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THE NATIONAL INTEREST

Number 74 • Winter 2003/04

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The National Interest—Winter 2003/04 17

THE EARLY 20th century wasfilled with predictions thatthe airplane, the automobile

or the assembly line had made parliamen-tary democracy, market economies, jurytrials and bills of rights irrelevant, obso-lete and harmful. Today’s scientific-tech-nological revolutions (epitomized byspace shuttles and the Internet) make thetechnologies of the early 20th century—itsfabric-winged biplanes, Tin Lizzies and“Modern Times” gearwheel factories—look like quaint relics. Yet all of the“obsolete” institutions derided by themodernists of that day thrive andstrengthen. The true surprise of the sci-entific revolutions ahead is likely to benot the technological wonders and dan-gers they will bring but the robustness ofthe civil society institutions that will nur-ture them.

This may seem counterintuitive tomany people. Surely novel technologicalcapabilities require novel social institu-tions, right? The experience of the pastcentury argues that the opposite is thecase. Institutions tend to be modifiedmore than replaced. They do not die outunless they demonstrate actual and sub-

stantial harm, and they adapt only as muchas needed to provide a viable solution topressing problems. We should respond tothe challenges facing us by strengtheningan evolving framework based on our bestand most successful institutions.

Of Civil Societies and Free Markets

AT THE DAWN of the 21st

century, it is quite clear thatstates are prosperous when

their civil society is strong, and peacefulwhen their civic statehood is strong. It isno surprise that most of the world’s poor-er and strife-wracked states are those withno or little civic nature: totalitarian states,personal dictatorships and kleptocracies.

A civil society is a vast network of net-works, beginning with the individual andmoving outward to encompass families,community organizations, congregations,social organizations and businesses—allinvented by individuals coming togethervoluntarily. Such civil societies beget civicstates. These states are ones in whichauthority begins at the local and commu-nity level and gradually is built upwards todeal with wider-scale issues. Civic statesare built on community assent and a feel-ing of participation in a local, regionaland national community, and the authori-ty of the state is not upheld by constantexercise of force but by the willingness ofcitizens to comply with its directives.

At the root of civil society is the indi-

Networking Nation-StatesThe Coming Info-National Order

James C. Bennett

James C. Bennett is an entrepreneur in the field ofInternet transactions, an adjunct fellow of theHudson Institute, and is the founding presidentof the Anglosphere Institute. His book, TheAnglosphere Challenge (Rowman & Littlefield) isforthcoming in spring 2004.

Bennett 17-30 12/5/03 15:05 Page 17

vidual. People who define themselves pri-marily as members of collective entities,whether families, religions, racial or ethnicgroups, political movements or even cor-porations, cannot be the basis of a civilsociety. Societies that place individualsunder the permanent discipline of inherit-ed or assigned collectivities, and perma-nently bind them into such, remainbogged down in family favoritism; ethnic,racial or religious factionalism; or the“crony capitalism” that has marred theeconomies of East Asia and Latin America.

Democracy and free markets areeffects of a strong civil society and strongcivic state, not their causes. Over the pastcentury, there has been a misdirection ofattention to the surface mechanics ofdemocracy, to nose-counting rather thanthe underlying roots of the phenomenon.It was clear that a society containing thestrong networks of association character-istic of a civil society also develops themeans of expressing the interests of soci-ety to the state. It is the need for effectivemeans of expression that gave rise to theoriginal governmental mechanisms wenow call democracy. Later, intellectuals insocieties that did not have a strong civilsociety (particularly pre-RevolutionaryFrance) looked at societies that did (par-ticularly England) and attempted to distillan abstract theoretical construct capturingthe essence of that experience. Theycalled this democracy, but they subse-quently focused attention on their model(and its misunderstandings) rather thanthe essence of what they actually admired.

England’s strong civic state had itsroots in local expressions of civil society, aprocess certainly well rooted by the 14th

century. These include the grand and petitjury systems, the election of various alder-men and other local officials and the quasi-official role of many civil society institu-tions. Selecting members of the House ofCommons was one of many differentmechanisms by which local communitiesgave or withheld their consent to the state.

The lesson of English history hasbeen repeated many times over, up to andincluding contemporary events in Taiwanand South Korea. When civil societyreaches a certain degree of complexity,democracy emerges. Without civil society,importing the procedures, rituals andeven institutions of democracy resultsonly in instituting one more set of spoilsfor families and groups to fight over at theexpense of the rest of society. Democraticmechanisms no more create civil societythan wet streets cause rain.

Similarly, the market economy is morethan the absence of socialism or stronggovernment; it is the economic expressionof a strong civil society, just as substantive(rather than formulaic) democracy is thepolitical expression of a civil society andcivic state. Entrepreneurship in businessuses and requires the same talents andoften the same motives that go into start-ing a church, a nonprofit organization or apolitical party. The society that can createentrepreneurial businesses tends to be ableto create the other forms of organizationsas well. Often, the same individuals startseveral of each form at different stages intheir lives. The market economy alsorequires a civil society with general accep-tance of a common framework of laws,practices and manners. Without a generalacceptance of fair dealing, an agreementon what fair dealing means, and an adjudi-cation system that can resolve and enforceresolution of disputes, a true market econ-omy cannot exist—as developments in thepost-Soviet sphere indicate.

