(upbeat music) Is your California dream feeling more and more distant? You've got countless apps and influencers telling you how to do it their way. And your expert aunt who might be giving a bit too much advice. Tips, hacks, and experts are everywhere these days. But when it comes to real estate, the question to ask is, who's your realtor?

Because a California realtor is the only person who can bring your dream home. Someone who gets that buying a home is one of the most complicated and stressful things you can do, but can still make it possible on your budget. A California realtor can read the constantly shifting market and they're out in front for all of the tough stuff.

So you can get to the good stuff. So who's your realtor? Because no one cares more about helping Californians live the California dream than California realtors. - The analysis and arguments you're about to hear were published in 1997. You can judge for yourself the prescience or the myopia of these arguments.

The life and death of the nation state. Democracy and nationalism as resource strategies in the age of violence. Quote, "Most important of all, "success in war depends on having enough money "to provide whatever the enterprise needs." Robert de Balzac, 1502. The rubble of history. On November 9 and 10, 1989, television broadcast to the world scenes of exuberant East Berliners dismantling the Berlin Wall with sledgehammers.

Fledgling entrepreneurs among the crowd picked up pieces of the wall that were later marketed to capitalists far and wide as souvenir paperweights. A brisk business in these relics was done for years thereafter. Even as we write, one can still encounter occasional ads in small magazines offering bits of old East German concrete for sale at prices ordinarily commanded by high grade silver ore.

We believe that those who bought the Berlin Wall paperweights should be in no rush to sell. They hold mementos of something bigger than the collapse of communism. We believe that the Berlin Wall became the most important pile of historical rubble since the walls of San Giovanni were blasted to smithereens almost five centuries earlier in February, 1495.

The leveling of San Giovanni by the French King Charles VIII was the first blast of the gunpowder revolution. It marked the end of the feudal phase of history and the advent of industrialism as we outlined earlier. The destruction of the Berlin Wall marks another historical watershed, the passage between the industrial age and the new information age.

Never has there been so great a symbolic triumph of efficiency over power. When the walls of San Giovanni fell, it was a stark demonstration that the economic returns to violence in the world had risen sharply. The fall of the Berlin Wall says something different, namely that returns to violence are now falling.

This is something that few have even begun to recognize, but it will have dramatic consequences. For reasons we explore in this chapter, the Berlin Wall may prove to be far more symbolic of the whole era of the industrial nation state than those in the crowd that night in Berlin or the millions watching from a distance understood.

The Berlin Wall was built to a very different purpose than the walls of San Giovanni, to prevent people on the inside from escaping rather than to prevent predators on the outside from entering. That fact alone is a telling indicator of the rise in the power of the state from the 15th to the 20th centuries and in more ways than one.

For centuries, the nation state made all outward facing walls redundant and unnecessary. The level of monopoly that the state exercised over coercion in those areas where it first took hold made them both more peaceful internally and more formidable militarily than any sovereignties the world had seen before. The state used the resources extracted from a largely disarmed population to crush small scale predators.

The nation state became history's most successful instrument for seizing resources. Its success was based upon its superior ability to extract the wealth of its citizens. Quote, MTV is more than a purveyor of music videos and a promotional tool of the recording industry. It's the first truly global network, the first network to deliver a single stream of programming in virtually every country in the world.

In the process, MTV is creating a single sense of shared global reality for its viewers, children and young adults. Recent research has found that young people around the planet more and more share not just common pop icons and common tastes, but common expectations for their careers, common sets of values about what is meaningful in life and what there is to be afraid of, a common sense that politics is less important than their own abilities in shaping their futures.

Jim Taylor and Watts Wacker, the 500 year Delta, what happens after what comes next? Love it or leave it, unless you're rich. Before the transition from the nation state to the new sovereignties of the information age is complete, many residents of the largest and most powerful Western nation states, like their counterparts in East Berlin in 1989, will be plotting to find their way out.

For the generations that came of age before World War II, or early in the Cold War, moving across borders is traumatic. But for new generations who draw their bearings from a more global perspective, abandoning the country of their birth is not the unthinkable decision it would be for older persons who are more deeply inculcated with the ideology of the nation state.

Jim Taylor and Watts Wacker report the intriguing results of a mass survey of 25,000 middle class high school students on five continents. In a sampling conducted during the 1995-96 school year by Brainwaves Group, a New York consumer research firm, nine of 10 students agreed that, quote, "It's up to me to get what I want of life." More strikingly, quote, "Almost half the teens said they expected to leave the country of their birth in pursuit of their goals." Perhaps because he is tuned in to the attitudes of the MTV generation, as the first presidential candidate to campaign on MTV, Bill Clinton has sought to make it more difficult for Americans to, quote, "Leave the country of their birth in pursuit of their goals." In 1995, at about the same time that the high school students were declaring their intentions to seek independence, the president of the United States proposed the enactment of an exit tax, a Berlin Wall for capital that would require wealthy Americans to pay a substantial ransom to escape with even part of their money.

Clinton's ransom is not only reminiscent of the late East German state's policy of treating its citizens as assets. It also calls to mind the increasingly draconian measures taken to shore up the fiscal position of the Roman Empire in decline. This passage from the Cambridge Ancient History tells the story, quote, "Thus began the fierce endeavor of the state to squeeze the population to the last drop.

Since economic resources fell short of what was needed, the strong fought to secure the chief share for themselves with a violence and unscrupulousness, well in keeping with the origin of those in power and with a soldiery accustomed to plunder. The full rigor of the law was let loose on the population.

Soldiers acted as bailiffs or wandered as secret police through the land. Those who suffered most were, of course, the propertied class. It was relatively easy to lay hands on their property. And in an emergency, they were the class from whom something could be extorted most frequently and quickly." When failing systems have the power to do so, they often impose penal burdens upon those seeking to escape.

Again, we quote the Cambridge Ancient History, quote, "If the property class buried their money or sacrificed two thirds of their estate to escape from a magistracy, or went so far as to give up their whole property in order to get free of the domain's rent and the non-property class ran away, the state replied by increasing the pressure." This is worth remembering as you plan ahead.

The twilight of state systems in the past has seldom been a polite, orderly process. We mentioned the nasty habits of Roman tax collectors in chapter two. The large numbers of agri deserti, or abandoned farms in Western Europe after the collapse of the Roman Empire reflected only a small part of a wider problem.

