Networking Nation-States

[R. A. Hettinga]

Wherein Crypto-Anarchy makes an article in the National Interest...

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RAH


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Issue Date: Winter 2003/04, Posted On: 12/12/2003

Networking Nation-States

James C. Bennett


The early 20th century was filled with predictions that the airplane, the
automobile or the assembly line had made parliamentary democracy, market
economies, jury trials and bills of rights irrelevant, obsolete and
harmful. Today's scientific-technological revolutions (epitomized by space
shuttles and the Internet) make the technologies of the early 20th
century-its fabric-winged biplanes, Tin Lizzies and "Modern Times"
gearwheel factories-look like quaint relics. Yet all of the "obsolete"
institutions derided by the modernists of that day thrive and strengthen.
The true surprise of the scientific revolutions ahead is likely to be not
the technological wonders and dangers they will bring but the robustness of
the civil society institutions that will nurture them.

This may seem counterintuitive to many people. Surely novel technological
capabilities require novel social institutions, right? The experience of
the past century argues that the opposite is the case. Institutions tend to
be modified more than replaced. They do not die out unless they demonstrate
actual and substantial harm, and they adapt only as much as needed to
provide a viable solution to pressing problems. We should respond to the
challenges facing us by strengthening an evolving framework based on our
best and most successful institutions.

Of Civil Societies and Free Markets
At the dawn of the 21st century, it is quite clear that states are
prosperous when their civil society is strong, and peaceful when their
civic statehood is strong. It is no surprise that most of the world's
poorer and strife-wracked states are those with no or little civic nature:
totalitarian states, personal dictatorships and kleptocracies.

A civil society is a vast network of networks, beginning with the
individual and moving outward to encompass families, community
organizations, congregations, social organizations and businesses-all
invented by individuals coming together voluntarily. Such civil societies
beget civic states. These states are ones in which authority begins at the
local and community level and gradually is built upwards to deal with
wider-scale issues. Civic states are built on community assent and a
feeling of participation in a local, regional and national community, and
the authority of the state is not upheld by constant exercise of force but
by the willingness of citizens to comply with its directives.

At the root of civil society is the individual. People who define
themselves primarily as members of collective entities, whether families,
religions, racial or ethnic groups, political movements or even
corporations, cannot be the basis of a civil society. Societies that place
individuals under the permanent discipline of inherited or assigned
collectivities, and permanently bind them into such, remain bogged down in
family favoritism; ethnic, racial or religious factionalism; or the "crony
capitalism" that has marred the economies of East Asia and Latin America.

Democracy and free markets are effects of a strong civil society and strong
civic state, not their causes. Over the past century, there has been a
misdirection of attention to the surface mechanics of democracy, to
nose-counting rather than the underlying roots of the phenomenon. It was
clear that a society containing the strong networks of association
characteristic of a civil society also develops the means of expressing the
interests of society to the state. It is the need for effective means of
expression that gave rise to the original governmental mechanisms we now
call democracy. Later, intellectuals in societies that did not have a
strong civil society (particularly pre-Revolutionary France) looked at
societies that did (particularly England) and attempted to distill an
abstract theoretical construct capturing the essence of that experience.
They called this democracy, but they subsequently focused attention on
their model (and its misunderstandings) rather than the essence of what
they actually admired.

England's strong civic state had its roots in local expressions of civil
society, a process certainly well rooted by the 14th century. These include
the grand and petit jury systems, the election of various aldermen and
other local officials and the quasi-official role of many civil society
institutions. Selecting members of the House of Commons was one of many
different mechanisms by which local communities gave or withheld their
consent to the state.

The lesson of English history has been repeated many times over, up to and
including contemporary events in Taiwan and South Korea. When civil society
reaches a certain degree of complexity, democracy emerges. Without civil
society, importing the procedures, rituals and even institutions of
democracy results only in instituting one more set of spoils for families
and groups to fight over at the expense of the rest of society.  Democratic
mechanisms no more create civil society than wet streets cause rain.
Similarly, the market economy is more than the absence of socialism or
strong government; it is the economic expression of a strong civil society,
just as substantive (rather than formulaic) democracy is the political
expression of a civil society and civic state. Entrepreneurship in business
uses and requires the same talents and often the same motives that go into
starting a church, a nonprofit organization or a political party. The
society that can create entrepreneurial businesses tends to be able to
create the other forms of organizations as well. Often, the same
individuals start several of each form at different stages in their lives.

The market economy also requires a civil society with general acceptance of
a common framework of laws, practices and manners. Without a general
acceptance of fair dealing, an agreement on what fair dealing means, and an
adjudication system that can resolve and enforce resolution of disputes, a
true market economy cannot exist-as developments in the post-Soviet sphere
indicate.

