Alex Tabarrok of Marginal Revolution observes that
[c]ompetitive federalism has many advantages. Citizens can move to communities that better reflect their preferences for public goods, they can vote with their feet, thereby penalizing poorly performing governments, and they can serve as a salutary example for others by trying out new ideas in governing.
Yet, in 1789 the United States had 13 states and four million people. If the number of states had grown as fast as the number of people or if we in the United States had about the same amount of federalism as do the contemporary Swiss we would today have about 1000 states.
I think we need more states. If 1000 sounds extreme why is 50 the magic number? And why is 50 the magic number when the population is 150 million as when it is 300 million?
I agree that the ability to vote with one's feet is essential to liberty. As I wrote here,
Exit -- the ability to flee a highly taxed and regulated State (that is, one of the United States) for a somewhat less taxed and regulated State -- remains an option, and those who avail themselves of it are sending a message that is lost in the tumult and shouting of electoral politics. Despite the erosion of local and regional differences in governance -- owing to the centralization of power in Washington and the general expansion of government power at all subordinate levels -- there is net migration from the Northeast and Midwest toward the "sun belt" States of the South and West (excluding California), which generally have lower tax rates and less unionism than the Northeast and Midwest. (Summary statistics on internal migration are here, at Table H on page 14. An index of economic freedom, by State, is here.)
It is therefore no coincidence that the mean population center of the U.S. has since 1960 moved smartly southwestward, from southern Illinois into south central Missouri. Incentives matter; that which enhances economic liberty also enhances personal liberty, for the two are indivisible. The urge for liberty drives people out of high-tax States and toward (relatively) low-tax States, as illustrated by this graphic from "Revolution on Wheels" (Barron's Online, February 13, 2006):The lesson here is simple: As long as there is meaningful exit there can be a race to the top. Exit serves liberty because it enables each person to find that place whose values come closest to his or her preferred way of life. Places deemed among the most attractive will grow in numbers and prosper; places deemed less attractive will wither, economically if not in terms of population. Under the right conditions (to which I will come), the balance will tilt toward liberty, that is, toward a modus vivendi that seems, for most people, to offer happiness. That is the essence of federalism, as it was envisioned by the Framers.
But how many States do we need? Ideally, a lot more than 1,000. In the same post I proposed the establishment of a
zone of liberty [which] would be something like a "new city" -- with a big difference. Uninhabited land would be acquired by a wealthy lover (or lovers) of liberty (call him or them the "developer"). The zone would be populated initially by immigrants, who would buy parcels of land from the developer, and who would be allowed to build the home or business of their choosing on the land that they buy. Sub-developers would be allowed to acquire large parcels, subdivide those parcels, and attach perpetual covenants to the use of the subdivided parcels -- covenants that initial and subsequent buyers would knowingly accept. Absentee ownership would be prohibited.
Infrastructure would be provided by competing vendors of telecommunications and transportation services. Rights-of-way would be created through negotiations between vendors and property owners. Any resident homeowner or businessperson could import or export any article from or to any place, including another country; there would be no import controls, duties, or tarrifs; the only restrictions on commerce would be those that are imposed by outside governments.
A zone's government would comprise an elected council, a police force, and a court (all paid for by assessments based on the last sale price of each property in the zone). The police force would be empowered to keep the peace among the residents of the zone, and to protect the residents from outsiders who come into the zone without permission from a resident and/or who breach the peace. Breaches of the peace would be defined by the development of a common law through the court. The elected council (whose members would serve single, four-year terms) would oversee the police force and court, and would impose the assessments necessary to defray the costs of government. The council would have no other powers, and it would be able to exercise its limited powers only by agreement among three-fourths of the members of the council. The members, who would not be salaried, would annually submit a proposed budget to the electorate, which would have to approve the budget by a three-fourths majority. The electorate would consist of every resident who is an owner or joint owner of a residence or business (not undeveloped land), and who has attained the age of 30.
A zone of liberty would not be bound by federal, State, or local statutes, except that the federal government could impose a per-capita tax on residents of the zone that is sufficient to defray the zone's per-capita share of the national budget for defense and foreign affairs. The actions of the zone's government would be reviewable only by the U.S. Supreme Court, and then only following the passage of a bill of particulars by two-thirds of the number of U.S. Senators and Representatives, which must be signed by the President. (A zone could be abolished only with the approval of four-fifths of both houses of Congress and the President.)
Absent such an experiment, I fear that organized minorities will continue to constrain liberty, mooting even the modest degree of inter-State migration that now prevails. Our only hope for liberty -- albeit a slim one -- would then rest in the hands of the Supreme Court.
I am being realistic in my assessment of what it would take to attain something like liberty in the United States: either an upheaval of the Supreme Court or the creation of something like zones of liberty. Politics as usual will only take us further down the road to serfdom. Frankly, I see little chance of averting serfdom. All I can do is propose an alternative -- unlikely as it is -- and pray.
How many persons would inhabit a zone of liberty?
I would constrain the size and membership of each zone of liberty, creating more of them instead of allowing any one of them to grow beyond the size of a small village -- perhaps not exceeding a population of 150.
That's 2 million zones of liberty (or States) for a population of 300 million. Hmmm . . .