Toward Real Decentralization

Winter 2019

Support for decentralized authority and an active civil society are embedded in conservative orthodoxy, but they play too small a role in conservative governing. Despite rhetorical nods to the value of federalism, localism, and non-governmental bodies, leaders on the right haven't done nearly enough to energize communities or arrest the upward trajectory of power and money.

This is at least partly because conservative leaders are poorly equipped to respond when the theoretical case for decentralization meets the realities of governing. "Push authority down to lower levels" is a compelling ante, but that hand quickly folds when practical challenges raise the stakes. The case for centralization often prevails when it becomes clear that local authorities haven't solved a problem or don't care to try, and that higher levels of government have more capacity, will, and energy.

Absent clarity about how to use decentralization to solve some of America's problems, conservative policymakers often find themselves a bit lost. When progressive legislators offer ideas, conservatives either join the centralizing bandwagon in the name of compassion, or demur and appear cold-hearted. When given the chance to advance proposals of their own, they often come up empty, appearing indolent or indifferent. Conservatives need a small-government agenda that consists of more than the promise to roll back federal initiatives and regulations, coupled with the hope that local authorities will step up.

Bringing an energetic, productive form of decentralization to life will entail combining lessons from two extraordinary resources: the scholarship of Nobel laureate Friedrich Hayek and the concept of subsidiarity. Though the former emanates from the classical and Austrian schools of economics and the latter from a branch of communitarian Catholic social thought, both speak to the distribution of authority. Their complementarity is unexpected but illuminating.

What emerges from an analysis of both is a view of decentralization in which civil-society bodies are the natural products of liberty, possessing inviolable rights and clear responsibilities. Their abilities and autonomy must be respected by the state, but the state should not simply stand down when problems arise. Instead, it should ensure that the various components of civil society are able to carry out their roles. Central policymakers should focus on supporting such entities, in part by determining which tools — for example, block grants to states, competitive grants to nonprofits, or vouchers to individuals — would be most helpful in any given situation.

INSTITUTIONS AND FORMATIONS

To understand the intersection between Hayek's thought and subsidiarity, it is important to clarify what we mean by subsidiarity. In political parlance, subsidiarity generally refers to pushing authority down to the lowest level capable of handling a task — a kind of hyper-decentralization. But that definition is incomplete, and its narrow construction obscures the principle's most valuable contributions to governing.

Subsidiarity flows from the Catholic Church's view that we — individuals, families, and entities of public life — are entrusted with the functions associated with our abilities. So, fully understood, subsidiarity is about the proper assignment of authority. It is about recognizing the different roles of individuals and organizations, and appreciating how their combined contributions advance the common good.

Before the term entered common usage, Pope Leo XIII implied his approval of the idea. In 1891, he described state efforts to "intrude into and exercise intimate control over" the family and household as a "great and pernicious error," even if such efforts were intended to help those in need. The government could not violate the prerogatives of an established social unit simply by invoking its own benevolence. Leo also celebrated "enumerated societies for mutual help," such as labor unions and organizations that aid the poor, sick, and elderly.

In 1931, Pope Pius XI clarified the principle, writing that larger bodies should not take power from individuals and smaller groups. Subsequent pontiffs, including John XXIII in 1961 and John Paul II in 1991, reinforced the importance of protecting the autonomy of smaller associations. In 2009, Pope Benedict XVI wrote that subsidiarity is "the most effective antidote against any form of all-encompassing welfare state."

Subsidiarity thus recognizes the existence of intermediate entities, appreciates their contributions to society, and acknowledges the protected sphere within which they ought to be allowed to operate. In part because of these tenets, Church leaders have expressed concern about both the free market's tendency to atomize societies and the authoritarian propensities of the state. Humans cannot fully thrive if they are detached from one another, nor if they are homogenized by a distant, impersonal power. Subsidiarity teaches that mediating entities between the individual and the state have inherent, not delegated, authority and should be carefully guarded.

