Network States, A History
From Panarchy to Programmable Social Orders
Sterlin Lujan
sterlin@status.im
Thoughts about creating a network state to secure voluntary governance did not appear out of nowhere. The concept had a substantial but obscure philosophical beginning. Selecting a nation state or governance model without leaving home has been discussed since the 1860s, when Paul-Emile de Puydt introduced the term “panarchy” into common usage. This piece explores the idea’s origin, history, and how it slowly transformed into a tech-centric vision in the early 1990s and the 21st century.
A Beautiful History of a Vital Notion
The idea of a ‘network state’ has a rich, obscure, and captivating history. It resurfaced recently as a product of the blockchain hacker ecosystem, which boasts a subculture of anarchists, futurists, engineers, and visionaries. These mavericks favour freedom of choice and political sovereignty. They helped develop the technical scaffolding around the philosophical idea.
These groups conceived the network state as a viable architecture for a person to ‘non-territorially exit’ a jurisdiction without physically relocating. They were looking for the ability to choose which governments or governance structures have a say in how they live and organise their affairs. The network state is the hypothetical implementation of that sentiment. Many earlier prophets of an open political society concocted the idea over the last century and a half, articulating it before its modern ‘technological’ associations.
This article will define network states (and related terminology), discuss its history starting with the development of panarchy, and examine its emergence through the lens of crypto-anarchism. Finally, we will look toward the future and understand the ‘programmatic state’ as it spreads across our digitally interconnected world.
Isms: Anarchism, crypto-anarchism, network-statism
A network state contains elements aligned with anarchist philosophy — specifically crypto-anarchism. Defining these terms will be helpful before delving into the thicket of network state history. Some people hear the word ‘anarchist’, and they imagine a mohawk-wearing punk rocker sporting black leotards tossing a Molotov cocktail into grandmother’s window!
That image of ‘chaos’ and ‘mayhem’ is inaccurate, and erroneous connotations like these poison the well. 'Anarchist' actually means ‘without rulers.’ It comes from the Greek anarkhia. The prefix An means ‘without,’ and the suffix arkhos means ‘ruler.’ In other words, an anarchist does not want to be compelled to live a certain way or obey someone calling themselves king or master. In ‘A Voice Crying in the Wilderness,’ Edward Abbey succinctly expressed the insight of anarchism:
This fact of few men being wise enough to rule anyone is why crypto-anarchists and hackers devised the network state concept. But before grappling with that idea, we must understand the phrase ‘crypto-anarchism.’
A crypto-anarchist uses computer code and technology to build applications that protect privacy, economic freedom, and political liberty. The crypto-anarchist strives to use technology to liberate humankind and ensure governments do not use similar technologies as instruments of oppression. Crypto-anarchism is, therefore, about undermining overreach from nation states through technological interference or disruption. For more information on the history of crypto-anarchists and their battle against the state, read Stephen Levy’s book, ‘Crypto: How the Code Rebels Beat the Government Saving Privacy in the Digital Age.’
With this clarity, we can now describe the ‘network state’:
A network state is a theoretical community of users — called ‘subscriber citizens’ — connected via the internet, who accumulate enough capital, territory, or political clout to achieve recognition as a state. These subscriber citizens, therefore, ‘subscribe’ to their set of rules and guidelines by choice or contract rather than compulsion.
A network state can be diplomatically recognised if it exists alongside other states. Geographical constraints or political boundaries do not limit their formation. One critical understanding of network states is unlike nation states, they do not have to be coercive or mandatory. They can — and should be — voluntarily selectable. The historical root of the network state was philosophical and political, with no technological ingredient. That early idea is called ‘panarchy.’
But what is panarchy, where did it originate, and how does it eventually turn into the idea of ‘network states’?
