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Foundations of Federalism: Experimentation & Value Pluralism

July 2, 2009

(This post is part of the Thursday: Federalism day in our Secession Week blogging series)

It’s unnerving how many arguments in popular American politics overlook the benefits of federalism. To take but one example–you hear me Lou Dobbs?–the absurdity of arguments for protectionism.  Consider it on the state level, and its force is attenuated.  Should California raise tariffs against imports from New York to protect its industries? Riiiiight. Instead of buying American, should we buy Californian? Vertically integrated in Kansas, baby! Doesn’t even pass the laugh test. No one’s mind becomes vulcanized by the heat of patriotic emotion on these questions. When firms and jobs migrate from one state to another, largely because of tax and regulatory incentives, not a peep–and why should there be? (See Will Chamberlain’s post today on just this kind of reasoning.)

You might think this is obvious, but of course, even in our current health care debate, such manifestly schlocky arguments have wormed their way into the brain trust of the White House. Lawrence Summers recently implored his colleague Christina Romer to present arguments to the president much to this effect (since Obama’s political advisors loved to jaw on about it) : socialized medicine will help American businesses stay competitive with foreign firms.

If this were true, why not argue for state-based experimentation? No one, and I mean no one, has argued that Massachusetts-based businesses would become more competitive against their rivals in California, if only the Bay State socialized medicine for its residents. (For a richer argument, see Greg Mankiw.) Or what about that “Public Option” that will force private insurance companies to be honest and more efficient? Again no one argues for this option at the state level. But why not?  If it makes so much sense at the national level, convince the rest of us with a state level experiment first.

Now Massachusetts has run one health care experiment. Hurray for federalism! If only we could learn from this fiasco. Many would do well to consider the consequences of enacting an “individual mandate”. Costs have mushroomed along with prices, as the state’s spending on health programs has increased 42 percent since 2006. It’s a tax on the middle class. Rationing is on the table. Meanwhile, Texas has run a different health care experiment with some success, as Jonothan Wilde recenly blogged here.

All in all it’s a pity. Americans tend to ignore the state level experiments we have, while hope springs eternal from the legislative fount of Washington that we must act nationally and think globally. There must be one national solution to these problems! And here we come at last to the other benefit of a federal system: respect for value pluralism. There is no one correct answer as to how we ought to live. It may be lamented by some, and celebrated by others, but it’s invariably true that not all values can be reconciled within the same political system. The idea that there’s one best society for all is laughable. But perhaps James Madison was more eloquent:

As long as the reason of man continues fallible, and he is at liberty to exercise it, different opinions will be formed. As long as the connection subsists between his reason and his self-love, his opinions and his passions will have a reciprocal influence on each other; and the former will be objects to which the latter will attach themselves. The diversity in the faculties of men, from which the rights of property originate, is not less an insuperable obstacle to a uniformity of interests. The protection of these faculties is the first object of government. From the protection of different and unequal faculties of acquiring property, the possession of different degrees and kinds of property immediately results; and from the influence of these on the sentiments and views of the respective proprietors, ensues a division of the society into different interests and parties.

This diversity is a good thing.  Federalism, with a strong separation of powers, can enshrine it. But unfortunately in today’s American political discussion, all evidence lately seems to support the contrary. With each new administration, Republican or Democrat, centrifugal forces in Washington pull tighter and tighter. Whither goes federalism in this mess? And will our respect for value pluralism and experimentation go along with it?

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