These realizations have immense implications for today. The rapid
formation, deployment and financing of enterprises like those found in
Silicon Valley are an inherent characteristic of a strong civil society.
The strong role of non-company organizations (such as professional and
industry associations and informal networks of acquaintances) in Silicon
Valley also suggest that such entrepreneurism is a strong civil-society
phenomenon. And it is highly likely that the innovations spawned by the
current Information Revolution-including the Internet, the communication
satellite and high-bandwidth fiber-optic cable-will spur innovation in the
other science-based revolutions.

Indeed, the new technologies have strengthened civic states and societies,
making them even more competitive vis-`-vis what could be called the
"economic state:" the centralized nation-state in which the government
draws its raison d'jtre from presiding over the transfer of benefits
between generations, classes and regions. The problem for economic states,
such as France, is that when creativity does arise and ventures start, the
prevailing set of social, economic and political institutions retards their
growth.

In corrupt and undemocratic countries with weak civil societies, family
networks permit entrepreneurs to get around these obstacles-but only up to
a point. They cannot expand easily beyond that. In stronger civil
societies, such as Germany, that have high-trust characteristics but lack
openness and flexibility in their political and social systems, ventures
start but can become frustrated by bureaucratic barriers. There is a French
Silicon Valley, but it does not lie in any of the technology centers
planned by the French state; rather, it stretches from Dover to London,
where hundreds of thousands of young French men and women have relocated to
pursue their dreams without the high taxes and social burdens of the
Continent.

The Economic State's Decline and Fall
States with high regulatory and tax burdens are now coming under heavy
pressure as they increasingly find themselves outdistanced. The erosion of
the monopoly of the economic state over most arenas of human activities is
traceable to the lowering of transaction costs for international financial
activities in the 1960s, which allowed major corporations and banks to take
advantage of the lower tax and regulatory burdens of tax havens such as the
Netherlands Antilles. Corporations became sophisticated consumers of
"sovereignty services."

Over the past three decades, these trends have accelerated enormously as
the breakup of old European empires gave rise to many new sovereign
entities. The increase in the number of providers, combined with the
falling cost of accessing them, has made sovereignty services
(incorporation, ship registration, citizenship, residency permits and so
on) a highly competitive market area. As devolution produces yet more
sovereign states and the Internet reduces the cost of accessing the
services to rock bottom, this market can be expected to flourish. The
market for sovereignty services has shown great price elasticity: the users
of offshore accounts, shell corporations and trust mechanisms proliferate
as the transaction costs of setting upsuch services fall.

Consider the ability to sell products and services on the Internet, and the
decline of the corporation-employment model (seen in downsizing, delayering
and in the rise of "free-agent" contractors and entrepreneurs). Private
Internet currencies based on strong encryption (cybermoney) will soon
provide payment mechanisms that are not recorded in central clearing houses
and are thus beyond subpoena power. Much of the actual economic activity in
the coming era will pass (and already has passed) out of the strictly
national realm. Even the most powerful nation-states are beginning to find
it impossible to set currency or interest rates without reference to the
world market.

Nor can the economic state count on coercive solutions to counteract this
trend. It cannot tax what it cannot see. One of the products of cheap,
ubiquitous computing has been the growing, worldwide availability of strong
programs for encrypting data on personal computers. With such programs,
individuals and companies can communicate and trade beyond the easy ability
of governments to intercept or, if proper precautions are taken, even to be
aware that the transactions exist.

States that cling unrealistically to the models of the past will find their
economies becoming more like that of Italy, where a very substantial
portion of GDP (over 50 percent by common estimates) is thought to be off
the books and beyond the view (and reach) of the state. This becomes a
vicious circle, as the declining collections force the state to cut
services or raise the rates on those who still pay taxes-usually both at
once. Cutting services causes taxpayers to question the value of their
relationship with the government, and raising rates pushes more taxpayers
further into tax avoidance. Both courses of action further reduce the
ability of the state to command the sort of revenue stream it previously
enjoyed.

The reduction of the effective available percentage of GDP to taxation
authorities will accelerate the existing trend toward the decline of
economic states. An economic state's support rests primarily on its ability
to transfer resources from one sector of society to another. Such states
will be subject to stronger pressures to break apart, as the ability to
shift wealth declines and the social compacts they support grow weaker.
Pay-as-you-go services, such as Social Security in the United States, will
be placed under ever-increasing fiscal pressure. To the extent that loyalty
to states depends on the delivery of such elaborate benefits, economic
states will become decreasingly cohesive.

Some politicians believe that immigration of enough young wage-earners will
make cuts from the retired generation's benefits needless. This contains a
hidden assumption: that young immigrants, often poorer and from different
cultures, will feel sufficient solidarity with the retirees to continue to
support the necessary high levels of taxation. Without assimilation, this
is  a dubious prospect.

