Opt In Societies

Another guest post (with minor edits) by @UsefulAggregate

From Nicholas Carr’s blog:

Maybe we should set aside some small part of the world, you know, like going to Burning Man, for example. Which I’m sure many of you have been to. Yeah, a few Burners out there. That’s an environment where people try out different things, but not everybody has to go. And I think that’s a great thing, too. I think as technologists we should have some safe places where we can try out some new things and figure out: What is the effect on society? What’s the effect on people? Without having to deploy it into the normal world. And people who like those kinds of things can go there and experience that.”

Reading that and watching the Sea-steading video, I realize that is exactly how Federalism was supposed to work. Individuals were supposed to be able to select which society (state) they wanted to belong to.  States had the opportunity to experiment. Not everyone had to go to a state that was trying new things with different technologies. Opt-in if  you were interested. But, the problem is that the states lost control of their territories. They no longer had the ability to “try out different things.” How did states lose this ability? Well, I think it is important to realize that Valerian Vision has two components:

1) Who controls what value?

2) What protections exist to guarantee that control?

The Tenth Amendment makes it pretty clear:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

So, if the power is not specifically granted to the federal government and the state is not specifically prohibited from exercising that power, then the power belongs to the state.  So, for example, Arnold Kling recommends as cure for our healthcare mess, creating Free Health Zones. Specific areas in the US (say certain cities for example) where no laws are made about health treatments except the prosecution of fraud. Well, clearly under the 10th Amendment, a state should be able to enact such a zone. But, no, they are prohibited by the federal government. How can this be when nowhere in the Constitution can the words “healthcare” be found? Well, being granted control without protections on that control is not enough.

The Constitution originally had protections on state control from encroachment by the Federal government. The states elected one half of the legislative branch of government (the U.S. Senate). Well, that protection was dismantled by the 17th Amendment in 1913. It’s interesting because that was the same year that equal taxation was dismantled by the 16th Amendment. Without equal taxation, suddenly the people had the motivation to seize control over the economic activity of individuals and companies in other states because — you know — people like value.

So, the protections were dismantled but that doesn’t mean that control was lost. So, looking at the states in 1913 with Valerian Vision and we would say that 1) the states control almost all of their value, and 2) there are few protections to that control. Really, the only remaining protection is the 10th Amendment telling them that they have control. So, only the Supreme Court can protect their control now. Whereas, previously they could 1) protect themselves (via the election of Senators) and 2) the people protected them because through equal taxation laws, they were only hurting themselves by trying to extract more taxes out of citizens of other states. So, previous to 1913 the states’ control of their value was protected by: 1) the Supreme Court, 2) the states themselves, and 3) the people. After 1913, the control of the states was protected by 1) the Supreme Court. What do you think happened?

Well, that Supreme Court fought valiantly. They fought off several incursions into state control but ultimately, a single protection was not enough in the onslaught of attacks to control that precious value. And now the federal government controls the majority of the value in this country. Taxes exceed 50% of GDP. Regulations regulate nearly every bit of economic activity in the country. This is what always happens when something very valuable is left with little protection.