The network state moment

33:05So we need to go as far and as fast as we possibly can to prepare. And so one of the ways that we do that is by freedom cities. You're creating special economic zones in the United States and doing everything possible to prevent Democrats from getting rid of them once they're put in place. In a nutshell, why do they think that the nation state is itself outmoded? Maybe that's a complicated question. It is a complicated question. I mean, I think it's interesting to put this in conversation with like, So in the 1990s, for example, right after the Berlin Wall fell, there was this whole discourse in like academic political circles about the nation state being kind of obsolete.

33:44And the idea was like financial markets go across borders. Pandemics go across borders. Corporations go across borders. And so like the nation state as a container for divvying up the way that power works in the world is no longer actually like an accurate representation of how power exists at all. And then that kind of went away in the Obama years. But basically, it's kind of a return to that idea. It's what I was saying before about like taxation. The real thinking on the part of like a lot of these people like Patri and Bology is like the nation state delivers bad services. It's like, why is it that going to a DMV is such a shitty experience?

34:26Whereas like signing up for Amazon is like so seamless and like pleasant. They literally think about like the services that a nation state provides. So like a police force, identity cards in the form of like a driver's license, certain types of bonds and financial asset protection, in some cases, security. if you look across all of these kind of like services that the nation state provides they believe that it's doing a bad job and part of the reason that it's doing a bad job they argue is that it's like it's old technology it's technology that was designed for the world that was like paper based and we're now in a computer world and there's just like better tech through solving all of these problems and so part of the like thinking around the creation of these like network states is like, think about all the like stack of like what a nation state does or like what any kind of state does.

35:22How can we adapt all of those systems for a modern era with new technology? They want to be the boss or like they want to be the president. Oh, yeah. Oh, yeah. This is something that I think is really underestimated in the way that people talk about MAGA is like, I really see like the ascent of like MAGA in the Donald Trump world as a kind of like class warfare. There's this stat that I keep on kind of like saying over and over, which is like, if crypto were a nation state, it would have a GDP of like$5 trillion or something like that, or $4 trillion. It would be the fifth largest country in the world.

36:04It's mind bogglingly large. It's like would be right behind Germany in terms of like the largest sort of GDP. And similarly, like if you talk into that, just like the entire sort of tech ecosystem that came before it. So like all of the like Web 2.0 startups, the Ubers of the world, Amazons of the world. Starting basically around 2012, we had one of the largest wealth creation events in world history. And every time that kind of happens, it creates a huge political backlash because the new class of wealthy people care about different things than the wealth class that came before it. So what's happening is there's a class competition between the kind of like New England finance, academic, you know, Yarvin calls the cathedral class.

36:52It was only good theory, in my opinion. The cathedrals is like main good theory. It's the main good theory, for sure. Yeah, everything else I could, you could leave. But yeah, in historical terms, when you have the creation of a new wealth class, you have political shift. And so MAGA and I think the network state movement is an expression of that ascendant type of power and wealth. If you like what you're hearing on this episode, there's a place where you can join the conversation. It's called Cujoplex, and it's a private online hangout zone on Discord where smart, cool weirdos just like you, you know, people who like talking about the evolving state of independent culture, can congregate, share links, and talk about the news of the day.

37:37We've had some great conversations lately about creative economies, media theory, AI, politics, the future of journalism, and even the records and TV shows we've been obsessing over this year. Some of our chats have even inspired episode ideas. You can get access to Cujoplex along with our monthly bonus episodes by signing up for a paid subscription over at our Substack. That's theculturejournalist.substack.com. Yeah, I mean, this ties really well into the next question, which is like, in addition to all the reasons that you've just explained, like kind of taking a step back. This was like one of the big questions in my mind when I was reading all your work to prep for this.

38:17Why would somebody want to start or join a network state? Like how much of this is ideology and how much of it is like tax evasion? My idea of this has changed over time. And when the network state discourse sort of started, it was like all ideology, I would say. If you look at like Praxis, you look at Zuzalu, you look at the book, The Network State, you look at the Seasteaders, you look at the Charter City people. They're all ideologues, every single one of them. They care about the ideas. They care about like it's dime square edgelordism. it's rejecting the nation state it was very ideologically driven as it's evolved over time it's become far more banal and thus far more powerful maybe like far more dangerous in the sense that like so when i was in singapore just recently for the network state conference like one of the things i was so shocked about was so it's a conference there was like three or four thousand people who came to the network state conference i'd say there's probably about 800 to a thousand who were like the people who were there for the ideas and everyone else was just like a crypto person.

39:26And what I mean by crypto person is like they work as a sales guy for some crypto exchange that you've never heard of. And they were there to network and they're completely apolitical and they might be crypto rich, but they're just part of like the like barstool class of like internet users. And what I was shocked about was like none of them had heard Curtis Yarvin, for example. I was like talking to people. I was like, why are you here? Like, they're just like, oh yeah, the network state. It's like the new globalization. It's cool. Like it's an opportunity. They're just like digital nomads who are bouncing around doing their startup.