The decline of the economic state will mostly be a quiet and gradual
affair, a revolution made of many individual decisions that, when taken
together and augmented by technical developments like high-speed air travel
and satellite communications, have a cumulative effect. A Canadian
executive may take a job in the United States because the income tax burden
is so much lower. Continental Europeans might move to London to start a
company in order to escape the "social burden" of regulation in France or
Germany. And a company could outsource software development to India, where
the workers speak English well and are cost-competitive. These are the sort
of individual decisions that will shape the emerging world.

What Lies Ahead
a group of people, the self-described "cryptoanarchists", maintains that
the availability of cyberspace transactions beyond the ability of the state
to monitor or control will destroy the ability of the state to maintain
itself. Those who adhere to this school of thought foresee an era of
essentially chaotic social organization, in which market forms predominate
in both the economy and other relationships.

Although many of the individual premises of that argument have some
validity, the results will not be as extreme as envisioned. Rather than
ending the state, it is more likely that these changes will substantially
transform its nature. Most states will either adapt to those changes,
decline in wealth and importance or, in extreme cases, split apart. The
ongoing technological revolutions mean that states will depend increasingly
on voluntary forms for cohesion. Successful states are likely to have one
or more of the following characteristics:

*Small populations with a relatively confined geographical spread.
Consensus and coherence are easier to achieve among a limited number of
people in territorially-compact areas. This will favor small jurisdictions
ranging from Caribbean island states to what Kenichi Ohmae terms
"region-states." Jurisdictions larger than that will probably be structured
as federations of civic states.

*Ethnic or religious homogeneity. Religious or ethnic ties form a strong
bond for cohesion. Israelis put up with the inordinate fiscal and
regulatory interventions of their state because to leave Israel is to leave
the community that supports their identity.

*Visible success. Singaporeans put up with their intrusive government, even
when few have any ideological, ethnic or religious reason to do so, because
it has delivered visible prosperity and security to its inhabitants over
their lifetimes.

*Market-ordered economies with scope for individual enterprise. Citizens
will tolerate state interventions in a market economy so long as they are
not visibly harmful, leave room for individual enterprise, and allow the
state to perform more reasonably the services people require. Citizens have
stayed in social democracies with state-protected corporations and heavy
taxation and regulation, but they tend to flee state-socialist regimes in
droves whenever possible. Swedes have always been free to leave their
country, while East Germans were not. Yet the latter fled in great numbers
when the opportunity arose (to the ultimate demise of their state), while
relatively few Swedes have exiled themselves.

*Low transaction costs for leaving. It is far easier to maintain cohesion
if unhappy persons are permitted and even encouraged to leave, rather than
facing heavy penalties for doing so. Exit taxes are signs of a loser state.
The Soviet Union was rightfully despised for levying one, and the United
States should reconsider its plans to follow in its wake. Many malcontents
will leave; more than a few will decide to return. And, having returned,
they will be less discontented. Even permanent expatriates should be
encouraged to maintain family and social ties with the home country.
Expatriates can deliver useful business and political contacts even when
they are not paying taxes.

*Serving as the home base for a diaspora. A diaspora provides an
environment for useful commercial relationships worldwide. Having even
minuscule territory with sovereign characteristics (such as the ability to
issue passports) makes life far easier for members of a diaspora. The
Internet facilitates personal ties and continued access to one's home
culture.

*Maintaining enough international associations to enjoy the security,
economic and cooperative ties formerly enjoyed only by large states.
Iceland maintains a unique culture and language in a prosperous civil
society with a population of only 270,000 people. As such, it would seem to
be an advertisement for the viability of very small states. It is not at
all clear, however, that it would be nearly as prosperous, secure or
independent if not for its active memberships in NATO, the European
Economic Area and the Nordic Council.

*Sharing a positive, self-affirming narrative. Many such narratives are
provided by religious, national or ethnic identity. Israel has a simple and
effective narrative-exemplified in phrases such as "Hear, O Israel, the
Lord thy God, He is One", and "Never Again." Political entities that do not
have ethnic or religious cohesion need a sophisticated and equally
compelling narrative. The United States has a complex and compelling
narrative-exemplified in the phrases, "We hold these truths to be
self-evident" and "the wretched refuse of your teeming shores." Both have
worked. Nations that lose the ability to sustain a positive narrative, on
the other hand, lose coherence and identity, and thus voluntary citizen
support. In the new environment, such nations will find it difficult to
maintain revenue bases, enforce regulation or defend their citizens.
In this world, civic states that are able to generate an essentially
voluntary adherence on the part of their populations will dominate. The
things of value that civic states provide for their citizens-principles,
identity and a sense of community-are fundamentally intangible things that,
unlike the economic aspects of sovereignty, cannot become commodities in
the world marketplace.