In fact, exactions tended to be relatively mild in Gaul and in the frontier areas that comprise current day Luxembourg and Germany. In Rome's most fertile region, Egypt, where farming was more productive because of irrigation, desertion by owners was an even bigger problem. The question of whether to attempt escape, the ultimum refugium, as it was known in Latin, became the overriding quandary of almost everyone with property.

Records show that, quote, "Among the common questions which used to be put to an oracle in Egypt, three standard types were, am I to become a beggar? Shall I take to flight? And is my flight to be stopped?" Clinton's proposal says yes. It is an early version of an obstacle to escape that is likely to grow more onerous as the fiscal resources of the nation state slip away.

Of course, the first US version of an exit barrier is more benign than Erich Honecker's concrete and barbed wire. It also involves greater price sensitivity with the burden falling only on, quote, unquote, "Billionaires" with taxable estates over $600,000. Nonetheless, it was justified with similar arguments to those once propounded by Honecker in defense of the late German Democratic Republic's most famous public works project.

Honecker claimed that the East German state had a substantial investment in would-be refugees. He pointed out that allowing them to leave freely would create an economic disadvantage for the state, which required their efforts in East Germany. If you accept the premise that people are or ought to be assets of the state, Honecker's wall made sense.

Berlin without a wall was a loophole to the communists, just as escape from US tax jurisdiction was a loophole to Clinton's IRS. Clinton's arguments about escaping billionaires, aside from showing a politician's usual disregard for the integrity of numbers, were similar in kind to Honecker's, but somewhat less logical because the US government, in fact, does not have a large economic investment in wealthy citizens who might seek to leave.

It is not a question of their having been educated at state expense and wanting to slip away and practice law somewhere else. The overwhelming majority of those to whom the exit tax would apply have created their wealth by their own efforts and in spite of, not because of the US government.

With the top 1% of taxpayers paying 30.2% of the total income tax in the United States for 1995, it is not a question of the rich failing to repay any genuine investment the state may have made in their education or economic prosperity. To the contrary, those who pay most of the bills pay vastly more than the value of any benefits they receive.

With an average annual tax payment exceeding $125,000, taxes cost the top 1% of American taxpayers far more than they now realize. Assuming they could earn even a 10% return on the excess tax paid by each over a 40-year period, each $5,000 of annual excess tax payment reduced their net worth by $2.2 million.

At a 20% rate of return, each $5,000 of excess tax reduces net worth by $44 million. As the millennium approaches, the new mega political conditions of the information age will make it increasingly obvious that the nation state inherited from the industrial era is a predatory institution. With each year that passes, it will seem less a boon to prosperity and more an obstacle, one from which the individual will want an escape.

It is an escape that desperate governments will be loath to allow. The stability and even the survival of Western welfare states depends upon their ability to continue extracting a huge fraction of the world's total output for redistribution to a subset of voters in the OECD countries. This requires that the taxes imposed upon the most productive citizens of the currently rich countries be priced at super monopoly rates, hundreds or even thousands of times higher than the actual cost of the services that governments provide in return.

The life and death of the nation state. The fall of the Berlin Wall was more than just a visible symbol of the death of communism. It was a defeat for the entire world system of nation states and a triumph of efficiency and markets. The fulcrum of power underlying history has shifted.

We believe that the fall of the Berlin Wall in 1989 culminates the era of the nation state, a peculiar 200 year phase in history that began with the French Revolution. States have existed for 6,000 years, but before the 19th century, they accounted for only a small fraction of the world's sovereignties.

Their ascendancy began and ended in revolution. The great events of 1789 launched Europe on a course toward truly national governments. The great events of 1989 marked the death of communism and an assertion of control by market forces over massed power. Those two revolutions, exactly 200 years apart, define the era in which the nation state predominated in the great power system.

The great powers in turn dominated the world, spreading or imposing state systems on even the most remote tribal enclave. The triumph of the state as the principal vehicle for organizing violence in the world was not a matter of ideology. It was necessitated by the hidden logic of violence. It was, as we like to say, a mega political event determined not so much by the wishes of theorists and statesmen, or even by the maneuvering of generals, as by the hidden leverage of violence, which moved history in the way that Archimedes once dreamt of moving the world.

States have been the norm for the past 200 years of the modern period. But in the longer sweep of history, states have been rare. They have always depended upon extraordinary mega political conditions for their viability. Prior to the modern period, most states were oriental despotisms. Agricultural societies in deserts depended upon control of irrigation systems for their survival.

Even the Roman Empire, through its control of Egypt and North Africa, was indirectly a hydraulic society, but not enough of one to survive. Rome, like most pre-modern states, ultimately lacked the capacity to compel adherence to the monopoly of violence that the ability to starve people provides. The Roman state outside of Africa could not cut off water for growing crops by denying unsubmissive people access to the irrigation system.

Such hydraulic systems supplied more leverage to violence than any other mega political configuration in the ancient economy. Whoever controlled the water in these societies could extract spoils at a level almost comparable to the percentage of total output absorbed by modern nation states. Magnitude over efficiency. Gunpowder enabled states to expand more easily outside the confines of rice paddies and arid river valleys.

The nature of gunpowder weapons and the character of the industrial economy created great advantages of scale in warfare. This led to high and rising returns to violence. As historian Charles Tilley put it, "States having the largest coercive means "tended to win wars. "Efficiency," the ratio of output to input, "came second to effectiveness," total output.

With governments mostly organized on a large scale, even the few small sovereignties that survived, like Monaco or Andorra, needed the recognition of the larger states to ensure their independence. Only big governments with ever greater command of resources could compete on the battlefield. The great unanswered question. This brings us to one of the great unanswered puzzles of modern history.

Why the Cold War that came at the conclusion of the great power system pitted as its final contenders, communist dictatorships against democratic welfare states. The issue has been so little examined that it actually seemed plausible to many when a State Department analyst, Francis Fukuyama, proclaimed, "The end of history," after the Berlin Wall fell.

The enthusiastic audience his work elicited took too much for granted. Apparently, neither the author nor many others had bothered to ask a fundamental question. What common characteristics of state socialism and welfare state democracies led them to be the final contenders for world domination? This is an important issue. After all, dozens of contending systems of sovereignty have come and gone in the past five centuries, including absolute monarchies, tribal enclaves, prince-bishoprics, direct rule by the Pope, sultanates, city-states, and Anabaptist colonies.

Today, most people would be surprised to learn that a hospital management company with its own armed forces could rule a country for centuries. Yet, something very like that happened. For 300 years after 1228, the Teutonic Knights of St. Mary's Hospital at Jerusalem, later united with the Knights of the Sword of Livonia, ruled East Prussia and various territories in Eastern Europe, including parts of Lithuania and Poland.

