What’s the T.L.D.R?
– Industrial Revolution means transformation, disruption, and opportunity: the Industrial Revolution has enabled an increased scale in human organization, facilitated specialization and coordination, brought together groups of people in production processes, and led to the rise of commerce and infrastructure types previously hard to imagine.
– A process ongoing for the last several hundred years, it can be faulty argued that we are now experiencing a new phase of Industrial Revolution, one that will shape the World in ways we do not yet fully understand.
– There are recurring themes across all Industrial Revolutions: Tech Innovation leads to Industrial Disruption, which yields Economic Unrest, and, ultimately, Warfare.
– Sovereignty is in crisis – the cases of international law, globalization, and sovereign morality (or lack thereof). The sovereign has failed to uphold its threefold duties.
– Digital sovereignty is the future of freedom and NFTs are the latest editions of the Industrial Revolution’s essentials of change – technology plus organization.
What Is The Industrial Revolution?
A process ongoing for the last couple hundred years, it can be fairly argued that we have now entered a new phase of the Industrial Revolution:
The first infrastructure developed during the Industrial Revolution was transportation focused – roads, canals, rail, air – for the movement of people and goods. The second infrastructure developed was energy utilities – oil, pipelines, gas, electricity – for the transmission of power. The third infrastructure has been telecommunications – radio, tv, satellite, Internet – but to what end? As metaverse, 5G and other telecom technologies continue to advance, the foundation of a new social structure has grown from infancy to wide-spread media attention. Called “Web3”, this new social structure relies on community and provable digital identity for coordination, communication, production, and even economy.
I envisioned myself better able to position my investment portfolio, selecting those companies early in their growth cycles and utilizing disruptive technologies with a plan for change, by drawing correlations from past Industrial Revolutions, then forecasting how tech innovation will lead to industrial disruption, economic unrest, and, ultimately, warfare. My initial investments focused on companies such as Amazon and Nvidia, but it was in questioning the role of Bitcoin and blockchain as disruptive technologies that I was able to formalize my investment thesis for this Fourth Industrial Revolution. The chart below highlights the cycles of innovation, disruption, unrest, and warfare found in each phase of the Industrial Revolution.
The First Phase Of Industrial Revolution
The First Industrial Revolution occurred in the late 18th to 19th centuries, and started in Europe. Samuel Slater brought new manufacturing technologies from Britain to the U.S. and founded the first cotton mill in America. This was a big deal and many other mills and factories sprung up quickly. However, they were all powered by water, which initially restricted industrial development to the Northeast. This concentration of industrial development is what facilitated the growth of advanced transportation innovations in that area, including railroads and canals, which further encouraged commerce and trade with other countries. The Northeast grew in clout, wealth, status… they had all the cool stuff from Europe, all the new clothes and fashions, and, perhaps most importantly, the North got steamboats. The South was left behind as a producer of America’s wealth, but not taking part in it, as America’s primary export continued to be cotton. Finally, because of economic and political issues around Slavery, the South seceded from the Union, an act that ultimately led to the American Civil War.
Tech Innovations Of The First Industrial Revolution
– Dynamite and high explosives
– Railroads
– Shrapnel
– Steam Power and the Steam Boat
– Structural Steel
– Typewriters
– The Bolt-action Rifle
– The Submarine
– The Colt .45
– The Gatling Gun
– The Maxim Machine Gun
– The Spinning Jenny
– The Swiss Army Knife
– The Telegraph
– The Cotton Gin
– The Mule
– The Weaving Loom
– Zippers
Industrial Disruptions Of The First Industrial Revolution
– New forms of manufacturing activities emerged as, for the first time, animal and some human labor was substituted by machines.
– The cotton gin allowed for hemp to replace cotton. This manifested huge and far-reaching impacts for textiles, healthcare, and pharmaceuticals.
– Transportation changed U.S. infrastructure and logistics forever. Steamboats opened up new global marketplaces, while railroads changed the face of America. The Transcontinental Railroad was completed in 1869.
– The telegraph introduced a communications revolution in America!
– Rockefeller and Andrew Carnegie began their rise to power – The petroleum industry was revolutionized while structural steel went into mass production.
Economic Unrest Of The First Industrial Revolution
– Industrial cities of various specializations arose, such as cities focused primarily on steel, textiles, or tools.
– Society shifted from rural and farming focused to urban and manufacturing focused, forever changing the way Americans lived, ate, made money, worked, and had families.