Appreciating how such associations come into being is also critical to understanding how they should be seen by policymakers. Hayek argues that most associations are not the product of advanced planning, but are rather the un-orchestrated consequence of individuals' living in freedom. We recognize common human needs, challenges, and opportunities, and we join together in various ways to address them. Such associations are largely informal and voluntary, so individuals have the latitude to defy mores, experiment with alternative approaches, or leave altogether. These groups thus present ongoing opportunities for societies to test and reassess established ideas. By contrast, a social architecture based on coercion and rigid laws is less forgiving.

In The Counter-Revolution of Science, Hayek differentiates between the terms "institution" and "formation" to argue that most social bodies are not the products of design but of a spontaneous, undirected process. When we say something has been instituted, the implication is that it resulted from a conscious, centralized effort; when we speak of something being formed, it suggests a more passive undertaking. The latter emphasizes the consequences of an action rather than the people and plans behind it. To Hayek, this distinction draws attention to the organic nature of formations and their predisposition to "adaptive evolution" — a process of continual change in response to shifting conditions.

The contrast also forces us to consider sovereignty. "Instituting" implies there is a power from above, a higher authority with the right to set things in place. "Forming," on the other hand, implies a power from below, and the right of individuals to create and develop. Pope Leo XIII, who prescribed a form of subsidiarity before the term became commonplace, underscores this point, calling individuals' formation of societies a natural right that must be protected by the state.

This right should not be taken for granted. Early European corporate structures required a government charter. Even the French "Declaration of the Rights of Man and of the Citizen" in 1789 proclaimed that the only legitimate associations were those created by the state, and that they could possess only powers specifically granted by the state. The notion that organizations can be legitimately instituted only by the state stands in marked contrast to what might be thought of as the Hayekian-subsidiarity approach of American life — the idea that "we the people" have the right to ordain and establish our own government and to freely form a vast array of other associations. These associations are not only created without the government's imprimatur, but are explicitly protected from the government by the First Amendment.

Several key texts on subsidiarity also stress the unplanned, natural character of formations, often through linguistic tools such as the passive voice or intransitive verbs. The Catechism of the Catholic Church, which describes the faith's fundamental beliefs, says that a society is a group of individuals "bound together organically." In a 2005 encyclical, Pope Benedict XVI wrote that a state acting in accordance with subsidiarity would acknowledge and support "initiatives arising from the different social forces." And in the 1991 Centesimus annus encyclical, John Paul II noted that "intermediate communities...develop" and "strengthen the social fabric." These characterizations resemble Alexis de Tocqueville's description of the American "village or township" as "the only association which is so perfectly natural that, wherever a number of men are collected, it seems to constitute itself." In Tocqueville and the writings of Church leaders, such groups are understood to instinctively arise and evolve.

Within a Hayekian-subsidiarity framework, then, mediating bodies are natural, their emergence and evolution reflect individual sovereignty, and, in a diverse, dynamic environment, they will adapt. They possess intrinsic authority, contribute to the common good, and deserve protection by and from the state.

LIBERTY, RESPONSIBILITY, AND UTILITY

Both Hayek and the subsidiarity tradition also revere freedom, with the understanding that it leads to individuals' choosing to assemble in a variety of ways. Our associations (and, paradoxically, their restraining conventions) don't run counter to liberty; they are its manifestation. Liberty isn't realized solely by pushing authority down to individuals; it can be fulfilled by respecting individuals' voluntary formations.

Hayek opposed state coercion, but he didn't consider freedom to be either a natural or a designed condition. Instead, he believed that liberty evolved, its advantages were recognized, and, over time, efforts were taken to perfect and expand it. According to Hayek, liberty's worth is further validated by the social formations it begets. As he wrote in The Constitution of Liberty, "the value of freedom consists mainly in the opportunity it provides for the growth of the undesigned," such as institutions, customs, and habits.

