Reviving the Libertarian Interstate Federalist Tradition: The American Proposal.

• Author: Christensen, Brandon L.

As we enter the third century of the American experiment it is essential to recognize that we can draw upon two quite distinct intellectual traditions in shaping future patterns of organization. One possibility is to draw upon the intellectual tradition of this last century. If we follow the logic of that tradition--which I shall refer to as the second century--we run the risk of creating a new imperialism to be associated with Presidential Government. The other possibility is to draw upon the intellectual tradition of the first century and fashion an extended federalism.

--Vincent Ostrom, "The Third Century"

Vincent Ostrom's words above were written to tackle the dilemma American federalists have faced for the past half century: how to tame an executive-run administrative state that has grown out of control. Yet his wording on an "extended federalism" has meaning that I think neither he nor other prominent liberal thinkers of Ostrom's second and third centuries have seriously entertained or even yet realized. This essay aims to fill that gap by making four arguments:

1. Prominent classical liberals and libertarians have long recognized the importance of interstate federalism for not only individual liberty but also security for liberal polities in the international arena.

2. The American federalists of the late eighteenth century faced the same problems we face, and the distinct interstate order that they patched together to solve those problems is not an outmoded Leviathan; it is the missing piece of the puzzle to the libertarian and classical liberal tradition of interstate federalism.

3. The piecemeal federation of political units under the U.S. Constitution would achieve more freedom for more people, and this interstate federalism should be enthusiastically embraced as the foreign-policy principle for libertarians and classical liberals.

4. The American Proposal would solve the security (and cost-sharing) dilemma for liberal polities, but it would also contribute to a decline in the worrisome trend of presidential government in the United States.

Intellectual Heritages

The eighteenth-century American federalists, whose intellectual tradition Ostrom encourages us to draw upon, were confronted with the following dilemma: how to counter the threats of despotism, conquest, and Balkanization with individual liberty, republican security, and federal union (Dietze [1960] 1999, 70-102; Hendrickson 2003, 7-64; Deudney 2007, 161-169). The clear problem for them was that the legislatures of the various states had, since the end of the war with the British Empire, morphed into "elective despotism[s]" (Federalist No. 48, in Hamilton, Madison, and Jay [1788] 1982) that "gave a violent and hasty character to the formation of the laws" (Tocqueville 2000, 145). These excesses of democracy were crushing individual liberty, threatening republican security, and pushing the polities of the North American continent into distinct blocs of potential geopolitical rivalries. (1) To make matters worse, these excesses encouraged men who did not belong to gentlemanly, internationalist culture to be a part of the political process, further provincializing democratic legislation (Wood 2009, 15-50). To put it bluntly, the excesses of democracy in the late eighteenth century were sovereign state legislatures and populist (antielite) rhetoric and policies--excesses that were all too eagerly being watched by foreign powers. In the early twenty-first century, these very same excesses of democracy are still the main threat to liberal and semiliberal polities worldwide.

Friedrich Hayek saw the connection that the American federalists drew between democratic excess and state sovereignty more clearly than most when he wrote in 1939, "Since it has been argued so far that an essentially liberal economic regime is a necessary condition for the success of any interstate federation, it may be added, in conclusion, that the converse is no less true: the abrogation of national sovereignties and the creation of an effective international order of law is a necessary complement and the logical consummation of the liberal program" ([1939] 1976, 269). Hayek's remarks on interstate federalism have almost been an afterthought in liberal circles since he first wrote them, (2) and he was not alone among twentieth-century liberal luminaries in yearning for a more integrated and liberal world. Ludwig von Mises also spilled considerable ink on interstate federation, although, like Hayek's work, these thoughts have been ignored or scantly examined. For instance, Mises pointed out that "for the liberal, the world does not end at the borders of the state.... The starting-point of his entire political philosophy is the conviction that the division of labor is international and not merely national.... The liberal therefore demands that the political organization of society be extended until it reaches its culmination in a world state that unites all nations on an equal basis. For this reason he sees the law of each nation as subordinate to international law" (1985, 148).

