The capitalist world of Sovereign Individual

Big Government, the Sovereign Individual, and Marxist Revolution: Three Alternate Futures

If modern politics could be defined by one word, that word might be “equality.” The 20th century was the age of public health care, generous welfare benefits, the rise of socialism, and preferential hiring for the disadvantaged. Many see these trends continuing; they predict we’re moving towards a world where resources are shared, every individual has leisure time for creativity, and “competition” is as jarring and archaic a word as “chivalry.”

Some see a different possibility. In the Sovereign Individual, James Dale Davidson and William Rees-Mogg predict a future built around the second great political trend of our time, the one wrapped around the word “freedom.” To understand their vision, we need to examine current economic trends.

Since the rise of the internet, the digital economy has exploded, with startups and tech companies occupying increasingly profitable and dynamic niches. Davidson and Rees-Mogg see this as no provincial trend, but as cause and catalyst for a political shift on the scale of the Industrial Revolution. As the global economy becomes more mobile, digital, and light-weight, governments will lose their ability to tax. The wealthy will flee to tax havens, and young professionals will become mobile entrepreneurs, “Sovereign Individuals” who pay for their own health care and are beholden to no one.

Davidson and Rees-Mogg predict a collapse of the welfare state and a roll back of democracy, as desperate governments restructure themselves to appeal to the new transient wealthy.

But what if they’re only half-right?

This article will explore three possible scenarios (AKA alternate futures) leading from the pathways sketched out in The Sovereign Individual. If you’d like more details on Davidson and Rees-Mogg’s argument, check out their book or our episode on the topic.

Scenario #1: The Rise of the Sovereign Individual 

“One hundred eighteen thousand, four hundred and four dollars, and seventy-six cents. Are you kidding me?”

Martin sighed, adjusted his glasses, and began reciting the script he’d been repeating since morning. He hated it as much as the students did, but… “I understand you’re upset Mr. Wallace. Other students are as well.”

“Then why don’t you—do!—something about it?” Cameron Wallace—second-year Chemistry, 3.0 GPA—slammed his hands, palm-down, on Martin’s desk.

“Mr. Wallace, I’m a Student Financial Counselor.” Which, in that moment, felt like the worst job in the world. “I don’t set tuition fees.”

“I meant the general you—the president, the administration!” The boy gestured to the room, wood paneled and high-ceilinged, the kind of room which symbolizes stability and sober decision-making. A room for a different time.

“The administration’s doing what they can, but you have to understand, with recent government cuts—”

“I can’t pay for this! I’m going to have to drop out, and get a job servicing a robot which flips burgers…”

“Your personal finances—that I can help you with.” And Martin could help—maybe. The school classified Cameron Wallace as “yellow light”—valuable, but expensable. There was hope. “Are your parents able to contribute?”

“That’s a laugh. My dad’s sick, and now we have to pay for the whole thing ourselves…”

“Have you considered a loan?”

“I’d love a loan, but I heard you can’t get them anymore unless you’re rich…”

“Nonsense, Mr. Wallace. You can still get a student loan, it just needs to be secured against property.”

“So my parents house…”

“It may come to that.”

Cameron Wallace grew pale, as the magnitude of his situation dawned on him. Then—”This is fucked! The government, they’re such assholes!”

Martin sighed. Of course the government were assholes, but what was he supposed to say? “I understand you’re frustrated, but we have to be patient. The government’s doing their best, but they’re in a bad spot too…”

The world of the Sovereign Individual

When describing the world of the Sovereign Individual, Davidson and Rees-Mogg take a triumphalist tone. However, the future they describe is a sad one. If their predictions come to pass, we’ll lose the dream of equality, to devastating consequences: children born to the wrong home may grow up to be illiterate; being poor and sick could be a death sentence; and securing a university education may require indentured servitude.

But! Davidson and Rees-Mogg might argue, Isn’t that already the world we live in?

