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The Sovereign Individual: Mastering the Transition to the Information Age
Two renowned investment advisors and authors of the bestseller The Great Reckoning bring to light both currents of disaster and the potential for prosperity and renewal in the face of radical changes in human history as we move into the next century.
The Sovereign Individual details strategies necessary for adapting financially to the next phase of Western civilization.
Few observers of the late twentieth century have their fingers so presciently on the pulse of the global political and economic realignment ushering in the new millennium as do James Dale Davidson and Lord William Rees-Mogg. Their bold prediction of disaster on Wall Street in Blood in the Streets was borne out by Black Tuesday. In their ensuing bestseller, The Great Reckoning, published just weeks before the coup attempt against Gorbachev, they analyzed the pending collapse of the Soviet Union and foretold the civil war in Yugoslavia and other events that have proved to be among the most searing developments of the past few years.
In The Sovereign Individual, Davidson and Rees-Mogg explore the greatest economic and political transition in centuries—the shift from an industrial to an information-based society. This transition, which they have termed "the fourth stage of human society," will liberate individuals as never before, irrevocably altering the power of government. This outstanding book will replace false hopes and fictions with new understanding and clarified values.
The Sovereign Individual details strategies necessary for adapting financially to the next phase of Western civilization.
Few observers of the late twentieth century have their fingers so presciently on the pulse of the global political and economic realignment ushering in the new millennium as do James Dale Davidson and Lord William Rees-Mogg. Their bold prediction of disaster on Wall Street in Blood in the Streets was borne out by Black Tuesday. In their ensuing bestseller, The Great Reckoning, published just weeks before the coup attempt against Gorbachev, they analyzed the pending collapse of the Soviet Union and foretold the civil war in Yugoslavia and other events that have proved to be among the most searing developments of the past few years.
In The Sovereign Individual, Davidson and Rees-Mogg explore the greatest economic and political transition in centuries—the shift from an industrial to an information-based society. This transition, which they have termed "the fourth stage of human society," will liberate individuals as never before, irrevocably altering the power of government. This outstanding book will replace false hopes and fictions with new understanding and clarified values.
448 pages, Paperback
First published January 1, 1997
About the author
James Dale Davidson
34 books131 followersJames Dale Davidson is an American writer and private investor. He specializes in the domain of economics and finance. Davidson had a successful career as a financial advisor, and in the year 1969, he established the National Taxpayers Union. James Dale Davidson was an alumna of the Oxford University. He pursued an undergraduate degree in the institution. As of now, we aren’t aware of any additional details about his education.
Currently, Mr. Davidson holds the position of Co-Editor in the department of Strategic Investment at Banyan Hill Publishing. He retired from the world of investment in the year 2004, only to eventually return to the firm.
He has spent a significant part of his life discussing about an overreaching government. He is best known as an economist and financial predictor, who allegedly predicted every significant financial event since the last thirty years.
Currently, Mr. Davidson holds the position of Co-Editor in the department of Strategic Investment at Banyan Hill Publishing. He retired from the world of investment in the year 2004, only to eventually return to the firm.
He has spent a significant part of his life discussing about an overreaching government. He is best known as an economist and financial predictor, who allegedly predicted every significant financial event since the last thirty years.
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April 17, 2018
KEY TAKEAWAYS/ACTIONABLES:
- Positioning: Healthcare vs Technology; Skills + Connections
- Career: These is no "job", just tasks/skills you complete. If you can teach yourself how to SOLVE PROBLEMS, you are ahead of the game.
- Social/Political: PERSONALIZED, Democratized power.
- Psychological: Losing Ikigai -- prioritize your CREATIVE OUTLET!!!
- Political: Set up mat in multiple countries
ACTIONABLE: Hone in on two skillsets in depth. Capitalize on becoming the best. The Top 1% will take 99% of customers.
The Transition of the Year 2000: The Fourth Stage of Human Society
1. Hunting and gathering societies
2. Agricultural societies
3. Industrial societies
4. Informational societies
- In the information age, a job will be a task that you do, not a thing that you have.
- As more money moves online, governments won’t be able to track or control it anymore. They’ll lose their power over commerce and won’t be able to treat their citizens as a farmer milking cows.
- The greatest resentment will likely be centered among the middle class in rich countries, they will feel they have the most to lose. Anyone receiving handouts from the government will resent the sovereign individuals who don’t support them.
- With technology increasing, we’ll move closer and closer to Neal Stephenson’s Metaverse in Snow Crash, where we live as much online as offline and conduct ourselves according to the online laws and customs, working in the cybereconomy.
Megapolitical Transformations in Historic Perspective
- You can’t rely on conventional information sources to give you an objective warning about how the world is changing and why. You have to FIGURE IT OUT YOURSELF!!!!!
- There are four key pieces to understanding megapolitcal changes:
1. LAND: Topography, the control and makeup of the land.
2. POWER: Climate, it’s change can precipitate major shifts in power. The 17th century was frought with social revolution.
3. HEALTHCARE: Microbes and disease can cause radical changes in power.
4. TECHNOLOGICAL: Technology plays the biggest and most impactful role in the new megapolitical changes though
East of Eden: The Agricultural Revolution and the Sophistication of Violence
- In the hunting gathering days, there was no reason to work more than the 10-15 hours a week you needed to do to secure food. Overkill was punished because the food would rot before it could be eaten, and decrease food available to you in the environment in the future.
The Last Days of Politics: Parallels Between the Decline of the Church and Nation-State
- Church vs Science compared to Government vs Science
The Life and Death of the Nation State
- The information age will require new mechanisms of representation and government to avoid chronic dysfunction and even social collapse. The past systems will break down as technology advances.
Megapolitics of the Information Age: The Triumph of Efficiency Over Power
- In the information age, if life becomes inoperable or undesirable in one location you’ll no longer be tied to it. You can simply leave and live elsewhere. A change in government could lead to companies fleeing overnight.
- Land resource: not limited by one place, portable
- Capital resource: lowered costs, lower barriers of entry and exit.
- Product cycle: obsolete faster, gains short-lived.
- Microprocessing: individualize work. low-skilled won't be able to contribute at all, builds resentment.
- One persons' contribution is exponential (even after death). Keep pushing boundaries, claiming frontiers, pulling away power from government.
- Power is democratized.
Transcending Locality: The Emergence of the Cyber Economy
1. Internet transactions
2. Long-distance (medical diagnosis, business, real estate)
3. Occurs outside jurisdiction
Trends: PERSONALIZED. Democratized.
Example: Used to be illegal to send fax. But those laws never last.
The End of Egalitarian Economics: The Revolution in Earnings Capacity in a World Without Jobs
- The minimum skill requirement increases for any meanignful contribution; therefore there will be more and more people at the bottom (99% to 99.9%)
- There's no "jobs", just skills/tasks to do. Example: movies (employed for the job, then go their separate ways).
- Abundant information. Knowledge is cheap. Skill is powerful (knowing how to use it).
Nationalism, Reaction, and the New Luddites
- Reaction is strongest in high standards of living (developed country), The neo-luddites will attract most of their adherents from the bottom ⅔ of income earners, underachievers with credentials who face downward mobility
- As it becomes easier to live comfortably and earn a high income anywhere, the pull to choose where to live based on price savings will be more appealing.
- if you want to take full advantage of the freedom of mobility, you should STAKE OUT A WELCOME MAT in multiple places beyond the one you were born in.
- Education: First, it was controlled by the Church. Then, it was controlled by the state. Now, it will be controlled and improved by technology, and it will be PERSONALIZED and INDIVIDUALIZED based on the student.
- People will CHOOSE THEIR JURISDICTIONS the same way they today choose their insurance carriers or religions. Jurisdictions that fail to provide a suitable mix of services will face bankruptcy and liquidation, like an incompetent business.
The Twilight of Democracy
- The information age will be the age of the independent contractor, rewarded based on PERFORMANCE and COMPETENCE, instead of the “company man.”
Morality and Crime in the Natural Economy of the Information Age
- increasingly valuable to be able to discern SIGNAL FROM NOISE!!!!!!! and know what to pay attention to (see Robert Greene).
1. The information overload puts a premium on brevity, which leads to abbreviation, which leaves out what is unfamiliar, which leaves out important parts of understanding the information.
2. There’s an increased value in broad OVERVIEWS and lower value of individual facts.
3. The growing tribalization and marginalization of life will STUNT DISCOURSE AND CRITICAL THINKING. Many people will shy away from conclusions that make them uncomfortable, even if they’re obvious.
Devolution and the Law of Diminishing Marginal Returns
- Losing a CREATIVE OUTLET!!! can lead to a nervous breakdown, we need an Ikigai, a reason to live.
- If you can teach yourself HOW TO SOLVE PROBLEMS, you have a bright career ahead of yourself. No matter where you live, you will find problems galore in need of solving. Those who would benefit from solutions of their problems will pay you handsomely to solve them.
- Positioning: Healthcare vs Technology; Skills + Connections
- Career: These is no "job", just tasks/skills you complete. If you can teach yourself how to SOLVE PROBLEMS, you are ahead of the game.
- Social/Political: PERSONALIZED, Democratized power.
- Psychological: Losing Ikigai -- prioritize your CREATIVE OUTLET!!!
- Political: Set up mat in multiple countries
ACTIONABLE: Hone in on two skillsets in depth. Capitalize on becoming the best. The Top 1% will take 99% of customers.
The Transition of the Year 2000: The Fourth Stage of Human Society
1. Hunting and gathering societies
2. Agricultural societies
3. Industrial societies
4. Informational societies
- In the information age, a job will be a task that you do, not a thing that you have.
- As more money moves online, governments won’t be able to track or control it anymore. They’ll lose their power over commerce and won’t be able to treat their citizens as a farmer milking cows.
- The greatest resentment will likely be centered among the middle class in rich countries, they will feel they have the most to lose. Anyone receiving handouts from the government will resent the sovereign individuals who don’t support them.
- With technology increasing, we’ll move closer and closer to Neal Stephenson’s Metaverse in Snow Crash, where we live as much online as offline and conduct ourselves according to the online laws and customs, working in the cybereconomy.
Megapolitical Transformations in Historic Perspective
- You can’t rely on conventional information sources to give you an objective warning about how the world is changing and why. You have to FIGURE IT OUT YOURSELF!!!!!
- There are four key pieces to understanding megapolitcal changes:
1. LAND: Topography, the control and makeup of the land.
2. POWER: Climate, it’s change can precipitate major shifts in power. The 17th century was frought with social revolution.
3. HEALTHCARE: Microbes and disease can cause radical changes in power.
4. TECHNOLOGICAL: Technology plays the biggest and most impactful role in the new megapolitical changes though
East of Eden: The Agricultural Revolution and the Sophistication of Violence
- In the hunting gathering days, there was no reason to work more than the 10-15 hours a week you needed to do to secure food. Overkill was punished because the food would rot before it could be eaten, and decrease food available to you in the environment in the future.
The Last Days of Politics: Parallels Between the Decline of the Church and Nation-State
- Church vs Science compared to Government vs Science
The Life and Death of the Nation State
- The information age will require new mechanisms of representation and government to avoid chronic dysfunction and even social collapse. The past systems will break down as technology advances.
Megapolitics of the Information Age: The Triumph of Efficiency Over Power
- In the information age, if life becomes inoperable or undesirable in one location you’ll no longer be tied to it. You can simply leave and live elsewhere. A change in government could lead to companies fleeing overnight.
- Land resource: not limited by one place, portable
- Capital resource: lowered costs, lower barriers of entry and exit.
- Product cycle: obsolete faster, gains short-lived.
- Microprocessing: individualize work. low-skilled won't be able to contribute at all, builds resentment.
- One persons' contribution is exponential (even after death). Keep pushing boundaries, claiming frontiers, pulling away power from government.
- Power is democratized.
Transcending Locality: The Emergence of the Cyber Economy
1. Internet transactions
2. Long-distance (medical diagnosis, business, real estate)
3. Occurs outside jurisdiction
Trends: PERSONALIZED. Democratized.
Example: Used to be illegal to send fax. But those laws never last.
The End of Egalitarian Economics: The Revolution in Earnings Capacity in a World Without Jobs
- The minimum skill requirement increases for any meanignful contribution; therefore there will be more and more people at the bottom (99% to 99.9%)
- There's no "jobs", just skills/tasks to do. Example: movies (employed for the job, then go their separate ways).
- Abundant information. Knowledge is cheap. Skill is powerful (knowing how to use it).
Nationalism, Reaction, and the New Luddites
- Reaction is strongest in high standards of living (developed country), The neo-luddites will attract most of their adherents from the bottom ⅔ of income earners, underachievers with credentials who face downward mobility
- As it becomes easier to live comfortably and earn a high income anywhere, the pull to choose where to live based on price savings will be more appealing.
