The Sovereign Individual

James Dale Davidson & Lord William Rees-Mogg, 1997

“To dare a thought is to risk being wrong.” “We live in the age of computers, but our dreams are still spun on the loom.” “Information technology transcends the tyranny of place.”

These renowned prognosticators (authors of earlier best sellers, Blood in the Streets and The Great Reckoning) note that there have been only four basic (and overlapping) stages of economic life: (1) hunting and gathering, (2) agricultural, (3) industrial (commencing with Guttenberg’s printing press in 1490), and, now, (4) information (beginning roughly with Microsoft in the early 1980’s). They here predict that the Information Age will become a less violent, more elitist and less egalitarian Information Revolution (Society) and will either end or greatly reduce the nation-states that now dominate the globe – making the individual “sovereign” and able to pick his spot and government, shedding the “tax slave” status that now predominates. Microprocessing, the word wide web and high speed (broadband) Internet connections are now enabling individuals to function independently of central authority or of any nation-state, setting the stage for “Sovereign Individuals”.

Cyberspace will become the ultimate destination. Digital lawyers, interactive retrieval systems, cyber medical examinations, cyber surgeons and virtual corporations will proliferate. Governments will lose their ability to regulate and tax every or even most transactions. The Information Revolution/Society will grant economic freedom to many by enabling them to work from anyplace on the globe (via their computers and the Internet). This will give those with such skills (the creative entrepreneurs) to “vote with their feet” by leaving their all-controlling, heavy-taxing home countries and move to less oppressive locales, such as tax havens, like Bermuda or tax-advantaged ones like Switzerland. These “Sovereign Individuals” will effectively de-nationalize themselves and become citizens of the world (or of cyberspace). No government will be able to monopolize cyberspace. This process is expected to gain momentum by 2010 and to be in full swing by 2020. The authors add that nation-states will need to begin to compete for their customers (their ex-sheep) via tax treaties and “tax contracts”, as do the Swiss, allowing most anyone to live there for a flat $50K/annum in income tax. By 2050, this will lead to smaller and smaller (and more efficient and more welcoming) nation-states, and the states with the best police protection, court system, roads, private schools, passports, etc. will attract the most affluent and profitable customers/residents.

A “cybereconomy” will emerge to dominate the globe’s economy. A de-nationalized cyber-currency (likely gold-based) or “digital money” (from a leading mining company or Swiss bank) seems likely to begin to gradually replace the world’s baseless paper currencies. This cybereconomy will be “The Story” of the 21st Century, rather than China. A decline of world wide epigenesis (extreme patriotism) will overcome fierce nationalism, as people revolt against conscription to fight endless wars, such as those that took 115 million lives in the 20th Century, the bloodiest century in history, and as education is privatized and gradually stripped of government-guided history texts and nationalist propaganda. Citizenship will become irrelevant and obsolete, recalling Socrates, “I am neither Athenian nor Greek; I am a citizen of the world.”

As these trends begin to emerge, the nation-states (especially the superpowers) will face massive declining revenues, even bankruptcy, and they will do everything within their power to halt these changes. (As people realize the impact of minimizing taxes, they will become more inclined to move.) Governments must be expected to use their monopolies of force to censor the free flow of information, violate human rights and sabotage useful technologies, hardware and software, but, in the end, their intercessions will fail.

Those individuals with superior cognitive skills, as always, will profit the most. Those with middle mental talents will, at first, be the most resentful (as politicians and governments will no longer be able to give them more than they deserve), but they will be forced to carve niches for themselves in the cybereconomy. Virtual corporations will be more like joint ventures formed for a specific task and will eliminate much of the corporate-organizational infrastructure with heightened outsourcing. Employees will become more like short term independent contractors. Lifetime jobs will become rare to extinct. “..[E]very employee will compete with every person anywhere in the world who is capable of doing the same job..” (Andrew S. Grove, Intel Chairman) Memory will become less valuable than one’s ability to synthesize and create. Protection will become technological rather than judicial (as courts don’t work for the most part anyway). Walled homes and walled communities will become the rule again (feudal-style), as people buy their own protection. The lower classes will be walled-out and more violent. More cities, like Detroit, will simply die, as people leave for safer, less tax-driven enclaves, like Bermuda. (The authors mention Bermuda many times.) Yet, in time, the authors see a world where some 500 million people become super rich and 100 million become Sovereign Individuals (wealthier than many countries).

As Alvin Tofler said in Future Shock, “Democracy is the political expression of mass production, mass consumption, mass education, mass media, mass entertainment, and all the rest.” He omitted “mass mediocrity” and the Platonic thought that democracy reduces everything to the lowest common dominator, because, as Plato concluded, “In democracy, fools rule.” The cyber society will change this as people can “vote with their feet [and money]” as Davidson and Rees-Mogg maintain. No longer like Mohamed Ali’s (Cassis Clay’s) opponents who could “run but not hide”, the Sovereign Individual will be able to run and hide. Millions will do it; the mega-governments will either change or slowly die. Darwin’s main thesis (that the species survive through adaptation) will again prove correct – and it will apply to today’s nation-states as it did the kings, lords, emperors and Communist leaders of the past. In closing, The Sovereign Individual, like many prescient works of the past, will surely be both on and off the mark in many ways, but much of it seems like reasonable prognostications.

“It is today possible…to locate anywhere, to use resources from anywhere to produce a product that can be sold anywhere.” Milton Friedman