The future of sovereignty.

Prof.James Sheehan

I have been listening to Prof.James Sheehan’s podcast on the International System from Stanford and to say the least, I wish I had history teachers like him back in the days when I went to school in India. I am, to put it mildly, thoroughly impressed. I may have ended up differently than as an electrical engineer, which branch I pursued purely out of peer pressure and from no love of the subject. I am one of the internet generations, having come of age at the same time as the internet (in its full glory as the World Wide Web in 1990, the year I turned 18 and came of age myself!), having made my first buck in/on the internet, having met my life partner online, and having grown up learning to use it as just another tool rather than to look at it as some kind of ‘technology’.

Douglas Adams in a shirt, possibly sitting on a chair.

As an aside, Douglas Adams, my favourite author, defines technology as ‘something that does not work well…yet!’ This is very succinct since he goes on to state that a chair is not technology, a shirt is not technology, since we have more or less figured out how they work and how to make them and use them. Most innovations in these are lateral and there is little left to revolutionise the concept of a basic chair or shirt. On the other hand, a computer is still technology, since it is not perfect. It is constantly being improved, it crashes, needs experts to repair, to understand, to use, to upgrade, and to build. Its internal workings are more or less a mystery to the common user and it is not ‘transparent’ as a shirt or a chair is.

This brings me to the point I have been thinking about for the past 10 years or so. It will take a bit of explanation from my side and request you to bear with me on this. I think the line of thinking I propose may have its benefits and hence, this entry on my blog. Do comment below if you think this has any merits.

Prof.Sheehan begins and finishes his lecture series with a discussion on nation and state and how difficult it is to define the way to the future as regards these two concepts given the growing aggression and realisation by various peoples that they are, in some way, ‘different’ and constitute a nation and hence, should have their own state. I wish to introduce another ingredient into this, viz., technology. With the growth of the internet, some of the equations we have seen since the late 19th century may change drastically (just like the industrial revolution did in the late 18th) and it is this that forms the basis of my theory.

I base my theory on the following assumptions:

1. The mandate of a government of a state, if based on Hobbes, Locke or Rousseau’s ‘Social Contract’ in which the citizens sacrifice some of their individual rights for the greater good of collective security, to put it simply, is ‘to take the minimum from the ruled and offer the maximum in return’. In short, tax people less and offer more and more benefits. The lesser the state asks of the people, and the more it offers, the better the social contract holds. In reality, however, this may not be as pure as it sounds in theory but that is as it should be at least. Take minimum, give maximum. That may be the reason this kind of social contract has found favour with most civilisations across history. However, the basis of this contract has always been the definition of ‘sovereignty’ that Prof.Sheehan (or, more rightly, Jean Boudin) has put forth: That of a monopoly on violence. For example, I follow the law and the rules of my country/society because of, major amongst other moral, ethical and peer-related reasons, I fear that I may be taken to task for not following them, through the police, the judiciary etc. The state, so to say, has a hold on my conduct and regulates it through this monopoly of violence it wields over any other agency I encounter in my daily life. This could also be the reason why, where a duopoly exists, like a mafia, for example, people follow two sets of rules, one by the state and one by the mafia. In fact, they may even pay dual taxes in such situations. In short, the threat of violence is what keeps people in line, though most of the time, this is very veiled and very subtle, especially in the state machinery, though not so much so in the mafia!

2. The mandate of a private enterprise, like a company, for example, is exactly the opposite: take the maximum and give the minimum one can get away with. For example, companies tend to charge you as much as you are willing to pay for their product or service and offer you the smallest amount in return, an amount that, if it were any smaller, you would turn away and go to the competition. Take maximum, give minimum. So, the mandates of the state and the private enterprise are always exact opposites. This is the basic premise. Now, I may be wrong or simplistic in saying so, and frankly, I have not presented this to any scholar of repute yet to get any true feedback on this, but let us go with this assumption for the time being, so as to understand what I intend to say below.

Money is power.