– Lacking a diversified agricultural economy, the South’s one-crop, cotton, economy became steadily less valuable year-over-year as countries around the world ramped up production of raw cotton. In contrast, Northern infrastructure grew and trade expanded due to innovations in transportation.
– Immigrants flooded into the U.S. Northern states
– In 1850, to the consternation of Southerners, California was admitted into the Union as a free state (Gold Rush miners didn’t want to compete with slave labor). For the first time the balance of power in the Senate went to the Northern states.
Warfare Of The First Industrial Revolution
This era of innovation didn’t just create opportunities for the substitution of efforts by machines in agriculture, communication, and transportation, but made change in the theater of war, as well. With the advent of repeating rifles, machine guns, and the Colt .45, a trend toward military mechanization had begun.
Rapid development in military technology had a dramatic impact on navies and armies in the industrialized world from 1840-1914. Of the steamship, British General Sir Howard Douglas wrote in 1858 that, “The employment of steam as a motive power in the warlike navies of all maritime nations is a vast and sudden change in the means of engaging in action on the seas, which must produce an entire revolution in naval warfare.” And, in 1862 during the American Civil War, the first iron-clad warship, the USS Monitor, was built and used by the Union Navy. Many other firsts in the history of warfare were experienced during the Civil War, such as the first extensive use of heavy rifled cannons made of high-quality cast iron. For armies around the World, the reduction by rifled Union artillery of Fort Pulaski in 1862, a supposedly impregnable Confederate fortification, marked the beginning of a new chapter in the design of permanent military fortifications.
Further, the Civil War (1861-1865) was the first conflict where the locomotive demonstrated its pivotal role in rapidly deploying troops and material. Civil War historians David and Jeanne Heidler write that, “Had the war broken out ten years before it did, the South’s chances of winning would have been markedly better because the inequality between its region’s railroads and those of the North would not have been as great.” Finally, the Civil War was the first conflict in which the telegraph played a major role. The most revolutionary aspect of the device was how it transformed the relationship between the executive branch and the military. Prior to the telegraph, important battlefield decisions were left to the discretion of field generals. The innovation of the telegraph gave the President the ability to fully exercise his prerogative as Commander In Chief.
The Second Phase Of Industrial Revolution
Following the Civil War, the pace of industrialization in the U.S. continued to quicken. Called the “American Industrial Revolution,” or the “American Age of Invention,” this period encompassed the late 19th century to early 20th century, and saw the rise of famous inventors such as Thomas Edison, Alexander Graham Bell, Henry Ford, and the Wright Brothers. During the Second Industrial Revolution, many innovations were created that we now take for granted and infrastructure for the transmission of power, especially gas and electricity energy utilities, were developed, leading to industrial disruptions in communication, transportation, and production. As a result, fresh opportunities for leisure were presented and a new class of Americans was created, the American Middle Class. Unfortunately, while the Second Industrial Revolution yielded massive economic growth, this progress was unstable and short lived – tech innovations led to the Gilded Age, but industrial disruptions led to The Great Depression.
Tech Innovations Of The Second Industrial Revolution
– Automobiles
– Airplanes
– Artillery
– Battleships
– Christmas Lights
– Electric Generators
– Elevators
– Flashlights
– Light Bulbs
– Motion Pictures
– Motorcycles
– Refrigerators
– Skyscrapers
– Telephones
– The Hershey Bar
– The Torpedo
– Traffic lights
– Washing Machines
Industrial Disruptions Of The Second Industrial Revolution
– Inventions such as the telephone, the typewriter, and the motion picture changed the way in which we communicate forever and impacted cultures around the world.
– Mass production, economies of scale and assembly lines changed manufacturing forever.
– The nature of the “job” changed as factories represented large corporations. People became cogs in the corporate machine as work became more and more repetitive, often involving only one small step in the manufacturing process.
– Structural steel changed the look and feel of cities forever as the first skyscrapers came into being.
– The automobile created a new American culture of connectivity, going a long way towards healing divides caused during the Civil War and the First Industrial Revolution.
– Transportation changed forever with the introduction of the airplane.
– Thomas Edison’s most famous invention, the light bulb, paved the way for modern life.
– The relationship between the U.S. government and the citizens of the U.S. changed forever – during this era, Americans adopted the belief that their government is meant to take care of them.
