The Sovereign Individual: Mastering the Transition to the Information Age, provided an accurate roadmap of the Digital Age. Yet the book was written 20 years ago! Before the invention of the mobile internet, before remote work, and before social media platforms existed. Despite being published so many years ago, the book provides valuable insights into how to benefit from the digital transformation.
But why should you care?
The lessons are remarkably relevant in the year 2020 and beyond. They provide a backdrop for societal changes that are happening right now. These are changes impacting your life whether you realize it or not. And because of the nature of these societal changes, you simply cannot afford to ignore them.
As we move deeper into the Information Age, a new social class structure is emerging. And it will create new winners and many losers. You don’t want to get caught on the wrong side of this change.
So read on to learn what exactly is happening and how the digital transformation will impact your life moving forward.
What You’re About To Read
This essay covers the core principles of the emergent Sovereign Individual class as it stands today. It highlights how these social class changes are already well underway. It’s a summary of some of the most relevant aspects of the book. And it emphasizes that readers will need to adapt their lives to this new societal structure. Most importantly, this essay functions as a wakeup call, identifying the changing reality around you.
Some Key Takeaways:
- The internet and the global digital economy are causing industrial era nation-states to lose their power
- As a result, a new societal class structure is forming and replacing the industrial era blue collar/white collar divide
- This new class structure includes a group of people known as Sovereign Individuals; digital savvy workers capable of generating location-independent incomes
- The Sovereign Individual class will emerge as the beneficiaries of the Information Age society
- But societal change is slow and modern social class structures appear to straddle both the industrial age and what will come next
- This slow change will result in rising nationalism, violent class struggles, and geopolitical conflict
- Future fortunes will favor those that prepare for this inevitable upheaval and embrace a digitally immersive future
“Thinking about the end of the current system is taboo. To understand the great transformation to the Information Age, you must transcend conventional thinking and conventional information sources.”
The Sovereign Individual
Society Is Evolving and Something New is Forming in its Place
On a day to day basis, most people keep there heads down and perform their daily rituals. They wake up, consume daily news, do some form of work, and at the end of the day, they play. Rinse and repeat, day in and day out. This sense of routine and habit can lull us into a sense of normalcy. A sense that life will go on as it always has.
This is referred to as normalcy bias. A feeling that our lives, and the way society functions will continue on unchanged. It’s a direct result of our daily rituals. But history teaches us that life does in fact change. And it teaches us that the change can be rather extreme over time. The truth is that when you lift your head up from the daily routine and see what’s going on in the world, you can begin to notice societal changes are taking place.
You get a sense that in the near future, we are heading somewhere totally different.
These changes are frequently hard to notice. This is partly because the mainstream media still crafts narratives for mass consumption which is an obsolete societal model. The arrival of the internet and unprecedented access to information has allowed divergent societal narratives to form. And because of this, we have an increasingly difficult time reconciling what’s actually happening in the world.
The Information Age is Causing A Societal Shift
There is a deeper takeaway from this breakdown in mass consumption. The internet has led to a deep societal rift. It’s like a tectonic shift of thought and ideology that is reshaping society. Mass consumption and the standardization of everything has been broken by the internet.
In its place, we see a rise in identity politics and communities of people that would otherwise be unable to form without the internet. Through this phenomenon, the power of society has shifted from the mass group to the individual level. And through it all we are starting to see the emergence of a new social class, the Sovereign Individual.
But what exactly does a Sovereign Individual believe in?
The Sovereign Individual believes that personal responsibility is the path to freedom and a quality life.
In the past, mass consumption created a standardized society. You would go to school and receive a standardized education, you’d go to college on a path for a corporate job, or you’d enter a trade industry. This mass consumption model created well beaten paths for society to follow. It lulled us into a sense of reliance on standardized processes. A reliance on the established system.
If you wanted to be X, you’d do A and then B.
But with the internet and the growing digital economy, standardization is being left behind for niche paths and opportunities. This requires personal responsibility to identify a desired path and build a unique process to achieve the goals of the path.
The Sovereign Individual understands the importance of personal responsibility in the digital age. Identifying information that builds situational context. Educating themselves on the problems and levers needed to escape standardized life. Learning the rules of the game and exploit them to their own advantage. And they personally take decisive action and commit to long term strategies of success.
This is not a stoic mindset although there may be some overlap.
The Sovereign Individual emphasizes self-ownership, rational thought over fatalism, and does not accept the one size fits all approach of mass consumption society. They typically view luck as a statistical probability and work to calculate how to take action to increase the probability of desired outcomes.
The Sovereign Individual is a globalist. They benefit from digital based opportunities of the internet economy.
They see the growth of digital opportunities as the future of society. The Sovereign Individual is a manifestation of the global character of the information age.
ie: The information age is global in nature and is created by the internet and globalized commerce born from the adoption of global reserve currencies. Sovereign Individuals desire a globally integrated economy and can be thought of as globalists.
They are not nationalists.
The production of information based products and services are signs of their emergence. The concepts of Software as a Service, User Generated Content platforms, and the Gig economy all directly empower the emergence of the Sovereign Individual class. As tools that support digital interoperability become more available, more Sovereign Individuals will emerge.
The Sovereign Individual is increasingly willing to shop around the world for nation-states with preferential policies.
Because they are globalists by nature, they will increasingly covet citizenship in multiple government jurisdictions. This will allow them to effectively vote with their feet should a government implement policies that harm them.
This is a move away from traditional patriotic sentiments of the Industrial Age. At the root of this change is a growing class conflict pitting globalization versus nationalism.