Such civic states are not likely to be able (or want) to form or sustain
large-area organizations with tightly integrated populations that generate
a consensus to pay for and share an elaborate structure of state-provided
and state-mediated benefits consuming high (33 to 60 percent) proportions
of the state's GDP. The decline, decentralization and, in some cases,
destruction of economic states will strengthen civic states by providing
impetus to the search for newer, more flexible and less centralized
mechanisms linking large-scale activities.

Do larger-scale economic areas like the European Union offer a potential
solution to this perfect storm of the economic state? To the extent that
such unions concentrate on the positive accomplishments of the Union, the
answer is a qualified yes. The EU has had some success in promoting free
movement of people, capital and ideas throughout its internal area, and
facilitating cooperation in all areas where existing commonalities permit
greater cooperation between similar cultures. A union that would seek to
create a common economic, informational, and residency space for the
citizens of its member-nations could be of benefit.

However, to the extent that the EU has ended up dictating the social
policies of its member-nations, attempted (with some success) to relocate
executive power from national bodies under democratic scrutiny to
unscrutinized bodies on Union-wide levels, and maintained large
cross-regional subsidies to buy assent, it is not only not a solution, but
becomes a new type of problem in itself. The EU has become to international
cooperative organizations what the economic state has become to the
nation-state. By trying to become an economic state on a wider scale, the
EU has increased the amount of bureaucracy, top-down planning and
intervention.

Additionally, it has replaced some of the barriers with which small states
have tried to insulate themselves from economic reality by a new,
Union-wide set of more insidious non-market barriers, particularly in the
area of rigid and expensive standards, and subsidy programs that have the
same ultimately futile goal in the world economy. By trying to maintain an
already strained entitlement and dirigisme-based political and social
model, the EU will find itself under ever-increasing pressure in the coming
decade because of these structural weaknesses, aggravating an increasing
demographic crisis.

The Rise of the Network Commonwealth
In discussions about these changes and their effects, two schools of
thought seem to have emerged to date. One is a gloomy and apocalyptic
vision of many small, essentially unconnected mini-states engaged in
intermittent low-level conflict and confrontation, reminiscent of Hobbes's
"War of All Against All." It is a vision of a few rich Singapores and many
poor, conflict-torn Kosovos. This view is reflected in political works such
as Robert D. Kaplan's The Coming Anarchy, and in the imagined worlds of
futurist fiction such as Neal Stephenson's The Diamond Age.

The other could be described as a "One World via Internet" vision of
increased communication (with English as the universal language),
omnidirectional cooperation and networking on a world scale. Its
proponents, such as
the cyber-futurists of Wired magazine, envision that lowering the
transaction costs of cooperation to a uniform level worldwide will make it
equally likely for any one person anywhere to cooperate with any other
person anywhere else.

In many versions, less futurist, less libertarian, but more typical of
Hegelian-Kantian internationalists, it leads to a vision of world
governance-of increasing integration into regional transnational
organizations, such as the European Union and nafta, in parallel with
single-purpose world-level structures such as the World Trade Organization,
ultimately all merging into a mode of world governance.

If the one vision leads to a few Singapores and many Kosovos, the other, it
is thought, will spawn a multicultural Golden Era, benignly presided over
by an enlightened United Nations and its international organs.1 Neither
vision is likely to be realized. The breakdown of the old structures need
not, and probably will not, continue infinitely. If it were to persist, the
ongoing division of national communities would result in an
undifferentiated and disconnected mass of ever-smaller nation-states-or,
more honestly said, tribal states. The dissolution of the ussr and of the
Socialist Federative Republic of Yugoslavia show what the human costs of
such processes can be.

Equally, there is an inherent limit to the prospect of any form of
universal or global governance in the near future. Such a government
(unless it is a disguised empire of a major power imposed on the rest)
would have to be constructed on a lowest-common-denominator basis to
include a substantial collection of hapless dictatorships, rotten
oligarchies and shabby kleptocracies. One need only look at the
ineffectiveness of the United Nations in coping with many global issues to
see the limits of this approach.

