As the breakdown of large systems accelerates, systematic compulsion will recede as a factor shaping economic life and the distribution of income. Efficiency will rapidly become more important than the dictates of power in the organization of social institutions.
The Sovereign Individual explores the social and financial consequences of this revolutionary change. Our desire is to help you to take advantage of the opportunities of the new age and avoid being destroyed by its impact. If only half of what we expect to see happens, you face change of a magnitude with few precedents in history.
The transformation will not only revolutionize the character of the world economy, it will do so more rapidly than any previous phase change‑ Unlike the Agricultural Revolution, the Information Revolution will not take millennia to do its work. Unlike the Industrial Revolution, its impact will not be spread over centuries. The Information Revolution will happen within a lifetime.
What is more, it will happen almost everywhere at once. Technical and economic innovations will no longer be confined to small portions of the globe. The transformation will be all but universal. And it will involve a break with the past so profound that it will almost bring to life the magical domain of the gods as imagined by the early agricultural peoples like the ancient Greeks.
To a greater degree than most would now be willing to concede, it will prove difficult or impossible to preserve many contemporary institutions in the new millennium. When information societies take shape they will be as different from industrial societies as the Greece of Aeschylus was from the world of the cave dwellers.
PROMETHEUS UNBOUND: THE RISE OF THE SOVEREIGN INDIVIDUAL
The coming transformation is both good news and bad. The good news is that the Information Revolution will liberate individuals as never before. For the first time, those who can educate themselves will be almost entirely free to invent their own work and realize the full benefits of their own productivity. In the Information Society, no one who is truly able will be detained by the ill‑formed opinions of others. It will not matter what most of the people on earth might think of your race, your looks, your age, your sexual proclivities, or the way you wear your hair. In the cybereconomy, they will never see you. The ugly, the fat, the old, the disabled will vie with the young and beautiful on equal terms in utterly color‑blind anonymity on the new frontiers of cyberspace.
Ideas Become Wealth
Merit, wherever it arises, will be rewarded as never before. In an environment where the greatest source of wealth will be the ideas you have in your head rather than physical capital alone, anyone who thinks clearly will potentially be rich. The Information Age will be the age of upward mobility. It will afford far more equal opportunity for the billions of humans in parts of the world that never shared fully in the prosperity of industrial society. The brightest, most successful and ambitious of these will emerge as truly Sovereign Individuals.
At the highest plateau of productivity, these Sovereign Individuals will compete and interact on term‑ that echo the relations among the gods, in Greek myth. The elusive Mount Olympus of the next millennium will be in cyberspace ‑ a realm without physical existence that will nonetheless develop what promises to be the world's largest economy by the second decade of the new millennium.
By 2025, the cybereconomy will have many millions of participants. Some of them will be as rich as Bill Gates, worth over $10 billion each. The cyberpoor may be those with an income of less than $200,000 a year. There will be no cyberwelfare. No cybertaxes and no cybergovernment. The cybereconomy, rather than China, could well be the greatest economic phenomenon of the next thirty years.
Politicians will no more be able to dominate, suppress, and regulate the greater part of commerce in this new realm than the legislators of the ancient Greek city‑states could have trimmed the beard of Zeus. The liberation of a large part of the global economy from political control will oblige all remaining forms of government to operate on more nearly market terms. They will ultimately have little choice but to treat populations in territories they serve more like customers, and less in the way that organized criminals treat the victims of a shakedown racket.
History Repeats Itself
This is a situation with striking parallels in the past. Whenever technological change has divorced the old forms from the new moving forces of the economy, moral standards shift, and people begin to treat those in command of the old institutions with growing disdain. This widespread revulsion often comes into evidence well before people develop a new coherent ideology of change. So it was in the late fifteenth century, when the medieval Church was the predominant institution of feudalism. Notwithstanding popular belief in "the sacredness of the sacerdotal office," both the higher and lower ranks of clergy were held in the utmost contempt‑not unlike the popular attitude toward politicians and bureaucrats today.
