p. 109-124

As Adam Smith well understood, economic life is deeply embedded in social life, and cannot be understood apart from the customs, morals, and habits of the society in which it occurs. —Francis Fukuyama, Trust: The Social Virtues and the Creation of Prosperity

Social mechanisms evolve, and evolution is conservative. It rarely eliminates an existing evolved mechanism unless it is actively harmful, and it prefers to work by adapting existing mechanisms to new purposes. Thus, a fish’s air bladder becomes an amphibian’s lung, and a feudal parliament that evolved to resolve disputes between nobles and kings becomes an instrument of constitutional democracy. The Speaker still carries a mace into Parliament but rarely bashes anybody with it these days. Similarly, the challenges of the new era will be met by those solutions that take existing institutions and alter them enough to meet new demands but no more, merely because such is the least costly solution. Thus the sinews of a network commonwealth will likely consist of security agreements, common economic areas, and science and technology collaborative institutions. The mechanisms for such organizations originated in institutions such as NATO, NAFTA, and the European Space Agency, but will have substantially different relations to and among their member entities.

More important, these organizations, being created primarily along lines of geographic proximity and by planning elites in government bureaucracies, have little deep-seated popular support. Even the European Union (EU), which is well down the road to federal statehood, has only lukewarm (at best) emotional support from citizens of many of its member states. Network commonwealths, by contrast, will grow from network civilizations—groups of nations and individuals with cultural and linguistic commonalities, linked together by new electronic media in a way previous linguistic communities never before experienced. As such, they have the potential to generate common narratives—identifications and unifying feelings shared throughout the commonwealth. Shared narratives, in turn, are essential for developing the genuinely popular support needed to last through the pressures that events may bring. One way to define a network commonwealth might be as a common market, a permanent alliance, and a shared narrative.

Even today, after decades of British membership in the EU, twice as many Britons report feeling closer to the United States than to their Continental neighbors. A survey by the pro-EU magazine The Economist even showed that more Britons felt represented by the U.S. flag than the EU flag and far more identified the United States than Europe as Britain’s most likely source of help. This suggests that this book’s central recommendation—a network commonwealth uniting English-speaking nations—may be more useful and more natural to Britons than is EU membership. Evolutionary conservatism argues that organizing relatively closely linked nations into a loose and flexible structure is a less costly step than organizing wide-scale, closely linked unions, but it is nevertheless capable of providing most of the benefits of the latter organization. Political evolution thus favors the network commonwealth solution.

The conservatism of evolution is demonstrated by the fate of proposals like that of author Clarence Streit in the late 1940s to create an ”Atlantic Union”—a permanent federal union of the Atlantic democracies. Although this idea had real potential benefits, it also had a number of real problems, most of which have also been encountered in the process of building the EU. It is quite likely that as today’s EU tries to become yet more state-like, it will run up against the same wall—it will become more of a solution than the problem warrants. (Many Europeans feel that point was reached some time ago.)

The Atlantic Union concept failed principally because it went against the principle of conservatism in evolution. Almost all of the benefits it promised could have been, and in fact were, delivered by less radical mechanisms, ones that did not impose the costs nor meet the resistance that federal union threatened. Many of these alternative mechanisms are the same institutions that now show promise to become the sinews of a network commonwealth: free trade agreements, alliance structures, and cooperative organizations. The network commonwealth is the next step in this actual evolution. It will be built from existing mechanisms, altered to fit the new circumstances and opportunities, and offered as solutions to problems as they arise.

Some theorists have argued that evolution works by “punctuated equilibrium”—the alteration of long periods of stability and only minor change, punctuated by periods of crisis and rapid change. To the extent that social evolution follows this pattern, advocates of change can exploit these periods by having templates for change at hand, giving an available solution to be adopted when crises arise. One reason why the network commonwealth is worth talking and thinking about now is that the new perspective it engenders may offer solutions adequate to meet emerging challenges of the Singularity revolutions. The more such solutions are built on familiar institutions and concepts, the more likely they are to be adopted. Thus a network commonwealth is built upon institutions and concepts such as alliances and trade agreements, but arranged in a new and more flexible manner. Since many of the crises of the transition to an Information Economy are foreseeable (even if the further Singularity crises may not be), it is worth exploring potential solutions as well.

