The Network State in One Outline

Listen to this chapter

Concepts 

• 100% Democracy
• The Cloud Country
• Cloud Capitals
• Internet First
• Post-American (Internet 1.0 is America 2.0 is Britain 3.0 is Rome 4.0 is Greece 5.0)

Post-British is not Anti-British, Post-American is not Anti-American 

If AI is about building a new God, crypto is about building a new State. Artificial general intelligence (AGI) is the Internet’s God, and the cloud country is the Internet’s State. Obviously, some partisans of the old States (or Gods!) will take umbrage at these heresies.

There’s a certain kind of person who’s professionally offended. The establishment journalist that wants you to say “LatinX”, the coin maximalist that calls all other digital assets a scam, the Chinese nationalist that constantly yells about Taiwan - these folks are incentivized to be outraged. There’s no point in accommodating them.

But there is a group that I don’t want to inadvertently offend. To be clear, they may still get offended, but at least they’ll be offended by an actual position rather than an inferred position. And that is the group of center-left, center-right, and generally well-meaning people who still “believe in America.”

They might believe in America in the limited sense that they think the domestic situation is still salvageable. Or they might believe in America in the broader sense that they still believe the US should be the “leader of the free world.” Or they might conflate these two things, and interpret any critique of the US establishment as anti-Americanism.

So let’s tackle this head on.

Post-British, not anti-British. First, while this book does have many critiques of the US establishment (and the Chinese establishment for that matter!), I wouldn’t think of it as “anti-American” at all, but rather “post-American” in the same way that Washington, Ben-Gurion, Gandhi, and Lee Kuan-Yew were post-British.

Israel, America, India, and Singapore did have some conflict with Britain during the time of independence, but after they gained a little bit of distance they had plenty of respect for the UK. In fact, these countries used many aspects of British common law, had a positive relationship with the UK, did trade deals with them, and so on. They just knew they could run their own affairs better than the British establishment. As the founders of new countries, their nations proceeded on an axis that was orthogonal to being pro- or anti-British. Once free of British imperialism, they didn’t feel the need to denounce the UK indefinitely nor praise it excessively. They were post-British.

Post-American, not anti-American, nor anti-Bolivian. That’s the right mentality for the founder of a startup society. Whether they’re formally a US citizen or not, they need to be post-American in their thinking, not anti-American.

Now, because of the sheer degree of global American cultural hegemony, and the fact that any collapse of the US empire will likely be messy beyond belief rather than “planned” like the British empire’s pullback, it will be necessary to sharply criticize the US establishment. And sometimes even to strongly resist them, from within the US or outside it.

But this hegemony itself shows the need for healthy pushback. We don’t see the need to criticize (say) the Bolivian establishment, because they don’t have global impact. The president of a small country or a startup society doesn’t need the Bolivians to withdraw their hands, their culture, their armies, for a new nation to breathe free. But the US establishment does still dominate all non-Sino-Russian territory, so you need to get it to withdraw in order to build something better.

Cryptocurrency was the first step here, as it removes the US establishment’s root control over the global financial system. But social independence from the US establishment is yet another important step. And that means critique.

Critical of the US establishment, not the American nation. Just as a side note here, one of the interesting contradictions of the American exceptionalist is that they both deny that America is an empire and argue that it’s a benevolent one that’s keeping global peace - one that we’ll miss when it’s gone. Perhaps so! There are arguments both for and against Pax Americana. But there aren’t really arguments for denying that it exists in the first place, for denying that billions of people are subject to the power of the US establishment and therefore have the right to speak up against it.

Moreover, just to head off another argument at the pass, there’s an important distinction here between critiquing the powerful State Department and the powerless Southerner. The former is a critique of the US establishment, the latter of some random member of the American nation. It’s as different as criticizing management vs criticizing labor.

Detailed Categorization. At the risk of spending too much time on this, one thing I anticipate is that a declining US empire could deprioritize wokeness to instead signal along the “patriotism” axis. As the dollar declines, the establishment may make less noise about “institutional racism” and more about “our democracy”, to pull in people from the center at the expense of alienating groups it no longer needs as much on the far left.