40:01And they're like, oh, a place where I can go spend my crypto money. Cool. Like it's really as simple as that. And to me, it kind of like signals a shift where it's like at the top of the funnel, you have these people who are like ideologues who are focused on like the destruction of the nation state who are maybe like into nrx or like yarvin sort of like radical politics and now we're kind of at the next stage of it where it's just people who are like yeah it would be nice to have a tax break yeah it would be cool to go hang out with other people who have crypto money yeah it would be cool to like go spend my crypto money somewhere because there's so few places in the world where I can do that.

40:40Yeah, it would be cool if there was like a better place to like be a digital nomad where I can like park up for a couple months and like hang out with other people. I mean, of course, the radical stuff is still there. And the people who are the organizers and are the most involved are still ideologues. But the like the average attendee of one of these conferences is just some guy who like works in tech. Yeah, you hear a lot about the leaders, but less about who are the folks on the ground that are being drawn to it. Yeah. So speaking of on the ground, there's not like a ton of IRL examples, but you did, as you've mentioned, go to Prospera, which from what I can glean seems to be the most established IRL network state.

41:21Tell us more about like what you found when you went there. Like what's the deal with it? How is that project actually going? Yeah, so I was just in Prospera in the end of November for a second time. So I have new insights to share. But basically, so the thing is with Prospera, so it started in 2016. In 2013, you have this change to the Constitution that allows for these special economic zones called Zedes. In Honduras, I know we've mentioned that before. In Honduras, yes. It's in Honduras, yes. So you have this change to the constitution. A couple of years later, these American startup founders plus like Venezuelan guys and a Honduran basically buy a plot of land on Roatan and announce that they're going to create this new city.

42:11and you know the first couple years are just like they do a contract with Zaha Hadid to like design a couple buildings they get started but mostly they just took over this resort basically they bought a resort and they were like this is our city now or at the basis of it and what happened is like they're sort of in incubation mode until around 2021 or 2022 when the network state stuff starts really happening. And so Prospera sees that happening and goes like, hey, that's like us. We actually have land. We can be part of this. And so that's when Balaji hosts this conference called Vitalia in Prospera.

42:50But what happened is around that time, there was a change of the political climate in Honduras and a left-wing party came to power arguing that the ZAs were kind of like countries within a country and did everything they possibly could to prevent it from growing. So Prospera sued the government for$10 billion or like two thirds of Honduras' GDP. And then they entered in a stalemate. And basically what just happened in November is there was an election that was kind of like going to decide the fate of the zone because they've been in a kind of like basically in a holding pattern where they had raised something like $150 million a couple of years ago, but they didn't want to spend it because they didn't know if they were going to need it for like legal fees or to like build stuff.

43:37So they've been kind of stuck. And what happened is the right-wing party won the election with the support of Donald Trump, who kind of started tweeting in support of the right-wing guy. And they are now kind of like in the clear. And I was there during the election. There was like an election watch party and they now are planning to like go really, really hard. So my assumption is they're going to go raise a ton of money. But the main thing that they're planning on doing is there's this plot on the mainland where they had planned to build like a 50 ,000 person city focused on manufacturing called Sotuya.

44:17And they are basically full steam ahead on that. And then they're also trying to position Prospera kind of in the shadow of like Trump more generally as a kind of like model for global development generally. because like you've had this collapse of like the USAID ecosystem. And so Prospera is like, hey, like we have like a, you know, plug and play model for city development and like investment production where basically we can go to Guatemala, we can go to Africa, we can go to wherever and we can just sort of like collaborate with different governments and attract United States investment to basically put forward, you know, US geopolitical strategic interest.

45:00and will be the sort of like muscle and know-how behind it. And so my prediction is like in the next like year or two, we'll see a lot of news coming out of it because they have to go ahead for like at least the next four years. And when you physically go there now, isn't it more just like a resort and a couple of buildings or something? Yeah, there's basically two sort of like sides of the zone. There's a resort, which is like a beach house where their offices are. there's kind of like a bunch of villas that are owned by like rich people who don't really have much to do with Prospera, but they're just sort of like they owned the villa before and now they own a villa inside Prospera because like the ownership changed.

45:43And then there's another side of the zone, which is kind of like where their headquarters are. And there's like an apartment building, but they're about to do a bunch of construction. While I was there, they are planning on doing like two new apartment towers. They're starting to build like cabins, like for remote workers to like come. They're going to build like a road that connects the two zones. But yeah, it's pretty minimal at this point. And then you also, you published a piece in Playboy. Was it Playboy? Or was it the reboot? Yeah, it was Playboy, right? About El Salvador, Yeah. About Bukele's El Salvador and sort of set amid this like weird, erbit, digital nomad hype house.