The more the highest value in international trade shifts from natural resources, agricultural commodities, and low-tech manufactured goods to information products and services delivered via the Internet, the more lines of trade and cooperation will fall along linguistic-cultural lines rather than geographic ones.

Already, a high proportion of such trade in all English-speaking countries is with other English-speaking countries; it should be described as “intra-Anglosphere” rather than “international.” Similarly, there has been an increasing trend for Spanish-language information trade (particularly in electronic entertainment) to flow seamlessly through what, by extension, we could dub the “Hispanosphere” (an elastic entity which today would have to include Los Angeles and Miami as well as Madrid, Mexico City, and Buenos Aires).

As the returns to political structures from large-scale revenue collections (income, capital, and sales taxation) decline, the economic states that once derived direct benefit from their large scale will find those benefits becoming increasingly elusive. Rising costs and falling benefits will encourage their devolution or breakup. However, there are other benefits to large-scale organization, such as mobility of productive people over wide areas and cooperative pooling for defensive or scientific research purposes. These benefits can be realized more cheaply by network commonwealth-type arrangements than by maintaining large-scale economic states. Therefore, many large political entities will recast themselves as, or see their constituent region-states join, network commonwealths.

Because of these new realities, current patterns and politics will shift, transform, and realign, restructuring themselves more on linguistic and cultural lines.

Regional cooperation not based on these types of commonalities will grow less important as the types of trade and relations they promote grow proportionally less important to advanced economies. The EU, NAFTA, and ASEAN will have seen their high-water marks of importance to the United Kingdom, the United States and Canada, and Australia, respectively. Existing free trade structures, such as the European Economic Area (EEA), can and should remain to facilitate trade in commodities such as wheat, iron ore, and low-tech manufactures such as cars and stereos. But they should not try to cast themselves as economic unions attempting to take control of their members’ economies. Former Senator Phil Gramm’s argument that the World Trade Organization principles require the EU to permit Britain to make a separate trade agreement with the United States, should it so desire, would be one way to give the EU a pretext for permitting such loosening without threatening the structure of the organization.

The proposal to create a free trade agreement between NAFTA and the EU (most recently raised by British Chancellor of the Exchequer Gordon Brown), to take a case in point, is fine as far as it goes (or can go). It could eventually succeed, although it may be more productive for the states of the British Isles to join from the Atlantic, rather than the Continental, side. However, it will not go far enough or create the right mechanisms for deep cooperation. New forms of common economic space must be created to facilitate the collaboration among countries that are neighbors in the information spaces of software, media, financial services, and other high-value information products.

NAFTA, the EEA, and the proposed NAFTA-EU link may ultimately have more value in the future as means of linking different network commonwealths, rather than as protocommonwealths in themselves. Thus, NAFTA’s true vocation may be as the linkage between the communities of Shakespeare and Cervantes, rather than merely a means of allowing the sale of cheaper tomatoes in American supermarkets.

The economistic model of the state is eroding. This mental model, which sees the political and social world as a billiard table with each state constituting a distinct, economically autonomous and equivalent unit (an economic state, in my terms) becomes decreasingly useful. This model ignores the reality of civilizational commonalities. A network-based paradigm is more useful. In this view, human communities are seen as part of an evolved continuum or range of social organizations, with civic states as cores anchoring wider network-like associations. In this range, civilizational, linguistic community, national, regional, and local classifications have significance as lines for organizing cooperative institutions on various levels.