In the Catholic social teachings that undergird subsidiarity, freedom is endowed. The Catechism notes that human rights are prior to society, that God has great regard for freedom, and that governments must respect the rights of individuals. Rights are certainly understood as ends in themselves, but liberty is also understood as a means of advancing self-determination and collective action. The Catechism notes that God created man with free will, conferred on man the dignity to initiate and control his own actions, and continuously wills that man should be left to his own counsel. Liberty is viewed as a way for individuals to control their own fates.

Of course, there are better and worse ways to exert such control, and the teachings of both Hayek and subsidiarity discuss how best to arrange society for the benefit of the individual. In a 1961 encyclical that discusses the distribution of authority among the state and "the numerous intermediary bodies and corporate enterprises," Pope John XXIII notes that they must all treat "individual members as human persons and encourage them to take an active part in the ordering of their lives." Similarly, Hayek emphasizes that human knowledge and initiative must be recognized and elevated so that individuals are able to plan for themselves. The British civil-society scholar David Green brings these concepts together succinctly, writing that a limited government's purpose is not to manage people but to enable individuals to voluntarily associate as a means of managing themselves.

So, while subsidiarity stresses liberty, it also makes clear that individuals have responsibilities to the associations they voluntarily help form. Catholic scholars Michael Novak and Paul Adams conceive of "social justice" as individuals forming associations in order to benefit the broader community. What emerges from their writings is a sense of the interdependence of individuals and groups of varying sizes, each with powers and responsibilities that complement those of others. In "Social Pluralism and Subsidiarity in Catholic Social Doctrine," Russell Hittinger, a professor of Catholic studies, writes that subsidiarity includes the concept of munera, which concerns the roles, responsibilities, and gifts of various entities. According to Hittinger, munera "unifies two things which are so often split apart in modern political and social thought: first, what man claims as his own, and second, what man has to give as a gift of service." Pope Benedict XVI describes subsidiarity as bolstering individuals and groups so that they can assume their responsibilities, which in turn fosters freedom and participation.

In this way, subsidiarity blends the liberties of individuals and associations with their duties. The Catechism describes proper authority as a "moral force based on freedom and a sense of responsibility." It also identifies several obligations related to community participation: supporting others by accepting responsibility for work, education, and associated personal matters; promoting the common good by engaging voluntarily in social interchange; and taking "an active part in public life." Many Catholic leaders have written in a similar vein: Benedict noted that, without the distribution of authority, collective action could become paternalistic and demeaning, but without responsibility to others, devolved power would be mere "social privatism." Pope John XXIII discussed combining the freedom of associations to pursue specific interests with the requirement that they collaborate to advance the common good. As St. Ambrose University's L. Joseph Hebert, Jr., has explained, this pas de deux directly relates to our own political history. By elevating liberty and responsibility, subsidiarity and Toqueville's view of decentralization foster a kind of civic participation that benefits the whole.

Hayek, by contrast, generally sees the contributions of associations as the natural consequence of developing social structures, rather than as a moral obligation. Markets, for example, enable individuals to act freely, while also efficiently allocating resources. Such unplanned and advantageous "institutions of freedom" can also include traditions and local formations. He argues that "the beneficial functioning of a free society rests largely on the existence of such freely grown institutions," which emanate from and amplify liberty while also advancing social welfare.

Hayek further argues that it is impossible for any single authority to adequately capture, analyze, and employ all of the information necessary for governing on a large scale. The roadblock isn't intentions; central planners might well have beneficent motives. It "is a problem of the utilization of knowledge which is not given to anyone in its totality." As he writes, "The knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess." Centralization deprioritizes or dismisses what Hayek sees as the "important but unorganized knowledge...of the particular circumstances of time and place." Similarly, John Paul II worried about the "bureaucratic ways of thinking" of a distant welfare state, writing that "needs are best understood and satisfied by people who are closest to them."

