On the Fourth of July we celebrate revolutionaries who sought sovereignty from power that was unfamiliar with their lives and unaccountable to their policy preferences. Today, American cities and rural areas find themselves in a much better place. However, increasingly cities are disenfranchised by a system of government that privileges rural areas and by policymakers who use that structural advantage to extend it. There are many paths forward, but the increased independence of American cities seems like one plausible and desirable future.
The hype
Post-Trump much has been made about predominately liberal cities and mayors being the most important, functional and serious governing bodies left in the US. And cities have led the way on maintaining climate change accords, raising the minimum wage and introducing soda taxes. But, in the grand scheme of American policy, they’re still playing small ball. And for good reason, cities’ ability to capture significant tax revenue is constrained by the fact that state and federal bodies extract such a large take that raising additional funds risks making a city undesirable to the productive folks it wants to attract and retain.
Time for cities’ rights?
What if we were to take seriously the idea that local governments can often craft more optimal solutions for their citizens and should therefore have the most leeway in crafting policy, law and regulations? To do so, they’d have to be the primary taxing entity with state and federal systems taking a back seat.
The US could look like a confederation of city-states and rural areas that band together into regional governing bodies however they like, but for the sake of simplicity imagine cities over with populations over 100,000 get to exit from state governments by popular vote and otherwise states assume most authority currently held by the feds. The federal entity would have to be subordinate to the city-state and regional authorities and primarily responsible for the military, inter-city, inter-state and international trade.
American City-States
Cities could rule themselves however they wanted—likely along quite neoliberal, pro-growth, pro-trade, pro-education lines. And rural areas could rule themselves along the conservative lines it seems that they prefer. One safety net benefit the federal government would need to provide would be a bus ticket to all 18 year olds either from a city to a rural capital or vice versa. Cities could compete additionally for in-migration through voucher systems, tax incentives and public amenities.
Productivity and partisanship
The productivity and partisan divides in America have reached all-time highs and seem to overlap pretty well with density. Conservative, low productivity areas are at odds with liberal, high productivity cities. With the introduction of exit rights and increased autonomy, cities would then compete more aggressively on policy fronts to win business and citizens. Rural areas would compete on policy fronts as well, but likely on best satisfying the cultural preferences of their citizens. Blue dots in red states (like my very own Austin, Texas) could immediately increase productivity and satisfy its citizens with increased services.
With an increased focus on local governance, national partisan divides would quickly lose their emotional salience and urban-rural tensions would subside. Clearly, there would still be lots of trade between city-states and rural areas. But rural areas would get a separate sense of identity, as would city-state residents. Anyone who objected to the policies of one, could take an exit subsidy and move.
The downsides
There are large benefits to having a federal government that can generate transfers between regions and to having a strong national identity. Strangely (fortunately?) the rural areas that receive most government transfers are ideologically opposed to them. Now, who knows how they would feel or what would happen were those transfers removed, but it seems plausible that rural areas could receive transfers from city-states if they agreed to policy concessions, but that’s kind of where we are today. An epiphenomenon of reducing transfers would be that we would reduce our total human capital because fewer people would have the baseline education necessary to exit a rural area. However, perhaps primary education could be funded by the feds. A strong national identity seems to have value in making people willing to sacrifice for the common good—say pay higher taxes or go to war—but our national identity is breaking down along partisan lines anyway and each side’s willingness to pay taxes or fight wars has decreased accordingly.
We’re already trying this
The strangest part of this argument is that we’re already running this experiment in some ways. San Francisco and New York City might as well be city-states given their output and how dramatically life differs there than anywhere else in the US.
Perhaps it’s time to admit that they truly are world-historical places and give them autonomy. If it works in those places, expand exit rights to cities with populations over 1 million. And then 100,000. (Will Wilkinson has given some thought to how we could operationalize this incrementally.)
In short, give cities and states more sovereignty. Give people more freedom of movement through subsidies. It’s time we consider that the Union needs to flex with the times and the will of the people.
