Author: Chen Peng CryPto33
"The Sovereign Individual" (The Sovereign Individual) is an epoch-making strange book, written in the mid-1990s, but it foresees the profound impact of the information revolution on global politics, economics and organizational structures in the next few decades, including predicting the digital The emergence of /encrypted currency, and predicted that there will be "super" individuals beyond the existing sovereign state system in the future. These individuals have a global vision, advanced information technology, digital/encrypted currency that protects privacy and avoids government censorship, through The combination of the above realizes the great freedom of personal politics and economy, thus realizing the "sovereign individual"
At this point in early 2023 when the AI revolution brought by GPT4 began to sweep the world, we can review this book to feel the author's wisdom and insights: in the future, the cost of information dissemination and intelligence will be lower and lower, and at the same time, AI will assist In the era when individual capabilities are enhanced exponentially, the emergence of sovereign individuals will not be far away. Here I would like to share with you the main content and personal insights of this book, so that we can welcome the era of "sovereign individuals" that will eventually come.
1) About the author:
Co-authored by conservative propagandist LORD WILLIAM REES-MOGG and American investor JAMES DALE DAVIDSON. Rees-Mogg was former editor of The Times of London and vice-chairman of the BBC; he was also a director of a private bank in London, while Davidson was a venture capitalist and entrepreneur.
They co-edited Strategic Investment, co-authored Blood in the Streets: Investment Profits in a World Gone Mad, and The Reckoning ( The Great Reckoning) two books.
They are all senior Liberal Rightists (Rightwing libertarians); William Mogg's eldest son, Jacob Rees-Mogg, is a famous British conservative politician, supports Brexit, and a successful financier. He mentioned that he was deeply influenced by his father's ideas
After the book was published in 1997, it did not cause much sensation or attention. It was not until recent years, especially with the outbreak of Crypto, that it gradually became known to more people.
2) Sovereign Individual Definition:
Sovereignty (English; sovereignty) is the supreme and exclusive political power that a country has over its jurisdiction. That is, the supreme authority of "self-determination". It is the source of power for domestic legislation , judiciary , and administration , and it is also a kind of strength and will to maintain independence in foreign exchanges. In a democratic system, sovereignty belongs to all the people of the country, which is called popular sovereignty . People's sovereignty is manifested in the representative government system in which the people elect representatives to participate in the government, and it is also the form adopted by most countries at present.
The specific meaning of the sovereign individual:
A) Sovereign individuals in the information age, at their peak of productivity, competition and interaction among them. In due course, there will be a kind of "diplomatic immunity" to get rid of the political issues that have plagued ordinary people both in ancient and modern China and abroad. Sovereign individuals live in the same physical environment as ordinary people who are dominated, but politically, they are in an independent space, and they will control more resources and go beyond power.
B) The Sovereign Individual no longer accepts as the human resources of the state, and all that is imposed. Millions of people would be freed from civic duties and become customers of valuable services provided by their governments. They will even create and sponsor institutions that place most citizenship-related services entirely on a commercial basis. The relationship between the sovereign individual and the state changes from "employee" to "customer".
C) The information revolution will liberate the individual like never before. People who are capable of self-education will, for the first time, be completely free to create their own work and realize the full benefits of their own productivity.
D) We will witness the creation of a world super class, perhaps made up of 500 million ultra-wealthy, 100 million of whom are wealthy enough to be sovereign individuals. Assets worth tens of billions or hundreds of billions of dollars will be controlled by hundreds of thousands or millions of sovereign individuals. Practice will prove that these new stewards of world wealth are more capable than traditional politicians in resource utilization and investment allocation. Capital will eventually be controlled by the most talented investors and entrepreneurs, not violent experts.
E) With the formation of the "sovereign individual" era, many of the most outstanding people will no longer consider themselves to be people of any country, no longer "British" or "American". A new "transnational" or "supranational" worldview.
F) Even in the "virtual cities" of the future, they will be their own supranational sovereigns, not subjects; they will define allegiance by contract or private treaty. This approach is more reminiscent of pre-modern Europe. (Dao has this feeling)
3) The analytical framework of this book:
This book explores megapolitics, and unraveling megapolitical changes and their impact lies in understanding the variables that catalyze violent revolutions, broadly grouped into four categories: topography, climate, microbes, and technology. **The influence of the first three is a long-term evolution, which is very slow; while technology is constantly improving and has started an exponential leap from the era of the industrial revolution.
