Since biologists discovered in the 1950's that all life forms could be understood as the processing of information, a new paradigm was conceived, a new era began, which we call the Information Age, and most people don't like it. The reason for this rejection is that the post-modern societies of the Information Age are chaotic, complex, multicultural.., and no philosophy has given yet the general public the road map to find out where these new phenomena are taking us : globalisation, the Internet, biotechnologies, etc.
I maintain libertarianism is that philosophy. Libertarianism has something to tell us about our behaviour as human beings, how we ought to relate to others in society and with nature. Libertarian philosophy and ethics are much more efficient in explaining the transformation which is taking place in the world than social-democracy, which represents today's consensus (to the point that the French refer to it as la pensÈe unique). I am not going to tell this audience what libertarianism is about, you know as much on the subject as I do. My purpose today is to share with you my analysis of the Information Revolution, and let you figure out how libertarianism applies. I would like to start with this proposition that we live in a certain type of societies, which I call Political Societies, for lack of a better term; that the last transformation of these Political Societies came as a by-product of the Machine Age, and they are slowly dying, as the Machine Age is replaced by the Information Age, and societies of a radical new type are forming, which are best described as Knowledge Societies.
Depending on your beliefs and values, and whether you read Oswald Spengler, or the Financial Times, or Cosmopolitan, you will variously say that this move from Political Societies to Knowledge Societies is the end of Western civilisation, or a world crisis, or the sun entering Aquarius. Whatever, we all know it is fundamental. I believe personally that the Information Revolution is no less important in magnitude and in impact on the future of humankind than the revolution which took place in the Neolithic period, when humanity changed from being nomadic to agricultural. What we are witnessing here is like a reversal of this process, not that we are going back to roam the world with backpacks, but we are slowly adopting the values and the culture of the nomads and giving up the values and the culture of the landowners. This change in the scale of our values has a profound impact on all three elements which constitute our Political Societies.
* Spatially and geographically, our societies are nation-states.
* Operationally, they function as democracies.
* Ideologically, they live by the book of social-democracy, which is a blend of socialism and nationalism.
Let's see how these three constitutive elements are affected by the Information Revolution.
7,000 years ago, a new mode of production : agriculture, created a new mode of living : permanent dwellings, walls, warehouses, irrigation... Land became the primary source of wealth. A sedentary life allowed the emergence of the state, as we know it, with a permanent bureaucracy, financed by recurrent taxes. Where you lived defined in great part who you were, and where you lived was necessarily part of a state, and your collective identity became defined by the state. For a very long time, nation and state did not coincide. You had people with a lot in common, religion, language, culture, which were fragmented into many states, like the ones which merged into present day Italy and Germany, and you had states which ruled over many different nations, with little in common, the typical examples being the Russian and Austro-Hungarian empires.
The nation-state really only dates back to the French Revolution, and there is no reason to believe it is eternal. Certainly, one can make a case that there is a growing demand for "nation-states". More are created virtually every month : Chechnia, Palestine, Croatia, Bosnia... This inflation in the number of units may reflect, however, the diminishing value of each unit; because the reasons for a nation-state structure are no longer relevant.
The primary reason for a nation-state type structure was to reduce transaction costs by having a larger and homogenous market for products and to create economies of scale by reaching a critical mass for the maintenance of certain so-called common goods, above all, an army. The reason is now obsolete. The nation nowhere is the scale by which one measures a market. Consumers have no passport. In addition, it is plain that the optimal scale for so-called common goods is no longer reached at state level. To quote Daniel Bell, "the nation-state is too big to be bothered with the small things and it is too small to cope with the big issues". For instance, nowhere, except maybe in Japan, the population is homogenous enough to make the provision by the state of a service like education an efficient proposition, and the trend is for more population movements across borders and for more multiculturalism.
