So, you’ve read The Sovereign Individual. Now what? You might want to gain some context. Because you intuitively know that the world is changing. And you understand that these changes will impact how we live, work, and interact with one another. But you might not know where to start building that context. This essay is designed to help you on that path by providing you with The Sovereign Individual’s Reading List.
Remember that The Sovereign Individual was originally written in 1997 prior to most of the digital transformation trends. As a result, it’s helpful to learn about the broader context of the major trends taking place. What’s happened in the world, what’s likely to happen, and why it all matters to you.
That means exploring these trends in detail to understand how they will evolve to create The Sovereign Individual Age. Trends like digital money, remote work, location arbitrage, and competitive governance. In other cases, you might benefit from understanding how human beings react to rapid technological change. How they react to new incentives and how they form communities.
This essay lists 10 books to help you understand how and why these changes are taking place. These books address many of the themes from The Sovereign Individual in greater detail. Some are modern, some are older and more “lindy”. But all are relevant in helping you understand what’s happening in the world and how to adapt to that reality.
Need a Summary Refresher on The Sovereign Individual?
1. Future Shock
Reason for reading? Many people recommend reading The Fourth Turning as the next important book. But if you already buy into The Sovereign Individual thesis, you understand that digital technology is going to rapidly change society. And so, you probably don’t want another book covering a similar societal paradigm shift using different words and examples.
Instead, you’ll want to understand how rapidly changing technologies impact people and communities. Ie: How will people react to a digital transformation that alters the world that we’ve become comfortable with?
Think of future shock as the distress suffered by people unable to cope with rapid social and technological changes.
It’s an older book. But many of its points are important for developing a modern context for what’s happening in the world and why. Why are people struggling to accept changes that are taking place? Why do they think that life will go on as it always has? And what are the consequences of a failure to adapt to technological change?
If you’re going to only buy one book on this list, this is that book.
Summary “Future Shock is about the present. Future Shock is about what is happening today to people and groups who are overwhelmed by change. Change affects our products, communities, organizations—even our patterns of friendship and love. Future Shock vividly describes the emerging global civilization: tomorrow’s family life, the rise of new businesses, subcultures, life-styles, and human relationships—all of them temporary. It illuminates the world of tomorrow by exploding countless clichés about today. Future Shock will intrigue, provoke, frighten, encourage, and, above all, change everyone who reads it.”
Reason for reading? Easy access to the internet changed how we form communities.
You can find many different beliefs online, form social groups, and interact with one another on a regular basis. And a global network of people forming different ideological communities puts pressure on the late industrial age political and social systems. Ie: the nation-state system is challenged by the formation of digital communities with conflicting beliefs and loyalties.
And these communities are beginning to form their own digital nations or as Balaji Srinivasan would describe them, Network States.
Invisible Countries is a book about communities of people that have no physical territory. Exploring a variety of causes and examples of how these communities maintain their identities despite no physical land to actively call home. It shows precedent that nations can exist without territory and that these nations can still influence the real world. It’s not crazy to imagine a digital nation of Sovereign Individuals forming and seeking physical land to inhabit. Maybe not now, but not too far in the future either.
Therefore, if you want to understand more about how Sovereign Individual communities might emerge, you should read this book.
Summary: “A thoughtful analysis of how our world’s borders came to be and why we may be emerging from a lengthy period of “cartographical stasis”
“What is a country? While certain basic criteria—borders, a government, and recognition from other countries—seem obvious, journalist Joshua Keating’s book explores exceptions to these rules, including self-proclaimed countries such as Abkhazia, Kurdistan, and Somaliland, a Mohawk reservation straddling the U.S.-Canada border, and an island nation whose very existence is threatened by climate change. Through stories about these would-be countries’ efforts at self-determination, as well as their respective challenges, Keating shows that there is no universal legal authority determining what a country is. He argues that although our current world map appears fairly static, economic, cultural, and environmental forces in the places he describes may spark change. Keating ably ties history to incisive and sympathetic observations drawn from his travels and personal interviews with residents, political leaders, and scholars in each of these “invisible countries.”