So if “patriotism” becomes a verbal battleground, it’s worth going through a typology of different types - non-American, pro-American, anti-American, post-American, and pre-American - just to anchor our our discussion.

• Non-Americans. Keep in mind that more than 95% of the world is not American. Asking them to believe in America means asking for them to continue accepting a foreign country to “provide global leadership” on their behalf, without even a nominal vote in a US election.

• Pro-American nationalist. This is the obvious kind of pro-American. The stereotypical patriot who says “these colors don’t run”, who flies the American flag, who unironically likes Team America: World Police, and is essentially a pro-American nationalist. They give lip service to the Bill of Rights and Constitution, support every US invasion, think of the US as the indispensable nation, and are the prototypical “national greatness” conservative. This is a type that was much more common in the 2000s after 9/11, and is one part neocon and one part Jacksonian. But they still exist today in the form of Republicans who fulminate against Russia and China as their highest priority.

• Pro-American establishment. As Glenn Greenwald has documented, this is most of the Democrats after 2021. They are the ones who swung from “abolish the police” to “fund the Capitol Police”. They’re the group that people as different as Curtis Yarvin and Stephen Wertheim have written about from different perspectives, the sort of state-worshipping ultra-American whose life centers around the State Department, the New York Times Company, Harvard, the nonprofits, and the like. Like the Pro-American nationalists who serve as their proletarian boots on the ground, the establishmentarians want the US to dominate the world. However, that domination is not justified by something as straightforward as bumptious nationalism. No, the US establishment’s wars are always for the world’s benefit, endless invasions for “democracy”, just as their predecessors imperialized countries in the name of “Christianity.”

• Pro-American reactionary. This is a more self-aware type of pro-American, typified by Yarvin’s followers, who are realistically critical of the US establishment…but still think it can be turned around by means of a true election that resets the country and installs a genuine leader. They are essentially arguing for the transition from the Roman Republic to the Roman Empire, from the chaos of the French Revolution to the order of Napoleon (hopefully without the Napoleonic Wars), from an American empire run by self-deceptive slogans to a consciously monarchist and dominant America. They are fundamentally pro-American, though, because they think that after all the rot and decline, that there’s still a core within the US capable of mounting a turnaround. (One alternative to this view is global technology and post-American startup societies.)

• “Anti-American” progressive. This is the “abolish-the-police”, Noam Chomsky-reading, Soros-funded type. The ones that tore down statues of George Washington, organized Occupy Wall Street, and rioted on command for weeks in mid-2020. If you listen to their words they’re against the US establishment, but they’re really best conceptualized as the startup arm of the government. Just as a startup might critique Google, but ultimately often wants to be acquired by them, so too does an NGO often attack the US government because it wants to be funded by it. And indeed, these NGO attacks are often rewarded by funding of exactly this kind. The obvious way to see this are the AOC types that seamlessly transitioned from criticizing American empire to funding the Capitol Police and silencing Julian Assange. When out of power, they argue against power, and when in power, they argue for it. It is that simple.

• Anti-American communist. This is also an interesting type. Think of the Soviet, Maoist, Cuban, or Venezuelan leftist who argued against the US so hard that they actually became independent of it, moving outside the Overton window and becoming what was once called a “left deviationist.” The anti-imperialists at the Gray Zone fall into this category, as do many so-called tankies. These folks are often what I’d consider irrational on economics, but they do surface many abuses of the US military abroad that others do not. However, they still fall into the pro/anti-American trap of defining themselves by their orientation vis-a-vis the US. Interestingly, when a Pro-American establishment type refers to a left-deviationist in writing, they usually refer to them euphemistically as a non-ideological “dictator” rather than calling someone like Maduro a “socialist dictator.”

• Anti-American nationalist. This is where Germans and Japanese were prior to 1939, and where many Russians and Chinese are today. They’re anti-American from the nationalist right, and have either been pulled or dove into full on mimetic rivalry. Read Putin’s speeches, where his new G-8 bloc is defined as anti-American. Or watch China’s movies like Wolf Warrior Two or Battle of Lake Changjin, where the whole point is a heroic victory over the Americans. Perhaps this was unavoidable on both sides. It’s hard to be neutral if you think someone is fighting a Cold War with you. Still, the point is that they are also increasingly defined by anti-Americanism.