46:28Tell us a little bit about what that was like, but also I'm curious like how what you saw there might feel like a preview of things to come. Yeah. So basically that started because I knew some people in New York that there was like these rumors kind of swirling around that like some of these people connected to like Sovereign House, which is this like right wing sort of like clubhouse in the Lower East Side and like Dime Square had this connection to El Salvador and that it was like they were talking about themselves as a network state. So I was like, okay, this is really weird and I need to learn what this is about.

47:02So I went there and basically, so like El Salvador, the history of El Salvador is kind of this like very dark history where there was a civil war that started in the 70s and 80s where like hundreds of thousands of people were killed. Millions of refugees left El Salvador and mostly came to the United States around like Los Angeles. And then basically in the 90s, America started changing its policy to be like, we don't really want these refugees here anymore. So they started sending them back to El Salvador and they went back to El Salvador and basically started gangs that took over the country.

47:38For example, like when they started, there was like, you know, 10 or 15 ,000 gang members. By like 2016, there was like 80 ,000 or 100 ,000 gang members and that were basically just like extorting everybody in El Salvador. And so Bukele came to power. And the first thing he did, he's like positioned himself as this like strongman leader. And it basically eventually arrested like all of the gang members. He arrested like 80 ,000 people, mostly by just like using their like tattoos as like identifiers that they were in gangs. I mean, it was pretty egregious. He arrested 80 ,000 people with no trial.

48:15And what ended up happening is he was immensely popular. And El Salvadorians like became obsessed with Bukele. He has like a 90 % approval rating. And as part of this kind of like bravado and framing himself as like a hero of the people, he was into Bitcoin. And so as a way of basically shirking the kind of like IMF based like global development system and the types of investments that were like possible at that time, he was like, I'm going to start attracting crypto people to El Salvador. So there's this metaphor in the piece. I speak to this woman who was like used to work for like an investment body and she describes him as being this kind of it's like a nightclub strategy.

48:57Like he's running the country like a nightclub. And her argument is like when you run a nightclub, you basically make a lot of noise. You invite the pretty girls. And like what you're trying to do is attract like a couple whales. it's not about the random guy who comes in and buys a drink it's about the like billionaire who shows up who decides like this is really cool and so what bukele has done is because there's this new wealth class that's been created what he's trying to do is like basically positioning himself as a network state like i'm open to business i'm open to like changing the regulations so that you like CEO of crypto exchange can do whatever you want here.

49:38I'll bend my entire country around your needs because my bet is that like whatever income and revenue that I generate on tax basis or whatever in terms of jobs is going to be better than whatever I would do if I was just like, you know, trying to attract like a manufacturing company who wants to make a factory to make t-shirts or something like that. So the piece is kind of about whether or not that worked. And the house that I stayed at was basically people who were crypto people who were sort of like attracted to that song and dance and who, you know, similar story, you know, COVID hits. They believe the apocalypse is coming.

50:16The end of the world is coming. This total civilization collapse is coming. And they're like, where is a place that we can escape to? Let's go to El Salvador. We can spend our crypto there. And so they show up in El Salvador and they kind of like rub shoulders with all of the like highest echelons of the government and they start writing legislation. And there's this little niche like crew of crypto people who are like really involved in this really the highest reaches of government in El Salvador. But they're just like dudes who have like guys and gals who have like a lot of crypto and hang out on Discord.

50:48Like they're not like people who are qualified in any way. Right. I mean, what is qualified? Like that was, I have this line in the piece where it's like, you know, it used to be the grooming protocols of like Harvard and, you know, Oxford. And now it's just like Twitter university. It's just like people who, you know, they show up there and they're part of the network and to their credit, like a lot of them are very smart and very competent in various ways. But you know, what I was shocked by, and I think something that proved the like argument of the piece was like, I show up there for a week and within like a couple days, I'm like riding in the president's brother's like personal convoy right like i go to this conference it's in the national palace and the final scene of the piece is me basically riding in the president's brother's like personal convoy and then like standing with him in this mansion talking about the coming of the apocalypse and how like el salvador can be like an ark to protect the world from the coming apocalypse and so to bring it back to like your point about like how does this connect to like where things are heading you know i was just asked recently like what's going to happen is it just going to be a bunch of crypto people like buying up plots of land and my thought is like it's actually going to be a lot more banal and simple than that it's basically going to be politicians being like please take my plots of land something that is really hard for americans to like i think consider and like appreciate is how hard it is as a politician in a developing country to attract investments.

