Nations And Networks

I was reading the NY Times today on the excellent Editors Choice App on the iPad and came across this line in a piece by Scott Shane:

“We’re still focused on the nation and not the network,” said John Arquilla, professor of defense analysis at the Naval Postgraduate School. “You can do brilliantly in Afghanistan and still not deal with the Faisal Shahzads of the world.”

This is not a post about the US' strategy in its war against terrorism. I have very mixed feelings about it and don't feel that I can add anything to that debate.

This is a post about nations and networks. The Internet is a global network with 1.25bn people on it right now (comscore may 2010 numbers). The world bank says there are 6.7bn people on planet earth so that is only 20% of the total population but it's a meaningful number and it is growing fast (up 12% in the past year according to comscore).

And there are some networks that are as big as countries. Google's monthly user base is 70% of the population of China. Facebook's monthly user base is 150% of the population of the US. Twitter's monthly user base is larger than the population of Germany.

These are some of the largest networks but as Professor Arquilla points out there are all sorts of networks on the Internet and some of them are dangerous. Maybe more dangerous than countries in an age of mutually assured nuclear destruction and suicide bombers. There are rogue nations and there are rogue networks.

I think we are just beginning to understand the power of these networks and what they can become. My partner Brad penned a very thoughtful post on the USV blog a few weeks ago talking about web services as governments. He was using that analogy to think about the recent actions of Apple, Facebook, Twitter and other web-based platforms. But the analogy is more powerful than that. Internet networks span geographies, the have governance systems, they are starting to develop currencies, they are starting to develop large economies. Just look at the Meetup Everywhere widget to the right of this post to see what the AVC network looks like.

So when we think of global political systems and how they are going to develop in this century, we cannot simply think in terms of the traditional nation state. We also need to think about the emerging network state.


Comments (Archived):

  1. RobWhite

    As soon as I read this, 4chan was the first network that came to mind. I guess that’s because it tries to be disruptive in a somewhat traditional sense, but is notable due to its successes and growing mainsteam following.(Edited to change my comment to something a little more thoughtful)

  2. Dave Pinsen

    I’m really not sure how that quote about terrorist networks became a jumping off point for you for another Internet/nation metaphor. The idea that the network we are dealing with when it comes to terrorist threats is so vast and amorphous that we need to stop focusing so much on nations is the sort of thinking that leads us to pat down little old ladies at the airport while ignoring what Faisal Shahzad has in common with so many other terrorists.

    1. fredwilson

      read the NYT piece. they use the internet to organize these terrorist networks

      1. Dave Pinsen

        I’ll read it. It actually downplays the role of the Internet when it came to facilitating Shazad’s terrorism,Proponents of the current escalation of troops and drones point out as well that even Mr. Shahzad was not turned into a terrorist solely by the Web. He met face-to-face with leaders and trainers of the Pakistani Taliban before crossing the line into violence.What’s weak about the article though is that it (and particularly its quote from the Naval Postgraduate School professor) presents this straw man argument: success in Afghanistan [whatever that might mean at this late date] isn’t sufficient to fight terrorism [duh]; ergo, we need to stop thinking so much about nations and start thinking about networks. But Shazad himself undermines this formulation. From the article:Calling himself “a Muslim soldier,” he explained his motivation: “avenging” the war in Afghanistan and American interventions in Pakistan, Iraq, Yemen and Somalia.“I am part of the answer to the U.S. terrorizing the Muslim nations and the Muslim people,” Mr. Shahzad said.So nations are still pretty important to terrorists such as Shazad. But nations (and national origin) are things we feel uncomfortable thinking about when it comes to domestic terrorism. That’s why early media reports of Shazad’s attempted Times Square bombing described him as “a Connecticut man”. So we focus on “networks”. That seems like a safer approach, career-wise, for a government employee such as the Naval Post Graduate School professor than pointing out the obvious logical implications.