According to both lines of thought, society's trust is better placed in the aggregated choices of individuals and the vast and continuously evolving array of local bodies than in a central power. This would certainly include practitioners, consumers, and leaders of associations and unions. But, as Hayek explains in "Freedom, Reason, and Tradition," it also includes local customs and the practices of longstanding institutions, which encompass the accumulated wisdom of generations.

Many of Hayek's insights have been translated into a kind of political lingua franca that bridges philosophy and law. In his "Let the People Rule" speech in 1975, Ronald Reagan lauded "the local fraternal lodge, the church congregation, the block club, the farm bureau." In 1988, George H. W. Bush spoke of our "nation of community, of thousands and tens of thousands of ethnic, religious, social, business, labor union, neighborhood, regional and other organizations, all of them varied, voluntary and unique." He gave voice to the wisdom found in evolved practice: "I respect old-fashioned common sense and have no great love for the imaginings of the social planners. You see, I like what's been tested and found to be true." As a candidate, George W. Bush promised to "look first to faith-based organizations, charities, and community groups that have shown their ability to save and change lives." As president, he established the White House Office of Faith-Based and Community Initiatives. All three Republican presidents proved that these heady concepts can have electoral appeal and can be directed toward meaningful policy outcomes.

INTRINSIC HETEROGENEITY

Subsidiarity also shares Hayek's view that very different "circumstances of time and place" will naturally bring about different problems, social formations, and interventions. One of the four constitutions resulting from the Second Vatican Council, Gaudium et spes, notes that "the people who come together in the political community are many and diverse, and they have every right to prefer divergent solutions." And according to the Catechism, so long as they serve the common good, respect natural law, preserve public order, and protect rights, "[t]he diversity of political regimes is morally acceptable." While the Church is often seen as possessing a cosmopolitan view of morality, subsidiarity assumes a degree of particularism in politics.

This particularism is related to self-determination, a form of which is indispensable to subsidiarity. John Paul II wrote that the Church "respects the legitimate autonomy of the democratic order and is not entitled to express preferences for this or that institutional or constitutional solution" (emphasis in the original). Such decisions are best left to a free and diverse citizenry.

As for managing differences, Hayek argues for allowing competition among ideas and groups. When power is diffused, "separate authorities will, through mutual jealousy, prevent one another from exceeding their authority." And if individuals are free to engage in the iterative process of acting, learning, and reassessing, their views and associations will evolve, adapt, and improve. He is particularly concerned about state activities that prevent this evolutionary process. Liberty is "an argument against all exclusive, privileged, monopolistic organization, against the use of coercion to prevent others from trying to do better."

Similarly, subsidiarity recognizes that differences should not be ironed out through top-down dictates. Balance emerges from strengthening different groups. Hittinger argues that when Pope Pius XI attributed some authority to the state, it was "almost always connected to the responsibility of the state to recognize and protect prior rights," such as those of the family, charitable organizations, and labor associations. Subsidiarity is realized when higher-level bodies are inhibited from encroaching on the territory of lower-level bodies, and when lower-level bodies are actively engaged in the common good. Also like Hayek, subsidiarity sees some competition among groups as healthy. In its section on authority and participation in social life, the Catechism notes that it "is preferable that each power be balanced by other powers and by other spheres of responsibility which keep it within proper bounds."

In particular, subsidiarity emphasizes that higher authorities should manage inter-group tension with a very light hand. John Paul II wrote that subsidiarity requires that higher-level powers not interfere in the internal activities of lower-level groups. Instead, they should help "coordinate" their activities "with the activities of the rest of society, always with a view to the common good." In that context and related sources, "coordination" is best understood as a kind of harmonization or facilitation, rather than a directive from the state. The government might help convene various groups, identify their challenges, and assist with their negotiations, but should not forcefully impose its own solutions. Improper state action in the name of coordination strips away the initiative and inherent rights of associations. By placing limits — with rare exceptions — on the ability of higher-order bodies to intervene directly, subsidiarity offers a vision of coordination that could help autonomous, lower-level bodies pursue the common good.