Economic Unrest Of The Second Industrial Revolution
– Andrew Carnegie became a “titan of the steel industry” by controlling every aspect of the steelmaking process.
– Rockefeller came to monopolize 90% of the oil industry, severely limiting competition. At his death, Rockefeller had assets equaling 1.5% of U.S. GDP.
– Industrial regions and manufacturing belts developed as cities continued to grow in specialization and interdependence.
– Women began to enter the workforce.
– Child labor became a major issue.
– Dangerous and unsanitary working conditions, long hours, and concern over wages contributed to the growth of labor unions.
– Millions of Europeans immigrated to America, which worsened living conditions in cities. Between 1860 and 1900, fourteen million immigrants came to the U.S.
– Deplorable urban conditions became the norm and sewage ran in city streets, contaminating water supplies and spreading disease. Conditions in these urban slums eventually led to the “Progressive Movement” of the early twentieth century, as well as many new laws to protect and support people.
Warfare Of The Second Industrial Revolution
During this era, we see individuals becoming more wealthy and influential than governments and sovereign nations. While tech innovations yielded disruptions that created a new American Middle Class, these disruptions also led to the rise of an ultra-rich, elite few, and monopolies became a clear and present danger during this Second Phase of the Industrial Revolution.
Ultra-rich, monopolistic industrialists, “Robber Barons”, as they became known, created for themselves political clout through economic influence. It was through this political clout that the industrial magnates forced the U.S. Government to adopt policies which supported industrial development and catered to personal success of the few, such as providing land grants for the construction of railroads and maintaining high tariffs to protect American industry from foreign competition. It is no coincidence that, during this era, we see the first U.S. trade wars, trade wars that, ultimately, led to the Great Depression – a major catalyst for the breakout of World War.
Seen during the Second Industrial Revolution was a continued trend in military mechanization for warfare on both land and sea. During this era was the advent of long-range artillery, mechanized transport, highly accurate long-range naval guns, heavy steel armor for battleships, the torpedo, and the destroyer. This second era of innovation also witnessed the first instance of modern chemical warfare when, on April 22, 1915, German soldiers opened 5,730 canisters of poisonous chlorine gas on the battlefield at Ypres, Belgium during World War I.
In the 1940s, toward the tail-end of the Second Industrial Revolution, a new era of military technology arose and included innovations such as nuclear weapons, radar, jet engines, proximity fuses, advanced submarines, and aircraft carriers. If World War I was the “Chemists’ War”, then World War II was the “Physicists’ War” – in 1942, The Manhattan Project was started in the U.S. in an attempt to build the first nuclear bomb. The first successful test of a nuclear bomb was carried out in New Mexico, on July 16th, 1945. On August 6th and 9th, 1945, nuclear bombs were dropped on the Japanese cities of Hiroshima and Nagasaki, respectively, which effectively ended the second World War. The age of nuclear weaponry was ushered in, and the World was never the same.
The Third Phase Of Industrial Revolution
The Third Industrial Revolution started in the second half of the 20th century and recently ended, with some naming the often misunderstood Mayan Calendar “End of the World” (2012) as the end of this era and the start of the Fourth. During this phase of the Industrial Revolution we saw advancements in manufacturing capabilities and global communications that gave rise to amazing world-wide production networks and new levels of business efficiencies never before seen. Economies and cultures became connected at an increasing pace, with the Internet as the primary tool for communication across the World. This “globalization”, a word that later became synonymous with corporate capitalism, set off advances in automation, computing, and information and communication technology, but also delivered a mixture of economic stress and social transformation that ultimately led to never-ending warfare. While the Second Industrial Revolution created the American Middle Class, the Third Industrial Revolution destroyed it.
Tech Innovations Of The Third Industrial Revolution
– Automation
– Cloud Storage
– Hand-held Calculators
– Integrated Circuits
– Lasers, Including Anti-satellite and Anti-artillery Lasers
– Microprocessors
– Mobile Phones
– Nuclear Power
– Personal Computers
– Radar
– Social Media
– Shipping Containers
– Space Exploration
– Spy Satellites
– The Internet
– The Taser
– The Pulsed Energy Projectile
– The Plasma Acoustic Shield System
– The Tomahawk Missile
– Video Games
Industrial Disruptions Of The Third Industrial Revolution
– This third great wave of invention and disruption saw the globalization of markets, competition, technology, corporations and industries, and gave rise to global production networks as an outcome of trade liberalization and lower global transport costs.