        1. fredwilson

          I don’t want to talk about terrorism in this thread. That wasn’t the point of this post

          1. Dave Pinsen

            Fair enough.

  3. Norbert Mayer-Wittmann

    Great post!I’ve been saying much the same for many years already — as when I was on a cc TLD panel at the Domain Roundtable conference a couple years ago (I gave some guidelines for domain name investors ;).I wonder when Qaddafi will take over;) nmw

  4. Rahul Deodhar

    Right you are. Tiffany Shlain is making an interesting film on interconnectedness. Here is a link http://www.connectedthefilm…Tackling terrorism, though, is a different ball game. The national security system is designed in a particular way. It processes volumes and is fairly well evolved structure will rigid rules. Imagine that to be like a super-strong wire-mesh fence. It can hold anything, herds of animals, even advancing armies. But it cannot hold a water flood. The terrorist organisation has evolved into something malleable and fluid like a flood of water. It passes right through, the system cannot see it. The solution to a distributed problem is a distributed solution. Citizens watching their own neighborhoods are more likely to identify and neutralize such threats. But our urban culture makes us avoid contact. Anyways I am writing about this in my next book on firms – hence the rant.

    1. fredwilson

      I like ‘the wire fence can’t hold water’ line. Its a good one

      1. Rahul Deodhar

        Thanks now that you say it that way – it goes into the book. 🙂

    2. Dave Pinsen

      “It passes right through, the system cannot see it.”Can’t or won’t?

      1. Rahul Deodhar

        It is said “don’t blame conspiracy for what is often the fault of incompetence” 😉

        1. Dave Pinsen

          I’m not blaming a conspiracy, unless you consider political correctness to be one.________________________________

  5. andyswan

    Just like “nation states”, “network states” will find success, innovation and wealth creation from LEAVING THEIR CITIZENS ALONE to pursue their own interests.The “nation state” has the power of violence to enforce its rules (and the whims of its leader) on its citizens. Example: at the core of the socialist/communist system are transactions coerced via the threat of sanctioned violence, not mutual agreement of self-interest.Currently, the “network state” requires the consent of the governed (I can leave facebook or itunes). Let’s keep it that way. As long as “network states” aren’t given the sanction of violence, the mobility of its citizens will insure that free-market forces keep its power in check.

    1. fredwilson

      I totally agree andy

    2. ShanaC

      There are lock-in problems, and they will get worse.

      1. andyswan

        Mobility ftw

        1. ShanaC

          I suspect that may change over time.

          1. andyswan

            If they don’t have guns and jails, how can they force me?

          2. Fred T

            Probably not yet, but I’m certain NSA could be using a subtle yet effective “watchdog” technology similar to that. Palantir in Palo Alto could be a good example developing that space.It may not be fully enforceable yet, but when these online “nation states” start standardizing virtual currency, impose international rules on e-commerce, and form more governing entities and committees overseeing every virtual human activity in the network, then that movie “Minority Report” might just be possible; if not to predict imminent crime – but to reinforce community network stability.

          3. ShanaC

            two ways-lets pretend that your primary form of self identification comes from yoursocial posturing on network from now on, so all; the information you leakhere is in some ways truer and more useful than a previously unnetworkedworldSocial ostracism becomes immensely powerful, you are unable to act withinthe system, although you are connect to it.Then we progress- you still won’t behaveWe cut you off from silos of information, you do not have access tointellgence.You still won’t behave-We cut you off from the network itselfWe deem you a form of madness:We cut you from all possible networks. You are always isolated. You arenow driven to hurt yourself.Foucault makes a superb point- the most damaging thing one can do is hurtthe soul of the person, not the body, after all. And we are entering an erawere it is increasing easy to do so. The body is just a container- you cancontinue on, as an extremely powerful force, quite maimed, in jail.Jails work best when they are prisons of the mind and spirit. Networks workbest when they contain your mind and spirit- and the internet, as it worksnow, is a creature of the mind and the spirit.