- if you want to take full advantage of the freedom of mobility, you should STAKE OUT A WELCOME MAT in multiple places beyond the one you were born in.
- Education: First, it was controlled by the Church. Then, it was controlled by the state. Now, it will be controlled and improved by technology, and it will be PERSONALIZED and INDIVIDUALIZED based on the student.
- People will CHOOSE THEIR JURISDICTIONS the same way they today choose their insurance carriers or religions. Jurisdictions that fail to provide a suitable mix of services will face bankruptcy and liquidation, like an incompetent business.
The Twilight of Democracy
- The information age will be the age of the independent contractor, rewarded based on PERFORMANCE and COMPETENCE, instead of the “company man.”
Morality and Crime in the Natural Economy of the Information Age
- increasingly valuable to be able to discern SIGNAL FROM NOISE!!!!!!! and know what to pay attention to (see Robert Greene).
1. The information overload puts a premium on brevity, which leads to abbreviation, which leaves out what is unfamiliar, which leaves out important parts of understanding the information.
2. There’s an increased value in broad OVERVIEWS and lower value of individual facts.
3. The growing tribalization and marginalization of life will STUNT DISCOURSE AND CRITICAL THINKING. Many people will shy away from conclusions that make them uncomfortable, even if they’re obvious.
Devolution and the Law of Diminishing Marginal Returns
- Losing a CREATIVE OUTLET!!! can lead to a nervous breakdown, we need an Ikigai, a reason to live.
- If you can teach yourself HOW TO SOLVE PROBLEMS, you have a bright career ahead of yourself. No matter where you live, you will find problems galore in need of solving. Those who would benefit from solutions of their problems will pay you handsomely to solve them.
January 10, 2022
I really don't know how to review this book. It's like Kevin Kelly meets David Duke. It's at times insightful and horrifying: it vacillates between fascinating foresight into technology's impact on societies (some of which is playing out) and naked racism. (I'm updating my rating to 4 stars because while I don't necessarily agree with how the thesis of the book is articulated, specifically the political views of the authors, I think it's a *critical* book to read to understand the potential and real impact of technology on society. Certainly one of the top 5 books of the last 25 years. Just because it's odious doesn't mean it's not important.)
The authors clearly have an axe to grind: they think poor people deserve to be poor, that (despite mountains of evidence to the contrary) minorities of all stripes have equal opportunities as those available to straight white males to succeed, and that if it weren't for these damned kleptocratic democratic governments the John Galts amongst us would ascend to the realm of "Sovereign Individuals", i.e. people who rise above nations to be sovereign entities unto themselves (facilitated by technology, naturally), like some kind of Randian wet dream.
Now, the *idea* of technology empowering people to become incredibly creative, successful, productive, etc. makes total sense. Computers essentially give people superpowers, and you can see the returns on a massive scale in the rise of companies like Facebook and WhatsApp where the work of just a few people creates billions of dollars of value. (And those superpowers can be used for evil, too: the Gamergate doxxing hydra that morphed into 4chan's Trump troll army.)
But the authors' attitude about what this means for everyone else boils down to "fuck them, I got mine." It's like taking Gordon Gekko's "greed is good" maxim and taking it to its absolute extreme. Callous doesn't even *begin* to describe their worldview. Society only works inasmuch as there is a social contract; what's being posited here is the complete abnegation of that. What kind of future is that?
How many people choose the family they're born into and the circumstances they grow up in? Does anyone really think people would actually choose to be born into an abusive household, or to drug-addicted parents, or in a war zone they'll have to flee? The authors are totally incapable of imagining a world in which they were not born with the opportunities they had, or one in which luck hadn't gone their way. (Even with bountiful opportunities, chance still has an effect.) Either that or they deny the empirically real barriers that stand in the way of non-straight-white-males trying to succeed. (Ask MLK Jr. about how that went. Or, better yet, Michelle Alexander.) No, you can't blame everything on circumstances, but you can also admit that they have a material affect on outcomes--especially when those circumstances involve explicit efforts to legally disenfranchise and disempower people.
The optimist in me wants to understand how technology can be used to create a better world. Technology is an amoral force: it generally amplifies tendencies that already exist. The authors' view on the impact of technology is extraordinarily prescient, but the lens through which they apply that to society reinforces injustices perpetuated by people--behavior we can change if we choose to. That they see this as natural, rather than human-driven, is their moral failing.
To reduce it to a sentence, my main critique of the book is the authors see a neutral world where certain groups of people are inherently inferior and condemn them based on that, where in reality it's like they're bullies holding your wrist and smacking you with your own fist while saying "Stop hitting yourself! Stop hitting yourself!"
Addressing the actual points the book makes (about technology empowering individuals): the thesis is very compelling and prescient! The breakdown of nation-states will depend on the arms race between individual/corporate technology and the rule of law. The rule of law (and/or nations, how law is currently administered) is technology, and it can adapt and be adapted. It facilitates economic growth by, amongst other things, setting the ground rules for how people, companies, etc. interact. The big question is when/whether other forms of organizing people that operate outside nation-state legal frameworks achieve escape velocity or are brought within the ambit of existing legal systems.
Basically: are existing powers (companies, governments) better served by maintaining the existing technology we use to structure society (nation-states and rule of law)--does that rising tide lift all boats rapidly enough--or will the sovereign individuals (and corporations, which are really just big sovereign individuals) break away from that to create spheres of power unconstrained by any one country. And will nation-states move quickly to constrain it and preserve the status quo, or are we embarked upon a brave new corporatist world? And in what ways might that be better (freeing people from ossified power structures that have ground them underfoot for generations) or worse (if it's just "meet the new boss, same as the old boss, but now entirely untethered from moral considerations, purely guided by profit--and if that means perpetuating injustice, so be it")?
If you work in technology, it's well worth considering the argument and applying that lens to what you see going on around you.
The authors clearly have an axe to grind: they think poor people deserve to be poor, that (despite mountains of evidence to the contrary) minorities of all stripes have equal opportunities as those available to straight white males to succeed, and that if it weren't for these damned kleptocratic democratic governments the John Galts amongst us would ascend to the realm of "Sovereign Individuals", i.e. people who rise above nations to be sovereign entities unto themselves (facilitated by technology, naturally), like some kind of Randian wet dream.
Now, the *idea* of technology empowering people to become incredibly creative, successful, productive, etc. makes total sense. Computers essentially give people superpowers, and you can see the returns on a massive scale in the rise of companies like Facebook and WhatsApp where the work of just a few people creates billions of dollars of value. (And those superpowers can be used for evil, too: the Gamergate doxxing hydra that morphed into 4chan's Trump troll army.)
But the authors' attitude about what this means for everyone else boils down to "fuck them, I got mine." It's like taking Gordon Gekko's "greed is good" maxim and taking it to its absolute extreme. Callous doesn't even *begin* to describe their worldview. Society only works inasmuch as there is a social contract; what's being posited here is the complete abnegation of that. What kind of future is that?
How many people choose the family they're born into and the circumstances they grow up in? Does anyone really think people would actually choose to be born into an abusive household, or to drug-addicted parents, or in a war zone they'll have to flee? The authors are totally incapable of imagining a world in which they were not born with the opportunities they had, or one in which luck hadn't gone their way. (Even with bountiful opportunities, chance still has an effect.) Either that or they deny the empirically real barriers that stand in the way of non-straight-white-males trying to succeed. (Ask MLK Jr. about how that went. Or, better yet, Michelle Alexander.) No, you can't blame everything on circumstances, but you can also admit that they have a material affect on outcomes--especially when those circumstances involve explicit efforts to legally disenfranchise and disempower people.
The optimist in me wants to understand how technology can be used to create a better world. Technology is an amoral force: it generally amplifies tendencies that already exist. The authors' view on the impact of technology is extraordinarily prescient, but the lens through which they apply that to society reinforces injustices perpetuated by people--behavior we can change if we choose to. That they see this as natural, rather than human-driven, is their moral failing.
To reduce it to a sentence, my main critique of the book is the authors see a neutral world where certain groups of people are inherently inferior and condemn them based on that, where in reality it's like they're bullies holding your wrist and smacking you with your own fist while saying "Stop hitting yourself! Stop hitting yourself!"
Addressing the actual points the book makes (about technology empowering individuals): the thesis is very compelling and prescient! The breakdown of nation-states will depend on the arms race between individual/corporate technology and the rule of law. The rule of law (and/or nations, how law is currently administered) is technology, and it can adapt and be adapted. It facilitates economic growth by, amongst other things, setting the ground rules for how people, companies, etc. interact. The big question is when/whether other forms of organizing people that operate outside nation-state legal frameworks achieve escape velocity or are brought within the ambit of existing legal systems.
Basically: are existing powers (companies, governments) better served by maintaining the existing technology we use to structure society (nation-states and rule of law)--does that rising tide lift all boats rapidly enough--or will the sovereign individuals (and corporations, which are really just big sovereign individuals) break away from that to create spheres of power unconstrained by any one country. And will nation-states move quickly to constrain it and preserve the status quo, or are we embarked upon a brave new corporatist world? And in what ways might that be better (freeing people from ossified power structures that have ground them underfoot for generations) or worse (if it's just "meet the new boss, same as the old boss, but now entirely untethered from moral considerations, purely guided by profit--and if that means perpetuating injustice, so be it")?
If you work in technology, it's well worth considering the argument and applying that lens to what you see going on around you.
August 26, 2017
Implementation details of Atlas Shrugged.
Might have given it more stars, but my expectations were too high after this book getting stellar recommendations from people whose opinions I value.
So basically,
And since the authors are investment consultants (this book is 20 yr old, one of the authors is no more), they will help you in setting up investments in tax havens.
There are many criticisms of this book, the most strong being that it is not self-critical. For any hypothesis, disciplined thinking requires outlining with clarity how and when it can fail. But of course the authors did not cover those because they need to sell something.
Many of its concrete predictions have not come to pass. Some general ones are common understanding now, though (but may not have been in 1990s).
There is also the assumption that cultural change is super easy. The Globe-trotting elite can just adjust anywhere. Though it seems true, in the last chapter they do hint at the problems such life involves - mainly a sense of meaninglessness. The authors nail the main religion of these elite - 'agnostic humanism'. But they assert that every stable society needs a strong religion. They don't really solve the problem of what the new religion will be.
That said, the overall historical arc is mostly true, and some of the prophecies will come to pass. I just think that it could be shorter/much better. I will have another look at this, and maybe update this review.
Might have given it more stars, but my expectations were too high after this book getting stellar recommendations from people whose opinions I value.
So basically,
Lot of parallels between Church and Nation States -Like the Church fell in 1500s, the Nation State is falling now. Printing press killed the church. Internet is killing the nation states. Church was first ideal, and then corrupt. Politics was once ideal, now corrupt. Chivalry died 500 years ago. Citizenship is dying now.
Democracy is like Communism. Only smarter. Gets more output from you, dear productive individual, by giving you freedom and *then* taxes the hell out of it. Democracy has worked since 1789, But now its time has come.
The rich and the productive are taxed and their spoils are taken away to be redistributed to the low-skilled classes. But now with cryptocurrencies which cannot be taxed and demonitised, your money will be safe from governments.
Nation states have had a monopoly on violence because gunpowder changed the logic of violence. Now, not so much.
The new elite (Sovereign Individuals) will become more powerful - they will have their own sovereignties. These will be the top 1% and 1% of 1%. Those who don't have their own sovereignties will shop among jurisdictions. Countries will be like companies - they will have to offer attractive policies to customers, else they will just move.
And since the authors are investment consultants (this book is 20 yr old, one of the authors is no more), they will help you in setting up investments in tax havens.
There are many criticisms of this book, the most strong being that it is not self-critical. For any hypothesis, disciplined thinking requires outlining with clarity how and when it can fail. But of course the authors did not cover those because they need to sell something.
Many of its concrete predictions have not come to pass. Some general ones are common understanding now, though (but may not have been in 1990s).
There is also the assumption that cultural change is super easy. The Globe-trotting elite can just adjust anywhere. Though it seems true, in the last chapter they do hint at the problems such life involves - mainly a sense of meaninglessness. The authors nail the main religion of these elite - 'agnostic humanism'. But they assert that every stable society needs a strong religion. They don't really solve the problem of what the new religion will be.
That said, the overall historical arc is mostly true, and some of the prophecies will come to pass. I just think that it could be shorter/much better. I will have another look at this, and maybe update this review.
December 9, 2016
Prescient AF. Predicts everything from Bitcoin to Trump.
