From Shadow Constitution to Network State

Sowing the Seeds of Underthrow with Solidarity Around Chosen Law

Adapted from an image by Daniel Weiss

“Where is the plan you are following, the blueprint?”
“We will show you when the working day is over,” they answer.
Work stops at sunset. Darkness falls over the building site. The sky is filled with stars. “There is the blueprint,” they say.
–Italo Calvino, Invisible Cities

Balaji

Srinivasan has distinguished himself as a neurodivergent fount. Ideas and analyses pour out of him, even on bad days. He regales interviewers momently with acronyms and anecdotes as if on a Modafinil drip. One time he melted Tim Ferriss’s face for four hours, which is that podcaster’s entire workweek. More recently, Srinivasan did a seven-hour interview marathon with the sleepy Lex Fridman.

If you’ve never heard of Srinivasan, you’re living in a bubble. Such is not to suggest Srinivasan is immune to criticism, nor that his staccato communication style couldn’t, at times, use more finesse. It is instead to acknowledge his genius. 

Srinivasan is the best of what, at one time, could be said about Silicon Valley. Creativity. Innovation. Entrepreneurship. His gifts as a founder/implementer might be less apparent to those who only know him from his tweets. Srinivasan has co-founded three startups that were acquired. He’s done stints as CTO of Coinbase and general partner at Andreessen-Horowitz. But since Silicon Valley went all decadence and social justice, let’s just say Srinivasan now represents the antithesis of what author Michael Gibson refers to as the “paper belt.” That sorry corridor, stretching from Washington, D.C. to Boston, deals in “newspapers, ads, money, and diplomas—all paper, all fading in power.”

Balaji Srinivasan stands over that part of the world with a lit match.

The Network United States

To those who have been in the startup societies’ space for decades, the dynamics of exit and voice are nothing new. Bob Haywood, for example, has done more to make special jurisdictions a reality than any living person, having a hand in creating Shenzen, Dubai, and many more. But Haywood is quietly effective, so he may never get the Nobel Peace Prize he deserves.

Balaji Srinivasan has become startup societies’ most outspoken champion, a rogue intellectual spreading the gospel of competitive governance. Srinivasan's main contribution to the space is his insistence that new jurisdictions should start by networking people in the cloud around a moral mission (Satoshi smiles).

That brings us to The Network State.

Regarding his bestselling ebook, Srinivasan says he’s written a how-to guide, not a manifesto. I’d like to think this book would qualify as a complementary manifesto. Still, the moral-political case for consent-based societies can get lost in memes, culture-warring, and horse-race politics.

Pamphleteers like me have more to do.

By this point, I assume you’re on board with the great liberatory project of the Declaration of Independence, as it contains that consent provision, which is the key to governance futurism. Maybe you also see that America’s other secular scripture, the Constitution, is in tatters. 

Forming a network state could be an important avenue to a cosmopolitan tent revival of true liberalism, though with significant upgrades. Because Srinivasan intends for The Network State to function more as a content-free guide for forming network states, even illiberal ones, let’s set aside our moral-political priors for the moment. 

To operationalize any Jeffersonian fire, we should consider starting a network state. Srinivasan lays out a seven-step program for doing just that. 

1. Found a Startup Society. Form an online community around some set of moral commitments. 

2. Organize it into a Group Capable of Collective Action. Coordinate members for mutual benefit, mutual aid, and mission focus. 

3. Build trust offline and a crypto-economy online. Meet in person, but build an internal crypto economy.

4. Crowdfund physical nodes. Crowdfund physical assets – from tracks of land to towns – to form the bases of a community’s “archipelago” on terra firma.

5. Digitally connect physical communities. Connect members to the physical nodes in the archipelago through digital passports and mixed reality technologies.

6. Conduct an on-chain census. Keep an ongoing count of member growth, income, and real estate, on-chain, through cryptographic means. 

7. Gain diplomatic recognition. Negotiate diplomatic recognition from surrounding legacy states until you have a viable network state.

Because forming a network state means reconstituting a mutual-aid sector, despite all the headwinds, it won’t be easy. 

Balaji Srinivasan

Critics have pointed out, justifiably, that this seven-step program means network states will still be nested in the jurisdictions of the powerful. Moreover, the world's peoples already have to pay for their predatory states, which leaves meager surpluses to fund developing new institutions or mutual aid arrangements. Recall that the New Deal, WWII, and Great Society programs crowded out America’s robust mutual-aid sector. Today, the warfare-welfare state means the richest nations on earth are dog-paddling in a sea of red ink. Authorities will soon have no choice but to inflate, default, or tax us more, leaving citizens with fewer resources. 

But nothing worth doing is ever easy. 