In between the old natural unit marking the limits of easy cooperation,
namely the nation-state, and the distantly (and perhaps chimerically)
glimpsed vision of universal civilization, we must interpose a middling
form: a set of like, but not identical, societies sharing a number of
common characteristics, within which social cooperation bears significantly
lower transaction costs than without. This now-emerging entity is the
network civilization-a new civilizational form enabled by networks.
Consider the visible effects of the current phase of the
scientific-technological revolutions: the Internet; the communication
satellite and high-bandwidth fiber-optic cable; fast, cheap
intercontinental air travel; and all the rest. Even today, these have
brought geographically distant areas into close proximity for many
purposes. The acceleration of these technological and economic trends will
make this "tele-proximity" even more significant. Collaboration in all
areas-economic, educational, political-is becoming relatively easier at a
distance. But as the old natural barriers to trade and
communication-mountain ranges, wide oceans, and other natural barriers-no
longer need be borders, the next most significant set of barriers
remains-differences in language, customs, legal systems, religions, and
other significant values, and particularly things like trust.
The network civilization is associated primarily on the lines of cultural
contiguity: groups of nations sharing language, customs, legal systems,
religions and other significant values, most specifically, trust
characteristics. It has sometimes been asserted that the global adoption of
English will abolish transaction costs of cooperation between
civilizations, or that automated translation will do so. Although both
phenomena are real, it is unlikely they will have the expected effect, for
it is precisely the unexpressed web of assumptions behind the formal words
that create the barriers between cooperation. "We must make an
accommodation" has a different nuance in a business discussion in Lima,
Ohio from one in Lima, Peru.

On the other hand, the unprecedented rapidity, cheapness and ease of use of
modern telecommunications, particularly the Internet and World Wide Web,
knits together culturally similar societies into what is rapidly becoming a
single cultural artifact subdivided along many different lines. Consider
one example: the changes in the public debates in the English-speaking
world at the time of the Gulf War, the Balkan interventions of the
mid-1990s and the Iraq War. The debates over the Gulf War were
overwhelmingly conducted in the traditional style of the 20th century,
somewhat accelerated by satellite television. That is, America, Britain and
other nations each witnessed a debate among their traditional policy elites
in legislatures, the media, and academic circles. The American media
analyzed, summarized, and then presented their summary of "British opinion"
on the matter; the British media likewise encapsulated their impression of
American debate and presented it domestically.

During the Balkan crises, Americans began to be able to follow lengthy
sections of the British parliamentary debate directly on cable television;
the proliferation of cable services and cable channels, particularly ones
devoted entirely to news and politics, suddenly made it possible for
millions of Americans to follow a debate that previously would have been
scrutinized in such a level of detail by mere hundreds, or at most
thousands, of diplomats and academics. Although the speed at which events
unfolded was far faster, Americans and British debaters spoke as much for
and from their national communities as an Athenian or Corinthian might have
22 centuries previously.

By the time of the Iraq War, the proliferation of the Internet and such
phenomena as Web logs-individually produced Web diaries updated daily or
even hourly, with direct links to other "blogs", often linking to
eyewitness accounts to current events, and to a huge host of media
sources-created a situation in which political debate effectively occurred
seamlessly across the English-speaking world without the intervening
mediation of cultural and political elites. It was a debate segmented
primarily by political position rather than by nationality. In fact, both
pro- and antiwar opinion was often elaborated by group blogs, each of which
were collaborative efforts stretching from London to Sydney and everywhere
in between. Both because of direct contact across the Web, and by the
indirect effect of subjecting traditional media to criticism and feedback
of a scope, level and intensity never before experienced, political debate
over the Iraq War has experienced a remarkable degree of disintermediation
and popular involvement. This experience promises to become a new benchmark
for future reportage and debate.

All indications suggest that these patterns will intensify rather than
abate. Network civilizations appear to be the next step in expanding the
circle of civil society, which has elaborated itself over time from local
and regional networks of commercial, intellectual and civic collaboration,
to networks of national scale.

The Industrial Revolution made continent-spanning nation-states possible.
The Information Revolution offers the possibility that civil societies may
link themselves on a globe-spanning-although not universally
inclusive-scale. Such is the network civilization. It can hardly fail to
call forth political and economic forms to parallel its effects. The
Network Commonwealth is an effort to name an equivalent form for the
network civilization, and to identify its emerging precursors in existing
institutions. Just as the ethnic nation was the raw material from which the
classical nation-state was built, so the network civilization is the raw
material from which the Network Commonwealth is being built.

This facilitates the movement of people, goods and services across borders,
forming and strengthening shared cultures (both elite and popular) and
experiences-for example, common publications read by the publics of all of
the nations of a particular network civilization. In turn, this lays the
foundation for greater institutional cooperation (in the form ofcommon
markets, permanent security alliances and joint scientific and
technological projects). A Network Commonwealth would build on these
existing forms of transnational cooperation and thus emerge along existing
information-oriented lines of linguistic and cultural affinity. It would be
defined by close trading relationships and substantial military cooperation
and intelligence-sharing among its constituent states, as well as a high
degree of intra-network flows of migration and investment.

The Network Commonwealth is not a nation-state of the historical type. It
is not a state at all, although it has the potential to offer an
alternative means for fulfilling some traditional functions of economic
states. It is a means of linking smaller political communities so that they
can deal with common concerns. It is a way to provide opportunities to
their members-opportunities that cannot be provided by small, independent
sovereignties alone, and for which economic states and empires exact too
high a price.