Then came the Gunpowder Revolution. Within decades, the Teutonic Knights were expelled as sovereigns of all their territories, and their grandmaster was of no more military importance than a chess champion. Why? Why did so many other systems of sovereignty dwindle to insignificance, while the great struggle for world power at the end of the Industrial Age saw mass democracies lined up against state socialist systems?

Unimpeded control. Our theory of megapolitics points to the answer. It is rather like asking why sumo wrestlers tend to be fat. The answer is that a lean sumo wrestler, however impressive his ratio of strength to weight, cannot compete with another wrestler who is gigantic. As Tilly suggests, the important issue was effectiveness, total output, not efficiency, the ratio of output to input.

In an increasingly violent world, the systems that predominated through five centuries of competition were necessarily those that facilitated the greatest access to resources needed to make war on a large scale. How did this work? In the case of communism, the answer is obvious. Under communism, those who controlled the state controlled almost everything.

If you had been a citizen of the Soviet Union during the Cold War, the KGB could have taken your toothbrush if they thought it useful for their purposes to do so. They could have taken your teeth. According to credible estimates that have become more credible since the opening of former Soviet archives in 1992, secret police and other agents of the late Soviet state took the lives of 50 million persons in 74 years of rule.

The state socialist system was in a position to mobilize anything that existed within its boundaries for its military, with little likelihood that anyone living there would argue. In the case of Western democracies, the story is less obvious, partly because we are accustomed to think of democracy in stark contrast to communism.

In terms of the industrial age, the two systems were indeed great opposites. But seen from the perspective of the information age, the two systems had more in common than you might suspect. Both facilitated unimpeded control of resources by government. The difference was that the democratic welfare state placed even greater resources in the hands of the state than the state socialist systems.

This is a clear cut example of a rare phenomenon, less being more. The state socialist system was predicated upon the doctrine that the state owned everything. The democratic welfare state, by contrast, made more modest claims and thereby employed superior incentives to mobilize greater output. Instead of laying claim to everything in the beginning, governments in the West allowed individuals to own property and accumulate wealth.

Then after the wealth had been accumulated, the Western nation states taxed a large fraction of it away. Property taxes, income taxes, and estate taxes at high levels furnished the democratic welfare state with prodigious quantities of resources compared to those available through the state socialist systems. Inefficiency where it counted.

Compared to communism, the welfare state was indeed a far more efficient system. But compared to other systems for accumulating wealth, such as a genuine laissez-faire enclave like colonial Hong Kong, the welfare state was inefficient. Again, less was more. It was precisely this inefficiency that made the welfare state supreme during the mega political conditions of the industrial age.

When you come to understand why, you are much closer to recognizing what the fall of the Berlin Wall and the death of communism really mean. Far from assuring that the democratic welfare state will be a triumphant system, as has been widely assumed, it was more like seeing that a fraternal twin has died of old age.

The same mega political revolution that killed communism is also likely to undermine and destroy democratic welfare states as we have known them in the 20th century. Who controls government? The key to this unorthodox conclusion lies in recognizing where the control of democratic government is lodged. It is an issue that is not as simple as it may seem.

In the modern era, the question of who controls the government has almost always been asked as a political question. It has had many answers, but almost uniformly, these involved identifying the political party, group, or faction that dominated the control of a particular state at a particular moment. You have heard of governments controlled by capitalists, governments controlled by labor, governments controlled by Catholics and by Islamic fundamentalists, governments controlled by tribal and racial groups, governments controlled by Hutus and governments by whites.

You have also heard of governments controlled by occupational groups, such as lawyers or bankers. You have heard of governments controlled by rural interests, by big city machines and by people living in the suburbs. And you have certainly heard of governments controlled by political parties, by Democrats, Conservatives, Christian Democrats, liberals, radicals, Republicans, and socialists.

But you probably have not heard much about a government controlled by its customers. Economic historian, Frederick Lane laid the basis for a new way of understanding where the control of government lies in some of his lucid essays on the economic consequences of violence discussed earlier. Thinking about government as an economic unit that sells protection led Lane to analyze the control of government in economic rather than political terms.

In this view, there are three basic alternatives in the control of government, each of which entails a fundamentally different set of incentives, proprietors, employees, and customers. Proprietors, in rare cases, even today, governments are sometimes controlled by a proprietor, usually a hereditary leader who for all intents and purposes owns the country.

For example, the Sultan of Brunei treats the government of Brunei somewhat like a proprietorship. This was more common among lords of the Middle Ages who treated their fiefs as proprietorships to optimize their incomes. Lane described the incentives of the owners of the production-producing enterprise as follows. Quote, "An interest in maximizing profits would lead him, while maintaining prices, to try to reduce his costs.

He would, like Henry VII of England, or Louis XI of France, use inexpensive wiles, at least as inexpensive devices as possible, to affirm his legitimacy, to maintain domestic order, and to distract neighboring princes so that his own military expenses would be low. From lowered costs, or from the increased exactions made possible by the firmness of his monopoly, or from a combination, he accumulated a surplus." Governments controlled by proprietors have strong incentives to reduce the costs of providing protection or monopolizing violence in a given area.

But so long as their rule is secure, they have little incentive to reduce the price, the tax. They charge their customers below the rate that optimizes revenues. The higher the price a monopolist can charge and the lower his actual costs, the greater the profit he will make. The ideal fiscal policy for a government controlled by its proprietors would be a huge surplus.

When governments can keep their revenues high, but cut their costs, this has a large impact on the use of resources. Labor and other valuable inputs that would otherwise be wasted, providing unnecessarily expensive protection, become available instead for investment and other purposes. The higher the monarch can raise his profit by lowering costs, the more resources are freed.

When these resources are used for investment, they provide a stimulus for growth. But even if they are used for conspicuous consumption, they help create and feed new markets that otherwise would not exist if the resources had been wasted to produce inefficient protection. Employees. It is easy to characterize the incentives that prevail for governments controlled by their employees.

They would be similar incentives in other employee-controlled organizations. First and foremost, employee-run organizations tend to favor any policy that increases employment and oppose measures which reduce jobs. As Lane put it, quote, "When employees as a whole controlled, "they had little interest in minimizing "the amounts exacted for protection "and none in minimizing that large part of costs "represented by labor costs by their own salaries.

"Maximizing size was more to their taste also." A government controlled by its employees would seldom have incentives to either reduce the costs of government or the price charged to their customers. However, where conditions impose strong price resistance in the form of opposition to higher taxes, governments controlled by employees would be more likely to let their revenues fall below their outlays than to cut their outlays.