These realizations have immenseimplications for today. The rapid forma-tion, deployment and financing of enter-prises like those found in Silicon Valley arean inherent characteristic of a strong civilsociety. The strong role of non-companyorganizations (such as professional andindustry associations and informal net-works of acquaintances) in Silicon Valleyalso suggest that such entrepreneurism is astrong civil-society phenomenon. And it is

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highly likely that the innovations spawnedby the current Information Revolution—including the Internet, the communicationsatellite and high-bandwidth fiber-opticcable—will spur innovation in the otherscience-based revolutions.

Indeed, the new technologies havestrengthened civic states and societies,making them even more competitive vis-à-vis what could be called the “economicstate:” the centralized nation-state inwhich the government draws its raisond’être from presiding over the transfer ofbenefits between generations, classes andregions. The problem for economic states,such as France, is that when creativity doesarise and ventures start, the prevailing setof social, economic and political institu-tions retards their growth.

In corrupt and undemocratic countrieswith weak civil societies, family networkspermit entrepreneurs to get around theseobstacles—but only up to a point. Theycannot expand easily beyond that. Instronger civil societies, such as Germany,that have high-trust characteristics but lackopenness and flexibility in their politicaland social systems, ventures start but canbecome frustrated by bureaucratic barriers.There is a French Silicon Valley, but itdoes not lie in any of the technology cen-ters planned by the French state; rather, itstretches from Dover to London, wherehundreds of thousands of young Frenchmen and women have relocated to pursuetheir dreams without the high taxes andsocial burdens of the Continent.

The Economic State’s Decline and Fall

STATES WITH high regulatoryand tax burdens are now comingunder heavy pressure as they

increasingly find themselves outdistanced.The erosion of the monopoly of the eco-nomic state over most arenas of humanactivities is traceable to the lowering oftransaction costs for international finan-cial activities in the 1960s, which allowed

major corporations and banks to takeadvantage of the lower tax and regulatoryburdens of tax havens such as theNetherlands Antilles. Corporationsbecame sophisticated consumers of “sov-ereignty services.”

Over the past three decades, thesetrends have accelerated enormously as thebreakup of old European empires gaverise to many new sovereign entities. Theincrease in the number of providers, com-bined with the falling cost of accessingthem, has made sovereignty services(incorporation, ship registration, citizen-ship, residency permits and so on) a high-ly competitive market area. As devolutionproduces yet more sovereign states andthe Internet reduces the cost of accessingthe services to rock bottom, this marketcan be expected to flourish. The marketfor sovereignty services has shown greatprice elasticity: the users of offshoreaccounts, shell corporations and trustmechanisms proliferate as the transactioncosts of setting up such services fall.

Consider the ability to sell productsand services on the Internet, and thedecline of the corporation-employmentmodel (seen in downsizing, delayeringand in the rise of “free-agent” contrac-tors and entrepreneurs). Private Internetcurrencies based on strong encryption(cybermoney) will soon provide paymentmechanisms that are not recorded incentral clearing houses and are thusbeyond subpoena power. Much of theactual economic activity in the comingera will pass (and already has passed) outof the strictly national realm. Even themost powerful nation-states are begin-ning to find it impossible to set currencyor interest rates without reference to theworld market.

Nor can the economic state count oncoercive solutions to counteract this trend.It cannot tax what it cannot see. One of theproducts of cheap, ubiquitous computinghas been the growing, worldwide availabil-ity of strong programs for encrypting data

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on personal computers. With such pro-grams, individuals and companies cancommunicate and trade beyond the easyability of governments to intercept or, ifproper precautions are taken, even to beaware that the transactions exist.

States that cling unrealistically to themodels of the past will find theireconomies becoming more like that ofItaly, where a very substantial portion ofGDP (over 50 percent by common esti-mates) is thought to be off the books andbeyond the view (and reach) of the state.This becomes a vicious circle, as thedeclining collections force the state to cutservices or raise the rates on those whostill pay taxes—usually both at once.Cutting services causes taxpayers to ques-tion the value of their relationship withthe government, and raising rates pushesmore taxpayers further into tax avoidance.Both courses of action further reduce theability of the state to command the sort ofrevenue stream it previously enjoyed.

The reduction of the effective avail-able percentage of GDP to taxationauthorities will accelerate the existingtrend toward the decline of economicstates. An economic state’s support restsprimarily on its ability to transferresources from one sector of society toanother. Such states will be subject tostronger pressures to break apart, as theability to shift wealth declines and thesocial compacts they support grow weak-er. Pay-as-you-go services, such as SocialSecurity in the United States, will beplaced under ever-increasing fiscal pres-sure. To the extent that loyalty to statesdepends on the delivery of such elaboratebenefits, economic states will becomedecreasingly cohesive.

Some politicians believe that immigra-tion of enough young wage-earners willmake cuts from the retired generation’sbenefits needless. This contains a hiddenassumption: that young immigrants, oftenpoorer and from different cultures, willfeel sufficient solidarity with the retirees to

continue to support the necessary high lev-els of taxation. Without assimilation, this isa dubious prospect.

The decline of the economic state willmostly be a quiet and gradual affair, a rev-olution made of many individual decisionsthat, when taken together and augmentedby technical developments like high-speedair travel and satellite communications,have a cumulative effect. A Canadian exec-utive may take a job in the United Statesbecause the income tax burden is so muchlower. Continental Europeans mightmove to London to start a company inorder to escape the “social burden” of reg-ulation in France or Germany. And acompany could outsource software devel-opment to India, where the workers speakEnglish well and are cost-competitive.These are the sort of individual decisionsthat will shape the emerging world.