The emergence of the Network Commonwealth as a potential form of political,
social and economic organization is driven by three emerging realities.
First, the basis of the world economy is changing from manufacturing to
information-the ideas and informational products, as well as the human
minds and skills in which they are embodied. Just as agriculture remained
important in the Machine Age, manufacturing (and agriculture) will remain
important in the Era of the Information Revolution-but mastery of
manufacturing will come with mastery of information, just as a mastery of
agriculture passed to those who mastered machinery. Similarly, as military
predominance once passed to those powers that led in industrialization, so
too will military predominance pass to those who best master information
technology.

Second, physical space is no longer the most important factor in political
association. Cultural space is. What is the result of this shift? In an
Internet-mediated economy where information is the chief product, London,
Toronto, Los Angeles, Cape Town and Sydney are next door to each
other-while London and Paris, Toronto and Montrial, Los Angeles and
Beijing, Sydney and Jakarta are all separated by a wall of differing
visions and assumptions.

Finally, cooperation is proportional to communication as complexity
increases. Meaningful, thorough and successful cooperation is most easily
accomplished among those who can communicate with the most depth and
clarity-namely, those who share language, a set of political assumptions or
common moral ideas. Certainly, substantial multinational and multicultural
cooperation does occur in business, scientific and political circles, but
when the focus of the cooperation is information-intensive (as in the
production of software or motion pictures), it has most frequently been
among companies rooted in the same linguistic communities.

All-in-all, instantaneous, flat-rate and worldwide communications, in
addition to cheap long-range aviation, are forming a new topology of
political space. In this new environment, physical proximity is no longer
the most important factor in either trade or power projection. Combined
with this are political developments, such as free-trade agreements and
migration arrangements permitting people to travel, visit, study or work
freely outside their native country. This is driving a transition from
organization along lines of geographical proximity to structures organized
primarily along civilizational lines. A further spur to the development of
Network Commonwealths is that they promise to provide many benefits without
the costs that economic states have historically imposed on individuals and
society.

The Emerging Anglosphere
Because Britain, and subsequently the United States, experienced the
Industrial Revolution and political modernity early on, the
English-speaking nations have tended to be in the forefront of social,
political and economic evolution and to develop particularly strong civil
societies. The position of the United States in the Information Revolution
and the emergence of the Internet have continued this tendency. So it is
likely that Network Commonwealth structures will probably emerge in the
English-speaking world quite early. Some developments to date indicate that
this is indeed happening.

Internally, the Anglosphere already exhibits a web of network
civilizational ties that could become the precursors of a budding Network
Commonwealth. Publications like the Financial Times and the Economist, for
example, effectively serve the entire English-speaking network
civilization, not simply a Britain-based constituency. One can also speak
of an emerging Anglosphere entertainment industry, based upon the growing
collaboration of Australian, American and British directors and actors (and
the use of New Zealand for film-shooting), where the final product appears
on screens from Canberra to Chicago to Cambridge. Already, a high
proportion of foreign direct investment-now a more important measure of
economic integration than trade in physical goods-in all English-speaking
countries is from other English-speaking countries.

Network civilizational ties have helped to spawn a series of common
institutions. The close military relationship between the United States and
the United Kingdom, once again displayed in the recent Iraq War, laid the
basis for the world's longest-lasting and most successful alliance, the
North Atlantic Treaty Organization. Similarly, anzus binds the Anglosphere
nations of the Pacific in a similar mutual defense pact. Other
institutional examples of the emerging Anglosphere include the us-UK-a
intelligence-sharing scheme and close cooperation between American and
British intelligence services; organizations that contain a substantial but
incomplete set of English-speaking nations, such as the Commonwealth of
Nations; and a large number of regional sets of collaborative institutions,
mostly linking the three main pairings of English-speaking states (the
United States and Canada, the United Kingdom and the Republic of Ireland,
and Australia and New Zealand). All-in-all, there are a substantial number
of British and American activities and non-trivial sets of
intra-Commonwealth institutions.

U.S.-Canadian collaborative institutions are of particular interest because
they achieve a very substantial degree of cooperation while being based on
a strict understanding of national sovereignty. Unlike the European case,
there is no master treaty of U.S.-Canadian integration that pledges an
"ever-closer union:" neither Jacksonian Americans nor Canadian nationalists
would tolerate any threat, however latent, of a permanent surrender of
sovereignty. Yet the U.S.-Canada Free Trade Agreement (and its more broadly
focused successor nafta), as well as norad in the defense realm, are both
conspicuously successful examples of international cooperation.