As the internet takes over our lives to greater and greater degrees, and more and more physical labour is put under automation, it may be possible to imagine a society, maybe 500 or maybe even 50 years from now, that relies less and less on manual labour-based income and more and more on income generated virtually through trading, services, research, teaching, consultation etc. The internet, regardless of how sophisticated it looks like at the moment to us, is still in its extreme infancy and as it develops into a more and more powerful tool, the very nature of what the internet is and what one can do with it will change. I do believe that there is a real possibility of a significant proportion of the world’s population making its living online and though this may take, as I said, maybe even 500 years to get, you would understand that it is indeed a long enough time in human history for society to evolve, change and adopt new ideas and practices, small as the number looks when compared the say the life of the planet Earth or some similar mind-boggling figure.

Today, the one dependency that all ‘power’ revolves around is money or wealth in some form. (I may be increasingly sounding like Alvin Toffler about the rising quality of power stemming from violence, money and knowledge, but yes, I do draw some inspiration from him when expounding this hypothesis). The actual power of wealth is vested within those that guarantee the value of money. This means that though the intrinsic value of the dollar bill I hold or the digitised funds my bank account has may be as close to zero as possible, the guarantee of the government that it is worth something is what holds the economy, and my existence, together.

Violence sustains power.

So, the real power is concentrated in the hands of those who can guarantee the buying power of the money in my pocket. The governments of states, due to their monopoly on THIS power, in addition to (or because of) their monopoly on violence, are therefore the ones that wield the real power over my life. My decisions on what I can do and what I cannot, who I need to please and who I need not, is based on who holds this power: the power to guarantee the value of my money. In fact, even in historical times, sovereigns have declared their independence by minting/printing their own money and this has always been a very well understood phenomenon.

Now, consider the internet. There are various issues and assumptions that crop up here and the best way to put them is in a point by point form:

1. People will rely more and more on the internet for their livelihoods. I have explained this before.

2. Money will become more and more digitised and less and less hard cash. This is obviously already happening.

Are we already controlled by these people?

3. People who deal with other people will need a guarantor for such digitised transactions. Currently, it is the government. But increasingly, it is private enterprises like Visa or MasterCard or Amex or some other agencies like international banks or cartels. These for-profit enterprises act as mediators and arbiters of exchange and guarantee that the supplier gets paid what the buyer has been charged and has been agreed upon between them regardless of whether they meet or not. These agencies charge a small amount. Today it is called a ‘fee’, but for sake of argument, let us call it ‘tax’ so as to equate it with something similar that we pay our governments so we can compare apples to apples as we go along.

Who decides?

4. With the advent of more and more automation, these agencies share information about defaulters and fraudsters, in short, the ‘bad apples’. So, if you are in the bad books of one, it is likely that you will receive no quarter from any other agency till you right whatever wrong you have committed and that too, within the rules (let us call them ‘laws’ so as to equate these too with the state’s constituted rules) set by them, earlier individually, but more and more, through a cartelisation, collectively. Your best chances of continuing to conduct your livelihood online are to follow these ‘laws’ in whose laying down you had no representation or part to play, except that you hope that the government you owe your allegiance to is keeping a watch on these and the courts set aside by this government are an effective platform for appeal in case you feel wronged. So far so good.

5. To repeat some of the things above, your government acts as the regulator of these companies, discouraging cartelisation, monopolies and restrictive trade practices, and encouraging competition and fair play. This is the situation now.

6. As the internet grows, along with other means of communications, like telephony, maybe virtual reality in the future etc, I, as an individual, will have a feeling of having more and more in common with other people where such a feeling is ‘geography-agnostic’ or ‘physical-location-blind’. this means that the ‘shared pattern of cultural values’ or ‘common sympathies’ that I share with other people may be free of location. Maybe you and I have more in common than me and my next-door neighbour, as an example. This can twist and make the problem of defining a ‘people’ or a ‘nation’ very knotty. Let us assume this will happen and that more and more people will associate with others online with just as much familiarity as they would have done with their neighbouring village or county in the 19th century, or for that matter, the 20th. This means that ‘nations’, in their strict technical sense, will be formed that will be physically and geographically nebulous.