What Lies Ahead

AGROUP OF people, the self-described “cryptoanarchists”,maintains that the availability

of cyberspace transactions beyond theability of the state to monitor or controlwill destroy the ability of the state tomaintain itself. Those who adhere to thisschool of thought foresee an era of essen-tially chaotic social organization, in whichmarket forms predominate in both theeconomy and other relationships.

Although many of the individualpremises of that argument have somevalidity, the results will not be as extremeas envisioned. Rather than ending thestate, it is more likely that these changeswill substantially transform its nature.Most states will either adapt to thosechanges, decline in wealth and importanceor, in extreme cases, split apart. Theongoing technological revolutions meanthat states will depend increasingly onvoluntary forms for cohesion. Successfulstates are likely to have one or more ofthe following characteristics:

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•Small populations with a relatively con-fined geographical spread. Consensus andcoherence are easier to achieve among alimited number of people in territorially-compact areas. This will favor small juris-dictions ranging from Caribbean islandstates to what Kenichi Ohmae terms“region-states.” Jurisdictions larger thanthat will probably be structured as federa-tions of civic states.

•Ethnic or religious homogeneity.Religious or ethnic ties form a strongbond for cohesion. Israelis put up with theinordinate fiscal and regulatory interven-tions of their state because to leave Israelis to leave the community that supportstheir identity.

•Visible success. Singaporeans put upwith their intrusive government, evenwhen few have any ideological, ethnic orreligious reason to do so, because it hasdelivered visible prosperity and security toits inhabitants over their lifetimes.

•Market-ordered economies with scope forindividual enterprise. Citizens will toleratestate interventions in a market economy solong as they are not visibly harmful, leaveroom for individual enterprise, and allowthe state to perform more reasonably theservices people require. Citizens havestayed in social democracies with state-protected corporations and heavy taxationand regulation, but they tend to flee state-socialist regimes in droves whenever possi-ble. Swedes have always been free to leavetheir country, while East Germans werenot. Yet the latter fled in great numberswhen the opportunity arose (to the ulti-mate demise of their state), while relativelyfew Swedes have exiled themselves.

•Low transaction costs for leaving. It is fareasier to maintain cohesion if unhappypersons are permitted and even encour-aged to leave, rather than facing heavypenalties for doing so. Exit taxes are signs

of a loser state. The Soviet Union wasrightfully despised for levying one, and theUnited States should reconsider its plansto follow in its wake. Many malcontentswill leave; more than a few will decide toreturn. And, having returned, they will beless discontented. Even permanent expatri-ates should be encouraged to maintainfamily and social ties with the home coun-try. Expatriates can deliver useful businessand political contacts even when they arenot paying taxes.

•Serving as the home base for a diaspora.A diaspora provides an environment foruseful commercial relationships world-wide. Having even minuscule territorywith sovereign characteristics (such as theability to issue passports) makes life fareasier for members of a diaspora. TheInternet facilitates personal ties and con-tinued access to one’s home culture.

•Maintaining enough international asso-ciations to enjoy the security, economic andcooperative ties formerly enjoyed only by largestates. Iceland maintains a unique cultureand language in a prosperous civil societywith a population of only 270,000 people.As such, it would seem to be an advertise-ment for the viability of very small states.It is not at all clear, however, that it wouldbe nearly as prosperous, secure or inde-pendent if not for its active membershipsin NATO, the European Economic Areaand the Nordic Council.

•Sharing a positive, self-affirming narra-tive. Many such narratives are provided byreligious, national or ethnic identity. Israelhas a simple and effective narrative—exemplified in phrases such as “Hear, OIsrael, the Lord thy God, He is One”, and“Never Again.” Political entities that donot have ethnic or religious cohesion needa sophisticated and equally compellingnarrative. The United States has a com-plex and compelling narrative—exempli-fied in the phrases, “We hold these truths

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to be self-evident” and “the wretchedrefuse of your teeming shores.” Both haveworked. Nations that lose the ability tosustain a positive narrative, on the otherhand, lose coherence and identity, andthus voluntary citizen support. In the newenvironment, such nations will find it dif-ficult to maintain revenue bases, enforceregulation or defend their citizens.

IN THIS world, civic states thatare able to generate an essentiallyvoluntary adherence on the part

of their populations will dominate. Thethings of value that civic states provide fortheir citizens—principles, identity and asense of community—are fundamentallyintangible things that, unlike the econom-ic aspects of sovereignty, cannot becomecommodities in the world marketplace.

Such civic states are not likely to beable (or want) to form or sustain large-area organizations with tightly integratedpopulations that generate a consensus topay for and share an elaborate structure ofstate-provided and state-mediated benefitsconsuming high (33 to 60 percent) pro-portions of the state’s GDP. The decline,decentralization and, in some cases,destruction of economic states willstrengthen civic states by providing impe-tus to the search for newer, more flexibleand less centralized mechanisms linkinglarge-scale activities.

