What is the Federalist Solution to the Personal Costs of Underperforming States Governments?

One of the many disappointing characteristics of the current Republican president is that he is just as much an advocate for powerful, centralized government as his Democratic opponents, albeit in differing ways.

Conservative Republicanism was supposed to advance a form of constitutional small-government, but the party, via Trump’s supporters, has abdicated that role. For some, such as the founders of the new Federalist Party, this is the last straw. The creation of this new party is an intriguing project, but its merits must be substantiated anew for it to be successful.

The Federalist Papers were written to defend the proposal for a more powerful, effective and stabilizing national government in a new country with a poorly-functioning confederate governmental system. Today, the federalism laid out in the Constitution does not need to be defended against the George Masons and Robert Yateses of the country, but against those who are used to a much more centralized state than was ever intended by the framers. To be politically viable, this renascent federalism must make convincing arguments for itself in our contemporary, Washington-centric context.

Broadly-speaking, I would identify as a small-government federalist. (Surely there can be as much ideological diversity under this tent as there was in the days of the Constitutional Convention.) However, I see a number of hurdles in the form of practical challenges, which the defenders of small-government federalism must clear to have electoral, and later political, success. Therefore I want to be not so much critical as challenging to the standard bearers of the new federalism.

Here, I specifically would like to pose to the Federalists the potential problems stemming from ideological diversity, as well as — and perhaps more importantly — the differing levels of government effectiveness and institutional quality across the fifty states. In most federalist thought, this diversity (at least the first kind) is considered a feature, not a bug. Each American can live in a state with politics of which they approve, whether by moving there or by engaging with the political process in his own state — a much easier task that influencing the national government. Conflicts created by the diversity of political opinions are partially dealt with by offering a wide range of arenas in which they can be realized — a potential boon for such a divided country as ours is currently. One can even argue that the competition among states will lead to rising quality in policies. But there is a complication: the people at the bottom hurt most by bad government are in the worst position to weather or escape its effects.

This is a challenge to which small-government federalists must respond: in those states with terrible public policies, for reasons ideological or institutional, the people who are likely to be most harmed will generally be the ones who cannot vote with their feet. To respond with the counter-argument of local variation and subsidiarity is to employ a powerful and fundamental justification for federalism, but it does not address this objection. While state and local governments are likely on par to institute better public policies for the people affected, some will inevitably be worse than what Washington can offer.

Skeptics of federalism will want non-utilitarian justifications. Though the aggregate quality of public policy will rise (I expect, and other federalists tend to agree), what arguments do federalists have to offer in response to those whose concern is that the people who need the policies to work the most are the ones who cannot escape the costs when they do not? In order for small-government federalism to be viable, this concern must be addressed, either with convincing reasons to expect state and local government policies to be as effective in almost all cases in assisting those who need them the most, or by amending the small-government federalist proposal to insure against a worsening policy situation.

This is important not simply for responding to Rawlsian liberals (whose first and foremost concern is whether the worst-off are as well-off as they can be). Small-government federalists must also respond to nationalist conservatives who are horrified by some terrible policy in a liberal state. If absurd minimum wage laws are pricing the unskilled poor out of a job in, say, Seattle, they are clearly in no position to leave for a state in which they can find a job. The same thing can be said for liberal policies that create housing shortages. To advance small-government federalism is to advocate for the expansion of the space in which not only poorly-governed red states potentially can hurt people who cannot avoid the effects, but poorly-governed blue states can inflict similar harm.

Even when policies are similar across states, the effectiveness of the governments in those states to administer the policies can differ greatly. Consider Medicaid, a program the quality of which varies widely between states and over which there is, reportedly, little top-down scrutiny. Potentially, such variation could occur in virtually every area of public policy if America moved in the direction small-government federalists want it to go. Of course, in a system considerably more federal, states would be able to institute alternatives to national programs such a Medicaid, which would be more suitable to their own situations. That said, there would be no safety net should any fail to do so. Those who favor centralization, do so in part because they hope Washington will provide such a safety net or ensure a minimum standard at the state-level.

Federalists need an answer to this challenge, and that answer, for anyone who is concerned for the American population as a whole and who recognizes the need for dynamic solutions to evolving, local problems, cannot be the status quo: national government-imposed universal mediocrity. Yet some prefer the safety of existing mediocrity to the uncertainty of an unknown that, one can imagine, will result in greatly improved government for a lot of people, but which carries the potential to make at least some worse off than before.

Ideological differences are the easier objection for federalists to respond to. What happens when the citizens of a state get the policies they want, but for reasons apart from the merits of those policies, they are poorly implemented? The better-off in those states whose governments cannot deliver as effective or prudent policies as the federal government might can move to state that does. (All things taken into account, they may not leave, but they are still likely to be shielded for poor policies and poorly-functioning government.) The rest would be condemned to suffer the effects of declining policy and institutional quality.

Perhaps that wouldn’t happen. Or perhaps there is a solution that is congenial to small-government federalism. For the success of their project, it is incumbent on federalists to give an answer to this challenge, without relying solely on the original defenders of the Constitution. Federalisms advocates must make fresh arguments.

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