21 September 2008

Competition: The Key to Restaining Government Power

The famed balance of power between the three branches of the federal United States government is often credited with the success of the American government experiment. While this healthy competition between government powers certainly has some restraining powers, it constitutes only one of the many levels of competition which have slowed the usurpation of power by the government.

At the highest level between governments of countries. A government with poor policies encourages its citizens to emigrate. A sure sign of poor leadership comes in the form of restrictions on emigration. This constraint on poor government is only as effective as the quality of foreign countries willing to accept immigrants. It is also constrained by the natural inclination of citizens to "suffer, while evils are sufferable." Abandoning family and community is not something undertaken lightly.

Competition between government jurisdictions does not always require families to move. Businesses can take some of their operations, like the manufacturing and call centers, abroad without necessarily taking their employees. Such outsourcing is quite simply the result of foreign governments outcompeting ours to attract business. The solution is not laws forbidding such competition between countries, but rather to create a more competitive business environment at home. Government regulation against businesses moving operations abroad, like communist laws against emigration, indicate an unwillingness to accept the hard fact that jobs are leaving because the domestic environment is uncompetitive.

Below the federal level, there is competition between local city and state governments. A poorly run city government is easily evaded by moving outside the jurisdiction of the offending city. The same is true at the state level, albeit a little more inconvenient to move between states than cities. At an even more local level, there is competition between public schools, as families vie to find homes associated with quality schools. Companies shop around as well, looking for the most favorable environment for both the company and its employees.

By removing their ability to create money, the Constitution forces local governments to pay for their decisions through explicit tax revenues, be they immediate or delayed through bond issues. Cities with favorable trade and tax policies, like those of Hong Kong and Singapore, prosper as a result, without any substantial natural resources. Competition between cities, like the competition for Boeing's new headquarters in the early years of the 21st century, is healthy.

The most local level of government, the individual, is perhaps less controversial. That individuals should be judged by those with whom they interact based on how they govern themselves is fairly well accepted. If individuals can't find jobs or spouses, they need to work on themselves, to become more competitive rather than blaming others.

The sharing of power in the United States between the federal and local governments (all the way down to the individual) is a vital competition that has long kept the federal government from expanding as rapidly as it might have liked. Alas, this competition has been breaking down since the Civil War, when the federal government made it clear that secession, another form of peaceful government competition, is not allowed. Instead, the federal government extensively expanded its powers, beyond the intended limits, to include national railroads, national bank charters, fiat paper money, and conscription. In more recent times, the federal government has further eroded competition by increasingly adding social programs and getting involved with traditionally local issues like K-12 education.

Freedom, by definition, is the retention of decision-making power as locally as possible. In the upcoming U.S. Presidential election, it is important for voters to remain vigilant in not only seeking candidates who have noble intentions, but who want issues to be dealt with at right jurisdictional level. May we vote to localize power and maintain domestic competition between jurisdictions. May we vote for freedom.

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