How a 1997 Book Predicted Tech's War on Democracy

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How a 1997 Book Predicted Tech's War on Democracy

Gil Duran

The Point: In 1997, an influential book predicted the rise of "cybercurrency," the decline of nation-states, and the ascendance of a "cognitive elite" who would eventually rule the world. To fully understand Silicon Valley's project to destroy democracy, read The Sovereign Individual: How to Survive and Thrive During the Collapse of the Welfare State. (In 1999, it was rebranded as The Sovereign Individual: Mastering the Transition to the Information Age, but I think the original title is more honest and revealing.)

The Back Story: In a recent Financial Times op-ed, Palantir billionaire Peter Thiel used the word apokalypsis to describe Trump's reelection. He helpfully explained that the term - the root of "apocalypse" - originally meant "unveiling" in Greek.

This reminded me of something I had read elsewhere, but I couldn't quite put my finger on it. But then I found it on page 12 of The Sovereign Individual: How to Survive and Thrive During the Collapse of the Welfare State by James Dale Davidson and Lord William Rees-Mogg:

As the decade expires, a murderous century expires with it, and also a glorious millennium of human accomplishment. All draw to a close with the year 2000.
We believe that the modern phase of Western civilization will end with it. This book tells why. Like many earlier works, it is an attempt to see into a glass darkly, to sketch out the vague shapes and dimensions of a future that is still to be. In that sense, we mean our work to be apocalyptic—in the original meaning of the word. Apokalypsis means "unveiling" in Greek. We believe that a new stage of history—the age of the Sovereign Individual—is about to be unveiled.

Balaji Srinivasan, the would-be leader of the Network State cult that seeks to break existing nations into smaller territories, likes to talk about "history running in reverse." He took the phrase from page 19 of The Sovereign Individual, which has a section headlined "History in Reverse":

The process by which the nation-state grew over the past five centuries will be put into reverse by the new logic of the Information Age. Local centers of power will reassert themselves as the state devolves into fragmented, overlapping sovereignties … The nation-state will devolve like an unwieldy conglomerate.

Srinivasan also describes two main ways to create network states: Voice, and Exit. The Voice method entails using wealth and technology to take over existing governments. The Exit method involves leaving democratic societies and forming new sovereign countries on private land.

excerpts

An anti-democratic vision of the future

Analysis: The Sovereign Individual has profoundly shaped the thinking of some powerful tech elites. The overtly prophetic book makes numerous predictions about the future, and several core themes emerge that continue to influence Silicon Valley's approach to politics, economics, and social organization. These key arguments reveal a terrifyingly anti-democratic vision dressed in the language of technological inevitability.

While it is not possible to capture every crucial detail in one post, here are my top 8 takeaways from the book:

1. Nation-States will decline

• Governments will lose their monopoly on violence and taxation as individuals gain more autonomy via technology.
• The ability to hide wealth digitally will allow people to evade high taxes, forcing governments to compete for citizens by offering better services.
• Traditional nation-states will become less relevant and collapse in violence and chaos. Smaller, corporate-governed entities that treat people as consumers rather than citizens will rise to take their place.

Quote from book: "If our deductions are correct, you stand at the threshold of the most sweeping revolution in history. Faster than all but a few now imagine, microprocessing will subvert and destroy the nation-state, creating new forms of social organization in the process. This will be far from an easy transformation. The challenge it will pose will be all the greater because it will happen with incredible speed compared with anything seen in the past."

2. A 'Cognitive Elite' will rise

• Wealthy and skilled individuals - the so-called "Cognitive Elite" - will use encryption, digital currencies, and jurisdictional arbitrage to escape democracy, law, and regulation.
• The wealthiest individuals will start by migrating to low-tax regions, depriving democratic governments of tax revenue.
• Personal "sovereignty" will be enhanced through self-reliance, digital mobility, and global entrepreneurship.

Quote from book: "The most obvious benefits will flow to the 'cognitive elite,' who will increasingly operate outside political boundaries."