In other words, their incentives imply that they may be inclined toward chronic deficits as governments controlled by proprietors would not be. Customers. Are there examples of governments controlled by their customers? Yes. Lane was inspired to analyze the control of government in economic terms by the example of the medieval merchant republics like Venice.

There, a group of wholesale merchants who required protection effectively controlled the government for centuries. They were genuinely customers for the protection service government provided, not proprietors. They paid for the service. They did not seek to profit from their control of government's monopoly of violence. If some did, they were prevented from doing so by the other customers for long periods of time.

Other examples of governments controlled by their customers include democracies and republics with limited franchise, such as the ancient democracies or the American Republic in its founding period. At that time, only those who paid for the government, about 10% of the population, were allowed to vote. Governments controlled by their customers, like those of proprietors, have incentives to reduce their operating costs as far as possible.

But unlike governments controlled by either proprietors or employees, governments actually controlled by their customers have incentives to hold down the prices they charge. Where customers rule, governments are lean and generally unobtrusive with low operating costs, minimal employment, and low taxes. A government controlled by its customers sets tax rates not to optimize the amount the government can collect, but rather to optimize the amount that the customers can retain.

Like typical enterprises in competitive markets, even a monopoly controlled by its customers would be compelled to move toward efficiency. It would not be able to charge a price in the form of taxes that exceeded costs by more than a bare margin. The role of democracy, voters as employees and customers.

Lane treats democracy in the conventional way, in assuming that it brings violence-using and violence-producing enterprises, quote, "increasingly under the control of their customers." This is certainly the politically correct conclusion. But is it true? We think not. Look closely at how modern democracies function. First of all, they have few characteristics of those competitive industries where the terms of trade are clearly controlled by their customers.

For one thing, democratic governments typically spend only a bare fraction of their total outlays on the service of protection, which is their core activity. In the United States, for example, state and local governments spend just 3.5% of their total outlays on the provision of police, as well as courts and prisons.

Add military spending, and the fraction of revenues devoted to protection is still only about 10%. Another revealing hint that mass democracy is not controlled by its customers is the fact that contemporary political culture, inherited from the industrial age, would consider it outrageous if policies on crucial issues were actually informed by the interests of the people who pay the bills.

Imagine the uproar if a US president or a British prime minister proposed to allow the group of citizens who pay the majority of the taxes to determine which programs of government should continue and which groups of employees should be fired. This would deeply offend expectations of how government should operate in a way that allowing government employees to determine whose taxes should be raised would not.

Yet, when you think about it, when customers really are in the driver's seat, it would be considered outrageous that they should not get what they want. If you went into a store to buy furniture and the salespeople took your money, but then proceeded to ignore your requests and consult others about how to spend your money, you would quite rightly be upset.

You would not think it normal or justifiable if the employees of the store argued that you really did not deserve the furniture and that it should be shipped instead to someone whom they found more worthy. The fact that something very like this happens in dealings with government shows how little control its customers actually have.

By any measure, the costs of democratic governments have surged out of control, unlike the typical situation where customer preferences force vendors to be efficient. Most democracies run chronic deficits. This is a fiscal policy characteristic of control by employees. Governments seem notably resistant to reducing the costs of their operations.

An almost universal complaint about contemporary government worldwide is that political programs, once established, can be curtailed only with great difficulty. To fire a government employee is all but impossible. In fact, one of the principal advantages arising from privatization of formerly state-owned functions is that private control usually makes it far easier to weed out unnecessary employment.

From Britain to Argentina, it has not been uncommon for the new private managers to shed 50 to 95% of former state employees. Think as well of the basis upon which the fiscal terms of a government's protection service is priced. For the most part, you would look in vain for hints of competitive influences on tax rates according to which government services are priced.

Even the occasional debates about lowering taxes that have interrupted normal political discourse in recent years betray how far removed democratic government has normally been from control by its customers. Advocates of lower taxes sometimes have argued that government revenues would actually increase because rates previously had been set so high that they discouraged economic activity.

The trade-off they normally intended to highlight was not competition between jurisdictions, but something much more amazing. They did not argue that because tax rates in Hong Kong were only 15%, rates in the United States or Germany must be no higher than 15%. To the contrary, tax debates have normally assumed that the trade-off facing the taxpayer was not between doing business in one jurisdiction or doing it in another, but between doing business at penal rates or taking a holiday.

You were told that productive individuals subject to predatory taxation would walk away from their inboxes and go golfing if their tax burdens were not eased. The fact that such an argument could even arise shows how far removed from a competitive footing the protection costs imposed by democratic welfare states have been.

The terms of progressive income taxation, which emerged in every democratic welfare state during the course of the 20th century, are dramatically unlike pricing provisions that would be preferred by customers. This can easily be seen by comparing taxation imposed to support a monopolistic provision of protection with tariffs for telephone service, which until recently was a monopoly in most places.

Customers would scream bloody murder if a telephone company attempted to charge for calls on the same basis that income taxes are imposed. Suppose the phone company sent a bill for $50,000 for a call to London just because you happened to conclude a deal worth $125,000 during a conversation. Neither you nor any other customer in his right mind would pay it, but that is exactly the basis upon which income taxes are assessed in every democratic welfare state.

When you think closely about the terms under which industrial democracies have operated, it is more logical to treat them as a form of government controlled by their employees. Thinking of mass democracy as government controlled by its employees helps explain the difficulty of changing government policy. Government, in many respects, appears to be run for the benefit of employees.

For example, government schools in most democratic countries seem to malfunction chronically, and without remedy. If customers truly were in the driver's seat, they would find it easier to set new policy directions. Those who pay for democratic government seldom set the terms of government spending. Instead, government functions as a co-op that is both outside of proprietary control and operating as a natural monopoly.

Prices bear little relation to costs. The quality of service is generally low compared to that in private enterprise. Customer grievances are hard to remedy. In short, mass democracy leads to control of government by its employees. But wait, you may be saying that in most jurisdictions, there are many more voters than there are persons on the government payroll.

How could it be possible for employees to dominate under such conditions? The welfare state emerged to answer exactly this quandary. Since there were not otherwise enough employees to create a working majority, increasing numbers of voters were effectively put on the payroll to receive transfer payments of all kinds. In effect, the recipients of transfer payments and subsidies became pseudo-employees of government, who were able to dispense with the bother of reporting every day to work.

