Recently, some of my friends singled out this piece by Jeff Deist, president of the Mises Institute, as truly awful. When I actually read it, however, it seemed like a reasonable presentation of a plausible view. Deist:
[L]ibertarians are busy promoting universalism even as the world moves in the other direction. Trump and Brexit rocked the globalist narrative. Nationalism is on the rise throughout Europe, forcing the EU to defend itself, secession and breakaway movements exist in Scotland, in Catalonia, in Belgium, in Andalusia, even in California. Federalism and states’ rights are suddenly popular with progressives in the US. The world desperately wants to turn its back on Washington and Brussels and the UN and the IMF and all of the globalist institutions. Average people smell a rat.
We should seize on this.
Mecca is not Paris, an Irishman is not an Aboriginal, a Buddhist is not a Rastafarian, a soccer mom is not a Russian. Is it our goal to convince them all to become thorough Rothbardians? Should libertarians care about gay marriage in Saudi Arabia, or insist on the same border arrangements for Brownsville, Texas and Monaco? Should we agitate for Texas-style open carry laws in France, to prevent the next Bataclan?
Or would our time be better spent making the case for political decentralization, secession, and subsidiarity? In other words, should we let Malta be Maltese?
Deist concludes:
In other words, self-determination is the ultimate political goal. It is the path to liberty, however imperfect. A world of seven billion self-governing individuals is the ideal, but short of that we should prefer the Liechtensteins to the Germanys and the Luxembourgs to the Englands. We should prefer states’ rights to federalization in the US, and cheer for the breakup of EU. We should support breakaway movements in places like Catalonia and Scotland and California. We should favor local control over faraway legislatures and administrative bodies, and thus reject multilateral trade deals. We should, in sum, prefer small to large when it comes to government.
But does decentralization alone really promote liberty or prosperity? The mechanism is elusive at best. Imagine a world with a thousand sovereign countries of equal size. This is far more decentralized than the status quo, right? Suppose further, however, that there is zero mobility between these countries. Labor can’t move; capital can’t move. In this scenario, each country seems perfectly able to pursue its policies free of competitive pressure. Why should we expect such policies to promote liberty, prosperity, or anything else?
The story would change, of course, if you combine decentralization with resource mobility. In that case, each country’s government has to compete to retain labor and capital at home. If you don’t make the customer happy, somebody else proverbially will. But without this “universalist” mobility rule, decentralization leaves everyone under the rule of a preordained local monopolist.
But wouldn’t decentralized governments voluntarily embrace mobility? It’s complicated.
A profit-maximizing dictator might try to get rich by welcoming the world’s talent to a glorious land of (apolitical) freedom. But then again, he might try to hold on to the riches he already has by isolating himself from the rest of the world and crushing his real, potential, and imagined enemies. See North Korea.
Nor is democracy much of a remedy. Yes, democracies give leaders strong incentives to adopt popular policies. But if you study public opinion, you’ll discover that neither libertarian nor wealth-creating policies are very popular. While people around the world migrate for prosperity and freedom, they rarely vote for them.
But doesn’t decentralization by itself have any systematic effects? Sure. Decentralization yields variance. In a world of a thousand sovereign nations, you’ll see all kinds of weird alternatives – a veritable zoo of polities. A few will probably be great. But if resources are immobile and leaders have familiar political incentives, there’s little reason to expect their greatness to be contagious. And the fact that a few great polities exist on Earth is small comfort to the vast majority of people who will never get to live or invest there.
Now you could say, “Sure, decentralization works poorly without high mobility and good political incentives. But what good are high mobility and good political incentives without decentralization?” My main response: Once you make this concession, you should be suspicious of efforts to increase decentralization at the expense of mobility or incentives. If you can decentralize without changing anything else, great. Otherwise, hold your applause until you’ve carefully analyzed decentralization’s net effect on liberty and prosperity.
P.S. For further analysis, see Week 2, section X and Week 12, Section I of my graduate Public Choice notes.
READER COMMENTS
Oriol
Jul 11 2018 at 5:18pm
I think small countries do have the incentive to adopt more liberal policies:
For starters, you are forced to accept free trade.
Secondly, citizens are in much lower risk of getting locked in a country. If a government starts becoming totalitarian, people can flee more easily.
Third, rational ignorance might be less of a problem since the chance of influencing the result of an election is much greater.
Public opinion holds bad opinions in part because of the big size of current states. – the costs of bad policies are spread widely. In a small state you are directly affected by policies and if not, probably people on your family or community.
Francisco Boni
Jul 11 2018 at 5:34pm
Complex systems under competitive pressure will always self-organize with varying permeability or mobility rules. The “universalist mobility rule” is not an evolutionarily stable strategy. It is an attractor state. And definitely not a perfectly robust one as can see right now sadly. The fact that the level of greatness of this megazoo of polities is not near pareto-optimal or contagious is not enough to make the universalist dream come true forever. Between atomic individualism, communitarianism, archipelagos of polities and political universalism there is the eternal Molochian process.