Do larger-scale economic areas likethe European Union offer a potentialsolution to this perfect storm of the eco-nomic state? To the extent that suchunions concentrate on the positive accom-plishments of the Union, the answer is aqualified yes. The EU has had some suc-cess in promoting free movement of peo-ple, capital and ideas throughout its inter-nal area, and facilitating cooperation in allareas where existing commonalities permitgreater cooperation between similar cul-tures. A union that would seek to create acommon economic, informational, andresidency space for the citizens of its

member-nations could be of benefit.However, to the extent that the EU has

ended up dictating the social policies of itsmember-nations, attempted (with somesuccess) to relocate executive power fromnational bodies under democratic scrutinyto unscrutinized bodies on Union-widelevels, and maintained large cross-regionalsubsidies to buy assent, it is not only not asolution, but becomes a new type of prob-lem in itself. The EU has become to inter-national cooperative organizations whatthe economic state has become to thenation-state. By trying to become an eco-nomic state on a wider scale, the EU hasincreased the amount of bureaucracy, top-down planning and intervention.

Additionally, it has replaced some ofthe barriers with which small states havetried to insulate themselves from econom-ic reality by a new, Union-wide set ofmore insidious non-market barriers, par-ticularly in the area of rigid and expensivestandards, and subsidy programs that havethe same ultimately futile goal in theworld economy. By trying to maintain analready strained entitlement and dirigisme-based political and social model, the EUwill find itself under ever-increasing pres-sure in the coming decade because ofthese structural weaknesses, aggravatingan increasing demographic crisis.

The Rise of the Network Commonwealth

IN DISCUSSIONS about thesechanges and their effects, twoschools of thought seem to have

emerged to date. One is a gloomy andapocalyptic vision of many small, essen-tially unconnected mini-states engaged inintermittent low-level conflict and con-frontation, reminiscent of Hobbes’s “Warof All Against All.” It is a vision of a fewrich Singapores and many poor, conflict-torn Kosovos. This view is reflected inpolitical works such as Robert D. Kaplan’sThe Coming Anarchy, and in the imaginedworlds of futurist fiction such as Neal

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Stephenson’s The Diamond Age. The other could be described as a

“One World via Internet” vision ofincreased communication (with Englishas the universal language), omnidirec-tional cooperation and networking on aworld scale. Its proponents, such as thecyber-futurists of Wired magazine, envi-sion that lowering the transaction costsof cooperation to a uniform level world-wide will make it equally likely for anyone person anywhere to cooperate withany other person anywhere else.

In many versions, less futurist, less lib-ertarian, but more typical of Hegelian-Kantian internationalists, it leads to avision of world governance—of increasingintegration into regional transnationalorganizations, such as the EuropeanUnion and NAFTA, in parallel with single-purpose world-level structures such as theWorld Trade Organization, ultimately allmerging into a mode of world governance.

If the one vision leads to a fewSingapores and many Kosovos, the other,it is thought, will spawn a multiculturalGolden Era, benignly presided over by anenlightened United Nations and its inter-national organs.1 Neither vision is likelyto be realized. The breakdown of the oldstructures need not, and probably willnot, continue infinitely. If it were to per-sist, the ongoing division of national com-munities would result in an undifferenti-ated and disconnected mass of ever-small-er nation-states—or, more honestly said,tribal states. The dissolution of the USSRand of the Socialist Federative Republicof Yugoslavia show what the human costsof such processes can be.

Equally, there is an inherent limit tothe prospect of any form of universal orglobal governance in the near future.Such a government (unless it is a dis-guised empire of a major power imposedon the rest) would have to be constructedon a lowest-common-denominator basisto include a substantial collection of hap-less dictatorships, rotten oligarchies and

shabby kleptocracies. One need only lookat the ineffectiveness of the UnitedNations in coping with many global issuesto see the limits of this approach.

In between the old natural unit mark-ing the limits of easy cooperation, namelythe nation-state, and the distantly (andperhaps chimerically) glimpsed vision ofuniversal civilization, we must interpose amiddling form: a set of like, but not iden-tical, societies sharing a number of com-mon characteristics, within which socialcooperation bears significantly lowertransaction costs than without. This now-emerging entity is the network civiliza-tion—a new civilizational form enabledby networks.

Consider the visible effects of the cur-rent phase of the scientific-technologicalrevolutions: the Internet; the communica-tion satellite and high-bandwidth fiber-optic cable; fast, cheap intercontinentalair travel; and all the rest. Even today,these have brought geographically distantareas into close proximity for many pur-poses. The acceleration of these techno-logical and economic trends will makethis “tele-proximity” even more signifi-cant. Collaboration in all areas—econom-ic, educational, political—is becomingrelatively easier at a distance. But as theold natural barriers to trade and commu-nication—mountain ranges, wide oceans,and other natural barriers—no longerneed be borders, the next most significantset of barriers remains—differences inlanguage, customs, legal systems, reli-

Networking Nation-States 23

1The universalists divide into the more optimisticlibertarian internationalists—such as WalterWriston or Kenichi Ohmae, who see global-ization à tout azimuth as an inevitable productof social evolution—and those who see thisworld as a goal to be imposed. The latter(including most of the pro-Europeanist theo-reticians, such as Charles Kupchan, WillHutton and Jürgen Habermas) have been use-fully catagorized as transnational progressives byHudson Institute scholar John Fonte.

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gions, and other significant values, andparticularly things like trust.

