20250617 - Preface
Yes this book missed China.
It missed that the competition between democracy and dictatorship will not end so quickly, because dictatorship has its own advantages.
Computers and internet will push both side to extreme. What will happen?
What's the role of AI in information society.
20250621 - Chapter 1: The Transition of the Year 2000: The Fourth Stage of Human Society
(In information societies,) It will prove difficult or impossible to preserve many contemporary institutions in the new millennium. p17Government is getting bigger in the past 27 years, through money printing(unanchered government debt).
Genius will be unleashed, freed from both the oppression of government and the drags of racial and ethnic prejudice. p18
Roughly correct.
In the future, when most wealth can be earned anywhere, and even spent anywhere, governments that attempt to charge too much as the price of domicile will merely drive away their best customers. p21
Yes and No.
Many governments are thinking about "wealth tax" and "Unrealized gain tax". BTC is not immune to those taxes.
More people move to other countries after retirement/finance independence to reduce living cost and improve living standards.
To billionaires, there are not enough expensive goods and services worth purchasing.
Efforts to contain violence will also devolve in ways that depend more upon efficiency than magnitude of power. p23
Individual move/react faster than nations, but nations can move fast, and they have much more information and power. If one person has and only has one missile, but the missile is not powerful and is poor in precision, then this person cannot use it to achieve big goal, especially if with serious consequence.
Cyberspace is the ultimate offshore jurisdiction. An economy with no taxes. p24
"FairTax Act of 2025" is designed as the ultimate tax to handle this challenge. I like it!
The beneficiaries of organized compulsion, including millions receiving income redistributed by governments, may resent the new freedom realized by Sovereign individuals. p25
After the transition of the year 2000, denationalized citizens will no longer be citizens as we know them, but customers. p28
In theory, individuals pay tax, and get the protection of their assets, and enjoy the infrastructure they need. Even with the help of crypto coins, they still need to pay tax, either use crypto coins or stable coins. Government support voters, which means they will destribute wealth from the rich to the poor.
What if almost everyone lose their jobs? Then governments have to rely on money printing. Will value be transferred from fiat currency to crypto coin? The crypto coin must be based on SP500 style index funds, to ancher the price to it, just like stable coins are anchered to fiat coins.
With the help from computers and AI, governments need much less public employees to handle the management tasks. With the help of Solar Panels, Lithium battery, starlink, EV, self-driving, robots, and even "Boring" tunnels underground, much less people are needed to operate the nation-states. Much smaller governments are possible, and money printing can be used for UBI.
Bandwidth Trumps Borders p29
It's true to both individuals and nation-states. In information and AI age, we can easily acquire enough knowledge and information, but need to pay long-time concentration to execute.
Singapour is also a good example.
Bandwidth means skills to individuals.
Skills have no form, only content. Anything that only has content but no form, is good.
We don't need to own guns, but we need to know how to use them. Just like driving motorcycle, plane, and building houses.
The emergence of criminal subcultures among urban minorities was setting the stage for widespread criminal violence. p36
Is the suburban area close to train stations safer? Yes. More police will be deployed there, while there are less criminal gangs.
Y2K worm had been proved not big deal. The people who worried so much didn't really understand computer software: the problem only exist at very bottom level, such as OS and database. The complex code is at "application level", which normally not get affected by Y2K worm directly.
The interesting part is about the 2000 year cycle of human civilization. Went up from 500BC, went down from 500AD, then up again from 1500AD.
If this is real, then we still have 500 years' of good life ahead.
But this must be coincidence! There is no supporting foundation for this theory.
20250626 - Chapter 2: Megapolitical Transformations in Historic Perspective
2. Income are usually falling when a major transition begins, often because a society has rendered itself crisis-prone by marginalizing resources due to population pressures. p63All 10 points are gold.
Although most of people may got less income during the early stage of this transition, a small percentage of people got much higher pay. They were lucky in the right position at the right time. For example, IT engineers.
IT improved productivity, which caused higher unemployment rate, until all people got a lot of government subsidy such as pension and medicare, which drove up the demand of goods and services.
The transition to AI society must be similar. What is the best position this time?
AI related developers, not matter hardware or software, surely get huge reward. Any other jobs?
As AI development heavily relies on resources such as data centers and AI models, maybe we just need to own more stocks of the major AI companies.
20250628 - Chapter 3: East of Eden: The Agricultural Revolution and the Sophistication of Violence
Higher saving allow self-insurance of riskier behavior. p83UBI is a type of "high saving". Will UBI make people much more creative and more willing to take risk?
