Localism in the Network StatePhilosophical: Conviction as an alternative to Voice vs. ExitInfrastructure: Localism enables full-stack prosperityCultu

Not long after the  Network State  was published, an inevitable frenzy of quips, quotes, and questions came filtering through a small corner of the vast Twitterverse. One criticism in particular surfaced regarding the role that a network state would play in the local jurisdictions it inhabits.

The thread continues with constructive attempts at reconciling some of the concepts that Balaji Srinivasan presents in the Network State with the need for locally accountable ecosystems.

Vitalik Buterin also surfaces related concerns in his essay “ What do I think about Network States? ” regarding the potential negative externalities of a network state predicated on a  voice vs. exit  philosophy:

If everyone’s first instinct when faced with a large problem within their country is to exit to an enclave elsewhere, there will be no one left to protect and maintain the countries themselves. Global infrastructure that ultimately network states depend on will suffer.

While these issues will continue to evolve as the broader thesis unfolds, Balaji himself acknowledges that the Network State is merely a framework, not a directive.

Will a localist network state look like a Hanseatic League?

As with any radically new ideas, philosophies, political parties, etc., there are not many field-tested frameworks yet for a network state; its very nascency lends to its modularity and ability to be shaped by those who lead them. Unlike the vast repos of history to examine what does and doesn’t work in nation states today, a network state is an entirely new frontier of which there are guideposts from history but no real precedents especially when accounting for the rapidly changing technological landscape today. While this essay advocates for a localist approach, it is worth noting that there will be hundreds if not thousands of possibilities to grow a network state.

In this essay, we’ll cover five axes of consideration for why localism is the strongest approach to building a network state:

Philosophical: Conviction as an alternative to Voice vs. Exit

Infrastructure: Localism Enables Full-Stack Prosperity

Cultural: Intangible Value Creation

Strategic: Strong Local Communities = Stronger Network Leverage

Political: Integration > Circumvention

Philosophical: Conviction as an alternative to Voice vs. Exit

A central tenet to the Network State is the idea of voice vs. exit in that it should be a fundamental human right to have both a voice in society and the right to exit. That is, should our voices fall on deaf ears, then at least we should have the right to exit that society to one that better aligns with our needs. These are no doubt essential rights everyone should be able to exercise which is better for the individual and can ultimately be better for societies as it fosters jurisdictional competition. Voice vs. exit have historically served communities very well especially when the adversity against voice is too great.

But framing our options as a binary solely as voice vs. exit comes with its share of negative externalities. In markets, voice vs. exit is an excellent dynamic where companies form, rise, mature, and get disrupted again like that of a phoenix. For the majority of goods and services that make up our economy, this cycle serves our needs.

Where the voice vs. exit binary starts to face challenges is in the context of broader society, its complexities, and its need for cohesion. It is not enough to operate on voice vs. exit alone. While the original author of the concept  Albert O. Hirschman  laid out his original thoughts in  “Exit Voice, Loyalty” , it was largely in the context of existing goods and services. But since the Network State is the construction of something entirely new altogether, the third axiom of “loyalty” falls a bit short because at the moment, there aren’t really any diplomatically recognized network states that exists to be loyal to in the first place (even though there are many network unions — the precedent to a network state).

The voice vs. exit binary requires a complementary option for localism to succeed: conviction. Otherwise known as digging heels in, fighting the good fight, advancing a cause through individual collective sacrifice, sometimes against insurmountable odds.

“Men did not love Rome because she was great. She was great because they had loved her.” -GK Chesterton

As something that is yet to be created, in essence that makes everyone and anyone working on a network state project more in the realm of conducting a public service. Public service, in its purest sense, seeks no expectation but rather a commitment to the betterment of society itself. It’s a bit like when a parent wants to “leave a better planet for their children”, there is no expectation that they (the parent) will directly benefit from the fruits of their labor but rather the benefit will extend to future generations. It is this type of ethos of which great societies are truly built. Whereas loyalty is more of an emotional alignment, it is conviction and commitment coupled with action that actually manifests in building the localities that people want to live in. It is the local library hosting a community festival, a group of neighbors organizing a park cleanup, a church constructing a community shelter. Actions which require no expectation of ROI on someone’s time.

By rejecting the thought process that might lead an individual to ponder whether they should voice with expectation of resolution, exit without confronting the problem, or be loyal (complacent) to the status quo. Instead, that individual can look to the end of their sleeve to improve what’s in front of them today for the betterment of tomorrow.

Vitalik expands further on the vulnerability of the voice vs. exit binary as “exitocracy” and its inherent risks in particular against centralized entities:

The risk is that exitocracy becomes recognized as the primary way you do the “freedom” thing, and societies that value freedom will become exitocratic, but centralized states will censor and suppress these impulses, adopt a militaristic attitude of national unconditional loyalty, and run roughshod over everyone else.