The network civilization is associatedprimarily on the lines of cultural contigui-ty: groups of nations sharing language,customs, legal systems, religions and othersignificant values, most specifically, trustcharacteristics. It has sometimes beenasserted that the global adoption ofEnglish will abolish transaction costs ofcooperation between civilizations, or thatautomated translation will do so. Althoughboth phenomena are real, it is unlikelythey will have the expected effect, for it isprecisely the unexpressed web of assump-tions behind the formal words that createthe barriers between cooperation. “Wemust make an accommodation” has a dif-ferent nuance in a business discussion inLima, Ohio from one in Lima, Peru.

On the other hand, the unprecedentedrapidity, cheapness and ease of use ofmodern telecommunications, particularlythe Internet and World Wide Web, knitstogether culturally similar societies intowhat is rapidly becoming a single culturalartifact subdivided along many differentlines. Consider one example: the changesin the public debates in the English-speak-ing world at the time of the Gulf War, theBalkan interventions of the mid-1990s andthe Iraq War. The debates over the GulfWar were overwhelmingly conducted inthe traditional style of the 20th century,somewhat accelerated by satellite televi-sion. That is, America, Britain and othernations each witnessed a debate amongtheir traditional policy elites in legisla-tures, the media, and academic circles.The American media analyzed, summa-rized, and then presented their summaryof “British opinion” on the matter; theBritish media likewise encapsulated theirimpression of American debate and pre-sented it domestically.

During the Balkan crises, Americansbegan to be able to follow lengthy sec-tions of the British parliamentary debatedirectly on cable television; the prolifera-

tion of cable services and cable channels,particularly ones devoted entirely to newsand politics, suddenly made it possible formillions of Americans to follow a debatethat previously would have been scruti-nized in such a level of detail by merehundreds, or at most thousands, of diplo-mats and academics. Although the speedat which events unfolded was far faster,Americans and British debaters spoke asmuch for and from their national commu-nities as an Athenian or Corinthian mighthave 22 centuries previously.

By the time of the Iraq War, the pro-liferation of the Internet and such phe-nomena as Web logs—individually pro-duced Web diaries updated daily or evenhourly, with direct links to other “blogs”,often linking to eyewitness accounts tocurrent events, and to a huge host ofmedia sources—created a situation inwhich political debate effectively occurredseamlessly across the English-speakingworld without the intervening mediationof cultural and political elites. It was adebate segmented primarily by politicalposition rather than by nationality. Infact, both pro- and antiwar opinion wasoften elaborated by group blogs, each ofwhich were collaborative efforts stretch-ing from London to Sydney and every-where in between. Both because of directcontact across the Web, and by the indi-rect effect of subjecting traditional mediato criticism and feedback of a scope, leveland intensity never before experienced,political debate over the Iraq War hasexperienced a remarkable degree of disin-termediation and popular involvement.This experience promises to become anew benchmark for future reportage anddebate.

A LL INDICATIONS suggestthat these patterns will intensi-fy rather than abate. Network

civilizations appear to be the next step inexpanding the circle of civil society, whichhas elaborated itself over time from local

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and regional networks of commercial,intellectual and civic collaboration, to net-works of national scale.

The Industrial Revolution made conti-nent-spanning nation-states possible. TheInformation Revolution offers the possibil-ity that civil societies may link themselveson a globe-spanning—although not uni-versally inclusive—scale. Such is the net-work civilization. It can hardly fail tocall forth political and economic formsto parallel its effects. The NetworkCommonwealth is an effort to name anequivalent form for the network civiliza-tion, and to identify its emerging pre-cursors in existing institutions. Just asthe ethnic nation was the raw materialfrom which the classical nation-state wasbuilt, so the network civilization is theraw material from which the NetworkCommonwealth is being built.

This facilitates the movement of peo-ple, goods and services across borders,forming and strengthening shared cultures(both elite and popular) and experiences—for example, common publications read bythe publics of all of the nations of a partic-ular network civilization. In turn, this laysthe foundation for greater institutionalcooperation (in the form of common mar-kets, permanent security alliances and jointscientific and technological projects). ANetwork Commonwealth would build onthese existing forms of transnational coop-eration and thus emerge along existinginformation-oriented lines of linguistic andcultural affinity. It would be defined byclose trading relationships and substantialmilitary cooperation and intelligence-shar-ing among its constituent states, as well asa high degree of intra-network flows ofmigration and investment.

The Network Commonwealth is not anation-state of the historical type. It is nota state at all, although it has the potentialto offer an alternative means for fulfillingsome traditional functions of economicstates. It is a means of linking smallerpolitical communities so that they can deal

with common concerns. It is a way to pro-vide opportunities to their members—opportunities that cannot be provided bysmall, independent sovereignties alone,and for which economic states andempires exact too high a price.

The emergence of the NetworkCommonwealth as a potential form ofpolitical, social and economic organiza-tion is driven by three emerging realities.

First, the basis of the world economy ischanging from manufacturing to informa-tion—the ideas and informational prod-ucts, as well as the human minds andskills in which they are embodied. Just asagriculture remained important in theMachine Age, manufacturing (and agri-culture) will remain important in the Eraof the Information Revolution—but mas-tery of manufacturing will come with mas-tery of information, just as a mastery ofagriculture passed to those who masteredmachinery. Similarly, as military predomi-nance once passed to those powers that ledin industrialization, so too will militarypredominance pass to those who best mas-ter information technology.

Second, physical space is no longer themost important factor in political association.Cultural space is. What is the result ofthis shift? In an Internet-mediated econo-my where information is the chief prod-uct, London, Toronto, Los Angeles, CapeTown and Sydney are next door to eachother—while London and Paris, Torontoand Montréal, Los Angeles and Beijing,Sydney and Jakarta are all separated by awall of differing visions and assumptions.

