Crack-Up Capitalism Chapter 11: A Cloud Country in the Metaverse
Remember Neal Stephenson’s 1992 novel “Snow Crash”? People strap on goggles and escape their lousy gig jobs into a virtual world called the Metaverse. They buy property, build things, live second lives. One character puts it bluntly: “When you live in a shithole, there’s always the Metaverse.”
In 2021, Facebook changed its name to Meta Platforms, and suddenly everyone was talking about the metaverse. Mark Zuckerberg even staged a promo video with a copy of “Snow Crash” sitting on the coffee table. Microsoft bought the company behind World of Warcraft. The business press couldn’t stop using a word that only sci-fi readers knew a year earlier.
But Quinn Slobodian, in Chapter 11 of “Crack-Up Capitalism” (ISBN: 9781250753908), shows us something deeper going on. The metaverse is not just about VR headsets and cartoon avatars. For a certain group of tech libertarians, it is about building new countries in the cloud. Countries without democracy, without taxes, and without obligations to anyone.
The Sovereign Individual: A Bible for Tech Libertarians
It starts with a book from 1997 called “The Sovereign Individual” by James Dale Davidson and William Rees-Mogg. These guys called themselves “instability forecasters.” Their pitch was simple: the internet and digital money would destroy the nation-state.
Here’s how they saw it. “Cybercash” would let rich people move money anywhere, anonymously. As the wealthy fled to low-tax places, governments would starve. Democracy would slowly wither, outcompeted by more efficient arrangements. No coups needed.
They called the winners of this new world “sovereign individuals.” About a hundred million people worldwide, they estimated. A global elite who would realize that their fellow citizens were, in their words, “the main parasite and predator.” No obligations. No shared identity. Just pure self-interest.
This book became a kind of bible in Silicon Valley. Marc Andreessen, the venture capitalist who co-created the first web browser, called it the most thought-provoking book he’d read. Peter Thiel created PayPal partly to realize its vision of encrypted digital cash. These were not fringe characters. These were some of the most powerful people in tech.
The Internet Is Not a Commune, It’s a Mall
There’s a popular story about Silicon Valley. It says the tech world grew out of failed hippie communes. When the communes didn’t work, people like Stewart Brand (publisher of the Whole Earth Catalog) tried to build utopias in code instead. In 1996, former Grateful Dead songwriter John Perry Barlow wrote the “Declaration of Independence of Cyberspace,” calling the internet a “new home of the Mind” where property didn’t apply.
But here’s the thing. Davidson and Rees-Mogg said the opposite. Property would absolutely apply online. And if played right, it could be even more protected than in the physical world.
They turned out to be correct. By 2000, Amazon and eBay had turned the internet into privately owned shopping malls. Your data became rent. The web was not a utopia beyond property. It was a utopia of property.
Balaji Srinivasan and the Cloud Country
Enter Balaji Srinivasan. Born on Long Island to Indian immigrant parents, PhD from Stanford, biotech founder, and eventually a principal at Marc Andreessen’s venture capital firm. In the early 2010s, he became one of the loudest voices calling for what he called “Silicon Valley’s ultimate exit.”
His idea was the “cloud country.” And it worked like this.
People already spend hours every day on social media, gaming, and messaging with strangers thousands of miles away. They don’t even know their next-door neighbors. Srinivasan called this “cloud cartography,” mapping not nation-states but states of mind.
So why not take it further? Start an online community. Build it up like an open-source project. Create your own economy around remote work. Simulate architecture in VR. Make art and literature that reflects your values. Watch the membership numbers grow on a public dashboard. First a cloud town, then a cloud city, then a cloud country.
The real twist was “cloud first, land last.” Build your community online, and then eventually crowdfund actual land somewhere on earth. Think of your apartment as an embassy for this future country. He compared it to Indonesia. Seventeen thousand islands, but still one nation. Why couldn’t digital users create their own archipelago?
If You Can LARP Money, Why Not a Country?
Srinivasan was also deep in the cryptocurrency world. He left Andreessen Horowitz in 2015 to work on mainstreaming Bitcoin. When he started, Bitcoin was trading at about $258. Six years later it hit $58,000. That’s a 24,000 percent return.
