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This group will form the world’s first “network state” — a concept Srinivasan calls “the successor to the nation state.”
Critics have long accused technologists of harboring world-dominant ambitions. “The Network State,” which Srinivasan published on July 4, articulates those aspirations in clear, unapologetic terms. “The state” is dying, he writes, having served its function by displacing God as the leviathan of the 20th century. We have now entered the era of the “network” and the conflict between the dying state and the emerging network will come to define this moment in history.
Whatever you think of this prediction, “The Network State” has undeniable appeal among some of the most powerful figures in technology. Marc Andreessen endorsed Srinivasan as producing “the highest production rate per minute of great new ideas of anyone I’ve ever met.” Ethereum co-founder Vitalik Buterin said, “[W]I have started new currencies … ‘The Network State’ shows us how to start new cities and new countries.” And Coinbase co-founder Brian Armstrong confidently proclaimed, “Balaji will be right about ‘The Network State’.”
A Twitter search for “network state” brings you to an almost endless wall of discussions among true believers. They are almost all men. Some have “.eth” added to their usernames. About one in 20 sports Boring monkey avatar.
Srinivasan presides over this digital domain like a philosopher king, issuing 280-character edicts on topics ranging from transhumanism to effective altruism. After completing a PhD in electrical engineering at Stanford, he went on to found four companies, lead a16z’s expansion into biomedicine and blockchain, and serve as CTO of Coinbase. Those credentials — as well as his Twitter following of nearly 700,000 — place him in a rarefied group of Silicon Valley influencers that includes Naval Ravikant, Chris Dixon and Paul Graham.
This positioning is precisely why “The Network State” is so important: It’s not just a thought experiment, but a plan that, right or wrong, will inform how powerful technology leaders interact with governments for years to come. Srinivasan instructs technologists to treat traditional nations as a collapsing obstacle whose demise should be hastened to make way for a superior alternative. But if “The Network State” is a technologist’s dream, it also suffers from a technologist’s blind spots: the humanities become “complaints studies departments,” religions are reduced to utilitarian organizing principles that can be exchanged for cryptography and our understanding of the past. becomes a fair fight between “technological truth” and “biased, noisy” written history.
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In Srinivasan’s view, the United States is controlled by the media – especially The New York Times, which has no fewer than 59 appearances in his book.
The media establishment, Srinivasan argues, embodies left-wing authoritarianism, consisting of a “woke” ruling class that also includes professors, activists and bureaucrats. He draws on Curtis Yarvin’s idea of the cathedral for this conception of power. But where Yarvin, a right-wing monarchist often associated with Peter Thiel, regards the ruling class as a permanent fixture simply in need of reform, Srinivasan believes the world would be better off without it. Journalists, he writes, are “basically just dogs on a leash, assassins for old money, assassins for the establishment”. Bureaucrats, he adds, stop exercising state power over others, while status-obsessed academics preside over their “complaint studies” fiefdom.
This establishment fears the disruptive power of technology, and especially decentralization, Srinivasan argues. Because the establishment wants to “turn back the clock on all the things that have disrupted their political control,” the old media rages against technology and wishes they could “put social media and the internet back in the garage.” This bias is supposedly an open secret that is occasionally admitted in unguarded moments, as when a New York Times op-ed encouraged Big Tech to share a larger share of advertising revenue with local newspapers.
Media and political elites will never get along with tech types, he says, because there is a psychological difference between “people who focus on what’s true” and “those who care about what’s popular.” Srinivasan, of course, identifies the media and political elites as fixated on popularity over truth, not his sphere of VCs clamoring to invest in Juicero, WeWork and Theranos. This simplistic distinction is particularly surprising from Srinivasan given his frequent citations of Stanford philosopher René Girard. Girard, recently popularized in Silicon Valley by Peter Thiel, states that it is human nature to “want what others want because we imitate their wishes.”
But technology and the media are both competitors and close partners, we are told. Watching mainstream outlets post stories about Big Tech is like “watching Coke try to wrest market share from Pepsi with increasingly mean blog posts,” Srinivasan said in 2020. He also argues that as the power of the US government has waned, the media has shifted from appealing to government to instead appealing to Big Tech. He sees this behavior exemplified in media calls for deplatforming or content moderation.
Thus, Srinivasan’s hated “establishment” does not exactly fear technology, which can be used as a tool of coercion, but instead specifically decentralization. The ultimate goal of the American establishment man, as he sees it, is to use the state as “a club to coerce people (for their own good, of course), to perhaps get a small budget along the way, and finally to change the world by change the policy.” Decentralization threatens this process, he says: “People in the network start thinking about getting a part of the network to call their own”, which means that the main goal of the technological progressive “is to build – and that no one should have power over them.”