Denver
Jul 11 2018 at 6:04pm
I refer to this as the size vs scope problem in libertarianism. Do you want a smaller state in terms of jurisdiction and/or population, or do you want a smaller state in terms of the amount of role it plays in your life. Sometimes these things go together, but sometimes they don’t.
I also think Jeff’s second point, that libertarians should stop criticizing civil society, isn’t sufficiently nuanced. Like technology, civil society does indeed provide mechanisms around the state. However, it also provides mechanisms which support the state. Don’t forget, state authority was historically justified through religious arguments, many wars were fought over religious and cultural divides, and many laws were made “for the children”.
Roger
Jul 11 2018 at 7:12pm
Why is mobility assumed to be zero? Is it not likely at least some of those entities would have agreements? Seems a specious argument.
Thomas
Jul 11 2018 at 8:02pm
Liberty, as Caplan imagines it, must be a mystical state of bliss. In fact, it is a state of beneficial, voluntary cooperation (social and economic), which is fostered by mutual trust, mutual respect, and mutual forbearance. These are more likely to be found in relatively homogeneous communities, which must be relatively small. (Caplan is undoubtedly familiar with Robert Putnam’s research, which says, in effect, that the characteristics of mutual trust, etc., are less prevalent in heterogeneous populations.)
Prosperity isn’t everything. America is a prosperous country, but that’s gross, not net. Tens of millions of taxpayers are forced to pay taxes to support people and things they don’t value. This would be less likely in a decentralized, relatively homogeneous community. Even if the tax burden was as high as before, people would feel better about where there taxes go. Such was the case in Sweden before it became “multicultural”.
Hazel Meade
Jul 12 2018 at 1:15pm
Like it not, we dont live in an ethnically homogenous so iety, and were noy going to. Ethnic mixing is only going to increase as it gets technologically easier to move around. Absent considerable amounts of force directed at preventing mixing, the future is going to invole ethnically diverse people living side by side. We have to develop social trust across ethnic lines in order to develop that liberty sustaining civil society you want.
Robert Schadler
Jul 12 2018 at 9:25am
Economics “tools” are rarely sufficient to address political issues. Too many libertarians idealize a world without political borders. Borders and citizenship are political matters determining who is “in” and who is “out.” Who gets to vote? What are the costs of people and goods moving across a border? Secession is about who gets to draw the political border. The reasons for wanting to change a border vary greatly — including “we don’t like them” to “we are more prosperous and they tax us too much” to “we would have more economic liberties and lower taxes if we were able to manage our own affairs.”
Joshua Woods
Jul 12 2018 at 10:57am
Bryan,
I think the statement below needs to be justified in a separate post because it is counter intuitive to me and others I’m sure.
“And the fact that a few great polities exist on Earth is small comfort to the vast majority of people who will never get to live or invest there”
Don’t the few great polities act like islands of innovation from which all benefit? Most of the worlds countries may never have invented penicillin but all have gained, the same goes for other innovations like the internet, bitcoin, pesticides, containerization etc. A common argument about why socialism wasn’t worse is that they were able to copy prices/techniques from places with more freedom. Also I think there is a tendency to imitate successful societies when the gap becomes large enough to overpower romantic nationalist sentiments and would cite the British influence during the 19th century and Roman influence in ancient times as an example. Are these ideas wrong? I’d need to hear why they are before agreeing with the substance of your post.
robc
Jul 12 2018 at 11:42am
It is a philosophy vs system problem.
Philosophically, I am libertarian. But that could come with many different forms of government.
The system of government I prefer is federalist. Each level should perform only those tasks which cannot reasonably be pushed down to the lower level. Article 1, Section 8 of the US Constitution describes too large of a federal government, in my opinion, but it is much better than what we have today.
I realize that with a federal system state A and state B may not be the same level of libertarian, but it is still the system I prefer.
Mark Z
Jul 13 2018 at 12:20am
In the context of the US or EU, decentralization is pretty much an unalloyed good because freedom of trade, travel, and investment across borders is already guaranteed by the framework in place.
The question in general is: does government at level x prevent greater intrusion and interference by government at level x-1 than government at level x causes itself. If so, then centralization may be counterproductive. Usually, I think the answer is no; usually (though not always) central governments interfere more than they prevent interference by lower levels of government.
Rob Wiblin
Jul 13 2018 at 2:59pm
Deist’s argument is particularly odd because the main criticism of Washington/EU/UN/IMF among populists is that they push free market policies and liberal cosmopolitanism that voters in receiving countries don’t support. But libertarians should support those things.
Jotto999
Jul 13 2018 at 3:41pm
Question: how mobile is Switzerland? I remember hearing someone say that it’s very hard to move there. And what about for inter-Canton movement?
S. P. Brown
Jul 22 2018 at 3:22pm
“Truly awful” Really? If Deist’s article is “truly awful,” a skinned knee must register as “truly horrific” as an injury to Caplan’s friends. But is it Caplan’s friends or Caplan channeling his feelings through his friends? Who is more prone to the barrator’s gift for hyperbolic exaggeration, Caplan or his friends? After all, no names are given.
By the way, Deist never claimed that “decentralization alone” promotes liberty or prosperity. His article promoted the possibilities if decentralization is embraced.
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