62 highlights from The Sovereign Individual: “The morality of the Information Age will be the morality of the market”

Ok I didn’t actually count the number of highlights, but there are a lot. It’s a dense book, with fancy language, and I had to slog through sections. But the time invested was worth it. This is a book I’ll read again, particularly as I see some of its sweeping predictions come to fruition. It’s already helped me to better understand the American political and emotional climate, the rise of bitcoin and cryptocurrency, and the evolution in what it means to work and to have a career.

The lens through which they analyze world events:

the most important causes of change are not to be found in political manifestos or in the pronouncements of dead economists, but in the hidden factors that alter the boundaries where power is exercised.

The thesis of the book:

The massed power of the nationstate is destined to be privatized and commercialized.

…leading to the rise of what they call “The Sovereign Individual.” I think in the authors’ view, a good example of someone approaching Sovereign Individual status would be Peter Thiel: defensibly rich, tech savvy, an independent thinker, future oriented, and now with citizenship in multiple countries.

I thought this was well-written, if a bit pandering:

A system that routinely submits control over the largest, most deadly enterprises on earth to the winner of popularity contests between charismatic demagogues is bound to suffer for it in the long run.

Please note: I share all of these highlights not as surrogates for my own views, but as food for thought and examination. I read the book at the same time as Yuval Harari’s Homo Deus and there was quite a bit of overlap in how they see our future.


All nationstates face bankruptcy and the rapid erosion of their authority. Mighty as they are, the power they retain is the power to obliterate, not to command.

Farming created stationary capital on an extensive scale, raising the payoff from violence and dramatically increasing the challenge of protecting assets. Farming made both crime and government paying propositions for the first time.

Whenever technological change has divorced the old forms from the new moving forces of the economy, moral standards shift, and people begin to treat those in command of the old institutions with growing disdain.

From the vantage point of the Information Society, the spectacle of soldiers in the modern period traveling halfway around the world to entertain death out of loyalty to the nationstate will come to be seen as grotesque and silly.

[Adam] Smith explains how eighteen separate operations are employed to produce pins. Because of specialized technology and the division of labor, each employee could make 4,800 times more pins in a day than an individual could fabricate on his own.

It was rather a case of the Church as a predominant institution shaping moral, cultural, and legal constraints in ways that were closely fitted to the imperatives of feudalism. For this very reason, they were ill-suited to the needs of industrial society, just as the moral, cultural, and legal constraints of the modern nationstate are ill-suited to facilitating commerce in the Information Age.

For centuries, the nationstate made all outward-facing walls redundant and unnecessary. The level of monopoly that the state exercised over coercion in those areas where it first took hold made them both more peaceful internally and more formidable militarily than any sovereignties the world had seen before. The state used the resources extracted from a largely disarmed population to crush small-scale predators.

Suppose the phone company sent a bill for $50,000 for a call to London, just because you happened to conclude a deal worth $125,000 during a conversation. Neither you nor any other customer in his right mind would pay it. But that is exactly the basis upon which income taxes are assessed in every democratic welfare state.

Most democracies run chronic deficits. This is a fiscal policy characteristic of control by employees. Governments seem notably resistant to reducing the costs of their operations.

“Almost all warmaking states borrow extensively, raise taxes, and seize the means of combat-including men-from reluctant citizens who have other uses for their resources.” CHARLES TILLY

Nationalism made it easier to mobilize power and control large numbers of people. Nationstates formed by underlining and emphasizing characteristics that people held in common, particularly spoken language.

Information technology promises to alter dramatically the balance between protection and extortion, making protection of assets in many cases much easier, and extortion more difficult.

Most factory jobs could have been performed by almost anyone capable of showing up on time. They required little or no training, not even the ability to read or write. As recently as the 1980s, large fractions of the General Motors workforce were either illiterate, innumerate, or both. Until the 1990s, the typical assembly-line worker at GM received only one day of orientation before taking his place on the assembly line. A job you can learn in a single day is not skilled work.

Wherever societies have formed at a scale above bands and tribes, especially where trade routes brought different peoples into contact, specialists in violence have always emerged to plunder any surplus more peaceful people could produce.

governments have never established stable monopolies of coercion over the open sea. Think about it. No government’s laws have ever exclusively applied there. This is a matter of the utmost importance in understanding how the organization of violence and protection will evolve as the economy migrates into cyberspace, which has no physical existence at all.

