Functional Sovereignty

Context

Igor Calzada:

"In their 2018 work, Frank Pasquale and Arthur Cockfield discuss the concept of Functional Sovereignty, which is highly influential for the second paradigm Network Sovereignties suggested by De Filippi et al. . Functional sovereignty examines how sovereignty is increasingly being exercised by powerful non-state actors, such as multinational corporations and digital platforms, that control critical functions traditionally managed by nation-states. The authors argue that these entities are beginning to operate with a level of autonomy and influence that rivals or even surpasses that of traditional governments, effectively reshaping the landscape of global governance. This concept of functional sovereignty directly supports the libertarian Web3 ideology, which advocates for the decentralization of power away from both state and corporate monopolies. By enabling decentralized networks where power is distributed among individuals and communities rather than concentrated in the hands of a few dominant players, the Web3 movement offers a way to reclaim sovereignty in the digital age. Pasquale and Cockfield’s analysis underscores the need for alternative governance models that can counterbalance the growing influence of these powerful entities, making a compelling case for the adoption of Web3 technologies that promote transparency, accountability, and individual autonomy."

(https://www.mdpi.com/1999-5903/16/10/361#B11-futureinternet-16-00361)

Description

1. Jonathan Hollis:

"Westphalian sovereignty is about top down control of de jure systems of collective action. Functional sovereignty is about bottom up control of de facto systems of collective action. These two concepts define a spectrum between what is legally and diplomatically recognized as sovereign, regardless of reality, and what is practiced in reality, regardless of legal or diplomatic recognition.

Functional sovereignty does not necessarily have anything to do with Hobbes’ state of nature or controlling physical territory or wars or the United Nations or international diplomacy or anything else that the idea of Westphalian sovereignty has come to represent. It has to do with how groups of people directly self-govern shared resources and values without requiring permission from existing governments. Functional sovereignty, while not as absolute as Westphalian sovereignty, is much more accessible, useful, and relevant for the vast majority of people.

Functional sovereignty can be defined as the direct practice of voluntary collective action using shared resources and behavior. The concept can be applied both physically and virtually. Physically, it is defined by small groups of people interacting locally without intermediaries. Virtually, it can be scaled to globally distributed groups without intermediaries via the internet and blockchains. When you add physical (local) and virtual (global) forms of self-governance together, you can achieve what Bauwens describes as the “potential fusion of productive ecosystems with the coordination infrastructure developed by crypto communities”."

(https://globalgovernanceprogramme.eui.eu/project/new-network-sovereignties-the-rise-of-non-territorial-states/functional-local-network-sovereignties/)

2. Liad Orgav:

"Under this approach, sovereignty is divided by functions, with each being governed by a different entity. Think of federal systems, a condominium of states, mandate/trusteeship, autonomy (e.g., Quebec or Puerto Rico), or municipalities (where certain functions are governed by local sovereignty). Divisible sovereignty can be exercised over territories – e.g. Andorra, which was a condominium before independence in 1993 and still had two heads of state (the French president and a Catalan bishop) – or peoples. Sovereignty can be divided between political entities, as in federations or in the European Union, or between political and nonpolitical entities – think of religion (in Israeli law, for example, religious law is sovereign in family issues). The idea of functional sovereignty, as coined by Willem Riphagen in 1975,[1] enables entity A to have sovereignty over social welfare, entity B to be the sovereign on financial issues, and entity C to enjoy sovereignty over security – all in the same territory. It also makes it possible for different political authorities to exercise functional sovereignty over different peoples in the same space. The switch is from a jurisdiction over territories to a jurisdiction over functions, peoples and services. "

(https://globalcit.eu/cloud-communities-the-dawn-of-global-citizenship/16/)

Typology

Jonathan Hollis:

Local Functional Sovereignty

Jonathan Hollis:

"Functional sovereignty starts at the smallest scales of human coordination and applies best to the practical reality of people’s day-to-day lives. The most relevant form of sovereignty for most people is their ability to exercise self-governance over their immediate surroundings with their nearest neighbors.