May 19, 2020
It is seldom that I list or review a book that I couldn't be bothered to read in full, but I made an exception for this one. James Dale Davidson, a US investor, and (Lord) William Rees-Mogg (former editor of The Times and father of Jacob Rees-Mogg MP) wrote a series of books with predictions on world economics and politics in the late 1980s and 1990s. This is the third one of the series published in 1997. They got some things right and some things wrong (as predictions do), but their books are still relevant because the thinking behind them inform the libertarian Right, and to a large extent the ideology (even if they don't dare to say it out loud) of the current Conservative and Republican parties in the UK and the US respectively.
It is hard to make out in this book who contributed what. I'd like to think that a former editor of the The Times would be cleverer than this and attribute most of the writing to Davidson, but I can't be sure (UK news magazine Private Eye used to refer to the former as "Mystic Mogg" due to these books).
In some ways, and that is a qualified compliment, this book can be read as a modern "Voluntary Servitude" by Etienne de la Boetie, or as a philosophical work by Hobbes or Rousseau about the origins of society and the state. But those were people who lived in the 16th, 17th and 18th C respectively.
Here we have a meandering discourse about the oppressive, violent nature of modern government, fat bureaucrats and the efforts by modern-day heroes to fight and undermine this oppression. What's not to like?
However, it doesn't take long to realise that this book is one long excuse for very rich individuals to hide their taxes abroad and let the rest of the losers fight it out amongst themselves. If 18th C pirates could have written a defense of their rapacious practices it would have looked a bit like "The Sovereign Individual".
Davidson and Rees-Mogg are big on name-dropping, so even George Orwell gets an approving quote in this book for his fight against Big Brother, but just like in Orwell's novel 1984 "freedom is slavery", in this book tax evaders become freedom fighters, and law-abiding tax-paying citizens become the stupid ones.
Democracy will soon be outdated the authors predict, to be replaced by the choices of the very rich. The electorate is just a cabal that tries to get their hand on the wealth of the rich. But: "Cyberspace is the ultimate offshore jurisdiction. An economy with no taxes. Bermuda in the sky with diamonds". "The twentieth-century nation-state, with all its pretensions, will starve to death as its tax revenues decline."
To be fair, Davidson and Rees-Mogg do admit to not being sooth-sayers, to also having got things wrong in previous books, and are not racist or sizeist: In the near-future they imagine that anyone, of any colour or size can make it in the new cyber (read: tax-free) economy. So that's a huge fillip for any oversized, relationship-challenged spiv sitting in front of a computer screen moving money about.
I think the title is clever, the sovereign individual. It means being independent, it means being in control, and it is an old high value coin all at the same time.
But see who they included with a special mention in their list of "oppressed" high-value sovereign individuals? Mr Osama Bin Laden himself, indeed... To prove the point that governments will use violence to go after newly-liberated "Sovereign Individuals" they mention the poor "exiled Saudi millionaire, Osama Bin Laden" who "became the first person in history to have his satellite phone targeted for attack by cruise missiles". Bad, oppressive government! Remember this is 1997... I bet they regretted this paragraph later on (see p21).
Of course, whilst the authors applaud the ability of rich individuals to go global to avoid the clutches of national Inland Revenues, they are hell-bent against a global government, or global cooperation by nation states to go after them! That would be so unfair!
In short this is a book that likes to pretend it is a philosophical standard-bearer for oppression fighting individuals, but it is in fact a spiv's manifesto, an apologia for rich tax dodgers without empathy for the rest of their fellow citizens. If you think about opening up a shell company or a trust fund in a tax haven, but feel a little bit guilty, you could read this book and sleep a little bit better, after all you are really a freedom fighter....
It is hard to make out in this book who contributed what. I'd like to think that a former editor of the The Times would be cleverer than this and attribute most of the writing to Davidson, but I can't be sure (UK news magazine Private Eye used to refer to the former as "Mystic Mogg" due to these books).
In some ways, and that is a qualified compliment, this book can be read as a modern "Voluntary Servitude" by Etienne de la Boetie, or as a philosophical work by Hobbes or Rousseau about the origins of society and the state. But those were people who lived in the 16th, 17th and 18th C respectively.
Here we have a meandering discourse about the oppressive, violent nature of modern government, fat bureaucrats and the efforts by modern-day heroes to fight and undermine this oppression. What's not to like?
However, it doesn't take long to realise that this book is one long excuse for very rich individuals to hide their taxes abroad and let the rest of the losers fight it out amongst themselves. If 18th C pirates could have written a defense of their rapacious practices it would have looked a bit like "The Sovereign Individual".
Davidson and Rees-Mogg are big on name-dropping, so even George Orwell gets an approving quote in this book for his fight against Big Brother, but just like in Orwell's novel 1984 "freedom is slavery", in this book tax evaders become freedom fighters, and law-abiding tax-paying citizens become the stupid ones.
Democracy will soon be outdated the authors predict, to be replaced by the choices of the very rich. The electorate is just a cabal that tries to get their hand on the wealth of the rich. But: "Cyberspace is the ultimate offshore jurisdiction. An economy with no taxes. Bermuda in the sky with diamonds". "The twentieth-century nation-state, with all its pretensions, will starve to death as its tax revenues decline."
To be fair, Davidson and Rees-Mogg do admit to not being sooth-sayers, to also having got things wrong in previous books, and are not racist or sizeist: In the near-future they imagine that anyone, of any colour or size can make it in the new cyber (read: tax-free) economy. So that's a huge fillip for any oversized, relationship-challenged spiv sitting in front of a computer screen moving money about.
I think the title is clever, the sovereign individual. It means being independent, it means being in control, and it is an old high value coin all at the same time.
But see who they included with a special mention in their list of "oppressed" high-value sovereign individuals? Mr Osama Bin Laden himself, indeed... To prove the point that governments will use violence to go after newly-liberated "Sovereign Individuals" they mention the poor "exiled Saudi millionaire, Osama Bin Laden" who "became the first person in history to have his satellite phone targeted for attack by cruise missiles". Bad, oppressive government! Remember this is 1997... I bet they regretted this paragraph later on (see p21).
Of course, whilst the authors applaud the ability of rich individuals to go global to avoid the clutches of national Inland Revenues, they are hell-bent against a global government, or global cooperation by nation states to go after them! That would be so unfair!
In short this is a book that likes to pretend it is a philosophical standard-bearer for oppression fighting individuals, but it is in fact a spiv's manifesto, an apologia for rich tax dodgers without empathy for the rest of their fellow citizens. If you think about opening up a shell company or a trust fund in a tax haven, but feel a little bit guilty, you could read this book and sleep a little bit better, after all you are really a freedom fighter....
January 26, 2019
I read this book two years ago during the 2016 election. At the time, it was getting coverage in the Twitterverse for being both a good explanation for the resurgence of nationalist and populist ideologies, as well as the book that predicted Bitcoin (in 1997!).
I re-read it more thoroughly and got a lot more out of it having thought more about bitcoin and cryptocurrency more broadly in the intervening two years.
The authors look at the logic of the information age and forecast how we will see society change over the coming decades.
To hard sell it: It’s a dense read and can come off as (read: is) a paean to libertarianism if that’s not your thing. Regardless, the authors got a lot right in terms of understanding the logic of the technology and it’s hard to think of a book that has more shaped my thinking about where the world is heading over the coming decades.
I re-read it more thoroughly and got a lot more out of it having thought more about bitcoin and cryptocurrency more broadly in the intervening two years.
The authors look at the logic of the information age and forecast how we will see society change over the coming decades.
To hard sell it: It’s a dense read and can come off as (read: is) a paean to libertarianism if that’s not your thing. Regardless, the authors got a lot right in terms of understanding the logic of the technology and it’s hard to think of a book that has more shaped my thinking about where the world is heading over the coming decades.
February 13, 2018
One of my favourite books is The Moral Animal. It does a great job of explaining the connection between the mental organs and behaviour, and does justice to the explanatory line on its cover - "why we are the way we are". I liked it a lot because it did a great job of helping me understand the reasons behind my mindset, relationships and interactions with the world at large. While that book helped me understand myself, this one helped me understand the world much better.
Considering that it was published in 1997, this is as much a prediction machine as it is a brilliant book. It took at least till the middle of the last decade for even the internet to manifest itself in the form we are now familiar with. Therefore, accurately predicting the rise of e-commerce and cryptocurrency (referred to as cyber currency) is a feat in itself. The projections are not just in the field of business but cover social, economical, societal, political and even moral aspects as well. For instance, the rise of nationalism, filter bubbles, the twist in increasing income disparity (from between nations to within nations) because of lack of access are all themes that are being played out now.
But as with the other book I mentioned, the admiration for this one too is largely because of the way the 'why' has been thought through and explained. From quickly using timeframes of 500 years to show shifts (and reasons) from hunter-gatherer to agricultural to industrial eras, to drawing parallels between the destruction of the Church's monopoly and the future of the nation state, the book shows patterns and cycles and more importantly, the common forces that have been shaping the world. In the current shift, it explains how the very factors that drove both geopolitics and business in the industrial age will now work against them in the information age. The title refers to the rise of the individual and his/her sovereignty in the scheme of things as monopolies capitulate and he/she becomes less citizen and more consumer of even things like taxation!
I really liked the flow of the book and the largely sequential narrative that drives home the point of why the events and themes that the authors predict are likely to happen. The articulation is top notch and yet, very accessible. In the end, it even gives a bit of a how-to guide in case one believes in the conclusions.
A fantastic read if one is even remotely interested in the system of the world.
P.S. I must admit to a little bias since the book validates one of my favourite hypotheses - the fall of the nation state and its trappings like patriotism!
Considering that it was published in 1997, this is as much a prediction machine as it is a brilliant book. It took at least till the middle of the last decade for even the internet to manifest itself in the form we are now familiar with. Therefore, accurately predicting the rise of e-commerce and cryptocurrency (referred to as cyber currency) is a feat in itself. The projections are not just in the field of business but cover social, economical, societal, political and even moral aspects as well. For instance, the rise of nationalism, filter bubbles, the twist in increasing income disparity (from between nations to within nations) because of lack of access are all themes that are being played out now.
But as with the other book I mentioned, the admiration for this one too is largely because of the way the 'why' has been thought through and explained. From quickly using timeframes of 500 years to show shifts (and reasons) from hunter-gatherer to agricultural to industrial eras, to drawing parallels between the destruction of the Church's monopoly and the future of the nation state, the book shows patterns and cycles and more importantly, the common forces that have been shaping the world. In the current shift, it explains how the very factors that drove both geopolitics and business in the industrial age will now work against them in the information age. The title refers to the rise of the individual and his/her sovereignty in the scheme of things as monopolies capitulate and he/she becomes less citizen and more consumer of even things like taxation!
I really liked the flow of the book and the largely sequential narrative that drives home the point of why the events and themes that the authors predict are likely to happen. The articulation is top notch and yet, very accessible. In the end, it even gives a bit of a how-to guide in case one believes in the conclusions.
A fantastic read if one is even remotely interested in the system of the world.
P.S. I must admit to a little bias since the book validates one of my favourite hypotheses - the fall of the nation state and its trappings like patriotism!
March 11, 2020
Kudos to the publisher for finally making this available as an audiobook. I couldn’t imagine a title more suited to this format. The new 2020 preface by Peter Thiel is short but good. This book is a real eye-opener (or “red pill” if you prefer). The authors would be easily dismissed as crazed conspiracy theorists or fear-mongers, if it weren’t for the fact that so many of their predictions have come true since the last two decades that the book was published.
They managed to predict (with alarming accuracy) everything from Bitcoin, e-commerce/Amazon, video chat, the widening effects of globalization, the gig economy (brought on by the microprocessing revolution), the ballooning U.S. college loan debt bubble, to the surprise mainstream popularity of Jordan Peterson and Trump.
Explains the history and evolution of human power balance, conflict, and war – all the way from the caveman days until the present day Information Age. It then proceeds to forecast where societies are likely to be headed in the future, and does it in an OCD-level of detail. It’s worth noting that the "MTV generation" as described by the book has since been replaced by the "social media generation,” which has had exponentially greater cultural influence worldwide.
I haven’t read Sapiens or Homo Deus, but I imagine both were heavily inspired by this book. Yuval Harari just recently gave an insightful talk at Davos: https://www.weforum.org/agenda/2020/0...
They managed to predict (with alarming accuracy) everything from Bitcoin, e-commerce/Amazon, video chat, the widening effects of globalization, the gig economy (brought on by the microprocessing revolution), the ballooning U.S. college loan debt bubble, to the surprise mainstream popularity of Jordan Peterson and Trump.