Hayek and Mises were unclear on their version of an interstate federalism, though, mostly because they faced more urgent matters: the world had just suffered through two world wars fueled by nationalism, and interstate federalism was simply too much to fathom. Hayek himself pointed out the impossibility of interstate federation in 1944: "Until I find a sane person who seriously believes that the European races will voluntarily submit to their standard of life and rate of progress being determined by a world parliament, I cannot regard such plans as anything but absurd" ([1944] 2007, 226 n. 5). Mises argued that the first attempts at more political integration between liberal states, such as the League of Nations and the Kellogg-Briand Pact, did not go well and that although interstate federalism would be the best liberal outcome, the reality of Europe's geopolitical situation would not permit a liberal federation to flower in his lifetime (see Mises 1985, 142-51; [1941] 2000a; [1943] 2000b; [1941] 2000c).

For Havek and Mises, the benefits they attributed to interstate federalism did not outweigh the costs in the world where they lived. (3)

Like Ostrom, then, Mises and Hayek failed to consider the full implications of their respective trains of thought on the matter of interstate federalism, mostly due to more pressing matters at hand. (4) They also failed to notice that their trains of thought echoed those of their liberal forebear, Adam Smith, who wrote about interstate federalism in 1776. Smith, lamenting the inability of the colonists and the metropole to see eye-to-eye on taxation and representation, suggested that the way out of the quagmire that eventually led to the first Anglo-American War was for the North American colonies to federate with the British body politic in London:

[Were British America] to send fifty or sixty new representatives to parliament, ... there is not the least probability that the British constitution would be hurt by the union of Great Britain with her colonies. That constitution, on the contrary, would be completed by it, and seems to be imperfect without it. The assembly which deliberates and decides concerning the affairs of every part of the empire, in order to be properly informed, ought certainly to have representatives from every part of it. That this union, however, could be easily effectuated, or that difficulties and great difficulties might not occur in the execution, I do not pretend. I have yet heard of none, however, which appear insurmountable. (1776, bk. IV, chap. 7, part 3)

Smith, of course, is known for being the father of economics, but his thoughts on transatlantic federation are just as conceptually groundbreaking as his insights into the division of labor.

For Hayek and Mises, though, a federated Europe--patched together by the states that had not been "liberated" from Nazi Germany by the Soviet Union--was too tall a task, much less a transatlantic option or a transcontinental option. Their Anglo-American contemporaries were no better. Foreign-policy discussions in the United States were framed around trying to cobble together an anti-Soviet coalition, and London's foreign-policy debates were focused on holding its once-powerful empire together. Federation was brought up, but it was dismissed as easily as Adam Smith's argument for the same in 1776. Even among federalists, liberalism took a back seat to supposedly pragmatic postwar realities. Few of them were laissez-faire enthusiasts, for example (see Hayek [1939] 1976, 265-72, and [1944] 2007, 232-33; Mises [1941] 2000c, 15-16, 19), and none was interested in setting up federations as constitutional orders that protected the individual from state power.

On the left, a strong world state was the preferred option, and on the right internationalists focused on loose associations of free states--for example, military alliances and intergovernmental organizations (IGOs). Hayek and Mises were correct, then, when they recognized that the idea of interstate federalism would be most conducive to individual freedom and democratic governance, but they were also correct in dismissing the idea as far too radical for a postwar world. Now, though, seventy-five years after the end of World War II, we must continue where these great thinkers left off. The democratic excesses described earlier and the inability of the liberal world order as it stands to extirpate these excesses from liberal society have emboldened illiberal factions around the world. We must begin the long, hard push toward an interstate federalism that is liberal in its character and in its purpose.

The Missing Piece of the Puzzle

So what would a liberal transatlantic or transcontinental federation look like? How should it be ordered? How can it be accomplished? To answer these questions, I propose that we must look not to the...