One example of an “exitocracy” in recent memory is what was known as the  Silicon Valley Exit . One of the negative externalities of the internet, especially in areas where the primary economic activity is web-based such as S.V., is an inevitable neglect of localities. Time spent online is time missed offline and there often forms a brand of techno-idealism that ends up displacing the consideration of our physical surroundings and communities. After the sizable tech exodus from Silicon Valley during COVID, we saw a real-world case study of the after-effects of an exitocracy. Increased crime rates, government incompetencies, lower citizen satisfaction at large, etc.

So what does conviction look like in the locally-focused Network State? Since each locality would represent its own startup society, we can borrow a lot of inspiration from Brad Feld and his tireless efforts in creating startup communities around the world, starting with Boulder, Colorado:

“…one of the key principles of building a startup community is that it takes a long time. Although I toss around a 20‐year number, this is really the minimum. Optimally, it’s 20 years from today, and that number resets to another 20 years every day. After you’ve been at it for a decade, it still requires a 20‐year commitment. The 20 year timeframe signifies a generation to me. It takes a generation of effort to get a startup community up and running in a sustainable way.” -Feld, Brad. Startup Communities (p. 79).

And this solely applies to the startup ecosystems in a specific locality, which typically only makeup a fraction of a given economy. But the philosophy is sound and can be applied to domains across the city stack. There is a reason elected mayors are typically lifelong residents of the cities they govern.

Infrastructure: Localism enables full-stack prosperity

If access to internet is the lowest common denominator from an infrastructure standpoint for a network state, then the full-stack of success is going to include a lot more than just high MBPS. Here are just some examples of largely non-digital services (public and private) required for ANY civilization to function properly:

Sure one could argue that many of these departments are ripe for disruption and that is true to an extent (May we one day be blessed with a DMV overhaul). However, for the most part bits and bytes aren’t going to replace bricks and bathrooms. The prioritization of the latter must be on par or exceed that of the former.

An interesting trend in the last few years that embodies some of these ideals is the relative rise of primitivism, especially amongst tech workers (techno-primitivism and/or solarpunk movement). Kift, Cohere, Cabin are just a few examples of startup societies that embody this movement (please comment on this article if there is a more fitting term!).

Chobani leaning heavy into the solarpunk aesthetic

While I am a fan of the primitivist ideals as much as the next person and try to experience it as much as I can, there is still a significant canvas for broader localist initiatives to take hold. For those who aren’t yet ready or able to manage their own crop lifecycles, there is a broader view of localism that extends from this techno-primitivist movement casted from renderings such as Dear Alice (see above). An advocacy for strong communities and cities, environments where people from all backgrounds, industries, viewpoints can come together. A network state that is in service of cities rather than cities in service of a network is a more fitting framework to ensure full-stack prosperity.

Atoms > Bits

If software is eating the world as the a16z fund thesis would suggest, then hardware is building it. No amount of software or digital infrastructure is going to replace the base levels of  Maslow’s pyramid  for civilization. While we could argue that internet connectivity itself is inching closer to the bottom of the pyramid, it would still just be complementary to the physical requirements we all need.

The Network State, in its consensus form, is quite tech-centric by design in its reliance on new and emerging technologies to create a better society. While I for the most part agree and believe technology to be a fundamental driver of progress, the technology itself that underpins it should be considered table stakes. The right permutation of the more tangible aspects of a network state that best accommodate Maslow’s pyramid for its constituents will be the ones that flourish.

Cultural: Intangible Value Creation

A huge aspect of what makes strong communities/cities/etc. lies largely in the intangibles embedded within. This is arguably the main obligation of the network union (the precedent to a network state). What creates the unseen glue that brings people together? What fosters cooperation amongst its citizens rather than division? What intangibles led to the strength of Sparta? To the unspoken cohesion of ethnic and/or religious diasporas? To the national pride of World Cup soccer teams and fans? The answers to this phenomena will not exist in a GitHub repo but instead lies amongst the neighborhood gatherings, family integrations, personal identities, or shared hardships of societal service. It’s the expansion of “taking a village to raise a child” proverb that extends to other aspects of the community existing more through our IRL > URL interactions. Afropolitan is a network state project that understands this acutely and is positioned accordingly to both create and capture the best of the African diaspora.

Afropolitan’s culture-first approach to building a network state.

Simply put, time spent in the cloud is time displaced from on-ground activities that lead to strong communities (coaching a local sports league, picking up trash in public parks, hosting a community event, etc.) and by extension, its culture.