          4. Mark Essel

            This makes a potent root for a series of blog posts Shana. this comment alone is one.

          5. Aviah Laor

            tax you

          6. andyswan

            Taxes aren’t enforceable on their own, without the threat of sanctioned violence.

    3. reece

      maybe the Internet is the last hope to be Galt’s Gulch? 😉

    4. howardlindzon

      right on andy.

    5. Mark Essel


    6. Norbert Mayer-Wittmann

      Markets aren’t really “free”, though — laws apply everywhere. I doubt anyone can buy an AK-47 on, ebay,de,, ebay.whatever.When I met Esther Dyson several years ago, I asked her whether she thought there could be more than 1 internet, and we agreed that it seemed implausible — but I wouldn’t go so far to say that it’s *impossible* (after all, Alexandria wasn’t the only library *either*).Just as many Chinese people are probably not aware that the Internet outside of China might be different than the Internet inside of China, so too many people might find it difficult to grasp that the Internet outside of is different than the Internet inside of (even today, many people still continue to think that google indexes the *entire* WWW; many people aren’t even aware of the fact that the different versions of google return different results).In general, the rate of what might qualify as “passable” online literacy is still very low. For example, just a couple years ago, there were articles on stating that was a russian company (which is complete nonsense, since all domains within the .com TLD fall within the jurisdiction of the state of Virgina [i.e., the United States]). People outside of the US are generally more knowledgeable regarding such facts (and usually prefer the TLD’s of their own jurisdiction).

      1. Rahul Deodhar

        I am sure everyone here is aware of the concept of Deep Web…The wiki page here lists DeepPeep as a deep web search tool. But there were others that I forget. The results were pretty interesting. It is possible that these (I refer to them from about 7-8 years ago) may no be so deep any more and may have died. But the concept lives.

  6. Dave Pinsen

    By the way, Fred, I wonder if your thinking on this isn’t influenced by Neal Stephenson. In Snow Crash and The Diamond Age he presented a future where nations had atomized into franchises or tribes, respectively, and in Cryptonomicon, he presented something of a path forward toward that, where individuals could trade money away from the watchful eyes of governments. Although Stephenson was prescient about a number of his tech predictions, he was sort of 180 degrees off on the political stuff. Our central government is stronger today than ever, for example, and has greater legal and technological ability to track electronic communications and financial flows.

    1. fredwilson

      Snow Crash is required reading on our firm

      1. Dave Pinsen

        I’m aware of that, which is why I brought it up. That, and it’s relevance to this post and the whole Internet platforms as governments meme. Do you agree with my point that Stephenson’s political/governance predictions have been as off-target as his tech predictions have been on-target?________________________________

        1. fredwilson

          to datesome things take longer 🙂

          1. Mike O'Horo

            Indeed, Fred. The only thing George Orwell got wrong was the date.

  7. ShanaC

    I keep wondering if lock-in issues will make us shift more to the extremely large nation-state, albeit one that that doesn’t exist in a given “place’I also wonder what “place” will come to mean if one is idenified as much by the networks one “joins” (there may not be much joining in the future, you may be born into a network system) and not by a physical space one actually inhabits. Will these meanings come to intertwine or to seperate, and what will it mean to the future of the identity politic?

  8. casinoman88

    I am reminded of the book “Daemon” by Daniel Suarez. The premise is similar in that groups of like minded individuals will create their own network outside of government (which is controlled by business interests) and essentially become their own nation with separate currency and hierarchy. The book is science fiction but the lesson is the same. Understanding these networks will be essential in not only the political arena, but in creating business opportunities.

