing gov't today seems crazy—or at least infeasible for most people.

To better elucidate, let’s revisit how agricultural and industrial eras led to the rise & fall of church

Agricultural led to some big changes over hunter-gatherer era. We now had:

*private property
*"long-term"
*specialization of violence, bc now there was something to steal(!)

Church had the moral authority to provide ethical frameworks during chaos of agricultural revolution

Printing press undermined the church monopoly on word of God, even as it created new market for heresy

(similar to attempts on us gov’t today to suppress encrypt technology)

Which is why churches banned books.

The more people read, the less the church could maintain its monopoly on moral truth.

Similar w/ govts—The more people build decentralized and sovereignty-enabling technology, the less the monopoly government has on violence.

Which is why nation-states have a natural interest to fight wars — wars make nations/gov’ts indispensable.

The Church was perfect for feudalism (legally, morally, culturally), but ill fitted for Industrial Age, compared to nation-states which were better for wars.

Similarly, The State was perfect for industrial era (economies of scale, centralization of violence) but ill fitted for Information Age

What’s better for Information Age? Sovereign individual.

Ppl didn’t mind giving money to church when there was no other use for it, but after they could invest and earn money, giving money to the church made less sense.

Same with taxes and governments.

As soon as you rely less on gov’t to protect you, and (more importantly) notice other options for governance, you start to evaluate where your tax dollars are going more critically.

Democracy in particular was most effective in building up the power of the state.

This may sound intuitive, but democratic capitalism was an even more effective statecraft than communism, because it allowed people to at least earn money before it took a large %.

People see democracy & communism as diff systems, but zooming out, they both rely on gov't allocation of resources.

Similar to how ppl see Keynes & Friedman as different but, when compared to Austrian economics, they’re both gov't manipulating the money supply in diff ways.

Democracy and governments more broadly were perfect for industrial production era.

Characteristics of industrial era

— natural resources mattered
— mass production
— economies of scale
— monopolistic large enterprises
— mass employment
— high capital needs
— commodity labor

Information era of course has the opposite characteristics:

— natural resources don’t matter as much
— mass customization
— diseconomies of scale
— many small enterprises
— robots take jobs
— low capital needs

But, some people ask, won’t gov’t control the internet?

Governments have never established staple monopolies of violence over sea…. Meaning they won’t get cyberspace either, an infinite realm without physical boundaries

At the very least, the book is impressive in all that it predicted in the 90s

- iPhone
- crypto
- rising inequality and corresponding unrest
- the transformation from economic to cultural marxism
- rampant hyper capitalism
- rise of political correctness

& much more

One other thing the book claims is that, until recently, technology has always led to increasing centralization.

And for the first time, this trend is going to be reversed.

That's what enables the Sovereign Individual

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If you read the book, add your own reflections.