From a global perspective, it is. A person’s prospects are already determined by country of birth: a child born in Texas has vastly different opportunities from a child born in Togo, regardless of race or sex. In Davidson and Rees-Mogg’s new world inequality between nations will disappear; it won’t matter much whether you’re born in Texas or Togo. What will matter is how well your parents hone your skills and intelligence.

In the world of the Sovereign Individual, inequality won’t be eliminated; rather, it’ll be globalized. As a result, intelligent third world people with high-tech skills will experience a renaissance in opportunity.

But it won’t be great for everyone. Lower- and middle-class people of the first world, used to generous welfare benefits, education subsidies, and health care, will suffer. They’ll be called upon to adapt to a world with fewer advantages than the one they’ve known, and if there’s one thing we know about human nature, it’s that people hate it when what they used to have gets taken away…

Scenario #2: Marx’s Revenge

16 gigabits of code. Could 16 gigabits of code really change the world?

Max paced back and forth, listening to Slicer clicking and tapping on the console.

He knew he should be quiet. He knew he should let Slicer work in peace. But…


Slicer looked over his shoulder. Impatient, Max was sure. “Let me finish this process, then we’ll talk.”

Another moment of tapping, then—“Alright. It’s loading. What’s up?”

“I just… are you sure we sandboxed this enough?”

“We sandboxed it 20 times.”

“What if there’s a 21st way we didn’t think of? Or what if things go right here, but wrong out there?”

“Max…” Slicer came over and put a hand on his shoulder. “Listen, you have to trust. I just heard from Comrade X and she’s in position outside the White House. Comrade Barracuda’s crossing the George Washington Bridge as we speak. Tonight’s our night.”

Max shrugged under Slicer’s grip. “Maybe I have a hard time believing one USB will flush the pigs out of Monaco.”

Slicer grinned, eyes glittering. “Trust me. Once they see what we’ve dropped in their systems, they’ll be clawing at the door, begging for citizenship in the United Worker’s State of the Americas…”

Viva la revolution!

There’s a particular bit of Marxist theory which has long embarrassed the devout: Marx’s prediction that as capitalism progressed, the middle class would be gutted and the divide between rich and poor would become stark. Throughout the 20th century, we saw the opposite: in capitalist nations, the middle class flourished, while in communist states it was non-existent.

But could the embarrassment be premature? Could it be that we’re only now, almost two centuries later, reaching the point where capitalism is forcing stark class polarization? The very class polarization which Marx predicted would spur the revolution of the proletariat?

If the world of the Sovereign Individual leads to revolution, it’ll be between social classes Marx could never have imagined. Instead of underpaid workers pitted against the bourgeois factory owners, we’ll see self-employed entrepreneurs pitted against an unemployed lumpenproletariat.

For the revolution to have spoils, it’ll need to be global, and the revolutionaries will need some way to make war against the rich in their remote and likely secret enclaves (as in the example above). It’ll be a difficult fight, but won’t be impossible.

If the revolutionaries prevail, they may set up a socialist system, which may fall prey to the same sad fate as communist states of the past. More likely, the fate of the revolution will be determined by whatever remains of the creaky nation-states. They may ally with the revolution, setting up a social democratic system in its wake. Or they may use the threat of mass revolution to coerce Sovereign Individuals back into the fold, re-cementing their hold on power.

Either way, the nation-state may have some life in it yet.

Scenario #3: Big Brother’s Not Happy

“Insert your finger into slot three.” The voice was female and melodic.

Jeremy felt a prick. He withdrew his finger, now painted with a tiny smear of red.

A light flashed on the machine—big, round and yellow. “Please take a seat in the waiting station to your right.”

Jeremy tried a smile. “Doctor, am I under arrest?”

“You are not under arrest. Please await further instruction.”

Jeremy sighed. Rule #1, never try to joke with an airport robot. He sat on a chair and watched the people go by. A family of four, full luggage, all finger pricking to green lights. A business man with a briefcase, green light.

“Can Albert Manchino please report to Gate 36.”

