[[Nation-states will be obsolete]] As the nation-state withers, a new elite, the "Sovereign Individual," emerges. 1. **Transcending Locality:** For the first time, the ability to earn a high income is decoupled from a specific geographic location. This is the fundamental source of the individual's new power. > "Merit, wherever it arises, will be rewarded as never before. In an environment where the greatest source of wealth will be the ideas you have in your head rather than physical capital alone, anyone who thinks clearly will potentially be rich... In the cybereconomy, they will never see you." 2. **Impervious Asset Protection:** Encryption technology makes wealth non-physical, portable, and nearly impossible for a state to seize. This gives the individual unprecedented control over their own resources. > "Microprocessing and rapidly improving communications already make it possible for the individual to choose where to work. Transactions on the Internet or the World Wide Web can be encrypted and will soon be almost impossible for tax collectors to capture... Cyberspace is the ultimate offshore jurisdiction. An economy with no taxes. Bermuda in the sky with diamonds." ## The New Political Status: From Citizen to Customer This economic liberation leads to a profound political transformation. The relationship between the individual and the state shifts from one of involuntary obligation (citizenship) to one of voluntary contract (customer). 1. **Jurisdictional Shopping:** Sovereign Individuals will no longer be bound by the accident of birth. They will actively choose which government provides the best services (protection, rule of law) at the most competitive price (lowest taxes). > "The Sovereign Individuals of the twenty-first century will be customers of governments... They will bargain for whatever minimal government they need and pay for it according to contract... Instead of state domination and control of resources, you are destined to see the privatization of almost all services governments now provide." 2. **The Denationalization of the Individual:** As individuals shop for sovereignty, their identity will no longer be tied to a nation-state. They will become cosmopolitan citizens of the world, with loyalties based on choice and affinity, not geography. > "...you will soon see the ultimate form of privatization—the sweeping denationalization of the individual. The Sovereign Individual of the new millennium will no longer be an asset of the state, a de facto item on the treasury’s balance sheet. After the transition of the year 2000, denationalized citizens will no longer be citizens as we know them, but customers."