• Post-American founder. Now we get to the nub of the matter. Any founder of a startup society has to in their head be post-American, just like Washington/Gandhi/Ben-Gurion/Lee Kuan Yew were post-British, and just like how any startup founder has to be post-Google/Apple/Facebook/Amazon/Microsoft (GAFAM).

  To extend that last part of the analogy, a startup founder may respect those companies, may recruit from them or use their APIs, may even have to compete with them…but does not assess their every action by whether it is pro- or anti-GAFAM. They are not looking for approval from those companies, or always competing with these companies. They are not quoting or denouncing “don’t be evil” all the time. They have their own culture and focus.

  So too must a post-American founder of a startup society be thinking along another axis. A cryptocurrency founder is close - they have a product which is by dint of its technology independent of the US establishment, a product that they’re offering to Americans and non-Americans alike. But it’s not pitched on that basis. It’s pitched to an internet user. It’s pitched on a z-axis, outside the pro/anti-American frame.

  Bitcoin is an alternative to the dollar, it’s true, but it’s also an alternative to every other fiat currency. Ethereum is an alternative to America’s Wall Street, but also to Hong Kong’s stock exchange.

  All of this is somewhat implicit when you’re talking about coins. We haven’t yet frontpaged the deep question of whether you can be both for Bitcoin (and hence against global US financial domination) and also for US empire (and hence for global US military domination).²⁴ But now that the dollar is a battleground, and the financial system is the primary theater of war, this Network-vs-State axis will become very prominent in the months and years to come.

  So, just as there was sort of a delayed reaction between the scaling of social networks and their political implications, there is a delayed reaction between the scaling of cryptocurrencies and their political implications.

  And the implicit conflict between internationalism and nationalism that lies in the background with cryptocurrency will come to the foreground when one is thinking about startup societies. The founder of a startup society is effectively a patriot to a country that doesn’t exist yet.

• Pre-American frontiersmen. There’s one more way of thinking about things worth mentioning, and that’s not post-American but pre-American. So, if you go all the way back to the 1600s, think about the people who settled the US before there was a common American identity. Read David Hackett Fischer or Walter Mead on this kind of thing. There were people running a bunch of different social experiments across America in what they thought of as a blank slate. That was the Massachusetts Bay Colony, it was William Penn’s Quakers, it was the Borderers of Appalachia, it was the Cavaliers of Virginia. They all had their own cultures.

  Even though US states are increasingly differentiating today, it’s still hard for modern people to intuitively understand how different those colonies were after two hundred years of American union. But a rough analogy is to Google, Microsoft, Amazon, Facebook, and Apple. These are all ultra-successful startups that had distinct charismatic founders, with their own cultures and ways of doing things. They have some commonalities, but someone who proposed integrating them in 2013 would get an eyebrow raise. By 2021, however, they all did manage to collude together to deplatform Trump and his followers. And as the founders of these companies all leave (save Zuckerberg), they do become more interchangeable parts of “Big Tech.”

  So that’s a rough analogy for what the pre-American period was like, and what it felt like to integrate them. As we move backwards in time, as per what we later call the “Future is our Past thesis”, you should think of the post-American period as being similar to the pre-American period, where a formerly centralized polity decentralizes into many pieces.

To summarize: think of this book as being targeted to that large and growing faction of the world that is neither pro- nor anti-American, but rather post-American, much as they are post-British without being unduly for or against the British. If you still want to be offended, go ahead, but now at least you understand the point of view.

Internet First > America First 

Scrap 

The network state is a way to defend liberal values in an increasingly illiberal world, one of rising American Anarchy and Chinese Control.