In that case, I guess that starting a business will need much more money, so UBI will not be enough.
Most people in agricultural society work as peasant.
Most people in industral society work as worker.
Most people in information society work as servant(to provide some service).
All have low risk, low reward.
Most people don't have choice.
What will happen in AI age?
Agriculture is good to our gene, but not good to any individual.
Through cooperation, human created more wealth, including food surplus, machines, infrastructure and knowledge.
The cost is much longer time work for everyone, with worse nutrition from food.
Religion seems critical to the Dark Age. It makes large scale cooperation possible.
What does this history tell us regardint the incoming AI age?
20250712 - Chapter 4: The Last Days of Politics: Parallels Between the Senile Decline of the Holy Mother Church and the Nanny State
As the scale of technology plunges, governments will find that they must compete like corporations for income, charging no more for their services than they are worth to the people who pay for them. p99
The government of large country has huge advantage of scale effect, even if we ignore the advantage of advanced education. How can any individual, normal organization or small countries compete with them?
North Europe countries are not that friendly to their citizens, as they charge much higher tax and fees.
High-income individuals want low tax rates and minimal social welfare benefits, whereas low-income individuals want the opposite. Government is elected by low-income individuals, and high-income individuals sell goods and services to low-income individuals to make money.
How can we expect governments compete with each other to keep their citizens?
Why self-flagellation was so popular in the medieval period?
Some people kept conquering Mount Everest again and again even after losing some fingers.
Does the insurmountable pain help them stay in the flow?
Feudal or hierarchic thought expresses the idea of grandeur by visible signs. p108
Nowadays, real power and wealth are invisiable.
What will it be like in the future?
First principles will upend the world.
Just as "Sapiens" says, religion, nation, justice, law, money, and so on are all collective fictions.
Once those fictions are shattered, what kind of new world will emerge?
And what surprises—and what terrors—might an AI grounded in first principles (for example, GROK 4) bring us?
It was largely imaterial whether the actual effect of received practices was to improve moral character or save souls, just as it is largely immaterial whether a welfare program actually improves the lives of the people to whom it is directed. p119
People eargerly adopted these and other "ineffective techniques to allay anxiety when effective ones were not available." p120
Just like what AI does. The first principles are important, the equally important thing is the courage to face ignorance.
Thus the mundane bits and pieces of life were interpreted not in terms of their causal connections, but in terms of static symbols and allegories. p124
Same thing happened everywhere around the world. Why? It's easier and simpler. It's something between conscious and subconscious.
When we started to ask how to verify those theories, science was born.
"Hatred of rich people, especially of the new rich, who were then very numerous, is general." p126
"Crime came to be regarded as a menace to order and society." It could be equally menacing in the future. p126
Blockchain technology makes things much worse. Real wealth is invisible. Blockchain makes wealth undetectable. There will be much more corruptions. Rich people will get hatered.
20250714 - Chapter 5: The Life and Death of the Nation-State: Democracy and Nationalism as Resource Strategies in the Age of Violence
Tax debates have normally assumed that the trade-off facing the taxpayer was not between doing business inone jurisdiction or doing it in another, but between doing business at penal rates or taking a holiday. p139Changing nationality is difficult, which may need years or residency. It's especially hard to switch back if tax rate is changed back in the original state.
Western Governments only need to NOT be the worst one to keep their most competent people.
In effect, the recipients of transfer payments and subsidies became pseudo employees of government who were able to dispense with the bother of reporting every day to work. p140
They are not the customers of the government.
It inescapably implies that when magnitude means more than efficiency, governments controlled by their customers cannot prevail, and often, cannot survive. p140
Necessary waste is necessary.
This new industrial equipment raised earnings for unskilled workers, making the income distributionmore equal. p142
AI will cause similar consequence: uneducated people will make equal income to educated people.
In the past 30 years, China replaced Form Soviet Union(USSR) or Russia.
Nation-State is still strong.
20250723 - Chapter 6: The Megapolitics of the Information Age: The Triumph of Efficiency over Power
The welfare state and the trade union......could not have existed if not for thechnologies, military and civilian, that raised the returns to violence during the Industrial Age. p155This is the ultimate explanation of a lot of confusing questions. For example, why the tax rate is getting higher and higher?
Advanced systems of every variety are complex adaptive sytems without an authority in charge. p157
True. For any company, most of the employees are in grey area most of the time. If they all choose to do the right thing spontaneously, the whole company is come competitive comparing with others.