De Puydt’s Obscure ‘Panarchy’ Paper
In 1860, Paul-Emile de Puydt wrote the seminal yet obscure paper called ‘Panarchy.’ In it, de Puydt makes the earliest known formalised argument for having competing governments or nations operating in overlapping, competitive jurisdictions. He refers to this overlapping political arrangement as a laissez-faire, laissez-passer. French for ‘let things take their course’ and ‘let people pass,’ respectively. The idea is that people can live in the same territory or jurisdiction and choose from a directory of governments, which he calls the ‘Bureau of Political Membership.’
De Puydt elaborates on the idea in the paper:
To his point, all panarchic governments or ‘states’ will overlap within a coterminous space — and ‘citizens’ within that space can opt into a distinct governance service by paying a fee and accepting its rules. De Puydt envisioned a situation where governments would compete like any company on the market. They would list their ‘citizens’ like a company lists its shareholders. For the time, the idea was completely novel. But given the historical context, it is no wonder someone as prescient as de Puydt imagined the concept’s revolutionary potential.
He imagined it precisely when the so-called ‘ancien régime’ or ‘old order’ fell into disrepute and crumbled. Democratic republics started to displace the rigid monarchies of the ancient world as coups erupted, beginning in the 17th century and coming to fruition in the late 19th century. De Puydt was living at the peak of this revolutionary change in thinking and governance, which laid the foundation for theories revolving around competing nation states and the so-called ‘social economy.’
But what exactly is the ‘social economy’?
Spontaneous organisation and panarchy thesis
In panarchy, the' social economy' means societies can and will develop guidelines and rules spontaneously, or what the Austrian economists called ‘spontaneous order.’ So long as the market operates without impediments, a customer or marketplace subjectively determines its needs and wants.
This ‘subjectivity of value’ allows markets to emerge at scale, and the ensuing market activity would also generate competing governance services. This formulation is what we can call the 'Panarchy Thesis.' It is the argument that governing services are no different than other market services and can be offered within a given territory by various providers. It suggests that with the right conditions in place, governmental monopolies collapse, and people freely select the governance provision of their choice.
However, although this idea has historical significance, the 'panarchy thesis' as a technical implementation would not pick up momentum until a century later.
It was not until the late 20th century that John Zube revived the idea via 'The Gospel of Panarchy,' a short piece he wrote in 1986. Then, in 1999, scholar Aviezer Tucker wrote the essay 'The Best States Beyond the Territorial Fallacy.' He followed this with a book-length treatment in 2015 titled 'Panarchy: Political Theories of Non-Territorial States.' Before these writings other sporadic works existed, but it wasn’t until the 21st century that their significance was fully unleashed. That significance came in the shape of technology, crypto-anarchy, and the idea of making panarchy a reality by applying blockchain solutions to the problem of nation-state monopolies.
This rapid evolution of technology and cryptography is where the path from panarchy to network state takes a near-instantaneous turn. The first known technical consideration of panarchy in the form of the network state emerged as 'Crypto Libertaria.'
Transcending Nations: Crypto Libertaria and Virtual States
Creating a network state to increase freedom and reduce physical coercion has been a crypto-anarchist talking point since at least 1992 when Timothy May discussed a version of these ideas in his article 'Libertaria in Cyberspace.' May said:
In his 1999 book 'Virtual States,' cypherpunk Jerry Everard explored these ideas further through the lens of Foucauldian philosophy, especially in discourse formation. His discourse analysis focused on the interrelationship between objects and statements describing the state. He acknowledged the state exists as a monopoly on violence in relation to its subjects. In other words, the state enjoys a power imbalance between itself and its citizenry.
Everard formulated the idea of disaggregating various elements of the nation state while considering what voluntarily procured 'virtual states' in a market environment would look like. He suggests that virtual states based in cyberspace will take over the 'goods and services economy' (as in the panarchic vision) of the state apparatus. In the final consideration, he did not believe the 'state' would face an extinction-level event, only that its power may be diminished in some areas but strengthened in others.