ONE WORLD THROUGH THE INTERNET? THE ROLE OF TRUST, COOPERATION, AND CULTURAL COMMONALITY

The issue of cultural commonalities as a factor in deep cooperation has been the subject of much confusion. We must examine it in detail, as the point is a crucial assumption of this work. Liberal theory held, as its progenitor Jefferson classically put it, that “all men are created equal.” Multiculturalist theory holds that all cultures are created equally “valid.” Furthermore, it assumes that any randomly gathered set of individuals from any set of cultural backgrounds can be assembled to successfully achieve any given goal as well or better than any homogenous group from any one particular culture. Multiculturalists tend to contrast themselves with past advocates of theories of racial or cultural imperial domination. Such theories have typically held that particular races or nationalities are inherently more suited for particular activities than others. A racist in the past was someone who argued that an individual of a particular racial or ethnic origin was inherently inferior, on account of his genetic background, to others. Today, multiculturalists brand as racist any argument that a particular culture has features that better adapt its adherents to succeed in a particular form of human endeavor.

The multiculturalist argument obscures reality and ignores the experience of history. Although individuals from every ethnic, racial, and cultural background have demonstrated an unquestioned ability to compete at the highest levels of endeavor in both Industrial Era and Information Era economies, they typically have done so as members of a limited number of specific cultures. The multiculturalist model denies the need for or value of assimilation—but typically, the successful individual from less successful cultures has immigrated to, been educated in, or otherwise strongly been influenced by more successful cultures. (I define a successful culture for the purposes of this discussion as one that maximizes an individual’s control over his or her destiny relative to the forces of nature, human predation, and oppression. Philosophers may argue infinitely over whether a particular culture may be “superior” to another, in terms of virtue or happiness. This discussion is confined to a much more limited and demonstrable question: which cultures seems to be better adapted to the challenges of the ongoing scientific-technological revolution.) All of these conditions involve a greater or lesser degree of assimilation; typically, the more assimilation, the more success.

For the impact of particular cultural matrices on success in adaptation to advanced technological economies, the most interesting test cases are what I call “template” societies. These are societies in which a founding seed population has established a society characterized by a particular language, culture, politics, and economic structure. Most such societies have been one of the historic colonies of settlement, such as the United States or Argentina. The language and culture established are usually derived from those of the original homes of the colonists, or some regional variants thereof. Subsequently, an extended immigration coming from a wide variety of national origins arrives and is assimilated into the template society, molding itself into the larger patterns of life and activity. Although the immigrants may contribute attributes of their cultures to the overall mix, the fundamental national characteristics of the template society remain those of the seed population, as affected by further evolution.

TRUST AND CIVIL SOCIETY

One of the most important cultural norms embedded in the template is the characteristic of trust, discussed by Francis Fukuyama in his book Trust: The Social Virtues and the Creation of Prosperity, as mentioned earlier. Fukuyama differentiates between high-trust and low-trust societies. (Properly, this distinction should be termed one of societies with, variously, a high or low radius of trust—the size of the circles within which one can expect fair dealing and impartial treatment.) The principal characteristic of the former relative to the latter is the ability of individuals in high-trust cultures to form, freely and easily, associations and enterprises among individuals not connected by close kinship ties. Such associations are formed with the reasonable expectation that the letter and spirit of the original understandings of the association will be carried out by all parties, even when to do so may turn out to be more to one party’s advantage in a specific instance. High-trust cultures are able to support rich civil societies—ones in which individuals spontaneously associate in all manners of organizations, from for-profit corporations to nonprofit community, civic, and religious organizations, in order to carry out the functions of society.

Furthermore, citizens of high-trust cultures can expect their governmental institutions to support the activities of the civil sector, through means like quick and fair adjudication of any disputes that cannot be settled privately, maintenance of public order, and defeat of coercive or fraudulent tactics. Low-trust cultures are ones in which the state becomes, by default, the principal organizing force for all civic and economic functions and the primary means by which individuals mediate all transactions beyond the family level. Typically, state employees in high-trust societies are oriented toward carrying out their functions as called for in their job descriptions, whereas state employees in low-trust societies view their situation as an opportunity to enrich themselves and their families. Hence we typically see higher rates of corruption and nepotism in low-trust societies.