This is why the time required for social change decreases exponentially, tens of thousands of years from hunting to agricultural society, thousands of years from agriculture to industrial society, and hundreds of years from industrial society to the information age. The big change in the information society will be faster, and it may only take a few decades.
In modern times, technology has the greatest influence in determining the costs and returns of the use of power. The basis of the argument in this book is the assumption that this effect will continue. Technology has several key dimensions:
A. The balance between offense and defense . Advanced weapon technology affects the balance between offense and defense, which in turn determines the size of political organizations. As offensive capabilities increase, forces that exert power at a distance become dominant, jurisdictions become more stable, and larger governments form. Correspondingly, defensive capabilities are rising, which increases the cost of using power outside the core area.
B. Equality of citizens and superiority of infantry . A key factor in determining the degree of equality among citizens is the nature of weapons technology. Weapons that were relatively cheap, accessible to laymen, and that enhanced the military status of the infantry tended to promote equality of power. When Thomas Jefferson wrote "all men are created equal," it was much more realistic than when he uttered similar slogans centuries ago. A peasant with a shotgun is not only equally armed, but better equipped than the typical British soldier with a bronze flintlock. The Middle Ages were very different from this. It is impossible for a farmer with only a pitchfork to fight against a knight in full armor on a tall horse.
C. Advantages and disadvantages of mass violence . A decisive variable in whether a society may be a few large governments or many small governments is the size of organization required to employ advanced weapons. When the rewards of violence get higher and higher, the bigger the scale, the higher the rewards, and of course the government gets bigger. When a small group can organize effective means of resisting attacks by a large group (as it did in the Middle Ages), national sovereignty tends to be fragmented.
D. Economics of mass production . An important determinant of whether power should be dispersed locally or centralized in a distant center is the size of the enterprises that are important to provide the needs of the people . If key firms are best served by organizing on a large scale over a broad trading area, the government can extract a lot of wealth by providing such conditions and protections to support large-scale political System costs and expenses. Under such circumstances, the world economy would run more efficiently if there was one world hegemon who dominated all other countries, as the British Empire did in the nineteenth century .
E. Dispersion of technology . The degree of decentralization of key technologies is another important variable in determining the power equation. At the end of the 19th century, the European powers enjoyed a monopoly on the machine gun, allowing them to easily conquer outlying countries and regions, greatly expanding their colonial empires. Later in the 20th century, especially after World War II, machine guns were widely adopted, relatively easy to obtain, and became a force to destroy imperialism. Under the same conditions, the more decentralized the key technologies, the more decentralized the power, and the smaller the optimal size of the government
These factors intertwine to determine whether the payoffs of violence rise as it expands to a larger scale. This, in turn, determines the trade-off between "scale" and "efficiency of resource utilization" by power .
The above analysis leads to a core framework discussed in this book— violence, that is, the cost elements and reward elements of using violence determine the evolutionary structure of human society .
In the author's view, everything from hunting tribes to huge empires is determined by the interaction of various factors in big politics. The popular saying is "natural law". The ability to harness and resist violence, whenever and wherever, is a key variable for life on the left and right margins. Violence shapes societies and sets the boundaries on which economies operate.
It is always easier to claim or plunder the fruits of other people's labor than to create one's own; some stronger individuals or groups are more inclined to plunder the fruits of others. Power "always seeks the most ready path to wealth, which is to attack those who already possess it". Therefore, the structure of human society arises from this relationship between creators and takers.
Another dimension of the author's analysis is the spiritual level. The ability to control information/create myths/narratives (Myths/narrative)** is also an important source of power. Violence brings capital; information is mastered through “myths/stories”.
The four basic stages of human economic life include: (1) hunter-gatherer society; (2) agricultural society; (3) industrial society; (4) information age: A) the age of hunter-gatherers , when there was no land and property The concept of violence; the tools of violence that people have are spears and axes. The violence at that time was basically between humans and animals; organizations mainly existed in the form of blood-related tribes.
