From Government to Governance

The end of the nation state and the revelation of panarchy

Image by kjpargeter

Under the present conditions a government exists only by the exclusion of all the others, and one party can rule only after smashing its opponents; a majority is always harassed by a minority which is impatient to govern. Under such conditions it is quite inevitable that the parties hate each other and live, if not at war, at least in a state of armed peace.

-Paul-Émile de Puydt

---

Massive, bureaucratic, violent nation-states mostly govern today’s societies.

These nation-states emerged from the Enlightenment ideals of the 17th and 18th centuries, especially through the evangelism of the so-called “constitutional government.” But these nation-states inevitably became corrupted by bad actors with expansionist, militaristic, and imperialist appetites.

Regardless of the reasons behind the cancerous growth of modern states, they exist as a pseudo-permanent fixture of human social organization. We will see that they may be faltering.

This article will make the case that nation-states are unlikely to exist in perpetuity and that governance that better serves humanity will likely supplant them. Many readers may disagree, but considerable evidence shows nation-states are in their death throes.

Before moving on, it is pertinent for this article to examine the difference between “government” and “governance.”

• “Government” is the bureaucratic arm of the nation-state; It is a small group of individuals who maintain a monopoly on violence over a territorial area. Sometimes, they even monopolize violence over smaller, localized states, such as in the US. Consequently, the government apparatus manages the affairs of individuals and society by issuing laws, regulations, and mandates. I sometimes use the terms “state” and “government” interchangeably. However, the State is typically the specific “organization,” whereas the government, as mentioned, is the bureaucratic control arm.
  

• “Governance” is the process of managing or directing a social unit, collective, or system. However, the distinction between governance and government is that governance does not automatically denote the use of violence or force. Nor does it suggest a territorial monopoly. It certainly can suggest a monopoly, but in modern parlance, “governance” refers to systems managed and directed via voluntary choice and consensus. This fact is especially true of “technological governance,” which occurs worldwide in blockchain systems and is virtually always operated based on consent and consensus.

This article will examine the future of governance and how the idea of the “government” is becoming less appealing and moribund. We will then study the emergence of novel panarchic, technological states that mostly leverage systems of “governance” rather than “government.”

I will make the case that these types of emergent governance structures will further erode nation-state governments, which will occur because people have a choice about which “states” they opt into and support. In this sense, the governance structure becomes more of an extension of man, à la McLuhan, rather than — to use Jeremy Bentham’s image — a panopticon apparatus of control. Let us first briefly explore why nation-state government is unsustainable and, hence, dying.

Thanatos-State

Anarchist and scholar Kirkpatrick Sale points out in “Human Scale Revisited” that any institution that grows beyond its ability to serve humans at the human scale is bound to become intolerable, destructive, and inhuman. He said,

Size, indeed, might well be regarded as the crucial variable in [government]. More important than, say, ideology—for a large disciplined party like the Communist Party in China is much like a large undisciplined one like the Democratic Party in the United States, unwieldy, unrepresentative, undemocratic, inefficient, and often unable to carry out policies enacted, not because of the politics but because of the party size.

To put it succinctly, large bureaucratic states repeatedly metamorphose into totalitarian behemoths at worst or unwieldy, oppressive institutions at best.

I call these monolithic governments “Thanatos-states.” Thanatos is the Greek mythological figure that represents death. Thanatos-states are, therefore, states that embody an impulse to mete out death and have grown so large as to be in the throes of death themselves. How exactly do they harm their populations, and what is the evidence for their violence?

Democide and Mortacracy

Modern nation-states are responsible for murdering millions of people in the 20th century alone. The University of Hawaii put the total amount of people murdered by governments at 262,000,000. Researcher RJ Rummel refers to this idea as “democide.”

Rummel defines the phenomenon,

Democide is murder by government, which includes genocide, mass murder, politicide, massacre, atrocities, bloody terrorism, and any other way in which government (the ruling organization of a well defined, populated territory) rulers, leaders, officials, authorities, or those acting officially on behalf of government, murder people. Genocide definitions may include all such murder, and thus be the same as democide, or be a subset of democide.”

Democide is so widespread among modern states that some scholars refer to these states as “mortacracies,” which are states that have a bureaucratic function established as a ritual-like fixation for war and mass murder.

The nation-state — irrespective of its knack for destroying lives — shows signs of decline and collapse. There are two primary reasons the nation-state is going extinct. The “bigness” of nation-states is causing their breakdown, and novel innovations threaten their longevity. These ideas warrant explication.