52:20And so if you as a politician can actually like guarantee that like some huge whale is going to show up in your country and all you have to do is like offer him some land and, you know, use the word Bitcoin a couple of times, then like people are going to start doing that willingly. And like the Bukele model or the Bukele strategy is going to become more of a model for politicians to use rather than it being like this forceful sort of colonial force. It actually is going to be like willful imperialism. This is or doesn't really sound that different from like Elon's original like Doge crew of these like 20 year old or 22 year old kids who are like computer whizzes who are now like making huge decisions.

53:04Like remember that energy like Luke that guy Luke Farreter. It's literally the same thing. Like what I've realized it's like it's not just it's like that. It's the same people. Like literally the same. Like it's literally the same people. Like that's like, it's exactly like that. And it's not a metaphor. There is a true, like an inner group of like technologists and developers and people who are like, have read Yarvin, who are kind of like word cell technologists. And they're basically being used as like functionaries in this kind of like new MAGA imperialistic system. Fascinating. I want to ask this question.

53:39Um, do you think that the network state movement as a whole, along with Trump's increasingly, you know, apparent imperialist ambitions, like especially that we're seeing in Central America right now, do you think they're part of the same story? Like, given everything you just said, is this essentially like what the future of imperialism looks like? Yes or no. I mean, I think it's really hard to understand what's going on in like Venezuela and Greenland, for example. Like I actually, I got into a whole debate just last week with somebody who is like Greenland can only be explained in terms of like network state impetus.

54:18And there was like a story, for example, that was published in Forbes a couple of days ago that basically there was like looking at some of the investments that like a bunch of tech billionaires had made in Greenland. And the thread to the network state was basically that like Praxis at one time was like, oh, yeah, we can make a network state in Greenland. And my reaction to this was like, this doesn't make any sense. First of all, because I don't take anything that Praxis does very seriously because they have announced cities in like Montenegro, somewhere in the Mediterranean, California and Santa Barbara in Greenland.

54:58And and like also Praxis has been kind of like kicked out of the network state movement. So like Balaji has basically like pulled funding from Praxis. He thinks they're like not serious. Because they're not serious. Exactly. So like I think the basis on which that argument is being built is like very, very flimsy. But the thing is like something I'm having a hard time understanding about Greenland is like basically Greenland is kind of been like, hey, America, like, yeah, you can do whatever you want here. They're like, oh, you want our minerals? Like, take our minerals. You want to build some data centers here?

55:33We're happy to have your data centers. You want to build up an Arctic force in the North that basically maintains, like, American waterways as, like, the Arctic starts unfreezing? Like, sure, we're down for whatever. The only thing that we don't want you to do is, like, take away our sovereignty. And yet, like, Trump is kind of, like, pursuing that anyway. Again, which is something like I don't really understand to me because of all of those things, because basically America can have direct imperial control over Greenland from like a client state perspective already without any change to the like nominal sovereignty.

56:12it's hard to understand like the gestures that are going on there besides like interpreting them as like the kind of like ravings of a madman or like the fact that like trump sees himself as this kind of like napoleon style figure who like wants to leave the empire with more territory than when he found it to me in this kind of weird way that is the best interpretation of what's going on because like on an actual like tactical strategic basis it's hard to make a case for the sovereignty of Greenland being worth very much. And again, like from a network state perspective, the way that I've come to view network states in general is as a kind of like business model or like a mechanism of imperialism.

56:55So like one of the ways that like you used to be able to do imperialism is like you force countries to close their markets to certain competitors, you force them to sell their resources to you at certain rates, you topple their regimes if they don't comply. Like this is the playbook that America has employed in Central America for the last 70 years. And so the network state, like what the network state is, is a kind of like, it's a mechanism that sits within the larger imperialistic playbook of like, hey, we think that this plot of land on the island of Honduras would be far more valuable to American geopolitical interests if we didn't have to rely on the Honduran government dictating what goes on there.

57:41And we could like, you know, allow American corporations to do stuff that they're not allowed to do stateside. And we basically created like a sort of green checkmark for American investors to park their money there. To me, that is, those are the circumstances under which building a network state makes sense. Yeah. As a business model, but like the idea that like Venezuela is going to turn into a network state, I think is just like absurd. It doesn't make any sense because why would it be a network state? It would just be a state. It would just be like a colony. So to answer your question, like I think yes and no, like I'm not exactly certain.

58:17I don't know how the recent like conquest actions fit into the sort of larger model of the network state besides saying like, clearly America is like reimagining the boundaries of its imperial network and network states are one of the mechanisms through which it's doing that. Maybe it's like in an example like El Salvador, it is an economic tool for bringing about a certain imperialism that is in this case welcomed by the leader of the country itself versus in the case of Venezuela, we see imperialism achieved through, you know, military might and political. Does that make sense? Like, it's an economic mechanism for, as opposed to a, you know, conquering a country by force that way.