Trans-border micro-transactions will become the norm.

7. Also, trade and exchange of services across today’s international boundaries will rise and will also become microscopic in nature. This means that it will not necessarily be 10 tonnes of, say, sugar that will be move from, say Brazil to Kuwait, but even a single piece of clothing or maybe a fishing rod or even a service that is worth less than a dollar in its value. so, micro-transactions will rise internationally, helped also by the fact that money is now more and more digitised and cross-border entities like Visa or MasterCard (as examples) are guaranteeing the transaction without reference to the governments in question. Already, the taxation implications of these transactions are causing headaches to legislators across the world. I can only see this growing and becoming uncontrollable by any one state government.

8. The local ‘geography-centric’ governments therefore, will lose their importance and eventually their power, as new relationships between faraway individuals form new ‘societies’ and I daresay, ‘nations’. As they lose their power, they will also lose the ability to control the trade that flows or guarantee the transactions as effectively as the private agencies do. This will further reduce their power to control these private entities and prevent any of the ‘bad’ things like cartelisation or monopolies being created. this is a vicious cycle and once caught in it, the power of the state governments over the private enterprises and hence, over the people they govern will spiral downwards.

Smaller countries, weaker countries?

9. Parallelly, ‘countries’ will get smaller and smaller as smaller parts of a large geographical entity will start asserting independence (as we can already see). This trend can only continue as smaller and smaller countries are formed. And the smaller they are, the weaker they will be overall compared to the power of the private enterprise that spans the globe and probably has a turnover several times the gross national product of the majority of the small countries. Till today, the hold that state governments had over the private companies was the physical access to the markets. With countries growing smaller and the internet growing bigger, this is likely to be less and less possible. Private entities will strong arm, bribe, lobby, bully, and force themselves onto smaller governments (as they surely do even today to some extent in some countries and to a larger extent in some others) to allow them access. With smaller countries and less powerful governments, this will become widespread and more the norm than the exception.

An offer you cannot refuse.

10. Now, in this changed scenario, when one has to follow two sets of rules, like in the societies where the mafia is prevalent today, one set by your government and one set by the private enterprise, one would choose to follow those rules that are set by the stronger party when these rules clash and contradict themselves. This is today true of the mafia also. In the future, this will be true of private enterprises. Given a choice, an individual would rather be in the bad books of his/her government than of the companies that guarantee the value of the exchange upon which depends their livelihood.

Is this what we are expecting?

Now, having laid out the picture, here are my questions:

1. In such a changed scenario, given that the mandates of the government and the private enterprise are exactly opposite and that the private enterprise exists to maximise shareholder value, meaning that it would give as little as possible for as much in return as it can extract from the customer, while the government works on the opposite principle of asking for the minimum sacrifice (tax, military service etc) and offering the maximum in return (security, benefits, health, education, infrastructure etc), how will this change the concept of sovereignty?
2. How will this change the concept of a ‘nation-state’? Will such an entity exist at all in the future or will the entire world be just one ‘nation’ where each individual is free to form their own cultural associations free from geographical limitations, and hence change the very definition of ‘peoples’?
3. How do you see the world 500 years from now when this has happened? More chaos? More order? A return to the 19th-century principles of the nation-state? A violent revolution that turns back time and restores the pre-20th century type of countries? Bloodshed? Another Marx? Medieval Italian city-state type of countries again?

I know you did not expect me to pose questions in this manner or come up with this harebrained idea!! I myself have been thinking how badly I put it even after 10 years of thought. Maybe it has to do with my writing or communication skills. But I am sure you can see the germ of the idea there somewhere. What do you think? Do you really feel the world will contract into small countries run by private entrepreneurs and then go through another process of violent upheaval and revert to the way things were 100 years ago? Or would there be a different path the world might take? What do you feel?