What are the real ramifications of the internet?

This is the question The Sovereign Individual seeks to answer. 

I believe the authors have correctly predicted the transition into the information age, which is why I’m writing a review about it. 

Mainly because I want to understand it more, ingrain the teachings into my psyche, and become a Sovereign Individual myself. 

You might be interested in becoming one yourself. There’s much to be gained with the transition, so prepare now. 

Beyond The Ubermensch

If you haven’t read Nietzsche’s book: “Thus Spoke Zarathustra” I would highly advise giving it a read before diving into The Sovereign Individual. 

They’re not tied directly to each other, in fact I would think the authors might be skeptical why I’m mixing the two titles, but as a personal opinion I see the Sovereign Individual to be the practical playbook for becoming an Ubermensch in the 21st century. 

In case you’re unfamiliar – the Ubermensch is Nietzsche’s way of correlating how to live life with the absence of Christian morals and values. Basically he surmised it’s best to create our own values, of which should be the highest form of human possible. 

I genuinely believe becoming a Sovereign Individual is the highest goal one can attain in the 21’st century.

I’ll detail my reasoning below. 

It Feels Like Something Big Is About To Happen

The internet has launched humanity into our fourth stage. With technological advancement we can finally be liberated. 

Be truly free. 

We’ve transitioned from the following societies:  

  1. Hunter-Gatherer 
  2. Agricultural 
  3. Industrial 

We’re now at the fourth stage of social organization, Information society. 

What does this look like? 

In the authors estimation this looks like history in reverse. Local centers will begin to reassert themselves, we’re seeing this with a collapsed mega city population after COVID. Governments will also begin to fragment into more locally driven protection systems.  

We’re already at this point. If you’re politically aware you’re seeing the fabric get ripped due to increased tribalization of our viewpoints. Progress on one side, Conservation on the other. 

The Panama Papers proved beyond a shadow of a doubt, the richest in the world are housing their money offshore in tax free havens. 

Commerce has progressed online with the majority of commerce happening via the internet. 

What’s even more shocking is the increase in a sense of nationalism. Generally an ideology with this much effort to stay alive is on its deathbed. Much like a cornered animal lashing out. 

The Sovereign Individual goes into detail about our transition, and how we can manage to escape into freedom on the other side. 

The Information Revolution

Here are a couple summary points I pulled from the book: 

  1. A shift in the mega political foundations of power normally unfolds far in advance of the actual revolutions in the use of power.
  2. Incomes are usually falling when a major transition begins, often because a society has rendered itself crisis-prone by marginalizing resources due to population pressures.
  3. Seeing “outside” the system is usually taboo. People are frequently blind to the logic of violence in the existing society: therefore, they are almost always blind to changes in that logic, latent or overt. Megapolicital transitions are seldom recognized before they happen.
  4. Major transitions always involve a cultural revolution, and usually entail clashes between adherents of the old and new values.
  5. Geopolitical transitions are never popular, because they antiquate the painstakingly acquired intellectual capital and confound established moral imperatives. They are not undertaken by popular demand, but in response to changes in the external conditions that alter the logic of violence in the local setting.  
  6. Transitions to new ways of organizing livelihoods or new types of government are initially confined to those areas where the geopolitical catalysts are at work.
  7. With the possible exception of the early stages of farming, past transitions have always involved periods of social chaos and heightened violence due to disorientation and breakdown of the old system. 
  8. Corruption, moral decline, and inefficiency appear to be signal features of the final stages of a system.
  9. The growing importance of technology in shaping the logic of violence has led to an acceleration of history, leaving each successive transition with less adaptive time than ever before. 

Let Politics Die

As I write, it’s 2 days after the capitol building was stormed by the conservative party on the right. To speak about the death of politics might seem premature, but the thesis from the Sovereign Individual is clear. 

Politics will, and must, die. 

With the information revolution transitioning us into a more open and free market, Governments will compete like corporations with the main service being protection from theft. 

The reason why governments will compete. They will no longer steal income from producers anymore due to encryption, cryptocurrency, and tax havens. 

You’re already seeing this happen live with the migration from New York and Los Angeles to places like Miami and Austin. Why are people moving? Taxes. 

Politicians are not beholden to their representatives. They have a positive feedback loop for people who provide them with funds to continue campaigning for the next election cycle. There can be no such thing as an honest politician in this age. 

Much like how the church in the days of the middle aged did everything in their power to maintain control, you can expect politicians and government to do the same. Just know it’s a futile effort. The system is dead already. 

We saw the history of how the church lost its power. The printing press led to increased literacy. With increased literacy people question the use of the church as the “only” source of knowledge about God. This doubt on the church led to their downfall. 

The state is the new church. It acts as the father figure, or provider, for millions of people. With the internet we’re now without the need of the state. I have the ability to gather crypto and keep it untraceable from any government. It exists beyond their reach. I can work from any place on the planet with an internet connection. All of this leads the average person to question: “Why should I put up with this anymore?” 

Thus, people vote with their feet, and once enough people realize how taxation drained so much value, they’ll just leave. 

Goodbye politics. Good riddance. 

What Happens To Nations?