An employee in a company or government agency in a low-trust society can be expected to play any situation for the gain of himself, his family, and his cronies, rather than for the good of the corporation or the state in general. Thus, in a low-trust society, bribes and kickbacks are the normal mechanisms of business and governmental relationships. This is not a breakdown of morality; rather, it is obedience to a more primitive morality, in which loyalty to kin networks is the highest value.

Businesses, political parties, and state administrations tend to function best in low-trust environments when they are under the personal control of a single, strong figure, one to whom inferiors are bound in personal loyalty relationships.

In such situations, personal loyalty limits the degree to which employees will put personal advantage over organizational interests. Similarly, strong ideological and nationalist movements in a low-trust society can generate loyalty to a state administration or enterprise, at least for some period of time. France, although possessing many of the characteristics of a low-trust society, used its strong national narrative to develop high-level state institutions that are relatively effective.

One does not bribe an énarque, at least directly, although an énarque may not hesitate to bribe a foreign official in order to sell a French arms system. Low-trust societies find themselves trapped in a vicious circle—the greater the corruption of the state, the greater the obstacles to individuals trying to act in a high-trust manner. Rational individuals then abandon high-trust behavior and act in a low-trust manner themselves. Conversely, low-trust individuals entering a high-trust society find themselves in a virtuous circle—the more they learn to trust their fellow-citizens and their institutions, the more they prosper.

To illustrate the differences by example, in a high-trust civil society, a group of citizens perceiving some need—say, a university—in their town would first create an organization (which might be for-profit or nonprofit) to try to meet the need, and only turn to the state if those means proved insufficient. In a low-trust society, individuals would be unable to trust each other sufficiently to organize themselves to carry out any important task. If one person tried, members of other families would immediately suspect that person of scheming to advantage himself at the expense of the rest.

In low-trust cultures, strong individuals and family networks are the primary channels of effective action. Nepotism, which promotes inefficiency in high-trust cultures, becomes an advantage in low-trust cultures. Hiring relatives provides collaborators who, whatever their competence, can at least be trusted not to steal or at least to steal no more than the amount to which custom entitles them.

In such societies, individuals can only petition or pressure the state to carry out a needed function that requires resources above the level of family enterprise.

The state either does it eventually, or it never gets done. The primary exceptions to this rule are individuals of extraordinary strength of will, who can maneuver the system skillfully enough to accomplish particular tasks.

The psychology of such extraordinary persons (successful or not) has been one of the great themes of Latin American literature, precisely because almost all great deeds in such countries have been the results of such wills. The multiculturalist critics of this book will likely accuse me of having contempt for members of low-trust cultures. On the contrary, I have admiration for the intelligence, energy, and will of many people I have known in such cultures, combined with regret that they are imprisoned in a system which does not permit them the full and highest use of their abilities.

Two sets of template societies demonstrate these processes as they affect levels of development. Fukuyama identified several particular cultures (although not exclusively) as high-trust: England, Germany, Japan, and Northern Italy. Cultures identified as low-trust included China, France, and Southern Italy. Spain and Portugal, although not extensively discussed by Fukuyama, also meet his definition of low-trust cultures (although the Catalan and Basque cultures display some high-trust characteristics).

Of the high-trust cultures, only the English engendered extensive template societies, particularly the United States, Australia, New Zealand, and (Anglo-) Canada. Spain engendered the template societies of Argentina, Chile, Uruguay; Portugal, that of Brazil. All of these template societies experienced extensive immigration, much of it from the same source cultures: Germany, Italy, Japan, Eastern Europe. The United States and Brazil also experienced the involuntary influx of Africans via the slave trade. Argentina, and to a lesser extent the other South American societies, drew a substantial number of British immigrants.

These source nations thus included both high-trust and low-trust cultures.