While it’s easy to get caught up in the echo chambers of Tech/VC/Crypto Twitter to re-affirm that technology is largely positive (as this author agrees), this does not discount the fact that many of the technological underpinnings of a network state (especially crypto) carries a significant amount of rep risk with a large portion of society, magnified exponentially by the most recent fallouts such as FTX/SBF and D.K./Luna. Whether one wants to pin these adversities on the NYT, mainstream media, the “establishment,” etc., it still exists. Taking into account the multiple facets of society that exist outside of tech will lead to a more robust polyculture and richer civilization, just like the most dynamic cities today.

Strategic: A Network of Strong Communities Creates Leverage

A city does not have significant leverage over a state/region, just as a state/region does not have significant leverage over a country (in the U.S.,  this paradigm is changing ). They could have loose connections with other cities to gain leverage but these cities are also competing for tax base so the incentives are still low to do so. But what if incentives could be aligned across cities? What if you could create a network of startup cities as leverage?

the best startup communities operate as networks: a broad, loosely affiliated set of leaders and organizations, which are working in parallel on a variety of different initiatives. There is rarely a leader of a network, just nodes that are interconnected. — Feld, Brad. Startup Communities (p. 78). Wiley. Kindle Edition.

Similar to how Brad defines startup communities, a geographically dispersed group of startup cities could compound value together and exercise their leverage in proportion to the strength of their cities.

Imagine if Singapore, Dubai, New York, London, Delhi, Lagos, Mexico City, Rio de Janeiro, Sydney, etc. had an aligned incentive structure and ease of mobility between them. Now this could easily go both ways as a network of cities might not look that dissimilar from a network of states and its potential pitfalls (i.e. EU + Brexit). But even in the E.U., the strength of the whole is greater than the sum of its parts.

Either way, the strength of the local community/city should be prioritized in a network state. A network of revolving door cities and unvested citizens without effective local leadership would most likely not have a lot of leverage to advance their objectives in their host regions.

On the contrary, a vested citizenry creating strong local communities and potent markets organically that are also connected to one other either through tax revenue share agreements, tokenized property ownership, accessible transportation, etc. will compound a lot more leverage for obtaining access to resources, diplomatic recognition, or any other aims deemed important by the constituency.

Political: Integration > Circumvention

Coming full circle from the philosophical premises of a localist network state, the same applies through a political lens. First off, one of the main political premises in this essay is that a certain level of bureaucracy (or at least decisions by the well-informed) is inescapable. This exists on a spectrum of course but often just takes different shapes. Where a network state may want to escape certain bureaucratic aspects of society; they could also just as easily displace it with a digital bureaucracy that you have to navigate through various Snapshot votes, Discord servers, Notion boards, and everything in between to understand what the heck is going on. This might even take more time than going down to a physical bureau to resolve an issue. The same challenges could be encountered establishing a special economic zone for example, where the main benefit is externalizing the bureaucracy from residents but is still subject to the relationship between the zone and the host region. All this to say is that no matter the society we live in, a certain level of bureaucracy will always exist, it becomes a matter of how much we prefer to tolerate.

With that being said, an integrated approach to government relations is preferred to one of circumvention where possible. Sometimes this isn’t possible at all. In circumstances of corruption, incompetence, etc. the only path forward may be in fact to circumvent. But this also pessimistically dismisses the many constructive, high-trust, and competent governments that do exist.

Many localities are  actually paying prospective residents already to move there  or  lowering the barriers to entry  in order to attract burgeoning talent to boost economic activity in a region. This act in itself is an admission by the region to say, “Hey, we’d like to accommodate new residents to improve our region and we want to actively work with you to make it happen.”

While it’s easy to armchair ideate on what a blank slate society could look like from the internet, Noah Smith precisely articulates our political realities today:

…it’s horizontal organizations — nation-states — that still provide almost all of our essential public goods.

Economics views public goods as a core reason — perhaps the core reason — that large human organizations exist in the first place. Things like national defense, courts of law, property rights, product standards, infrastructure, scientific research, and so on require something like a government to administer them. And governments are still organized horizontally; they administer physical territory defined by lines on maps. Moving from the nation-state system to a network-state system would require us to implement private law for members of the various networks — just like the law in medieval France was different for a priest than for a peasant, the law in a world of network states would have to apply differently to two different people who passed each other on the street. And remember that the old French word for “private law” is “privilege”. We are very, very far from having any idea how to live productively and happily in a world like that. — Smith, Noah.  Vertical Communities . Noahpinion Substack.

Unless a prospective network state plans to literally build all of their infrastructure from scratch, one might be able to move faster and more effectively in working directly with willing municipalities. This would allow them to achieve shared aims and leverage the existing infrastructure that works while reforming or creating the new infra where it is needed in a way that benefits the broader region by working together.

I’ll close with a disclaimer and recognize that I probably don’t have even a fraction of a percent of all the answers here. Much of this essay is merely based on observations and a general direction of where I think it would be preferable to go. But as with any endeavor that concerns more than one stakeholder, we can go further when we go together and we should in a world that is evolving faster than we can fathom.