Explains the history and evolution of human power balance, conflict, and war – all the way from the caveman days until the present day Information Age. It then proceeds to forecast where societies are likely to be headed in the future, and does it in an OCD-level of detail. It’s worth noting that the "MTV generation" as described by the book has since been replaced by the "social media generation,” which has had exponentially greater cultural influence worldwide.
I haven’t read Sapiens or Homo Deus, but I imagine both were heavily inspired by this book. Yuval Harari just recently gave an insightful talk at Davos: https://www.weforum.org/agenda/2020/0...
July 6, 2021
After reading this boook after almost 25 years i'm suprised not by how many things they got wrong (quite a lot) or how many of them were completely trivial (Y2K bug!) but how many they got so right. I've reached for it because Peter Thiel said that it influenced him greatly when he was working on paypal. After reading it i see that it influenced him to do many things in crypto, longjevity, taxes and structuring his affairs in a certain way as well.
Awesome book. Very meta and libertarian.
Awesome book. Very meta and libertarian.
April 15, 2018
Equal parts history and prophecy, The Sovereign Individual is one of the most engaging books I’ve ever read. The reader doesn’t need to agree with all of the conclusions in order to get a lot out of it. This is a thinking person’s book and only those that want to be challenged will enjoy it - similar to Antifragile or Reality Transurfing. The authors predicted a rise in nationalism (the type leading to Brexit and Trump) before the new millennium—in 1997–writing, “Politicians willing to cater to the insecurities of those whose relative talents fall well down on Ammon’s turnip will come noisily to the fore in almost every country.” They also foresaw cryptocurrencies, writing “As cybercommerce begins, it will inevitably lead to cybermoney [which] will consist of encrypted sequences of multihundred-digit prime numbers...It will also be divisible into the tiniest fraction of value. It will be tradable at a keystroke in a multitrillion-dollar wholesale market without borders.” Mind you this was written a decade before Satoshi’s paper which was a decade before bitcoin’s prevalence. Ultimately, the authors believe these forces will lead the winners of the Information Age to form “devolved microstates hosting Sovereign Individuals” similar to the ones fictionalized in Malka Older’s Infomocracy (which I now want to re-read). The authors conclude by advocating for “traditional liberal education”: “If you teach yourself how to solve problems...you will find problems in need of solving [and] those who would benefit from solutions of their problems will pay you handsomely to effect them.”
In the authors own words: “The argument of this book is that the increased capacity of individuals to protect their transactions and their assets from predatory taxation implies a decline in the redistribution of resources, along with less centralized social control, less regulation and regimentation, and, ultimately, devolution of territory.”
In the authors own words: “The argument of this book is that the increased capacity of individuals to protect their transactions and their assets from predatory taxation implies a decline in the redistribution of resources, along with less centralized social control, less regulation and regimentation, and, ultimately, devolution of territory.”
October 4, 2020
Манифест и исследование процесса денационализации человека. Гениально для книги 1997 года. Понятно что пальцем в небо, но описан вирус, призванный остановить свободное передвижение людей по миру, опасное для поддержания мифов национальных государств. Описано также и возможное движение за виктимизацию все более широких групп населения. Многое из описанного Харари есть во вполне четком изложении здесь. Из минусов - можно смело убирать все, касающееся текущей политической повестки - Клинтон, Коль и тп. Истрические экскурсы интересны, но призваны доказать в основном точку зрения авторов. Недостаток критических взглядов и логики. Рекомендую всем интересующимся вопросами будущего мироустройства, без этой книги понимание не будет полным. Читал по рекомендации Равиканта
February 15, 2021
The book's most important prediction hasn't materialized. In the end the state found a way to tax online businesses, so the big transition to a stateless society hasn't happened. The authors make a big deal of encryption. And yet we still pay taxes in 2021, even though our online purchases and online banking are all based on encrypted communication. Bummer.
Reading this 1997 book in 2021, it's tempting to think that blockchain will change things - that *now* the internet will finally be decentralized, economic activity will be untaxable, and the state will collapse. Maybe this book wasn't wrong, just early? But that's like being a marxist who sees every financial crisis as *the* ultimate crisis of capitalism. The state has adapted to disruptive technologies before - even to encryption -, it might very well adapt to blockchain and to quantum computing and to whatever comes next.
Other predictions have materialized though. The part about "cybercash" is essentially about Bitcoin - except that it predates Bitcoin by eleven years. The authors talk about how "cybercash" will make it harder for states to tax through inflation, and it is precisely in countries that have seen inflation rise in the 2010s, like Argentina and Venezuela, that Bitcoin has been most popular.
It's also hard not to think of Estonia's e-residency program, created in 2014, when the authors predict small nations competing for citizens, and that such competition wouldn't necessarily involve immigration. And it's impossible not to think about Amazon Turk and Upwork when the authors talk about technology will accelerate the transition from jobs to project-specific work - a post-Coasean economy.
Also, the authors anticipate the hordes of humanities majors and journalists with no no marketable skills who have turned against technology and capitalism:
“The nationalist and Luddite reaction will be strongest, however, not among the very poor but among persons of middling skills, underachievers with credentials, who came of age during the industrial era and face downward mobility.”
Relatedly, the authors correctly predict the multiplication of self-declared (and more or less officially recognized) "oppressed" categories. And they offer a neat theory about it: "We see the growth of victimization as mainly an attempt to buy social peace by not only widening membership in the meritocracy as [Christopher] Lash argues, but also by reconstituting the rationalizations for income redistribution."
Fake news and echo chambers are also there: "you'll even be able to order a nightly news report that simulates the news you would like to hear. [...] You'll see any story you wish, true or false, unfold on your television/computer".
It's also great to be reminded of how absurd it is to consider "fair" that "different persons should pay wildly different amounts for the services of government". Why should someone with an income of US$ 2X pay twice as much tax than someone with an income of US$ X? If anything policing wealthier neighborhoods is *cheaper* than policing poorer neighborhoods. In fact the lower your income the more likely you will use up *more* state resources, so you should pay more taxes, not less.
Finally, every now and then it's good to be reminded that our faith in democracy is no less ludicrous than a medieval peasant's faith in the Church. The authors do a good job drawing parallels between the religious myths of 1000 years ago and the civic myths of today. The state is nothing more than the stationary bandit of Mancur Olson's "Power and Prosperity" - but the mythology around the state is strong and it's easy to forget that we're all serfs.
Reading this 1997 book in 2021, it's tempting to think that blockchain will change things - that *now* the internet will finally be decentralized, economic activity will be untaxable, and the state will collapse. Maybe this book wasn't wrong, just early? But that's like being a marxist who sees every financial crisis as *the* ultimate crisis of capitalism. The state has adapted to disruptive technologies before - even to encryption -, it might very well adapt to blockchain and to quantum computing and to whatever comes next.
Other predictions have materialized though. The part about "cybercash" is essentially about Bitcoin - except that it predates Bitcoin by eleven years. The authors talk about how "cybercash" will make it harder for states to tax through inflation, and it is precisely in countries that have seen inflation rise in the 2010s, like Argentina and Venezuela, that Bitcoin has been most popular.
It's also hard not to think of Estonia's e-residency program, created in 2014, when the authors predict small nations competing for citizens, and that such competition wouldn't necessarily involve immigration. And it's impossible not to think about Amazon Turk and Upwork when the authors talk about technology will accelerate the transition from jobs to project-specific work - a post-Coasean economy.
Also, the authors anticipate the hordes of humanities majors and journalists with no no marketable skills who have turned against technology and capitalism:
“The nationalist and Luddite reaction will be strongest, however, not among the very poor but among persons of middling skills, underachievers with credentials, who came of age during the industrial era and face downward mobility.”
Relatedly, the authors correctly predict the multiplication of self-declared (and more or less officially recognized) "oppressed" categories. And they offer a neat theory about it: "We see the growth of victimization as mainly an attempt to buy social peace by not only widening membership in the meritocracy as [Christopher] Lash argues, but also by reconstituting the rationalizations for income redistribution."
Fake news and echo chambers are also there: "you'll even be able to order a nightly news report that simulates the news you would like to hear. [...] You'll see any story you wish, true or false, unfold on your television/computer".
It's also great to be reminded of how absurd it is to consider "fair" that "different persons should pay wildly different amounts for the services of government". Why should someone with an income of US$ 2X pay twice as much tax than someone with an income of US$ X? If anything policing wealthier neighborhoods is *cheaper* than policing poorer neighborhoods. In fact the lower your income the more likely you will use up *more* state resources, so you should pay more taxes, not less.
Finally, every now and then it's good to be reminded that our faith in democracy is no less ludicrous than a medieval peasant's faith in the Church. The authors do a good job drawing parallels between the religious myths of 1000 years ago and the civic myths of today. The state is nothing more than the stationary bandit of Mancur Olson's "Power and Prosperity" - but the mythology around the state is strong and it's easy to forget that we're all serfs.
December 3, 2021
On the one hand their predictions are beyond incredible - it was 1997 and they were quite accurately calling the kind of populism that led to Trump as well as the app based gig economy that was not even imagined at the time ("future" predictions include decentralized finance and cybermoney) - on the other for a couple of men who're able to see so well into the future they definitely want to take a lot of the past with them. I'm torn on rating this - it's a brilliant picture of not only what tech was going to do (and has done) since 1997 but their projections for the future are right now happening in front of our eyes with web3. Then their worldview...it's some sort of elitist Randian libertarian mess that takes the humanity out of people and treats everyone as nodes. You know how it is - social factors, discrimination, racism, complexities of gender issues, these are all concocted categories as is history really. None of it matters to the present - particularly NOT when you're referring to justice. That's simply a money grab. No no, everything can be reduced to the market, and the market is god, the market decides all. That's fantastic when the market's rigged in your direction isn't it? My position would be that those social elements do actually matter (funny that) and not acknowledging them corrupts any sort of "fairness" you hope to obtain from your cold clinical vision of the "market".
There's no denying the changes they're talking about will happen - they are right now. And this might shock but some of their ideas are actually attractive if you ARE dealing simply with nodes. Which is more and more how governance will begin to look. One way or another our identity in the digital world will matter to a greater degree. In that sphere, we are all nodes and we won't be face to face with anything that could bias us in a particular direction (race, gender, age, etc) Yet there's a settling of accounts to be had - they allude to much of it here from the perspective of those with the most to lose.
This is a challenging read as it's brilliant but cold, lacking of empathy and clinical yet highly accurate. So take the positive and leave whatever is negative. The gift here is some serious insight as to what the next decade or two might hold - so take that along with their disregard for social issues as a perfect picture of the challenges facing us in a world that will change faster than many of us can fathom.
There's no denying the changes they're talking about will happen - they are right now. And this might shock but some of their ideas are actually attractive if you ARE dealing simply with nodes. Which is more and more how governance will begin to look. One way or another our identity in the digital world will matter to a greater degree. In that sphere, we are all nodes and we won't be face to face with anything that could bias us in a particular direction (race, gender, age, etc) Yet there's a settling of accounts to be had - they allude to much of it here from the perspective of those with the most to lose.
This is a challenging read as it's brilliant but cold, lacking of empathy and clinical yet highly accurate. So take the positive and leave whatever is negative. The gift here is some serious insight as to what the next decade or two might hold - so take that along with their disregard for social issues as a perfect picture of the challenges facing us in a world that will change faster than many of us can fathom.
September 9, 2022
Unexpected gem. A lot of interesting information, things that make you think. All well put together, I will reread it for sure because this was quite a big one.
July 18, 2021
It starts rough in talking about Y2K bug and what might happen. We are in 2021, that is old shit. So one feels this is a really old book. After the chapter(s) about Y2K they start talking about the future which can be very interessting and its fun to hear what they have been able to talk about in 1999.
Its fun to hear how much they are potentially missing on. Speech to text was something they really thought would boom. But that was a swing and miss for now. It is coming slowly, but taking some time to really take off.
They did talk a lot about governments and digital economy. That globalization is happening and governments will lose some of its power. This is partly happening with crypto and SSI, but not to the extent being told in this book, yet.
There is a lot of interesting thought experiments they are coming with during the book which is why I kept with it, but it does feel outdated to listen to visionary thoughts that is 20 years old.
I would love a similar book, published this year, or last year.
So if anyone has any good and similar books for today, let me know.
PS: I do wish I had read this book in 2000, and that i believed much of it. Then it would have been much easier to get into cryptocurrency in early 2008
Its fun to hear how much they are potentially missing on. Speech to text was something they really thought would boom. But that was a swing and miss for now. It is coming slowly, but taking some time to really take off.
They did talk a lot about governments and digital economy. That globalization is happening and governments will lose some of its power. This is partly happening with crypto and SSI, but not to the extent being told in this book, yet.
