Sunday, February 17, 2013

States Rights

There is this concept that government should be split into three levels: federal, state, and local. For a long time now I've questioned the value of state government having anything more than just an administrative function. We have it here in Australia, but nowhere do you hear about states rights more than in the US, and so that will be the primary example I will address.

The US has such a strong notion of states rights primarily due to the way the union was originally founded. I get the impression that it was much more like a loose union of independent states, sort of like the European Union, rather than like Australia. Of course the comparison is not exact since the EU is a union of countries, but it seems that the US states very much wanted to keep existing and operating as separate entities as much as possible.

This certainly explains why there is a historical tradition of strong states rights, but that is not a justification for not changing if there are good reasons. Though, of course, useful change can still be very hard to enact, even if most people agree that it would be a good thing (*cough* metric system *cough*).

The independent experiments argument

One of the arguments for states rights that is very popular in the US is the idea that each state operates as its own independent experiment, trying different ideas for what makes a well run state. The laws can be a little different (except for federal laws of course), services provided by the government can be different, and then we can compare results and hopefully learn more about what are the best policies.

This idea has a couple of problems. The most obvious one is that experimentation has a real cost. When a state implements a bad policy, it's real human beings that suffer the consequences of that policy. This should not be trivialized. While you can certainly create bad federal policy that then will effect everyone rather than just one state, maybe it's better to not have states thinking that they are their own little policy sandbox, and instead get together all the best thinkers from every state on various issues and come up with good policy for everyone.

The more subtle, but possibly greater problem, is that states are far from independent. When one state experiments with something like lower taxes, or better health care, etc, this doesn't happen in isolation, but can heavily disrupt all of the other states. For example, states with favourable corporate taxes (such as Nevada) attract a lot of businesses that take advantage of this. But this then takes tax revenue, employment opportunities, etc away from whatever state those businesses would have otherwise been started in. Or a state with better health care will attract more people in need of health care, which may then place extra burden on that program and even make it appear that it was a bad policy because it ends up costing a lot more than it would have if all states had the same policy.

So without independence, these state experiments cannot give good information about whether policies are actually good or not, since it becomes very hard to tell how much it was your state's policies and how much it was the effects of other states' policies that you observe. And if one state can create policies that negatively affect another state, but there is no legal accountability for those effects, then the incentive becomes much lower for states to consider the national consequences of their policies.

Universal law

State level laws open up the problem of behaviour in one state being legal, but the same behaviour being illegal in a different state. To me it seems a rather perverse idea that the legality of a citizen's behaviour is dependent on the state that they are in. I think that there are certain things that should bind all citizens within a country for the concept of 'country' to have any real value, and one of those things should be that the same laws apply to every citizen. We see the separate problem of laws seemingly being different if you happen to be rich or a big corporation, but this tends to be more due to uneven enforcement of laws. To actually say that certain laws don't apply at all is different, and I really don't see any benefits for having different laws. 

I would argue that any law that can't be applied to every citizen of your country is a bad law. Many bad laws actually get created because of this state based legal apparatus, with big industries specific to a particular state finding it much easier to get favourable laws made for them than they would if they had to petition on the national level. Corruption goes to the highest levels of course, but given that state legislators tend to be focused on the wellbeing of their state, it's always going to be harder to get national laws passed that only benefit a single state, or that benefit one state at the detriment of another.

There is also a problem with trying to change laws that exist on the state level for national purposes. For example, when the company Cars Direct was initially founded, it was done with the intention of providing internet sales of new cars direct from manufacturers to consumers all over the US. It turned out that such a thing was impossible, because there are laws in every state giving car dealerships their own territories that can't be infringed on by other sellers of the same make. This meant that Cars Direct would in effect be infringing on the territory of every dealership in the country. It also meant that if they wanted to go to court and fight to have this law changed, they would have needed to go to court in every state and fight the same battle, rather than being able to fight it once on the federal level, so it never happened.


State laws also create a lot of extra bureaucracy that makes government both more expensive and less effective. Each state needs to spend time and effort on the same types of laws, making the same research and policy work have to be done multiple times. Take a topic like energy policy. It's far less efficient if every state needs to hire its own experts and decide on the pros and cons of different energy sources and come up with policies. The more this was done at a federal level, the less duplication of effort there would be, and you also increase the opportunities to bring together experts from different states, giving you overall better information and hopefully better policies as a result.

State laws also end up reducing the government's ability to distribute funds in an efficient way, with each state having its own set of red tape and loopholes that can cause inefficiencies and need to be overcome.

Part of the pointless bureaucracy is the totally unnecessary duplication of things such as driver's licences and car registrations. How is it helpful to anyone to have to get a new licence and change your car registration whenever you move interstate, with different compliance laws and so on? I can see no good reason why systems such as these should not be unified across the entire country.


I'm sure that state level government is very useful from an administrative point of view, just as local government is, but I hope I've put forward some compelling reasons why the scope of state government should be reconsidered and ideally reduced, particularly in the case of state level laws. Times change, and what may have once been a useful framework may no longer be, and we should accept this without holding unreasonably to outdated ideas.

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