“Software is Eating the World”[1]
“Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object, evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.”
Marc Andreessen’s most famous prophecy, that “software is eating the world[3]” is continually proving its remarkable prescience. Not only is software transforming most business models, but it is also disrupting the largest enterprise in human history — the nation state. In each industry disrupted by digital innovation, previously impossible economic efficiencies have been unlocked, making the lives of consumers easier and cheaper. But what happens when digital innovation disrupts modernity’s dominant enterprise, the state?
To understand the implications of nation-state disruption, we must first understand the purpose of its business model.
In a most basic sense, nation states are compulsory territorial monopolies equipped with the power to impose taxation (property extractions) on taxpayers to fund the protection of taxpayer life, liberty and property. Read that definition again, slowly. Upon careful reading, it becomes immediately clear that the nation state is a self-contradictory enterprise: a property “protection service” that funds itself by violating the property of its “customers.”
Anyone that has studied basic economics will quickly realize that nation states, as monopolies, must be overcharging for these protection services, and that the quality of their services must be
