How to Build Your Own Country on the Internet
A review of Balaji Srinivasan’s new book, "The Network State"
Balaji Srinivasan’s new book, “The Network State,” is one of the year’s more interesting reads thus far, and it’s notable as much for its style and format as for its content. It’s a must-read for libertarian techie types looking to “exit” the reach of the traditional nation state. However, the book should also be of interest to more pragmatic policy wonk-types who just want to understand where current technological developments are taking our politics. Some of the predictions in the book may turn out to be wrong, but even if that’s the case, the book sets the new baseline for discussions about how Web 3.0 and policy are going to interact and clash in the coming decade and beyond.
“The Network State” is nominally about internet-based start-up societies centered around technologies like the blockchain, smart contracts, cryptocurrency, and social media. The case for network states rests on the fact that so much of life is now online. In theory, one could build an entire legal, monetary, and community structure in the digital realm. A sufficiently sophisticated decentralized online community could begin to resemble a country. If it could somehow gain international diplomatic recognition—a big ask to be sure, but not inconceivable—it could fundamentally change the idea of the nation state forever. Srinivasan predicts a clash in the years ahead as more and more life lies outside the control of traditional nation states. Elites sitting atop conventional power structures shouldn’t be expected to go down without a fight however, as we are already seeing with the debates about how to regulate Big Tech.
One aspect of the book I particularly enjoyed was its format. First, there is a completely free version of the book available online for anyone who wants to read it. The book also has a very user-friendly “Quickstart” version that includes one sentence-, one image-, one thousand word-, and one essay-length definitions of the network state concept. I found myself wishing all books allowed the reader to so easily peruse their core contents before committing to reading the whole thing.
In some ways, “The Network State” reads like one long, running blog post more than a book. It is full of hyperlinks that take the reader down interesting rabbit holes, which consist of Twitter messages, blog posts, and other obscure internet materials. This was a fun and engaging way to read, closer to surfing the web than sitting down with a paperback and thumbing through the endnotes in the back.
Much of the book is about the depressing state of US politics and the seemingly endless battles in America between the left and the right. The author’s style is informal, intelligent, and humorous, which makes the bleak subject matter a little more bearable. However, this also leads to my biggest criticism of the book. While I agree with many of the authors’ observations about shifting coalitions on the right and the left, a lot of this narrative reads like the kind of commentary one might expect to hear from Tucker Carlson in one of his evening monologues. Although I tend to be sympathetic to campaigns against “a corrupt national media” (I’m paraphrasing), which is how I read a lot of the sentiment expressed in these parts of the book, a lot of readers probably won’t be so enthusiastic about this material. And although I recognize this narrative was intended to provide background context for the world in which network states are set to take off, I found these parts of the book distracting from the more important core material about network states themselves.
Indeed, more than half of the book is a kind of running political commentary, while only about the last quarter is a deep drive into network states. I would have much preferred this ratio to be reversed. Upon finishing the book, I felt like there were a number of unresolved issues that the book didn’t completely address. Here are just a few that occurred to me:
The author believes successful network states will be “one commandment societies,” where online communities are built around a single core message or ideology. Examples given are “keto societies” that avoid sugar and “digital Sabbath” communities that reject 24-7 life on the internet (a great idea!). I could definitely see online communities built around these ideas, but they hardly seem like principles a whole country should be built around. Contrast those ideas with principles like, “All men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the Pursuit of Happiness.” I wish the author had provided examples of commandments more relevant to the project at hand.
A network state is going to be an ensemble of small clusters and communities around the world, which are decentralized and separated by physical geography, but come together online. However, network states are presumably more than just Facebook groups that also use a cyptocurrency, like Libra. I wanted to know more about how the physical and the digital realms are likely to interact. Will there need to be some critical mass of people in a geographic location before a network state displaces a traditional nation state? Or will they not compete directly along many margins, in the same way I am a citizen of the United States but could also get “e-residency” in Estonia, and there is no conflict? Not to mention, how do we deal with national defense?
One of the benefits of network states, according to Srinivasan, is they allow for “experimental macroeconomics.” In other words, they allow people to experiment with different modes of governance and institutions. This is claimed to be unethical in the real world, but not so in the digital world. However, because barriers to entry to creating network states are so low, I worry the resulting equilibrium could be unstable. There are “network effects” that could provide a network state with some temporary stability, just as Facebook and Google can be confident in their market position in the short run. But these businesses are likely to be outcompeted eventually, as would any government not founded upon physical control over some piece of geographic territory. Creative destruction is usually good, but there are also some benefits to monopoly. I worry that in allowing for more competition in governance we lose some of the benefits of a stable legal regime, money, and culture. Too much of a good thing could easily result in anarchy.
Overall, this is an entertaining, engaging, and interactive book, one that surely can’t be missed if you are interested in the clash between the emerging digital economy and modern politics. Even if you aren’t interested in reading the book, the Quickstart summaries are well worth a few minutes of your time. Given some unanswered questions, I hope the author (or someone else) considers writing a follow-up soon. As for the network state concept itself, it’s a fascinating idea. I’m mostly on board, so just tell me where I sign up.