🇺🇳 Nation-States and Network States Will Be Complementary

The Internet didn't kill the "traditional economy," rather it pushed the economy into a new dimension. Similarly, new forms of human organizations are coming and change is inevitable, but that does not mean anything will be destroyed. Network states will exist alongside nation states in a complementary relationship.

Special Economic Zones (SEZ) provide a precedent for semi-autonomous Network States within Nation States.

An SEZ is an area inside the borders of a country in which the business and trade laws are different from the rest of the country. SEZs are designed to foster economic growth by reducing the cost of regulatory compliance. To encourage businesses to set up in the zone, special policies are introduced. These policies typically encompass investing, taxation, trading, quotas, customs, and labour regulations. In Dubai’s special economic zones, private companies perform some of the regulatory and licensing functions typically provided by nation state governments.

With this precedent of SEZ creation and delegated government functions in place, a Network State could petition a nation-state government to create a SEZ for its citizens and agree to perform some necessary government functions, reducing the cost of governance for the nation state in exchange for reduced tax rates. With sufficient economic growth, the net tax revenue for the area could increase, even though network state citizens in the SEZ would pay a lower rate.

The growth rate of SEZs around the world is impressive. More than 147 countries have SEZs. These numbers show how this model actually worked.