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Decentralization

6 min read

Part of Federalism and exit.

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Every episode (2)

Who argued it

Ilya Somin · Stan Larimer

Foot Voting · Monetary Policy

Background

Decentralization as foot voting

In a discussion of the future of cities, Bob Zadek argued that once the link between where a person lives and where a person works is severed, people can live wherever they want, and he described this as freeing. He said he had done a show on “Voting with Your Feet” with Ilya Somin, and he predicted that as population and economic power decline in major metropolitan areas, economic and voting power spread more evenly across the country. In his account, the power of public service unions — the teachers’ union, the transport workers’ union, the prison guards’ union and the policemen’s union — is diluted along with pressures on pensions and city budgets, making the country more small-d democratic. He called the virus a gift from God in the long run in terms of economic and political power being dispersed The Future of Cities (2020).

Brent Orrell agreed that the suburbanization of American life has continued since the end of the Second World War and shared Zadek’s preference for people being free to choose where they live. He tempered the analysis by arguing that cities have traditionally pulled together disparate people and skill sets that drive innovation, and that face-to-face communication matters because 90% of human communication is non-verbal. His central qualification was that not everybody can move: elites always have the option to opt out of a bad situation and generally exercise it, while middle and lower income groups do not, so the worst effects fall on the most vulnerable The Future of Cities (2020).

Decentralization versus central planning

Carol Roth framed the treatment of small business during the pandemic as a question of decentralization versus central power. She noted that about half the economy before COVID was in the hands of about 30.2 million small businesses, which she called decentralization and the free market, while the other half was in the hands of about 10 to 15,000 big businesses. Because so few entities hold so much power, she argued, it is easier for politicians to deal with them when seeking lobbying dollars or campaign support. She described two theses for how small businesses were treated — “too small to matter” or “too hard to control” — and said the intention does not matter because the outcome is the same. As the country moves toward central planning, she said, it gets more of an unholy triumvirate between big government, big business, and big special interest, at great expense to economic freedom and wealth creation Carol Roth on the War on Small Business (2021).

Zadek’s framing of the same episode was that government responds only to political pressure, and he contrasted small business with lobbies such as the South Florida sugar lobby, which he said is one family in one area of one state yet has profound political clout. He asked why small business, with its numbers and economic power, was totally ignored and did not get its share of the COVID goodies Carol Roth on the War on Small Business (2021).

The libertarian case for decentralization

Ilya Somin said the part of his report with the most libertarian flavor is the part on foot voting, which argues that because of voter ignorance and excessive centralization of power, more authority should be decentralized to state and local governments and to the private sector. He argued that people making foot-voting decisions have better incentives to be informed, comparing the effort most people spend choosing a television set with the effort they spend deciding whom to vote for. He also argued that expanded foot voting and decentralization can reduce polarization, because when so much power is concentrated in the federal government and in the hands of whoever sits in the White House, it becomes scary to have it held by the opposing party, which stimulates partisan conflict and efforts to overturn elections. He conceded that libertarians find the recommendation easier to accept, but said non-libertarians can accept it too, and that the federal government is so overgrown that as much as half or two-thirds of it could be eliminated while remaining far from a pure libertarian state 3 Libertarian Ideas to Strengthen Democracy (2022).

On barriers to mobility, Somin named exclusionary zoning as the biggest one, saying tight restrictions on building new housing, especially cheap housing, block millions of people from moving to places of opportunity and damage the economy by keeping people from places where they would be more productive. He also named state-by-state occupational licensing, and said school choice would let families send children to a different school without changing address 3 Libertarian Ideas to Strengthen Democracy (2022).

Democracy, centralization and its limits

In a later episode, Somin distinguished problems inherent to democracy, such as voters having little incentive to be well-informed, from problems arising from specific current institutions, such as a loser of an election refusing to recognize the result and trying to overturn it. He said some problems can be mitigated though not eliminated, and that the report deals with all three sorts. He rejected the assumption that more democracy is always better, saying there is somewhere an optimal amount of democracy and that trying to do too much through a centralized democratic process can be dysfunctional and can undermine democracy itself. He pointed to the report’s section on expanding other decision-making mechanisms, including voting with your feet and the jury system 3 Libertarian Ideas to Strengthen Democracy (2022).

Zadek’s framing in that exchange was that the starting point is a vision of how democracy is supposed to work, and that the 17th Amendment and the disappearance of an effective Electoral College are examples of movement toward more popular democracy 3 Libertarian Ideas to Strengthen Democracy (2022).

Across episodes: foot voting and its limits

The topic recurs across the 2020, 2021 and 2022 episodes, and the treatment develops in one respect: Zadek’s 2020 monologue presents decentralization as an almost wholly benign dispersal of power, while Orrell’s response in the same episode supplies the counterargument that not everyone can move and that face-to-face institutions have value. Somin’s 2022 appearances then give the argument its most systematic form, tying foot voting to voter ignorance, polarization and barriers such as exclusionary zoning, and explicitly conceding that decentralization falls short of a libertarian minimal state. Roth’s 2021 episode supplies the economic version of the same contrast, decentralization versus central planning, in the treatment of small business.

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