B) In the era of agriculture, farming is a very heavy work. In the early stages of agricultural development, those who were unable to hunt and gather, that is, were relatively weak individuals, stayed in the tribe, and may have been forced to develop agricultural technology. With the emergence of agriculture, land and property appeared, but they were more difficult to protect, and larger-scale organizations, such as landlords and lords, emerged, and the entire society became more hierarchical. After the disintegration of the Roman Empire, new strength was needed to maintain the rights and interests of farmers/landlords and maintain local feudal self-control. There is the rise of the church with information and access to military support. (Wealth is not important in the agricultural society of the Middle Ages. Merchants have no status in the agricultural society. Church beliefs and chivalry are important, because knights are much stronger than farmers in terms of force).
C) In the industrial age, industrial machines improved production efficiency and created things that the land could not produce. Stronger tools of violence, such as guns and cannons, began to appear. Facing groups with guns, private industries or factories become more vulnerable. In order to protect these means of production, produce fruits, and consolidate the political power in the territory, higher requirements are placed on the organization. From material strength to spiritual strength, a nation-state is born. The establishment of a large market cannot be divided, it needs to gather a large enough group of people, and the democratic invention that relies on the so-called blood/culture/language is the cheapest and most effective. Therefore, the period from 1500 to 2000 was dominated by the rise of nation-states.
In addition, in the field of information/mythology , the emergence of the printing press broke the church's monopoly of printing Bibles or books, making knowledge more popular and accessible. At the same time, the social "myths" monopolized by the church and the right to interpret the mainstream spirit of society have been challenged. With the rise of the merchants/bourgeoisie brought about by the Industrial Revolution, the previous mainstream of social culture began to develop from the belief in loyalty to the church/chivalry to the more secular pursuit of wealth/personal class advancement.
D) In the information age, the economy is increasingly virtualized, automated , and does not require a lot of human labor, and the income and cost of violence are not conducive to sovereign states . The world of virtualization income is not bounded by the physical world. What everyone is fighting for is knowledge, technology, and of course energy, but they don't use traditional violent means to obtain it.
At the same time, the emergence of Bitcoin and cryptocurrency will make personal wealth more difficult to be plundered (Vitalik calls this the “defender's advantage”). Individuals can better protect and control their own wealth, so they are less dependent on violent machines such as the state or government.
However, the cost of the country's implementation of violence requires more and more expenses, and it can only cause more potential crises by releasing water and borrowing. At the same time, self-awareness is becoming more and more abundant, and the identity/hobby/ideology of the virtual world is gradually greater than the national identity, so there can be new forms of social organization. And sovereign states have brought less and less benefits to most people in the information age.
In a software-dominated world, information is wealth, weapons, and land. New technologies have brought disintermediation of information (intermediation of Internet social media/blockchain at the information dissemination end), and it turns out that nation-states hold information and define values/myths/Narratives from top to bottom.
4) The conclusions derived from this book:
With the development of digital technology, the monopoly of traditional organizations on violence, information and wealth will gradually disintegrate, decentralize, and sovereign individuals will rise . The year 2000 is not just a sharp break in the uninterrupted course of time, but an inflection point between the old world and the coming new world.
Like all radical institutional change, such revolutions rarely occur in a gradual, linear fashion. We expect the information age to lead to catastrophe —a sharp break with past institutions and consciousness:
On the one hand, with the rise of the sovereign individual, we will see the realization of a new type of freedom. At the same time, we expect to see the death of the modern nation-state (similar to the fall of the Soviet Union and Eastern European governments). Many guarantees of equality that grew up in the 20th century and are taken for granted by Westerners are bound to disappear with it.
Representative democracy, as it is now known, will gradually disappear; replaced by new democratic options from the online marketplace. If we extrapolate correctly, the politics of the next century will be far more varied and far less important than the politics we have become accustomed to.
In the 20th century, governments' taxing capacity will plummet by 50-70%, and smaller jurisdictions will likely be more successful. Develop competitive conditions to attract capable individuals and capital, and enclaves have a better chance of winning this challenge than continents. The individual will go from being a citizen of the state to being a client, and the government will become a service we employ rather than a relationship of rule and rule.
