April 23, 2017
Libertarianism is important, and I want it to be more influential. For it to do this though it has to become more realistic. I believe a major impediment is that many -though not all- libertarians imagine a vision of society that the vast majority of Americans simply do not want. If they somehow managed to win electoral power for a short time and execute their vision, it would be tremendously short lived with a massive backlash.
However, we have a lot of choice over our state and local government. Only 58% of people currently live in the state in which they were born. The share living in a different county than they were born would be even higher: every year 1.5% of people move to a different state, and 2.4% move to a different county in the same state. With all of this movement, people exhibit a fair bit of choice in the long-run over what kind of state government they live under, and in the short-run they have a lot of choice about the kind of local government.
This mobility provides an important check on state and local government. And yet state and local governments do not attempt to usher in anywhere near the libertarian utopia that so many dream of. It’s true that federal mandates set something of a binding constraint. For example, no local government could just stop providing k-12 education in some form. However, for the most part federally mandated minimum of what must be provided are not a binding constraint. Local school districts spend a lot educating their students, and in the richest parts of the country the spending becomes even more generous and less bound by federal mandates.
There is, of course, a libertarian explanation for the generosity of state and local government in some places. One is that people have anti-market biases in their voting because the cost of each individual vote is zero. In other words, voting is cheap. This is the Myth of the Rational Voter case. However, while the voice constraint may be subject to systematic bias, the exit option is not. If people truly valued having less government like libertarians imagine, then Tiebout competition should counter the pro government biases at the local level.
You can throw up arguments for why Tiebout competition doesn’t work well at delivering small government in practice, but these arguments are just different ways of admitting people don’t value small government that much. For example, you can argue that places with big government are great for other reasons, and this draws people there despite the big government and not because of it. And I think there’s a lot of truth to this. But what it tells you is that revealed preferences show that having a small government is less important to people than the other things that make a place great, like culture, quality of life, agglomeration, and economic dynamism.