– Logistics and transportation improvements supported the space between production and consumption as manufacturing processes became automated and labor costs were minimized (especially for big business) through a rapid increase in cross-border movement of goods, service, technology and capital.
– Powerful computing was made possible by the development of the integrated circuit in the 1950s, starting the digital revolution.
– The Internet became influential in connecting people across the World.
– By the end of this era we see high-tech companies replacing traditional, industrial-focused, marketcap leaders, such as Exxon and General Electric, ushering in the era of the tech-giant with companies such as Amazon, Facebook (META), Google, and Microsoft. As said by Marc Andreessen, “Software will eat the World.”
Economic Unrest Of The Third Industrial Revolution
– Globalization opened up unlimited opportunities for corporations to reduce cost, improve profit, and control their industries through incredible wealth and political influence, and monopolies became global.
– The “Third Great Wave” of tech innovation and industrial disruption started a digital revolution that created a huge economic divide between the skilled few, and the rest of society. This destroyed the American Middle Class and decimated the small-time farmer (previously a back-bone of the American economy).
– The U.S. became a Nation of renters, forever indebted and unable to break free of the shackles of debt. In addition to middle America’s eroding purchasing power, there was a decline in the level of U.S. influence and importance as global power shifted to China.
– The Big Mac Index became an informal measure of purchasing power parity among World currencies as national economies across the World became increasingly economically interdependent.
Warfare Of The Third Industrial Revolution
Largely because of globalization and worldwide economic interdependence, the third wave of innovation and disruption saw a shift away from declarations of war and towards “policing actions”, a purely political consideration that resulted in constant, unending warfare around the World. In place of declared wars and large conventional forces fighting climactic battles, conflict instead featured undeclared wars, hybrid operations combining military and nonmilitary activities, and smaller precision-based forces. There was no longer a strict delineation between military and nonmilitary efforts. This era of war without end witnessed the Cold War, the Korean War, the Vietnam War, the Gulf War, the War in Afghanistan, the Iraq War, Operation Desert Storm, the War on Terror, and even a War on Drugs, to name only a few of the major conflicts.
While geopolitics changed the face of warfare, innovations in computer technologies changed the nature of warfare. The first decades of digital computing, computer science, and computer engineering were shaped, and almost entirely funded, by military spending, and it was during this era that we saw a shift towards a focus on information superiority and the ability of a government to dominate a battlespace from peace operations. Cyber warfare became the modus operandi, and cyber terrorism began. Adoption of both cyber warfare and cyber terrorism advanced quickly around the World, leading to “net-centric” operations, networked swarming warfare, and the establishment by NATO of the Cooperative Cyber Defence Centre of Excellence (CCD CoE) in Tallinn, Estonia, in order to enhance the organization’s cyber defense capability. Finally, in 2011, the US Defense Department declared cyberspace to be a new domain of warfare.
The Fourth Phase Of Industrial Revolution
You are here, now.
We know that each era of the Industrial Revolution follows the same pattern of tech innovation yielding industrial disruption that leads to economic unrest and, ultimately, warfare. But, where in the cycle are we, as of the writing of this sentence in 2024?
When I first started writing of the Fourth Industrial Revolution, I firmly believed we were in the tech innovation phase, and quickly approaching industrial disruption. Ten years later, it now seems we’ve entered the economic unrest phase of this Fourth Industrial Revolution, featuring a combination of near all-time high housing prices around the world, destructive interest rates, incomprehensible levels of debt (both for sovereign nations and individuals), crippling inflation, massive migration, and geopolitical risk at levels not seen for nearly 100 years after just coming out of a global pandemic. Another global warfare quickly approaches, of this we can be sure.
Tech Innovations Of The Fourth Industrial Revolution
– The infographic below shows our current tech foundation leading to some innovation accelerators that then may yield disruptive scenarios and, hopefully, produce a new economic paradigm.
– The infographic above is not intended to be comprehensive, but instead is intended to illustrate that on the other side of warfare we should expect to see, as in every phase of the Industrial Revolution, a new era of prosperity, productivity, and wealth enabled by continued advancements in “next-gen” technologies that later become the well-established norms, such as the Internet of the Third Industrial Revolution. Further, one should realize that, as a result of constant change, the Industrial Revolution is an ongoing process, that disruption is continuous, and that a fifth era of innovation and industrial disruption, economic unrest, and warfare is as inevitable as was this Fourth Industrial Revolution. It stands to reason that embracing never-ending change is fundamental to securing one’s economic and financial success.