Even in the ultimate attributes of sovereignty, which are foreign affairs and defence, the nation-state is ineffective. I gave a short paper here last year about defence problems in the Information Age, in which I attempted to show that aggression is no longer a factor of geography. We can wage war today without ever violating the enemy's borders. We can cripple his telecommunications, air traffic, banking settlements, electricity production, and many other vital services, by launching a massive infiltration of his computer systems. In a way, this style of electronic warfare creates a new balance of power between the highly-developed countries, which their own sophistication renders vulnerable, and the smaller potential belligerents, who can attack them successfully with a small gang of hackers. Reprisal is not easy, electronic warfare can be launched from anywhere in the world, not necessarily from the territory of the aggressors; for instance, you could have Algerian hackers, posing as tourists travelling with laptops, who could attack France simultaneously from hotel rooms in Rome, in Lebanon, wherever, so that it would take a long time to determine the identity and the objectives of the aggressors. In other words, the nation-state is not even good at making war.
We knew the state could not stop terrorism, it could not restore law and order in our cities, we now know that the state cannot even provide the one service which has always been the ultimate reason invoked by luminaries like Rand and Nozick for keeping it at least in its minimal format, national defence.
For me, the sad tragedy with the nation-state is that it reduces all what you are, the multiple facets of your personality, to a single dimension, your nationality. Only one question is relevant : Are you Serb or are you Croat ? Are you French or Algerian ? If you are French or Croat, and I am on the other side, I'll kill you or I'll deport you. Forget that you are a good lover, that you like Beethoven, that you collect garden dwarves, that you enjoy old clarets, that you are a Catholic homosexual banker who practices Zen meditation... None of this matters. Your only identity is your nationality. I can only rejoice when I see all the signs that the nation-state is headed towards the dustbin of history.
The operational procedure of the modern state almost everywhere is that of democracy. Citizens believe democracy allows them control over their government, and it does to a large extent, but this control is useless. Democracy is globalisation's most visible victim. Remember where our modern democratic system started. It was in Britain, isolated, of course, by definition; in the United States, also isolated on the other side of a whole ocean, and even, isolationist; and in the Alpine valleys, again a place where people were secluded, surrounded by steep mountains. In all these places, whatever the majority decided was applied, there would be nothing to prevent it. But look at what is happening today : very few of the important events which affect our lives have been decided by any election, because the truly important events of today are not part of the political realm. Nobody voted the sexual revolution; you do not hold a referendum to ban AIDS or unemployment; no parliament decided to put a PC in every home; it is not elected representatives who made the Internet global... The Political Society is collapsing, because everything that is important in the world today is happening outside the realm of politics. We have gone from a belief in the 1960's slogan : "everything is political", to an acknowledgement that politics are irrelevant.
I mentioned that today's Political Societies occupy space in the form of nation-states, and that their operating procedure is democracy. The third constitutive element is their common ideology, which is social-democracy. Admittedly, mainstream political parties do not all claim to be social-democrats. What about the US Republicans, the Tories in England, the CDU in Germany.. ? The truth is any difference between these organisations is of form much more than substance. Fidel Castro and Brezhnev and Mao Ze Dong and Kadar in Hungary boasted also about the differences in their regime; the Iranians and the Saudis argue the same way. When you unwrap the package, however, the product is the same. Without following Fukuyama's conclusion that we have reached the end of history, I think we can agree with him that the quasi universal political agenda on the planet is social democracy. I would even add, the more democratic a country claims to be nowadays, the more it means it has become a one-party state. Now, social-democracy itself is rooted in two ideologies, socialism and nationalism, and my point is that the Information Revolution is making both of them obsolete.
The democratic election system leads to forced wealth redistribution, which is socialism. Wealth redistribution is at the core of the system, no candidate gets elected unless he or she makes the electoral promise to take from the "rich" and give to the "poor". Redistribution has even become the process which gives its legitimacy to democratic governments. Most human beings feel this temptation to steal what they have not earned. Society, of course, cannot allow "unregulated" theft. If it would, there would be no savings, no investments, producers would consume immediately their output, and such a society of thieves and victims would soon be absorbed by other groups, more efficient because they would give some sort of protection to investments. However, because the temptation to steal is still there, theft everywhere is "regulated", it is not outlawed. The rule is that only governments may steal legally, and governments are even allowed the use of armed forces to do it. Politics, therefore, has become the way to legalise robbery. Democracy's extraordinary appeal is that it extends to each one of us this capacity to rob our neighbours. In the old days, legalised robbery was a privilege of a few, democracy makes everybody believe they can share in the loot, even more, they can organise it. Robbery was always the purpose of any government, but it was hidden behind a grand design. We were told that governments had a mission, they were governing for the greater glory of God, or to increase the power of the nation, or to save it from invasion, or to bring civilisation to the savages... None of this propaganda works today. It has become all too obvious that the only function of governments is to ensure the forced redistribution of wealth from a minority to a majority of the electorate. In many countries, and certainly in France, the whole rhetoric about la fracture sociale, the meltdown of the social fabric, is evidence that politicians nowadays can conceive of only one bond to hold society together, and it is the one-way dependence which exists between a parasite and its host, between the robber and his victims. By a gross abuse of language, social-democrats dare call this "legalised robbery" : "solidarity" or "social justice". What I shall attempt to show in a minute is that the Information Revolution makes "legalised robbery" a lot more difficult, hence it is one of the reasons why democracy in particular, and politics in general, are becoming no longer viable.