Will ASI judge individual person this way in the future?
Such attacks became commonplace during attempts to organize effective unions. These efforts were generally most intense during periods when real wages were rising due to deflation. p163
Information technology is making it plain that the problem faced by persons of low skill is not that their productive capapcities are being unfairly taken advantage of, but rather the fear thaey may lack the ability to make a real economic contribution. p172
Not sure. Janitors contributed a lot of value to the society, but their labour price is decided by supply and demand. It's just like the price of intelligence.
Because AI can provide plenty of intelligence to our society, the price of intelligence will drop drastically.
Since successful merchants are more likely to reinvest their profits than consume them, the higher profits of merchants in that stage in history led to self-reinforcing growth. p183
This is the reason that Monarches cannot beat Capitalists.
RSA algorithm itself is not enough for implement sovereign individual. With the help of blockchain and AI? Maybe.
The problem is about how to guarante the loyalty of personal AI.
AI relys on huge data centers, which are controlled by companies and nation-states. Normal people cannot go against them.
20250803 - Chapter 7: Transcending Locality: The Emergence of the Cybereconomy
The processing and use of information is rapidly replacing and modifying physical products as the most important source of profit. p201This prophecy 27 years ago is reality now.
The profit of Google, Meta, Microsoft, Oracle, etc. are all from the processing and use of information. Amazon, Nvidia, Broadcom and Apple also have similar profit source based on information processing.
"The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves." - Alan Greenspan, p209
What does it mean to crypt coins?
There are at least three errors in this book so far.
1. The cost of Communication is not the cost of Interaction.
The cost of communication has dropped to almost zero, but the cost of interaction is still as high as before the information age.
How do we solve this problem? Voting.
The government leader then can make decisions quickly without negotiation with lay people.
2. The Sovereign Individual is good to those individuals, but not good to our gene.
From gene's point of view, redudency is critical for the thriving and reproduction of gene itself. That's why most of the top 10% high income people don't have much problem paying much higher tax than the average level
3. The total volume of economy is decided by the smaller side of Goods & Services supply and demand.
It's always the inadequate supply limit the volume of economy, but automation changed the foundation, especially with the help of computers, Internet and AI.
The thoughts from ChatGPT o3, based on the words above three points:
https://chatgpt.com/s/t_688dd748ea848191bf6ef079f781272a
The cybermoney that anchored to gold is not going to work, because the gold mining, around 1% per pear, is not enough to meet the need to economy growth, which is at least 3% per year. Serious deflation is nightmare.
Whenever circumstances allow people to reduce protection costs and minimize tribute paid to those who control organized violence, then economy usually grows dramatically. p224
True, but why? The reason is, when people got extra resource, they prefer to reinvest it. But the aristocrates prefer to use it for luxuary stuff, which is useless except for showing off.
Reinvestment bring us the compound effect of growth.
However, modern society already have oversupply of goods and services, which means not much worth reinvestment. The compound growth can only caused by technical breakthrough.
That's why AI is so attractive. It needs huge investment, and the potential reward is limitless.
20250805 - Chapter 8: The End of Egalitarian Economics: The Revolution in Earnings Capacity in a World Without Jobs
In the Information Age, familiar locational advantages will rapidly be transformed by technology. p237
If working from home is allowed, we can move to the countryside.
With the help of Starlink, we can provide the same services as if we were in the city.
The cost of living will be much lower, so comparatively, the return will be much higher.
Does this mean that property prices in cities will drop significantly?
Meta (Facebook), Netflix, online games, etc., can replace local nightclubs and theaters. Soon, AI will be able to replace local services like law and finance.
The advantage of location (such as convenient transportation and efficient teamwork) will eventually lose its power.
For local governments and the poor, this is a disaster.
No matter how much tax Netflix pays to EU governments, it's far less than the income Netflix collects from the EU. So where does the remaining money come from?
For example, if Netflix collects $10 billion from the EU and only pays $3 billion in taxes to EU governments, then the people of the EU have to make up the remaining $7 billion.
In the past, Europe could export cars and other goods to the U.S., but in today's era of deglobalization, this kind of international trade will keep shrinking, making it hard to offset losses from the virtual economy.
There is no much return of violence in virtual economy, such as which Internet ISP people choose, or which web site they visit as social media platform. Even in that case, local nation-states still can force those social media companies to follow their law.