One obvious route for further elaborating intra-Anglosphere ties would be
to extend nafta to Australia and New Zealand, a move already under
discussion among policymakers. Another would be to bring into daylight the
existing us-UK-a intelligence-sharing arrangements (not formally
acknowledged at present) in the form of a public mutual-assistance treaty
and permanent formal organization. Such a step might assist in
demonstrating a publicly-visible oversight mechanism for its controversial
elements such as the Echelon data-intercept system.

Welcoming the United Kingdom and, in some areas, the Republic of Ireland
into organizations formed on the armature of U.S.-Canadian collaboration is
likely to depend upon the future course of European integration. The
Washington-London economic and security relationship is the key
relationship of the Anglosphere, considered either in economic terms or
military heft. If evaluated on a dynamic scale anticipating trends in the
Information Revolution, the potential for even closer British-American
economic integration is substantial.

It is also a question of balance. An Anglosphere Network Commonwealth
without the UK is predominantly the United States with appendages. With the
UK, and particularly the financial capabilities of London,
intra-Anglosphere relations are not so lopsided. Yet, given the
substantial turbulence likely in European relations over the next decade
due to its accelerating demographic and fiscal-structural issues, a looser
Europe more open to closer UK-Anglosphere ties is more rather than less
likely. Even today, after decades of British membership in the European
Union, there is a substantial gulf in attitudes towards America between
Britain and Continental Europe. Not only was this seen in the Iraq War, but
at a popular level twice as many Britons report feeling closer to the
United States than to their Continental neighbors. A recent survey by the
Economist, largely a pro-EU magazine, showed that more Britons felt
represented by the American flag than by the EU one, and far more of them
identified with the United States than Europe as Britain's most likely
source of help.

An Anglosphere Network Common-wealth would emerge from a series of
parallel, overlapping and non-exclusive cooperative organizations. Not all
Anglosphere nations would be expected to be involved in every other one.
Ireland, for example, would probably find the economic and migration
dimensions to be of interest, but would probably not participate in
defense-related activities. Nor should a rigid linguistic-cultural test be
used to exclude automatically a particular nation if its cooperation would
be otherwise useful. After all, whether a particular nation is a member of
a particular network civilization is in many cases likely to be a matter of
debate to which there is no automatic answer. Neither India, South Africa
nor even Canada are entirely English-speaking, but they all are significant
actors in the Anglosphere. Still more so, India is part of the Anglosphere
even though it is not primarily English-speaking. Yet its burgeoning
military alliance with the United States is facilitated both by the fact of
an English-speaking elite and, more particularly, by the British
"character" and traditions of its military forces.

So it is probably more useful to define network civilizations inclusively
rather than exclusively: some significant degree of English-speaking
population, and some degree of institutional affinity with Anglosphere
legal or governmental practices probably make it valid to include a nation
in the broader definition of the Anglosphere, and thus indicate that such a
nation might usefully participate in some of its cooperative institutions,
including an emerging Network Commonwealth.

What Spheres May Follow?
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. This is true not only for the Anglosphere.
Similarly, there has been an increasing trend for Spanish-language
information trade (particularly in electronic entertainment) to flow
seamlessly through what, by extension, could be dubbed the "Hispanosphere:"
an elastic entity that includes Los Angeles and Miami as well as Madrid,
Mexico City and Buenos Aires.

Indeed, the Spanish-speaking world is another prime candidate for the
creation of such a Network Commonwealth in the near future.
Spanish-language information productions (not only books and periodicals
but television programs and movies) flow freely across borders.
Spanish-language literature is enjoyed across national boundaries, and
something like a pan-Hispanosphere intellectual dialogue exists. The
Spanish-language Internet world lags behind that of the Anglosphere, for
obvious economic reasons, but similar trends can be observed within that
world.

In the economic realm, Spanish companies played a substantial role in the
modernization of Latin American economies during the 1990s and can be
expected to play a similar role in the future. Spain is now poised to
become the world's leading investor in Latin America. This is a new
phenomenon, as Latin Americans since independence have looked to France,
Britain and Am
erica for foreign economic participants. Yet it is likely to continue, and
perhaps accelerate, depending partly on whether the European Union's
structural evolution begins to create obstacles to Hispanosphere economic
cooperation.

Given its demographic vigor, the Hispanosphere could also emerge as another
network civilization. Although there has been relatively little effort to
create formal institutions to date, due partly to existing
intra-Hispanosphere rivalries, the cultural and economic spheres offer
obvious places to start-and there are proposals to turn the annual
Ibero-American Summit into a more permanent forum. Additionally, Spain,
like Britain, will eventually have to decide to what extent its European
ties can be permitted to limit its ability to collaborate with its overseas
linguistic compatriots. Both may find that a looser definition of the
European project is attractive as a consequence. Indeed, for Spain, a freer
movement of peoples from Latin America could present a more tolerable
solution to its share of Europe's demographic challenges than its current
course of action-dependence upon a flow of migrant labor from North Africa.