It was a result dictated by the mega-political logic of the industrial age. When the magnitude of coercive force is more important than the efficient deployment of resources, as was the case prior to 1989, it is all but impossible for most governments to be controlled by their customers. As the example of the late Soviet Union illustrated so well, until a few years ago, it was possible for states to exercise great power in the world, even while wasting resources on a massive scale.

When returns to violence are high and rising, magnitude means more than efficiency. Larger entities tend to prevail over smaller ones. Those governments that are more effective in mobilizing military resources, even at the cost of wasting many of them, tend to prevail over those that utilize resources more efficiently. Think what this means.

It inescapably implies that when magnitude means more than efficiency, governments controlled by their customers cannot prevail, and often cannot survive. Under such conditions, the entities that will be most effective militarily are those that commandeer the most resources for war. But governments that are truly controlled by their customers who pay their bills are unlikely to have carte blanche to reach into the pockets of everyone to extract resources.

Customers normally wish to see the prices they pay for any product or service, including protection, lowered, and kept under control. If the Western democracies had been under customer control during the Cold War, that fact alone would have made them weaker competitors militarily, because it would almost certainly have curtailed the flow of resources into the government.

Remember, where customers rule, both prices and costs should be expected to be under tight control. But this is hardly what happened. The welfare states were manifestly the winners of the spending contest during the Cold War, commentators of all stripes cited as a factor in their triumph, their ability to spend the Soviet Union into bankruptcy.

It is precisely this fact that highlights the way in which the inefficiencies of democracy made it mega-politically predominant during a period of rising returns to violence. Massive military spending, with all its waste, represents a distinctly suboptimal deployment of capital for private gain. We suggested earlier that while welfare states were economically efficient as compared to state socialist systems, they are far less efficient for the creation of wealth than laissez-faire enclaves like Hong Kong.

Ironically, it was this very inefficiency of the democratic welfare state as compared to a more unencumbered free market system that made it successful in the mega-political conditions of industrialism. How did inefficiency fostered by democracy become a factor in its success during the age of violence? The key to unraveling this apparent paradox lies in recognizing two points.

One, success for a sovereignty in the modern period lay not in creating wealth, but in creating a military force capable of deploying overpowering violence against any other state. Money was needed to do that, but money itself could not win a battle. The challenge was not to create a system with the most efficient economy or the most rapid rate of growth, but to create a system that could extract more resources and channel them into the military.

By its nature, military spending is an area where the financial returns per se are low or non-existent. Two, the easiest way to obtain permission to invest funds in activities with little or no direct financial return, like tax payments, is to ask for permission from someone other than the person whose money is coveted.

One of the ways that the Dutch were able to purchase Manhattan for $23 worth of beads is that the particular Indians to whom they made the offer were not the ones who properly owned it. Getting to yes, as the marketing people say, is much easier under those terms. Suppose, for example, that as authors of this book, we wanted you to pay not its cover price, but 40% of your annual income for a copy.

We would be far likelier to get permission to do so if we asked someone else and did not have to ask you. In fact, we would be far more persuasive if we could rely instead upon the consent of several people you do not even know. We could hold an ad hoc election, what H.L.

Mencken described with less exaggeration than he might have thought as quote, "An advanced auction of stolen goods." And to make the example more realistic, we would agree to share some of the money we collected from you with these anonymous bystanders in exchange for their support. That is the role the modern democratic welfare state evolved to fulfill.

It was an unsurpassed system in the industrial age because it was both efficient and inefficient where it counted. It combined the efficiency of private ownership and incentives for the creation of wealth with a mechanism to facilitate essentially unchecked access to that wealth. Democracy kept the pockets of wealth producers open.

It succeeded militarily during the high water period of rising returns to violence in the world precisely because it made it difficult for customers to effectively restrict the taxes the government collected or other ways of funding the outlay of resources for the military, such as inflation. Why customers could not dominate.

Those who paid for protection during the modern period were not in a position to successfully deny resources to the sovereign, even acting collectively when doing so would simply have exposed them to being overpowered by other possibly more hostile states. This was an obvious consideration during the Cold War. The customers or taxpayers who bore a disproportionate share of the cost of government in the leading Western industrial states were in no position to refuse to pay hefty taxes.

The result would have been to expose themselves to total confiscation by the Soviet Union or another aggressive group capable of organizing violence. Industrialism and democracy. Taking a longer view, mass democracy may prove to be an anachronism that will not long survive the end of the industrial age. Certainly, mass democracy and the nation state emerged together with the French revolution at the end of the 18th century, probably as a response to a surge in real income.

Incomes had begun to rise significantly in Western Europe about 1750, partly as a result of warmer weather. This coincided with a period of technological innovation that displaced skilled jobs of artisans with equipment that could be operated by unskilled workers, even women and children. This new industrial equipment raised earnings for unskilled workers, making the income distribution more equal.

The crucial trigger point of revolution may not have been, as is often thought, the perverse idea that people tend to revolt when conditions improve. More important may be the fact that when incomes had risen to a certain level, it at last became practical for the early modern state to circumvent the private intermediaries and powerful magnates with whom they had previously bargained for resources and move to a system of direct rule, in which a national government dealt directly with individual citizens, taxing them at ever higher rates and demanding poorly compensated military service in exchange for provision of various benefits.

Because the emerging middle class soon had enough money to tax, it was no longer essential, as it previously had been, for rulers to negotiate with powerful landlords or great merchants who were, as historian Charles Tilley wrote, "In a position to prevent the creation of a powerful state that would seize their assets and cramp their transactions." It is easy to see why governments were more successful in extracting resources when they dealt with millions of citizens individually, rather than with a relative handful of lords, dukes, earls, bishops, contract mercenaries, free cities and other semi-sovereign entities with whom the rulers of European states were obliged to negotiate prior to the mid 18th century.

Rising real incomes allowed governments to adopt a strategy that placed more resources under their control. Small sums taken in taxes from millions could produce more revenue than larger amounts paid by a few powerful people. What is more, the many were far easier to deal with than the few who were generally unwilling to give their money away and were far better placed to resist.

After all, the typical farmer, small merchant or worker possessed vanishingly small resources as compared to the state itself. It was not even remotely possible that the typical private individual in Western Europe on the eve of the French Revolution could have effectively bargained with the state to reduce his tax rate or mounted an effective resistance to government plans and policies that threatened his interests.

But this is precisely what powerful private magnates had done for centuries and would continue to do. They effectively resisted and bargained with rulers, restraining their ability to commandeer resources. Quote, "Going to war accelerated the move "from indirect to direct rule. "Almost any state that makes war "finds that it cannot pay for the effort "from its accumulated reserves and current revenues.