The picture of civil society painted by subsidiarity and Hayek thus invokes shades of James Madison. A variety of social formations exist, each possessing innate authority. Competition and complementariness among such associations serve public purposes, and there is an explicit though limited responsibility for higher authorities to help them advance. In To Empower People: From State to Civil Society, Peter Berger and Richard John Neuhaus captured the seemingly contradictory notion that associational diversity produces social harmony. They argued that policy should recognize and enliven mediating structures in the name of e pluribus unum because "unum is not to be achieved at the expense of the plures....the national purpose indicated by the unum is precisely to sustain the plures."

In short, these sources teach that differences among the forms and views of associations are inevitable and reflect natural variations in time and place. These differences serve the common good, fostering competition that checks power and facilitates adaptations. The state might help coordinate groups, but should never dominate them. On the contrary, the government has an interest in strengthening civil society's wide-ranging associations.

WEEDING THE GARDEN

Of course, proponents of decentralization must also acknowledge that not all longstanding local formations ultimately serve the public good or even automatically solve problems. Fortunately, the Hayekian-subsidiarity framework provides guidance for addressing ineffective or damaging formations.

It begins by admitting the problem. The Catechism recognizes "the fears, prejudices, and attitudes of pride and selfishness which obstruct the establishment of truly fraternal societies." Pope Leo XIII, too, acknowledged the dangers of some formations and suggested a response: "There are occasions, doubtless, when it is fitting that the law should intervene to prevent certain associations, as when men join together for purposes which are evidently bad, unlawful, or dangerous to the State. In such cases, public authority may justly forbid the formation of such associations, and may dissolve them if they already exist." John Paul II reiterated that the state could act to address harmful, monopolistic formations.

Hayek also recognized that societies could organically develop moral rules that prove destructive. He argued that competition among associations and customs is essential to remedying many errors; the same adaptive processes that formed today's robust traditions from yesterday's flawed practices must continue, so that today's mistakes evolve into tomorrow's successes. In his essay "Why I am Not a Conservative," he explains the risks of reflexively deferring to established ways. To Hayek, while conservatism wisely stands against drastic change, "by its very nature it cannot offer an alternative to the direction in which we are moving." Relying on the wisdom of our predecessors leads to the "characteristic complacency of the conservative toward the action of established authority." Righting wrongs, he argues, demands gathering new knowledge, testing the stock of old ideas, and being willing to change.

Though neither is subservient to tradition or localism, Hayek and subsidiarity agree that the failings of associations do not generally authorize aggressive, permanent interventions by higher authorities. Instead, Hayek contends that the state should foster policy environments that enable communities to naturally course-correct. In his 1974 Nobel lecture, he argued that the state should approach policymaking more like a gardener than like a craftsman. It should cultivate conditions hospitable to the undirected development of activities and associations; it should not presume to fully understand and be able to fix every problem.

Similarly, in The Road to Serfdom, Hayek argues that those with state power should confine themselves to creating conditions so that others can act. He differentiates between policies based on "planning against competition" and those based on "planning for competition." The former are coercive and inflexible, and might include a central authority running all public schools or providing all welfare services. The latter are dynamic and liberating, and could include measures such as allowing varied formations to run different public schools or provide services. When writing of the state's role in the economy, John Paul II also distinguished between a government that plans and one that creates fertile policy environments. Guaranteeing jobs for all would entail a domineering state and would restrict individual initiative; the state's duty instead lies in "creating conditions" to sustain a healthy economy.

