For those that haven't read the book, I strongly recommend you do. Here's a taster/reminder...
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⚡ Summary
When technology is mobile, and transactions occur in cyberspace, as they increasingly will do, governments will no longer be able to charge more for their services than they are worth to the people who pay for them.
Anyone with a portable computer and a satellite link will be able to conduct almost any information business anywhere, and that includes almost the whole of the world's multitrillion-dollar financial transactions.
This means that you will no longer be obliged to live in a high-tax jurisdiction in order to earn high income. 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.
Taxing capacity will plunge by ~50-70 percent. This will tend to make smaller jurisdictions more successful.
Incomes will become more unequal within jurisdictions and more equal between them.
Unlike the Agricultural Revolution, the Information Revolution will not take millennia to do its work. Unlike the Industrial Revolution. its impact will not be spread over centuries.
What is more, it will happen almost everywhere at once. Technical and economic innovations will no longer be confined to small portions of the globe. The transformation will be all but universal.
The cybereconomy, rather than China, could well be the greatest economic phenomenon of the next thirty years.
The death of inflation will take away the disguised profits that inflation previously conveyed to to those who were monopolistic issuers of currency.
❓Who benefits & loses
The Information Age will be the age of upward mobility. It will afford far more equal opportunity for the billions of humans in parts of the world that never shared fully in the prosperity of industrial society.
The brightest, most successful and ambitious of these will emerge as truly Sovereign Individuals.
By 2025, the cybereconomy will have many millions of participants. Some of them will be as rich as Bill Gates, worth over $10 billion each.
The "cyberpoor" may be those with an income of less than $200,000 a year.
Tens of billions, then ultimately hundreds of billions of dollars will be controlled by hundred of thousands, then millions of Sovereign Individuals.
It is important not to forget that in many areas of the globe, the transition to the information economy will lead output to surge, with higher incomes all around.
In general terms, the tax consumers will be the losers.
Those without savings who rely on government to pay their retirement benefits and medical care will in all probability suffer a fall in living standards.
For better or for worse, the societies of the 21st century are likely to be more unequal than those we have lived in during the 20th.
Those who live in jurisdictions that remained poor or underdeveloped during the industrial period have the most to gain by the liberation of economies from the confines of geography. This is contrary to what you will hear.
Jurisdictions in Latin America and Asia where per capita income is rising rapidly may endure for generations, or until lifetime income prospects there equate with those in the formerly rich industrial countries.
We also suspect that nation-states with a single major metropolis will remain coherent longer than those with several big cities.
🎲End Game
The vision of the nation-state among persons of ability and wealth, the Sovereign Individuals of the future, will have undergone the political equivalent of laser surgery. They will be seeing 20/20 👈👀
The result to be expected is an intense fiscal crisis with many unpleasant social side effects.
The economic consequence of this transition crisis will probably include a one-time spike in real interest rates. Debtors will be squeezed as long-term liabilities contracted under the old system are liquidated.
Governments facing serious competition to their currency monopolies will probably seek to underprice the for-fee cybercurrencies by tightening credits and offering savers higher real yields on cash balances in national currencies.
Higher real rates around the world will spur liquidation of high-cost, unproductive activities and temporarily reduce consumption.
The deflationary environment may drag on for some time, with more adverse consequences in the high-cost industrial economies of North America and Western Europe than in the low-cost economies in Asia and Latin America.
Those in regions where computer usage and net participation are low may opt for old-fashioned hyperinflation in the early stages of the cyberecononomy.
Those countries that first recognise the validity of digital signatures and provide local court enforcement for nonpayment of cyber debts will stand to benefit from a disproportionate surge in long-term capital lending.
Conventional thinkers would conclude that the breakdown of income redistribution in the leading nation-states would doom the world to economic collapse. Do not believe it.
The main controversy surrounding the advent of the information economy and the rise of the Sovereign Individual will focus on the allegedly effects on "fairness" arising from the death of politics.
The Information Revolution will make it much less important whether governments are able to function capably. It will therefore be easier for persons living in traditionally poor countries to surmount the hurdles that their governments have thereto placed in the path of economic growth.
While public debate will focus on growing "inequality" in the OECD countries, individuals everywhere will enjoy far more nearly equal opportunities.
There will be no cyberwelfare. No cybertaxes and no cybergovernment.
The "losers and left-behinds" in the Information Society will surely envy and resent the success of winners.
While the leading states will no doubt attempt to enforce a cartel to preserve high taxes and fiat by cooperating to limit encryption and prevent citizens from escaping their domains, the states will ultimately fail. The most productive people on the planet will find their way to economic freedom.
For this reason, it is to be expected that one of more nation-states will undertake covert action to subvert the appeal of transience. Travel could be effectively discouraged...
🤑 The Size of the Prize
Each $5,000 of annual tax payments paid over forty years slashes your net worth by $2.2million, assuming a 10% return. At a 20% return, the compound loss balloons to $44 million.
Global competition will also tend to increase the income earned by the most talented individuals in each field, wherever they live, much as it does now in professional athletes.
Cheap governments that have few liabilities and impose low costs on customers will be the domiciles of choice for wealth creation in the Information Age.
New fragmented sovereignties will cater to different tastes, just as hotels and restaurants do.
Within years, let alone decades, it will be widely understood that anyone of talent could accumulate a much higher net worth and enjoy a better life by abandoning high-tax nation states.
⚡ Summary
❓Who benefits & loses
🎲End Game
🤑 The Size of the Prize