Democracy and capitalism are valuable ideals. But the former national champion of those ideals is in structural decline, and as a

valuable, but the US is warping into a very twisted version of those ideals combined with some very authoritarian pressures coming from the NYT and a general lack of competence. There is a need for a new “decentralized center”, some kind of global structure that is supportive of capitalism and freedom but has a much saner version of these values. Unfortunately, there aren’t good traditional paths from the status quo into this new equilibrium. But here’s this totally different strategy of network states, which actually can work, and here’s why it can succeed where both reformism and hyperlibertarian micronation ideas fail.

You know that Steve Jobs quote: “if you’re serious about software, you need your own hardware”? Well, Because that’s

I realized many

Today that’s obvious. Crypto runs up against the Fed and SEC. AI hits federal regulations.

As a technologist, I realized many years ago that

What’s in it? 

History as Trajectory: what is the most powerful force in the world? This chapter is a story of the past, of the recent emergence of a third Leviathan, a new candidate for that force which is most powerful in the world — neither God’s wrath, nor the State’s military, but the Network’s encryption. It is because the Network is the next Leviathan that the network state is becoming feasible.²⁵

The Tripolar Moment: what factions are in cold war today, under the banner of different Leviathans? This section is on the present, on the ongoing emergence of three gigafactions: NYT/USD, CCP/RMB,²⁶ and BTC/web3. Each of them has a form of official truth (NYT, CCP, BTC) and each has a digital economy (USD, RMB, web3). Each is already at billion-person scale or rapidly approaching it. Each has arisen over the last decade in response to a great wave of technological change that we call the Decentralization. America’s Great Awokening and China’s Xi Jinping app (Xuexi Qiangguo) can be understood as expressions of an ideological Counter-Decentralization, analogous to the Counter-Reformation of the 1500-1600s. The Crypto Decentralization of BTC/web3 can likewise be understood as itself a reaction to these two centralized reactions, to this duopoly of digital totalitarianism, one that may be adopted by the rest of the world outside the USA and PRC.

Decentralization, Recentralization: how could network states emerge? This section is about scenarios for possible futures: how network states could come about, or not, and why we should aim for a recentralized center rather than bending to one of several extremes. We discuss how BTC/web3 is itself a movement split between Bitcoin Maximalists and web3 pragmatists, and how this may ultimately result in a four way contest between the compulsory centralization of (a) Establishment America and (b) CCP China, (c) the leaderless anarchy of pure maximalism, and (d) a consensual recentralization around web3-governed, BTC-backed network states. As per the conventions of any decent video game, these denouements are divided into “good endings” and “bad endings” for various civilizational factions. Keep in mind that one group’s glorious victory may of course be another’s bitter defeat.

From Nation States to Network States: a history of the nation state, with a special focus on state formation process. Then a discussion of how we can go from a digital community founded by a single person to a network state with diplomatic recognition.

The Network State in One Outline 

Compact Theorem, Complete Proof 

Outlines are good. ²⁷

Compression is understanding Memes travel like genes Most people wil Minimum description length is good Regularization is good Cliff notes are good AI summaries are good Short is good And short that uncompacts into long when “citation needed” is best

A concise and memorable theorem with a long proof That’s how this book is organized Obviously it’s not math, per se But it’s an attempt at logical argument supported by facts If you have my premises, you may reach my conclusions Links are often to premises, to statistics or facts Logic is in my conclusions

There are many aspects of what one might call the libertarianish critique of the American establishment that are addressed herein.

• consent as primary

  • good:
  • good: rather than imposing, exiting and attracting
  • good: one commandment approach ensures MVP
  • bad: sometimes you do need to fight
  • bad: technological tricks to reopen the frontier are challenging

• build a new nation

  • good: america isn’t a “nation state,” it’s domestically at least binational, and globally an empire
  • good: this avoids the aggressive conflict that comes from reset
  • bad: there’s a lot of US establishment code left, and we don’t want to junk all of it
  • bad: there’s a process to do a ’reset’

• we want high-trust societies

  • trustless technologies allow us to withdraw trust in the current establishment
  • but you can’t scale a society without some trust
  • you aren’t taking a dipstick to starbuck to test everything
  • bitcoin - enemy of the state, but not each other

