Ducks and Economics

John Payne at the Show-Me Institute has this to say about state legislative opposition to the reach of the federal government’s power:

Setting aside for the moment the specific content of the amendment, it is great to see Missouri and other states attempting to use the nearly forgotten tools of interposition and nullification to stop the federal government from abusing its powers. Of course, these are just tools that can be used for good (such as when Wisconsin nullified the Fugitive Slave Act in the 1850s) or ill (such as George Wallace attempting to preserve segregation). However, all else being equal, the more a political system is localized, the less dysfunctional it is likely to be, because the politicians are not as removed from the people. Consequently, anything that takes power away from the federal government and gives it to the states, or from the states to the counties and municipalities, or from the municipalities to the neighborhoods and individuals, should, as a general rule, be applauded.

While I understand very pertinently the reasons John makes these claims, I come to a different conclusion. Or, at least, I offer a different interpretation. I don’t think it’s right to say that the more a political system is localized, the less dysfunctional it will be. If anything, some of the worst abuses of government happen at the local level, where specific people or organizations can gain control of the executive powers of government, including and particularly police power.

In this sense the analysis misses the point. Devolution of power is not strictly a good thing. The desired aim should be to maintain an balance of power between governments. In some fashion we can think of this balance of power as competition in the sense that governments compete for citizens. Federal, state, and local governments all offer different goods and services to the public; some goods and services are unique to the level of government (like diplomacy to federal governments and trash services to municipalities) and not open to competition, while some goods and services are open to competition between governments. Another way to say it is that that governments compete for the right to regulate different things to citizens. Perhaps the most important service governments offer citizens is protection from other governments: the federal government, for instance, serves a very useful recourse against systemic racism in state and local governments. From the other direction, state and local sovereignty provide a hedge against excesses of federal power.

In some sense this interpretation of federalism says that a balance of power between competing governments best serves individual interests. I stress the “competing” here; looking at America in that light it is clear that there has been a big shift in consumer preferences away from federal provision of goods and services and towards other lower-level government entities.

Note that when governments compete, they offer justifications for elevating their power and reach relative to other governments. While governments might question the justification for other governments they never as a rule question the justification for government itself. In this sense the statist game is a rigged game and I suggest it points us in the directions of thinking of governments as networks for politicians and bureaucrats. The game of questioning the legitimacy of another government or its power is a way for politicians to elide the complex interactions between local, state, and federal governments.

Interested readers will find much to ponder in the collected work of Laurence Tribe and Steven Calabresi. Particularly, I might point you towards Tribe’s 1977 article in the Harvard Law Review and Calabresi’s 1995 article in the Michigan Law Review.