Nothing about local functional sovereignty is fundamentally new. People have been practicing a wide range of methods of local collective governance for as long as we’ve been using rudimentary language.[9] Modern society can be defined in terms of three sectors: public (states), private (markets), and plural (associations).[10] As markets and states have brought more of the commons under their regime, we’ve lost track of the crucial role that the functional sovereignty of plural association plays in a healthy society.

The local scale of functional sovereignty is crucial to broader-scale democratic governance. This idea is embedded in the US Constitution’s First Amendment, which protects “the right of the people peaceably to assemble”.[11] In Democracy in America, de Tocqueville made the case that “the germ and gradual development of that township independence … is the life and mainspring of American liberty”.[12]

Social movements throughout American history, from Thoreau to the hippie movement, have attempted to rediscover this mainspring of civilization by going ‘back-to-the-land’.[13] This idea is not originally American; for instance, Rousseau suggested those dissatisfied with society could “retire to the woods, there to lose the sight and remembrance of the crimes of your contemporaries”.[14] The capacity for local functional sovereignty is clearly highest in areas with low population density and limited existing government intervention. Recently, drastic reductions in the cost and minimum scale of solar power, battery storage, electric motors, modular housing, aerobic septic systems, and other technologies have made it cheaper and easier to develop off-grid functional sovereignty in rural areas.

For instance: in her introduction, de Filippi references Cabin, the project I work on, as an organization “paving the way for the advent of new network sovereignties.”[15] Cabin is building a network city of neighborhoods around the world where our community can live near friends and family.[16] We started out by building our first neighborhood in an unincorporated area of Texas, where there are no existing municipal regulations. Our community of amateurs has been able to collectively build extensive water, sewage, electrical, internet, and housing infrastructure from the ground up with almost no government involvement or intervention.

However, back-to-the-land movements have struggled to create lasting societal change due to their insular nature, the challenges of bootstrapping local economies, and an over-reliance on consensus governance processes.[17] Getting people to exit society, move to the middle of nowhere, and rebuild from scratch is incredibly difficult. While functional sovereignty is more constrained in areas with existing local government, it is also much more widely applicable because populated urban areas are where most people live.

The simplest acts of functional local sovereignty in urban areas involve practicing microsolidarity[18] with your existing neighbors. Examples of local voluntary collective action include the creation of community events, emergency preparedness caches, lending libraries, and other shared resources. Neighborhood groups can also make rogue improvements to urban public goods infrastructure through tactical urbanism[19], like the creation of unsanctioned community gardens, park benches, or bike lanes.[20] More advanced forms of functional collective action include developing third spaces, cohousing compounds, and microschools.

Another way to practice functional local sovereignty is to get a group of people to agree on local norms, rules, or behaviors and collectively enforce them. For example, a group of neighbors could agree to go on a weekly run each Saturday morning and hold each other accountable by fining members who don’t show up. You could start a regular potluck in the neighborhood park that only permits vegetarian food. A coliving house can evolve norms around whether drugs and alcohol are de facto allowed or disallowed, regardless of their de jure legal status."

(https://globalgovernanceprogramme.eui.eu/project/new-network-sovereignties-the-rise-of-non-territorial-states/functional-local-network-sovereignties/)

Networked Functional Sovereignty

Jonathan Hollis:

"Functional sovereignty scales beyond local groups via communication and coordination technologies. Bauwens describes the role that cooperative irrigation networks played in the development of the earliest Sumerian cities.[21] Ostrom has documented the ways that societies continue to use bottom-up systems of functional local and networked sovereignty to manage irrigation commons.[22] Similarly, each of the four major periods of Western civilization (Ancient, Classical, Medieval, and Modern) began with new communication and coordination technologies that allowed humans to form decentralized governance structures and evolve new types of networked cities.[23]

Now, two more communication and coordination technologies are creating a new opportunity to scale collective action via networked functional sovereignty: the internet and blockchains. These technologies are particularly effective because they are scale-independent—they can be used by groups of any size with members located anywhere in the world with minimal overhead costs. As a result, the internet and blockchains increase the capacity for functional sovereignty of both large and small groups, locally and globally.