The printing press opened new intellectual horizons. It was the first machine of mass production, a signature technology that marked the onset of industrialism. Most textbooks would date its origins in the 18th century, but the actual mega-political transition between feudalism and industrialism began much earlier, at the end of the fifteenth century. Its impact was felt almost immediately in the transformation of dominant institutions, particularly in the eclipse of the medieval Church.
The capacity to mass-produce books was incredibly subversive to medieval institutions, just as microtechnology will prove subversive to the modern nation-state. Printing rapidly undermined the Church’s monopoly on the word of God, even as it created a new market for heresy. Although the Church attempted to suppress the printing press, censorship did not suppress the spread of the subversive technology; it merely assured it was put to its most subversive use. A similar technological revolution is destined to downsize radically the nation‑state early in the new millennium
What mythology described as the province of the gods will become a viable option for the individual ‑a life outside the reach of kings and councils. First in scores, then in hundreds, and ultimately in the millions, individual will escape the shackles of politics. As they do, they will transform the character of governments, shrinking the realm of compulsion and widening the scope of private control over resources.
The emergence of the sovereign individual will demonstrate yet again the strange prophetic power of myth. Conceiving little of the laws of nature, the early agricultural peoples imagined that "powers we should call supernatural" were widely distributed. These powers were sometimes employed by men, sometimes by "incarnate human gods" who looked like men and interacted with them in what Sir James George Frazer described in The Golden Bough as "a great democracy."4
When the ancients imagined the children of Zeus living among them they were inspired by a deep belief in magic. They shared with other primitive agricultural peoples an awe of nature, and a superstitious conviction that nature's works were set in motion by individual volition, by magic. In that sense, there was nothing self‑consciously prophetic about their view of nature and their gods. They were far from anticipating microtechnology. They could not have imagined its impact in altering the marginal productivity of individuals thousands of years later. They certainly could not have foreseen how it would shift the balance between power and efficiency and thus revolutionize the way that assets are created and protected. Yet what they imagined as they spun their myths has a strange resonance with the world you are likely to see.
The "abracadabra" of the magic invocation, for example, bears a curious similarity to the password employed to access a computer. In some respects, high‑speed computation has already made it possible to mimic the magic of the genie. Early generations of "digital servants" already obey the commands of those who control the computers in which they are sealed much as genies were sealed in magic lamps. The virtual reality of information technology will widen the realm of human wishes to make almost anything that can be imagined seem real. Telepresence will give living individuals the same capacity to span distance at supernatural speed and monitor events from afar that the Greeks supposed was enjoyed by Hermes and Apollo.
The new Sovereign Individual will operate like the gods of myth in the same physical environment as the ordinary, subject citizen, but in a separate realm politically. Commanding vastly greater resources and beyond the reach of many forms of compulsion, the Sovereign Individual will redesign governments and reconfigure economies in the new millennium. The fall implications of this change are all but unimaginable.
Genius and Nemesis
For anyone who loves human aspiration and success, the Information Age will provide a bounty. That is surely the best news in many generations. But it is bad news as well. The new organization of society implied by the triumph of individual autonomy and the true equalization of opportunity based upon merit will lead to very great rewards for merit and great individual autonomy. This will leave individuals far more responsible for themselves than they have been accustomed to being during the industrial period. It will also reduce the unearned advantage in living standards that has been enjoyed by residents of advanced industrial societies throughout the twentieth century.
As we write, the top 15 percent of the world's population have an average per‑capita income of $21,000 annually. The remaining 85 percent of the world have an average income of just $1,000. That huge, hoarded advantage from the past is bound to dissipate under the new conditions of the Information Age.
As it does, the capacity of nation‑states to redistribute income on a large scale will collapse. Information technology facilitates dramatically increased competition between jurisdictions. When technology is mobile, and transactions occur in cyberspace, as they increasingly will do, governments will no longer be able to charge more for their services than they are worth to the people who pay for them. Anyone with a portable computer and a satellite link will be able to conduct almost any information business anywhere, and that includes almost the whole of the world's multitrillion‑dollar financial transactions.