Reason for reading? The Sovereign Individual is born in part from an ability to earn money online from anywhere on earth. This empowers remote workers to conduct location arbitrage. Think of location arbitrage as the positive benefits gained form relocating where you live. Better quality of life, lower taxes, less crime, living near family, etc.
The Sovereign Individual is a growing social class of people that will use this arbitrage at a large scale. As a consequence, governments will be forced to change policies to align with this group’s wants and needs. If they don’t, they risk decline of their jurisdictions as people opt to exit. Because when using “voice” doesn’t lead to policy change, people will exit the system for alternatives when they can.
Exit, Voice, & Loyalty explores the technical, economic, and social aspects that an ability to relocate has on organizations. Simply put, remote work will lead to competitive governance. This will happen at state, local, national, and international levels. And it will even happen within traditional workplace cultures. So, you should read this book to understand the technical aspects of why people conduct location arbitrage. And how it impacts organizations.
Summary: “An innovator in contemporary thought on economic and political development looks here at decline rather than growth. Albert O. Hirschman makes a basic distinction between alternative ways of reacting to deterioration in business firms and, in general, to dissatisfaction with organizations: one, “exit,” is for the member to quit the organization or for the customer to switch to the competing product, and the other, “voice,” is for members or customers to agitate and exert influence for change “from within.” The efficiency of the competitive mechanism, with its total reliance on exit, is questioned for certain important situations. As exit often undercuts voice while being unable to counteract decline, loyalty is seen in the function of retarding exit and of permitting voice to play its proper role.”
“The interplay of the three concepts turns out to illuminate a wide range of economic, social, and political phenomena. As the author states in the preface, “having found my own unifying way of looking at issues as diverse as competition and the two-party system, divorce and the American character, black power and the failure of ‘unhappy’ top officials to resign over Vietnam, I decided to let myself go a little.”
Reason for reading? One major claim in The Sovereign Individual is that our systems of money will change in the digital age. And in many ways, The Ascent of Money provides historical validation for that idea.
It teaches you from a historical perspective that money is a social technology. A technology that has evolved to fit the needs of society at different times. And although many people push back against the reasons to adopt new forms of money, history shows it’s quite common. Historical context validates the idea that the age of the Sovereign Individual will necessitate a new type of digital money.
Most importantly, this book makes an argument that an evolution in finance is often a precursor to evolutions in society. Read this book if you’re looking for reasons why society would move on from our current monetary system.
Summary: “The Ascent of Money reveals finance as the backbone of history, casting a new light on familiar events: the Renaissance enabled by Italian foreign exchange dealers, the French Revolution traced back to a stock market bubble, the 2008 crisis traced from America’s bankruptcy capital, Memphis, to China’s boomtown, Chongqing. We may resent the plutocrats of Wall Street but, as Ferguson argues, the evolution of finance has rivaled the importance of any technological innovation in the rise of civilization. Indeed, to study the ascent and descent of money is to study the rise and fall of Western power itself.”
Reason for reading? Continuing with the theme of finance and money’s role in frontrunning societal change, you have to learn about Bitcoin. Especially as it fits so perfectly within The Sovereign Individual thesis. The Bitcoin Standard supports the claim that money is technology, and that bitcoin is the next iteration of that technology.
This book defines and sets important context for where bitcoin falls within the global ecosystem. It fills the narrative gaps left by The Sovereign Individual in describing a yet to be created digital money. And we’re now able to understand it’s early impact on society. Ie: understanding where bitcoin fits within the digital transformation makes it easier to understand where society is evolving to.
This book provides essential context to a critical part of The Sovereign Individual narrative.
Summary: “When a pseudonymous programmer introduced “a new electronic cash system that’s fully peer-to-peer, with no trusted third party” to a small online mailing list in 2008, very few paid attention. Ten years later, and against all odds, this upstart autonomous decentralized software offers an unstoppable and globally-accessible hard money alternative to modern central banks. The Bitcoin Standard analyzes the historical context to the rise of Bitcoin, the economic properties that have allowed it to grow quickly, and its likely economic, political, and social implications.”
“While Bitcoin is a new invention of the digital age, the problem it purports to solve is as old as human society itself: transferring value across time and space. Ammous takes the reader on an engaging journey through the history of technologies performing the functions of money, from primitive systems of trading limestones and seashells, to metals, coins, the gold standard, and modern government debt.
