Governance for Self-actualization

As you know, I think that self-actualization should be everyone's goal, and that it can be best had when we have the most capabilities and least coercion. The issue is finding the proper balance, and this is easier said than done. I've been reading an amazing book: Amarya Sen's Development as Freedom. The concept that comes out more and more is that, not only must the dials of governance be set properly, but that every society has its own optimum settings as seen through the lens of its core beliefs.

A great example of this is a comparison of income inequalities and unemployment in Europe and the United States. The basic argument is that in Europe there is lower inequality of incomes than in the US, however the US has vastly lower unemployment rate. Sen believes, justifiably by my take, that the difference is mostly philosophical. The US believes more in rugged individualism so we're more appalled by unemployment than the EU, and conversely the EU believes more strongly in income equality and hence their system reflects this.

There is no overall “right” answer as is proposed by the partisans – there are only gradients between many points of view (as opposed to the usual two). If we're to self-actualize and achieve happiness, what is the best system? We know there can really be only one system implemented at a time and place. Is there a system that allows everyone to set the dials of government as close to their beliefs as possible?

There is - the answer is that we need to change the “place” part of that equation. We need government to have to compete for citizens / residents just like any business has to today. The idea is to move each dial of governance to the lowest possible level so that they have the highest relevance for each citizen. By doing this, you democratically capture the beliefs of the area so that the dials can be set to each area's optimum setting. If you happen to have minority beliefs in your area, move to one that better represents you. In this way, you can live under whatever system you'd like from communism to minarchism, and should you decide you don't like it – just move.

What's the form of these areas? They could be similar to the current system of states with counties with districts and cities with wards. The issue here is which dials are located at which level. The deciding factor here should be externality effects. For instance, environmental issues would have to be decided at the highest possible level because regulating only the upstream part of a river makes no sense – as does CO2 emissions in only one state. For other issues such as gun rights there are gray areas that could be construed as externalities, such as guns passing from pro-gun to anti-gun states, however it seems that most of these cases are usually unenforceable – even a draconian government can't regulate guns or drugs well.

There's an issue though with this though: a local system favors some systems of living over others. For instance, if one state were to enact higher labor laws many businesses would move out to other states with less strict laws – as they do today already. The issue is that income distributive systems require either corporations and/or the rich to subsidize everyone else's activities, and if they move away this can't happen. This is truly a conundrum.

One of the issues we're fighting against with this more localized form of governance is switching costs. In the US, moving from state to state isn't a big deal - you just change your residency. Moving from country to country however has always been very difficult. What this does is vastly increases switching costs that makes everyone think twice before changing citizenship. The same issue is true with states as a whole. The US Civil War decided that no state may secede, which is nothing but massively increasing the switching costs from the national government. I see no good reason that a state can't secede and/or join another country (Canada maybe?) or even form another nation itself. Anything else is coercion.

So would a system like this really encourage a variety of settings for their dials of governance? I believe it would – of course many options aren't as likely such as pure communism, however I think a very similar thing such as the US & EU belief/policy gap would take place. Each area would decide where it wanted to set to the controls, and adjust accordingly. Let each area make its own decisions, bounded by limits of reality – not national coercion. In this way, we'll allow everyone to live as close as they can to their belief optimum.

Comments

[Chusko]

This system of shopping for a government, though in good spirit, would only favor the rich. For instance you and I are both well-educated people who are poised to live successful lives. I've worked exceedingly hard and sacrificed in the name of furthering my education. In a few short years, I'll be rewarded for my work by a healthy income. And this may surprise you... I don't want to share.

I don't want my money taxed and given to high-school dropouts on Welfare. I don't want to pay for other people's health care, I want to pay for mine. I don't want to support people who don't have the economic sense to not have 15 children. I want to keep what I earn.

As an example, suppose New Mexico believes in income sharing and Iowa believes in the "to each his own" philosophy. The poor are going to move to New Mexico in hopes of getting help. I'm moving to Iowa to keep what is mine, Go Jayhawks! So we have a state full of people who all have the same money (none) and a state full of people who really enjoy talking about the American Dream.

Alert me if I'm simply being overly cynical, but I cannot see how, if given the choice, the minority 'haves' would ever choose to support the majority 'have-nots'. However, I do see a system of great economic polarization. Though our current system isn't what everyone wants, it forces greedy bastards like me to help out the rest.

[Chusko]

and for the sake of saving the stupid college football joke above, let us assume that Iowa annexed Kansas in this reality.

[Nick Pinkston]

Chusko, thanks for the comment dude!

I think that you're correct to say, as both of us pointed out, that it's harder to distribute wealth in a highly federalized system with few switching costs. With that said the issue of the system hurting the poor is far from resolved.

First, any good policy tries to prevent large swings in the rules and to slowly phase in new laws. I don't think the poor would suddenly become come into a worse position in this case. Second, we live in a world on the margin, rarely is anything happening in the extremes - let's look deeper.

Look at the effect happening in the US/EU model above. Some areas with a lot of economic production also believe in helping the poor. If we look at NYC and California, both are very prosperous and also have above average welfare systems - which are based on state level taxation. They also have similar switching costs to a fully federalized system.

Another issue, which you acknowledge quite freely, is that this distribution requires government coercion. Even though it's in the name of something good, I'm very much against a society with this inescapable coercion - vis-a-vis high switching cost of citizenship. If my fellow citizens want to enact policies that don't help the poor - then they're exercising their right to determine how to live. The federalized system is great for this.

If somehow the welfare systems in NYC and CA help them become prosperous, than other states will adopt them too. If they're more of a rich-guilt issue, than the rich states may adopt them for this reason. Sure, there are people like me who want a state close to an Ayn Rand utopia, but that doesn't mean every state would trend that way.

[Anthony Russo]

Nick ... great blog! I have a question though. Why are you framing your proposed system of federalsim at the national level (i.e., people switching from country to country)? Don't you think that if true federalism were enacted in the United States that states and local governments would reflect the belief system of its peoples? Don't you think such a system would be sufficient?

[Nick Pinkston]

Thanks for the comment dude.

I'm proposing federalism at every level. I want power to be as close to the citizens as possible - to minimize coercion and maximize relevance.

As far as national federalism being sufficient, the rub lies in switching costs. Over time, as we've seen, all systems pollute themselves from cities to states to countries. I'd like to lower the switching costs for each area of governance. If your city goes wrong - you move to another, if your state is pursuing the wrong ends - you can drive across the border. Currently, you can't easily switch countries though. This lowers the efficiency of the market for governance.

So, to answer your question: I think federations should only exist at the national level - I don't want sovereignty ceded to the UN. However, I'm very in favor of easing the ability to change countries, and the ability to make new countries - a la seasteading. I'd like to see all protectionist policies eradicated and all entrance issues brought down to a bare minimum.

I would love to see citizenship become obsolete, and just have countries govern those who happen to live there - like how the constitution covers people in the US on vacation.