"Almost all war-making states borrow extensively, "raise taxes, and seize the means of combat, "including men, from reluctant citizens "who have other uses for their resources." Charles Tilly. The example of Poland in the mid-18th century illustrates this perfectly. In 1760, the Polish National Army comprised 18,000 soldiers. This was a meager force compared to the armies commanded by rulers of neighboring Austria, Prussia, and Russia, the least of whom could control a standing army of 100,000 soldiers.

In fact, the Polish National Army in 1760 was small even in comparison with other units under arms within Poland. The combined forces of the Polish nobility were 30,000 men. If the Polish king had been able to interact directly with millions of individual Poles and tax them directly, rather than being limited to extracting resources indirectly through the contributions of the powerful Polish magnates, there is little doubt that the Polish central government would have been in a position to raise far more revenues and thus pay for a larger army.

Against ordinary individuals who were not in a position to act in concert with millions of other ordinary individuals, the central authorities were to prove irresistibly powerful everywhere. But the king of Poland lacked the option of directly taxing his citizens in 1760. He had to deal through the lords, wealthy merchants, and other notables who were a small, cohesive group.

They could and did act in concert to keep the king from commandeering their resources without their consent. Given that the Polish nobility had far more troops than he did, the king was in no position to insist. As it turned out, the military disadvantage of failing to circumvent the wealthy and powerful in gathering resources was decisive in the age of violence.

Within a few years, Poland ceased to exist as an independent country. It was conquered by invasions from Austria, Prussia, and Russia, three countries with armies, each of which was many times bigger than Poland's small force. In each of those countries, the rulers had found paths to circumvent the capacity of the wealthy merchants and the nobility to limit the commandeering of their resources after the French Revolution.

The French Revolution resulted in an even greater surge in the size of armies, a fact that demonstrated the strength of the democratic strategy when returns to violence were rising. The bargain government struck from the French Revolution onward was to provide an unprecedented degree of involvement in the lives of average people in exchange for their participation in wars in place of mercenaries and paying a growing burden of taxes from their rising incomes.

As Tilly said, quote, "The state's sphere expanded far "beyond its military core, and its citizens began "to make claims on it for a very wide range "of protection, adjudication, production, and distribution. "As national legislatures extended their own ranges "well beyond the approval of taxation, "they became the targets of claims "from all well-organized groups "whose interests the state did or could affect.

"Direct rule and mass national politics grew up together "and reinforced each other mightily." The same logic that was true in the 18th century remained true until 1989, when the Berlin Wall fell. As the Industrial Age advanced, incomes for unskilled work continued to rise, making mass democracy an even more effective method of optimizing the extraction of resources.

As a result, government grew and grew, adding about 0.5% to its total claims on annual income in the average industrial country over the 20th century. During the Industrial Age prior to 1989, democracy emerged as the most militarily effective form of government, precisely because democracy made it difficult or impossible to impose effective limits on the commandeering of resources by the state.

Generous provision of welfare benefits to one and all invited a majority of voters to become, in effect, employees of the government. This became the predominant political feature of all leading industrial countries, because voters were in a weak position to effectively control the government in their role as customers for the service of protection.

Not only did they face the aggressive menace of communist systems, which could produce large resources for military purposes since the state controlled the entire economy, but true taxpayer control of government was also impractical for another reason. Millions of average citizens cannot work together effectively to protect their interests. Because the obstacles to their cooperation are high and the return to any individual for successfully defending the group's common interests is minimal, millions of ordinary citizens will not be as successful in withholding their assets from the government, as will smaller groups with more favorable incentives.

Other things being equal, therefore, you would expect a higher proportion of total resources to be commandeered by government in a mass democracy than in an oligarchy or in a system of fragmented sovereignty, where magnates wielded military power and fielded their own armies, as they did everywhere in early modern Europe prior to the 18th century.

Thus, a crucial, though seldom examined, reason for the growth of democracy in the Western world is the relative importance of negotiation costs at a time when returns to violence were rising. It was always costlier to draw resources from the few than from the many. A relatively small elite group of rich represent a more coherent and effective body than a large mass of citizens.

The small group has stronger incentives to work together. It will almost inevitably be more effective at protecting its interests than will a mass group. And even if most members of the group choose not to cooperate with any common action, a few who are rich may be capable of deploying enough resources to get the job done.

With democratic decision-making, the nation state could exercise power much more completely over millions of persons who could not easily cooperate to act collectively in their own behalf than it could in dealings with a much smaller number who could more easily overcome the organizational difficulties of defending their concentrated interests.

Democracy had the still more compelling advantage of creating a legitimizing decision rule that allowed the state to tap the resources of the well-to-do without having to bargain directly for their permission. In short, democracy as a decision mechanism was well-fitted to the mega-political conditions of the industrial age. It complemented the nation state because it facilitated the concentration of military power in the hands of those running it at a time when the magnitude of force brought to bear was more important than the efficiency with which it was mobilized.

This was demonstrated decisively with the French Revolution, which raised the magnitude of military force on the battlefield. Thereafter, other competitive nation states had little choice but to converge on a similar organization with legitimacy ultimately tied to democratic decision-making. To summarize, the democratic nation state succeeded during the past two centuries for these hidden reasons.

One, there were rising returns to violence that made magnitude of force more important than efficiency as a governing principle. Two, incomes rose sufficiently above subsistence that it became possible for the state to collect large amounts of total resources without having to negotiate with powerful magnates who were capable of resisting.

Three, democracy proved sufficiently compatible with the operation of free markets to be conducive to the generation of increasing amounts of wealth. Four, democracy facilitated domination of government by its employees, thereby assuring that it would be difficult to curtail expenditures, including military expenditures. Five, democracy as a decision rule proved to be an effective antidote to the ability of the wealthy to act in concert to restrict the nation state's ability to tax or otherwise protect their assets from invasion.

Democracy became the militarily winning strategy because it facilitated the gathering of more resources into the hands of the state. Compared to other styles of sovereignty that depended for their legitimacy on other principles, such as the feudal levy, the divine right of kings, corporate religious duty, or the voluntary contributions of the rich, mass democracy became militarily the most potent because it was the surest way to gather resources in an industrial economy.

Quote, "The nation, as a culturally defined community, "is the highest symbolic value of modernity. "It has been endowed with a quasi-sacred character "equaled only by religion. "In fact, this quasi-sacred character derives from religion. "In practice, the nation has become either "the modern secular substitute of religion "or its most powerful ally.