There is a lot of interesting thought experiments they are coming with during the book which is why I kept with it, but it does feel outdated to listen to visionary thoughts that is 20 years old.
I would love a similar book, published this year, or last year.
So if anyone has any good and similar books for today, let me know.
PS: I do wish I had read this book in 2000, and that i believed much of it. Then it would have been much easier to get into cryptocurrency in early 2008
November 6, 2016
The Sovereign Individual is incredibly prescient for a book written in 1997. Had I read this book in its year of publication, I probably would have dismissed it as an alarmist-elitist rant. But reading it after two decades since its publication, I am quite surprised how accurate many of its prediction are. The authors rightly predicted the role of cyber economy, crypto-currencies, income disparity, automation of low skilled jobs, rise of nationalism & extreme right-wing groups across the globe, rise of neo-luddites and the role of silicon valley entrepreneurs. Although many other events predicted in the book haven't happened yet, I am inclined to agree with most of their views. The main thesis of the book is that, in the twenty-first century, citizens will be more of a customer to governments and governments will act more as a service provider than a political institution. A thought provoking read. Highly recommended
June 6, 2017
A jumbled mess of a book. It's written by two financial advisors posing as armchair historians. The book is loosely strung together by short paragraphs, each with their own title. The only parts worth reading are the sections on cybermoney.
They actually advocate moving your money to offshore tax havens in Bermuda and give you the name of the service to contact. Lots of cringey Bible references and quotes.
They actually advocate moving your money to offshore tax havens in Bermuda and give you the name of the service to contact. Lots of cringey Bible references and quotes.
January 15, 2022
The authors have a tendency to belabor the point and over-explain even the simplest concepts. As a result, this is an incredibly dry read that would have benefited from a more empowered editor. That said, there is no denying just how prescient The Sovereign Individual is. It is 2020 as I write this, some 24 years after publication, and many predictions that no doubt sounded absurd in 1996 have come true: the gig economy, telework, social media filter bubbles, smart contracts, and even cryptocurrency. The most profound predictions of the book have yet to materialize, but seem ever more plausible.
The premise of The Sovereign Individual is that increasing technology-enabled disruptions to the economy will ultimately weaken the power of the state vis-a-vis its citizens, enabling individuals to (eventually) lead sovereign, post-national lives. The defanged state will no longer be able to charge what it wishes (in taxes) to a captive citizenry; instead, it will compete with other states to provide services at the lowest possible cost (otherwise workers and companies will simply conduct business in a competing jurisdiction). This "fourth stage" of human civilization, brought about by the Information Revolution, will lead to the decline of the nation-state, just as the advent of the printing press and the Gunpowder Revolution contributed to the decline of the Catholic Church as a state power.
While many of the technological disruptions predicted by The Sovereign Individual have materialized, their ultimate collective impact on the nation-state remains to be seen. As Peter Thiel notes in the preface, the rise of China was one significant oversight on the part of the authors. The Chinese Communist Party's use of mass surveillance, internet censorship, and social credit scores demonstrates that technology can also be used to empower the state at the expense of the individual. In fact, this nationalist, authoritarian model is on the rise globally (e.g. Turkey). To their credit, the authors do predict that nationalism — and the skepticism of globalization, immigration, and free trade that it entails — will rise in the interim. These repressive uses of technology are, no doubt, a direct response to the threat technology poses to the nation-state. Perhaps they are the death throes of a dying model. Time will tell.
All things considered, this is a work of incredible foresight, one that has many lessons — and words of warning — that are still worth heeding today.
The premise of The Sovereign Individual is that increasing technology-enabled disruptions to the economy will ultimately weaken the power of the state vis-a-vis its citizens, enabling individuals to (eventually) lead sovereign, post-national lives. The defanged state will no longer be able to charge what it wishes (in taxes) to a captive citizenry; instead, it will compete with other states to provide services at the lowest possible cost (otherwise workers and companies will simply conduct business in a competing jurisdiction). This "fourth stage" of human civilization, brought about by the Information Revolution, will lead to the decline of the nation-state, just as the advent of the printing press and the Gunpowder Revolution contributed to the decline of the Catholic Church as a state power.
While many of the technological disruptions predicted by The Sovereign Individual have materialized, their ultimate collective impact on the nation-state remains to be seen. As Peter Thiel notes in the preface, the rise of China was one significant oversight on the part of the authors. The Chinese Communist Party's use of mass surveillance, internet censorship, and social credit scores demonstrates that technology can also be used to empower the state at the expense of the individual. In fact, this nationalist, authoritarian model is on the rise globally (e.g. Turkey). To their credit, the authors do predict that nationalism — and the skepticism of globalization, immigration, and free trade that it entails — will rise in the interim. These repressive uses of technology are, no doubt, a direct response to the threat technology poses to the nation-state. Perhaps they are the death throes of a dying model. Time will tell.
All things considered, this is a work of incredible foresight, one that has many lessons — and words of warning — that are still worth heeding today.
August 20, 2018
If you want to know what the anti-democratic super-rich think of the rest of us, read this. The son of the second author is using this as a playbook as we speak?
April 25, 2020
4/2020:
Timely for sure and recommended reading for those who haven't in a time of COVID. But I searched for a coherent framework for a second time and still didn't find it. "Literary gumbo," indeed.
1/2018:
In a sprawling tangle of arguments, Davidson and Rees-Mogg construct a view of why nation states came into existence, why they are failing (1997), and the world and systems of human organization that will replace them.
The essence of the argument is something like this:
(A) Starting with the emergence of gunpowder weapons, there came tremendous advantages to scale in a group of humans' ability to enact violence and protect against it. Your number of persons with guns had better exceed the number of persons with guns in your enemy's army, otherwise all of your farms are as good as plundered. Hence the rise of the nation-state and associated national myths in the 18th and 19th centuries. And in a couple of good examples they point out just how absurd some of these consolidations and agglomerations were e.g. langues d'oil and Occitan speakers smushed into a single "French" state. (My own addition - even contemporaries seemed to have this realization, see Metternich on Italy: "The word 'Italy' is a geographical expression, a description which is useful shorthand, but has none of the political significance the efforts of the revolutionary ideologues try to put on it")
(B) In our Information Age, highly empowered individuals and small groups displace the value of nation-states' scaled armies. No number of aircraft carriers could have saved us from 9/11 (again, the book was written in '97, this is my own gloss). A group of hackers or even a single hacker could be far more deadly or destructive than any standing army. The authors claim on several occasions that Microsoft could be more dangerous than 90% of nation states.
(C) Nation states and their ability to organize large standing armies are thus no longer providing a valuable, irreplaceable service to their constituents. And the ramifications are manifold. Highly-talented individuals will seek ways of escaping the state or effectively become mobile "shoppers" between states in order to escape extortive taxation that doesn't return a useful thing to the payer. They'll accumulate wealth in cryptocurrencies outside the reach of government and immune from inflation. Masses of unskilled humans dependent upon state welfare will lose benefits as the state withers. Inequality will grow and there will probably be violence that comes with it. Humans will at long last be free. Fin.
There are a lot of compelling arguments in The Sovereign Individual that the above doesn't encapsulate. The book really does not stick to a clearly rendered line of reasoning and a form to match it - it's literary gumbo. And beyond that I think that (perhaps unfortunately) some of the best bits are in these edge arguments - e.g. that the internet will facilitate highly individualized news feeds; fake news; the rise of cryptocurrencies; digital nomadry - which proved to be highly prescient. There is definitely some kernel of truth here.
But I think that the deductive approach employed here also fails to miss some things that would be obvious if we rendered real scenarios on top of abstractions:
- We still manufacture a lot of physical things in this world and I'm not sure that such a huge proportion of economic activity will necessarily exist in cyberspace.
- I don't think that people are quite so mercenary and are so willing to move around from geography to geography on whims.
- Not sure how motivated highly-skilled individuals will be to achieve tax savings at the expense of dismantling e.g. Medicaid.
It's ultimately thought-provoking, and I don't regret reading this. The fundamental point - that the nation state has less purchase on the individual than ever before - is probably right.
Timely for sure and recommended reading for those who haven't in a time of COVID. But I searched for a coherent framework for a second time and still didn't find it. "Literary gumbo," indeed.
1/2018:
In a sprawling tangle of arguments, Davidson and Rees-Mogg construct a view of why nation states came into existence, why they are failing (1997), and the world and systems of human organization that will replace them.
The essence of the argument is something like this:
(A) Starting with the emergence of gunpowder weapons, there came tremendous advantages to scale in a group of humans' ability to enact violence and protect against it. Your number of persons with guns had better exceed the number of persons with guns in your enemy's army, otherwise all of your farms are as good as plundered. Hence the rise of the nation-state and associated national myths in the 18th and 19th centuries. And in a couple of good examples they point out just how absurd some of these consolidations and agglomerations were e.g. langues d'oil and Occitan speakers smushed into a single "French" state. (My own addition - even contemporaries seemed to have this realization, see Metternich on Italy: "The word 'Italy' is a geographical expression, a description which is useful shorthand, but has none of the political significance the efforts of the revolutionary ideologues try to put on it")
(B) In our Information Age, highly empowered individuals and small groups displace the value of nation-states' scaled armies. No number of aircraft carriers could have saved us from 9/11 (again, the book was written in '97, this is my own gloss). A group of hackers or even a single hacker could be far more deadly or destructive than any standing army. The authors claim on several occasions that Microsoft could be more dangerous than 90% of nation states.
(C) Nation states and their ability to organize large standing armies are thus no longer providing a valuable, irreplaceable service to their constituents. And the ramifications are manifold. Highly-talented individuals will seek ways of escaping the state or effectively become mobile "shoppers" between states in order to escape extortive taxation that doesn't return a useful thing to the payer. They'll accumulate wealth in cryptocurrencies outside the reach of government and immune from inflation. Masses of unskilled humans dependent upon state welfare will lose benefits as the state withers. Inequality will grow and there will probably be violence that comes with it. Humans will at long last be free. Fin.
There are a lot of compelling arguments in The Sovereign Individual that the above doesn't encapsulate. The book really does not stick to a clearly rendered line of reasoning and a form to match it - it's literary gumbo. And beyond that I think that (perhaps unfortunately) some of the best bits are in these edge arguments - e.g. that the internet will facilitate highly individualized news feeds; fake news; the rise of cryptocurrencies; digital nomadry - which proved to be highly prescient. There is definitely some kernel of truth here.
But I think that the deductive approach employed here also fails to miss some things that would be obvious if we rendered real scenarios on top of abstractions:
- We still manufacture a lot of physical things in this world and I'm not sure that such a huge proportion of economic activity will necessarily exist in cyberspace.
- I don't think that people are quite so mercenary and are so willing to move around from geography to geography on whims.
- Not sure how motivated highly-skilled individuals will be to achieve tax savings at the expense of dismantling e.g. Medicaid.
It's ultimately thought-provoking, and I don't regret reading this. The fundamental point - that the nation state has less purchase on the individual than ever before - is probably right.
September 23, 2020
The Sovereign Individual by James Dale Davidson and Lord William Rees-Mogg (we'll call them D&RM) is just a year younger than I am — it was first published in 1997. D&RM display an eerie clairvoyance in their previous book The Great Reckoning, which analyzed the pending collapse of the Soviet Union and was published mere weeks before an attempted coup against Gorbachev. The Sovereign Individual analyzes the transition to the Information Age and predicts the following trends with a comparable eeriness: (1) the advent of decentralized, cryptographically secure currencies, (2) an acceleration of nationalist & populist ideologies fanned by the flames of (3) working-class citizens losing employment due to automation, and many, many more.
The crux of these predictions is the idea that the Information Revolution will transform us from citizens to customers of governments. What does that really mean — aren't we both customers and citizens of our governments? The reality is that that it's more of a spectrum with individuals veering further towards the customer end as they realize that they are putting more into the system than they are getting out of it.
Since the advent of society itself, organizing bodies have existed to preserve some sort of order by capturing a monopoly on violence. This basically means that as a citizen, you pay the government taxes and they protect you from harm. At least, that's the idea. In today's world, this relationship is deteriorating as a small but growing class of the informational elite, as D&RM call them, no longer see the value in this rather parasocial exchange. In many western countries, this group is generating the majority of the wealth and is being forced to subsidize a bloated bureaucracy and the corresponding welfare state.
All of this is to say that as the centrifugal forces of technology & autonomy (increasing) and violence (decreasing) play out, the role of the state will become more and more questionable. Only time will tell if the nation-state will fall D&RM predict, or if it will metastasize into a new shape unlike anything we've ever seen.