Finally, cooperation is proportional tocommunication as complexity increases.Meaningful, thorough and successfulcooperation is most easily accomplishedamong those who can communicate withthe most depth and clarity—namely,those who share language, a set of politi-cal assumptions or common moral ideas.Certainly, substantial multinational andmulticultural cooperation does occur inbusiness, scientific and political circles, but

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when the focus of the cooperation is infor-mation-intensive (as in the production ofsoftware or motion pictures), it has mostfrequently been among companies rootedin the same linguistic communities.

All-in-all, instantaneous, flat-rate andworldwide communications, in additionto cheap long-range aviation, are forminga new topology of political space. In thisnew environment, physical proximity isno longer the most important factor ineither trade or power projection.Combined with this are political develop-ments, such as free-trade agreements andmigration arrangements permitting peo-ple to travel, visit, study or work freelyoutside their native country. This is dri-ving a transition from organization alonglines of geographical proximity to struc-tures organized primarily along civiliza-tional lines. A further spur to the develop-ment of Network Commonwealths is thatthey promise to provide many benefitswithout the costs that economic stateshave historically imposed on individualsand society.

The Emerging Anglosphere

BECAUSE Britain, and subse-quently the United States,experienced the Industrial

Revolution and political modernity earlyon, the English-speaking nations havetended to be in the forefront of social,political and economic evolution and todevelop particularly strong civil societies.The position of the United States in theInformation Revolution and the emer-gence of the Internet have continued thistendency. So it is likely that NetworkCommonwealth structures will probablyemerge in the English-speaking worldquite early. Some developments to dateindicate that this is indeed happening.

Internally, the Anglosphere alreadyexhibits a web of network civilizationalties that could become the precursors of abudding Network Commonwealth.

Publications like the Financial Times andthe Economist, for example, effectivelyserve the entire English-speaking networkcivilization, not simply a Britain-basedconstituency. One can also speak of anemerging Anglosphere entertainmentindustry, based upon the growing collabo-ration of Australian, American and Britishdirectors and actors (and the use of NewZealand for film-shooting), where thefinal product appears on screens fromCanberra to Chicago to Cambridge.Already, a high proportion of foreigndirect investment—now a more impor-tant measure of economic integrationthan trade in physical goods—in allEnglish-speaking countries is from otherEnglish-speaking countries.

Network civilizational ties havehelped to spawn a series of commoninstitutions. The close military relation-ship between the United States and theUnited Kingdom, once again displayedin the recent Iraq War, laid the basis forthe world’s longest-lasting and most suc-cessful alliance, the North AtlanticTreaty Organization. Similarly, ANZUSbinds the Anglosphere nations of thePacific in a similar mutual defense pact.Other institutional examples of theemerging Anglosphere include the US-UK-A intelligence-sharing scheme andclose cooperation between American andBritish intelligence services; organiza-tions that contain a substantial butincomplete set of English-speakingnations, such as the Commonwealth ofNations; and a large number of regionalsets of collaborative institutions, mostlylinking the three main pairings ofEnglish-speaking states (the UnitedStates and Canada, the United Kingdomand the Republic of Ireland, andAustralia and New Zealand). All-in-all,there are a substantial number of Britishand American activities and non-trivial setsof intra-Commonwealth institutions.

U.S.-Canadian collaborative institu-tions are of particular interest because

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they achieve a very substantial degree ofcooperation while being based on a strictunderstanding of national sovereignty.Unlike the European case, there is nomaster treaty of U.S.-Canadian integra-tion that pledges an “ever-closer union:”neither Jacksonian Americans norCanadian nationalists would tolerate anythreat, however latent, of a permanentsurrender of sovereignty. Yet the U.S.-Canada Free Trade Agreement (and itsmore broadly focused successor NAFTA),as well as NORAD in the defense realm,are both conspicuously successful exam-ples of international cooperation.

ONE OBVIOUS route forfurther elaborating intra-Anglosphere ties would be

to extend NAFTA to Australia and NewZealand, a move already under discus-sion among policymakers. Anotherwould be to bring into daylight the exist-ing US-UK-A intelligence-sharingarrangements (not formally acknowl-edged at present) in the form of a publicmutual-assistance treaty and permanentformal organization. Such a step mightassist in demonstrating a publicly-visibleoversight mechanism for its controversialelements such as the Echelon data-inter-cept system.

Welcoming the United Kingdom and,in some areas, the Republic of Irelandinto organizations formed on the arma-ture of U.S.-Canadian collaboration islikely to depend upon the future course ofEuropean integration. The Washington-London economic and security relation-ship is the key relationship of theAnglosphere, considered either in eco-nomic terms or military heft. If evaluatedon a dynamic scale anticipating trends inthe Information Revolution, the potentialfor even closer British-American econom-ic integration is substantial.