Template societies assimilated individuals from widely diverse backgrounds, individuals who then adopted the great majority of the cultural characteristics of the template, including the trust characteristics. At first, all of these societies prospered.

All had substantial natural resources and were able to adapt the new technologies of Machine Age agriculture to exploit those resources and to achieve a broad prosperity. Argentina and Uruguay achieved a level of prosperity essentially similar to those of Australia and Canada by the eve of World War I.

That is because agricultural prosperity in the Industrial Era could be adequately achieved by family scale enterprises, a level of organization at which low-trust cultures can act effectively. Countries like Brazil and Argentina have had most of the preconditions of Machine Age and Information Age success, including a well-educated population, adequate domestic capital, and plenty of hard-working, individually ambitious, motivated, and imaginative entrepreneurs.

Despite this, these nations continue to linger at the threshold of the “Third Gateway”—takeoff into the high-tech entrepreneurial revolution— without generating the critical mass of enterprise needed to accomplish it. Consider the emerging high-technology entrepreneurial world in Brazil. At first, the region seemed extremely promising. The quality of the human capital was high, and there was plenty of the small-scale precursor entrepreneurial activity that seemed to presage the coalescing of a new Silicon Valley under the Southern Cross. Missing, however, was the fluidity with which new enterprises could self-assemble, determine the appropriate set of rewards, and work together.

Although Silicon Valley entrepreneurs are usually thought of as individualists, they are individualists with an uncommon ability to collaborate. Latin American template societies tend to generate individualists of an older model—more zero-sum oriented, less able to coordinate smoothly without hierarchical structures.

Many of the participants in this world were not Portuguese or Spanish by national origin. They were from the same mix of origins we think of as typically American: German, English, Eastern European, and Italian. Furthermore, most of the individuals in this world could speak fluent English and had studied or worked in the United States or Britain.

High-trust template societies accept individuals from low-trust cultures and gradually assimilate them into high-trust behavior patterns, through the virtuous circle of reward for trust. Low-trust templates assimilate individuals from high-trust cultures into low-trust behavior patterns through the vicious circle of penalizing high-trust assumptions and rewarding low-trust behavior. It starts with the first bribe solicited and accepted.

TRUST, REFORM, AND THE THREE GATEWAYS

Advocates of the One-World-through-Internet and English as a Universal Language persuasion too readily discount the fine-grained cultural and institutional factors that affect the ability to progress in the Singularity revolutions. It is useful in this regard to consider the various levels of trust and strength of civil society as gateways through which a society must pass on the way to prosperity. The first gateway is the basic one of property rights and rule of law. The second gateway consists of constructing a state regime that relinquishes the arbitrary assignment of wealth to parties based on state-granted monopolies, protection, or confiscatory taxation.

The third gateway consists of elimination of social, cultural, and political barriers to fluid entrepreneurship and rapid enterprise formation.

Economists often fail to understand why favorable second gateway policies regarding macroeconomic factors (such as stabilizing the currency or lowering the overall rate of taxation) are often insufficient to spark third gateway entrepreneurship without the additional removal of non-fiscal barriers such as overregulation and corruption. Similarly, universalists fail to comprehend that it is not enough to have simply learned English to become a member of English-speaking civilization, just as North Americans traveling to Spanish America require more than a knowledge of the Spanish language to integrate themselves into Spanish-speaking civilization.

Some today maintain that the emergence of automatic translation software will render linguistic differences obsolete. It is more likely, however, that the existence of such software (which is likely to become available) will increase friction rather than diminish it. A good human translator is a facilitator between cultures as much as between languages. Without such intermediaries, monolingual individuals who rely on software will never understand how little has been truly understood until it is too late. To mix individuals from high-trust and low-trust cultures is to create an unstable situation. Over time, either the individuals from low-trust cultures will assimilate into high-trust behavior patterns, or vice versa.