  9. Aviah Laor

    I must say Fred that I strongly disagree with such arguments. People live, after all, where they live. Nations, local regimes and religious fundamentalism are not going to disappear anytime soon. Where women rights are limited if any, birth rates are exploding, religion uses it’s old powers and corrupt regimes manipulate their countries – there is very little the network can do. It’s an illusion.The western world, which portrays itself as the flagship of these “networks”, has limited influence.It still suffers from loosing two successive young generations in two world wars, just on the dawn of an era when life expectancy tripled.One of the results of this tragedy is a catastrophic demographics effect, probably loss of billions of people in future generations. This is much more crucial influence on global society than Facebook.Cultures, and fundamental religion in particular, were always the strongest force in human history (after visit Europe, with all it’s beauty, fertile land and water, one wanders what had they fought for so much).There are Seth Goddin tribes, and there are real tribes. The latter hold guns. It will be naive, if not dangerous, to assume that new channels will change core values of societies, and consumer/ads networks are far, far from spreading values.Paypal is a good example. According to “The Paypal wars” their original idea was to provide global exchange platform that will help people around the world to shield their financial wealth against local governments moves on the local currency. A transforming idea.They ended up as a consumer payment platform.Still, the idea is important, to consider the web as a channel to transform and spread alternative, and hopefully positive, core values. But the implications on current state of affairs is very limited.

    1. Mark Essel

      I respect your argument Aviah but would like to offer a counter.Communities that leverage digital social networks are no less capable than other more ingrained social mechanisms (religion, cultural control). Let’s not count out the rise of global networks of people that share ideals just yet (both good and bad).

      1. Aviah Laor

        Thanks Mark. I certainly wish you are right.

    2. fredwilson

      that’s a strong counter argument Aviah, but I am not convincedi am an optimist though

    3. ShanaC

      You know, I keep thinking about this post….it doesn’t sit right at all.

  10. paramendra

    This post totally speaks to me. I think of that number (1.25 billion out of 6.7 billion online) the way you perhaps think about web services, your domain expertise. As someone who grew up in the Global South, I think of Internet Access – Internet as in broadband with full size keyboard – as the voting right for this century. This is the Internet Century.When I started reading this post, I was thinking of Brad’s post (that I read when it came out) before I had finished the first sentence.The Al Qaeda is not a state, it is not even an organization any more. The Al Qaeda embodies two big trends – the Internet and Globalization – the way not even Kiva does. Bush went after Saddam instead of Bin Laden because, well, if the medicine I have is for cough (the nation state as an enemy), I am going after cough viruses, the facts be damned, don’t tell me the diagnosis is for AIDS.You and I might not be the best people to talk of security issues, but there are plenty of cyber security issues. Maybe that is worth a post. For all its promises, the Internet is just the newest platform for the age old fight between good and evil.Heck, that is four paragraphs. Let me turn this into a reply blog post. :-)(By the way, I clocked in at 6:30 AM, and the post was not here yet. Some people get too excited about the World Cup.)

  11. Morgan Warstler

    Our single biggest failing as for-profit technologists is that we have not turned our powers on government… not politics (grassroots in boring), I mean the actual functioning of government:1. Web Interface – ease of use, self service2. Productivity gains – automation, workforce reductions, increased competition3. Transparency and data miningA mere 20% gain in productivity at Federal, State, and Local level would save us $300B annually (this is true, run the numbers), if technology companies keep 1 of every 5 of these dollars – thats SIXTY BILLION in new annual revenue.That’s twice what we get in online ad revenue.That’s new IPOs, liquidity events, and tens of thousands of new startups.Fred, this should be your real Public Policy MO, this is what you should be getting behind!

    1. Fred T

      Somehow, Thomas Friedman’s “The World is Flat” book is reverberating in my mind.

    2. Mark Essel

      Hey Morgan somewhat related to your comment. I was hashing out back of the envelope calculations on the legalization of Marijuana and it’s financial savings to the US yesterday.We’d save ~$3 billion a year in policing costs alone. Add on to that courts, imprisonment, and supporting bureaucracy and it’s a fast way to save some money. Now compile on top of that new hemp based products, and taxation of the drug.

