Invest Foresight has reported on more than one attempt at creating new states on the planet at private initiative – sometimes using new technology like Decenturion, a blockchain-based state. Of course, blockchain per se is not enough to build a new state, but there is no doubt that the development of new technologies, in particular communication technologies, will sooner or later lead to a radical change in the entire political system in the world.
IT and territory
If one wonders where the spirit of modern information technologies clashes most with the spirit of conventional statehood, it is probably about territorial locality. The main thing about modern ICT is that it helps establish instant connection at almost any distance. True, many social issues take more than communication to be resolved, but physical interaction is not all it takes either. In politics and governance, a lot of functions boil down to the transfer and processing of information. All financial transactions, the assignment of pensions and benefits, notary and vital record services, registration of transactions and property rights, elections and political propaganda – these and many other types of state apparatus activities are essentially information processes, which means there are technical possibilities to deal with those without any territorial reference.
Modern statehood is based on the idea that the population of a given territory is a political community associated with a particular government, ideally electing that government. But, with the growth of security, the development of information technology and the generally expanding extraterritoriality of various social processes may suggest the idea of extraterritorial political communities.
To a certain extent, in fantasy, it is possible to imagine an extraterritorial sovereign state that does not have its own territory but has a population based all over the planet: they are registered as citizens of this state; they pay taxes and contributions and benefit from certain services. However, the humankind may never actually fulfill the concept of an extraterritorial sovereign state – mainly because the concept of sovereignty itself is starting to dramatically transform. Political literature has even mentioned the process of “desovereignization”. We may still imagine the emergence of certain extraterritorial communities.
Functions of an extraterritorial state
We can already find some fetal forms of this manifested in today’s world. Perhaps the oldest one is Catholic religious orders. Moreover, a number of functions usually performed by a state can already be transferred, occasionally, to extraterritorial bodies. Thus, commercial, institutional, corporate and industrial pension systems are not bound to a specific territory although normally, they do not fall outside borders of one state. International commercial (arbitration) courts are an excellent example of an extraterritorial judicial body that anybody can apply to. Patent registration systems are currently national but there is an obvious demand for an international system because their customers are increasingly more often foreign citizens. With a properly functioning system of remote user identification and electronic signature in place, any registration service may become extraterritorial, be it registration of a marriage, a right or a legal entity.
Besides, any operations related to financial asset redistribution can be considered extraterritorial. For instance, a social insurance system has to include enough members to become extraterritorial. Arbitration courts are a good example of how legislative bodies can operate on an extraterritorial basis. Modern cryptocurrencies prove that an extraterritorial state can have its currency and monetary policy; its practical sense, however, is highly questionable.
Cultural and educational policy within an extraterritorial state is also generally possible; it requires a sufficient amount of necessary financial resources – this is especially possible in case the cultural and educational projects financed from the community budget are also of a network and virtual nature. Yet, any cultural project such as a festival can serve as an occasion for a convention for citizens to finally meet in a single location.
Army and police
The most difficult thing to imagine is how security functions can be transferred to an extraterritorial community. Since such a community does not have any territory, it has nothing to protect; however, it is theoretically possible to imagine that a “state without a territory” engages in some military operations as part of a coalition – either simply through financing the coalition or even providing its armed citizens, possibly as volunteers or on some other basis.
It is hard to imagine the way police and criminal and judicial functions would work on an extraterritorial basis – but broadly speaking, an extraterritorial community can protect violated rights of its members through outsourcing structures including lawyers, detective agencies and even private military contractors. A lawyer who protects the rights of an extraterritorial political community’s members should perform duties similar to those of consuls at modern diplomatic services.
An agreement between an extraterritorial state and a territorial political entity is also imaginable; under such an agreement, territorial agencies could execute decisions of extraterritorial courts and arrest suspects on their orders.
Competition for citizens
The most important consequence – and perhaps the most important effect of extraterritorial communities becoming a thing – would be the growing competition between political and administrative systems for citizens – for taxpayers. There is competition even today, since there is emigration, and people can change citizenship. But actually moving to another country still involves a host of obstacles and costs. On the contrary, changing your extraterritorial state is likely to be no more difficult than changing your bank remotely. So competition for citizens will become an additional factor in improving the quality of administrative-political systems.
So far, all this is no more than a fantasy. It is much more likely that multiple communities will emerge, grouped around a single administrative or financial function, such as social insurance or rights protection, than a fully-fledged extraterritorial state. These communities cannot even be called political; their only association with a modern state would be the fact that the functions they take on used to be performed by state institutions in the past. Yet, there is no denying the possibility that multifunctional political communities will emerge, even with the conventional attributes such as a state emblem, anthem, their own currency and even symbolic armed forces.
By Konstantin Frumkin, Managing Editor, Invest Foresight