59:10Yeah. And it's one mechanism of many, right? Like, as I said before, like some of the other mechanisms are like, tariffs are a mechanism forcing countries to close their markets to certain types of, to China, for example, which is something that is going on in Honduras, where America is trying to prevent China from infiltrating. And that was at stake in the most recent election. There's a number of mechanisms that you can use to exert imperial power on a country, and network states are just basically one of them. For sure. So the irony of a lot of what we've been talking about and this idea that we started with of exit in general is that now that Trump is in office, the exit people have this ally in the federal government.

59:58Have the network states movement's goals shifted under Trump? And could you tell us a little bit about Freedom Cities and how they sort of fit into this larger vision of the future that Trump seems to be working towards domestically? Yeah. So the goals have changed and the way that they've changed, I'd say like it's sort of bringing together a couple of things we've already spoken about, but one of them is like this kind of like group of people that I was talking about, the people who are going to El Salvador that are the same people as like the Doge folks or like very closely aligned to them.

1:00:34So one is like those people kind of like working on behalf of U.S. imperialism. And then the other is basically using the cover provided by Trump as a kind of once and a lifetime opportunity to exact their will. And there is a direct, I think, intrinsic tension between the goals of the network state people and the goals of like the American government. And I think like right now you have a scenario where like the benefits to Trump of supporting those people outweigh the costs. Those are for some future president to deal with. But the benefits of getting those people on his side are just so high that carving up territory in the Southwest, it somehow fits within the larger project of kind of like MAGA nationalism.

1:01:27And how it's changed, like the broader vision, I think, of how the network state's ambitions have changed under Trump is basically the network state. So have you heard of the Hanseatic League before? I don't think so. No, I don't think so. Okay, so from the 12th to the 15th century, there was this like league of German merchants who basically like organized a bunch of towns around the Baltic Sea and worked as this kind of like unified trade bloc that sort of functioned almost like a government. But it was not a government. It was not a nation. But like they did, for example, like fight wars with like the king of Denmark.

1:02:08And they, you know, they were all these kind of like chartered towns and the basis of their wealth was basically owning the fishing rights in the Baltic Sea. And you're seeing something, some of the, one of the ways that the network state movement is like now talking about itself is as a kind of like neo-Hanseotic league. And so actually like the blogger, like Noah Smith was at the network state conference in Singapore, kind of like making this argument. And his idea was basically like, okay, so you've got Prospera, the crypto exchange Solana is like interested in pursuing a project in Kazakhstan.

1:02:46You've got what will become Freedom Cities if that ends up happening in the United States. It's you've got projects like Liberland, which is like this weird territory on the border of like in Croatia. You've got all of these kind of like weird projects that are starting to like act as a unified trade block. And that's merging with like, so in San Francisco, for example, Ethereum bought up this tower called Frontier Tower. And they're like thinking about it as like a sovereign building nation state. And so you're going to start to see all of these kind of like projects working together. And what Trump is doing is basically like providing cover for these people to do that and using like, so if Freedom Cities happen, like the money for them, one of one of the proposed ways that the money would come for those projects from the CHIPS Act.

1:03:38So in the CHIPS Act, basically, like something like$2 billion was slated or some large amount of money was slated for the for building out certain industries. So like data centers, biotech, electric cars, all of these different kind of like industries that America, the American government has slated as important to American industrial purposes. They're hoping to use Trump as a vessel to procure those funds for the creation of these new cities. And yeah, so it's kind of like how it's changed is you're starting to see, I mean, Trump is just kind of doing their bidding for them. And the argument is that it's kind of for American industrial development.

1:04:20but there is most certainly going to be a point in the future at which the two parts of MAGA either become at odds with each other, like the sort of Steve Bannon versus Musk sort of divisions of MAGA start butting heads because like if the scenario actually occurs where you're able to create some special zone in the Southwest that's like works as a special economic zone and Elon Musk puts a bunch of money into it and then it starts acting like a neo sort of like network state exit charter city, you will start to see you will see problems. Yeah. Yeah.

1:05:09What is it that network states in EVOS and in execution, what do they leave out? What don't they account for or who or who yeah you touched on this a little bit in your piece for the guardian when you were addressing apology's book and what do you think are the obstacles and challenges maybe both literal and ideological that network states face we should know like i don't i don't know why i haven't noted it thus far but like there are people who have compared this model to like fascist you know a form of fascism it's important to shout that out yeah because we've been likening it, you know, or talking about it maybe as just like this kind of form of like neo neo imperialism.

1:05:47It seems thus far that it is also like following that playbook in terms of the inequities and stratifications that it conveniently overlooks towards continuing its own ascent. Yeah, I mean, the obvious answer is that it leaves out normal people. Like I'm constantly shocked being in these spaces at how little attention is is placed on like how normal people would live their lives inside these worlds like how would you raise children like who is going to create the schools i think that a lot of the people that show up at these conferences have a completely deluded sense of the financial state of the rest of the world like these are people who like if they're like on the lower end side have like been you know collecting salaries as like a developer for right out of college at like you know 150 250 350k and then that's without them being like crypto rich from like if they bought in at the right time like a lot of these people like are post money or live in a completely distorted orientation to money that makes them kind of like completely blind to the types of problems that they would need to resolve if they were to actually make a space like this livable.