The internet solves the cold start problem of finding other people to coordinate with. Social content can serve as a ‘bat signal’ that attracts others with an aligned vision to collaborate, share resources, learn from each other, and even colocate locally. Widespread satellite internet and mobile networks have brought the internet to extremely rural areas, enabling places with high functional sovereignty to more easily attract like-minded participants and bootstrap local economies with remote work.

Blockchains allow for a significant expansion of networked functional sovereignty. They can provide an immutable shared record of identity, a capture resistant method of self-governance without intermediaries, and the ability to create new forms of money—all with security guarantees that can’t be overcome by existing nation states.

Fundamentally, blockchains have the core purpose of keeping track of the current state of balances, transactions, and executable code. For example, “the Ethereum protocol itself exists solely for the purpose of keeping the continuous, uninterrupted, and immutable operation of this special state machine.”[24] In a typical computer, the state is managed by a Central Processing Unit (CPU). What makes blockchains ‘special state machines’ is that they are managed by a decentralized network. In other words: blockchains are, in a technical sense, ‘network states’.

If you’re Seeing Like a State[25], you can view this sort of immutable ledger of people and their records as the core way to create the legibility that enables an administrative sovereign entity. In this sense, blockchain states and nation states share a deep similarity. A nation state is only functional insofar as it has an accurate record of its citizens and how much money they are making. Without the first, the nation state doesn’t know who it let in, and without the second it can’t charge taxes to fund itself. Because these records are so crucial to a nation states’ existence, maintaining the state of the records becomes the existential responsibility of the nation state.

Blockchains also provide a new capture resistant trust model for self-governance.[26] They are the only way for large or physically decentralized groups to directly execute collective action over shared resources without any trusted intermediaries. The ability to pool resources and govern them onchain is a fundamental breakthrough in human coordination because it allows any group with an arbitrary number of agents located anywhere to practice functional sovereignty.

Blockchains can also serve as an international sovereign store of value, which makes them a compelling global reserve currency. Several states are already using bitcoin as legal tender[27] and the United States holds over $8 billion in bitcoin.[28] In this sense, bitcoin has already achieved a form of recognized sovereignty. It didn’t ask for diplomatic recognition, it just grew until nation states acquired it. Since the creation of bitcoin, countless other tokens have attempted to create self-sovereign forms of money.

Creating self-sovereign forms of shared identity, governance, and money rely on the fact that blockchains can provide a security guarantee that can’t be controlled by nation states, without needing to rely on a monopoly on violence. When nation states talk about national security, what they mean is that their sovereignty is protected by a fleet of aircraft carriers. When blockchains talk about security guarantees, they mean their sovereignty is protected by a proof of work or consensus mechanism too computationally difficult and expensive for even modern nation states to overcome.

When you put together better infrastructure for creating local functional sovereignty with the self-sovereign coordination tools enabled by the internet and blockchains, you get a rapidly improving tech stack for building new network sovereignties.[29] You can get together with others and bootstrap decentralized systems for energy, food, water, housing, education, entertainment, child care, and anything else your community needs. You can attract others who share your values, live within your own shared context, and collectively share resources without intermediaries. You can hold economic resources virtually with nation-state-proof protections against confiscation, and you can stitch together a network of other places who also share your values in case you need to physically exit.

In sum, the tools now exist to operate with a degree of functional sovereignty that leads to the question: “At what point are national governments rendered mostly irrelevant compared to the norms and rules of the groups of which we are voluntary members?”[30] In a world of global trade and nuclear weapons, we will probably always need a thin layer of traditional Leviathans to keep the peace. But the expansion of sovereignty in the 21st century won’t come primarily from asking the Leviathans for a seat at the table. New network sovereigns will earn their legitimacy through the effective practice of collective action."

(https://globalgovernanceprogramme.eui.eu/project/new-network-sovereignties-the-rise-of-non-territorial-states/functional-local-network-sovereignties/)