Courts, governments, and jurisdictions in The Diamond Age?

Question

In The Diamond Age, the narration firmly establishes that the traditional geography-based nation-state has been made obsolete by technology. That is, information secrecy has made it impossible for governments to trace/follow people's financial activities, so they can't collect taxes to fund governments.

But then we learn that there is a strong traditionalist Chinese government in the Shanghai area, with courts, and other government functions and policies, and people and equipment that enforce it. So, how do they get the money to run their state?

Also, how is it that people from the former United States (such as Bud) are living in the Chinese state's territory, subject to its laws, but unaware of this? (Granted, Bud wasn't very bright, but most people usually know which country they live in, and under what government.)

Answer 1

There is no in-book discussion of this, so all we have is speculation. That being said,

Land

is the most likely answer. The synthetic tribes require land upon which to place themselves, and the traditional states are presumably able to levy taxes upon blocks of land (e.g, "rent") without needing to "trace/follow people's financial activities." The setting of the majority of the book is called the "Leased Territories".

The geographical lines around authority are discussed in the book, e.g.:

His natural impulse had been to summon the police. But since they were on the Causeway, this would mean the Shanghai Police again.

And the value of real estate:

MPS made consumer goods and ITL made real estate, which was, as ever, where the real money was. Counted by the hectare, it didn't amount to much - just a few strategically placed islands really, counties rather than continents - but it was the most expensive real estate in the world outside of a few blessed places like Tokyo, San Franciso, and Manhattan.

Which - to put in the context of the book - means that the ability to generate synthetic real estate, connected by causeway to but outside the traditional ownership of existing geopolitical states - was very valuable commodity.

China must be a signatory to the Common Economic Protocol:

"The CEP code," said the Sikh, "governs all kinds of economic interactions between people and organizations.... As Protocol does not aspire to sovereign status, we work in cooperation with the indigenous justice system of CEP signatories in order to pursue such cases."

With crime, as we see in Bud's case, that interaction is a justice system. With the various tribes the interaction is that in return for money, the barbarians get land.

(Incidentally, I'm sure that CEP ensures that the Middle Kingdom will get some renumeration from the Ashanti tribe for having prosecuted Bud's case. If Bud had belonged to a tribe, they would have had to pony up some as well, under the CEP. I think Justice is a resource, just like Land.)

But as we see at the end of the book, the whole push of the Chinese has been to expel the barbarians from their land:

Then all of the barbarians stepped into the ocean, leaving their filthy clothes strewn across the beach, relinquishing the last foothold of Chinese soil to the Celestial Kingdom.... By the time the last girl's foot broke contact with the sandy ocean bottom, the end of the land had already been claimed by a man with a scarlet girdle round his waist, who stood on the shore laughing to think that now the Middle Kingdom was at last a whole country once more.

How well they'll manage to return to a traditional state - without the Seed to nurture their Confucian society, without the expertise in the Feed to compete at a high level - we never get to see.

Answer 2

I don't have my copy handy right now, but it is clear both from the beginning of the book that the one thing that large, rich or powerful organizations still have over other groups is control of the feeds. This is reinforced by the way much of the book focuses on the development seed and the expectation that it will be disruptive. Admittedly the focus is in mostly in the subtext and only surfaces in plain language a few times.

Large-scale society of the book is structured into competing moral or ethical philosophies, and power comes from two sources: controlling a feed and the voluntary aggregation of talented people (in this sense it is a sort of homage to Ayn Rand).

Any entity that can develop and protect their own feed (or any entity that has something to trade with an entity that controls a feed) has options. Entities that can't have to rely on the generosity of those that can.

Governments, of course, control territory with force as they always have and they can exert a certain amount of control over the people in their territory with access to the feed. You'll notice that the Neo-Victorians set up some of their space outside of pre-existing territorial nation spaces and set up separate feeds when they do. The interesting question here is, how did London and the American north-west come to be a welcoming space for them, and we have to project and guess from the conditions observed on the American west coast in Snow Crash.

We're not told how Bud came to be in China, but there is ample evidence that movement is not strongly restricted in the Diamond Age. Perhaps he (or more likely his parents) came for work, got out of the job and never left. As for his ignorance of the law, he seem ignorant even of the visible markers of the powerful tribes of his world. Why would you expect him to know anything of the local law?