– One innovation accelerator that I believe is key in enabling a new economic paradigm on the other side of this Industrial Revolution is the Blockchain, which will advance Provable Digital Identity through NFTs, P2P Lending through Decentralized Finance (DEFI), and trustless, borderless, transaction through cryptocurrencies such as Bitcoin and Ethereum.
– Other key disruptive technologies of this era include: Advanced cybernetics and medical implants for enabling “transhumanism”, Artificial Intelligence, Machine Learning, and Deep Learning, especially for enabling advanced drones and robotics, Autonomous Transportation and Self-Driving Cars, and Virtual, Augmented, and Mixed Reality, for enabling smart city and smart home metaverses.
Industrial Disruptions Of The Fourth Industrial Revolution
– In past phases of the Industrial Revolution, industrial disruption was primarily restricted to the “blue collar” jobs of the low and middle class. That is no longer the case in this fourth era of innovation and disruption. With the introduction of machine and deep learning, artificial intelligence has created an opportunity for corporations to replace extremely skilled individuals who were considered “safe” in the past, such as coders, doctors, lawyers, accountants, traders and all sorts of other professional careers.
– With the coming proliferation of commercial drones and autonomous machines of all shapes and sizes, anyone who moves anything from one place to another will be disrupted, from the trash man to the micro-surgeon.
– Disruption in the financial sector has been devastating to small, community banks, as mergers and acquisitions allowed for the creation of “The Big 4 Banks” and the introduction of “Too Big to Fail”. Financial sector monopolies continued to grow with the merger of Capital One and Discover, further threatening financial stability by reducing competition.
– The agricultural industry has been disrupted with the merger of giant agtech companies such as Bayer and Monsanto, and Dow Chemical and Syngenta, continuing a trend towards patented and genetically altered seeds through agtech technologies such as “seed-chipping” and CRISPR and chemical controls for plant health, soil fertilization, and pest control, negatively impacting the biodiversity of the World’s agricultural biomes.
– The promise of social media (for users) was destroyed as social media platforms monetized their user base through the use of invasive algorithms and ad revenue models. However, these algorithmic engagement controls and ad revenues also led to the rise of the social media influencer.
– The increasing flexibility of capital through advanced manufacturing systems may erode the comparative advantage currently enjoyed by many emerging and developing countries, which are focused on labor-intensive goods and services.
Economic Unrest Of The Fourth Industrial Revolution
– The richest 1% of the World’s population owns more than half of all household wealth, with just 62 individuals controlling more assets than the poorest 3.6 billion people combined.
– Global mass migration is changing the needs and demographics of destination countries and adding to stress on global food systems.
– Money printing, inflation, loss of purchasing power: The purchasing power of the USD has continued to decline. In fact, the US Dollar lost 50% of its purchasing power from 2020 through 2023, alone. In 1979, US National Debt was $3.4 Trillion and the average home sale price was $72,000. Today, US National Debt sits only momentarily at $34.2 Trillion and the average home sale price is approx $400,000. Money printing is a political act of wealth redistribution from the bottom to the top. The words of F.A. Hayek come to mind: “Governments have a strong interest in persuading the public that the right to issue money belongs exclusively to them, and the monopoly of money has buttressed government power. It is perhaps significant that Adam Smith does not mention the control of the issue of money among the ‘only three duties [which] according to the system of natural liberty, the sovereign has to attend to’.”
– The national debt clock can be seen in real time here: https://www.usdebtclock.org/. Please note that the debt assigned to each U.S. Citizen is far different from the debt assigned to each U.S. Taxpayer, and I expect that gap to widen due to mass illegal immigration. For posterity, the current U.S. debt assigned to each citizen is $101,973; while the U.S. debt assigned to each taxpayer is $265,178.