1:07:09Like I can think of at least like two examples of this. So there's the scene in the Austin story where this guy is like pitching this proposed town that he wants to build called Ostantinople. He wants it to be this like Bitcoin town outside of Austin. And he is like giving example of like infrastructure that lasts. and one of the examples he used is like Hadrian's Wall that like separated like England from the barbarians and I'm like do you not realize the implications of like separating your little insular tech world from the barbarians that live outside the gates and he was like he's like no we every you know every city has to decide who's in and who's out and I was like I don't know it's like it's kind of mind-blowing it's like it's really like all material to them like in the most literal sense there's no consideration for like what actually has to happen or like why we have society or city or infrastructure.

1:08:03Yeah. And I do think on some level that has to do with like the stage that like the industry itself is at. Like you're at the stage where it is so like high in the sky and it is so like capitalist. I mean, you see certain groups. So like, for example, like there's Edge City is like an example of like a kind of pop-up city business that's like really focused on building community and sort of like I actually see quite similar to like Friends with Benefits. in that it's kind of like focused on like groups first. The people that they attract to their events are more like thoughtful and are more mindful of like the realities of like living in a space.

1:08:41For example, like they're trying this city, basically they're trying to build like a tech Chautauqua in California. I think it's called Edge Esmeralda. And so they are thinking about like actually how people would live and how do you like provide child services or like solve the problem of like grocery stores. But it's definitely unevenly distributed. And like many of the more like Bitcoin and crypto oriented people within that world are completely oblivious to the implications of those things. The other of the biggest challenges that I see is basically it's like an extension of like in shitification, but on like a municipal level.

1:09:20The concept of in shitification is like platforms when they start, they're really good at providing services and they like make the lives of their customers really good, but then they get to a certain size that like they absorb the market, they become monopolistic and then they start becoming really bad at delivering those services and they intentionally make things much worse. And so the web 2.0 platforms that sort of like became monopolistic are kind of exhibiting those behaviors where like they've like become really bad. And instead of like prioritizing making their business better or the services that they provide better.

1:09:56They are just like preventing competitors from emerging. And so you can imagine a scenario on a municipal level where like that phenomenon of incentivification, like it's a problem of capitalism, you know? And so if you can imagine if like you've built a city that is a capitalist corporation, that problem becomes so much worse because suddenly you've built the city where like everything is owned by its city. It gets to a certain scale and size. And it does that maybe at the beginning by like providing really good services, by being a good place to live. But then like, how do you deal with like political dissent?

1:10:32How do you deal with like cultural decline? How do you deal with like any of these problems that emerge in complex societies? And you can imagine that the scenario in a corporate environment, like it would be very bad. And I don't think that any of the people in that space are thinking about that type of problem. I think the other issue is that within this sort of extreme libertarian mindset itself, there's always this plausible deniability of like, well, if you're slipping through the cracks of the system, then you're just not working hard enough or you're not good enough at business or something.

1:11:07And I could see that that could also be an issue where they're like, well, we don't need to take care of people because those people should be picking themselves up by their bootstraps, even though the entire system is predicated upon a capitalist class kind of extracting from the people who live there anyway. Yeah, there's this hilarious story of like a libertarian experiment that happened in New Hampshire. I forgot the name of the city itself. It's like the Bear City is how it's known. Basically, what happened is like there was this kind of libertarian city that came up in New Hampshire and they couldn't agree upon a system for garbage disposal.

1:11:45And there was this lady there who like started baking cupcakes to feed to the bears. And so like all of these bears started like coming into the town and this lady would wake up every morning and start feeding cupcakes to the bears. And because they were libertarian, they couldn't force her to like stop doing that. And so the town got completely overrun with bears and ended up killing two people in the town. And then the town completely collapsed. I actually know this story because when I was in Prospera the first time, I was watching this presentation that this guy was giving about like libertarian projects.

1:12:22And one of the successful projects that he listed was this bear town. And I like looked it up afterwards and I was like, oh my God. I'm just like even thinking back to when I was at FWB, like there are a lot of people who are actually quite left wing who are involved, but like they didn't give us health insurance. And the mentality there was very much like we don't need to give you health insurance. Like we're paying you a decent wage, but also if you can't afford your own health insurance, then you should just be like making enough money to pay for your own private health insurance. That's kind of what I'm trying to get at.