New Situations Political groups: nation-states will be replaced by new forms of sovereignty, some historically unique, some reminiscent of the city-states and medieval merchant republics of the pre-modern world: A) collections of sovereign individuals, B) the authors mention Competitive territorial clubs, C) corporations + small hired arms.
The information age has increased the ability of small teams and even individuals to operate independently of central authority. Although observers like Hayek and Orwell were bright-eyed, they were too pessimistic. History has unfolded its surprises. More likely, we will see unprecedented opportunity, along with individual autonomy and self-government. The information revolution is likely to happen within a generation.
Jobs are changing too. This means that the operating model of business will inevitably be rewritten. The Virtual Corporation demonstrates that the nature of business is changing across the board as information and transaction costs continue to fall. In the information age, a "job" is a project or task, not a "job" you have.
5) Some objective comments on the conclusions of this book:
V God has a Tweetstorm about this book, I think it sums it up well:
V God generally agrees with the author's analysis of the general trend of the information age, although he thinks the process will take longer;
Disagree with the author: excessive individualism and ignoring fairness; no answer to where people find a sense of belonging; cross-organizational cooperation; underestimating the government's ability to resist/collect taxes -- trivial inconveniences; ignoring the value of collaboration on public goods at the global level . The increasing scale effect brought about by the network effect was not foreseen, and the resulting monopoly Internet giant became an important new political and economic force.
6) Contents related to cryptocurrency in this book:
There is not much content in the book that directly talks about cryptocurrencies, accounting for less than 10% of the book. But the core purpose is to pursue personal control over wealth, and not to be intruded by sovereign states is the most fundamental spirit of cryptocurrency.
One of the sources of ideas for cryptocurrencies. In the political spectrum of technology, cryptocurrency is a right-wing ideology, while AI is more left-wing; I personally think that in the ideological spectrum of cryptocurrency, Bitcoin is a more typical spiritual embodiment of the liberal right, but Ethereum, more Focus on fairness and development to solve problems and bring about progress, which is more to the left. The overall thinking is conservative, but the thinking of different people is constantly evolving. V God mentioned that he was very concerned about these ideological things 15 years ago, but after 15 years, he has paid more attention to how the technology and experiments of Ethereum can Better landing to help the world.
7) Some of my own thoughts after reading:
The pessimism about the current social development is a bit similar to the social problems seen in Western Europe in 1500. It is very pessimistic from a static point of view, and there are indeed many unsolvable political problems; but if we consider that we are currently in N kinds of disruptive innovations The critical point of the technological explosion (AI/New Energy/Biotechnology/Crypto), as predicted by Kurzweil’s Heart of the Machine, the next 5-10 years will be the accelerated maturity of technology (continuation of Moore’s Law). This will bring many incremental opportunities, bring about a revolution in productivity, and may cause changes in production relations. Such as the future sovereign individual. A similar static analysis of the church's corruption in 1500 AD cannot predict the rise of subsequent nation-states, let alone the prosperity brought about by the industrial revolution for a long period of time.
The entire cryptocurrency has been accumulated for more than 50 years since the emergence of encryption algorithms, and the thought trend of using encryption technology to maintain personal wealth has also been brewing for decades, and Bitcoin was launched in 2008. This is the crystallization of decades of ideological trends, which condenses the wisdom of several generations of liberal rightists, so this force is very powerful, and it cannot be negated by existing supervision.
Sovereign individuals, coupled with the maturity of AI+biological genetic engineering in the future, will they "create" superhumans like the gods of Greek mythology mentioned by Herali in the future? Or even go further and completely evolve from carbon-based organisms to silicon-based organisms? Time will tell.
8) The last book's suggestion for personal growth: how to approach, learn or think about the sovereign individual:
a. Be a globalist;
b. Jumping out of the traditional education and learning system, specialized, customized or apprenticeship teaching methods are the future and can cultivate outstanding individuals;
c. Make good use of the leverage effect of the Internet; a sovereign individual, his mental model or thinking model, is to create his own niche market, based on his unique combination of knowledge, skills and experience, and amplify it through the Internet.