D&RM generally fail to provide any answers for the negative externalities of the changes they predict. Mostly, they tell the few that are cut out to be Sovereign Individuals to avoid taxes like the plague and to embrace self-reliance, technology, and learning as a way of life. That's all fine and dandy, but what about the societal loss of community and higher purpose from the death of religion, citizenship, and conventional corporations?
The Sovereign Individual has deeply influenced many thinkers that I respect, and I can see why. I don't agree with a some of the values presented in this book, nor do I jive with the 'elites will inherit the earth' mentality. However, I nonetheless read intently and took notes as if I was peering into an alien broadcast from another galaxy. I highly recommend this for a worldview-shattering read that will stretch your understanding of what a society actually is.
The crux of these predictions is the idea that the Information Revolution will transform us from citizens to customers of governments. What does that really mean — aren't we both customers and citizens of our governments? The reality is that that it's more of a spectrum with individuals veering further towards the customer end as they realize that they are putting more into the system than they are getting out of it.
Since the advent of society itself, organizing bodies have existed to preserve some sort of order by capturing a monopoly on violence. This basically means that as a citizen, you pay the government taxes and they protect you from harm. At least, that's the idea. In today's world, this relationship is deteriorating as a small but growing class of the informational elite, as D&RM call them, no longer see the value in this rather parasocial exchange. In many western countries, this group is generating the majority of the wealth and is being forced to subsidize a bloated bureaucracy and the corresponding welfare state.
All of this is to say that as the centrifugal forces of technology & autonomy (increasing) and violence (decreasing) play out, the role of the state will become more and more questionable. Only time will tell if the nation-state will fall D&RM predict, or if it will metastasize into a new shape unlike anything we've ever seen.
D&RM generally fail to provide any answers for the negative externalities of the changes they predict. Mostly, they tell the few that are cut out to be Sovereign Individuals to avoid taxes like the plague and to embrace self-reliance, technology, and learning as a way of life. That's all fine and dandy, but what about the societal loss of community and higher purpose from the death of religion, citizenship, and conventional corporations?
The Sovereign Individual has deeply influenced many thinkers that I respect, and I can see why. I don't agree with a some of the values presented in this book, nor do I jive with the 'elites will inherit the earth' mentality. However, I nonetheless read intently and took notes as if I was peering into an alien broadcast from another galaxy. I highly recommend this for a worldview-shattering read that will stretch your understanding of what a society actually is.
February 27, 2022
Overall, I was quite disappointed with this book.
The book, written in the late 90s, added a new preface with the new edition. The book boldly predicts the demise of the nation-state, and that the elites will flock to smaller, no tax havens. Their prime example: Hong Kong. Obviously the aggressive nation-state of China devoured any semblance of the independence and unique role for Hong Kong in the upcoming future. So just with the preface, this book seemed to potent some unrealistic notions…
Methodology: the authors repeatedly cite Marxist (materialist) interpretation of history, (citing historians such as Eric Hobsbawm) and Benedict Anderson, who wrote extensively about nationalism. They seem keen on noting different technological/larbor market shifts throughout history (standard Marxist lens), yet they somehow seem to ignore their purportedly wonderful conclusion: that 99%+ of the population will be economically unproductive as they are tied to the land/nation and won’t be as mobile as the emerging intellectual elites. Generally, a Marxist lens would tip you off that that is not a good result. The authors’ conclusion is basically to say, “sucks to be you, 99%ers, I’m going to fly off to my tax haven and use encrypted bank funds and just leave.” They really have a fetish with the notion that your funds will be encrypted, so they will have the freedom of movement and can relocate as they choose. I kept thinking of my “superior” cryptographic knowledge over the authors: a $5 wrench works pretty well. If you have those teeming masses and they grab you, I don’t care what encryption you have, a threat to wack you with a wrench is a pretty good decryption method. They seemed blissfuly ignorant of the danger of multitudes of angry and displaced people. As for citing Benedict Anderson, the authors talk about the rise of the nation-state and how it was extremely beneficial for the leaders at that time (early modern period), yet they completely ignored why the masses so enthusiastically embraced the concept of nationalism. They only seem to be concerned with the opinion of a very small sliver of society, and simply ignore what the rest of society will probably do to that tiny sliver if/when things get bad.
It displayed an astonishingly bad appreciation of human nature (both on an individual and societal basis), and I basically had to hate-read it to finish the book.
The book, written in the late 90s, added a new preface with the new edition. The book boldly predicts the demise of the nation-state, and that the elites will flock to smaller, no tax havens. Their prime example: Hong Kong. Obviously the aggressive nation-state of China devoured any semblance of the independence and unique role for Hong Kong in the upcoming future. So just with the preface, this book seemed to potent some unrealistic notions…
Methodology: the authors repeatedly cite Marxist (materialist) interpretation of history, (citing historians such as Eric Hobsbawm) and Benedict Anderson, who wrote extensively about nationalism. They seem keen on noting different technological/larbor market shifts throughout history (standard Marxist lens), yet they somehow seem to ignore their purportedly wonderful conclusion: that 99%+ of the population will be economically unproductive as they are tied to the land/nation and won’t be as mobile as the emerging intellectual elites. Generally, a Marxist lens would tip you off that that is not a good result. The authors’ conclusion is basically to say, “sucks to be you, 99%ers, I’m going to fly off to my tax haven and use encrypted bank funds and just leave.” They really have a fetish with the notion that your funds will be encrypted, so they will have the freedom of movement and can relocate as they choose. I kept thinking of my “superior” cryptographic knowledge over the authors: a $5 wrench works pretty well. If you have those teeming masses and they grab you, I don’t care what encryption you have, a threat to wack you with a wrench is a pretty good decryption method. They seemed blissfuly ignorant of the danger of multitudes of angry and displaced people. As for citing Benedict Anderson, the authors talk about the rise of the nation-state and how it was extremely beneficial for the leaders at that time (early modern period), yet they completely ignored why the masses so enthusiastically embraced the concept of nationalism. They only seem to be concerned with the opinion of a very small sliver of society, and simply ignore what the rest of society will probably do to that tiny sliver if/when things get bad.
It displayed an astonishingly bad appreciation of human nature (both on an individual and societal basis), and I basically had to hate-read it to finish the book.
May 7, 2013
Most of the time I read books that have interesting perspectives but little to pragmatic advise. Every so often I read a book that has amazing insight and strategy about details but very little comprehension of larger trends. "The Sovereign Individual" has both a grand perspective and detailed steps to take in order to profit from the transition that our world is going through.
Written in 1997 this work examines how information technology will reshape the world over the coming decades. It makes many bold predictions about the death of the nation-state and the change in economics to come. If so many of its predictions were not proven over the last decade, I would dismiss the other predictions as the work of deluded minds. History, however, has verified much of Davidson's insights. If you want to read a challenging work, read this one. If you want to have a different understanding of how the world works, then read this book. If you want a better way to approach investing and economics, read this book. You will not be disappointed.
Written in 1997 this work examines how information technology will reshape the world over the coming decades. It makes many bold predictions about the death of the nation-state and the change in economics to come. If so many of its predictions were not proven over the last decade, I would dismiss the other predictions as the work of deluded minds. History, however, has verified much of Davidson's insights. If you want to read a challenging work, read this one. If you want to have a different understanding of how the world works, then read this book. If you want a better way to approach investing and economics, read this book. You will not be disappointed.
January 17, 2022
Interesante y desconcertante a la vez. Por una parte el concepto de superación del estado nación es interesante, por otra es un análisis ultraliberal que basa todo el contrato social en si los servicios recibidos del estado justifican el precio en impuestos oagado por los mayores contribuyentes. Ok no es un buen deal y el estado no gasta eficientemente y es a menudo corrupto, ¿pero que pasa con todo el resto de la población, especialmente los que no son contribuyentes netos? ¿Cómo se independizan ellos del estado?
El hecho de que se escribiera originalmente hace 20 años te deja a veces con la duda de si las cosas en las que patina son porque verlo entonces era difícil o porque simplemente no funcionan.
Buen ejemplo de eso que dice Recuenco de no comprarle todo el pescado a nadie.
El hecho de que se escribiera originalmente hace 20 años te deja a veces con la duda de si las cosas en las que patina son porque verlo entonces era difícil o porque simplemente no funcionan.
Buen ejemplo de eso que dice Recuenco de no comprarle todo el pescado a nadie.
November 26, 2022
The Sovereign Individual takes the stance that the information age will fundamentally shift the world. Their assertion is that as the digital world enables more mobility and independence, states will have less power over individuals. Individuals will become more sovereign. Governments will need to compete for citizens the way companies compete for your business.
Being written in 1997, this book is extremely prescient. The Network State by Balaji is modern book building on these ideas, incorporating cryptocurrencies and more practical ideas of how to start a new state.
Notes:
Power is based on violence. In nomadic tribes, there were not many gains to violence. There wasn't much to be stolen, there wasn't much private property. Once agricultural society emerged, violence became much more beneficial, and therefore much more important. Wealth was now concentrated in a fixed place (a house and farm), which made stealing a more attractive option. Under these conditions, it made sense for a community of owners to agree to give a subset of the community a monopoly on violence in exchange for protection.
It can always be hard to see the water we are living in. In the Middle Ages, everything was seen through the eyes of chivalry. We day, we see things through the eyes of democracy and citizenship. This is not necessarily an evolution, it could just be a change. In today's society, it's near heretical to suggest that democracy isn't a noble ideal. That shows the power this idea has in society. This idea could be the effect of nations rising to power, rather than the cause.
War used to be between groups such as the nobility, the church, the barbarians, not necessarily states. The wars were actually fought between knights and vassals, not lay people. Oaths were necessary to ensure vassals actually showed up. Breaking an oath was essentially treason, similar to how enlisted or drafted citizens today are bound to not desert. Wars didn't impact the lay people as much then as they do now.
"The success and survival of any system depends upon its capacity to marshal military effort in times of conflict and crisis"
Systems need to be able to circumvent rational cost-benefit analysis, otherwise no one would go to war that didn't directly benefit them. Myths and stories are created and tailored to the prevailing megapolitical conditions.
The move from chivalry to citizenship happened when nation states began to exist and realized it's easier to appeal to the citizens than negotiate with the lords. Individuals or small groups of individuals couldn't exercised military power independently. The authors' hypothesis is that the information age will alter the logic of battle and antiquate citizenship, when an individual can command more power (I wasn't entirely clear on the claim here: through nanobots / microtechnology / biological technology?).
Gunpowder weapons were expensive to produce and easy to use with little training. Commoners could now defeat heavily trained knights. This rewarded those with financial resources, those allied with merchants.
The printing press then made knowledge less expensive. This subverted the existing power structures that relied on limited knowledge, specifically the Church and feudalism. Again, there is the hypothesis that microtechnology will do the same to the modern nation state. Information is at everyone's fingertips. (There is also Bitcoin replacing fiat money)
The Church over-regulated to benefit itself: they made it sinful to use aluminum not sold by the church, they mandated eating fish to prop up fisheries they owned, they sold indulgences and held lotteries, all abusing their position to increase wealth. This is similar to the corrupt, self-serving overregulation that exists today.
Protestantism emerged as a lower-cost religion. It removed the constraints that had the most hypocrisy.
The underlying issue with this over-regulation was that productivity was hampered. This was true of the Church in the Middle Ages and of government today.
East Berlin had a wall ot keep its citizens in. People celebrated when it came down. Today the US has an "exit tax" (established in 1995 under Clinton). Putting this effective wall in place shows that the US is a declining state, needing to rely on draconian measures to keep its productive citizens, rather than winning their citizenship on merit.
Effectiveness (total output) is more important than efficiency (ratio of input to output). Democracies and communism both have high effectiveness, given the total resources under their control. That's why they were the major competing philosophies in the Cold War.
Communism says "we own everything" from the start. Democratic welfare states say "you own property" and then after wealth is accumulated in the system they continue to increase taxes.
Governments can be controlled by proprietorship (owner, wants low costs), employees (wants high employment, doesn't care about budget), or customers (merchants, want value for money). In ancient Rome, only those paying for the government could vote. Mass democracies are effectively controlled by employees by putting the majority of the people on welfare, making them dependent on the state.
The book's hypothesis is that the information age will make defense (protection) easier than offense (extortion) for the first time via encryption. Before violence against an employer was easy. You could harm the production line, the physical facility, and this could be done anonymously. When there is no office and work is digital, there are safeguards in place to prevent workers from hurting the code, and nothing done in the system is anonymous.
Commerce, banking, and medicine will move online. Physical locations are nearly irrelevant if you can provide value online.