"In modern times, the communal sentiments "generated by the nation are highly regarded "and sought after as the basis for group loyalty. "That the modern state is often the beneficiary "should hardly be surprising, given its paramount power." Joseph R. Libera. Nationalism. Much the same can be said of nationalism, which became a corollary to mass democracy.

States that could employ nationalism found that they could mobilize larger armies at a smaller cost. Nationalism was an invention that enabled a state to increase the scale at which it was militarily effective. Like politics itself, nationalism is mostly a modern invention. As sociologist Joseph Libera has shown in his richly documented book on the rise of nationalism, the nation is an imagined community that in large measure came into being as a way of mobilizing state power during the French Revolution.

As he puts it, "In the modern sense of the term, "national consciousness has only existed "since the French Revolution. "Since the time when in 1789, "the Constituent Assembly equated the people of France "with the French nation." Nationalism made it easier to mobilize power and control large numbers of people.

Nation states formed by underlining and emphasizing characteristics that people held in common, particularly spoken language. This facilitated rule without the intervention of intermediaries. It simplified the tasks of bureaucracy. Edicts that need only be promulgated in one language can be dispatched more quickly and with less confusion than those that must be translated into a babble of tongues.

Nationalism therefore tended to lower the cost of controlling larger areas. Before nationalism, the early modern state required the aid of lords, dukes, earls, bishops, free cities, and other corporate and ethnic intermediaries, from tax farmers to military contract merchants and mercenaries to collect revenues, raise troops, and conduct other government functions.

Nationalism also decisively lowered the costs of mobilizing military personnel by encouraging group identification with the interests of the state. There was such a substantial advantage in harnessing group feeling to the interests of the state that most states, even the allegedly internationalist Soviet Union, converged on nationalism as a complementary ideology.

Seen in a longer perspective, nationalism is as much an anomaly as the state itself. As historian William McNeill has documented, polyethnic sovereignties were the norm in the past. In McNeill's words, quote, "The idea that a government rightfully should rule "over citizens of a single ethnos "started to develop in Western Europe "towards the end of the Middle Ages." An early nationalist entity was the Prussian League, Prussischer Bund, which formed in 1440 in opposition to rule by the Teutonic Order.

Some of the characteristics of the order were highlighted earlier as a polar example of a sovereignty unlike the nation state. The Teutonic Order was a kind of chartered company, almost none of whose members were native to Prussia. Its headquarters shifted at various times from Bremen and Lubeck to Jerusalem, to Accra, to Venice, and on to Marienburg on the Vistula.

At one time, it ruled the district of Britsenland in Transylvania. It is not surprising that a sovereignty so unlike a state would become the object of one of the early attempts to mobilize national feeling as a factor in organizing power. However, as an indication of how different early nationalism was from later varieties, the German-speaking nobles of the Prussian League petitioned the King of Poland to place Prussia under Polish rule, largely because even then, the Polish king was a relatively weak monarch who was not expected to rule with the same rigor as the Teutonic Order.

Nationalism in its early incarnations came into play just prior to the Gunpowder Revolution. It continued to develop as the early modern state developed, taking a quantum leap in importance at the time of the French Revolution. We believe that nationalism as an idea of force has already begun to recede.

It probably reached its heyday with Woodrow Wilson's attempt to endow every ethnic group in Europe with its own state at the close of World War I. It is now a reactionary force inflamed in places with falling incomes and declining prospects like Serbia. As we explore later, we expect nationalism to be a major rallying theme of persons with low skills, nostalgic for compulsion as the welfare state collapses in the Western democracies.

You haven't seen anything yet. For most persons in the West, the fallout from the death of communism has seemed relatively benign. You have seen a drop in military spending, a plunge in aluminum prices, and a new source of hockey players for the NHL. That is the good news. It is news that most people who came of age in the 20th century could applaud, especially if they are hockey fans.

Most of the news that is destined to prove less popular is still to come. With the passage of the industrial age, the political conditions that democracy satisfied are rapidly ceasing to exist. Therefore, it is doubtful that mass democracy and the welfare state will survive long in the new, mega-political conditions of the information age.

Quote, "Congress was not a temple of democracy. "It was a market for bartering laws." Alberto Fujimori, President of Peru. Indeed, future historians may report that we have already seen the first postmodern coup, the remarkable padlocking of the Congress in Peru in 1993. This was hardly an event that attracted much favorable notice in the leading industrial democracies, but it may turn out to mean more in the fullness of time than conventional analysts would suggest.

The few who have thought about it tend to see it as just another power grab of the kind that has become depressingly familiar in the history of Latin America. But we see it as perhaps the first step toward delegitimizing a form of governance whose immediate mega-political reason for being has begun to disappear with the transition to the information age.

Fujimori's closure of the Congress is a symptom of the ultimate devaluation of political promises. A similar fate could await other legislatures when their credit is exhausted. The shift in technology that is eroding industrialism has trapped many countries with governments that no longer work or work badly. Legislatures, in particular, appear to be increasingly dysfunctional.

They grind out laws that might've been merely stupid 50 years ago, but are dangerous today. This was spectacularly obvious in Peru, where the internal sovereignty of the state had almost collapsed by 1993. Quote, "Attacks, kidnappings, rapes, and murders "have coincided with increasingly aggressive driving habits "and unsafe streets. "The police have gradually lost control of the situation, "and some of their members have been involved in scandals "and become seasoned criminals.

"People have gradually grown used "to living outside the law. "Theft, illegal seizure, and factory takeovers "have become everyday occurrences." Hernando de Soto. Peru in ruins. In a sense, Peru was no longer a modern nation state in 1993. It still had a flag and an army, but most of its institutions lay in ruins.

Even the prisons had been taken over by the inmates. This disintegration could be traced to a number of causes, but most expert attempts to explain it miss the real point. Peru was an early casualty of the technological change that is making closed economies dysfunctional and undermining central authority everywhere.

These mega-political stresses are compounded because decision-making institutions like the Peruvian Congress are trapped by perverse incentives into aggravating the very problems that they most need to solve. Representative democracy in Peru was like a pair of loaded dice. As a decision mechanism for aggrandizing the state, it was unsurpassed. But when new circumstances called for devolving power, the inherent biases that made democracy so useful under the old mega-political conditions made it increasingly dysfunctional.