The other ideology on which democracy is based besides socialism is nationalism. If casting a ballot can decide on the redistribution of wealth and on many other issues, such as culture, education, justice, police, the army, housing and urban planning..., then it becomes essential to know who has this power to vote and who is entitled to the benefits provided by the state. The average European voter objects to immigrants, with their 10 children, collecting family welfare; the Basks don't want the Spaniards to decree that all education should be in Spanish; nobody wants the Moslems to make the sharia part of the laws of the country... But if I don't want this to happen, then the others must be denied voting rights, else my people have no other choice than to secede and create a new state. Witness how Israel, which claims to be the only democratic state in the Middle East, never annexed the Occupied Territories and could not create the Greater Israel, because, by giving all Palestinians an Israeli nationality, the majority of the country would become Arabic and Moslem. Note how, as soon as democracy was introduced in Eastern Europe, ethnic violence erupted. No one wanted the rival ethnic group to gain control of the state, especially one so much infected with decades of socialism, which is supposed to control so much of one's life. Watch as Italians in the North are openly talking about secession. Not to mention Belgium... I remember some time ago, I was sitting in an aeroplane next to a passenger who introduced himself as a French tax inspector. I was cautious not to give him any details about myself, but I could not disguise my French accent. In the course of the conversation, I asked him whether he could give me a single good reason why people ought to pay taxes, other than avoiding going to jail. "What about helping the poor ?", he offered. I agreed with him there is a case for helping the poor, but I added, "Let's start with the ones who are the most in need. I am ready to send my tax money to Haiti". The bleeding-heart friend of the poor was shocked. "If you are a Frenchman, he banged on the armrest between our seats, your money must go to the French people !". Nationalism and socialism are the twin children of democracy. They come together; when you see one, the other is not far behind. The good news is that they are both bankrupt.
What is causing this bankruptcy ? The Information Revolution is shattering the three pillars supporting our Political Societies. To the spatial dimension of the nation-state, the Information Revolution is substituting virtual communities in cyberspace. To the operating procedure of the nation-state, based on "democratic robbery" and coercion, the Information Revolution is opposing offshore commerce, encryption, digital cash... To the twin ideologies of nationalism and socialism, leading to closed inward-looking social-democratic societies, the Information Revolution is replying with the physical wiring of collective human consciousness.
A society moving from agriculture to commerce, from land-based to trade-based activities, this mobile society always spelt bad news to governments. The Belgian historian Jacques-Henri Pirenne, who wrote a monumental Great Trends in History, in the 1950's, made a convincing case, I believe, that the more agricultural, the more sedentary, a society, the more authoritarian its political tradition. The culture of liberty was stronger in the maritime and trading nations of Holland, England, Venice, where people could move their property and their business out of reach of their government, than in the continental countries of Russia, Germany, Spain... In the latter countries, most of the wealth was generated by the landed gentry and their peasants; later on wealth took the form of mines and factories, but whether ploughing fields or mines, these immovable assets could be controlled easily by the police and the tax collector. And of course, these societies were not only more independent from the state, they cultivated the values of entrepreneurship, self-responsibility and openness to alternative life-styles. This difference between maritime and continental societies cuts even across nation-states. Compare New York and San Francisco today with the Mid-West, Shanghai with Beijing, and notice how France, which is both continental and maritime, sways between the two traditions. But globalisation, which is a product of the Information Revolution, means this opposition between liberal trading societies and agricultural authoritarian ones is no longer imposed on us by geography. If we wish to, we may all live in the virtual equivalent of the cosmopolitan open-minded maritime gateways of London and San Francisco. We can all benefit from whatever is generated in terms of products and of ideas, wherever in the world. We can even go farther and break away completely from our land-based authoritarian societies and embrace the free life of the nomads.