It is also a question of balance. AnAnglosphere Network Commonwealthwithout the UK is predominantly the

United States with appendages. With theUK, and particularly the financial capabili-ties of London, intra-Anglosphere rela-tions are not so lopsided. Yet, given thesubstantial turbulence likely in Europeanrelations over the next decade due to itsaccelerating demographic and fiscal-struc-tural issues, a looser Europe more open tocloser UK-Anglosphere ties is more ratherthan less likely. Even today, after decadesof British membership in the EuropeanUnion, there is a substantial gulf in atti-tudes towards America between Britainand Continental Europe. Not only wasthis seen in the Iraq War, but at a popularlevel twice as many Britons report feelingcloser to the United States than to theirContinental neighbors. A recent survey bythe Economist, largely a pro-EU magazine,showed that more Britons felt representedby the American flag than by the EU one,and far more of them identified with theUnited States than Europe as Britain’smost likely source of help.

An Anglosphere Network Common-wealth would emerge from a series of par-allel, overlapping and non-exclusive coop-erative organizations. Not all Anglospherenations would be expected to be involvedin every other one. Ireland, for example,would probably find the economic andmigration dimensions to be of interest, butwould probably not participate in defense-related activities. Nor should a rigid lin-guistic-cultural test be used to excludeautomatically a particular nation if itscooperation would be otherwise useful.After all, whether a particular nation is amember of a particular network civiliza-tion is in many cases likely to be a matterof debate to which there is no automaticanswer. Neither India, South Africa noreven Canada are entirely English-speak-ing, but they all are significant actors inthe Anglosphere. Still more so, India ispart of the Anglosphere even though it isnot primarily English-speaking. Yet itsburgeoning military alliance with theUnited States is facilitated both by the fact

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of an English-speaking elite and, moreparticularly, by the British “character” andtraditions of its military forces.

So it is probably more useful todefine network civilizations inclusivelyrather than exclusively: some significantdegree of English-speaking population,and some degree of institutional affinitywith Anglosphere legal or governmentalpractices probably make it valid toinclude a nation in the broader definitionof the Anglosphere, and thus indicatethat such a nation might usefully partici-pate in some of its cooperative institu-tions, including an emerging NetworkCommonwealth.

What Spheres May Follow?

THE MORE the highest valuein international trade shiftsfrom natural resources, agri-

cultural commodities and low-tech manu-factured goods to information productsand services delivered via the Internet, themore lines of trade and cooperation willfall along linguistic-cultural lines ratherthan geographic ones. This is true notonly for the Anglosphere. Similarly, therehas been an increasing trend for Spanish-language information trade (particularlyin electronic entertainment) to flow seam-lessly through what, by extension, couldbe dubbed the “Hispanosphere:” an elas-tic entity that includes Los Angeles andMiami as well as Madrid, Mexico Cityand Buenos Aires.2

Indeed, the Spanish-speaking world isanother prime candidate for the creationof such a Network Commonwealth in thenear future. Spanish-language informa-tion productions (not only books andperiodicals but television programs andmovies) flow freely across borders.Spanish-language literature is enjoyedacross national boundaries, and some-thing like a pan-Hispanosphere intellec-tual dialogue exists. The Spanish-lan-guage Internet world lags behind that of

the Anglosphere, for obvious economicreasons, but similar trends can beobserved within that world.

In the economic realm, Spanishcompanies played a substantial role inthe modernization of Latin Americaneconomies during the 1990s and can beexpected to play a similar role in thefuture. Spain is now poised to becomethe world’s leading investor in LatinAmerica. This is a new phenomenon, asLatin Americans since independencehave looked to France, Britain andAmerica for foreign economic partici-pants. Yet it is likely to continue, andperhaps accelerate, depending partly onwhether the European Union’s structur-al evolution begins to create obstacles toHispanosphere economic cooperation.

Given its demographic vigor, theHispanosphere could also emerge asanother network civilization. Althoughthere has been relatively little effort tocreate formal institutions to date, duepartly to existing intra-Hispanosphererivalries, the cultural and economicspheres offer obvious places to start—andthere are proposals to turn the annualIbero-American Summit into a more per-manent forum. Additionally, Spain, likeBritain, will eventually have to decide towhat extent its European ties can be per-mitted to limit its ability to collaboratewith its overseas linguistic compatriots.Both may find that a looser definition ofthe European project is attractive as a con-sequence. Indeed, for Spain, a freer move-ment of peoples from Latin America couldpresent a more tolerable solution to itsshare of Europe’s demographic challengesthan its current course of action—depen-dence upon a flow of migrant labor fromNorth Africa.

The National Interest—Winter 2003/0428

2Darrin McMahon discussed “The OtherTransatlantic Tie: Thoughts on anHispanosphere” for the Foreign PolicyResearch Institute’s Study Group on Americaand the West on October 20, 2003.

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Along with the possible emergingHispanosphere, France supports a sub-stantial apparatus—La Francophonie—forpan-Francophone relations that couldserve as the nucleus for a FrancosphereNetwork Commonwealth. And finally, theincreasingly close connections betweenBrazil and the former Portuguese states ofAfrica foreshadows the possible develop-ment of a Lusophere. Such ties would bean asset out of proportion to Portugal’sother economic opportunities.

MIGHT THE NetworkCommonwealth amelio-rate situations in which

ethnic populations spill over internation-al borders? The Commonwealth ofIndependent States—and now Putin’scurrent program for a common econom-ic space that includes Belarus, Ukraineand Kazakhstan—has been suspect as astalking-horse for a renewed SovietUnion or revived Russian empire.Similarly, Chinese interest in Taiwan andChinese-populated states such asSingapore, and Turkish ambitions in theTurkic-speaking states of Central Asiahave also been viewed with suspicion. Yetin each case, a Network Commonwealthapproach might provide an outlet forthese ambitions without presenting theproblems that any effort at state-buildingor incorporation would arouse.