“Exploring what gave these technologies their monetary role, and how most lost it, provides the reader with a good idea of what makes for sound money, and sets the stage for an economic discussion of its consequences for individual and societal future-orientation, capital accumulation, trade, peace, culture, and art. Compellingly, Ammous shows that it is no coincidence that the loftiest achievements of humanity have come in societies enjoying the benefits of sound monetary regimes, nor is it coincidental that monetary collapse has usually accompanied civilizational collapse.”
“With this background in place, the book moves on to explain the operation of Bitcoin in a functional and intuitive way. Bitcoin is a decentralized, distributed piece of software that converts electricity and processing power into indisputably accurate records, thus allowing its users to utilize the Internet to perform the traditional functions of money without having to rely on, or trust, any authorities or infrastructure in the physical world. Bitcoin is thus best understood as the first successfully implemented form of digital cash and digital hard money. With an automated and perfectly predictable monetary policy, and the ability to perform final settlement of large sums across the world in a matter of minutes, Bitcoin’s real competitive edge might just be as a store of value and network for final settlement of large payments—a digital form of gold with a built-in settlement infrastructure.”
Reasons for reading? The internet has been mainstream for over 20 years now. And we’ve learned a tremendous amount about how networked civilization alters the incentives of cooperation. These incentives are important for understanding the growth and evolution of the information economy. It provides context within the 10-year space following the original publication of The Sovereign Individual.
If you buy into The Sovereign Individual thesis and the value of bitcoin as a decentralized money, you’ll want to dive deeper into the information-based economy’s network effects. Especially the political and economic value of open-sourced networks.
Warning, this is a tough read.
It’s dense and covers a lot of examples using economic explanations for the development and value of software. But it sets important context for where the world is heading and why large open-source networks are valuable. It helps understand and set context for the broad Web 3.0 movement.
Summary: “With the radical changes in information production that the Internet has introduced, we stand at an important moment of transition, says Yochai Benkler in this thought-provoking book. The phenomenon he describes as social production is reshaping markets, while at the same time offering new opportunities to enhance individual freedom, cultural diversity, political discourse, and justice. But these results are by no means inevitable: a systematic campaign to protect the entrenched industrial information economy of the last century threatens the promise of today’s emerging networked information environment.”
“In this comprehensive social theory of the Internet and the networked information economy, Benkler describes how patterns of information, knowledge, and cultural production are changing—and shows that the way information and knowledge are made available can either limit or enlarge the ways people can create and express themselves. He describes the range of legal and policy choices that confront us and maintains that there is much to be gained—or lost—by the decisions we make today.”
Reason for reading? The pursuit of a Sovereign Individual lifestyle doesn’t have to mean living a solitary life. The digital age is all about connecting people around the world that have common beliefs and interests. But the world is big and people are geographically distant. Many have yet to find each other online. So, you may just need to take the first step towards building your own tribe.
Seth Godin’s book on building internet communities and the leadership that’s involved is an easy to read but valuable book. It gives foundational pointers on building a community of like-minded peers. Sovereign Individuals can and should use these concepts as a reference point to create their own digital communities.
Summary: “If you need to rally fellow employees, customers, investors, believers, hobbyists, or readers around an idea, this book will demystify the process. It’s human nature to seek out tribes, be they religious, ethnic, economic, political, or even musical (think of the Deadheads). Now the Internet has eliminated the barriers of geography, cost, and time. Social media gives anyone who wants to make a difference the tools to do so.”
“With his signature wit and storytelling flair, Godin presents the three steps to building a tribe: the desire to change things, the ability to connect a tribe, and the willingness to lead.”
“If you think leadership is for other people, think again—leaders come in surprising packages. Consider Joel Spolsky and his international tribe of scary-smart software engineers. Or Gary Vaynerhuck, a wine expert with a devoted following of enthusiasts. Chris Sharma led a tribe of rock climbers up impossible cliff faces, while Mich Mathews, a VP at Microsoft, ran her internal tribe of marketers from her cube in Seattle”
“Tribes will make you think—really think—about the opportunities to mobilize an audience that are already at your fingertips. It’s not easy, but it’s easier than you think.”