– Record levels of credit card debt at all-time high interest rates: Today, the average debt an American owes is $103,358 across mortgage loans, home equity lines of credit, auto loans, credit card debt, student loan debt, and other debts like personal loans. As of the fourth quarter of 2023, total household debt in the U.S. was $17.50 Trillion, up $210 Billion since the third quarter of 2023, leaving the balance the highest since the New York Fed began tracking in 1999. This marks the third consecutive quarter in which Americans’ credit card balances topped $1 trillion, which had never happened before the second quarter of 2023. It also continues a trend of fourth-quarter credit card debt increases. Since 1999, credit card debt has fallen during the fourth quarter of a year just twice – in 2009 and 2010 as the nation wrestled with the impact of the Great Recession. Making matters far worse, Americans carried a balance on 56% of all active credit card accounts in the third quarter of 2022, according to the most recent available data from the American Bankers Association, at a time when credit card rates are over 20% on average. See the chart below for total outstanding consumer credit card balances from 1999 to Q4, 2023, and note that parabolic debt levels started during the global pandemic, with no looking back.
– Despite a falling real-income level due to inflation of the US Dollar and consumer goods prices, supply chain issues in energies and other key commodities, and increased risk of global warfare, Americans keep piling on debt at near all-time interest rate levels and remain in a state of “Extreme Greed”, according to the Fear & Greed Index. The chart below shows the historical interest rates of credit cards over time. Note that the margin between the prime rate and the average credit card interest rate increased by 9.46% since May 2000, reaching a peak of 14.27% in May 2023. The purple line is the average interest rate of all accounts with finance charges. The turquoise line is the average interest rate of all credit card accounts. The green line is the interest rate margin of all accounts with finance charges. The yellow line is the interest rate margin of all credit card accounts. The dark blue link is the Prime Rate.
– Further, in an article dated February 2024, Nerdwallet pointed out that 62% of Americans said they had gambled in the last year, with a 12-month total averaging $1027. Those of Generation Z topped the charts, wagering $1885 on average over the last year. Put another way, the average American gambled a month of rent over the last year, despite acquiring a record level of credit card debt at record high interest rates. It’s terrifying to also note that 24% of Gen Z gamblers and 22% of millennials consider gambling to be an investment.
Warfare Of The Fourth Industrial Revolution
“This is another type of war, new in its intensity, ancient in its origin – war by guerrillas, subversives, insurgents, assassins, war by ambush instead of by combat; by infiltration, instead of aggression, seeking victory by eroding and exhausting the enemy instead of engaging him. It preys on economic unrest and ethnic conflicts. It requires in those situations where we must counter it, and these are the kinds of challenges that will be before us in the next decade if freedom is to be saved, a whole new kind of strategy, a wholly different kind of force, and therefore a new and wholly different kind of military training.”- President John F. Kennedy, addressing graduating West Point class of 1962.
In this 1962 speech, the other type of war to which Kennedy refers is “asymmetrical warfare”. While not modern in its origin, what is new is that the technologies of the Fourth Industrial Revolution have brought asymmetrical warfare to a global level, to new theaters of war far beyond terrorism or insurgency, and that an increasingly connected World has created huge opportunities for success in remote, contactless conflict. How can governments around the World prepare for warfare that can happen anywhere, at any time, and everywhere, all at once?
On the topic of asymmetrical warfare, David Galula said: “It’s effective, productive, and typically requires few resources for deployment. Disorder is cheap to create and very costly to prevent. Because we cannot escape the responsibility of maintaining order, the ratio of expenses between us and the asymmetric enemy is high. Because of the disparity in cost and effort, the asymmetric enemy can thus accept a protracted war; we should not. The asymmetric enemy is fluid because he has neither responsibility nor concrete assets; we are rigid because we have both.”
Asymmetrical warfare of the Fourth Industrial Revolution relies on primacy of nonmilitary domains and independent forms of combat, such as communications, diplomacy, economics, finance, ideology, information, intelligence, politics, and technology, and utilizes cyberwarfare, propaganda, and deception, especially towards one’s own people, in promoting disorder as a legitimate objective. This is a type of enemy for which we are ill prepared. This is an enemy that seeks to mislead, demoralize, and paralyze, both militaries and populations, by affecting the information flow processes that impact government administration and command, military control systems, major manufacturing, fuel and energy infrastructure, transportation hubs, chemical processing units, and nuclear power facilities in order to achieve diplomatic leverage, attain both foreign policy goals, and create a pro-state fiction.
Warfare in this fourth era of innovation and disruption is based on the idea that the main battlespace is in the mind and, as a result, wars are to be dominated by information and psychological warfare with the main objective being to reduce the necessity for deploying hard military power to the minimum necessary, making the opponent’s military and civil population support the attacker to the detriment of their own government and country. As well-stated by Jolanta Darczewska: “Information is a dangerous weapon. It is cheap, it is a universal weapon, it has unlimited range, it is easily accessible and permeates all state borders without restrictions.”