The financial ruin of the U.S. government and its people could help catalyze a renaissance. This time, we will have subversive innovators to help us unite in mutual benefit and mutual aid as we refocus our efforts on creating an order rooted in peace, prosperity, and pluralism.

This is the basic strategy behind the Constitution of Consent, which we will continue to refine and work on into the future, hopefully until a symbolic ratification.

Three Steps

As promised, I return to this manifesto business, which we can think of as a convenient source of mission, morality, and meaning. 

The mission is to constitute a truly consent-based order in which individuals can choose their governance systems according to their conception of the good. Morality is how we justify a consent-based order. The essence of liberalism is to reduce mass compulsion. The array of communities and associations that flow from the governed’s consent confer meaning, too. As people coalesce around shared values, common needs, and collective action, they will participate in a truly pluralistic society: what John Stuart Mill called “experiments in living.” Many will fail. A few will succeed. 

Now I want to focus on the first three steps in the program to create a network state:

1. Found a startup society. 

2. Organize it into a group capable of collective action. 

3. Build trust offline and a crypto-economy online. 

There is so much to do in these first three. We oughtn’t to bite off more than we can chew. In what follows, I want to articulate a vision for what this particular startup society is and does.

1. The Shadow Constitution

Our first order of business is to bring the most formidable, talented, and aligned people together to fashion a shadow constitution. Shadow has connotations of an alternative cabinet in a parliamentary system, but it also evokes something more clandestine. This novel constitution should take the best from the one that Americans currently have but realize the promise of consent.

(See our $25,000 Constitution of Consent Contest.)

The shadow constitution should also offer greater clarity and remove passages that have enabled the chicanery of a “living constitution.” These legal loopholes have opened the door to errant illiberalism and dubious interpretations that have rendered the most important protocols inert. For example, the General Welfare clause has been a monstrous loophole for the powerful, while Amendments 9 and 10—designed to empower the people—are as good as dead. I suspect our mission might be to eventually encode the shadow constitution so that members become customers who live by the auspices they have chosen. 

Such is the essence of the “consent of the governed.” 

I imagine pulling together the most amazing people, from captains of industry to liberal philosophers, constitutional scholars to bright influencers, who would work in cross-functional teams to reimagine a constitutional order and its protocols. Over time, this group would coalesce around the shadow constitution, effectively ratifying it, as Founding Members.

2. The Shadow Society

As the shadow constitution is being finalized, a team of implementers will assemble a basic membership infrastructure in the cloud. Initially, membership would offer a sense of solidarity and modest benefits. At launch, new members would sign on to the new constitution as a condition of membership. Otherwise, signatories pledge allegiance to this new governance substrate and its embedded values.

The Founding Members would then use their considerable influence to attract more members. New members would immediately see value for their dues and efficacy in association, all within a framework that facilitates community participation and personal growth. The Freemasons aren’t a bad comparison. The key here, though, is efficacy. Can the organization get things done? Do the members feel their participation is valued? Collective action can be challenging, but technology can help.

3. Temples and Tokens

Though he advises us to start in the cloud, Srinivasan knows that in-person intimacy is irreplaceable. It’s hard to imagine the Masons or the Oddfellows hunched over smartphones for very long. Community is possible online, but members must earn deep love and trust through personal interactions that bind them to each other, sacralizing them in their commitment to the mission. Thus, a series of centers, perhaps a franchise of ‘temples,’ could represent the first seeds of the archipelago. These might function as meeting places crowdfunded through dominant assurance contracts.

But that’s not all. 

As a scion of Satoshi Nakamoto, Srinivasan emphasizes using cryptographic tools and tokens to represent The Shadow Society’s internal value flows. Such is wise when fiat currencies are being debased by and for legacy powers and, at the same time, retooled for central surveillance and control (See, for example, central bank digital currencies, or CBDCs.) We can imagine utility tokens that can only be used among members. Members might opt for technology not built on a blockchain but still secure and decentralized, such as Holochain.

One Giant Leap

Since about 2008, I have been cheerleading for the idea that we ought to build a consent-based social order. I knew it would involve technologies that lateralize power relationships, but the protocol designers would have to share certain commitments. With The Network State, Balaji Srinivasan has written a startup manual. Those two different-but-overlapping domains—ought to and how to—might seem confusing at first. But together, they’re a one-two punch against legacy powers. 

Just as the bitcoin whitepaper was the how-to manual for starting a decentralized peer-to-peer currency network, it carried significant moral-political assumptions. In sketching a network state around a fundamental commitment to the consent of the governed, Srinivasan’s how-to assumes the ought-to for manifesto scribblers like me. Executing the first three steps of the Shadow Society would be one giant leap for the future of consent-based governance. 

Of course, no one can do it alone.

This article is excerpted from my new book Underthrow: How Jefferson’s Dangerous Idea Will Spark a Revolution, a variation of which first appeared at AIER.