Balaji-bhumi: Getting from here to there

  • A network state is a social network with a moral innovation, a sense of national consciousness, a recognized founder, the power of collective action, individual civility, an integrated cryptocurrency, a consensual government bounded by a social smart contract, an archipelago of crowd-funded physical territory, a virtual capital, and an on-chain census that proves a large enough population, income, and real-estate footprint to earn a measure of diplomatic recognition.
  • -Balaji Srinivasan, Network state

bAlaji Srinivasan Network state (TNS) is filled with provocative arguments and insights. I strongly recommend TNS for your book discussion group. It can fit into the fiction or non-fiction category.

Like Neal Stephenson or JK Rowling, TNS uses original linguistic expressions that create a sense of an alternate universe. As just one example, you probably know that the Democratic Party once represented white racists in the South, and the Republican Party was stronger in the more racially progressive Northeast, but these positions have changed. In TNS, this is called “flippening”.

Indeed, TNS also strikes me as fictional, it does not address the problem of how people can extricate themselves from existing states to join a network state. Suppose my home is located in Silver Spring, Maryland, USA and I want to join Balaji-land. How can I pay taxes to my county, state and US Treasury? What regulations in my local jurisdiction can I jettison?

I don’t think my neighbors would be pleased to tell me that my house is in Balaji-Bhoomi, the playground my kids use, the road I drive on, and I don’t have to pay taxes for it. Other local amenities. I don’t think they want to exempt me from the laws prohibiting commercial establishments in residential areas or the laws regarding the sale of drugs or alcohol.

Such issues will need to be discussed with each successor government so that people move to a networked state. Otherwise, a network state is nothing more than an add-on set of rules and regulations, if all the obligations of the region in which one resides remain. It is an international club or affinity group or corporate loyalty program. While the eloquent TNS might describe how networked states might be possible if human social systems were started from scratch, it is silent on what I see as the important point of getting from here to there.

As a non-fiction book, TNS describes the predicament we are in with the current state system and the potential superiority of a network state system. The rest of this review will discuss some of the many insights that TNS has to offer on these topics.

Governments justify power by increasing threats and preying on public fear. Srinivasan wrote,

  • Somewhat toned-down versions of the atrocity story are techniques used to justify the expansion of political power.
    • • If we don’t force people to take off their shoes at airports, people will die!
    • • If we don’t stop people from willingly taking experimental healing drugs, people will die!
    • • If we don’t set up a distraction office to stop people from making nasty comments online, people will die!

Rulers distort history to expand their power. But it has limitations, as there is an objective source of truth, which TNS refers to as technology.

  • The history of what makes technological history work; Political history is the history of what works to maintain power.

TNS argues that encryption is a fundamental revolution in power distribution.

  • When there is strong encryption governments can’t crack, that means states can’t hide communications, transactions they can’t intercept, and digital borders they can’t penetrate. It means nothing less than the ability to organize groups outside of state control, and thus the reduction of state power per control

The state is also weakened by the way the Internet erodes the importance of physical geography.

  • When network identity is more important than neighborly relations, it challenges the basic premise of the Westphalian state, which is that (a) those who live geographically close to each other share values ​​and (b) therefore laws should be based on geographic boundaries. The alternative is… the laws that govern them should be based on network boundaries.

The distinction between state and network seems blurred in America today, as the same group currently wields power using both. In a passage illustrating the flavor of linguistic expression in the book, Srinivasan writes,

  • There are various names for this left-authoritarian network that “responsibly” controls the state from the outside. We may call it the Paper Belt (which emphasizes their rust-belt-like technological backwardness), we may call it the Cathedral (which emphasizes their sanctity), we may call it the Regime (which emphasizes their illegitimacy), or we may call I can It’s just the American establishment (which emphasizes their staying power). We will later call it NYT/USD to emphasize their source of truth and digital economy relative to BTC/web3 and CCP/RMB.
  • It is important to understand that left-wing power comes from crushing their enemies in centralized American state officials and (recently) centralized Big Tech network executives.

But TNS is hopeful that a section of the political left is leaning towards libertarianism.

  • Left-libertarian subgroups of the Blues have begun to flirt with decentralized media and Web3, as they realize that the network might be more attractive than the collapsing American state. Could Substack be more profitable than Sulzberger? Can Satoshi’s community provide more for them than Barney? If they need to be redefined as “socialism”, so be it! And if their funding streams are changing, their ideology is also slowly changing. Yes, they may start out as mere pawns of America’s left-authoritarian establishment, but the values ​​they value are increasingly coming from a decentralized global network rather than a centralized American state. So they started to become unrelated. And it’s the emerging network-versus-state division among blue tribes.

TNS also sees a liberal party on the right. He called them “international capitalists”. He claims that their belief in free markets and global markets will lead them to gravitate towards Bitcoin, and therefore towards the network and away from the state.

I have my doubts about these libertarian cadres on the left and right, especially the latter. Capitalism depends on strong property rights, and so far these seem better protected by governments than software algorithms. Trade today is facilitated by government-affiliated banks. Bitcoin and other cryptocurrencies are associated with criminal activity. The possibility of this changing, which I never thought was very good, only fell away with the various hacks, frauds and collapses that occurred in the crypto world in early 2022. In fact Srinivasan says,

  • … Crypto has made progressives more liberal and libertarians more progressive. Progressives have discovered that you can create stateless money. Libertarians have discovered that you then have to rebuild something like the state: identity, reputation, anti-fraud, custody, trust, community and the like.

“TNS foresees a conflict between those who turn to networks to solve problems through innovation and those who turn to the state to solve problems through legislation.”

In any case, TNS predicts a clash between people who look to networks to solve problems through innovation and those who look to the state to solve problems through legislation. In this regard, TNS reminds me of the distinction between dynamists and statists drawn by Virginia Postrel. The future and its enemies:

  • There is a sense, both outside and inside the United States, that the US-dominated postwar order is either on its way out or has already ended, and that antiquated legislation and endless remakes reflect a fading culture that tries to hold on to what’s to come. to do Next up.

TNS argues, in order to sustain its power, the state must spin a narrative that distorts the truth. But now these distortions are being exposed.

  • Why do we know about these current distortions? This is again due to the clash of leviathans, as the network sends information around the kingdom, giving people original Instead of free speech.

TNS makes the case for network states as a means of promoting ethical innovation. Like technological innovations, ethical innovations should be empirically tested and evaluated by the people affected by them.

  • Backers can finance startup societies using technology methods, with open, transparent contracts and consent of all citizens. But they can also achieve the moral innovation desired by political revolutionaries. And if these startup societies are built on boundaries, whether digital or physical, then ethical innovations are no longer imposed top-down, but adopted bottom-up by those who choose. It gives a better way to achieve the goal. ambitious young political reformers.

For more on this, see

  • “Networks, Hierarchies and History” by Arnold Kling. Econlib, March 5, 2018.
  • Podcast episodes Marc Andreessen on Software, Immortality and Bitcoin. Ecotalk.
  • “Libertarians and Group Rules” by Arnold Kling. Econlib, September 9, 2012.

TNS says that we should envision a future of many new network states, each state based on a single moral innovation that is a single set of principles that all members adhere to but that differ somewhat from the social morality prevailing elsewhere. As these states rise and fall, we can expect moral progress, just as we enjoy economic progress from the process of creative destruction within organizations.

TNS hopes that it will lead

  • … Recentralized Center: A circle of startup societies and network states built by pragmatic founders, a group of high-trust communities established as deliberate alternatives to failed states and surveillance states alike.

In short, TNS offers a rich set of concepts. Even if its vision for the future is purely fictional, it is still an important thought experiment.

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