There is a vivid example in the Bible of the difference between land-based and nomadic societies. Abraham and Loth had a quarrel about who should be the leader of the tribe. If they had resorted to a vote, the minority would have had to accept the rule of the leader it didn't like. Being nomads, however, they had a more sensible option. Abraham rallied those who wanted to follow him, Loth did the same, each clan took its possessions and off they went their separate ways. Of course, in a land-based society, you cannot carve the country around each family's plot of land, with thousands of little enclaves. Therefore, you have to submit to the leader, whether this leader is the one you chose or not.
The Information Revolution allows you the joys of nomadism without leaving the comfort of your room. You can do what Abraham did, you can defect, you can drop out, but it's not you who is moving if you don't wish to, all you need actually is to move your possessions.
I want to stress here another difference, it is the difference between a libertarian project and all political revolutions. Libertarians nurture no desire to change society for others, if others prefer the statu quo. We may find it very sad, but the fact is a lot of people are not interested in being free, it scares the wits out of them, they have other values. I have no problem with that. I tell these people : If you like your government, keep it. If you enjoy being told what to do, being taxed, being censored, being drafted in the army.., you can have it, but, please, let me out of it.The Information Age brings all of us the opportunity to do like Abraham and Loth, we can opt out of government. This is how, and it starts with the separation of State and Space.
It is not agricultural land, coal mines, oil wells, brick factories, that we will call wealth in the next century; it is information - in all the diverse and exploding manifestations that human ingenuity can create. And information by its very nature is difficult to restrain. It will soon become impossible for governments to monitor and manipulate the streams of data that will become the substance of wealth creation. While tax collectors had the power to confiscate a factory or a pay check, they cannot arrest an idea. You cannot spirit your farm into the night, but an idea ? An idea can cross the world in milliseconds.
And this Knowledge Society is already here. I am ready to bet that 9 out of 10 of us in this room, we are knowledge workers. All what we produce and process is information, whether we are lawyers, computer programmers, consultants of one kind or another, priests, bankers... What we do, we could do it anywhere.
The following businesses, by essence, are "nomad businesses" :
* all companies doing cross-border business, of course, and it is now the case for most companies;
* all trading in securities, stocks, bonds, investments in unit trusts, pensions, life insurance;
* all media business, newsletters, television, magazines, publishing;
* all information related business, databases;
* software;
* gambling;
The non-taxability comes from the development of new technologies of encryption and digital authentication. For the first time in history, it becomes possible for two parties anywhere on the globe to transact business that is both confidential and verifiable. Commercial correspondence, contracts, even the object of the transaction, the digital product itself, will be encrypted. So it is not that the authorities cannot stop that business, they don't even know that it exists. Accounts can be settled in a new medium of exchange, digital cash, a technology that allows reliable and verifiable funds transfers, without leaving a paper trail. There are many projects of digital cash being tested now, including one by a Dutch entrepreneur. Digital cash can be exchanged for gold or the currency of your choice in any offshore jurisdiction, or it can be spent to buy other goods and services on the net.
I understand Visa, the credit card people, are also kicking the idea of offering their own currency, because for them, any government printing cash is a competitor. People will gladly accept payment in "Visa Money", because it is accepted in virtually all shops, hotels and businesses around the world.
I believe we are a few in this room who can help you shield your earnings from tax confiscation, but I fear that even this noble profession is in danger, because, very soon, it will be so easy to cheat the tax man, you won't need any counselling to do it.