Bigness, Pax Americana

The first reason is that nation-states have become too large. This “bigness” results in States expanding every aspect of their empire beyond the pale of control. A past example was the Roman Empire. Rome unsustainably expanded its dominion across Europe, causing coordination and consensus problems. By their nature, centralized, bureaucratic regimes are tantamount to “paperclip maximizers.” They expand to spread their power and clout, similar to how a runaway artificial intelligence would seek to create paperclips ad infinitum, regardless of the cost and who it hurts until the world is buried in paperclips.

The eventual consequence of “Pax Romana” was its inability to protect its borders, maintain a currency of value, prevent corruption, and quell dissent. Its “bigness” led to unwieldy bureaucracy and unsustainable politics, leading to death by a thousand cuts. The Visigoths, among other Germanic tribes, defeated the empire with minimal effort. In reality, Rome defeated itself; the consequence of being a paperclip maximizer. Read “How Rome Fell: Death of a Superpower” by Adrian Goldsworthy for more insights.

Modern Nation states, including “Pax Americana,” are on a similar path. Many have already compared the United States to Rome at its peak, especially regarding similar empire-building strategies and monetary policies. At the time of writing, the United States government was in debt of $33 trillion. The United States maintains around 750 military bases across 80 countries. The prison population of the United States sat at 1,230,100 on December 31, 2022, a 2% increase from 2021 (1,205,100). The current population has a 55.4% disapproval rate for President Joe Biden.

These statistics are meaningless if analyzed alone, but they point to a trend of overexpansion by the State and a growing sense of unease and discontentment in the population. These stats, taken into account along with the rising tide of innovation, suggest people are paving the way for a new kind of governance apparatus or implementation. The result of bigness and bloat in government necessarily gives rise to solutions, especially in an age of technological acceleration. We used the example of the United States here, but all major nation-states suffer from similar problems arising from bigness.

Innovation, Crypto

The other reason why nation-states are going extinct is largely due to the proliferation of new technologies. New tech alone, of course, will not upend the nation-state, but taken with governmental failures, it represents a critical blow.

Bitcoin is an example of a disruptive innovation. Not only does bitcoin represent a move from government-issued fiat currency toward circulating private currencies, but more importantly, bitcoin introduced a novel form of governance. In truth, bitcoin paved the way for understanding how governance can work without coercion and force.

Bitcoin has a system of rules largely controlled by algorithms. This system is often expressed by the hacker ethic of “code is law.” Indeed, the law of Bitcoin can only be altered via a process of consensus, which is a truly democratized way for the community to initiate changes to the protocol. It may seem trivial, but this new “governance structure” was a revelation. Indeed, the notion that only governments control currency was undermined, but Bitcoin catalyzed a new way of thinking about governance in the form of consensus, which is a watershed moment in the history of technological and social innovation.

With this newfound knowledge, people have begun to dream up ways to apply governance to society. In other words, these governance models can apply to cryptocurrency networks but perhaps also to cities, territories, and whole civilizations. Pandora’s box is now open. A new way to improve governance denotes that “constitutional government” may not be the most effective or moral way to manage society.

Panarchy

Now, let us take a step back. All the way to 1860, when a Belgian botanist and thinker, Paul Emile De Puydt, wrote an underappreciated essay titled “Panarchy.” In this piece, De Puydt makes the case that people should have the option to choose their governing services without physically relocating. He said,

My panacea, if you will allow this term, is simply free competition in the business of government. Everyone has the right to look after his own welfare as he sees it and to obtain security under his own conditions. On the other hand, this means progress through contest between governments forced to compete for followers. True worldwide liberty is that which is not forced upon anyone, being to each just what he wants of it; it neither suppresses nor deceives, and is always subject to a right of appeal. To bring about such a liberty, there would be no need to give up either national traditions or family ties, no need to learn to think in a new language, no need at all to cross rivers or seas, carrying the bones of one's ancestors.

De Puydt was the first to envision this concept of “nonterritorial exit,” which denotes that people can choose what kind of “governance” mechanism they engage with. This suggests that there would be little room for “government,” as people would have a choice to opt-in to their “governance” service.

Scholar Aviezier Tucker expressed how such a competitive governance society would function:

Panarchy suggests that an optimal framework for the emergence of the best states is that of free competition between states. In Panarchy, people and states negotiate the relationships between them, as sellers and buyers and formalize them in explicit social contracts.

To echo Tucker, governance services would be in a perpetual state of competition with each other, and people could choose what type of governance solution they want by selecting one at an office location. Today, we can envision this governance selection occurring via an online or network directory.