1:12:52Like, I guess some of these projects do envision some form of state services, but there's always just this, like, I don't know, the sense of if you found a society that is like oriented around the idea of like excellence in business and entrepreneurship, I can just see it tending towards incentivification at all times. For sure. And I think like, again, a lot of the people that are involved are people whose orientation to like what a reasonable salary or like what people make and live on is completely distorted, is like completely out of proportion with the realities of like the world and is the product of having worked in a specific industry at a specific time that is completely inflated.

1:13:36I'm talking about the tech industry, obviously, like that is completely out of proportion with like literally every other industry in the world. Another thing is like there are often like gestures towards democracy in these kinds of groups. I know like within the Dow world, it was like, you know, you voted on proposals. And I'm sure that in some of these projects, maybe some of it is like the executive makes all the decisions. But some of it is like, no, like if you have a passport, you could vote on the laws of the society or whatever. But also something that I definitely learned was like it's often like your power in the group or your ability to vote or the number of votes you have might also be like you kind of like purchase your influence in the government.

1:14:18So like at FWB, there were some people who had like just the number of tokens that would enable them to be a member of the community and vote. And then there'd be people who had like 15 times that number of tokens because they were like whales and then they could sway the entire like all the decision making. Has that come up at all in your reporting? that kind of thing? I don't think the projects are evolved enough, honestly, for that to be a problem yet, but it will 100, like if it does get to that point, like these are systems designed for oligarchy and in oligarchy in the kind of like narrow sense, but also like, I think among the leaders of these groups, you really see a strong preference for like authoritarianism, like a strong preference for the model of the CEO politician.

1:15:06Lee Kuan Yew, the president of Singapore, is kind of pointed to as the go-to model. And this was somebody who ruled for 25 years in a basically like a single party system and had pretty close to near total control over the way that Singapore functioned. And so, yeah, I imagine in the best case scenario, the oligarchical, but actually it will likely sway far more towards authoritarianism. How much of this, like we've gone really deep here, you've gone way deeper than just this conversation. How much of this is like kind of this fringe, cultic, subcultural curiosity, and how much of it is like what feels like the next phase of geopolitical evolution?

1:15:48For example, there's one argument to be made that you alluded to in your piece on freedom cities that is like America is just trying to become like Shenzhen. This is not actually like this weird utopian thing. This is just like Westerners adopting models that they've seen work in places like China. Right. So I'm wondering how much daylight there is between just these ideas and what China is doing, or even how much daylight is there between these ideas and Ezra Klein vibes where it's like, we can solve the country's problems by slashing regulations and fostering private sector growth. My hunch is that maybe this isn't that fringe anymore.

1:16:33Yeah, I mean, I am writing about it because I think it's important. And I don't think it's just important in terms of here's a bunch of zany, rich people who are doing this weird stuff who are using inflated language. I think it once was that. And I think that is sort of what pulled me into it. But we're getting to a point where, yeah, you're seeing like the Ezra Klein stuff is really interesting because I think you're going to see interest among the donor class on the left towards creating. they'll use words like sandboxes and cutting regulations and like words that are palatable to people. But what we're talking about is like, we're talking about special zones.

1:17:14We're talking about like, okay, the system of American governance and regulation has become so bloated. And so you need to find ways of stepping outside of it in controlled ways. So that China model of like Shenzhen, I think will be repeated and will become a part of like American industrial strategy. And then the sort of like larger piece of the network state, like this Hanseatic League sort of example. One of the arguments that I'm interested in is if you think about like the sort of rise of the nation state itself as a model, which is kind of like ushered in through Napoleon. A lot of what happened at that time and one of Napoleon's sort of innovations was basically looking at the fact that like you had this whole merchant class that emerged through sort of like early colonial escapades.

1:18:05So like first there was the Dutch East India Company, there was the British East India Company. There were all of these kind of like corporations who had pseudo sovereign powers who acted on behalf of the nation states and created very, very quickly a huge amount of wealth. There was this like massive wealth creation event that happened in those years. And the things that the merchants wanted were different from what the aristocrats wanted. The aristocrats were landowning. The source of their money was in territory, whereas the merchants, the source of their money, it was liquid. It was in colonies.

1:18:37It was in trade networks. It was in banking. And the idea is like, we're kind of moving into a moment that's kind of similar to that, where like the American aristocratic class, the Harvard school, the New England sort of like banking class, the Wall Street class, and the sort of systems of power around media that organized it are taking on a ton of pressure from people who want power, right? This is what I mean by like a sort of insurgency, MAGA as an insurgency. It's an attempt to take control of the system and organized. It's like why Trump is focused so much on crypto. It's why he's doing things like talking about freedom cities.