Worse still, if local governments have no money, it becomes difficult to achieve wealth redistribution. How will local poor people receive government benefits?
The only option for local governments is to increase tax rates, which will lead to the outflow of talent and capital. Also, many people can work for European companies without living in Europe.
In this way, government tax revenues in Europe will decrease even further.
Due to technological progress, without government wealth redistribution, not only will the wealth gap between regions widen, but the gap within countries will also grow.
Governments will be obliged by the force of competition to set policies to appeal to those of their customers who make the greatest contributions to economic well-being, not to those who contribute little or whose economic contributions are negative. p238
Quite the opposite. Governments are controlled by those who contribute little. What would they do? They are not rational, so they are likely to choose Latin Americanization.
The current western european and north european countries are perfect place to verify whether democracy can help them to do self-correction. Or else they will fall into the Latin America trap.
The twentieth-century political view assumed that in order for outcomes to be "fair" they had to be equal. p239
Not really. In order for the outcomes to be "fair" they had to be able of surviving.
What is "surviving" level support?
Thousands of jurisdictions won't solve the problem.
For example, when the people in jurisdiction A want to migrate to B,
1. The people in B don't want more immigrants. Resource is limited, including land, water and properties.
2. The people from A want to keep some of their "culture" which is not welcome by some people in B.
Local regulations that impose higher costs will be transformed to a market footing. p256
This works well for business in USA from one state to another. Or company can "move" their profit from one company to another, such as from USA to Ireland.
Business relations will gravitate toward reliance upon "circles of trusts." p256
It's valid to both business and individual. How does AI decide whether someone/some business is trustful? AI will check the whole history of this person/business. We need to leave years of track on Internet to prove ourselves trustful.
20250822 - Chapter 9: Nationalism, Reaction, and the New Luddites
Government bureaus in almost every country were famously inefficient, largely because they tended to be controlled by employees who lacked an incentive to improve productivity. p266Can most of the functionalities be outsourced? That means no public school or public hospital.
"The Sovereign Individual" won't work, because:
1. Centralization brings significant advantages: extremely low trust costs. Transactions require trust.
2. There is no such thing as a purely virtual economy.
3. Oversupply of goods and services.
So, the imagined scenario of living on a luxurious island, purely earning big money anonymously through high technology, is impossible. Even in AI age.
The leading welfare states will lose their most talented citizens through desertion. p269
Maybe. Then what? The social productivity will drop, then people's living standards will become lower, and the governments will get less tax.
People is not rational, especially when acting as "crowd", they will go against it violently. This is exactly what happened in France when their government want to postpone the pension age from 62 to 64, although the retirement age in UK and Germany is at least 3 years later.
So the governments will charge more tax from rich people, even apply wealth tax to them.
Will the same thing happen in Australia?
"The economy of nature" includes three main forms of human sociality: reciprocity, coercion and kin selection. p281
Human desires are ultimately adaptive responses shaped by man's biological nature and situation on earth. p282
Universe love chaoes and hate order. The richer you are, the more exceptional you are, the more likely you will be destroyed. To go against universe, the richer you are, the more tax you need to pay.
Tax is price we pay to fight with the law of Entropy. Universe hates exceptional stuff, such as the people or the countries who own huge amount of wealth. That's the most efficient way so far.
As Sovereign Individual, we should keep optimizing the rules to lower tax, such as using tariff and sales tax to replace income tax.
The bulk of the Luddites were not an impoverished proletariat but skilled artisans who were accustomed to earning incomes five times or more greater than those of an average worker. p319
The threat mainly comes from the people whose income drop most. They are the one who don't own much US market high-tech stocks.
In the new world of commercialized sovereignty, people will choose their jurisdictions, much as many now choose their insurance carriers or their religions. p321
Not true. The authors underestimated the potential cost of "communication". It's hard to sue the bad insurance carriers.
More likely, it will be "bad money drives out good money".
Not all government services are equal. If turn all schools into private, only the one whose children study there pay to the school, the fees will be very high.
Apart from that, who's going to pay to maintain parks, roads? How many service providers each individual need to interact with? What's the cost for a organization 1000 km away to come to your place weekly to collect rubish of only 20 houses?
Nation-states would rather supress local people, instead of attractive external wealthy people. So there will be no "competitive pressures" among sovereignties.
Many talented people left Europe for USA. Europe governments don't care at all. Instead they keep trying to raise tax rate for wealthy people.