This means that you will no longer be obliged to live in a high‑tax jurisdiction in order to earn high income. In the future, when most wealth can be earned anywhere, and even spent anywhere, governments that attempt to charge too much as the price of domicile will merely drive away their best customers. If our reasoning is correct, and we believe it is, the nation‑state as we know it will not survive in anything like its present form.
There is a high probability that some who are offended by the new ways, as well as many who are disadvantaged by them, will react unpleasantly.
The clash between the new and the old will shape the early years of the new millennium. We expect it to be a time of great danger and great reward, and a time of much diminished civility in some realms and unprecedented scope in others. Increasingly autonomous individuals and bankrupt, desperate governments will confront one another across a new divide. We expect to see a radical restructuring of the nature of sovereignty and the virtual death of politics before the transition is over. Instead of state domination and control of resources, you are destined to see the privatization of almost all services governments now provide. For inescapable reasons that we explore at length in this book, information technology will destroy the capacity of the state to charge more for its services than they are worth to the people who pay for them.
Sovereignty Through Markets
To an extent that few would have imagined only a decade ago, individuals will achieve increasing autonomy over territorial nation‑states through market mechanisms. All nation‑states face bankruptcy and the rapid erosion of their authority. Mighty as they are, the power they retain is the power to obliterate, not to command. Their intercontinental missiles and aircraft carriers are already artifacts, as imposing and useless as the last warhorse of feudalism.
Information technology makes possible a dramatic extension of markets by altering the way that assets are created and protected. This is revolutionary Indeed, it promises to be more revolutionary for industrial society than the advent of gunpowder proved to be for feudal agriculture. The transformation of the year 2000 implies the commercialization of sovereignty and the death of politics, no less than guns implied the demise of oath‑based feudalism. Citizenship will go the way of chivalry.
We believe that the age of individual economic sovereignty is coming. Just as steel mills, telephone companies, mines, and railways that were once "nationalized" have been rapidly privatized throughout the world, you will soon see the ultimate form of privatization‑the sweeping denationalization of the individual. The Sovereign Individual of die new millennium will no longer be an asset of the state, a de facto item on the treasury's balance sheet. After the transition of the year 2000, denationalized citizens will no longer be citizens at all, but customers.
The commercialization of sovereignty will make the terms and conditions of citizenship in the nation‑state as dated as chivalric oaths seemed after the collapse of feudalism. Instead of relating to a powerful state as citizens to be taxed, the Sovereign Individuals of the twenty‑first century will be customers of governments. These governments will be organized along different principles than those which the world has come to expect over the past several centuries.
A new moral vocabulary will be required to describe the relations of Sovereign Individuals with one another and what remains of government. We suspect that as the terms of these new relations come into focus, they will offend many people who came of age as "citizens" of twentieth‑century nation‑states. The end of nations and the "denationalization of the individual" will deflate some warmly held notions, such as "equal protection under the law" that presuppose power relations that are soon to be obsolete.
Just as attempts to preserve the power of knights in armor were doomed to fail in the face of gunpowder weapons, so the modern notions of nationalism and citizenship are destined to be short‑circuited by microtechnology. Indeed, they will eventually become comic in much the way that the sacred principles of fifteenth‑century feudalism fell to ridicule in the sixteenth century. The cherished civic notions of the twentieth century will be comic anachronisms to new generations after the transformation of the year 2000. The Don Quixote of the twenty‑first century will not be a knight‑errant struggling to revive the glories of feudalism but a bureaucrat in a brown suit, a tax collector yearning for a citizen to audit.
REVIVING LAWS OF THE MARCH
We seldom think of governments as competitive entities, except in the broadest sense, so the modern intuition about the range and possibilities of sovereignty has atrophied. In the past, when the power equation made it more difficult for groups to assert a stable monopoly of coercion, power was frequently fragmented, jurisdictions overlapped, and entities of many different kinds exercised one or more of the attributes of sovereignty. Not infrequently, the nominal overlord actually enjoyed scant power on the ground. Governments weaker than the nation‑states are now faced with sustained competition in their ability to impose a monopoly of coercion over a local territory. This competition gave rise to adaptations in controlling violence and attracting allegiance that will soon be new again.