(And Why Should I Care)? The Crisis Of Sovereignty
I’ve outlined above the case for a great transformation – that what we are experiencing now is indeed a new era of innovation and disruption. But where are we in the cycle of this Fourth Industrial Revolution? What’s at risk and what comes next?
“Authority and power are facts as old and ubiquitous as society itself, but they have not everywhere and at all times enjoyed the support or suffered the restraints which sovereignty, a theory or assumption about political power, seeks to construct for them.” – F.H. Hinsley, Sovereignty.
The history of the modern world is closely linked to the birth, growth, and triumph of the political form known as the sovereign state. However, since the Globalization experienced during the Third Industrial Revolution, we have seen the foundations of the sovereign state system weakening to the point of disappearing as the political and corporate elite around the world control, manipulate, and fail to “suffer the restraints which sovereignty… seeks to construct for them”.
International Law Creates A Crisis Of Sovereignty
From the perspective of international law the concept of national sovereignty is in decline. Poverty is increasing, global food systems are at risk, mass migrations are expected to continue, and demographics are shifting around the World at a time when we’ve reached geopolitical risk like we’ve never seen in our lifetimes. With warfare next in store for us in this Fourth Industrial Revolution, tensions are likely to escalate over the next several years.
“The fragmented development of legal functions – at both the domestic and international levels, in both administrative and political fields – can no longer be contained in a single systemic frame.” – Fischer-Lescano. In addition, “Sovereign states that harbour, nurture, or manipulate terrorists – even states that may be unable to suppress terrorists operating on or from their territory – are placing themselves outside the legitimate international system and its legal protections and immunities. They are threatening or acquiescing in a threat to other sovereign states and to the international order. They are in breach of international law and are provoking foreign powers to intervene in their territorial jurisdiction or to take other actions to deal with the threat.” – Robert Jackson, Sovereignty. Why? Because, “The essence of political power is its jurisdiction over the land.” – Carl Schmitt, Nomos of the Earth.
To be sure, the whole of the state of law is no longer able to stick to the concrete rules of normative organization of “government according to the law” (or its legal processes). As argued by Michael Foucault, the deductive character of law is no longer able to integrate the concrete case, to regulate a unique conflict, to build (continuously and repetitively) trustworthy instruments for the application of law. “… governments pervert the abundance which civilized life produces to carry on their uncivilized part to a greater extent. If commerce were permitted to act to the universal extent it is capable, it would extirpate the system of war, and produce a revolution in the uncivilized state of governments.” – Thomas Paine, The Rights of Man. If we follow this line of thinking, then the twin forces of sovereignty and commerce will eventually gain the upper hand – politics will be subordinated to universal morality, foreign policy to the general interest of society, violence and oppression to reason and liberty.
Globalization Creates A Crisis Of Sovereignty
Making matters more complex is the fact that everyone and everything are now connected as a result of Globalization: “Today, sovereignty is a global system of authority. It extends across all the regions, civilizations, languages, cultures, ethnic and racial groupings, and other communities and collectivities into which humanity is divided. The entire population of the World, more than 8 billion people, find themselves living inside a ‘sovereign’ state… they have no choice except to live in one state of another, having to make the best of it, enjoying its advantages and opportunities and suffering its hazards and liabilities. The weight of that now universal fact of human affairs is not always fully appreciated.” – Robert Jackson, Sovereignty.
According to Hent Kalmo, “Symptoms of the crisis [of sovereignty] include the development within the state of powerful economic and social forces; the decline of public services and the increasing privatization of public corporations; the loss of control of the economy by the state and domination by the market; regulation of important activities not by the state but by independent agencies; the developing role of minorities; and the dramatic changes we see in the legal system because of such phenomena as the growing importance of international organizations or legal pluralism. These symptoms affect not mere peripheral characteristics of the state, but its very essence: sovereignty.” And, “The core security interests of [sovereign] states emanate from threats of several kinds: weapons of mass destruction including nuclear weapons, support for transnational terrorist activities including safe havens, and energy supplies and prices.” Globalization, the ease of communication and transportation, and the availability of nuclear weapons have created a situation in which “even states with very limited material resources can threaten the key interests of even the most well endowed polities.” – Sovereignty In Fragments.
