Review: Network State

To everyone reading this. I am very far away from what you would call a “Blogger” or “Writer”, heck I have a hard time even understanding most of my own thoughts, let alone, write them down in a logical structure. Thus, I would have never thought that I would ever start this amateur-blog, however the ideas proposed by balajis.com are so powerful that I would like to contribute. If at least one of the concepts in this review sparks your interest, I encourage you to tell at least 2 friends about 1792.com.

Ok, here we go with the review…

Balajis states that “The Network Union” is a new social network with a blockchain, with a leader and a purpose. Now let’s split it up for a quick clarification. We have 3 components of this definition: the social network with a blockchain, the leader, the purpose. Balaji dedicates most of the article to the technological side, the first component, which is actually enabling the idea of a network union. He clearly shows how blockchains change social technology and why it is revolutionary (Tokens, Balances, Crowdfunding, Encryption, Messaging, Partial Sovereignty, Governance, Login Token Hodling and Quantifiable Social Capital). I totally agree with him on all of these things and if you want to know more read his article first. However, for this review I want to focus on the next 2 components, which I believe are of far greater importance for a network union.

For me, the network union is a smaller component, a start into the bigger idea of “Starting a New Country". To explain why I believe the 2 other components (leader & purpose) are more essential and where Balaji's blog post lacks a certain direction or concreteness, we need to look at the bigger picture.

By looking at the bigger picture we understand what Network Unions are today and why there has been no innovation in this field for the last decades. As Balaji explains, our “Network Unions” are not directly social networks like Facebook, but rather corporate companies.

It is rather the company itself that resembles a “Network Union'' because they clearly follow the leader and Mark’s purpose. Unfortunately, the “Network Union” of employees only represents a tiny fraction of Facebook, the rest does not follow the leader nor the purpose. They are just on the platform to share pictures with friends. So, the people are just using Facebooks because of what the technology allows them to do, not because they think Mark Zuckerberg is an amazing leader.

Here, Balaji says that a company itself resembles the structure of a “Network Union” more, because there is a leader who founded and convinced his employees to follow a purpose/mission of the company.

However, this is a point where I do not fully agree with Balaji. He takes Amazon as an example of a “1.1 Million Employee”-Force. Unfortunately, only a tiny fraction of this Network of “1.1 Million Employees” truly believe the purpose of Amazon. I would argue that actually only the executive positions are following it. In the end, 99% of the employees are just there for the money. Their purpose is not Amazon's vision, they do not see Jeff Bezos as their real leader, their purpose is to get enough money to pay rent and buy a nice car or whatever. The question here is more: “Which leader and purpose would people follow, without money?”.

To answer that, we must take another step back. I argue that we have an even better example of a “Network Union”: Our Nations. The only difference is, that the technology part, “a true blockchain” is missing. There are some rather weak attempts with online banking, etc., but mostly the tech part is just missing. However, nations do have a leader and purpose (even though they are changing due to time or events like wars).

The first leaders with a specific purpose were the founding fathers of countries. Especially in important historical moments, like wars or revolutions, people get together and follow true leaders with a true purpose (money is not the first priority). That is why countries can be real “Network Unions” and companies cannot. A company would never achieve such a movement. If a company would go through a crisis, most of the people would just change to another company with better pay and a similar purpose.

So is the lack of a shared purpose maybe even driving innovation, you can just switch to the better company. But why can’t you do the same thing with a country? Why aren’t we seeing new countries popping up? Why is there no disruptive innovation with countries like there is with companies?

The answer is quite simple actually.

Even though there might be many leaders with a great purpose for a new country, there is just no land on our planet, which is not already controlled by some country. So it is not even possible to “Start a new Country”, except you do it the Balaji way. For companies it is a different case, you can just buy some territory and innovate in the realm of the country's jurisdiction. However, if you get into trouble with the leader or purpose of the country you started the company in, you will always lose. The company is never fully yours. As Clausewitz wrote: “Politics is about imposing will, and if necessary war is just a means of politics”. So in the end the company always abides by the laws of the country, not vice versa, because the country has the last word - the army.

So in the end - you can never disrupt a country like a business. Even though the power between countries may change, they will almost never “go out of business” like companies.