The issue of trust is only one of many cultural characteristics that affect deep cooperation, although it is a fundamental one. As I talk about English-speaking nations or Spanish-speaking nations, I am not talking primarily about the issue of linguistic competence. Rather the language becomes a marker for a whole set of cultural characteristics, standards, expectations, and practices which foster or hinder cooperation in business, politics, and civic affairs. Nor is cooperation between different high-trust cultures to be taken as a matter of course.

The particular practices, institutions, and understandings which mark and bind relationships in high-trust cultures (which began as expansions of kinship relations, as with the practice of adult adoptions in Japanese culture) tend to be culture-specific. In order to make those practices work, an outsider must learn to understand them and integrate into such structures. Once inside, the connection can be highly rewarding, as Westerners who undergo the substantial transaction costs of establishing mutual trust relations with Japanese institutions can discover.

However, such connections will not be easy to cultivate via the Internet; the transaction costs of such interactions will create a boundary in the geographically flat information-space of the Internet.

In addition to trust, it is useful to think about the role of openness in societies. The United States, the Netherlands, Germany, and Japan are all high-trust societies. However, they vary widely along a scale measuring openness—the degree to which nonmembers may enter and be given access to the trust mechanisms of those societies. America is very open to newcomers—traditionally, those who demonstrate willingness to assimilate are rewarded with membership (although racial barriers formed exceptions in the past, and do so even today in some circumstances).

The Netherlands has always had a tradition of asylum, tolerance, and acceptance. Germany today has large numbers of ethnic Turks, speaking fluent German and educated in German schools, who have not been granted citizenship until very recently. Japan is notoriously averse to assimilation of foreigners—Koreans and Chinese have lived in Japan for generations without ever being accepted as truly Japanese. One key to why America and other English-speaking nations, like Canada and Australia, have become successful high-trust template societies while others have not is the unique mixture of high-trust and openness.

Ironically, it may well be easier for an individual from one low-trust society to integrate into another low-trust culture, providing that culture is open, than for that individual to integrate into a high-trust society. An Italian landing in Rio de Janeiro at the turn of the century needed only to figure out which officials needed to be bribed, which businessmen needed what size kickback, and with which families a marriage connection ought to be sought. All of these were familiar tasks from life in Naples. The same immigrant arriving in America, unless he confined himself to the ethnic wards of the big cities, would find the familiar home strategies to be counterproductive. Thus the ethnic wards served as halfway houses for immigrants, providing limited areas in which low-trust strategies could provide a basic living while they, or their children, could learn high-trust values from the surrounding culture, permitting them to fully benefit from the American system.

We don’t yet know how the Internet will affect the interplay between high-trust and low-trust cultures. In physical space, a template is provided by the surrounding culture. Values are reinforced through the sovereign government. The Internet, however, is not a single, unitary space. It is a medium more like the ocean, on which an unlimited number of islands (discrete information spaces) can exist side by side. Each has its own template, and each can impose its own rules.

To the extent that the general Internet is a single space, it is inherently a low-trust culture. As with oceanic space prior to the nineteenth century, in which any ship might be a pirate, any random party coming to you via the Internet must be assumed to be untrustworthy until proven otherwise. Smaller subsets of the Internet, particularly virtual private networks with restricted entry, can support high-trust environments. A network for an ethnic minority speaking a little-known language, such as the Hakka language of that Chinese minority, would need little in the way of passwords to exclude nonmembers. For English speakers, assurance of higher trust must come in other ways.

There are some early indications that the Internet can serve as the medium for new high-trust communities. The experience of the Linux open-source software community indicates that people from many countries can participate in a common venture on a productive basis. As I discussed earlier, Linux is software: a newer version of UNIX, a robust computer operating system. Its development was started by a computer programmer from Finland, Linus Torvalds, on a volunteer basis, and was ultimately taken up by an extremely loose-knit, worldwide community of computer programmers, all working for free, and all coordinating themselves via the Internet.

