Let’s Try Everything – Local Autonomy And Innovation In Government

Here at Let A Thousand Nations Bloom, we have a different way of thinking about politics which we believe greatly simplifies a number of issues. Instead of fighting about what policy should govern a nation of 300,000,000 people, we believe in promoting an ecosystem of competing nations. Instead of uniformity in political goals, culture, and implementation, we believe in diversity. Instead of solving problems, we believe in setting up a system where problems solve themselves. Sounds impossible? Let me explain.

As I wrote in my Cato essay Beyond Folk Activism, we can look at politics at three different levels:

Policies: Specific sets of laws. Institutions: An entire country and its legal and political systems. Ecosystem: All nations and the environment in which they compete and evolve.

Most political discussion occurs at level (1) – argument about what the best policy is. Protection or free trade? Socialized medicine or our current vaguely-private-ish system? Private retirement accounts or Social Security? The revolution of public choice theory was to point out the importance of level (2), the institutions of a society, in determining what policies get passed. For example, while a democracy will tend to pass policies that are broadly beneficial compared to what monarchs and one-party states implement, it also tends to pass policies which appear to reflect the will of the electorate, but whose details benefit special interests. To keep debating about what the perfect policy would be, and ignore the fact that perfect policies never get passed, is to ignore the last half-century of economic research showing that level (2) matters, and that policies are an emergent behavior of institutions.

But that’s not the end of the story, because national governments are not the highest level system. They emerge from and compete in the global ecosystem of nations, and we think that the future of economic research and political activism lie in understanding and changing this ecosystem. Currently, there are less than 200 governments for almost seven billion people, and it is very difficult to start a new country. All land is claimed, and countries are reluctant to allow secession or local autonomy. Why would they? The governing industry is an oligopoly, and current nations are like any cartel which tries to restrict the entrance of new firms in order to keep selling a bad product (government) at a high price (taxes).

What if we somehow changed this, by restoring American Federalism, increasing support for secession, or opening a new frontier for colonization, like the high seas – and thus Letting A Thousand Nations Bloom? Any change to the ecosystem of governments which allows creation of new governments will make government more diverse and innovative by allowing for small-scale experimentation with many new ideas. And it will make the market for government more competitive, which will lead to it providing a better product at a lower price. In other words, the governing industry is just like any other industry – restrict it to a few big firms, and it stagnates, but allow small ones to enter, and they will innovate. No wonder politics has so few new ideas – it has no startups!

For those who doubt that governments compete, look at the tax rates on capital (corporate tax) vs. labor (income tax). Capital is taxed less because it is more mobile, and so countries must compete for it. Which they don’t like – which is why they are trying to form a cartel to keep taxes up.

Imagine a world where instead of debating furiously about what policies to impose on everyone, we debate just enough to establish the top contenders – and then go try all of them. For example, socialized medicine (or radical free-market medicine) could be implemented on a state-by-state (or city-by-city) basis. Some experiments will work and be universally adopted, others will fail and be universally loathed, while many will fall in-between and be or attractive or unattractive based on individual preference. But in every case, our judgements will be based on trials and real-world experience – not hot air from pundits or politicians advancing their own agenda.

There are many ways to get such a system. Secession obviously increases the number of polities, and even the threat of secession should enable local governments such as US states to reclaim a large amount of local autonomy (ie move the United States back towards its founding principle of federalism). Opening a new frontier, where social entrepreneurs can go try experimental systems of governance also does the trick. I’m sure there are more that I haven’t thought of.

The important thing is that we try to make the industry of government more competitive, rather than pushing our favored specific policies. This solution is glorious because it lets everyone dissatisfied with the performance of the current government industry (which is pretty much everyone) work together to make the world better for all of us. Republicans, Democrats, Greens, Libertarians – we may not agree on what policies work best, but we can all agree that a world of small governments trying new things will teach us far more about what does and doesn’t work than continuing our endless debates.

Let’s all get behind this global goal of local autonomy: To Let A Thousand Nations Bloom.