U.S. President Donald Trump and Elon Musk speak in the Oval Office before departing the White House in Washington in March.ROBERTO SCHMIDT/AFP/Getty Images
Susi Geiger is professor of markets, organizations and society at University College Dublin’s Michael Smurfit Graduate Business School.
It’s perhaps for the best that U.S. President Donald Trump and Tesla’s TSLA-Q Elon Musk have had such a dramatic falling out. But this does little to fix the damage wrought by Mr. Musk or the wider disruption he represents.
A few weeks into the tumultuous reign of the (recently banished) U.S. Department of Government Efficiency captain, medical historian Mike Magee wrote a blog post titled “Disruption For the Sake of Disruption Is Not Innovation.” It aptly describes the “hostile takeover” of government departments in the U.S. by private industry interests and the interruptions of state functions this has caused.
Silicon Valley has long been known to elevate disruption as a virtue that lead to innovation. What this ideology misses is the fact that to reach that positive outcome, a great deal of institutional framing is necessary. When it’s institutions themselves that one is disrupting, as Mr. Musk and colleagues have aimed to do, this can only lead to productivity gains if another “frame” can scaffold the journey from disruption into innovation.
What do the architects of disrupting government functions have in mind that might replace the institutional scaffolding they are dismantling? The answer, in tech terms, is mostly data infrastructure and platforms. While this seems a sensible move in our digital age at face value, it could, if driven to an extreme, jeopardize the very existence of what we know as a nation-state.
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Big Data and Big Tech firms have replaced many of our social relationship with digitally mediated ones, becoming a “network society,” coined by sociologist Manuel Castells more than 20 years ago. In the past few months, we have witnessed a further evolution of the network society, one where our institutions are being slowly replaced with data flows and data infrastructures.
Some in the tech community have dreamed of a “network state” for years, one where all conventional state functions run through digital interfaces. In the extreme, this concept would even dissolve the notion of citizenship as bounded to a national territory; it would allow individuals to “choose your nationality like you choose your broadband provider,” according to American entrepreneur and investor Balaji Srinivasan, one of the chief promoters of the network state.
The idea is that an internet community comes together and pools cryptocurrency to purchase land that is mutualized through Blockchain ownership. On this land, the community builds its own state, governed by its own rules, which again are tokenized and mutualized through Blockchain.
Peter Thiel’s SeaSteading Institute hopes to build a community in extraterritorial parts of the oceans.Wendy Sitler/Roddier/The Seasteading Institute
There have been a few of these projects springing up across the world, including Peter Thiel’s SeaSteading Institute, which seeks to build a community in extraterritorial parts of the oceans so that they would not be subject to any state rule. These individual pockets of network communities, run on Blockchain, would then be connected to what proponents envisage as an archipelago of sovereign, “citizen”-owned states.
“We can build a 1-10M person startup society with a genuine sense of national consciousness, an integrated cryptocurrency, and a plan to crowdfund many pieces of territory,” Mr. Srinivasan wrote in 2022.
He added: “We can digitally sew these disjoint enclaves together into a new kind of polity that achieves diplomatic recognition.”
While this is extreme and perhaps still fantastical, tech firms have increasingly infiltrated themselves in what used to be core state functions, including data infrastructure firms such as Thiel-backed firm Palantir, which hold simultaneous government contracts for functions as diverse as border control and security and health care in many Western countries.
These data firms aim to make the state essentially redundant, replacing its institutions entirely with privately-controlled data infrastructures. What we are really dealing with when we talk about how the likes of Mr. Musk “disrupt” state functions is a step toward a techno-optimist globalization.
The end game: to make nation-states obsolete, and with them all those transnational organizations that might stand in the way of the “free market” and that seek to protect citizen rights. Governments signing over important state assets or public goods provisions to private firms risks precipitating their own demise.
Of course, many government functions can do with some innovation, and digitalization is part of this in many different ways. In health, for instance, a nationwide electronic health infrastructure reduces duplication and waste, and significantly increases productivity and resource allocation.
However, we cannot allow state asset stripping, and we should not condone disruption for disruption’s sake, particularly when it comes to our democratic institutions. This needs to start with the business community stopping the worship of the concept of disruption.
Innovation is at its most powerful when it combines those parts of our institutions that have stood the test of time with new, creative approaches – rather than “deleting” or “disrupting” them just for the sake of doing so.