The Predictions Scorecard: What Davidson and Rees-Mogg Got Right

When James Dale Davidson and William Rees-Mogg published The Sovereign Individual in 1997, most of the infrastructure we now take for granted did not exist. There was no Google, no Bitcoin, no iPhone, no Zoom. The internet was a novelty, ecommerce was an experiment, and the idea that a person could earn a living from a laptop on another continent was science fiction. To evaluate the book fairly, we have to hold two things simultaneously: the predictions that failed, which we will address honestly in the next article, and the predictions that landed with startling accuracy. This article is about the latter.

We are not interested in grading prophecy. Prediction is not a sport. But when a framework generates specific, falsifiable claims about the future, and a meaningful number of those claims materialize, we owe the framework serious engagement — not worship, but the honest acknowledgment that something in the underlying model was capturing reality.

The Original Argument

Davidson and Rees-Mogg predicted that information technology would generate a form of digital money beyond state control. They described it in terms of encrypted, borderless, anonymous transactions — money that could not be taxed at the point of exchange because states would not know the exchange had occurred. They published this prediction twelve years before Satoshi Nakamoto released the Bitcoin whitepaper.

The specifics were imprecise. They did not describe blockchain technology, proof-of-work consensus, or decentralized ledgers. But the functional description — digital currency that reduces the state’s ability to monitor and tax transactions — maps onto Bitcoin and the broader cryptocurrency ecosystem with uncomfortable accuracy. Whether cryptocurrency ultimately fulfills the role they envisioned remains an open question; that it exists at all, functioning roughly as they described, is a genuine predictive achievement.

They predicted the decoupling of work from geography. In 1997, remote work meant occasionally checking email from a hotel room. Davidson and Rees-Mogg described a world in which skilled individuals would sell their labor across borders from wherever they chose to live, forcing jurisdictions to compete for their presence. The COVID-19 pandemic did not create remote work, but it compressed a decade of gradual adoption into eighteen months. By 2023, the decoupling they described was not a theory; it was a labor market reality. Millions of knowledge workers had demonstrated, in practice, that productive work does not require physical proximity to an employer.

They predicted jurisdictional competition for mobile individuals. This was perhaps their most structurally important claim: that as individuals gained the ability to relocate their economic lives, governments would begin offering favorable terms to attract them. Portugal’s digital nomad visa, Estonia’s e-residency program, the proliferation of residency-by-investment schemes across the Caribbean, Southeast Asia, and Southern Europe — these are precisely the mechanisms Davidson and Rees-Mogg described. The nation-state has not collapsed, but it has, in certain segments, begun behaving like a service provider competing for customers.

Why It Matters Now

The declining trust in institutions that Davidson and Rees-Mogg treated as inevitable has materialized with striking consistency. Gallup’s tracking of trust in the United States Congress shows a decline from already-low levels in the late 1990s to single digits in some recent surveys. The Edelman Trust Barometer has documented a broader erosion of trust across government, media, business, and NGOs in multiple countries. Pew Research Center data shows that the percentage of Americans who trust the federal government to do the right thing “most of the time” has fallen from roughly 30 percent in the late 1990s to the low teens in recent years.

This is not a uniquely American phenomenon. Eurobarometer surveys show parallel declines across European Union member states. The pattern is structural, not partisan — it persists across changes in government, across left and right administrations, across periods of economic growth and contraction. Davidson and Rees-Mogg argued that this decline was not a bug to be fixed but a feature of information technology dissolving the information asymmetries that institutional authority depended on. You may disagree with their interpretation. The trend itself is not in dispute.

They predicted that economic activity would migrate to digital spaces. In 1997, this sounded abstract. Today, the creator economy, digital services, SaaS businesses, and remote freelancing represent trillions of dollars in economic activity that exists, in meaningful ways, outside traditional geographic and institutional boundaries. A graphic designer in Medellin serving clients in London and Tokyo, paid in a currency of her choosing, depositing to an account in a jurisdiction she selected — this is the cybereconomy Davidson and Rees-Mogg described, minus the jargon.

The education prediction deserves particular attention. They argued that traditional credentialing — the university degree as gatekeeping mechanism — would be challenged as information became freely available and demonstrated competence became independently verifiable. This prediction has partially materialized. Coding bootcamps, professional certifications, portfolio-based hiring, and the growing skepticism toward the economic value of certain degrees all reflect the dynamic they described. The university system has not collapsed, but its monopoly on credentialing has eroded in visible, measurable ways.

