NYU lawprof Roderick Hills, a leading academic expert on federalism, asks why libertarians “care about federalism.” He posits three possible reasons:

I have three theories to explain the connection that libertarians draw between federalism and libertarianism, which I’ll label the (a) “feet-voting” theory; (b) “shrink-and-drown” theory; and (c) “insincerity” theory.

Hills captures the major libertarian rationales for federalism roughly accurately. But he is wrong to claim that these rationales are in deep conflict with broader libertarian commitments, or that the third one is based on “insincerity.” Let’s take his commentary on the three one by one.

I. Foot Voting.

As Rick notes, the foot voting rationale for federalism is one that I have advanced in various articles (e.g. here and here). Rick can see why this might appeal to libertarians, but thinks it is ultimately ineffective:

Take, first, the “feet-voting” theory. The idea is familiar from the “fiscal federalism” literature that developed in the wake of Wallace Oates’ revival of Tiebout’s hypothesis about locational economies….. The basic idea is that citizen-consumers reveal their preferences for local public goods by moving between competing subnational jurisdictions. In the context of fundamental constitutional rights, citizens can “vote with their feet” for liberty over laws that they deem oppressive. Think Mormons’ trekking to Utah from Nauvoo, Illinois; Puritan pilgrims making their way to New England, Exodusters heading west to flee white supremacy, etc. Ilya Somin, among others, has pressed this argument for federalism in several articles. I am willing to concede that foot-voting provides a a weak and indirect method of limiting governmental power. Note that it requires vigorous national protection of interstate mobility through the devices like the dormant commerce clause,Article IV, section 2, etc. Note also that the theory works best when state expropriate mobile assets and works worst when states persecute nationally unpopular groups like, say, accused sexual predators who have nowhere to flee because they are too few in number to capture a state government… Note finally that theory is a really attenuated way to protect liberties from very large states that can extract locational rents: yes, you can flee California and New York, but you’ll have to leave behind family, friends, community, and so forth…. But put these objections aside and consider a larger difficulty with “libertarian federalism”: Why support this indirect method of defending individual liberty rather than the straightforward way of using national courts to enforce a robust set of national rights?

Rick is wrong to assume that it can’t help “nationally unpopular groups.” Even if a group is unpopular nationally, the degree of their unpopularity may vary greatly from one region to another. In Jim Crow-era America, blacks improved their lot enormously by migrating from the South to the North even though there was no lack of racism in either region; northern state governments were much less oppressive towards blacks than southern ones. Given their nationwide unpopularity at the time (and the fact that southern whites were much more committed to maintaining segregation than northerners were to moderating it), a single unitary national policy on race during that period would have left blacks worse off. Indeed, as the post linked in the last paragraph notes, federal government-controlled Washington, DC was just as legally segregated as southern states were.

Rick is also right that foot-voting doesn’t work as well against “very large states.” But it still works much better than with respect to the federal government. It’s easier to leave a big state than to leave the US entirely. Even California, the state with the biggest population and strongest “locational rents,” has recently been losing people to states like Nevada and Arizona because of its dysfunctional policies. Foot voting between states isn’t perfect; it’s just less imperfect than unconstrained federal power.

Also relevant here is the fact that foot voters have better incentives to become informed about politics than ballot box voters (who tend to be rationally ignorant), a point I summarized in Part VI of this article. Not only does foot voting increase the range of choices available to citizens. It also gives them better incentives to make those choices in an informed way.

Rick is also correct that a system of foot-voting requires federal enforcement of mobility rights against the states and other constraints on state power. John McGinnis and I emphasized this fact in a 2004 article. What we support is a system of competitive federalism where state and local governments compete with each other for residents, not a system of untrammeled “states’ rights.” Thus the title of our article (“Federalism vs. States’ Rights”).

Rick also asks why we should support this “indirect method of defending liberty” instead of just using federal courts to “enforce a robust set of national rights.” The answer is that the one strategy does not exclude the other. It is perfectly consistent to seek to impose strict constitutional limits on government power at all levels and at the same time seek to leave state and local governments less constrained than the federal government. Foot-voting makes state and local governments less dangerous than Washington.

