It is frequently argued that a variety of collective action problems demand a single central decision maker, one uniquely empowered to make final determinations. But centralized, hierarchical organizations are actually ill-equipped to provide effective solutions to collective actions problems, constrained both by their distance from the problems at hand and by the incentive problems associated with monopolies, which are insulated from feedback and competition. Indeed, as both Elinor and Vincent Ostrom’s work demonstrates, successful and efficient collective action requires just the opposite—a polycentric political and social order in which there are several centers of decision-making power, often even overlapping. Here, Proudhon’s federalism remains highly relevant and applicable to contemporary social and policy problems.

Whether through his mutualism, anarchism, or federalism, Proudhon’s project sought after a synthesis or reconciliation of liberty, the rightful, natural freedom of the individual, and authority, the needful structure and rules creating the preconditions for order and justice—establishing the limits that prevent liberty from crossing into the territory of license. In The Principle of Federation, Proudhon settles upon referring to himself as a federalist, though without completely abandoning anarchy, defined as “the government of each by himself” or “self-government.” Proudhon is deeply interested in bringing opposites into equilibrium. With social and economic relations properly structured and organized, after-the-fact political intervention becomes unnecessary and counterproductive, harmful to the social order and its own goals. In Proudhon’s thought, the perceived need for the intervention of a supposedly external political authority itself demonstrates that the ordering of social and economic relations was amiss in the first place. 1 Proudhon sees federalism as the key (or at least as among the most important keys) to unlocking society’s latent ability to govern itself, with social and economic relations ordered spontaneously by everyone simply “doing what he wishes and only what he wishes.”

In The Meaning of Democracy and the Vulnerability of Democracies, Vincent Ostrom notes the importance of Proudhon’s contributions on society’s capacity to self-organize and self-govern. Elsewhere, Ostrom observes that were political scientists not so insistent on applying the methods of the natural sciences to social or “artifactual phenomena,” they would not have failed to recognize the importance and transformative potential of the theory of federalism, which he regards as “a development of Copernican proportions in the history of political thought.” Ostrom believed that the work of anarchist left libertarians like Proudhon and Kropotkin had much to offer to contemporary market-oriented libertarians. He is interested particularly in Proudhon’s analysis of what Ostrom calls “[m]icroconstitutional systems of self-governing associations.” Following Proudhon, Ostrom treats federalist processes as both a goal and as a pathway to the achievement of that goal, a way to erode the power of “states as monopolies of authority relationships and instruments of force” without the need to destroy the state through violence. For Ostrom, then, the idea of a “federal state” is a contradiction in terms, federalism representing an alternative to the nation state, not a way to organize one. 2 Both Proudhon and Ostrom envision a network of intersecting spheres, at once cooperative and competitive. The state, in contrast, both exists as a result of the fact that individuals lack routes of egress—that is, are held captive—and itself naturally produces institutions that follow this pattern. It resists the development of a diverse and dynamic social ecology capable of producing viable rivals. Whatever fosters or enables competition strikes at concentrated power, which, by definition, exists precisely to the extent that it is without real rivals. Where the individual enjoys the ability to opt out of her interaction with a given institution, where there are several routes of egress, the ability of that institution (the state, in our example here) to dictate terms is undermined.

Writing in the federalist journal Publius in 1973, Ostrom provides the following explanation of his vision of federalism:

A necessary condition for federalism to exist is a system of concurrent regimes with overlapping jurisdictions. I prefer to characterize a “highly federalized” political system as one which has a rich structure of overlapping jurisdictions with substantial autonomy among jurisdictions. I see no point in confining discussions of American federalism to state governments and the Federal government.... Finally, I would prefer that a condition of democratic control be added as a qualifying characteristic regarding the government of concurrent regimes in a federal system.

Ostrom’s highly federalized system is a vast complex of associations, cooperatives, guilds, clubs, and communes, each one autonomous and reflecting the goals and values of its members. Thus is power dispersed, problems and solutions networked rather than consigned to the monolithic bureaus of the state. Ostrom wants to distinguish “objectively existent communities of interest,” organic and developing on their own terms from specific needs and desires of the group, from those grouped together simply because they are caught in the dragnet of the omnipotent nation state. Associated bodies should agree to be bound, their contracts contingent on continued mutual benefit. A genuine contract, a real bargained-for exchange, must be made, if it is to be made at all, between parties who both are free to decline its terms—that is, free not to make it in the first place. Such would be a true social contract, its terms “always to be temporary and revocable,” 3 tailored to a common vision and leaving parties’ autonomy intact. Here, any agreement results from a definite process of discussion and deliberation between parties lacking special advantages at the bargaining table. This idea can be traced to the origin of the word “federalism.” Mikhail Filippov, Peter C. Ordeshook and Olga Shvetsova observe that “[i]n 1863, Proudhon was among the first to emphasize that the Latin foedus means a pact, contract, treaty, or alliance between equals,” each one guaranteed its sovereignty.