• Leader as target

  • good: leadership is good
  • bad: a monarch can’t beat an oligarchy because the monarch becomes a target and strengthens the oligarchy
  • instead, only another oligarchy can beat it
  • web3 replaces the US establishment
  • it’s also weakened by bitcoin maximalists who manage to create some kind of american anarchy
  • and the chinese
  • so, really several forces acting on this incumbent, which is declining but still has a massive amount of hit points

• Inversion of morality

  • bad: turns pre-existing and working moral premises on their head, resulting in bad ideas like ’abolish the police’ which force all of society into an experiment against their will
  • good: gives a one

• Citizen-as-customer

  • good:
    • emphasizes choice, consent, cost-efficiency of government relative to wasteful thing we have now
    • theoretical basis via tiebout sorting, sovereign individual, libertarian theory
  • bad:
    • doesn’t have higher purpose - apple, and america, weren’t built for money alone — cause there
    • doesn’t think through the fact that the police and military aren’t paid enough to risk their lives as part of their jobs
    • they’re paid in status - ideally via a positive-sum society that rewards them for serving country, and where they don’t abuse their powers
    • think about the small town cop who’s part of the community and has their trust, not the warrior cop in an MRAP
      • Stalin used foreigners to police each other b/c they had less mercy
    • or the citizen soldier, the farmer who reluctantly serves, not the praetorian class
    • essentially, “for god and country [or coin]” is needed to get people to sacrifice
    • certainly in terms of the force needed to operate a state
    • but also in terms of the sacrifice needed to build one in the first place
    • singapore for example requires national service to become a citizen, not just an investment
    • if it’s JUST commerce, it’s a mall not a country - no mutual obligation between citizens
    • need a higher purpose (morality), not just money
    • but you ALSO need money - don’t want to lose sight of that - need a better business model too
    • AK-47 on a flag is a cause, but it’s not enough

• Escape-politics-via-technology:

  • good
    • think about options outside of current system
    • religion/politics/technology = god/state/network = different leviathans
    • moreover, in 1492 turkey blocking the path to india is what led to funding for columbus - using tech to reopen the frontier, just like the internet in 1991 and space
    • Note that exit of the losing faction is a known pattern in both China and AngloAmerican culture, as per this thread
      • TLDR: multiple times, the losing faction in a civil war leaves
      • “It’s not necessarily the unity that triggers the territorial expansion. It’s quite often the division”
      • And, so, the current bit of american polarization may trigger a mass exit/expansion/serious desire to reopen the frontier
  • bad
    • scale = disalignment, and no other humans (in absence of automation/autarky) = can’t build things
    • not having a social operating system means one will be imposed on you b/c you need other people for other things (assuming not robot society)
    • tech can open or reopen a frontier - as it did even in 1492 or 1991 - b/c oceanic navigation is a tech
      • Bantu: iron age
      • Steppe nomads: horses
      • New world, oceanic navigation
      • US frontier, railroads
      • internet routing and AUP, digital frontier
      • satoshi: system of freedom for a few years, quote on this
      • Space travel, spaceX

• 0% Democracy vs 51% Democracy vs 100% Democracy:

  • good
    • good to note that ’democracy’ has become a doctrine, not exactly a religion but a religion substitute complete with a catechism
    • good to critique use
  • bad

• City States vs Nation States vs Network States:

  • city states good b/c innovative, consensual
  • nation states won b/c scaled, powerful
  • network states are a v3 that combines aspects of both

• Faux Universalism vs Particularism vs True Universalism:

  • right can’t beat the left but the center can
  • left - faux universalism, actually particularism [self-interest while claiming to prioritize other-interest]
  • right - respond with ferocious nationalism and not even the pretense of universalism [self-interest only, no other-interest]
  • center - true universalism, balance self-interest and other-interest [the only group that ACTUALLY cares about other-interest]

• Force-as-assumed vs Force-as-necessary vs Consent-as-necessary:

  • left: assumes state is just there
  • right: assumes force is good and just, doesn’t want to argue with left who is better at words
  • center: frontier argument, force as last resort, consent is upstream of ability to use force