Throughout history, violence has been the dagger pointed at the heart of the economy. We’ve used the government, or the nation-state, as the protection mechanism from violence. 

It was previously easy to commit large acts of violence on corporations in the industrial age because of the cost to move locations. For example, a large textile mill is basically an easy target for violence. It’s a large immovable structure that is very precious to the owners because it produces money for their accumulation. Someone bent on using violence as a means of gathering resources can easily destroy the factory, or threaten to destroy the factory. 

This meant these owners needed protection, and the nation-state was happy to be that security. The tradeoff though is you pay taxes for access to this protection. The owners were happy to pay these taxes because the math of protection makes sense. 

With the Information Revolution this all changes. Now it’s possible to create assets that are outside the realm of many forms of coercion. We’ve transformed the math behind violence. 

If an owner is threatened with destruction of their property, they can literally pack their computers and move to a different country if they so choose. 

They don’t need protection from the government anymore because they have the option to vote with their feet. 

You’re already seeing this happen live, but people don’t want to talk about it. Microtechnology has proven to subvert any extortion attempts. 

What about war? 

The Sovereign Individual theorizes there’s a decline in the marginal productivity of violence. The reason why is the more effective route for war would be a logic bomb compared to a nuclear bomb. 

Ask yourself, what would cause more destruction? A logic bomb taking out the entire eastern power grid, or a MOAB bomb detonating in New York? 

Warfare has transitioned into cyberspace. A government is not necessary for protection when corporations will be able to provide this at greater efficiency. 

What’s going to put the nail in the coffin for mega-nations as we know it is the globalization of commerce. The cost of communicating with someone on the opposite side of the world is basically $0. So long as you have a stable internet connection you can handle all your transactions via the internet. 

People will wake up to taxes being too high, especially for a fledgling welfare state, and they will start shopping for a jurisdiction to stay like they would a house. 

If you believe in profit maximizing decisions, here’s some interesting math. For each $5,000 of annual tax payments paid over 40 years slashes your net worth by $2.2 million (if you hit a 10% return on capital.) 

Do you think savvy entrepreneurs are not waking up to this fact? We’re seeing it happen within the nation if you live in the U.S., but it’s only a matter of time before people leave for good to a different country. 

Does This Affect My Money?

Most certainly.

You can anticipate taxes to increase in the final phase of transition for Western governments. They will do this because the wealthy have gotten smart and moved their location to other tax free areas. 

I’m sure you can see the dilemma for Western governments. They will face drops in revenue from taxation and elimination of leverage, while they still have unfunded liabilities and inflated expectations because of the welfare state.  The result will be an intense fiscal crisis. You can expect a one time spike in real interest rates and debtors will be squeezed as long term liabilities will be liquidated with credit drying up. 

Once this occurs paper money will be in circulation for the poor and computer illiterate, but cyber money will be privatized (hint hint Bitcoin), which eventually halts inflation. 

One very likely scenario when this occurs is a deflationary period for capital. 

The good news.

Income redistribution won’t necessarily end. There will obviously be a transition, and many people will be affected, but private individuals will finally have access to capital to use more efficiently than the government. 

What’s important for you…

You MUST be literate and numerically intelligent to succeed in this new age. You can guarantee your success by improving your literacy. Additionally, a Sovereign Individual will be a master of investment and entrepreneurship. All of which requires a high level of reading comprehension and ability to process information rapidly. 

The economic value of memorization will fall, while the importance of synthesis and creative application of information will rise. If you can synthesize information you will have one of the most valuable skills in the 21st century. 

Final Transition To A Sovereign Individual

The losers of the future will identify their well being with the political life of existing nation states. We saw this happen with Donald Trump where people tie their identities to him and thus the U.S.A.

Smart individuals will happily leave because they know the math doesn’t make sense. Obviously this will be difficult as the nation-state will do whatever necessary to prevent exit. Plus, neo-luddites will come out of the wood works to destroy technology that might replace them. 

The final transition will be shocking to say the least. The good news is our day to day will actually revert to something more like chivalry. Encryption will cause entrepreneurs to be cautious about who they do business with because they won’t get their money back if a shady person does a deal with them. 

I believe we will go back to a more honest way of living. The world is too small to be a psychopath. They’ll learn about you far quicker then you can travel and go to different areas. 

This brings us into an interesting realm of how to view morality moving forward. It’s noted that a weak morality within a nation actually indicates near collapse. We’re experiencing this in the U.S. with political correct action and nihilism. 

This is especially true of the cognitive elite. They generally have little religious or moral education in their family. They will be agnostic to humanism. Thus, a godless, rootless and rich elite are unlikely to be happy or loved. They will be individualistic rather than shared. 

Find a place with a strong moral value, even if you have to pay extra taxes to live there. It’s worth the investment. 

Final parting words…

A strong moral character, and a reputation for honesty, will prove to be the most profitable skills you can develop in the 21st century.

Most importantly, if you can teach yourself how to solve problems, you have a bright career ahead of yourself. No matter where you live, you will find problems galore in need of solving. In most cases, those who would benefit from solutions to their problems will pay you handsomely. 

Welcome to the new age. Good luck becoming a Sovereign Individual. 

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