Columbia Law's Pistor Warns of a Tech Sovereignty That Replaces the State

A Columbia Law School professor argues that Peter Thiel, Mark Zuckerberg, Elon Musk and a small circle of technology executives are constructing a new form of sovereignty — one that replaces nation-states and leaves the public with no vote over the systems that govern them. Katharina Pistor, author of "The Code of Capital: How the Law Creates Wealth and Inequality" (Princeton University Press, 2019), lays out the case in a Project Syndicate-distributed essay written from New York.

Her core claim is blunt: the technology industry's leaders want power without social contract, and courts and legislatures have already handed them the legal scaffolding to take it.

What does Pistor actually allege?

Pistor opens with history. Nation-states, she writes, emerged in modern Europe, spread through colonialism, and reached every corner of the world through postwar decolonization. Their defining feature, in her words, is "control over territory and its inhabitants, without interference by others." That model now faces a challenger she calls tech sovereignty — "capable of even more intrusive and insidious forms of control than most states can muster."

She names names and specifics:

• Peter Thiel, PayPal co-founder, "speaks openly about a 'deadly war' between tech and state," she writes. Thiel also chairs the board of Palantir, which Pistor says is "ensnaring the state with digital infrastructure to reach deep into sensitive sectors, including health and security."
• Mark Zuckerberg, Meta's CEO, "has tried (unsuccessfully, so far) to launch a global currency, and has now set his sights on controlling critical infrastructure like the subsea transatlantic cable system."
• Elon Musk "rules the skies with Starlink and has demonstrated a willingness to cut off access to embattled democracies (or anyone else) whenever he sees fit, no matter the national-security implications."

These are argumentative claims, not court findings, and Pistor's essay is an opinion piece rather than a report. But the underlying facts she cites — Thiel's rhetoric, Meta's abandoned Libra currency project, Musk's control of Starlink connectivity — are documented matters of record.

The stakes, in her framing, are constitutional: who governs the infrastructure and data that modern life runs on. States, she argues, have been complicit. "Most states have willingly aided and abetted these companies," she writes, "effectively accelerating their own demise for fear that they might be outdone by other states embracing the same mass surveillance and control technologies." That is a competition dynamic, not a conspiracy — each government fears surveillance inferiority, so all of them buy.

Why does she compare tech companies to colonizers?

The essay's most contested move is its analogy to colonial dispossession of Indigenous peoples. Pistor is explicit that the parallel is structural, not rhetorical decoration.

Colonists, she writes, "may have played nicely at first, using treaties or contracts, and pretending that the contracting party was acting voluntarily. Eventually, they took what they wanted by force, sometimes under cover of law." They justified expropriation without compensation "by asserting that Indigenous peoples had no concept of property or capacity to improve it" — and from there moved people onto reservations.

The modern parallel, in her telling, runs through data law. Courts, she says, "have denied data producers any property rights to their data," while legislatures have "vindicated, ex post, the property rights that tech companies asserted over data they 'improved' by cleaning, organizing, and storing it on some device." The people who generated the data get nothing; the companies that processed it get ownership. She calls the result "platform reservations far from the levers of power," where users "feed their addiction to endless scrolling (and data extraction)."

She pushes the analogy one step further, comparing big technology companies to "the corporate charters imposed on Indigenous peoples by the US Indian Reorganization Act of 1934, which allowed for a president and a board, but not self-determination." In plain words: you may get an organizational chart, but you do not get a vote.

What about Anthropic's and Musk's ownership offers?

Pistor devotes careful attention to two recent proposals that sound like power-sharing — and finds both wanting.

Anthropic, she writes, "wants to establish a public benefit fund that will be capitalized with shares in the company, potentially making payouts to the public from time to time." But the structure, she argues, defeats the purpose: "As a limited liability company owned and controlled by Anthropic, it would give no voice to anyone but its own people." Money without governance is not sovereignty — it is a dividend.

Musk's proposal goes further on paper: giving "every kid" in the United States a share in SpaceX. Pistor asks the questions the announcement does not answer. "Will they get voting rights? With cumulative rights, could they elect at least one director?" Her own answer is skeptical: "Of course, it would be delusional to believe that the kids might one day exert control. The expectation is that they should be grateful for the pittance they receive in exchange for bending to corporate rule."

The pattern she identifies is consistent across both offers: financial participation is offered precisely where political participation is withheld. Readers should note what is absent from both proposals as announced — any mechanism for beneficiaries to elect directors, block decisions, or exit the arrangement.

She also acknowledges, without naming them, that some industry figures "have recently expressed fears of losing control over their own digital creations." Her point is that even that fear has not produced power-sharing: "neither the prospect of global instability nor even human extinction is enough to convince them to share power. They have put our fate at the mercy of rogue AI agents, and we are expected to accept it quietly." That is her characterization of industry safety discourse, and it is as much indictment as analysis.

What does 'exit, voice or loyalty' mean here?

The essay closes with a framework borrowed from the economist Albert Hirschman, who argued that every organization gives its members three options: exit, voice, or loyalty.

Pistor applies it to platform dependence. The current tech infrastructure "is designed to deny us exit by making us dependent," she writes, "and we have already seen that it gives us no real voice." That leaves loyalty — which, she notes, "means nothing when it is not freely chosen." Her prescription follows directly: "Proactive disloyalty by the many may be our last, best defense."

She does not spell out what proactive disloyalty looks like in practice — whether that means deletion, regulation, collective bargaining or something else. The gap is the essay's most obvious weakness for readers seeking a program rather than a diagnosis.

Her darkest warning concerns aftermath rather than arrival. Even if tech sovereignty eventually erodes, she writes, societies may not recover intact — and she returns to the Indigenous parallel to make the point. When Indigenous peoples in the US finally won the right to adopt their own constitutions, "only a few succeeded in forming viable societies again. The power structures that had been imposed on them had destroyed their social fabric, and with it their capacity to self-govern." Applied to the present: elections may continue, she writes, but "manipulated by money and communication technologies that further cement tech sovereignty," leaving people "a mere resource to be managed by the likes of Thiel, Zuckerberg, and Musk."

Why does this argument matter now?

Pistor is a prominent academic voice on how law constructs economic power, and her essay arrives as the companies she names control infrastructure — subsea cables, satellite networks, data processing for health and security agencies — that once sat squarely within state hands. The policy question her essay poses is whether ownership-sharing schemes like Anthropic's fund and Musk's SpaceX share proposal constitute public governance or a substitute for it.

Her answer, argued in full, is that dividends are not votes. Whether regulators, courts or users agree is the fight she is inviting — and "proactive disloyalty" is her name for the tool the public still holds.