This community was more American than otherwise, but not overwhelmingly so; it did communicate and work in English, and its members are largely from high-trust cultures. Although the effort was done on a nonprofit basis, the product has served to launch a number of successful companies making commercial software products based on Linux. Linux has been a highly successful software product, preferred by many over its rival, Microsoft’s Windows NT, for server operating systems.

In a sense, working on an open-source software system is the ultimate high-trust action: you work and trust that the world will reward you for the value you create. Open-sourcing may well become a powerful part of the paradigm of the network economy. How do you characterize a person whose life revolves around work, socializing, and recreation all on the Internet? Such a person is truly amphibious and spends the bulk of his time in the newer medium. One could argue that, whatever his location in physical space, he has become an immigrant to the network civilization which harbors the activities whose values he chooses to adopt. One of the ways in which a network civilization is different from previous civilizations may be that it will find a way to extend membership to such cyberimmigrants. Network commonwealths may want to extend participation in this fashion to cyberimmigrants.

If people could download the fulfillment of all their desires from the Internet, as they do software, social groupings existing only in cyberspace—virtual nations—could become the basis of new nations. Given that humans can at best be amphibious in that regard, existing partly in cyberspace and partly in physical space, it is likely that most cyberspace institutions will be extensions of existing or adapted entities from physical space. Trust mechanisms from physical space will be adapted to cyberspace to permit establishment of high-trust business, social, and civic relationships. High-trust cultures will likely be able to readily adapt existing networks of companies, congregations, clubs, and societies to serve similar functions in cyberspace. This process is in fact now developing. In fact, such mechanisms may be improved by the ability of cyberspace to lower transaction costs of human interaction.

Low-trust cultures will find this task more difficult. As we have seen, the principal means of accomplishment in low-trust societies are kinship relations (including founder-dominated businesses or political parties driven by the dynamism of the founder figure), and the state. Kinship relationships can of course be effectively extended via Internet. Even high-trust societies, in which extended kinship relations tend to be weaker due to their relative unimportance as economic mechanisms, may see a revival of extended family ties due to their lower transactions costs, and in compensation for smaller nuclear family sizes resulting from lowered fertility rates in advanced nations.

Institutions dependent on state-mediated relationships (primarily, government agencies, state-protected corporations, and established churches) are the principal means for achieving large-scale projects in low-trust societies. They will have a much harder time adapting to the new era. In order to adapt, their forms must evolve substantially. State entities tend to depend on their sovereign powers as a means of reducing competition, obtaining capital, and securing their economic base. The erosion of effective state economic sovereignty, due to the reduced ability to control capital and human mobility in the Information Revolution, will hit state entities particularly hard. The waves of privatization already seen in the world are not just due to the return of market theory. Rather, they are a result of the increasing inability of such state entities to remain functional otherwise in the changing world environment.

These trends will likely accelerate. Therefore, such state-dependent institutions will attempt to cooperate with one another on an international basis, as a means of remaining competitive against more market-based organizations.

Unfortunately for them, such cooperation will be problematic without the existence of a supernational authority to control their operating environment, as individual states do on a national scale. Consider the EU as an attempt to create one such authority, and its politics become clearer. Its difficulties in mediating the desires, needs, and expectations of its various members illustrate the problems inherent in such a task.

Such state-mediated organizations will come under increasing competitive pressure from networks of entrepreneurial organizations based in high-trust cultures, which can more swiftly organize, capitalize, adapt, and deploy themselves on a global basis, and likewise from kinship-based networks and founder-dominated family firms operating from bases in low-trust cultures. The primary effective state-mediated organization will be those in fields where governmental decisions have substantial bearing on competitiveness, such as the arms industry.

Also, organizations may continue to prosper if their home nation remains a stable home market through essentially voluntary support. Israel may be an example of such, if Israelis remain willing to pay higher taxes to support their government’s purchases from local companies at higher than world-market prices.