Reason to read? As the world transforms at a rapid pace, the need to understand the human psychological relationship with time becomes important. This is a good book to read as a follow on to Future Shock.
Why? Because our personal relationships with time impacts how we approach life’s opportunities. It influences how we adapt to changing circumstances. It’s useful to understand how we intuitively react to life based on our relationship with time. Because we can use that understanding to adapt to the rapid digital transformation more quickly than our peers.
Read this book with an understanding that we live in changing times. It will help you understand how to invest your time and energy.
Summary: “This is the first paradox of time: Your attitudes toward time have a profound impact on your life and world, yet you seldom recognize it. Our goal is to help you reclaim yesterday, enjoy today, and master tomorrow with new ways of seeing and working with your past, present, and future.”
“Just as Howard Gardner’s Multiple Intelligences permanently altered our understanding of intelligence and Malcolm Gladwell’s Blink gave us an appreciation for the adaptive unconscious, Philip Zimbardo and John Boyd’s new book changes the way we think about and experience time. It will give you new insights into how family conflicts can be resolved by ways to enhance your sexuality and sensuality, and mindsets for becoming more successful in business and happier in your life. Based on the latest psychological research, The Time Paradox is both a “big think” guide for living in the twenty-first century and one of those rare self-help books that really does have the power to improve lives.”
This book is a foundational idea behind how the modern internet developed. Because it addresses how the internet changed the economic incentives of commerce. It also provides a good middle point for understanding the changes in the internet’s evolution of society.
The Sovereign Individual was written in 1997 before many of the modern internet trends had impacted society. And The Long Tail was written in the mid 2000s, when we started to understand how the internet changed society. Think of this book as a way station for the evolution of the internet and its impact on society.
It’s a read that helps you understand how the modern internet developed the business models behind Amazon, Google, and e-commerce. It provides context for how the internet evolved global commerce and directly caused the first part of the digital transformation.
You should read it to understand where we’ve come from so that you understand where we’re heading next.
Summary: “What happens when the bottlenecks that stand between supply and demand in our culture go away and everything becomes available to everyone?”
“The Long Tail” is a powerful new force in our economy: the rise of the niche. As the cost of reaching consumers drops dramatically, our markets are shifting from a one-size-fits-all model of mass appeal to one of unlimited variety for unique tastes. From supermarket shelves to advertising agencies, the ability to offer vast choice is changing everything, and causing us to rethink where our markets lie and how to get to them. Unlimited selection is revealing truths about what consumers want and how they want to get it, from DVDs at Netflix to songs on iTunes to advertising on Google.”
“However, this is not just a virtue of online marketplaces; it is an example of an entirely new economic model for business, one that is just beginning to show its power. After a century of obsessing over the few products at the head of the demand curve, the new economics of distribution allow us to turn our focus to the many more products in the tail, which collectively can create a new market as big as the one we already know.”
“The Long Tail is really about the economics of abundance. New efficiencies in distribution, manufacturing, and marketing are essentially resetting the definition of what’s commercially viable across the board. If the 20th century was about hits, the 21st will be equally about niches.”
Reason to read? A digitally connected society becomes increasingly complex. What happens in one aspect of the network increasingly impacts all other aspects of the network. The consequences of this unprecedented level of connectivity is that it can become hard to predict outcomes.
So, it makes sense to have an elementary understanding of complexity theory. What it is, how it originally came into being, and the traditional context with which it was applied to society. It can help you understand systemic risk a little better and hopefully, empower you to make better decisions moving forward.
You should read it with an understanding that the transition to the Sovereign Individual age will be chaotic. It will be hard to predict. And will require and understanding that seemingly insignificant changes can have large impacts on global society.
Summary: “In a rarified world of scientific research, a revolution has been brewing. Its activists are not anarchists, but rather Nobel Laureates in physics and economics and pony-tailed graduates, mathematicians, and computer scientists from all over the world. They have formed an iconoclastic think-tank and their radical idea is to create a new science: complexity. They want to know how a primordial soup of simple molecules managed to turn itself into the first living cell–and what the origin of life some four billion years ago can tell us about the process of technological innovation today.”
“This book is their story–the story of how they have tried to forge what they like to call the science of the 21st century.”
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