Two other elements in Hayek's work can help refine our thinking about the state's role. First, the gardening metaphor suggests, among other things, a kind of weeding. Perhaps a Hayekian approach would parallel Pope Leo XIII's view that higher-level bodies are needed to halt hazardous associations on occasion. But Hayek's opposition to coercion, and his skepticism of the idea that central authorities know more than local bodies, would militate against supporting a state that regularly punished associations. Likewise, directly after giving a limited benediction to the state's policing of toxic formations, Leo explicitly endorsed curbing that power: "[E]very precaution should be taken not to violate the rights of individuals and not to impose unreasonable regulations under pretense of public benefit." Weeding may be warranted but should be undertaken with great caution.

Second, Hayek does not unbendingly oppose action from higher-order bodies. He notes that modern governments have legitimate interests in health, education, and aid for the disadvantaged. Such services, he thought, could grow, and governments could even play a role in areas like social insurance. But he added qualifiers. The goal of central government should be to identify common needs that require collective action while avoiding liberty-restricting interventions. Associations can be enormously powerful devices for achieving shared aims, but freedom is jeopardized when participation is compelled or when the state claims exclusive control over a particular area of life. Voluntary and local action can maximize collaboration while minimizing coercion. Fundamentally, Hayek's concern "is not so much the aims as the methods of government action."

So what might it mean, Hayek asks, for the government to "usefully and without doing any harm, assist or even lead in such endeavors"? When we recognize that a social need is not being met naturally, and we know that collective action is needed, how can higher-level authorities engage in a way that respects individual liberty and makes use of local formations?

Subsidiarity offers an answer. When smaller bodies are unable to fulfill their roles, larger bodies are responsible for helping to rehabilitate them. For example, John Paul II endorsed the idea of higher authorities providing support when lower formations "are not equal to the task at hand." Benedict XVI also approved of this idea for times when smaller bodies are "unable to accomplish something on their own." This is profoundly different from viewing local failures as an invitation for central administrators to intervene comprehensively and permanently (by, for example, creating vast federal systems for housing, job placement, or welfare). Subsidiarity holds formations in such esteem that they are protected from an overbearing state, even while their rights and responsibilities make a binding claim on it. It unambiguously couples limits on state intervention with demands for state assistance.

Subsidiarity's focus on initiative is also key to understanding its view of relations between higher and lower powers. In what seems to be the Catechism's clearest statement on subsidiarity, higher-order bodies are required to support lower-order bodies in cases of need. But the same passage urges higher-order entities not to interfere in the internal life of a smaller community: "Excessive intervention by the state can threaten personal freedom and initiative." Elsewhere, the Catechism states that "neither the state nor any larger society should substitute itself for the initiative and responsibility of individuals and intermediary bodies." In the same vein, Pius XI criticized those who would undermine the "initiative and industry" of individuals and groups by moving their authority to higher powers.

In other words, preserving human initiative provides a basis for limiting government assistance. When a social formation falls short, too little aid means it will remain stalled, but too much aid will enfeeble it.

Two quintessentially Midwestern Republican presidents showed how this balance between assistance and initiative can be offered up as folksy wisdom. In his 1955 State of the Union address, President Dwight Eisenhower argued that the aspirations of most Americans "can best be fulfilled through their own enterprise and initiative, without government interference," and that "the government can fully meet its obligation without creating a dependent population or a domineering bureaucracy." To Eisenhower, this could be accomplished through two related principles: The federal government should perform "an essential task only when it cannot otherwise be adequately performed," and, in doing so, it "must not impair the self-respect, freedom and incentive of the individual." Abraham Lincoln wrote that governments should not interfere when people are able to act for themselves, but that governments should act for a "community of people" who cannot attain what they need through "their separate, and individual capacities."

In short, policymakers should acknowledge the occasional weaknesses of formations but should curtail far-reaching, permanent interventions that would abridge their rights, subsume their responsibilities, or blunt their initiative. By providing limited aid to declining formations and fostering new ones, the state can create environments that promote social entrepreneurship while modestly weeding the garden.

