Book SummaryThe Sovereign Individual, by James Dale Davidson and Lord William Rees-Mogg

1-Page Summary1-Page Book Summary of The Sovereign Individual

Writing in the 1990s, venture capitalist James Davidson and banker and journalist William Rees-Mogg predicted that the first quarter of the 21st century would bring sweeping changes to the global economy and the very structure of human civilization. In The Sovereign Individual, they explain both their predictions and the rationale behind them. One of their most significant predictions is that nations will fragment into millions of city-states and even individual estates with sovereign-nation status. The owners of these sovereign estates are the “sovereign individuals” from whom the book draws its title.

(Shortform note: The word “sovereign” in this context means “having governmental authority,” such as the power to make or enforce laws, levy taxes, fight wars, and make treaties with other sovereign states or...

The Sovereign Individual Summary Megapolitics: How The Economics of Force Shape Civilization

Davidson and Rees-Mogg contend that civilizations throughout history have been shaped mostly by their circumstances, including environmental factors like climate and technological developments that create new ways of doing things. Thus, if you can understand how circumstances are changing, you can predict how society will change. This is the basis of their predictions for the rise of sovereign individuals and other changes in the 21st century.

According to Davidson and Rees-Mogg, the circumstances that dictate how people can make the most money impact society the most. This is because most people tend to do whatever they think will enable them to accumulate the most wealth. So if circumstances change, creating a new way of earning money or changing which businesses are most profitable, society will change too, as people adapt their behavior to increase their wealth.

Circumstances that affect the armed forces (such as weapons technology) are also highly significant in shaping society. And factors that affect the armed forces also affect wealth, because armed forces are used either to protect wealth or to obtain it by force. In the authors’ view, taking wealth by force...

The Sovereign Individual Summary Technological Assumptions

Now that we’ve covered the basics of how circumstances and technological developments shape societies, we’ll take a look at the specific technologies Davidson and Rees-Mogg expect will transform society in the 21st century. Writing in the 1990s, they expected all these developments to take place by 2025.

The Virtual Economy

Davidson and Rees-Mogg predicted that commerce and financial assets would increasingly migrate from localized physical economies into the online virtual economy. Furthermore, the online economy would be largely beyond governments’ ability to tax or otherwise regulate, for three reasons.

First, assets and businesses that exist in cyberspace aren’t tied to any particular location. This means that no nation really has jurisdiction over them, because governments (as we know them) exercise authority over areas with well-defined geographical boundaries. If you’re running a business that’s all online, and the government tries to interfere with your business, you can just move to a different jurisdiction where they won’t bother you.

Second, the authors expect that encryption technology will make online transactions completely private—no one except the...

The Sovereign Individual Summary Predicted Changes

Davidson and Rees-Mogg believe that the technological developments we just discussed will have a profound impact on social structures in the 21st century. As circumstances change to favor small, efficient organizations over large ones, both economically and militarily, they expect nation-states and national governments to decline and ultimately disappear. Nations will be replaced by millions of city-states and sovereign individuals. During the transition, they also anticipate a general increase in crime and violence throughout the world. We’ll break down the reasoning behind each of these predictions in turn.

The Decline of Nations

After the end of the medieval era, feudal monarchs disappeared because new technology gave nation-states an economic and military advantage over them. Davidson and Rees-Mogg assert that nation-states will soon disappear in the same way, and for the same reasons, as new technology renders them economically unsustainable and makes their military power irrelevant.

Economic Insolvency

We’ve already discussed how Davidson and Rees-Mogg expect economic activity to migrate from local and national markets that governments can tax and...

Shortform Exercise: Assert Your Sovereignty

As we’ve discussed, the authors make a number of predictions about technological developments and resulting social changes that they expected to take place in the first part of the 21st century. Most of their predictions have not been fully realized yet, but this exercise will give you a chance to think about how you could take advantage of them when and if they do come about.

Imagine that for a trivial fee, you can hire an AI virtual assistant that is capable of performing any task that a teleworking human with advanced degrees in language, law, graphic arts, and every field of science and engineering could perform. Would you hire one? If so, what is the first task or responsibility that you would assign to it? If you wouldn’t hire one, why not?