Along with the possible emerging Hispanosphere, France supports a
substantial apparatus-La Francophonie-for pan-Francophone relations that
could serve as the nucleus for a Francosphere Network Commonwealth. And
finally, the increasingly close connections between Brazil and the former
Portuguese states of Africa foreshadows the possible development of a
Lusophere. Such ties would be an asset out of proportion to Portugal's
other economic opportunities.

Might the Network Commonwealth ameliorate situations in which ethnic
populations spill over international borders? The Commonwealth of
Independent States-and now Putin's current program for a common economic
space that includes Belarus, Ukraine and Kazakhstan-has been suspect as a
stalking-horse for a renewed Soviet Union or revived Russian empire.
Similarly, Chinese interest in Taiwan and Chinese-populated states such as
Singapore, and Turkish ambitions in the Turkic-speaking states of Central
Asia have also been viewed with suspicion. Yet in each case, a Network
Commonwealth approach might provide an outlet for these ambitions without
presenting the problems that any effort at state-building or incorporation
would arouse.

Can the European Union itself be considered a Network Commonwealth of
sorts? It has abolished state monopolies, opened protected markets and has
greatly increased the average European's freedom to travel, reside, work
and compete throughout its territory. Most importantly, it has served to
keep many of its politically more marginal members, such as Spain or
Greece, from backsliding into dictatorship-thereby creating an incentive
for shaky Mediterranean, central and east European democracies to join. But
the answer is no. It is difficult to envision the very broad Union, now
realized with the accession of the central and east European states, ever
successfully replicating the level of integration of France and Germany
from the Azores to the suburbs of St. Petersburg. The inherent problems in
defining a "common European culture" that includes all Union member-states
but excludes the Americas and Australasia make the idea of a wider European
state or a "European Network Commonwealth" highly problematic.

What is more likely to emerge over time is a European Union structure that
enables its member-states to develop Network Commonwealth ties with their
non-European civilizational partners. The most likely arrangement-to
oversimplify brutally-is a "variable geometry" Europe with a tight
federation of the Rhenish states (grouped around the Franco-German core)
much more loosely linked with the four historically "exceptionalist" areas:
the British Isles, Iberia, Scandinavia and east-central Europe. None of
these areas, for various reasons, ever experienced the full charms of the
Colbertian state, and each thus retains a core of resistance to
implementing such institutions on a wider scale. Whether the tight
federation or
the wider, loosely linked trade area bears the name "European Union" is a
taxonomic quibble.

Alternatives to World Governance
Evolutionary conservatism argues that organizing closely-linked sovereign
nations into a loose and flexible structure is a less costly step than
organizing wide-scale, rigid unions. The evolution of political forms thus
favors the Network Commonwealth. This is demonstrated by the fate of
proposals like that of author Clarence Streit in the late-1940s to form an
"Atlantic Union", a permanent federal union of the Atlantic democracies.
Although this idea had potential benefits, it also had a number of real
problems, many of which have also been encountered in the process of
building the European Union. Almost all of the benefits of the proposed
Atlantic Union promised could have been, and in fact later were, delivered
by less radical mechanisms that neither imposed the costs nor met the
resistance that a federal union threatened. Many of these alternative
mechanisms are the same institutions that  promise to become the sinews of
a Network Commonwealth: free trade agreements, alliance structures and
cooperative organizations.

As returns from revenue collections (income, capital and sales taxation)
decline, the economic states that once derived direct benefit from their
large scale will find such benefits increasingly elusive. Rising costs and
falling benefits will foster their devolution or breakup.
Still, benefits to large-scale organization remain. They include mobility
of productive people over wide areas and cooperative pooling for defense or
scientific research purposes. These benefits can be realized more cheaply
by Network Commonwealth arrangements than by maintaining large-scale
economic states or by trying to form purely economic unions. The proposal
to form a free-trade agreement between nafta and the European Union (most
recently raised by British Chancellor of the Exchequer Gordon Brown) is
fine as far as it goes. But new forms of common economic space must also be
realized to facilitate the collaboration of software, media, financial
services and other high-value information products among countries that are
information neighbors. 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 proto-commonwealths in themselves.
nafta's true vocation may be to link the communities of Shakespeare and
Cervantes rather than merely serve as a means of allowing the sale of
cheaper tomatoes in American supermarkets.

Rather than problematic schemes of universal transnational governance,
associated commonwealths, achieving more modest goals more effectively,
could be the prevailing political form of international organization in the
21st century.


-- 
-----------------
R. A. Hettinga <mailto: rah at ibuc.com>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'