BRINGING DECENTRALIZATION TO LIFE

As noted earlier, while the formation process is natural, it must be nurtured. The indispensable contributions of formations to the common good create a corresponding obligation to formations. Society must somehow ensure they exist and can properly operate. But in passages discussing this idea, the Catechism twice uses the passive voice, masking who bears responsibility for fostering formations. In one instance, it says that "the creation of voluntary associations and institutions must be encouraged." In a separate discussion of membership in formations, it says, "Widespread participation in voluntary associations and institutions is to be encouraged." The responsibility for creating and bolstering these groups extends beyond the groups themselves and their members. But to whom? Public leaders committed to decentralization should see this indeterminate obligation as an invitation.

In embracing this task, policymakers can look to Hayekian subsidiarity, which offers a way to address society's needs through government while appropriately restricting the state's reach, providing a balance between "do-nothingism" and government crusading. Within this framework, the state's primary role is to enable groups and individuals in civil society to exercise their rights while living up to their responsibilities.

This approach differs from other popular modes of decentralization in several ways. Federalism, for example, is necessary but insufficient. The federal government's handing authority and funding down to states is directionally correct but almost certainly will not go far enough toward resolving local problems. After all, a well-funded local government may choose not to empower a diverse array of local formations or citizens; a federal block grant could be used to privilege a small number of favored groups or even establish a kind of monopoly system.

Hayekian subsidiarity asks higher-level bodies to develop interventions specifically tailored for particular shortcomings. If a community's civil sector is mostly healthy but needs a boost, for example, aid to local nonprofits might be in order. But if there are too few helpful nonprofits, either because nonprofits in a particular area are scarce or simply ineffective, direct aid to individuals might foster the necessary improvements.

Some promising strategies for putting this framework into practice include open-ended, short-term, competitive grants. The federal government can make small grants available to local bodies that propose to address a problem. Such grants should have minimal requirements so as not to discount local knowledge, initiative, and priorities. The federal charter-school program is a good example. This 25-year-old program simultaneously recognizes that families deserve K-12 options and that Washington's role in providing them should be small. So competitive grants were made available to states, which then distributed grants to nonprofits starting new public schools. Eligibility requirements are light, and the grants last only a few years. The program has fostered a wealth of community-based organizations that develop and operate a constellation of "choice" schools.

A similar approach has been employed in the federal Promise Neighborhoods program, which provides assistance to local organizations that offer education and community services, as well as in the Investing in Innovation Fund, which grants aid to groups researching new education initiatives or expanding successful programs. The federal Race to the Top program, however, demonstrated how this approach can be distorted: Washington offered massive awards to states willing to adopt a laundry list of requirements from Uncle Sam, and rather than catalyzing civil-sector activity and locally crafted solutions, it forced its own policies on the states.

The federal government can also employ a range of tax-policy strategies to support local formations. The New Markets Tax Credit program, for example, offers tax relief in exchange for private investments in distressed communities. Rather than creating a new Washington bureaucracy, the program encourages individuals and businesses to support local "Community Development Entities" by providing tax credits and financial support to businesses in needy areas.

The Opportunity Zone program, created through the 2017 tax-reform law, calls on states to identify the most economically disadvantaged areas in their states. Individuals can invest unrealized capital gains in these locations, earning tax relief while supporting economic development. "Social impact bonds" can also enable investors interested in improving social welfare to make loans to service providers working on local problems. If a project succeeds, the investors are repaid by the government. In each of these instances, higher-level bodies energize others to diagnose problems, craft solutions, and invest in a variety of approaches.

Conservative leaders who embrace this view should be comfortable even with formations that adopt initiatives they may not like. By recognizing our own limitations and the authority of others, we can see that the American unum requires a pluribus.

