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The Network State with Balaji Srinivasan

In this episode, we’ll explore the concept of The Network State with Balaji Srinivasan. As the world becomes more digital, it also becomes more distributed. This is obvious on the individual level – how you order goods, the way you chat with friends, and the news you consume… all from a handheld computer. It’s also becoming more obvious at the company level. The pandemic shook the world into remote work and many companies have decided that maybe work can be done in ways they never imagined. But what about the state – whatever that means? Could the network rival the state? In this episode we’ll explore what a nation state even is and how it may be challenged by a new Leviathan: the network. We also cover the difference between a nation and a state, how constants become variables, the cloud continent, digital power, your identity stack, calibrating risk, polycentric law, cloud regulations, building fast with atoms, founding vs inheriting, the powerful vs the powerless, and just about everything in between. Topics Covered: 0:00 - Introduction 2:40 - Nation vs state 15:13 - Constants becoming variables 16:49 - The cloud continent 20:52 - The three leviathans 31:11 - Digital power 38:50 - The identity stack 55:28 - Cloud first, land last 58:08 - Diplomatic recognition 1:04:30 - Root access to land 1:09:35 - Calibrating risk as society 1:19:40 - Regulatory harmonization 1:32:03 - Polycentric law 1:38:54 - Building fast with atoms 1:43:07 - Looking to history 1:46:18 - Founding vs inheriting 1:55:31 - The one commandment 2:23:16 - The powerful vs powerless 2:34:58 - The competition for people 2:40:10 - Historical lines 2:49:13 - v3 of governance Resources: * Balaji’s Twitter: https://twitter.com/balajis * Balaji’s website: https://balajis.com/ * The Network State: https://thenetworkstate.com/ Stay Updated: * Find us on Twitter: https://twitter.com/a16z * Find us on LinkedIn: https://www.linkedin.com/company/a16z * Subscribe on your favorite podcast app: https://a16z.simplecast.com/ * Follow our host: https://twitter.com/stephsmithio Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. For more details please see a16z.com/disclosures.

Balaji SrinivasanguestSteph Smithhost
Nov 16, 20222h 52mWatch on YouTube ↗

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At a glance

WHAT IT’S REALLY ABOUT

Balaji Srinivasan Explains Network States, Exit From Legacy Institutions, and Startup Societies

  1. Balaji distinguishes the nation (a people with common descent and culture) from the state (the administrative layer above it) to argue that today's map is neither permanent nor natural.
  2. He argues that the internet is a new continent and that the network now sits alongside God and the state as a third leviathan, with digital power such as deplatforming and freezing accounts acting as a form of compulsion.
  3. He defines a network state as a highly aligned online community with the capacity for collective action that crowdfunds territory and gains diplomatic recognition, progressing from network society to union to archipelago to state.
  4. He uses the FDA, regulatory harmonization and the contrast between founding and inheriting to argue that legacy institutions cannot be reformed from within and that people should exit them, using cloud-based or polycentric alternatives.
  5. He says startup societies should be built around a 'one commandment' moral premise, such as keto kosher or a digital Sabbath, and argues the US is fracturing into Democrat and Republican nations, which makes new forms of governance necessary.

IDEAS WORTH REMEMBERING

5 ideas

Nation and state are different things that have been conflated.

Balaji says the nation is a group of common descent and the state is the administrative layer above it. Many ethnic groups have no state, and maps are abstract constructs that could change.

The network is a third leviathan after God and the state.

He frames the 1800s as 'God will smite you,' the 1900s as 'the state will punish you,' and the 2000s as 'the network won't let you,' with digital hard power taking forms such as deplatforming, freezing and seizing.

Collective action is the filter that separates a network state from an ordinary online audience.

He says most online communities generate 'popcorn action,' such as a thousand likes from a million followers. A real community must move as one before it can crowdfund territory.

The path to a network state is staged and useful at each step.

He describes a progression from network society to network union to network archipelago to network state, noting that a purely digital guild or a set of group houses can be valuable without ever seeking sovereignty.

Regulatory harmonization is the problem he calls most important to solve, and he prescribes exit rather than abolition.

He argues that US regulators like the FDA effectively write rules for the world and are unaccountable to voters or markets. He proposes competing cloud-style regulators and sanctuary zones instead of zero regulation.

WORDS WORTH SAVING

5 quotes

God would smite you, 1800s. State will punish you, 1900s. Network won't let you, 2000s, okay?

— Balaji Srinivasan

Money runs out. Morality, a moral premise doesn't.

— Balaji Srinivasan

So cloud first, land last, but not land never, okay?

— Balaji Srinivasan

So I'm not saying just end the FDA. I'm saying exit the FDA.

— Balaji Srinivasan

if in the 2010s the question is what is a currency, the 2020s the question is what is a nation.

— Balaji Srinivasan

Nation versus stateThe cloud continent and constants becoming variablesThree leviathans and digital powerNetwork union, archipelago and stateFDA and regulatory harmonizationPolycentric law and cloud-based regulatorsFounding versus inheriting

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