Wednesday, May 30, 2012

Book Review: The Sovereign Individual

The International Society for Individual Liberty published James Elwood's book review of the amazing and prescient The Sovereign Individual: Mastering the Transition to the Information Age.

Here is a brief excerpt from the full review:

It is the computer revolution that provides the promise of a real-world Galt's Gulch. Still in its infancy, the cybereconomy will allow the successful practitioners of computer technology to escape the regular economy and the predations of governments. Widely available strong encryption tools like Pretty Good Privacy (PGP) are already allowing ordinary users to make it impossible for government to monitor their communications or decipher the contents of their hard drives or storage disks.

The Information Revolution will also bring us the death of politics as we know it. Participants in the cyber-economy will operate in the anarchic environment of the Internet, choosing who they will deal with, how and when. The authors think that the morality of the marketplace will dominate the Internet, and that private clubs with their own security procedures will arise to prevent theft by cybercriminals. Politicians will become increasingly irrelevant, as people bypass them and form new voluntary local institutions and virtual communities on the Internet.

The death blow to the nation-state will be digital cash, which has just become available. E-cash or even e-metal, using encrypted verifiable signals will allow individuals to make their transactions in secret on the Internet, and will destroy the ability of governments to exact wealth through the hidden tax of monetary inflation. Using financial institutions domiciled in tax havens, and using anonymous remailers, cybernauts will be able to largely avoid taxes and inflation, and thus amass wealth at a vastly accelerated rate.

Governments will starve. Their ability to exact large sums from the rich for transfer payments will disappear. If they are to survive, they will be forced to radically downsize, and treat their citizens like customers instead of livestock. And since their ability to police large territories will also decline due to weapons technology, there will be enormous pressures to break up nations into much smaller jurisdictions. The provision of protection will become a business service, and much more personalized, especially for the rich cyber-entrepreuners.

For further reading:
"The Sovereign Individual Book Review", Peter Macfarlane, October 31, 2008
"Will Computer Technology Liberate Individuals from the Nation-State?", Greg Kaza, The Freeman, February 1, 1998


  1. The future outlined in this review seems extremely unlikely. The protector can coerce the protected but not vice versa. Whoever can coerce, can tax and throughout history, they always have.

    The provision of protection as a business service can only occur with the acquiescence of whoever is in charge and it is those in charge the protection service must ultimately answer to, whoever pays the bills.

    Digital cash has many positives but a tool to destroy the nation state is not amongst them.

  2. Alister Cyril BlancMay 30, 2012 at 12:18 PM

    Ken, you assume the future must be lawless? This is certainly not the case. Law & order in future will probably be more efficient and fair then in any other time in human history:

    The Idea of a Private Law Society

    1. The linked article points out problems with the nation state but the alternative it proposes would require the state to choose not to exist and that won't happen. The state can coerce, so whether you like it or not you are subject to its whims. You can't opt out. The state is inevitable, it has always existed and always will.

      The future is not lawless, it is the state that creates and enforces laws.

    2. Ken, I believe the point is that individuals can opt-out through non-compliance. Yes, a coercive taxing authority has the ability to demand a per head tax or even an existence tax, however an income-based tax will be difficult to ascertain. As a result, tax policy may shift to consumption-based taxes via the larger compliant merchants.

  3. This is basically System D in full gear. I already see this....Google Wiki Speed. This guy built a 100mpg car using the internet and did it for under 20k simply by cutting out the middle man. Paying the bankers and middle man (corporate whores) is just another form of tax. I see this happening now. Why should the banks get a cut of everything? This will take off because it will simply cut out the parasites. @Alister there is no law and order in the markets or Wall Street. Mortgage fraud went unchecked. MF Global and John Corzine stole millions from customer accounts, Jamie Dimon at JPM gets away with naked short selling everyday. The government does nothing. The only option we have is to op out, and digital money is one tool we have for this.

  4. in a cashless world they control and monitor everything you do,they can simply cut you off if they dont like what you stand for even if you have not broken the law.This book is another smokescreen to get people to think cashless society is a good idea which it would be if we didnt have a corrupt and genocidal cabal controlling society

  5. its already been tried and failed. The fed will stop at nothing to crush any who attempt to compete with the currency.

  6. Those Anon comments are a good example of people with opinions but little information. The fact is that bitcoin is already in use and is already being used to avoid taxation and to make digital transactions that would be impossible to do with cash. Such encrypted digital cash will bring down the state because in order to stop it, the state would have to bring down the internet. That is something they cannot and will not do. The state walks a precarious line. They like tech, they use it. It makes them wealthy as long as its used the way they want it to be used. The problem is that technology cannot be put in a bottle. The genie is out and it can be used by anyone. Encrypted digital cash, anonymous email, anonymous peer to peer networks, all using industrial grade encryption make it nearly impossible for any government to stop. Remember, the State isn't a thing or a person, its an idea. A system created and used by a group of people to maintain power. When the average person has the same level of power available to them that was once only available to governments, then the age of the Sovereign individual will have truly come.