A theme of elementary education in North America is that the colonists came from Europe seeking freedom and opportunity, which is true. What is seldom told, however, is how reluctant most people were to take the trip […] In the middle of the seventeenth century, inmates locked up in Bridewell, London’s notorious house of correction, revolted to show “their unwillingness to go to Virginia.” In 1720, there were riots in the streets of Paris to free vagabonds, thieves, and murderers scheduled for deportation to Louisiana.

Paper money is a distinctly industrial product. It would have been impractical before the printing press to duplicate receipts or certificates that became paper currency.

Cybermoney will be all but impossible to counterfeit in this way, officially or unofficially. The verifiability of the digital receipts rules out this classic expedient for expropriating wealth through inflation. The new digital money of the Information Age will return control over the medium of exchange to the owners of wealth, who wish to preserve it, rather than to nationstates that wish to spirit it away.

As Lane said, “I would like to suggest that the most weighty single factor in most periods of growth, if any one factor has been most important, has been a reduction in the proportion of resources devoted to war and police.”

the true obstacle to development in backward countries has been the one factor of production that could not be easily borrowed or imported from abroad, namely government

We also suspect that nationstates with a single major metropolis will remain coherent longer than those with several big cities, which imply multiple centers of interest

An intense and even violent nationalist reaction centered among those who lose status, income, and power when what they consider to be their “ordinary life” is disrupted by political devolution and new market arrangements.

Shaw and Wong focus on five identification devices used by modern nationstates to mobilize their populations against out-groups. These are: 1. a common language 2. a shared homeland 3. similar phenotypic characteristics 4. a shared religious heritage and 5. the belief of common descent

Information technology is also creating supraterritorial assets, which will help to subvert the embodiment of the in-group, the nationstate. Ironically, these new cyberassets will probably be of higher value precisely because they are established at a distance from home. All the more so if there is an invidious backlash of the kind we expect against the economic inequality arising from increasing penetration of information technology in the rich industrial countries.

Bethke Elshtain observed, nationstates indoctrinate citizens more for sacrifice than aggression: “The young man goes to war not so much to kill as to die, to forfeit his particular body for that of the large body, the body politic.”

Yet blacks, as a group, are major beneficiaries of income transfers, affirmative action, and other fruits of political compulsion. They are also disproportionately represented in the U.S. military. Therefore, they are likely to emerge, along with blue-collar whites, as among the most fervent partisans of American nationalism.

By eliminating the beneficial impact of competition in challenging underachievers to conform to productive norms, the welfare state has helped to create legions of dysfunctional, paranoid, and poorly acculturated people, the social equivalent of a powder keg.

Predatory tax rates made the democratic state a de facto partner with a three-quarters to nine-tenths share in all earnings. This was not the same thing as state socialism, to be sure. But it was a close relation. The democratic state survived longer because it was more flexible and collected more prodigious quantities of resources compared to those available in Moscow or East Berlin.

A system that routinely submits control over the largest, most deadly enterprises on earth to the winner of popularity contests between charismatic demagogues is bound to suffer for it in the long run.

For human beings it is the struggle rather than the achievement that matters; we are made for action, and the achievement can prove to be a great disappointment.

We can see the history of public morality as a cycle between disorder and authoritarianism; the modern authoritarian moralities, both feminism and fundamentalism, have emerged as a cyclical response to the hedonism of the 1960s.

Like most elites, the cognitive elite tend to be a bit above themselves, are rather arrogant, and think they can set their own standards. They are alienated from society as a result.

In science, three thousand years completely changed what human knowledge is; in morality, we may actually have fallen back. The average psychotherapist probably gives the patient less good moral advice on how to lead his life than the average Jew would have received from his teacher in the period of Moses.

A good social morality has certain characteristics. It should contribute to the survival of society and of individuals, in a dynamic rather than static way. It should include tolerance and avoid self-righteousness. It should be religious, rather than merely agnostic. It should not pretend to decide questions of scientific fact. It should be neither anarchic nor authoritarian. It should be widely shared and deeply held. Such a social morality is particularly important to the family and to the raising of children as independent and responsible adults. It provides the focus of a good society.

The morality of the Information Age applauds efficiency, and recognizes the advantage of resources being dedicated to their highest-value uses. In other words, the morality of the Information Age will be the morality of the market.

Today most people believe that cultures are more matters of taste than sources of guidance for behavior that can mislead as well as inform. We are too keen to believe that all cultures are created equal, too slow to recognize the drawbacks of counterproductive cultures.

Protection will be more technological than juridical. Walling out troublemakers is an effective as well as traditional way of minimizing criminal violence in times of weak central authority.

Because incomes for the very rich will rise faster than for others in advanced economies, an area of growing demand will be services and products that cater to the needs of the very rich.

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