3. Cryptography and Digital Currencies will dominate

• Encryption will allow individuals to hide their wealth and privacy from governments.
• "Cybercurrency" will disrupt traditional financial systems by enabling peer-to-peer transactions without government oversight.

Quote from book: "A more advanced stage will mark the transition to true cybercommerce. Not only will transactions occur over the Net, but they will migrate outside the jurisdiction of nation-states. Payment will be rendered in cybercurrency. Profits will be booked in cyberbanks. Investments will be made in cyberbrokerages. Many transactions will not be subject to taxation. At this stage, cybercommerce will begin to have significant megapolitical consequences of the kind we have already outlined. The powers of governments over traditional areas of the economy will be transformed by the new logic of the Net. Extraterritorial regulatory power will collapse. Jurisdictions will devolve. The structure of firms will change, and so will the nature of work and employment."

4. The Social Welfare state will collapse.

• As governments lose tax revenue due to digital innovations that evade taxation, social welfare programs will become unsustainable.
• Citizens will be forced to rely on personal responsibility, private enterprise, and decentralized solutions for healthcare, education, and security.
• Governments will operate like businesses and those who can afford their protection will be mere customers rather than citizens.

Quote from book: "With the passage of the Industrial Age, the megapolitical conditions that democracy satisfied are rapidly ceasing to exist. Therefore, it is doubtful that mass democracy and the welfare state will survive long in the new megapolitical conditions of the Information Age."

5. Economic inequality will skyrocket

• The transition will create a divide between early adopters of the new digital economy and those who do not adapt.
• "Cognitive elites" will thrive, but the majority of people - those dependent on traditional employment or government aid - will struggle.
• However, the authors claim this transition will increase personal freedom (for the elites, anyhow) and reduce government power (which they see as a good thing).

Quote from book: "In short, human nature, the origin of species, and their development by natural selection are elements to be considered in understanding the continuing evolution of human society. In the present case we are considering the likely human response to new circumstances occasioned by information technology. Particularly, we are focusing on the reaction to the advent of the cybereconomy and its many consequences, including the emergence of economic inequality more pronounced than anything seen in the past."

6. The transition will be disruptive and violent

• Governments will resist losing control, leading to authoritarian measures and political upheaval.
• Cybercrime, digital warfare, and new forms of economic conflict will arise as old power structures weaken.
• Violence and organized crime will rise. Elites will rely on private security forces for protection.

Quote from book: "Violence will become more random and localized. Organized crime will grow in scope."

Note: This is interesting because the Tech Elites spend a lot of time whining about crime, which is mostly at historical lows, especially in places like San Francisco. Yet their prophetic text predicted a large rise in crime and violence…

7. Work and wealth creation will change dramatically

• Traditional jobs will disappear, replaced by decentralized, digital, and gig-based work models.
• Innovation and entrepreneurship will be the main drivers of wealth, and those who master digital tools will gain a competitive edge.
• Education and career planning will shift towards self-directed learning and specialized skill acquisition.

Quote from book: "To an increasing degree, individuals capable of creating significant economic value will be able to retain most of the value they create for themselves. Support staff that previously absorbed a large part of the revenue generated by the principal income creators in an enterprise will be replaced by low-cost automated agents and information systems … 'Good jobs' will be a thing of the past."

8. Democracy will die

• Democracy as we know it will not survive in its current form.
• Small and "efficient" and specialized corporate governance models may replace large, bureaucratic nation-states.
• Political loyalty will be less about nationality and more about choosing jurisdictions that align with economic status and personal values.

Quote from book: "Now that information technology is displacing mass production, it is logical to expect the twilight of mass democracy. The crucial megapolitical imperative that made mass democracy triumph during the Industrial Age has disappeared. It is therefore only a matter of time until mass democracy goes the way of its fraternal twin, Communism."

Toward Tech Dystopia

You will probably need a nice walk outside after reading all of that. And there's plenty I left out, like the book's strange obsession with genetics (surprise, surprise).