Lack Of The Sovereign’s Morality Creates A Crisis Of Sovereignty
According to the Founding Fathers of the United States, the validity of government is rooted in its relationship to the Laws of Nature, and the Founding Fathers make a distinction in The Declaration of Independence between the bonds created by the powers of politics and the bonds created by the powers of the earth – the Laws of Nature and of Nature’s God. According to natural law, human beings possess intrinsic values that govern their reasoning and behavior, rules of right and wrong that are inherent in people and not created by society, culture, or courtrooms. The seven basic goods of natural law are: life, knowledge, sociability/friendship, play, aesthetic experience, practical reasonableness, and religion. Taken together, it would stand to reason that maximum individual and group liberty and sovereignty should yield for a population the greatest happiness, for an economy the greatest productivity. Is the sovereign supporting in your life the seven basic goods? In 1581, Theodore de Beze said in Du droit des magistrats sur leurs sujets, “Obedience to [the commands of princes] is subject to the condition that what they command is not contrary to religion or morals. I call contrary to religion those commands which order to be done what the first Tables of the Law of God forbid, or which forbid to be done what they order. I call contrary to morals those commands obedience to which involves a man in injuring his neighbors or not rendering to him his due, according to his public or private vocation.” It can be fairly argued that the sovereign is in such a state of depravity that laws no longer support the seven basic goods of its people and that the sovereign is in fact acting contrary to the foundations of the U.S. Pledge of Allegiance: “one nation under God… with liberty and justice for all.”
The Sovereign Has Failed
“… the inequality of fortunes went on continually increasing. The greater part of the citizens had no land, and without it the manners and customs of those times rendered it difficult for a freeman to maintain his independence … even the retail trade were carried on by the slaves of the rich for the benefit of their masters, whose wealth, authority, and protection made it difficult for a poor freeman to maintain the competition against them. The citizens, therefore, who had no land had scarce any other means of subsistence but the bounties of the candidates at the annual elections.” – Adam Smith, The Wealth Of Nations. Here, Smith is speaking of the fall of Rome; not due to barbarian invasions and over-expansion, but due to economic monopolies and an ever-increasing disparity between the haves and the have-nots. Fast forward to the modern era, and the passage above could just as easily be speaking of us right now. In The Wealth Of Nations, Adam Smith defines the duties of government as threefold:
The First Duty Of The Sovereign
“The first duty, that of protecting the society from the violence and invasion of other independent societies, can be performed only by means of a military force …”
The Second Duty Of The Sovereign
“The second duty, that of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice …”
The Third Duty Of The Sovereign
“The third and last duty is that of erecting and maintaining those public institutions and those public works, which, though they may be in the highest degree advantageous to a great society, are, however, of such a nature, that the profit could never repay the expense to any individual or small number of individuals, and which it therefore cannot be expected that any individual or small number of individuals should erect or maintain.”
Has The Sovereign Upheld Its Threefold Duties?
Sovereign states are intended as havens where people can live out their lives free from threats and acts of plunder, predation, and brutalization, and a fundamental responsibility of statesmen and stateswomen is to uphold the safety, freedom, and dignity of their people. “I regard it as the essential function of the sovereign to ensure the reliability of the individual’s environment… the social universe must be at the same time fluid, responsive to new initiatives, and a solid ground to which the individual may trust. The unexpected must be allowed to happen, and legitimate assumptions must not be belied. The task of adjustment and stabilisation is the essential duty of the sovereign.” – Bertrand de Jouvenel, Sovereignty: An Inquiry into the Political Good.
Are you living “free from the threat of plunder, predation, and brutalization”? Is your environment a “solid ground [you] may trust,” one in which “legitimate assumptions [are] not belied’? Is the sovereign stabilizing and responsive to, rather than controlling of, new initiatives? The answer to each must be a resounding, “No.” Without any doubt, the promises of the U.S. Declaration of Independence, “Life, Liberty, and the pursuit of Happiness,” are in jeopardy of being lost to us forever.
Final Thoughts
Will we challenge existing principles and norms, or continue to be violated? “If we want freedom, we must persuade others that these are worth having.” – Hal Finney. So then, how do we know when, “it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them”, as stated in The U.S. Declaration of Independence? Have we finally reached the point at which “Humanity revolts against a sovereign who, without necessity or without pressing reasons, wastes the blood of his most faithful subjects and exposes his people to the calamities of war”? – Vattel, The Law of Nations.
Thanks for reading!