technology
culture

Will digital technologies kill the nation state?

Uncharted Territories
Economist
Genesis
Response
Penultimate
Finale

Tomas Pueyo

Uncharted Territories

January 3rd, 2022
I have immense respect for Mr. Kling. Here's where we agree and disagree.
Mr. Kling's first concern is about finance outside the government. This is very US-centric concern. Bitcoin and DeFi are game-changers abroad, where fiat currencies are unreliable and financial systems are dreadful. That's where DeFi will blossom first, regardless of governments. And I doubt the US will then ban a $2 trillion asset class—do you think our lawmakers don't own Bitcoin?
He also doubts governments will give up sovereignty to supra-national organizations, forgetting that they already have. Ask Argentina or Greece about their financial sovereignty, China and the US about trade sovereignty, Brexiteers about EU sovereignty, or multinationals about GDPR.
He agrees, however, that transnational agencies will likely take over some government roles without government backing. We agree on that.
To deny the power of decentralization, Mr. Kling mentions platforms' economies of scale. True. I'd add network effects to that. That was my point about massive corporations undermining governments.
But beyond that, it's their users who've been empowered. Like Satoshi Nakamoto, using the Internet to invent and spread the concepts of Blockchain and Bitcoin. Or QAnon, to spread conspiracy theories, brainwash millions, and incite revolts. Or even myself, when I studied a few science papers from my apartment and published essays like The Hammer and the Dance, which influenced the epidemiological policies of dozens of governments. These would have been impossible 20 years ago. This trend is only going up: with more access to data and distribution, individuals will only gain more power.
Mr. Kling fears reactionary "Somewheres". But they are like Church devotees of the 1500s: anchored in the identity of a bygone era. They still prevailed for some time—until the nation-state replaced the Church. The same will happen to nation-states and its followers in the coming decades. Dying stars still shine.
Mr. Kling and I also agree that some countries will choose an authoritarian route and suppress the power of the Internet. But this is a bifurcation: the countries that choose that path will miss out on the future and be left in the ditch of history.
More importantly, Mr. Kling doesn't address the core thesis: Information technologies determine political structures.
It happened before with speech, writing, the printing press, broadcasting media... And it is happening now with the Internet.
Nation-states lose power: (1) to individuals who are connected to everybody else by the Internet, have more information than ever, more distribution than ever, and a new lingua franca to share all this knowledge: English; (2) to behemoth corporations, with more power than most countries; and (3) to supra-national entities, whether government-sanctioned or not. All the while their costs soar and their incomes plummet.
Like the Church in 1500, nation-states will fight for relevance for a long time. But their star is dying. Most haven't realized it yet. Their replacement is emerging as we speak. Instead of preserving the archaic, I want to ask: what will replace nation-states? How can we shape it for the best?
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