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James Dale Davidson and Lord William Rees-Mogg edit and publish Strategic Investment, one of the world's best-performing investment newsletters. They are coauthors of Blood in the Streets. Davidson is a principal of Strategic Advisors Corp. Lord Rees-Mogg is a financial advisor to some of the vis mere world's wealthiest investors. He was formerly editor of the Times of London and is vice-chairman of the BBC. vis mindre

Includes the name: DAVIDSON JAMES DALE

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investment writer
National Taxpayers Union (founder)



The book's most important prediction hasn't materialized. In the end the state found a way to tax online businesses, so the big transition to a stateless society hasn't happened. The authors make a big deal of encryption. And yet we still pay taxes in 2021, even though our online purchases and online banking are all based on encrypted communication. Bummer.

Reading this 1997 book in 2021, it's tempting to think that blockchain will change things - that *now* the internet will finally be decentralized, economic activity will be untaxable, and the state will collapse. Maybe this book wasn't wrong, just early? But that's like being a marxist who sees every financial crisis as *the* ultimate crisis of capitalism. The state has adapted to disruptive technologies before - even to encryption -, it might very well adapt to blockchain and to quantum computing and to whatever comes next.

Other predictions have materialized though. The part about "cybercash" is essentially about Bitcoin - except that it predates Bitcoin by eleven years. The authors talk about how "cybercash" will make it harder for states to tax through inflation, and it is precisely in countries that have seen inflation rise in the 2010s, like Argentina and Venezuela, that Bitcoin has been most popular.

It's also hard not to think of Estonia's e-residency program, created in 2014, when the authors predict small nations competing for citizens, and that such competition wouldn't necessarily involve immigration. And it's impossible not to think about Amazon Turk and Upwork when the authors talk about technology will accelerate the transition from jobs to project-specific work - a post-Coasean economy.

Also, the authors anticipate the hordes of humanities majors and journalists with no no marketable skills who have turned against technology and capitalism:

“The nationalist and Luddite reaction will be strongest, however, not among the very poor but among persons of middling skills, underachievers with credentials, who came of age during the industrial era and face downward mobility.”

Relatedly, the authors correctly predict the multiplication of self-declared (and more or less officially recognized) "oppressed" categories. And they offer a neat theory about it: "We see the growth of victimization as mainly an attempt to buy social peace by not only widening membership in the meritocracy as [Christopher] Lash argues, but also by reconstituting the rationalizations for income redistribution."

Fake news and echo chambers are also there: "you'll even be able to order a nightly news report that simulates the news you would like to hear. [...] You'll see any story you wish, true or false, unfold on your television/computer".

It's also great to be reminded of how absurd it is to consider "fair" that "different persons should pay wildly different amounts for the services of government". Why should someone with an income of US$ 2X pay twice as much tax than someone with an income of US$ X? If anything policing wealthier neighborhoods is *cheaper* than policing poorer neighborhoods. In fact the lower your income the more likely you will use up *more* state resources, so you should pay more taxes, not less.

Finally, every now and then it's good to be reminded that our faith in democracy is no less ludicrous than a medieval peasant's faith in the Church. The authors do a good job drawing parallels between the religious myths of 1000 years ago and the civic myths of today. The state is nothing more than the stationary bandit of Mancur Olson's "Power and Prosperity" - but the mythology around the state is strong and it's easy to forget that we're all serfs.
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marzagao | 4 andre anmeldelser | Jun 1, 2021 |
It gets one major detail wrong - only rich people will be sovereign (are, as this has already happened). They already only pay as much in tax as they want to and they have no homeland - just a tax haven. Otherwise gets everything else spot on.
Paul_S | 4 andre anmeldelser | Feb 27, 2021 |
Viewing high level history through a lens of Frederic Lane's concept of the economics of violence and protection, the authors provide an interesting take on how western culture got to where it is (as at the late 1990s, when the book was written) and where it is going in the near future. Some of the predictions are well done (terrorism, nationalism, and cyber-currency) but the authors have a strong libertarian bias which colours many of their opinions, and taints much of the prose as well. The lambasting of (now historic) figures such as President Clinton anchors the book to the turn of the millennium, and I would have found the book more accessible without the references to events that seem irrelevant twenty years on.

The ultimate vision of the authors is rather terrifying. A society of super-rich, essentially unaccountable citizens of the world who have no limits to the wealth and power they can accumulate except for the actions of other super-rich sovereign individuals. The book doesn't provide any place for the poor and middle class except as serfs or retainers of the rich. Nations and the social safety nets they provide will be gone, and we will be left dwelling in city-states that compete vigorously for the attentions of a handful of mega-rich.

The book seems to indicate this is another step up on the great ladder of human progress that began when we discovered agriculture. Depending on your place in the social ladder, you might view this rather as a few step down.
… (mere)
Beniaminus | 4 andre anmeldelser | Nov 1, 2017 |


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