The skill curve is shaped like a turnip (skill being a mix of mental, physical, economic, willpower/character, etc.). As the required skill goes up even modestly, many people are closed out from productive work. This creates the potential for an unemployable underclass.
The greatest wealth inequality is between jurisdictions, not within them. Poor governments hold back struggling nations. Providing subsidies doesn't help, it just props up the ineffective governments.
Welfare nations tax good outcomes (the rich) to subsidize poor outcomes (the poor). This is a doomed endeavor. Instead, incentives should reward wealth creation and encourage people to pay for the resources they consume.
Regulation can be used when it has a net positive outcome, meaning it attracts more revenue than it costs. For example not allowing the creation of a dirty power plant to retain clean air, causing other benefits.
"Good jobs" (jobs in which you are paid more than you are worth) will be fewer and fewer as there are fewer advantages to large firms. Information availability is increasing and communication and transaction costs are decreasing. This means people will be paid in proportion to their impact, and possibly being paid per tasks ("gig employment") rather than having a traditional "job" (permanent salary). This is a return to how things were before 1800. Jobs made sense in an industrial era where the administration was worth the expense. When it's easier to measure output, and it's easier to distribute work, they may make less sense. The typical job could be more project focused, like a movie studio creating a team for the movie, then closing when it's complete (and building/closing certain teams along the way).
Nationalism doesn't make sense. It creates conflict between people. National lines are arbitrary and reflect the balance of power at one snapshot of time. Could move from international to extranational as nations have less focus and influence.
The same is true for language, "a dialect with an army."
The end of welfare nations could be the end of egalitarianism. With choice of nations, productive people likely won't want to live in welfare nations. Without a strong nation, no one will forcibly try to make people equal, nor provide equal opportunity.
Epigenesis: using language of family to manipulate citizens into thinking nationalism is real and meaningful (what do "we" should with "our" Olympic athletes?).
There may be violence and terrorism by the current beneficiaries of wealth transfers as we move to this new order. Nations and politicians will fight against their loss of wealth and influence, they won't want their productive and wealthy to leave (and implement measures such as the exit tax). A good strategy for current second-tier nations would be to provide low-tax sovereignty to these fleeing elites. This could be an opportunity to gain status in the new order.
Being an American citizen is a liability at the dawn of the Information Age. They will fight the hardest to keep their assets & citizens, and are the more powerful at curtailing citizen freedoms (such as exit, travel, and tax). (This seems to have played out to be partially true, though trumped by China)
Is democracy a good system? It's not used for any meaningful decisions outside of politics.
We're already starting to see free trade zones and pilots of sovereign states. The authors expect this to grow. Technology could be used to create truly representative government. One option could be a "selection by lot," which prevents self-selection, and makes it unlikely anyone would ever serve again. Another could be paying politicians for performance against certain criteria we are about.
Another option is to have commercial sovereignty. Make citizenship and taxation voluntary.
Important for every system to have options for entry, exit, and voice. We have all of these economically, while we only have a small voice politically.
The authors predict growing political corruption and misinformation. The only way through this is using judgment.
The morals of society still matter. Individuals and societies should focus on sovereignty, honesty and trust, competence, keeping the value you generate, and minimizing violence.
Selected quotes:
"There is a strong tendency for societies to render themselves crisis-prone when the existing configuration of institutions has exhausted its potential."
"The success and survival of any system depends upon its capacity to marshal military effort in times of conflict and crisis."
"Citizenship emerged when returns to violence were high and rising, and the state had vastly greater resources than the social entities that waged war in the medieval period."
"Suppose the phone company sent a bill for $50,000 for a call to London, just because you happened to conclude a deal worth $125,000 during a conversation. Neither you nor any other customer in his right mind would pay it. But that is exactly the basis upon which income taxes are assessed in every democratic welfare state."
"To summarize, the democratic nation-state succeeded during the past two centuries for these hidden reasons: There were rising returns to violence that made magnitude of force more important than efficiency as a governing principle. Incomes rose sufficiently above subsistence that it became possible for the state to collect large amounts of total resources without having to negotiate with powerful magnates who were capable of resisting. Democracy proved sufficiently compatible with the operation of free markets to be conducive to the generation of increasing amounts of wealth. Democracy facilitated domination of government by its “employees,” thereby assuring that it would be difficult to curtail expenditures, including military expenditures. Democracy as a decision-rule proved to be an effective antidote to the ability of the wealthy to act in concert to restrict the nation-state’s ability to tax or otherwise protect their assets from invasion."
"we expect nationalism to be a major rallying theme of persons with low skills nostalgic for compulsion as the welfare state collapses in the Western democracies."
"The technology of the Information Age makes it possible to create assets that are outside the reach of many forms of coercion."
"Government is not only a protection service; it is also a protection racket. While government provides protection against violence originating with others, like the protection racket it also charges customers for protection against harm that it would otherwise impose itself."
"Information technology divorces income-earning potential from residence in any specific geographic location."
"Governments have become accustomed to imposing “protection services” that are, in Frederic C. Lane’s words, “of poor quality and outrageously overpriced.”"
"“If the world operates as one big market, every employee will compete with every person anywhere in the world who is capable of doing the same job. There are lots of them and many of them are hungry.”8 —ANDREW S. GROVE, PRESIDENT, INTEL CORP."
"The greatest income inequalities have been observed among jurisdictions. Income redistribution has done little to alleviate them. In fact, we believe that foreign aid and international development programs have had the perverse effect of lowering the real incomes of poor people in poor countries by subsidizing incompetent governments."
"“Nationalism, of course, is intrinsically absurd. Why should the accident—fortune or misfortune—of birth as an American, Albanian, Scot, or Fiji Islander impose loyalties that dominate an individual life and structure a society so as to place it in formal conflict with others?"
"The impulse to sacrifice is no less active where the taxpayer is concerned. Paying taxes, like bearing arms, is a duty, rather than an exchange in which one forgoes money to obtain some product or service of an equal or greater value. This much is acknowledged in common speech. People speak of a “tax burden” as they do not speak of the “food burden” of shopping for nutriments, or the “car burden” of purchasing an automobile, or a “vacation burden” for traveling, precisely because commercial purchases are generally fair exchanges. Otherwise, the buyers would not make them."
Being written in 1997, this book is extremely prescient. The Network State by Balaji is modern book building on these ideas, incorporating cryptocurrencies and more practical ideas of how to start a new state.
Notes:
Power is based on violence. In nomadic tribes, there were not many gains to violence. There wasn't much to be stolen, there wasn't much private property. Once agricultural society emerged, violence became much more beneficial, and therefore much more important. Wealth was now concentrated in a fixed place (a house and farm), which made stealing a more attractive option. Under these conditions, it made sense for a community of owners to agree to give a subset of the community a monopoly on violence in exchange for protection.
It can always be hard to see the water we are living in. In the Middle Ages, everything was seen through the eyes of chivalry. We day, we see things through the eyes of democracy and citizenship. This is not necessarily an evolution, it could just be a change. In today's society, it's near heretical to suggest that democracy isn't a noble ideal. That shows the power this idea has in society. This idea could be the effect of nations rising to power, rather than the cause.
War used to be between groups such as the nobility, the church, the barbarians, not necessarily states. The wars were actually fought between knights and vassals, not lay people. Oaths were necessary to ensure vassals actually showed up. Breaking an oath was essentially treason, similar to how enlisted or drafted citizens today are bound to not desert. Wars didn't impact the lay people as much then as they do now.
"The success and survival of any system depends upon its capacity to marshal military effort in times of conflict and crisis"
Systems need to be able to circumvent rational cost-benefit analysis, otherwise no one would go to war that didn't directly benefit them. Myths and stories are created and tailored to the prevailing megapolitical conditions.
The move from chivalry to citizenship happened when nation states began to exist and realized it's easier to appeal to the citizens than negotiate with the lords. Individuals or small groups of individuals couldn't exercised military power independently. The authors' hypothesis is that the information age will alter the logic of battle and antiquate citizenship, when an individual can command more power (I wasn't entirely clear on the claim here: through nanobots / microtechnology / biological technology?).
Gunpowder weapons were expensive to produce and easy to use with little training. Commoners could now defeat heavily trained knights. This rewarded those with financial resources, those allied with merchants.
The printing press then made knowledge less expensive. This subverted the existing power structures that relied on limited knowledge, specifically the Church and feudalism. Again, there is the hypothesis that microtechnology will do the same to the modern nation state. Information is at everyone's fingertips. (There is also Bitcoin replacing fiat money)
The Church over-regulated to benefit itself: they made it sinful to use aluminum not sold by the church, they mandated eating fish to prop up fisheries they owned, they sold indulgences and held lotteries, all abusing their position to increase wealth. This is similar to the corrupt, self-serving overregulation that exists today.
Protestantism emerged as a lower-cost religion. It removed the constraints that had the most hypocrisy.
The underlying issue with this over-regulation was that productivity was hampered. This was true of the Church in the Middle Ages and of government today.
East Berlin had a wall ot keep its citizens in. People celebrated when it came down. Today the US has an "exit tax" (established in 1995 under Clinton). Putting this effective wall in place shows that the US is a declining state, needing to rely on draconian measures to keep its productive citizens, rather than winning their citizenship on merit.
Effectiveness (total output) is more important than efficiency (ratio of input to output). Democracies and communism both have high effectiveness, given the total resources under their control. That's why they were the major competing philosophies in the Cold War.
Communism says "we own everything" from the start. Democratic welfare states say "you own property" and then after wealth is accumulated in the system they continue to increase taxes.
Governments can be controlled by proprietorship (owner, wants low costs), employees (wants high employment, doesn't care about budget), or customers (merchants, want value for money). In ancient Rome, only those paying for the government could vote. Mass democracies are effectively controlled by employees by putting the majority of the people on welfare, making them dependent on the state.
The book's hypothesis is that the information age will make defense (protection) easier than offense (extortion) for the first time via encryption. Before violence against an employer was easy. You could harm the production line, the physical facility, and this could be done anonymously. When there is no office and work is digital, there are safeguards in place to prevent workers from hurting the code, and nothing done in the system is anonymous.
Commerce, banking, and medicine will move online. Physical locations are nearly irrelevant if you can provide value online.
The skill curve is shaped like a turnip (skill being a mix of mental, physical, economic, willpower/character, etc.). As the required skill goes up even modestly, many people are closed out from productive work. This creates the potential for an unemployable underclass.
The greatest wealth inequality is between jurisdictions, not within them. Poor governments hold back struggling nations. Providing subsidies doesn't help, it just props up the ineffective governments.
Welfare nations tax good outcomes (the rich) to subsidize poor outcomes (the poor). This is a doomed endeavor. Instead, incentives should reward wealth creation and encourage people to pay for the resources they consume.
Regulation can be used when it has a net positive outcome, meaning it attracts more revenue than it costs. For example not allowing the creation of a dirty power plant to retain clean air, causing other benefits.
"Good jobs" (jobs in which you are paid more than you are worth) will be fewer and fewer as there are fewer advantages to large firms. Information availability is increasing and communication and transaction costs are decreasing. This means people will be paid in proportion to their impact, and possibly being paid per tasks ("gig employment") rather than having a traditional "job" (permanent salary). This is a return to how things were before 1800. Jobs made sense in an industrial era where the administration was worth the expense. When it's easier to measure output, and it's easier to distribute work, they may make less sense. The typical job could be more project focused, like a movie studio creating a team for the movie, then closing when it's complete (and building/closing certain teams along the way).
Nationalism doesn't make sense. It creates conflict between people. National lines are arbitrary and reflect the balance of power at one snapshot of time. Could move from international to extranational as nations have less focus and influence.
The same is true for language, "a dialect with an army."
The end of welfare nations could be the end of egalitarianism. With choice of nations, productive people likely won't want to live in welfare nations. Without a strong nation, no one will forcibly try to make people equal, nor provide equal opportunity.
Epigenesis: using language of family to manipulate citizens into thinking nationalism is real and meaningful (what do "we" should with "our" Olympic athletes?).
There may be violence and terrorism by the current beneficiaries of wealth transfers as we move to this new order. Nations and politicians will fight against their loss of wealth and influence, they won't want their productive and wealthy to leave (and implement measures such as the exit tax). A good strategy for current second-tier nations would be to provide low-tax sovereignty to these fleeing elites. This could be an opportunity to gain status in the new order.
Being an American citizen is a liability at the dawn of the Information Age. They will fight the hardest to keep their assets & citizens, and are the more powerful at curtailing citizen freedoms (such as exit, travel, and tax). (This seems to have played out to be partially true, though trumped by China)
Is democracy a good system? It's not used for any meaningful decisions outside of politics.