Can you disrupt a sector with huge barriers of entry like the oil industry? Yes, if you have enough money to finance it.

Can you disrupt the concept of a country? Yes, but only if you would start a war. Additionally you would need enough money to finance the rebuild.

So to start a new physical country would just not be worth the process.

However, if the process of disruption would not be that difficult, then I believe countries would be like products. People could just choose a Country/”Network Union'', with people they like and transparent governance they all agree upon. We would have different states with “Value Propositions''. If you don't like one anymore, you can easily transfer to another one. The switch would be as easy (or painful) like switching from Apple to Android. Also countries would need to defend their “Value Proposition” and convince great people to join, just like a great company would. What a beautiful thought of meritocracy.

So even if we would manage to disrupt the concept of a country. The biggest difficulty remains - how do we sustain it? To solve this difficulty, we must ask ourselves: Why do people become a community and stick together for a longer period of time?

As I argued before, companies are fake “Network Unions”. Even though they might have leaders and a purpose, the real “glue” is money. Countries are real “Network Unions”, people follow the leader because of a non-monetary purpose. Nevertheless, the real “glue” for countries is actually the place of birth. The place of birth, combined with the lack of disruption in the “country-business” is the real reason why people stick together. Even if you want to go to another country, their “Value Propositions” are not drastically different. So only few people take on the arduous process of relocating and changing countries.

Thus, the shared purpose of a country is created primarily by “place of birth”, not by “interests”. So why do people become a community and stick together for a longer period of time? The answer is simple: because they were born into their “community” and they do not really have a worthwhile alternative.

But what would be the best process of creating a community from first principles, if you could choose by “interests” and had various alternatives which “Network Union” to join?

As I am currently involved in building Circle 8 “Vienna’s Nr. 1 Community”, I am often asking this question myself. To be totally honest, I am still not certain. Also, I think I will have to make a seperate blog post to explain the conclusions in the next sentences. So, just believe me on this one.

The closest I have gotten to answering this question is, that the “glue” for people are meaningful interactions. Interactions where people give meaning and validate each other's thoughts. In the end it is to give them the feeling of being “home”, “understood” and “loved”. How banal, I know :)

Nevertheless to achieve this true purpose it takes time and a community. So until then, you also need rudimentary benefits or values which you can provide to the Network Union, so people even consider joining. But what could these rudimentary benefits and values be?

Even though I have not thought about this extensively, I came up with a small foundation on which to build a scalable “Network Union” or even “Network Country”:

Create a community of first leaders, with shared interests, in the cloud. Change your citizenship if needed to a country with the least restrictions in the physical world. This way you can easily travel the world and not pay taxes, insurance etc. Create real “Community Spaces” or “Hubs” in different countries around the world where “Network Union Members” can interact in the real world. Merge the information flow of the physical world and the cloud.

Now we have an infrastructure for interaction, which connects the cloud and the physical world. But we still need people to sustain life, when joining the new “Network Union” from their country aka. old/boring/low-tech “Network Union”

In order to do so, I propose a combination of “base-salary” and a higher “upside-salary” for great contributions to the “Network Union” as an incentive. This model proved to show the best outcome for “innovation accelerators''. Additionally, not everyone has the same ambitions as a founding member, but would still like to contribute on a smaller scale.

With money as the first incentive, we are off to a great start and already outperform the current “Value Propositions” of most of the countries. You get money just for living there? That’s awesome! However, if a certain “Network Union Size” is reached and a true Community with leaders is built, people will gain a true purpose to follow.

I hope Balajis thoughts will become reality. Step by step current “Network Unions” we call companies/countries will be disrupted by new “Network Unions” and by the interplay of the 3 magical components: a blockchain, a leader and a purpose.

Now I want to make a first step myself towards this decentralized future Balaji has introduced me to. I hereby pledge my hospitality on my 30 hectare ranch in Russia, to anyone from 1729.com who wants to connect and is also as fascinated by the idea of starting a new country as I am. Maybe my Ranch will become one of the many “Community Spaces” I was talking about above :-)

PS: You also need good parties, interesting people and a good mix between men & women...