“Can Jennifer Anderson please report to baggage check.”

He smelled nachos. Was there somewhere he could get nachos? After this was over. Why had he been yellow-lit?

“Mr. Jeremy Turner, please enter interview door number 7.”

Interview room 7 wasn’t exactly the airport lounge. It was empty but for a government computer console in the center of the room. There wasn’t even a chair.

“Mr. Jeremy Turner,” This robotic voice was male, and stern. “You are in tax default to the United States government.”

Jeremy’s stomach twisted. “I file my taxes. Every year, I file them on time.”

“Mr. Jeremy Turner, you owe the United States government one hundred and eighteen dollars and twenty-four cents in unpaid credited tax refunds.”

Jeremy exhaled and felt the tension ease out of his body. “Seriously? You’re busting my balls for a hundred bucks?”

“Mr. Jeremy Turner, if you don’t repay your debt to the United States Government within the next sixty minutes, you will be arrested and brought into federal custody.”

“Jeez, of course I’ll pay.” Jeremy pulled out his credit card and approached the computer. He glanced behind him at the door he came in through—it was locked.

Doubleplus ungood

Davidson and Rees-Mogg assume that governments will fail to keep up with the tax evasion of the new digital wealthy, the Sovereign Individuals. But what if they don’t?

The free market’s not the only sector which has embraced digitization. Governments already collect biometrics from immigrants, visa applicants and criminals, and it may be only a matter of time before they collect fingerprints, iris scans and perhaps even DNA samples from all citizens.

Governments of the world could band together and create a system where every human being is tracked, logged, and held accountable for their taxes. If governments create such a system before their wealth is drained by the flight of Sovereign Individuals, they may forstall Scenario #1, the world of the Sovereign Individual, entirely.

Taken to an extreme, Scenario #3 would mean the end of human freedom. If surveillance and tracking reaches a certain level, no activity could occur without the awareness and tacit consent of government.

If the Paleolithic was the long childhood of our species, antiquity its turbulent adolescence, and modernity its breathless youth, Scenario #3 would represent a grey middle age, complete with a controlling husband who only grudgingly lets humanity leave the house.

Not a scenario I’d look forward to, for one.


I finish The Sovereign Individual and walk over to the window. Cars and voices drift up from below, threads of narrative in a city still fueled by industrial adventures. Did I really want this to end? A part of me thrills at the idea of living through a lofty civilizational transition, but another part recognizes that transitions, like mutations, rarely turned out for the better; would I someday be navigating a Mad Max-type landscape, wistful for the world of city and government and prosperity I knew in my youth?

For now, I can’t know. For now, I can only get into my travel pod and head to work excavating rock craters on Lunar Face #7.

Good, solid, manual labor. While it lasts.

There are several strategies for facing the future. One is to figure out which future is the most likely, and to prepare for it as well as possible. We think we’re heading for the age of the Sovereign Individual, so we become digital nomads.

Another is to eschew probability, map out as many possible futures as you can, and then leverage your actions to be useful in a wide range of them. We learn to use guns, since they’ll come in handy in all manner of civilizational collapse/revolution scenarios.

If we take this strategy to the extreme, it becomes a kind of virtue ethics: we observe which kinds of actions have tended to be useful across different times and contexts, and we adopt these, assuming they’ll continue to be useful. We can often find these behaviours mapped out in myth and fiction, which laud heroism, courage, honesty and integrity; not only because they’re good, but because they’re useful.

The right approach may be a combination of these strategies. We adopt historical virtues, squint into the misty future, and even try our hand at dubious probabilizing.

William and Rees-Mogg have a point. But they also face counterpoints.

To understand what’s going to happen, we need to pay close attention to them. But we also need to pay close attention to many other sources.

We live in a world without oracles: many people hold individual pieces, but no one holds the whole puzzle. And the more perspectives we consume, the more pieces we’ll be able to touch, and the more of the puzzle we’ll be able to see.