• All-at-once vs incremental:

  • rocket launch - but even that proceeded in many stages (wright, goddard, N failures, before the last)
  • zero to one is a single transistor, not a working computer — zero to one is not year zero
  • compound interest - the art is in the decomposition of a huge problem into subproblems

• Passivist vs activist vs focused activist:

  • passivist - can’t change anything, do nothing. good = understand ways in which one is practically weak
  • activist - wants to change things. good = has that energy, but doesn’t know how to direct it
  • focused activist - one commandment focuses the moral activism, fix broken society in one way

• Americo-centric:

  • good: need to understand america to break free of it
  • bad: assumes most power still lies within the US establishment when huge swaths have moved to BTC and CCP
  • Asia rising, tech rising
  • make this case at length in the Tripolar Moment

• regime does not care what citizens think

  • good: no system of ramping speech and though controls, wokeness, xi, etc

  • bad: evangelize or be evangelized, if you don’t have that you will be colonized by one that does

  • solution:

    • the one commandment, get people who are aligned with

    your vision and morally differentiated, and then link up those “git diffs” to go from parallel societies to a parallel system

    • also pulls quite a few of the ENFJ-style moral entrepreneurs and aligns them with the ENTJ-style tech founders which makes the practical coalition stronger

• leadership good, but consent enables leadership

  • good: leadership is important, need it to get things done
  • bad: leadership is not the ONLY component, in fact consent is what allows leadership, not force, force is a last resort, and force comes from consent/alignment
  • eg where did elon musk come from? a selection process. the network’s democracy of clicks and upvotes, not the state’s democracy
  • all his employees follow him because of consent
  • all his customers do as well
  • if someone within the company disagrees and he instructs some to fire others, why do they obey and why don’t shareholders riot?
  • because 99% are still with him when he fires 1%
  • the budget for force is limited and it comes from political capital which comes from consent/alignment
  • consent + alignment are what make leaders great -
  • not propaganda like the left thinks or brute force like the right ends up resorting to
  • hence frontierism

• obeying vs ruling vs self-ruling

  • good: observation that people don’t really want to follow
  • but: make them kings and see whether they’re actually good, make them CEOs, give them that opportunity to fail
  • allow them to be heads of household, parents, CEOs, they can have reports, and see what happens not everyone can be a manager, but everyone (to first order) can be a parent or CEO
  • bad: rule or be ruled -> self-rule, sinful society that lacks self control is not really capable of enforcing on others
  • see The One Commandment vs the Seven Deadly Sins

Moral and Technological Innovation 

A significant theme in this book is reunifying moral and technological progress. These arms of the progressive movement split over the course of the 20th century, but they really do go hand in hand, especially in the context of the frontier.

To give a preview of the point, moral innovation is about good/bad, while technological innovation is about true/false. And it turns out they have a powerful interplay.

Once you stop saying heliocentrism is bad, you can get satellites. Once you stop saying communism is good, you get tech companies. Once you start saying cleanliness is good, you get public sanitation. Once you start saying inflation is bad, you get Bitcoin.

In other words, you need moral innovation to facilitate technological innovation, and vice versa. I know we don’t usually talk about “moral innovation,” but if it helps, you can use the term “social entrepreneur.”

Disruption and Wokeness Both Cause Resistance 

The problem right now is that many moral innovators feel like they are subject to technological innovation without their consent, because the tech founders have disrupted virtually every part of their lives - from newspapers to political institutions - and they feel powerless to stop it, save for aggressive moral preaching.

Many technological innovators feel similarly subject to moral innovation without their consent, with the rise of wokeness turning all kinds of previously fringe notions into catechisms that all must assent to.

Frontier Enables Consensual Innovation 

For example, once you stop saying

Why? Because legal codes are as much a function of moral codes as they are of computer codes.

Because

Because of an inverse version of the Jeff Goldblum

Because a true startup society is premised on a historically-informed critique of the existing social order, in the same way a startup company is premised on a technologically-informed critique of the products for sale in the market. The reason is that all social arrangements - legal codes and moral codes alike - are