Nassim Nicholas Taleb, in Antifragile, published fifteen years after The Sovereign Individual, independently articulated a related framework — that systems which suppress volatility become fragile, and that individuals and organizations benefit from building antifragility rather than relying on institutional stability. Taleb’s framework is more rigorous and less ideological than Davidson and Rees-Mogg’s, but it arrives at a compatible conclusion: betting on institutional continuity is a fragile strategy; building individual capacity to adapt is antifragile. The convergence of these independently developed frameworks lends credibility to the underlying structural analysis.

The information asymmetry shift may be the most consequential prediction of all. Davidson and Rees-Mogg argued that institutions maintained power partly by controlling access to information — financial data, legal knowledge, medical expertise, market intelligence. The internet, they predicted, would democratize access to this information, undermining institutional gatekeeping. This has happened so thoroughly that we no longer notice it. You can research a medical diagnosis, review a legal contract, analyze a financial instrument, and compare prices across global markets from your phone. The expertise hasn’t disappeared, but the monopoly on access to information has. This shift alone has reshaped the power dynamic between individuals and institutions in exactly the direction the book described.

The Practical Extension

If you take the confirmed predictions seriously, the practical implications are substantial but not dramatic. They do not require you to renounce citizenship, buy a bunker, or move your assets to a Caribbean trust. They require you to acknowledge structural trends and position accordingly.

Build portable skills. If the decoupling of work from geography continues — and there is no reason to expect it to reverse — the ability to generate income independent of a single employer or location is not a luxury but a baseline. This does not mean everyone must become a freelancer. It means that skills which translate across employers, industries, and jurisdictions are more valuable than skills tied to a single institutional context.

Diversify jurisdictionally. You do not need three passports and a Cayman Islands LLC. But having a bank account in more than one country, understanding the tax implications of different residency structures, and maintaining the documentation to relocate if necessary — these are prudent steps that the trend toward jurisdictional competition makes increasingly accessible. Start with understanding the rules. The options are more numerous than most people realize.

Reduce institutional dependency. This is not anti-institutional paranoia. It is the recognition that institutions which are losing trust, losing monopoly power, and facing structural pressures are less reliable as long-term partners than they once were. Build your own information systems. Maintain your own records. Develop your own professional network outside institutional boundaries. When the institution is strong, this costs you nothing. When it weakens, it saves you everything.

Take information access seriously. The asymmetry shift is a gift, but only if you use it. The same technology that makes information available also makes distraction available. The person who uses freely available information to develop genuine competence in finance, law, health, and their professional domain has captured the upside of the shift Davidson and Rees-Mogg described. The person who uses the same technology to scroll through content has captured none of it.

The Lineage

The tradition of evaluating predictions against outcomes is older than it sounds. Thucydides did not merely record the Peloponnesian War; he analyzed which strategic predictions proved correct and why. The Enlightenment project, at its best, was an exercise in testing claims against evidence rather than authority.

Davidson and Rees-Mogg belong to a tradition of macro-historical prediction that includes Oswald Spengler, Arnold Toynbee, and more recently, Peter Turchin — thinkers who attempt to identify structural patterns in historical change and project them forward. The track record of this tradition is mixed; Spengler’s cyclical model captured genuine patterns but imposed false precision, while Turchin’s “cliodynamics” has generated both impressive predictions and significant misses.

What distinguishes useful prediction from useless prophecy is falsifiability. Davidson and Rees-Mogg made specific enough claims that we can evaluate them — digital money, remote work, jurisdictional competition, institutional trust decline, education disruption. The claims that materialized tell us something about the underlying model. The claims that failed, which we will examine next, tell us something about its limits.

Taleb’s contribution to this lineage is the insistence that you do not need to predict correctly to position wisely. The antifragile strategy — building capacity to benefit from volatility rather than betting on specific outcomes — is compatible with the confirmed predictions of The Sovereign Individual without requiring you to accept the entire framework. You can build portable skills, diversify jurisdictionally, and reduce institutional dependency without believing that the nation-state is about to collapse. The practical extensions hold even if the grand theory is only partially correct.

The next article examines where the model breaks down — the blind spots, the failures, and the assumptions that twenty-five years of evidence have contradicted.

This article is part of The Sovereign Individual Thesis series at SovereignCML. Related reading: “The Sovereign Individual: What the Book Actually Argues,” “What The Sovereign Individual Got Wrong: The Blind Spots”