II. States as a Less Dangerous Level of Government than the Feds.

Here is Rick’s commentary on this second argument:

The “shrink-and-drown” theory argues that, by distributing power among governments with fewer resources, government will be easier to control. It is easier to drown a kitten than a tiger in a bathtub, and states look more kittenish than then feds. Again, there may be something to this idea, (a theory which is heavily dependent on constraints in states’ fiscal capacity induced by taxpayer mobility). But is it not counter-balanced by the greater danger a la Federalist #10 that states move faster and in a more populist direction than the feds? “Three strikes, you’re out,” civil commitment for sexual predators, etc, are more likely to be enacted more quickly by the states than the gridlocked Congress supervising a bureaucracy not easily mobilized for popular vendettas. As a libertarian strategy, federalism again seems a bit attenuated.

Rick’s critique here relies heavily on the famous arguments of James Madison’s Federalist 10. I don’t know about other libertarians. But I think Madison (whose other writings I greatly admire), was wrong on this point. I explained why in this post. Part of the reason is that Madison failed to consider the relevance of mobility and state fiscal constraints. I also don’t think that state governments are necessarily more “populist” (in anti-libertarian sense) than the federal government is. Some are, but others are actually less so. There are many states that do a far better job than the federal government of protecting economic liberties, property rights, civil liberties, and other freedoms important to libertarians. New Hampshire is probably the best example.

III. Are Libertarians “Insincere” in Supporting Federalism?

Finally, Rick argues that libertarians may be “insincere” in supporting federalism (though interestingly he doesn’t condemn this supposed insincerity):

Finally, it just might be that the libertarians are insincere about federalism: While Randy [Barnett] and Co. find it a convenient way of limiting one level of government, they do not ultimately want to defend a federal system with robust subnational jurisdictions but rather intend to suppress the states with some robust theory of the 14th Amendment, dormant commerce clause, etc, when the time is right. They simply believe that a frontal assault on the welfare state is impossible before this Court and, therefore, are focusing their energies on the feds, saving the states for a later attack except on issues like the Second Amemndment where they think that they can pick off five votes. I have no objection to insincere litigation for a sincere political goal. But one must be careful what one sues for: If one aggressively argues that issues like civil commitment, home-grown marijuana, crime control, family relations, and so forth, belong exclusively with state jurisdiction, then it may be tricky later to argue that the 14th Amendment places substantial limits on such “traditional state concerns.” , Federalism, after all, did not evaporate as an important concern of the Constitution in 1868: If courts can enforce federalism-based limits against Congress under Article I, then surely they can do against themselves under the 14th Amendment, reserving this provision for only the invasions of liberty that are most obvious affronts to the concerns of 1868. On this theory, federalism remains a background rule of construction for the 14th Amendment, to resolve interpretative doubt in favor of state power in close cases.

As I noted above, most libertarians seek tighter constitutional constraints on both federal and state governments. But there is no necessary inconsistency between the two, either legally or politically. Libertarian constitutional arguments against broad federal authority don’t rely on any notion of state autonomy. Rather, we make the argument that certain policies are beyond the scope of Congress’ enumerated powers.

The fact that Congress is forbidden to do X does not decide the question of whether state governments can do it. There is no inconsistency in arguing that X lies beyond Congress’ enumerated powers, while also arguing that states are forbidden to do it because of constraints imposed by the Bill of Rights or the 14th Amendment. To put it another way, the legal point is not that “federalism” constrains Congressional power but that Congress is limited by the enumeration of its own powers in Article I. Those limits would be legally binding regardless of the level of power enjoyed by state governments; indeed, they would be binding even if state governments had no power at all.

That said, I don’t doubt that there is a significant class of powers that is forbidden to Congress but permitted to the states. Even in an ideal constitution (which we, of course, do not have), I think it would be proper to grant state and local governments certain powers that are denied to the center. Because of the availability of foot-voting, I believe this is a far less dangerous situation than having virtually unconstrained federal power.

Lastly, although Hills says he has no objection to libertarian “insincerity,” I don’t think that most libertarians are in fact insincere on these points. Most are quite open about the fact that we seek stronger constraints on both federal and state authority. Randy Barnett, whom Hills specifically cites, has written an entire book that advocates both simultaneously.

In sum, most libertarian supporters of federalism don’t “care about it” for its own sake. We just believe that it is a greatly superior alternative to unconstrained central government authority.

UPDATE: While I think Hills characterizes most of the libertarian arguments accurately, I don’t endorse his pejorative terminology (e.g. – “shrink and drown”), which both departs from ordinary usage and is not entirely accurate. For example, “shrinking” federal or state governments doesn’t necessarily mean abolishing them completely (“drowning”).