20250909 - Chapter 10: The Twilight of Democracy
In 1996 the lifetime federal tax rate at the highest brackets in the United States stood at seventy-three cents on the dollar. For owners of corporations, who received their income through dividends, the rate was eighty-three cents on the dollar. p329
It's more likely around 60%, even if pay full tax all the time.
If democratic selection were truly a superior method to identify competent leaders, you would expect to see it as a universal decision rule. Instead, it is confined almost solely to the political realm. p336
In commerical realm, it's shareholders make the decision. Not the clients or the people who have local citizenship. The difference is that shareholders have "skin in the game".
What if the voting rights are based on individual contribution? The contribution could be money or service.
But rich people may get rich by accidents and the leverage of technology, family support, etc.
If a woman never work but raised 10 children, she may actually contributed a lot to the society if at least some of her children can cotribute to the society.
Why not pay prime ministers and prsidents even a tiny share of the gain that their policies promote? p338
Because they may sacrifice long term benefit for short term benefit. Where is no KPI can measure their performace, as no one can predict the future, so we don't know what may cause damage in the near future.
They are more likely to act as the fund managers from Wall Street. Bet recklessly. If they win, they win huge; if they lose, others take the loss.
What's the best way to allocate voting rights? What's the best way to manage the society? Let AI to make the decision?
We expect to see efficiency predominate over massed power. p346
True, but this needs to go extreme to be true. One man can beat a state with nuclear weapon, but he cannot do that with a machine gun.
In short, you would probably accept $50 million to move to Bermuda. p346
Only billionaires can get that $50M benefit by moving to Bermuda. Most of people, even most of wealthy people, are not billionaires.
"Public expense" here is a euphemism for "at the expense of those who pay the taxes." p356
The percentage of net taxpayers, who pay more tax than the benefit they received including infrastructure, national defense, public education, public healthcare, justice and police, pension, unemployment subsidy, etc., is quite small.
Grok 4: Approximately 14-17% of U.S. people (including children) paid more than average government expenses($21,938) in total taxes (federal, state, and local) in 2019.
If we assume each adult's lifespan is 80, and work between 21 to 60, then the threshold get doubled:
Approximately 4-5% of U.S. adults paid more than $44,000 in total taxes (federal, state, and local) in 2019.
20250916 - Chapter 11: Morality and Crime in the “Natural Economy” of the Information Age
Efforts to contain violence will also devolve in ways that depend more upon efficiency than magnitude of power. p359It's faster to send one policeman to handle one request, than sending 100 policemen to handle it. But no big difference, and only 100 policemen can handle large scale of issues.
Same to brainpower. 100 scientists/software engineers are better than one scientist/software developer.
Kevin Kelly: "For most of the industrial revolution, serious, wealth was made by bringing processes under one roof. Bigger was more efficient." Now it isn't. p365
This only applys to three types of production.
1. Information. Such as software, information service, etc.
2. Electricity.
3. Tiny production. Such as single unit production.
Is single unit production feasible to replace massive production? No.
The cost will be much higher, but it's maybe worth it, as we may get the product in very short period of time.
Chances are, whenever a new civil war or insurgency gets under way,, the desperately poor combatants will finance their military effort by delivering drugs and laudering drug money. p366
When in the easy-going mood the shrinking from present ill is our ruling consideration. The strenuous mood, on the contrary, makes us quite indifferent to presetn ill, if only the greater ideal be attained. p377
Such a morality not only performs specific functions such as reducing crime, and helping to support family and social strucutres, but gives citizens a sense a purpose and direction. p381
After WW2, Germany, Japan, Korea, Taiwan, Singapore's economy quickly rised up. What's the real reason of that? The lives of people were getting better every day. They had hope.
But nowadays, the living standard is not getting better.
A godless, rootless, and rich elite is unlikely to be happy, or to be loved. p389
We always want to join some group. Can a godless, rootless, and rich elite find some group to join? Playing golf maybe?
20250917 - Afterword: Devolution and the Law of Diminishing Marginal Returns
"Of all 36 ways to get out of trouble, the best way is - leave." p398
True. Unless there is nowhere to go.
Whatever your current residence or nationality, to optimize your wealth you should aim to primarily reside in a country other than that from which you hold your first passport, while keeping the bulk of your money in yet a third jurisdiction, preferably a tax haven. p399
Nationality, residence, investment should be with different countries. It could be correct until most of countries collecting tax from their citizens no matter where they live.
Another problem is, is this ethical? Maybe not.
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