Simply put, globalization harms the location-dependent class of workers in developed nations. Why? Because labor can be outsourced to locations with different tax laws and cheaper labor. As the global labor markets open up, a labor arbitrage takes place that leads to a great equalization of labor value across the globe. This benefits developing and third wold nation workers while harming developed world laborers.
Globalization creates a new class structure:
- The location-dependent workers are characteristic of the industrial age. Ie: blue-collar laborers such as factory workers
- This group may find themselves left behind by automation
- Location-dependent knowledge workers
- The Sovereign Individual class of location-independent information workers. ie: jobs that can be increasingly completed anywhere in the world with computer access.
This new and growing class divide becomes clearly demarcated along policy choices of nationalism and globalism. Put another way, government policy choices in favor of nationalism or globalism uniquely impact different classes of jobs.
There is a growing opportunity cost for location independent and digital workers that maintain one nationality or citizenship in one nation. It’s a growing cost and a risk to them as nationalist policies sweep the globe.
Sovereign Individuals embrace a global and mobile lifestyle to achieve personal sovereignty.
By voting with their feet, Sovereign Individuals aim to become customers of the state with which they reside in. Leaving as necessary in order to avoid nation-states that adopt policies that harm them. A key element of this mobility is that they will cultivate multiple income sources and develop resources beyond nation-state control including cryptographically secure assets like Bitcoin and Non-Fungible Tokens.
Examples of recent policy decisions that may cause a Sovereign Individual to move:
- Governor Cuomo threatens to withhold school funding
- Biden’s proposed capital gains tax increase
- New Jersey raises taxes on millionaires
- Belarus shuts down the internet
Sovereign Individuals seek out global digital havens to shelter from restrictive nation-state policies.
The internet has become a robust economy unto itself and offers increasingly immersive experiences. Sovereign Individuals use the internet to find like minded individuals, to share best practices, join forces to collaborate on projects, and form enclaves of protected thought among peers.
These early communities will form the prototype for governance of the Sovereign Individual age. In these private digital environments, Sovereign Individuals will formulate moral frameworks and ideologies of the digital future. They will also collaborate in digital settings, relying on software enforced smart contracts to enter into binding agreements without the need of government enforcement.
These “smart contracts” although still relatively new and experimental will play a very important role in the future of business. Especially to global groups like Sovereign Individuals because it offers a way to vote on common initiatives.
An emerging question – in the future, will software enforced governance eventually replace core roles of governments?
A Sovereign Individual seeks out location independent sources of income and assets.
Sovereign Individuals seek out digital work in an attempt to create multiple location-independent income streams and assets outside the bounds and reach of nation-states. Why? Because this fundamentally empowers the Sovereign Individual to vote with their feet. The ability to earn money anywhere in the world at any time makes the threat of hostile policies less damaging because you can simply move away.
This type of income generation and asset creation is driven by new internet technologies such as SaaS, No-Code, and blockchain. These tools allow individuals to build small and agile companies with limited software experience and allow for the creation and exchange of digital assets outside of the reach of nation states.
A Sovereign Individual places a significant focus on income resiliency by cultivating multiple sources of income.
Multiple sources of income supports mobility, is a form of deterrence, and provides freedom from the establishment. There is also a bonus value placed on “non-correlated” or globalized assets. The type of asset that is out of reach of a nation-states control.
Additionally, there is a premium that a Sovereign Individual should place on cultivating sources of income across multiple time zones and jurisdictions. In doing so, the Sovereign Individual can spread geopolitical risk. If one jurisdiction should implement hostile policies, or face an economic hardship or war, others may be relied upon.
The key point is that a Sovereign Individual is self reliant and must focus on reducing all single points of failure. Especially with regards to income. This is in stark contrast to traditional blue collar/white collar professions. Gig work becomes desirable in this scenario.
Sovereign Individuals reject mass media and popular narratives in favor of personally researched information.
The internet ended the monopoly that the credentialed class had on valuable information. A Sovereign Individual fundamentally understands the end of this monopoly and uses it to their advantage. Information consumption has become hyper selective, niche oriented, and bypasses mainstream broadcast channels of the industrial age.
There’s a newsletter and YouTube video for everything these days.
You no longer need to rely on mass produced information products like newspapers and broadcast television to get reliable information. This means that there is no longer mainstream indoctrination of one narrative over another. It means that multiple narratives can be constructed from information and alternative interpretations of facts can become common.
This creates a growing sense of cognitive dissonance within societal discourse. It opens the way for gas-lighting in popular culture by the establishment. A Sovereign Individual cultivates sources of information that bypass the cognitive dissonance to provide a proper worldview.
Sovereign Individuals value and seek out privatized education.
As a result of the breakdown of credentialed knowledge, Sovereign Individuals value and seek out privatized education. They personally select non-standardized education pathways, personalizing the skills and experiences they acquire. They do this because, mass media and mass-produced government services, standardized education is breaking and becoming obsolete.
These systems are notoriously slow to adapt to change. An agile Sovereign Individual seeks to take personal responsibility in adapting to the demands of the societal changes underway. Placing focus on acquiring skills and tools needed to dominate the digital economy and location independent work of the future.
The Bottom Line
Society is changing and the age of the Sovereign Individual is at hand. The establishment will fight back against the truth of this change. But as Galileo said when forced to recant his theory that the Earth revolved around the sun, “Eppur si muove”.
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Fantastic summary of the book period thanks very much for taking the time to post this.