ONE WORLD, MANY MARKETPLACES

Although the Internet creates the possibility of an infinite number of world-spanning networks, it is likely that most such networks will connect individuals sharing access to like mechanisms for establishing and maintaining trust. One could readily create a network linking Kenya, Guatemala, and Mongolia, for example, but that network would have an extremely limited set of uses. More likely is the definition of worldwide networks connecting English-speaking cultures, or Spanish-speaking ones, or the worldwide ethnic diasporas such as the various Chinese regional and ethnic groups.

This process can best be visualized as a series of spheres on which are traced the lines connecting each pair or group of parties connecting via the Net. Thus the Anglosphere can be thought of as a worldwide network with great densities over North America, Australasia, and the British Isles, and much thinner ones over, say, Siberia; while the Hispanosphere would be densest over Spain and Spanish America (including nodes over Los Angeles and Miami). A Sinosphere would contain many subdivisions: Cantonese and Shanghaiese networks would be dense over their home regions of China, but they would also have substantial nodes in California, Australia, British Columbia, and Hawaii, to name but a few places.

These network spheres are a new category of social organization, having some of the characteristics of nations, some of civilizations, some of diasporas, but some unique characteristics as well. They overlap with, but are not entirely coincident with, states and can coexist in the same physical space—as Los Angeles, for example, serves as a node in many spheres simultaneously. For the purposes of this book, I call them network civilizations. I define a network civilization as a set of nations, communities, and individuals bound together through language, culture, and assumptions more far-reaching than those of individual national communities. Another way of thinking of it is the next widest set of civil-society networks beyond the boundaries of individual sovereign countries.

It would be accurate, but impossibly clumsy, to term them “intralinguistic- cultural-civic communities.” Another term that could be applied is “subcivilization”—recognizing that such a community may be part of a larger civilization but is quite distinct from other members. However, this is likewise an inelegant term.

“Network civilization” as a term also distinguishes this phenomenon by insisting that these entities are bound together more by information space than by geographic space, as were all predecessor civilizations. The English-speaking cultures of this planet are emerging as one such network civilization. Others are also emerging. I believe that these network civilizations will be the preeminent form of social organization of the coming era, as the nation was of the last. The network commonwealth will become the preeminent form of political entity by which network civilizations will be bound together, as the nation-state bound together cultural nations in the last era.

Some communities may be bound together by nonlinguistic ties, such as religion or political belief. Some speculation has been made that commercial or vocational ties may form substantial networks. This may have some truth. But I would caution that communities, to have staying power in the face of the probable challenges of the future, must be able to summon substantial allegiance from their members. Networks will empower nonstate actors such as political, religious, and social movements. These are not states but can affect states. It is unlikely that corporations will become such nonstate actors. As I have already noted, traditional corporations may end up suffering many of the same problems that governments are now experiencing in the new era of the Internet.

Throughout history, communities that could not convince or compel their members to pay taxes and bear arms have been subjugated or destroyed by other communities. Microsoft may be a globe-spanning organization with immense resources, but its ability to summon its members to kill or die for its sake is most likely quite limited; at most, it could hire a limited number of mercenaries competent to handle some, but not all tasks of the type that states by their nature must be able to undertake. The Mormon Church, on the other hand, was once able to turn its members’ loyalty into state power and could undoubtedly do so again should it become necessary for survival.

The network commonwealth, like humans in the Information Revolution, is amphibious, existing in two dissimilar media and adapted to function in each.

Humans are just beginning the transition to this state, so it is not surprising that their political forms will evolve along with them, at a somewhat slower pace. Like biological amphibians, network commonwealths will function in their medium of origin and physical space, and they will interact with their predecessors, those nation-states that survive.

As biological amphibians also utilize the new medium of the land to expand their range relative to their predecessors, so will network commonwealths use the unique capabilities of their new environment of cyberspace to gain advantages that their predecessors were unable to realize. In this case, those advantages will be the expansion of common areas for trade, residence, cooperation, and defense over a wide, global scale without the costs of empire or national-scale cohesion with which their predecessors were burdened.