In the 1999 book, 'The Sovereign Individual: Mastering the Transition to the Information Age,' authors James Dale Davidson and Lord William Rees-Mogg accurately predict the coming of network states, albeit without naming them per se. They suggest we will transcend the idea of nation states altogether, and this change would be ushered in by the 'Information Age.' They reflect on the idea of March Law, a legal precedent in the Middle Ages that allowed for the functioning of multiple overlapping jurisdictions. In their view, March Law returns to a more greatly disintermediated and decentralised world, leading to overlapping digital governance models. The 'transcending nationality' section of the book posits a future where no single nationalities exist. Instead, a heterogeneous mix of peoples and networks intermingle and choose their national identities and governance services.
Fast forward another two decades, and these earlier 'utopic visions' of the network state find a more complete and practical articulation.
Srinivasan: Network State Invented
Technologist, angel investor, and former Coinbase CTO Balaji Srinivasan fully fleshed out the idea of network states. He is mainly responsible for coining the term in his 2022 book, ‘The Network State: How to Start Your Own Country.' The book details how a non-territorial affiliation of like-minded individuals could enact a covenant to share, build, and distribute power as a network state. Srinivasan articulated a complex definition of the idea:
We will not unpack all of these ideas here, but the 'moral innovation' piece of Srinivasan’s crypto-anarchist articulation underlies the goal of a network state. His motivation is to align ideologies more cohesively, disrupt political infighting, and institute a more accessible human future. Throughout the book, he expresses the problems with traditional nation states and emphasises their territorial, coercive nature. In the section on Nation States, he says, '(State) refers to the entity that governs these people, that commands the police and the military, and that holds the monopoly of violence over the geographic area that the nation inhabits.'
Srinivasan argues for a modern variation of Frederick Jackson Turner's Frontier Thesis. He makes the case that frontiers throughout history have been open, uncontested territories allowing exploration, experimentation, and settlement. In his modern take on the thesis, cyberspace represents the crypto-anarchist new frontier for social creativity and growth. It is only through these new frontiers, he claims, can people secure greater sovereignty and build saner, more voluntary governance mechanisms.
The Frontier Thesis is reminiscent of John Perry Barlow's famous 'A Declaration of the Independence of Cyberspace,' where he eschews the domination of nation states by comparing cyberspace to a frontier inhabited by the 'virus' of freedom.
The programmatic social order
Barlow’s 'virus of freedom' will likely spread continuously as the idea of the network state expands. It took over a century for the concept of panarchy to transform into the 'network state.' However, it does not appear clear to the pioneers of the network state that 'panarchy' was its obvious predecessor. Timothy May never mentioned panarchy specifically in his work. Balaji only alluded to panarchy in his book but never explored or examined the shared characteristics of both ideas.
Regardless, the two ideas denote that we are on the verge of using technology — specifically blockchain and cryptography to create panarchy. The crypto-anarchists might yet realise de Puydt’s philosophical vision as the technological implementation of the network state, where people can choose their governments without removing their 'dressing gown' or 'slippers.' He said:
In the final analysis, we arrive at a fully programmable, freely chosen social order — anarchy combined with network states. This governance model responds to market incentives in real time and at scale. Subscriber citizens select their state and the rules they follow. These states can be programmed or reprogrammed with different rules or 'laws' to react to dynamic environments and interact with other overlapping networks. In other words, governance becomes a programmable convenience on the market. Selecting a government would be as easy as choosing a grocery store or pharmacy without leaving town.
This governance philosophy is the most flexible because it allows people with divergent viewpoints to disagree and still get along. As many panarchist theorists rightly observed, selective governance foils the need for bloody revolutions and dangerous revolts. It is simultaneously the most anarchic and non-anarchic solution to the problem of power centralisation and government overreach. It provides options without forcing people into a particular political box or creating a climate of rabid divisiveness.
Logos
Bathang
Anon
Easton
Corey Petty