1:19:18It's why Musk has given these special powers. It's why you're using sort of like this doge class to intervene and reshuffle the way the government is organized. It's why USAID is being collapsed and shifting more towards like foreign direct investment. It's the mechanism behind the tariffs strategy. The tariff strategy was like, we need to renegotiate the size of American empire and the function of American empire. And the way that we can do that is set up a tariffs on every single one of our partner countries so that we have to renegotiate those relationships one after the other. So that whole mechanism, it's part of the same broader system of like the tech class kind of like getting their shot at the larger sort of like project of American governance.

1:20:08And it's the result of a huge wealth creation event. That's basically like if you think about the dotcom bubble up until crypto, like you think about all of that money, like it's one of the largest wealth creation events in world history. And so it's not that shocking that you would see a kind of political shift that emerge from that. And I see the network state and the sort of like broader values and vision of like America's role in the world that emerges from that as being connected to that larger process of class warfare between this new ascendant tech class. And then because of that, if you think about like that larger process, I think it's one of the most important things happening in our world right now.

1:20:51And the network state basically becomes, it's like the mechanism through which that larger process and that larger phenomenon is becoming material. And part of it is like some kind of ideological scaffolding to support it. Yeah, it's the dark enlightenment. it's um the way that i think about the dark enlightenment is like a philosophy professor once told me that like a philosophical system starts with like an epistemology and metaphysics it works its way to like history and ethics and then a politics sort of stems from that and if you think about the sort of like larger world of like the dark enlightenment you have kind of nick land as like the epistemology and metaphysics and like all of his kind of references then you have the sovereign individual and certain other books and like exit like alfred hirschman is the kind of like history political theory and then yarvan and balaji become the politics and then there's the mechanism and it sits within this kind of like larger um frame and and so i think like we are experiencing the world is being reshaped by people who have who are actually operating with a far more cohesive ideology than is um than is thought and like to people who are unfamiliar with it it looks psychotic and it looks um it looks like tyranny and it looks like fascism yeah that too right it looks fringe it looks like um it looks i feel like people haven't taken it seriously and like the world is undergoing like an epistemic crisis and these guys have like ideology like dialed in for better or worse and i know you said that you really admired the journalist james poge who we had on a few years ago when he wrote his article about the new right and how yarvin's ideas were beginning to like infiltrate the political world and even um some someone like jd vance and like everything he was predicted came true but like most people haven't been paying attention to this stuff and i just don't understand why and i'm really appreciative that you've been looking into um sort of how these ideas have evolved and other ideas that have been simmering in the background while we're all just paying attention to like you know whatever stupid thing trump is is saying yeah yeah james is the goat i love his work um he yeah he has a really wonderful way of um towing the line between i think what he does what he does that a lot of other journalists don't do is take people seriously um and it's something that i've really wanted to emulate because um you because like it's kind of like one of it's like that thing of like showing up in the office and seeing some 25-year-old Korean kid with a bowl cut who's worth$500 million and being like, huh, that's something.

1:23:56Something's going on here. That's weird. That's really weird. That's all about, man. Yeah. And so it's just kind of like, all right, there's something serious here. Like, I need, okay, like, crypto's cringe. It's whatever. All of the things that people have to say about it. It's like, okay, yes, but. how do we how do we yes or yes and how do we dig deeper into that and try to connect it to like um try to find the the inner lining that like explains all of the sort of manifestations the signals that are that are popping on yeah it's like this like it's like almost like intellectual like nimbyism that i think has been like tripping up like so much of like the mainstream media and journalists as all this stuff has emerged it's like you're not taking it seriously isn't gonna stop it from accruing power you know are you being like i'm going to not pay attention to ai and just be like i'm so into being organic and analog and then like not following what's actually going on and yeah i mean there's there's another gesture that i find particularly annoying and that is the gesture of um thinking that the tech people are incompetent um or call it like making them into the wool cows.

1:25:07And it's like, okay, like you can do that, but like, these are some of the most confident people in the world. They're some of the most financed and deeply connected people in the world. So like, you can point to them and be like, oh, Bezos is an idiot, but like, all right, like he doesn't care. And I think that, um, that all that does is basically like, it's a kind of like wishful optimism that like the impact won't be so high and it just is not a serious engagement with the substance of the issues. Exactly. Sam, thank you so much for coming on. How can people follow your work? Keep tabs on what you have coming up.

1:25:48I share most of the stories that I published on my sub stack and occasionally publish my own essays there, which is called Technical Personae. You can follow me on Twitter. I'm working on a book about the subject. The tentative title of the book is Pirate Kingdoms, and hopefully we'll be out soon, in a couple years. Soon in a couple years, and then we can have you back on to talk about it and how things have evolved. Thanks so much, Sam.

1:26:18This episode of The Culture Journalist was produced and edited by Emily Friedlander and me, Andrea Dominic. To check out more, head to our Substack. That's theculturejournalist.substack.com. And if you like what you're hearing, leave a rating or review on Apple Podcasts or share us with friends to help support independent journalism.