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The Demise of Sovereignty

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Once upon a time, nations laid claim to three-mile, off-shore extensions of their jurisdictions. Any nation desiring to send its ships within three miles of another nation’s coast either obtained permission first, or risked having its ships fired-upon, cannon-damaged, and sunk.

There was nothing magical about the measure of three miles: it simply represented the distance a cannonball could travel when fired by a shore battery. Thus, this three-mile limit is a concrete example of the core meaning of the term "sovereignty."

Sovereignty is about the power to enforce a government’s will over a people. When that power weakens, so does sovereignty. However, the measure of power is relative. It makes little difference whether the absolute power of a government deteriorates, or whether the power of competing interests strengthen. When the government cannot control its people, for either reason, sovereignty is at risk.

We are in an age where the relative balance of power is shifting. The process is being driven by the manner in which individuals and businesses communicate—by the ubiquitous and instantaneous Internet. It is no longer necessary for a business in Indianapolis to limit its contacts to customers in the midwest. Instead, its market is the world. Similarly, it is no longer possible for a government in Beijing to limit the intellectual ideas to which its people are exposed; anyone who has access to the Internet has access to the world.

Information is global and diffuse. Information is power. Where, then, does that leave national governments?

The answer, I suggest, depends upon what aspect of sovereignty one wishes to examine. At the most basic level, governments maintain certain functions necessary in a civilized society—police to control crime, courts to resolve disputes, fire departments to prevent town-wide conflagrations, tax collectors to insure funding for these services, and so forth. At the other end of the spectrum, totalitarian governments censor speech and ideas, appropriate property for the state, and dictate religious beliefs. All of the these are possible because sovereigns have more power over people than people have over sovereigns.

With the advent of distributed information, this will change. The power peaks merge, and valleys will become less distinguishable from the peaks. The Internet will do this. Let us examine four aspects of power in modern society.

Commerce. One reason why individuals support (or tolerate) governments is because they need the services they supply. If a government is the only entity that can ensure the flow of goods between two countries due to, say, the control of postal communications, the connection of telephone cables, or customs services, then businesses must support a stable government, and cede to its demands in order to carry on. With the advent of the Internet, certain factors are experiencing accelerated development: the flow of goods can be the flow of information, business communication can bypass government institutions, and the transfer of goods need not be between the geographic locations of the people conducting the transactions. Businesses will be on their own. For these businesses, other businesses will be more important than their own governments. Since the customers of these businesses may be scattered globally, other countries may be just as important as their own country, and their own government.

Speech. Speech is information. Despite attempts, information cannot be censored on the Internet. In the past, individuals in societies shared the same thoughts and values as others in that society, because they communicated primarily within a geographically small location. A government could easily cater its policies to those thoughts and values. The Internet makes small geographic locations meaningless for the communication of ideas. For this reason, it will be increasingly difficult for any government to appease a majority power block without weakening governments. Similarly, it will be impossible for a government to dictate the thoughts and values of its citizens, once exposure to other thoughts and values becomes the norm through the Internet.

Association. I may be alone with my thoughts, on my island located on my inland sea. Previously, I would be helpless to influence my national government. With the Net, although physically isolated, I can associate with millions across my country, and across the globe. No longer am I one person, and no government can afford to ignore me. I have become a power block, in both theory and in fact. Even if I ignore today the ability I now have to associate with others, no government can afford to ignore the possibility that someday I may, for some reason, choose to exercise this ability to associate. The individual, isolated or not, has become important.

With the Net, although physically isolated, I can associate with millions across my country, and across the globe. No longer am I one person, and no government can afford to ignore me. I have become a power block, in both theory and in fact.

Currency and taxation. A government that cannot control its own currency cannot control its own economics or its own nation. The movement of assets across the Net and the easy conversion of money will make the control of currencies extremely difficult. This was forcefully demonstrated last summer in the "Asian crisis," where money-fund managers, not governments, decided which economies would rise and which would fall. Similarly, the collection of taxes is necessary for the effective operation of a sovereign. However, in order to tax something, a government must locate it. With various governments competing for assets, and with individuals constantly moving their money, the accurate location of taxable funds will become problematic at best. With the communication capability of the Net, there is little reason for a business to maintain its taxable headquarters or assets where its parent country asserts its jurisdiction.

What all this demonstrates is that geographical and political boundaries are becoming porous. Sovereign powers will compete with one another, washing upon the shores of other sovereigns. Individuals will grow in power, or even in perceived power, vis-à-vis the governments of the countries in which they live. The exercise of jurisdiction will grow problematic. Forum shopping for laws, tax rates, and quality-of-life concerns will become the norm.

Look at the U.S. Thirteen original states initially functioned as preeminent sovereigns. With the advent of railroads, telephones, automobiles, radio, air travel, and satellites, differences among how these (now 50) sovereigns governed inevitably eroded. Uniform laws are now the norm; tax rates mirror the rates of other states competing for the same jobs; accents disappear; and state governments seem to tend toward serving as mere regulatory bodies.

Of course, the U.S. has a 51st sovereign—the federal government. In our world of 200 (or so) nations, there is no "global federal government" to keep the other 200 in line. Yet these nations will have to move in concert if they hope to avoid being abandoned by their people and left by the economic wayside as technologies advance. Nonetheless, there exists something that will keep these nations "in line," so to speak. It will be the Internet, and the voice of the masses as they vote, not with their ballots or with their feet, but with their keystrokes, their choices, and their values.

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