As state governments do less and less, there ought to be more and more of them. The renewed push to split Queensland into two states should be just the beginning, writes Chris Berg.

"Most persons think that a state in order to be happy ought to be large," wrote Aristotle in his Politics, "but even if they are right, they have no idea what is a large and what is a small state."

And 23 centuries later, not much has changed.

A group of Queensland MPs have renewed a longstanding call to split Queensland in two. They believe they can force a referendum on the issue. The Minister for Northern Australia, Matt Canavan, also supports the new state proposal.

But Annastacia Palaszczuk believes "Queensland should be bigger, not smaller". She wants Queensland to take the Tweed Coast from New South Wales.

There are other proposals. Warren Entsch wants to split the top half of the country in two, creating a northern mega state.

Yes, redrawing the map of Australia is a classic holiday-season news story. It's both fun and slightly frivolous.

But the question of the ideal size of a political jurisdiction pervades debates about everything from council amalgamations to whether Britain should leave the European Union - a political and economic alliance that has developed state-like characteristics.

The great Greek philosophers believed that the ideal size of a political jurisdiction was a small city. Aristotle put it this way. The city should be large enough to be self-sufficient. But a city with too many people is ungovernable. A city should be small enough so that the citizens know each other well enough to distribute offices according to merit. Plato decided that optimal city size had 5040 families.

Neither economic self-sufficiency nor knowing office-bearers personally are imagined to be important any more. But Aristotle did underline the basic tension in deciding whether to make states larger or smaller: between economic desires and democratic ones.

On the one hand, economic considerations suggest that larger states are better. Larger states can exploit economies of scale and deliver more services. It is as much work to write a school curriculum for two schools as 2000 schools. This is the intuition behind the steady centralisation of policy towards the federal government - the idea that it is more efficient to impose the same policy on everyone, rather than have regional governments develop their own approaches from scratch.

But on the other hand, economies of scale aren't everything. Democracy - that is, genuine democratic engagement, not just attending a polling booth every few years - seems to thrive better in smaller jurisdictions. The idea that the people rule is more believable when it is possible to imagine ourselves as one of those rulers - something which is less likely in a giant unitary nation than a small community.

There is, simply put, a trade-off between the economic benefits of large size and the democratic benefits of small size.

That trade-off helps us understand why the Queensland government - any Queensland government - will fight a split. More economic power means more wealth that can be delivered to the government's supporters, and the political class rarely welcomes any more democratic participation.

Nor is the federal government likely to welcome any new states. It is much easier to negotiate with one Queensland government rather than two. More states reduce the concentration of political power. Those who hold political power dislike that idea.

Back in 2009 Geoffrey Blainey argued that it was "absurd" not to establish a new state in northern Queensland because when Queensland was formed no one knew about the mineral resources in its north.

Yet as the Danish political scientists Martin Bækgaard, Søren Serritzlew, and Kim M. Sønderskov point out, the optimal jurisdiction size for any political community depends on what we want those communities to do. Aristotelian self-sufficiency is unnecessary in a world of international trade. But the high cost of modern militaries mean we need huge nations to pay for a single F-35 Joint Strike Fighter.

Bækgaard, Serritzlew and Sønderskov argue that for jurisdictions with minimal functions and responsibilities, smaller is better. For Australian local governments the optimal size might be as little as 5,000 people. Rather than amalgamating councils we should be splitting them up.

Blainey is right that it has been a long time since the map of Australia was first drawn. But the key change since is not the discovery of resources, but the long centralisation of power in the Commonwealth government. Policy areas that the constitution leaves to the states - like education - are increasingly being controlled by Canberra. This is as good a reason as any to rethink the number of states.

As state governments do less and less, there ought to be more and more of those governments. North Queensland should be just the start.

Chris Berg is a senior fellow with the Institute of Public Affairs. His new book, The Libertarian Alternative, will be published by Melbourne University Publishing in May. Follow him at twitter.com/chrisberg