When the reach of lords and kings was weak, and the claims of one or more groups overlapped at a frontier, it frequently happened that neither could decisively dominate the other. In the Middle Ages, there were numerous frontier or "march" regions where sovereignties blended together. These violent frontiers persisted for decades or even centuries in the border areas of Europe, There were marches between areas of Celtic and English control in Ireland; between Wales and England, Scotland and England, Italy and France, France and Spain, Germany and the Slav frontiers of Central Europe, and between the Christian kingdoms of Spain and the Islamic kingdom of Granada. Such march regions developed distinct institutional and legal forms of a kind that we are likely to see again in the next millennium. Because of the competitive position of the two authorities, residents of march regions seldom paid tax. What is more, they usually had a choice in deciding whose laws they were to obey, a choice that was exercised through such legal concepts as "avowal" and "distraint" that have now all but vanished. We expect such concepts to become a prominent feature of the law of Information Societies.
Before the nation‑state, it was difficult to enumerate precisely the number of sovereignties that existed in the world because they overlapped in complex ways and many varied forms of organization exercised power. They will do so again. The dividing lines between territories tended to become clearly demarcated and fixed as borders in the nation‑state system. They will become hazy again in the Information Age. In the new millennium, sovereignty will be fragmented once more. New entities will emerge exercising some but not all of the characteristics we have come to associate with governments.
Some of these now entities, like the Knights Templar and other religious military orders of the Middle Ages, may control considerable wealth and military power without controlling any fixed territory. They will be organized on principles that bear no relation to nationality at all. Members and leaders of religious corporations that exercised sovereign authority in parts of Europe in the Middle Ages in no sense derived their authority from national identity. They were of all ethnic backgrounds and professed to owe their allegiance to God, and not to any affinities that members of a nationality are supposed to share in common.
Merchant Republics of Cyberspace
You will also see the re‑emergence of associations of merchants and wealthy individuals with semisovereign powers, like the Hanse (confederation of merchants) in the Middle Ages. The Hanse that operated in the French and Flemish fairs grew to encompass the merchants of sixty cities.7 The "Hanseatic League," as it is redundantly known in English (the literal translation is "Leaguely League"), was an organization of Germanic merchant guilds that provided protection to members and negotiated trade treaties‑ It came to exercise semisovereign powers in a number of Northern European and Baltic cities. Such entities will re‑emerge in place of the dying nation‑state in the new millennium, providing protection and helping to enforce contracts in an unsafe world.
In short, the future is likely to confound the expectations of those who have absorbed the civic myths of twentieth‑century industrial society Among them are the illusions of social democracy that once thrilled and motivated the most gifted minds. They presuppose that societies evolve in whatever way governments wish them to‑preferably in response to opinion polls and scrupulously counted votes. This was never as true as it seemed fifty years ago. Now it is an anachronism, as much an artifact of industrialism as a rusting smokestack. The civic myths reflect not only a mindset that sees society's problems as susceptible to engineering solutions; they also reflect a false confidence that resources and individuals will remain as vulnerable to political compulsion in the future as they have been in the twentieth century. We doubt it. Market forces, not political majorities, will compel societies to reconfigure themselves in ways that public opinion will neither comprehend nor welcome. As they do, the naive view that history is what people wish it to be will prove wildly misleading.
It will therefore be crucial that you see the world anew. That means looking from the outside in to reanalyze much that you have probably taken for granted. This will enable you to come to a new understanding. If you fail to transcend conventional thinking at a time when conventional thinking is losing touch with reality, then you will be more likely to fall prey to an epidemic of disorientation that lies ahead. Disorientation breeds mistakes that could threaten your business, your investments, and your way of life." ~ Sovereign Individual (I highly recommend you read it.)
"The universe rewards us for understanding it and punishes us for not understanding it. When we understand the universe, our plans work and we feel good, Conversely, if we try to fly by jumping off a cliff and flapping our arms the universe will kill us." -JACK COHEN AND IAN STEWART