There are many instances in which leaders on the right seem to miss this point. For example, after the city of Charlotte passed an ordinance in 2016 permitting transgender people to use the bathrooms they prefer, state lawmakers in North Carolina hastily passed a bill overriding this policy. The law was criticized nationwide, leading to widely publicized boycotts of North Carolina and an estimated loss to the state of several billion dollars. Ultimately, the portion of the law regarding bathroom use was repealed.

Similarly, as political-science professor Jay Aiyer pointed out in a paper on localism in Texas, "Texas is a conservative state with growing liberal urban centers. However...the leadership in Texas has chosen to centralize authority through the legislative process, undermining local control on a myriad of issues." In other words, to prevent liberal policies from taking effect, or what Texas governor Greg Abbott often refers to as "the Californization of Texas," conservative leaders at times proudly subvert local authorities.

Conservatives also frequently support a type of government contracting that denigrates or usurps lower authorities. For example, a state government that "allows" local or community policing only if it follows myriad state policies, carries out state priorities, and files countless state reports has in essence seized a power that rightfully belongs to lower levels of power. In other words, contracting must increase, not diminish, local authority.

A conservatism that looks to Hayek and subsidiarity is not stubbornly deferential to the old and the locally developed. Instead, it seeks ways to assess and remedy associations that have gone awry. For example, the federal government helped to correct widespread, longstanding racial discrimination in schools; policies that so clearly defied fundamental rights could not be allowed to stand. Today, the majority of state constitutions still contain "Blaine Amendments," which prohibit state legislatures (and often other governmental entities) from appropriating funds to religious sects or institutions, including religious schools. Preventing faith-based organizations from participating equally in social formations stymies the natural development of communities. These and other measures that thwart associational pluralism should end, and proponents of decentralization can lead the way.

In situations where existing formations are collectively falling short, the state should also — very cautiously — catalyze the evolutionary process. Examples might include offering resources to new nonprofit social-service providers, publicizing data to help inform consumer choices, and suspending government funding for projects that aren't succeeding. Promising examples abound in urban education: Some states with charter-school laws, publicly funded school vouchers, or tax-credit scholarships have seen their cities develop vibrant K-12 ecosystems that include nonprofit service providers, philanthropies, and more.

Of course, state action is often at least partially responsible for local struggles. When a central power institutes an exclusive source for job services, health care, or housing, it not only crowds out competitors, but it dulls the pressure that tends to produce healthy adaptation. When a social challenge is left unsolved by organic, local forces, higher-level policymakers should first examine whether state action has created a monopoly or, through funding or other means, privileged one or more actors. In such cases, the state should end these arrangements.

Conservative policymakers must keep in mind, however, that there are costs associated with this form of decentralization. While school-choice policies have liberated low-income families and fostered lively civic communities, they have also been disruptive. Removing a district's monopoly and closing its increasingly vacant schools may be the right thing to do, but it also overhauls longstanding communal institutions. Such institutions, corrupt or ineffective as they may be, contribute to social capital, provide jobs, and more. They are intertwined with their communities' culture and history. The serious protests and political battles against school choice serve as a reminder that efforts to fundamentally alter social arrangements — even in the direction of liberty, associations, and civil-society dynamism — should be undertaken gradually, prudently, and with eyes wide open.

TOWARD A CAPACITATING CONSERVATISM

Advocates of decentralization have long struggled with the question of how to use limited state authority to address today's most pressing problems. A capacitating conservatism offers a vision of appropriate state authority that respects the freedom of individuals and the value of the associations they form. But it also offers an answer to the question raised repeatedly by civil-society scholars — from Berger and Neuhaus to Robert Putnam and Yuval Levin — for the last several generations: How can we lean on voluntary, intermediary associations for collective action after they've been allowed to atrophy for decades?

By properly incorporating lessons from Hayek and the teachings of subsidiarity, conservatives can offer a meaningful response. We must energize the products of individual liberty — the social formations that arise in every large city and tiny neighborhood — so they can apply their own accumulated wisdom, community agency, and distinct perspective to today's domestic challenges.