Proudhon famously bemoaned the influence of Rousseau, in particular his influence on the Jacobins, who embraced Rousseau’s “principle of authority” as opposed to “the Contractual Idea” advanced by Proudhon. Exalting politics and the state, Rousseau’s social contract was no contract at all; it was rather an apology for the domination inherent in the political system, for which Proudhon suggested the substitution of actual contracts between individual persons. Jacobinism entailed a fundamental rejection of federalist ideas. For if the power of the state expresses Rousseau’s volonté générale, as the Jacobins contended, then that power need not—indeed should not—be limited, qualified, or divided. Thus does federalism become a threat to democracy, “subversive of the ‘general will’” the vehicle of which is the “organic unity” of the state. 4 Federalism came to be identified with the forces of counter-revolution, that is, with the political right, the centralism of the Jacobins with the political left. 5 And so these associations have remained in the generations since, a powerful, indivisible state being the practical ideal of the left. In their principle “everything for the people, but everything by the state,” 6 the Jacobins are among the obvious forerunners of the twentieth century’s various totalitarian regimes.

Today’s left follows the Jacobins in the essentially utopian belief that a powerful, unitary state can check (and, really, is the only body that can check) potentially harmful sources of power in society, for example, economic power. But it is a serious error to see the state as a check on this kind of power rather than to observe the glaring fact that it is in fact first among the principal reasons that such power exists.

Proudhon understood that political and economic power are connected, mutually interdependent forces that are coactive in society. The inauguration of the modern state, gathering all power within its hands, actually aggravates the kinds of power imbalances that Proudhon regards as being at the heart of the social and economic problem. To restore balance, he argues, requires federalism. Treating Proudhon’s conception of federalism, noted Proudhon biographer George Woodcock stresses that in Proudhon’s formulation, federalism does not stand in for “a world government or a confederation of states.” Rather, administrative or governing bodies would remain as close as possible to the local populations served, to the people. Nor was Proudhon impressed by the mere separation of powers within the state, insofar as the state itself remained intact and possessed of enormous power. Ostrom argues similarly that “the idea of federalism is rendered trivial” if we take it to mean only “the coexistence of state and national governments,” if we don’t consider it more expansively as “an enabling basis for the development of self-organizing and self-governing capabilities under conditions of equal liberty and justice.” Here, Ostrom echoes Proudhon in emphasizing the power of federalism as a motivating principle and tool for liberation and self-determination. Like Proudhon, Kropotkin saw Jacobin centralization as setting France and the continent generally on a dangerous wrong course, through which “local customary institutions” were displanted, often violently, by new, centralized governing bodies at the national level. 7

Nor does democracy necessarily limit the power of the state. Ever skeptical of democracy, Proudhon worries that the extension of the franchise to the entire population would serve in practice to legitimize the status quo, strengthening and encouraging the arbitrary, undivided power of the state. To abstain from voting, to break from politics and its “coterie of intriguers,” would, Proudhon argued, redirect energies toward the development of federalism as an alternative to parliamentary activity. Again, federalism is, in Proudhon’s thought, both means and end. As Max Nettlau writes in his Short History of Anarchism, federalism means the reestablishment of the free play of socially useful associations and federations, which freedom accomplishes perforce the isolation and eventual liquidation of states. 8 Federalism is a route around politics and a reimagining of revolutionary action. For Proudhon’s emphasis on the liberty of the individual and the division of power, Marx derided him as “a petit-bourgeois and petit-peasant socialist.” Though true, this charge was, as Gustav Landauer pointed out, not actually insulting. Proudhon’s distinctive proto-libertarian project embraces small landowners and artisans rather than treating them as class enemies to be eradicated in the revolution.

The Jacobins, of course, proved to be very wrong about how unified, unrivaled governmental power acts in the world, about its relation to liberty, equality and fraternity; these it attacks and destroys. Proudhon was, as Yves Simon observes, an incredibly prescient thinker, foreseeing the twentieth century’s “extreme centralization of authority” and its “rise of devouring dictatorships.” Yet from the ideological struggles of the nineteenth century, it was the “centralizing Jacobin left” 9 that emerged victorious. Today, when we speak of the left, it is of this Jacobin left, of the particular means of a centralized, unified, bureaucratic state. The heretical suggestion that nonhierarchical, libertarian, decentralist social mechanisms could accomplish the goals of the left, however defined, is not given serious consideration, relegated to the infrequently trafficked domain of a few forgotten radicals. At present, then, the decentralist, libertarian left is effectively without a home, or else torn between two homes, two ways (a left one and a right one) of framing libertarianism. The language we use to talk about politics is impoverished, lacking nuance and an ability to meaningfully explain ideas and events. Maybe free markets and socialism can not only coexist, but actually reinforce one another, less opposites than they are aspects of one another. 10 Proudhon’s federalism asks us to reconsider the relationship between all-embracing political, social, and economic centralization and progress, to revisit the possibility of ordered liberty without the dominating hierarchies of the state.