The very laws passed by the Congress were rapidly destroying any foundation of value or respect for the law. As de Soto put it in "The Other Path," quote, "Small interest groups fight among themselves, "cause bankruptcies, implicate public officials. "Governments hand out privileges. "The law is used to give and take away "far more than morality permits." A Congress like that in Peru, entirely enthralled to special interest groups, has all the moral stature of a gang of fences auctioning off stolen goods.

It made the free market illegal and consequently made the law ridiculous. As de Soto writes at the pre-Fujimori period, quote, "A complete subversion of ends and means "has turned the life of Peruvian society upside down, "to the point that there are acts which, "although officially criminal, "are no longer condemned by the collective consciousness.

"Smuggling is a case in point. "Everyone from the aristocratic lady "to the humblest man acquires smuggled goods. "No one has scruples about it. "On the contrary, it is viewed as a kind of challenge "to individual ingenuity or as revenge against the state. "This infiltration of violence and criminality "into everyday life has been accompanied "by increasing poverty and deprivation.

"In general terms, Peruvians' real average income "had declined steadily over the last 10 years "and is now at the level of 20 years ago. "Mountains of garbage pile up on all sides. "Night and day, legions of beggars, car washers, "and scavengers besiege passers-by asking for money. "The mentally ill swarm naked in the streets, "stinking of urine.

"Children, single mothers, and cripples "beg for alms on every corner. "The traditional centralism of our society "has proved clearly incapable of satisfying "the manifold needs of a country in transition." De Soto described the abandonment of the grotesque legal economy for the black market that was underway before Fujimori padlocked the Congress as, quote, "an invisible revolution." We are positive about the benefits of the free market, but much less positive about the promise of a society in which the law is as degraded as the money.

The world that De Soto described in Peru prior to 1993 was a clockwork orange world where overly centralized and dysfunctional government institutions were literally destroying the civil society. This is what Fujimori set out to change. He had slashed inflation by turning off the printing presses. He had also managed to fire 50,000 government employees and trim some subsidies.

He had made a start toward balancing the budget. His program of reform included comprehensive plans to create free markets and privatize industry. But as in the former Soviet Union, most of the important elements of Fujimori's reform were yet to be adopted in 1993, including the first round of large-scale privatization of state banks, mining companies, and utilities.

Instead of enacting these necessary proposals, Peru's Congress, like the Russian Congress that challenged Yeltsin's reforms in Moscow, sought to move backwards. Their plan, restore subsidies from an empty treasury, pad the payroll, and protect any and all vested interests, especially the bureaucracy. Exactly what you would expect of a government controlled by its employees.

Fujimori claimed that the Congress of Peru was dithering and corrupt, a fact with which almost everyone agreed. He further claimed that congressional dithering and corruption made it impossible to reform Peru's collapsing economy or combat a violence assault by narco-terrorists and nihilistic sendero luminoso, shining path, guerrillas. The 70% solution.

So Fujimori closed the Congress, an act that might have indicated that he was as authoritarian as many earlier Latin American leaders. But we thought, and said so at the time, that Fujimori had correctly identified a fundamental impediment to reform. The extravagant official elegies for the Peruvian Congress by American editorial writers and officials of the State Department were not shared by the people of Peru.

While North Americans carried on as if Peru's Congress were the incarnation of freedom and civilization, the Peruvian people cheered. President Fujimori's popularity shot up above 70% when he sent the Congress home, and he was later reelected to a second term in a landslide. Most citizens apparently saw their legislature more as an obstacle to their well-being than as an expression of their rights.

In 1994, real economic growth in Peru reached 12.9%, the highest on the planet. Deflation of political promises. We saw Peru's turmoil less as a throwback to the dictatorships of the past than as an early installment of a broader transition crisis. You can expect to see crises of misgovernment in many countries as political promises are deflated and governments run out of credit.

Ultimately, new institutional forms will have to emerge that are capable of preserving freedom in the new technological conditions, while at the same time giving expression and life to the common interests that all citizens share. Few have begun to think about the incompatibility between some of the institutions of industrial government and the megapolitics of post-industrial society.

Whether these contradictions are explicitly acknowledged or not, however, their consequences will become increasingly obvious as examples of political failures compound around the world. Institutions of government that emerged in the modern period reflect the megapolitical conditions of one or more centuries ago. The information age will require new mechanisms of representation to avoid chronic dysfunction and even social collapse.

When the Berlin Wall fell in 1989, it not only signaled the end of the Cold War, it was also the outer sign of a silent earthquake in the foundations of power in the world. It was the end of the long period of rising returns to violence. The fall of communism, which we forecast in 1987 in "Blood in the Streets," and even earlier in our monthly newsletter, "Strategic Investment," was not merely the repudiation of an ideology.

It was the outward marker of the most important development in the history of violence over the past five centuries. If our analysis is correct, the organization of society is bound to change, to reflect growing diseconomies of scale in the employment of violence. The boundaries within which the future must lie have been redrawn.

Chapter that I have just read you is chapter five called "The Life and Death of the Nation-State" from a book titled "The Sovereign Individual, "Mastering the Transition to the Information Age," by James Dale Davidson and Lord William Rees-Mogg. Lord William Rees-Mogg is now deceased. James Dale Davidson is not particularly prominent, but their book was, at the time, considered to be pretty crackpot-ish.

It was revived quite a bit in the 2000s by a lot of the tech wonks. Peter Thiel, among others, has been quite a fan, and the Bitcoiners have broadly pushed it as being enormously influential and farsighted. I always find it interesting to read books 25 years after they're published, 'cause you can get some sense of what they've gotten right, what they've gotten wrong, and adapt from there, and you can think about the predictive power of their model.

If this chapter's been interesting to you, I hope you'll pick up a copy. The next chapter is called "The Megapolitics of the Information Age." There are other chapters, "Transcending Locality," "The Emergence of the Cyber Economy." I would go on and talk about nationalism and reaction and the new Luddites, many other elements to the book, but I hope you'll pick it up.

It's available on audio as well as digital copies and physical copies, of course. And I hope that you'll think about what you might see reflected in our society today. Look around at the world and ask yourself, how well has this analysis held up? Think about countries all around the world.

Obviously, most of my audience is from the United States of America. We are having our own challenges and issues, but somewhat insulated from a lot of these things. Around the world, though, you can see the impacts a little bit more clearly, and you can certainly trace a lot of influence in the United States as well.

I hope that you'll pick up a copy of the book. I personally believe that we are living in a hinge of history. I have a hard time predicting the future, but I certainly want to understand the past more keenly today than I ever did before. So check out the book, and I look forward to continuing our conversation on it in the future.

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