But how does this “market for governance” work in practice?

Unbundling and Disaggregation

The implications of this “market for governance” suggest that governance services would be packaged in the form of contracts or deals. These deals would then be selected by those seeking a service that aligns with their values and political ideals.

In his book, “Virtual States,” Jerry Everard called this governance packaging a “disaggregation” of previously managed State services. Similarly, Trent Macdonald called this governance service selection “unbundling.” Both ideas presuppose that in an environment without a centrally planned, monolithic state, various providers emerge to offer their services to the population in a decentralized fashion.

In his essay “The Unbundled State: Economic Theory of Non-Territorial Unbundling,” MacDonald explains:

We can overcome the majoritarian problem and the bundling problem, as well as the inherent spatial trade-offs in territorial decentralization, by carrying the decentralization ethos to its logical ends: unbundle as many functions of government as possible (whether territorial or not), decentralize non-territorially where feasible, and promote parallel governance. The reality is we don’t need to all agree on the same set of collective goods and institutions. By “unbundling governance” we can each individually choose the public goods and services that we want and rebundle them as we like.

These unbundled services would include protection services, defense organizations, postal processors, insurance agencies, and any other services that were once established as State monopolies.

Indeed, there is no need to believe that a centralized government must be the only way to provision governance services. In reality, human history is replete with examples of localized governance provision. The emergence of the nation-state is an aberration of what humans have done in the past. Examples include the Cantons of Switzerland in the Middle Ages and the Commonwealth of Iceland. To learn more about both, read the essay “Virtual Cantons” by Roderick T. Long.

In both examples, localized government was the rule rather than the exception. In these environments, the governments were more localized and “unbundled,” and a common law system typically emerged when disputes arose between people of the commonwealth and foreigners.

Decentralization and Network States

In today’s environment, panarchy is being revisited due to the enormous focus on technological decentralization. This is the idea that a network of distributed nodes can manage the governance functions of a given society. The concept of decentralization has been around for years, but it has come to the forefront with the emergence of cryptocurrency. The idea behind decentralization is that power can be contained and limited by distributing control over a given system or network.

However, with novel governance systems, decentralization can be applied to panarchy. The computational properties that give rise to decentralization in blockchain technology can be used to power a shift to panarchy. But as Avizier Tucker mentioned in his work, even though the conditions for Panarchy exist, it does not mean they are sufficient. The point is that people can now implement governance models into society by leveraging smart contract applications and consensus algorithms. This creates a techno-panarchy, or as Balaji Svrinisan calls it, a network state. He compares a network state to the “legacy state”:

Unlike an ideologically disaligned and geographically centralized legacy state, which packs millions of disputants in one place, a network state is ideologically aligned but geographically decentralized. The people are spread around the world in clusters of varying size, but their hearts are in one place.

The network state is, therefore, an implementation of “techno-panarchy” in the cloud. As Balaji put it, these network states would form first as “network unions,” composed of like-minded people. They would share values and ideals. However, the most important thing about network states for this piece is that these would be “governance” solutions rather than “governments.”

Beta Testing the New Society

All technological advancements that appear to be a precondition for realizing De Puydt’s vision seem to be in place. However, Tucker said there is no guarantee panarchy will materialize. The necessary conditions may not be sufficient without directed effort.

So, how can we contribute to making it a reality?

Demonstrating that these solutions work is the first step.

Luckily, we have done this already with the Bitcoin and Ethereum networks. Both have been functioning for years and have tremendous network effects that continuously feed their growth. Most impressively, these systems maintain the valuable component of being “opt-in” systems. People are not forced or coerced into using them. It is a choice. In this sense, these networks act as early demonstrations of what governance could look like in a future of “techno-panarchy.”

These ecosystems are effectively beta tests for new social experiments.

Furthermore, many are experimenting with building unique cities and territories worldwide with novel governance implications. One such example is Prospera. Another is Vitalik Buterin’s recent project, Zuzalu. These experimental communities, ecovillages, smart cities, etc, represent the human urge to try new forms of social organization.

It should be noted that many of these are “territorial” based systems, but the fact that they also act as experiments in different governance models gives rise to the idea that panarchy or other extraterritorial models could be a legitimate experiment in designing new governance.

Regardless of how panarchy takes shape, we must continue to build systems and experiment with novel ways of governance to incrementally abandon the nation-state and its “government” apparatus. One of the most important things humanity can do this century is embrace the idea of allowing for “governance” services in the place of “governments,” which have cost humanity dearly, both in dollar amount and in lives lost.