You all know Max Weber's famous definition, "a government is the agency that exerts the monopoly of legitimate violence over a given territory". The separation of State and Space means simply that a vast territory has been discovered over which no government can exert any violence. That is not bad for a start, but, just to dampen your enthusiasm, remember you will still be physically living somewhere, there is still this place in "meatspace", where the tax police can catch you. But what can they charge you with ? If you are self-employed, or employed in a small and smart firm, which knows how to take good care of its employees, you get paid offshore, your favourite tax man knows only the income you are kind enough to declare, which, presumably, is what you need to justify your visible standard of living. The big difference becomes that taxes are no longer on wealth creation, they are on consumption, they are taxes on what you buy in your local shop, like VAT, or taxes for the services you use locally, like a property tax or a road tax. All income not spent in your country of residence remains tax free abroad. A lot of us have already adopted this style of living. So you can well understand that when they hear "Information Revolution", bureaucrats everywhere brandish garlic and crucifixes. (And they may have a point : If you believe in the Gnosis, the initials of the World Wide Web, "WWW", translates as 666, which is the number of the devil).
Your local community may want to hit you with taxes, but the big difference is that they will not be taxes on wealth creation, because all your profits and savings will have moved offshore. The taxes that will remain will be on consumption, taxes on what you buy in local shops.
Governments should expect even more bad news.What about the separation of State and Commerce ? When the primary source of wealth was derived from land, there was a natural collusion between the governments of the nation-states and business people. Their interests would converge. Powerful companies made governments powerful. Rich companies made their country rich. Remember all these companies which proudly affirmed their national origin : US Steel, American Telephone & Telegraph, British Petroleum, Compagnie FranÁaise des PÈtroles, and so on. Today they are happy to be known by a neutral acronym, they are "denationalising" their name. Very few businesses want to be "national" any more. The Knowledge Society has no allegiance whatsoever to any political society. Even in Japan, the president of Sony dared declare recently that Sony is not Japanese, it is a "global company".
The only relationship left between politicians and business people is through taxes and corruption. Taxes, because for the time being they cannot be entirely avoided; corruption, because when the government throws money out of the window, you want to buy yourself a good place under the window. But as more and more individuals and companies alike will evade taxes, money thrown out of government's windows will dry up. The Big Companies, which owe their dinosaurian size mostly to political favours, will lose their importance. Small will really become efficient, and small, as I pointed out earlier, means even greater opportunities to escape the long arm of government agents.
Finally, I believe we will see the separation of State and Politics. During the 17th and 18th centuries, Western societies successfully fought to separate the Church from the State. This separation is not total yet, we still have Sundays, Easter, Christmas, etc., as legal holidays (Holy Days), we have monogamy, and all sorts of laws which are nothing but moral precepts; yet a big progress was made towards putting religious matters in the private sphere, where they belong. Because religion is purely a belief, there was no justification to impose this belief onto others who did not share it. But politics is also a belief, there can be no demonstration that social democrats govern better than Christian democrats, nor the reverse. The next logical step, therefore, is to separate the State from Politics, and make politics a private matter, like religion. If my community, which I joined totally freely, tells me it is wrong to look at a naked woman's bottom on the screen of my computer, or that I should wear a kippah, or that I should pay 30% of my revenues to the Party, I am free to obey or to leave the community. Why should all others, who have not chosen to join this community, be affected by its decisions ?
I stopped participating to all democratic elections 20 years ago, not because they were useless (at the time I didn't realise they were), but quite the reverse, I became an abstentionist because I believed that if my party won the elections, its program would become the law of the land, it would be forced on those who had voted against it, and I don't want that. I want this program for me, but not to force it on others who have a different agenda. And, of course, conversely, I expect the others to live by their political opinion, but not to impose it on me.
If we separate state from space, from commerce and from politics, there will be very little left of the State as we know it, so maybe we could leave it to pass away quietly.
The material conditions of a freer life are slowly being put in place, not because Libertarians are preaching freedom, although I hope we all do that, not because politicians are embracing the philosophy of Ayn Rand and Rothbard, but simply because the procedures of a Political Society are no longer adapted to the Information Age. The new societies of the Information Revolution, the deterritorialised virtual communities which are forming now the Knowledge Societies, are evolving autonomously from the states, they are not part of the power-based Political Societies of the Machine Age. People do not know yet what will replace Political Societies and they worry. What we, libertarians, can do is to load libertarianism into the Information Age, we can explain what is happening, because we have conceived it intellectually already. We can explain that the Knowledge Society which is emerging will bring freedom, peace and abundance. And if people do not believe us, just let them go their way. Opt out. Take the government out of your life. We are nomads, so let's form our own tribe and secede.