      1. Morgan Warstler

        Yeah Mark, one of the things that comes from viewing government as a basket of community services that private companies can bid to provide at the lowest possible cost… is a far more cost-based mindset across the board. A heightened awareness of price is a virtue in all things.The underlying promise of technology is more for less overtime – therefore, the more we turn government into a price driven sale, the more we can expect from it overtime. By focusing everyone’s attention on price of government, technology, and those practice it, will feast.Note Fred: Nationalizing broadband is far less profitable to us than GOV2.0.

      2. fredwilson

        if i ever ran for office, which i doubt i would ever do, legalization of recreational drugs would be front and center in my platform.our policies regarding recreational drugs are simply ridiculous

        1. Morgan Warstler

          Holy sh*t, you are running for office! Genius. I’m in. All the other important stuff aside, imagine how much fun you can have with the franking privilege.

      3. Mike O'Horo

        By legalizing recreational drugs, not only do you eliminate the policing costs, but by eliminating underground, cash-based economies, you also eliminate the cause of violence inherent in the need to protect turf, product and cash. If people could buy weed or coke in tax-stamped packages at Walgreen’s, or online, wither the contraband kingpins? Who needs them? That also eliminates at least one source of corruption at all levels of government, police and military. Without the billions earned via smuggling, who could afford the armies or weaponry that now makes headlines every week?Our Puritan heritage continues to extract a heavy price from our society.

        1. fredwilson


    3. fredwilson

      we have not made much money serving the establishmentwe’ve made a lot more money competing with it

      1. markslater

        the challenge comes when we innovate disruption in to government systems. the institution of government is not equipped to respond to a challenge to its revenue sources.Just look at education – their are the beginnings of some tremendous innovations – but they will have a rough time of changing a bloated and heaving dinosour. Its not like we have free market forces to push these innovations down the hill

  12. William Mougayar

    The key nugget is this quote “We’re still focused on the nation and not the network”. Evil networks must be fought and defeated as should evil nations/leaders/regimes, etc…The challenging part is that these networks are mostly invisible until something bad happens that’s associated with them. But the root causes of these electronic networks are the same and they are the known geo-political issues which must be solved first.

  13. Mark Essel

    Seeing how virtual communities which cross national boundaries mesh with governments, and cultural institutions like religious organizations is beyond my future vision.We’re just going to have to keep on working and see how things play out.

  14. Matt A. Myers

    Apart of my own projects are to create networks of people who have similar views and values. I want to harness these networks for positive change. I hope I succeed. I hope I can find the help along the way that I need, whether moral support or other.

  15. Ronnie Rendel

    We have been living in a new world order (literally) for a couple of years now, and as your post points out, we are only starting to figure out what to do with it (and where the new “value” is located…)I would propose that the Internet networks bring with them an end to the huge 300,000+ employee corporate behemoths like IBM, giving rise to small highly specialized “niche” firms providing very specific and very consistent value.This scenario, by the way, brings out one skill/service that will greatly increase in demand – project management and “hub services.” Firms specializing in connecting the niche services firms and delivering value through executing on their clients objectives. Kind of like project managers for hire, but with a global network “strategic” approach.I am personally very involved with youth programs, and lately I have been investing greatly in developing management skills and virtual team building skills among our students. I see these skills as being the “hubs” that unleash the potential in the growing specialized networks.As my name implies, I am holding by the opinion that we are in the midst of the “Messianic Redemption”, but as you can tell from my personal bog, I’m not buying into the “fire and brimstone” sermons. I believe that humanity is at the brink of a tremendous “coming of age” through global networking, coupled with a long overdue spiritual maturity and enlightenment. OK, I think I went to far now, better end it here, but I write about it much more on

    1. fredwilson

      i hope you are right

  16. Paul B. Hartzog

    Fred,Long time no talk :-)Re: network state”We have opened the door on the notion 1) that the state could participate in the new networks as a legitimate actor, or 2) that the state could decentralize to the point of being a network itself.”fromPanarchy: Governance in the Network Age…