Srinivasan has a habit of giving credit to the network whenever technology produces desirable results, while blaming the state for everything else. With San Francisco, for example, the city government bureaucrats were able to “make the city hell” by using the power of the state. They managed this “despite how competent the technical founders of SF were on the network.” Fortunately, Srinivasan tells us, telecommuting and the resulting “techxit” are giving the people of the network a chance to fight another day—eventually in the first network state, which will serve as “a blank sheet of paper, an empty text buffer, a fresh start , or a clean slate.” So the reader is meant to believe that what went wrong with San Francisco, social media, and so on has nothing to do with technology or technologists, but with everything that came before them.
Wipe the state clean
The Network State will be technology’s first chance at “something new without historical limitation.” If this sounds utopian, that’s because Srinivasan insists it is can be: Rather than arising from a violent colonization of indigenous peoples, the network state will simply crowdfund new territory as a “peaceful mechanism of territorial expansion.” Instead of submitting tax reports, income will be earned and recorded on the blockchain, leading to full transparency. Instead of holding democratic forced elections, subscriber citizens will vote on the chain and effortlessly leave the state if they wish.
Srinivasan even imagines that competition between network states will resemble “the same way people left Blockbuster for Netflix,” so that the more innovative state will inevitably win out.
Image: Courtesy of Balaji Srinivasan and Aar Aalto
All in all, this is meant to allow people to “sign up to build their own vision of utopia.” Srinivasan doesn’t seem to see the potential for this to devolve into anarchy. He rightly identifies the social contract that requires compromise, but then goes a step further by declaring all forms of compromise bad. If your cannibal neighbor decides to join a network state with legalized cannibalism, that might be his version of utopia, but it doesn’t make for a safe neighborhood or a functioning society.
“The Network State” takes a “cloud first” approach that allows Srinivasan to ignore these more pragmatic real-world issues. There is a potential counterargument that a cannibal society would never gain recognition from the diplomatic community. If that is true, then why would the global diplomatic community recognize any other network state? And if indeed there is a diplomatic restraint on network states, then that precludes Srinivasan’s free market model of competition between network states.
Blood on the blockchain
One might ask why the US or China – or any country, for that matter – would be willing to cede parcels of land to a group of blockchain enthusiasts.
After all, not all forms of land ownership are equal. For example, when you own land in the US, you still pay property taxes and must comply with US laws. Your ownership is contingent on America’s continued existence—your taxes fund the military that deters foreign invaders, not to mention the water that flows through your pipes, the police that patrol the streets nearby, and the construction workers that pave the surrounding roads.
Traditional nations are likely to be especially wary of these blockchain enthusiasts given their explicit goal of overturning the existing world order. Mind you, these are nation-states that collectively spent $2.1 trillion on militaries last year, which doesn’t even include government spending on programs with indirect military applications. If a “subscribing citizen” physically living in Russia or Brazil decides to join a network state and renounce its citizenship, what should the network state do if Russia or Brazil says “Thanks, but no thanks”? And why wouldn’t a country say no, since that would mean giving up income tax and any territory owned by those citizens?
In the face of all these challenges, Srinivasan argues that “a start-up community with five million people worldwide, thousands of square kilometers of (disjointed) communally owned land and billions in annual income would have an indisputable numerical significance.” This meaning, he says, will allow society to negotiate national sovereignty and acceptance in international organizations such as the UN, the African Union and the EU.
Rather than engage directly with these difficult questions, Srinivasan avoids them by insisting that network states need only win a war over minds. Encryption, he argues, will ultimately triumph over state violence because secure communication “means nothing less than the ability to organize groups outside of state control, and thus a reduction in the state’s power to control.” Once founded, the Network State experiment can ensure its continued existence through a “historical/moral critique of the current system that delegitimizes the state’s violence against them and allows the experiment to continue.”
Finally, Srinivasan struggles to provide convincing reasons why the network state can or should exist. The legions of true believers in the upper echelons of the tech world don’t seem particularly concerned about these questions. Although we’ve been experiencing something of a crypto winter since the book’s release in July, Srinivasan’s appeal has only continued to grow. Next week he is set to lead the confluence of Urbit in Miami.
Still, there are a few limited criticisms from within. Buterin, for example, wrote a positive review but warned that poorly constructed network states would only serve the interests of the wealthy. “Chaos Monkeys” author Antonio García Martínez — whose hiring at Apple sparked a backlash from employees — said deeper conviction is needed to build a new nation, though he said Srinivasan describes “a de facto reality that only accelerates with the breakup after COVID. ”
Overall, “The Network State” is sure to have a significant impact on the future, even if the actual implementation of the ideas does not go far. The power of the book therefore lies not necessarily in its feasibility, but its appeal.