Can the European Union itself beconsidered a Network Commonwealth ofsorts? It has abolished state monopolies,opened protected markets and has greatlyincreased the average European’s freedomto travel, reside, work and competethroughout its territory. Most importantly,it has served to keep many of its politicallymore marginal members, such as Spain orGreece, from backsliding into dictator-ship—thereby creating an incentive forshaky Mediterranean, central and eastEuropean democracies to join. But theanswer is no. It is difficult to envision thevery broad Union, now realized with the

accession of the central and east Europeanstates, ever successfully replicating thelevel of integration of France andGermany from the Azores to the suburbsof St. Petersburg. The inherent problemsin defining a “common European culture”that includes all Union member-states butexcludes the Americas and Australasiamake the idea of a wider European state ora “European Network Commonwealth”highly problematic.

What is more likely to emerge overtime is a European Union structure thatenables its member-states to developNetwork Commonwealth ties with theirnon-European civilizational partners. Themost likely arrangement—to oversimplifybrutally—is a “variable geometry” Europewith a tight federation of the Rhenishstates (grouped around the Franco-German core) much more loosely linkedwith the four historically “exceptionalist”areas: the British Isles, Iberia, Scandinaviaand east-central Europe. None of theseareas, for various reasons, ever experi-enced the full charms of the Colbertianstate, and each thus retains a core of resis-tance to implementing such institutionson a wider scale. Whether the tight feder-ation or the wider, loosely linked tradearea bears the name “European Union” isa taxonomic quibble.

Alternatives to World Governance

EVOLUTIONARY conser-vatism argues that organizingclosely-linked sovereign

nations into a loose and flexible structureis a less costly step than organizing wide-scale, rigid unions. The evolution ofpolitical forms thus favors the NetworkCommonwealth. This is demonstratedby the fate of proposals like that ofauthor Clarence Streit in the late-1940sto form an “Atlantic Union”, a perma-nent federal union of the Atlanticdemocracies. Although this idea hadpotential benefits, it also had a number

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of real problems, many of which havealso been encountered in the process ofbuilding the European Union. Almost allof the benefits of the proposed AtlanticUnion promised could have been, and infact later were, delivered by less radicalmechanisms that neither imposed thecosts nor met the resistance that a federalunion threatened. Many of these alterna-tive mechanisms are the same institu-tions that promise to become the sinewsof a Network Commonwealth: free tradeagreements, alliance structures and coop-erative organizations.

As returns from revenue collections(income, capital and sales taxation)decline, the economic states that oncederived direct benefit from their largescale will find such benefits increasinglyelusive. Rising costs and falling benefitswill foster their devolution or breakup.

Still, benefits to large-scale organiza-tion remain. They include mobility ofproductive people over wide areas andcooperative pooling for defense or scien-tific research purposes. These benefits canbe realized more cheaply by NetworkCommonwealth arrangements than by

maintaining large-scale economic states orby trying to form purely economic unions.The proposal to form a free-trade agree-ment between NAFTA and the EuropeanUnion (most recently raised by BritishChancellor of the Exchequer GordonBrown) is fine as far as it goes. But newforms of common economic space mustalso be realized to facilitate the collabora-tion of software, media, financial servicesand other high-value information prod-ucts among countries that are informationneighbors. NAFTA, the EEA and the pro-posed NAFTA-EU link may ultimately havemore value in the future as means of link-ing different Network Commonwealths,rather than as proto-commonwealths inthemselves. NAFTA’s true vocation may beto link the communities of Shakespeareand Cervantes rather than merely serve asa means of allowing the sale of cheapertomatoes in American supermarkets.

Rather than problematic schemes ofuniversal transnational governance, asso-ciated commonwealths, achieving moremodest goals more effectively, could bethe prevailing political form of interna-tional organization in the 21st century. ■■

The National Interest—Winter 2003/0430

The French economist, Michel Albert, was right when he drew the great capitalist divide not downthe Atlantic but down the English Channel, between the “neo-Americans” and the “Rhine model.”Though his divide was between the collectivist corporatism of Continental Europe and the individual-ism of Anglo-America, it was also cultural. Mr Blair’s ambition to be “the bridge between Europe andAmerica” is absurd. He is an “American”, leading a country which may not be a 51st state but which hasalways been part of a centuries-old confederacy. That confederacy may have split in the 18th century,but it has drawn sustenance from that split and has exchanged people, ideas and security ever since.

Britons still comprise the largest category of legal immigrants into America each year. There are35,000 Americans living in London and 35,000 Britons living in New York. These two most dynamicworld cities are Siamese twins. Their economies depend on the same industries of finance and leisure,rising and falling in unison and largely independent of their hinterlands. They are both global peoplemagnets. New York’s greed is London’ s greed; London’s art is New York’s art.

I cannot turn on a radio station and not hear an American voice. Britain and America enjoy ashared cadre of novelists, playwrights, architects and musicians. Judging the Booker Prize three yearsago, I found the exclusion of American-born authors absurd. English literature is that of a global diaspo-ra. Today’s most dynamic art form, cinema, depends on a single transatlantic talent pool, as does mostpopular entertainment. . . . Continental Europe, rich though it is, might be on another planet.

—Simon Jenkins, Times of London, November 19, 2003

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