He used a funny term for what happened. Bitcoin enthusiasts had “LARPed” a currency into existence. LARP stands for live action role-playing. They treated a line of code as if it were money, and enough people believed them that it became money. A trillion-dollar part of the financial system, conjured from a 2008 whitepaper.
And if you can LARP money into existence, Srinivasan asked, why not LARP a nation? “Where we are: start your own currency,” he said in 2017. “Where we will be going to now: start your own country.”
This isn’t totally crazy. Political historians have long written about “invented traditions.” Modern nations were brought into existence through rituals, anthems, dictionaries, folk stories, monuments, and traditional dress. Benedict Anderson famously called nations “imagined communities,” created when people who read the same newspapers and novels began to see themselves as part of a common group. Maybe online communities were just the next version.
The Things They Left Out
But Slobodian points out some pretty big holes in this vision.
The debt to government. Srinivasan loved to trash the “Paper Belt,” meaning Washington, DC, New York media, and Ivy League universities. But his own boss Andreessen invented the first web browser at a government-funded land-grant university. Google was built on a National Science Foundation grant. The NSF built the backbone of the internet before letting it be privatized. Silicon Valley’s exit from the state was funded by the state.
The resource problem. The cloud is not floating in thin air. It runs on massive data centers cooled by rivers and powered by coal plants. Bitcoin mining alone uses more electricity than the entire country of Sweden. Iran banned it after blackouts. China banned it too. Srinivasan’s cloud country writings mentioned nothing about energy or climate change.
The “bare land” myth. Srinivasan described himself as part of the “Oregon Trail generation,” and saw 19th-century America as a time of equal opportunity. But as Slobodian reminds us, “anybody could go out West” only if you were the right kind of person. Indigenous people were pushed off their lands. The frontier was not freedom for everyone.
And where exactly is this bare land for the cloud country? Canada’s North, where Indigenous communities have fought for centuries for their territory? Australia, where Rio Tinto blew up sacred Aboriginal sites for iron ore in 2020? Indonesia, where the Dayak people have opposed gold mining since the 1960s?
COVID and the “Techxodus”
Srinivasan thought COVID-19 would be the trigger. The pandemic split the world into “green zones” and “red zones.” States competed for ventilators. California’s governor called it a “nation-state.” Maryland’s governor hid COVID tests under armed guard to prevent federal seizure.
“We are entering this fractal environment in which the virus breaks centralized states,” Srinivasan told a virtual summit in 2020.
Talk of a “techxodus” grew as tech workers left the Bay Area. Miami opened its arms. Peter Thiel bought two houses on artificial islands near Miami Beach for $18 million. Srinivasan called Miami “the Singapore of Latin America.” Though as Slobodian notes, “Dubai” would be more accurate. An enclave of conspicuous spending and questionable money flows. Florida was among the most corrupt states in the country.
And then came a revealing moment. When Thiel was advising Trump on cabinet picks in 2017, Srinivasan’s name surfaced as a candidate for FDA commissioner. For someone who preached exit from the state, he didn’t seem to mind potentially running part of it.
The Cloud Floats Because Someone Holds It Up
Here’s the problem with all these visions. The pandemic did not prove that states were useless. It proved the opposite. People needed their governments. A study in the Lancet showed that “trust in government and interpersonal trust” was what actually determined how well a country handled the pandemic.
Crypto did not replace traditional money. It just became another speculative asset that rose and fell with the stock market. The metaverse did not become a land of freedom. It became a surveillance system. Every keystroke, every twitch in a VR headset, tracked and sold to advertisers.
Slobodian ends the chapter with a point about Hegel. The philosopher taught that the master always depends on the slave. No cloud country, no island utopia, can exist without its underclass. When COVID hit Singapore, the country thought it had flattened the curve. Then infections exploded among migrant workers crammed into dormitories that the city’s leaders had basically forgotten existed.
The cloud floats because the underclass holds it up. And as Slobodian writes, time will tell if they drop their arms one day and make something new.
That last line hit different.
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