  17. SD

    Interesting post…. people typically belong to more than a single network, and join (& leave) multiple networks over the course of their lives. Some connections are strong (eg: a workgroup on an office project), whereas others are weak (the network of people who recently bought audis in north jersey)Strong networks have an incredible ability to influence behavior, whereas weaker ones are less influential.I think tools that help people understand strong vs. weak connections … to help decipher which virtual connections are likely to turn into actual physical behavior – well, that seems to be an exciting opportunity in advertising.

  18. GlennKelman

    What a dazzling idea. But for a state to function as a state it has to be able to act.Are network states capable of cohesive action? Can a network build a school? Facebook helps individuals raise money to build schools, but I am not sure its governance rules are so binding that the entire network could move in any unified direction. Perhaps if Earth were invaded by aliens, the response could be coordinated on Facebook & Twitter but short of that…I guess what I am asking is whether a network has a purpose or is it just a platform, which by definition lacks a purpose?.

    1. fredwilson

      a network can’t and won’t build a schoolit will be a school…in particular the comments to these posts are an example of what i am talking about

  19. kagilandam

    The power of network will transform the connections of minds … like minded will groupand transform the world… good and bad. IMHO bad will dominate initially like porn did decades ago … the good will comelate as usual :-).

  20. Rick Wingender

    Interesting idea…web services as governments. I’m not sure how effective that can be in deterring terrorism or getting people to behave better (cooperatively). However, it is somewhat in line in Thomas Friedman’s observations about McDonald’s in The World Is Flat, which basically said that two nations who both had McDonald’s never fought against each other. Don’t know if that’s still true, but the idea of losing “modern amenities” and recent improvements in standards of living could have an impact on behavior. So, that tells me that we should be doing all we can to not only increase innovation, but also to spread the benefits of that innovation around the world.

  21. brisbourne

    The question of governance in the 20th century is a fascinating one. Sociologists have been talking about globalisation and the demise of the nation state for 20-30 years now and maybe the concept of companies/communities as governments is one way in which the power vacuum gets filled.What is clear is that the dislocation between global business and national regulation is becoming acute. The first piece of global regulation that I’m aware of was an agreement on international postal tariffs agreed immediately after the Second World War and which is still in place today, and the tension has been building since then. We are now witnessing the first attempts at global regulation of the financial services industry and as you and Brad have noted a couple of times internet companies are taking on some of the attributes of governments which is causing serious disquiet in countries from China to Turkey to France.Where does all this go?In my opinion a single global economy demands a single global government, for some elements of policy at least, although there can and will be considerable local autonomy underneath, but to maximise growth businesses need harmonious and predictable regulatory structures within which to operate. It will take a long time though, not least because harmonisation of values is a pre-requisite, but I think the trend of the last 200 years to larger units of government can only accelerate.

  22. Csongor

    Offtopic: nice site redesign but the missing tweet this button is a real pain

    1. fredwilson

      hmmmaybe we can fix that

  23. andyswan

    Yes, the protection of rights. This is typically manifest in three basic areas:1) Internal police, to protect us from criminals2) An army to protect us from invaders3) Courts of law, to protect private property and contracts from breach or fraud by others, to settle disputes by known, rational rules, according to objective law.These go beyond the “consumer” model, because every single person has the exact same rights as I do by nature of being alive. They are not granted and they cannot be bought.

  24. andyswan

    No, like “healthcare”, that’s not a defensible right. There are manycircumstances where the natural water or air is not clean. I have no rightto require others to provide it to me at their expense.I do have the right for my air and water supply not to be poisoned/ruined byanother man, who would either be a criminal and/or liable, depending on theintent, etc.Thankfully, industry, science and technology have provided the means toproduce the cleanest and safest water in world history…within the last80-100 years.