We're already starting to see free trade zones and pilots of sovereign states. The authors expect this to grow. Technology could be used to create truly representative government. One option could be a "selection by lot," which prevents self-selection, and makes it unlikely anyone would ever serve again. Another could be paying politicians for performance against certain criteria we are about.
Another option is to have commercial sovereignty. Make citizenship and taxation voluntary.
Important for every system to have options for entry, exit, and voice. We have all of these economically, while we only have a small voice politically.
The authors predict growing political corruption and misinformation. The only way through this is using judgment.
The morals of society still matter. Individuals and societies should focus on sovereignty, honesty and trust, competence, keeping the value you generate, and minimizing violence.
Selected quotes:
"There is a strong tendency for societies to render themselves crisis-prone when the existing configuration of institutions has exhausted its potential."
"The success and survival of any system depends upon its capacity to marshal military effort in times of conflict and crisis."
"Citizenship emerged when returns to violence were high and rising, and the state had vastly greater resources than the social entities that waged war in the medieval period."
"Suppose the phone company sent a bill for $50,000 for a call to London, just because you happened to conclude a deal worth $125,000 during a conversation. Neither you nor any other customer in his right mind would pay it. But that is exactly the basis upon which income taxes are assessed in every democratic welfare state."
"To summarize, the democratic nation-state succeeded during the past two centuries for these hidden reasons: There were rising returns to violence that made magnitude of force more important than efficiency as a governing principle. Incomes rose sufficiently above subsistence that it became possible for the state to collect large amounts of total resources without having to negotiate with powerful magnates who were capable of resisting. Democracy proved sufficiently compatible with the operation of free markets to be conducive to the generation of increasing amounts of wealth. Democracy facilitated domination of government by its “employees,” thereby assuring that it would be difficult to curtail expenditures, including military expenditures. Democracy as a decision-rule proved to be an effective antidote to the ability of the wealthy to act in concert to restrict the nation-state’s ability to tax or otherwise protect their assets from invasion."
"we expect nationalism to be a major rallying theme of persons with low skills nostalgic for compulsion as the welfare state collapses in the Western democracies."
"The technology of the Information Age makes it possible to create assets that are outside the reach of many forms of coercion."
"Government is not only a protection service; it is also a protection racket. While government provides protection against violence originating with others, like the protection racket it also charges customers for protection against harm that it would otherwise impose itself."
"Information technology divorces income-earning potential from residence in any specific geographic location."
"Governments have become accustomed to imposing “protection services” that are, in Frederic C. Lane’s words, “of poor quality and outrageously overpriced.”"
"“If the world operates as one big market, every employee will compete with every person anywhere in the world who is capable of doing the same job. There are lots of them and many of them are hungry.”8 —ANDREW S. GROVE, PRESIDENT, INTEL CORP."
"The greatest income inequalities have been observed among jurisdictions. Income redistribution has done little to alleviate them. In fact, we believe that foreign aid and international development programs have had the perverse effect of lowering the real incomes of poor people in poor countries by subsidizing incompetent governments."
"“Nationalism, of course, is intrinsically absurd. Why should the accident—fortune or misfortune—of birth as an American, Albanian, Scot, or Fiji Islander impose loyalties that dominate an individual life and structure a society so as to place it in formal conflict with others?"
"The impulse to sacrifice is no less active where the taxpayer is concerned. Paying taxes, like bearing arms, is a duty, rather than an exchange in which one forgoes money to obtain some product or service of an equal or greater value. This much is acknowledged in common speech. People speak of a “tax burden” as they do not speak of the “food burden” of shopping for nutriments, or the “car burden” of purchasing an automobile, or a “vacation burden” for traveling, precisely because commercial purchases are generally fair exchanges. Otherwise, the buyers would not make them."
July 14, 2022
If you enjoyed the book "Sapiens", then this book is an excellent read specially considering it was written 25 years back on the impact of information tech and how the forecasts of the writer have come true to a large extent.
Apart from individuals, the national policy makers could definitely use this book to look further in the future.
A slightly longish book but perfectly narrated and edited. Though, the writer could have shortened some of the historical stories and instead focused more on the learning from general trends of the history.
Thus, definitely recommended if you are looking to engross yourself in the story telling of history and future of human civilization. You will definitely come out as a more enlightened individual.
Apart from individuals, the national policy makers could definitely use this book to look further in the future.
A slightly longish book but perfectly narrated and edited. Though, the writer could have shortened some of the historical stories and instead focused more on the learning from general trends of the history.
Thus, definitely recommended if you are looking to engross yourself in the story telling of history and future of human civilization. You will definitely come out as a more enlightened individual.
January 27, 2024
Extremely interesting reading. Some forecasts rightly fulfilled, but others have given way (or currently give way) to more political control instead... Of course with the voter's permission in western democracies. I'd go for a 4 but, due to its novelty 25 years ago and the good spillovers its reading would deliver, I definitely push for a 5.
Extremadamente interesante lectura. Algunas predicciones se han cumplido al pie de la letra y otras han abierto (o están abriendo) el camino a un mayor poder político... Siempre con permiso del votante en democracias occidentales. Le daría un 4, pero por lo novedoso que fue hace un cuarto de siglo, y por lo beneficioso que sería que fuera leído de forma generalizada, le doy el 5.
Extremadamente interesante lectura. Algunas predicciones se han cumplido al pie de la letra y otras han abierto (o están abriendo) el camino a un mayor poder político... Siempre con permiso del votante en democracias occidentales. Le daría un 4, pero por lo novedoso que fue hace un cuarto de siglo, y por lo beneficioso que sería que fuera leído de forma generalizada, le doy el 5.
August 19, 2021
One of the best books written on the larger (century-long) trends of how technology influences society. Essentially, a focus on how the technology of violence (capex vs. opex, specialist personnel vs. mass armies, materiel vs. human, offense vs. defense) influence structures of governments, and thus overall society. The book goes into agricultural vs. industrial revolutions, changes in European and global structure, but then is primarily focused on the modern era -- the transition from broad-scale mass movement political structures where overall force amount is most relevant, to information-age systems where efficiency is most relevant.
As a consequence, individuals and small groups, which are very efficient but don't have comparable total force levels to existing nation states, will be able to exist as first-class participants in the world. Osama Bin Laden was an example from this book (before 9/11...) of an individual capable of challenging a nation state; plenty of others exist in the commercial and scientific sphere, such as Bill Gates who appears to be more significant in the Covid-19 situation than many governments, and even middle-tier tech companies being more significant than most governments in information/commerce.
This book was written in the early 1990s and has accurately predicted the past 25 years, and seems on track for the rest of the century. The one area not addressed was the rise of China, although this might just be a nationalist rear-guard action as suggested in the book for Western countries facing this change. Otherwise, a book full of highly specific and highly accurate predictions.
The one thing the book got wrong was at the end -- saying "becoming a programmer isn't necessarily the best way to exploit the change toward computerization" -- this was wrong, as it's a very useful skill (even if not one's primary role), in addition to the general problem-solving skills they advocate. I think this was just because the author isn't a technologist and thus doesn't appreciate the skills of programming beyond just rote coding. Otherwise, the book is full of excellent and highly actionable advice.
As a consequence, individuals and small groups, which are very efficient but don't have comparable total force levels to existing nation states, will be able to exist as first-class participants in the world. Osama Bin Laden was an example from this book (before 9/11...) of an individual capable of challenging a nation state; plenty of others exist in the commercial and scientific sphere, such as Bill Gates who appears to be more significant in the Covid-19 situation than many governments, and even middle-tier tech companies being more significant than most governments in information/commerce.
This book was written in the early 1990s and has accurately predicted the past 25 years, and seems on track for the rest of the century. The one area not addressed was the rise of China, although this might just be a nationalist rear-guard action as suggested in the book for Western countries facing this change. Otherwise, a book full of highly specific and highly accurate predictions.
The one thing the book got wrong was at the end -- saying "becoming a programmer isn't necessarily the best way to exploit the change toward computerization" -- this was wrong, as it's a very useful skill (even if not one's primary role), in addition to the general problem-solving skills they advocate. I think this was just because the author isn't a technologist and thus doesn't appreciate the skills of programming beyond just rote coding. Otherwise, the book is full of excellent and highly actionable advice.
April 21, 2018
This was an extremely thought-provoking and unsettling book about the inevitable end of democracy and government as we know it.
It argues states are agreed-upon tools for social organization which are built on coercing money out of people in exchange for protection. This old agreement is now obsolete in the Information Age, where money is no longer tied to geographic location and people independently generating wealth object to states' draconian taxation.
There are also some extremely insightful points about whether the government is run by its constituents (customers) or its employees (government workers). The book argues most are run by their employees, as evidenced by their inefficiency, bloated costs, and inner fiefdoms of power meant to benefit those on the inside.
The intro and chapters "East of Eden: The Agricultural Revolution and the Sophistication of Violence" and "The Last Days of Politics: Parallels Between the Senile Decline of the Holy Mother Church and the Nanny State" were just insane. I was completely rethinking everything by page 40 or so.
It is also prohibitively dense, sometimes to points of incomprehension, for me at least. At times, some of the chapters devolve into a list of nifty inventions we will benefit from in the Information Age. That gets old fast.
My metric for five stars is if I think about a book all the time or if it made me take actions that drastically changed my life. This meets those criteria, but I'm taking a star away for the negatives mentioned above and the fact I didn't enjoy the slower chapters.
Still, this is easily the most thought-provoking book I've read recently. It's in the same league as Thinking Fast and Slow in that regard.
It argues states are agreed-upon tools for social organization which are built on coercing money out of people in exchange for protection. This old agreement is now obsolete in the Information Age, where money is no longer tied to geographic location and people independently generating wealth object to states' draconian taxation.
There are also some extremely insightful points about whether the government is run by its constituents (customers) or its employees (government workers). The book argues most are run by their employees, as evidenced by their inefficiency, bloated costs, and inner fiefdoms of power meant to benefit those on the inside.
The intro and chapters "East of Eden: The Agricultural Revolution and the Sophistication of Violence" and "The Last Days of Politics: Parallels Between the Senile Decline of the Holy Mother Church and the Nanny State" were just insane. I was completely rethinking everything by page 40 or so.
It is also prohibitively dense, sometimes to points of incomprehension, for me at least. At times, some of the chapters devolve into a list of nifty inventions we will benefit from in the Information Age. That gets old fast.
My metric for five stars is if I think about a book all the time or if it made me take actions that drastically changed my life. This meets those criteria, but I'm taking a star away for the negatives mentioned above and the fact I didn't enjoy the slower chapters.
Still, this is easily the most thought-provoking book I've read recently. It's in the same league as Thinking Fast and Slow in that regard.
May 6, 2021
In large part, they were directionally right about certain trends. Reading it in 1999 might have enabled you to predict the rise of precision news, Trump, and even cryptocurrencies. This book is rightfully part of the crypto canon, because the conclusions challenge so much of the unspoken axioms society takes for granted (democracy as the end of history, returns to violence as a key metric, ...)
Worth reading especially for the methodology and thought process.
Still, I'm convinced extrapolation and prediction is a fools' errand, made easier by the fact that among many low-p predictions, a few of them will come true in time. Most importantly, getting things right isn't the thing that matters, it's getting them right at the right time. You might have YOLO'd on PayPal's IPO in 2002, fully convinced that this was the "cybermoney" realization spoken of in this book... but Bitcoin would come out nearly a decade later.
Moreover, I disagree fundamentally with the analysis that "Sovereign Individuals" will flood to low-tax jurisdictions. The opportunity cost of moving to a low-tax regime can often be offset by the community, infrastructure of high-tax places.. JDD cites that democracy triumphed over socialism because in explicitly laying hold to less property, it harnessed incentives so that the total take was greater. In much the same way, is it not possible for high-tax places to have such generative moats that the total output after taxation is higher than compounding for years in a low-tax place?
Worth reading especially for the methodology and thought process.
Still, I'm convinced extrapolation and prediction is a fools' errand, made easier by the fact that among many low-p predictions, a few of them will come true in time. Most importantly, getting things right isn't the thing that matters, it's getting them right at the right time. You might have YOLO'd on PayPal's IPO in 2002, fully convinced that this was the "cybermoney" realization spoken of in this book... but Bitcoin would come out nearly a decade later.
Moreover, I disagree fundamentally with the analysis that "Sovereign Individuals" will flood to low-tax jurisdictions. The opportunity cost of moving to a low-tax regime can often be offset by the community, infrastructure of high-tax places.. JDD cites that democracy triumphed over socialism because in explicitly laying hold to less property, it harnessed incentives so that the total take was greater. In much the same way, is it not possible for high-tax places to have such generative moats that the total output after taxation is higher than compounding for years in a low-tax place?
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