Supranational (political) entrepreneurs

[…] the basis of the functional (Coasian) theory of international regimes advanced by Robert Keohane: If interstate transaction costs were very low, relative to the gains at stake for each actor, decentralized negotiation among voluntary actors with property rights would generate efficient outcomes. In summary, we may define informal supranational entrepreneurship as exploitation by international officials of asymmetrical control over scarce information or ideas to influence the outcomes of multilateral negotiations through initiation, mediation, and mobilization. […] Most existing studies of entrepreneurship fail to address this central puzzle. They focus on characteristics of supranational entrepreneurs and their actions, not the nature of alternatives.

The link (pdf) is here, and it’s a good read despite the jargon. You’ll notice that neither the Federalist Papers nor Hayek are cited in the piece. Libertarians have a chance to become relevant again in international affairs, if only they came to re-embrace the ideas of Madison, Smith, and Hayek, by abandoning non-interventionism and alliance free-riding and recognizing that federation is both a foreign policy and a type of government.

Libertarian foreign policy for the 21st century

American libertarians are behind the times when it comes to foreign policy (also known as “international relations”). We’re still, to a large extent, stuck in a Cold War mentality. The non-interventionism of Murray Rothbard and Robert Higgs is still prevalent in our circles, but this non-interventionism is rooted in the bipolar power struggle between the United States and the Soviet Union; it’s concerned with imperial overreach rather than liberty and republican security, which is understandable given the America’s role in the Cold War (the reactionary opposite to the Soviet penchant for exporting revolution).

European classical liberals are ahead of us, as they are in a more multipolar environment than us Americans, but they’re missing something too. They think the Westphalian status quo is just fine. They point to the European Union and they say, it’s better than nothing. But the world has changed since Westphalian confederations were en vogue. How does Westphalian nation-statism answer puzzles like Somaliland or Biafra or Balochistan?

It doesn’t.

American libertarians and European classical liberals have built their exit-centric approach to international relations upon Westphalian assumptions.

I think that an entrance-centric approach to the world would be a much better, more libertarian option.


  1. Our very British brand of totalitarianism James Jeffrey, Critic
  2. Federalist versus democratic peace (pdf) Daniel Deudney, EJIR
  3. Go Bruins!


  1. British and American fascism, past and present Priya Satia, Los Angeles Review of Books
  2. Why a world state is inevitable: the logic of anarchy (pdf) Alexander Wendt, EJIR
  3. Greater Britain or greater synthesis? (pdf) Daniel Deudney, RIS
  4. The Sung empire vs. the Byzantine “republic” Branko Milanovic, globalinequality

Does federation unite or divide?

I am reading a lot on federation lately, for an article I would like to contribute to Brandon’s special issue of Cosmos + Taxis. I am going back to the debate about federalizing (parts of the) the democratic world which was very lively in the 1930s and 1940s. Reading the texts, for example the best-selling Union Now! (1939) by American journalist Clarence Streit, you can feel the scare for the authoritarian rulers and their nationalistic and militaristic policies. As an anti-dote, Streit proposed the federation of all the grown democracies in the world at that time, 15 in total, spread over the globe. This Union of the North Atlantic had to include a union citizenship, a union defense force, a union customs-free economy, union money and union postal and communications system After the war broke out, Streit published a new version, now calling for a union between Britain and the USA. Needless to say, none of these or other proposals went anywhere. Still some interesting perpetual questions remain.

Ludwig von Mises and Friedrich Hayek also wrote on federation during this period, as I described in Classical Liberalism and International Relations Theory (2009). I now went back to their writings, which is a treat. It is nice to have a fresh look, I also have deeper insights now (at least – I think!) than I had about 15 years ago when first encountering these ideas.

One of the divides between Mises and Hayek (which they never openly discussed, as far as I am aware) revolved around the alleged pacifying effect of federations. Mises made the point that joining a federation would lead to a larger loss of sovereignty than was normally conceived in the debate. It was not just about pooling some powers at the federal level. In an interventionist world, Mises argued, the number of policies that are dealt with from the center, or the capitol, continually rise. After all, the call for intervention will be made from all corners of the federation, all the time. This leads to a call for equal treatment, which in turn lead to a larger number of policies and regulations administered from the capitol. Consequently, the member states increasingly lose sovereignty and eventually end up as mere provinces. This would be a new cause of division, especially when the member states of the new federation used to be powerful countries on their own. Hence, a federation divides, not unites. Therefore, he proposed a much more radical solution in his plan for Eastern Europe: no federation but a strict central union (administered by foreigners, in a foreign language he even once suggested) where the members would basically have no say at all over all the important legislation normally associated with sovereignty. The laws and regulations would be limited, ensuring maximum economic and political freedom for the individual citizen.

This blog is not meant to discuss the merits of Mises’ ideas. It solely aims to point at a division between Mises and Hayek. Hayek, and most thinkers on federation with him, Streit included, had different expectations about the political effects of federation. They expected that federation would be a force of unity.  In a federation you arrange the most difficult and divisive policies at the center (for example defense, foreign policy and foreign trade), while leaving all other policies to the constituent parts. This allows room for different policies in those states, while taking away their instruments to start violent conflict. Yes, this would mean less sovereignty, but also less trouble, while the freedom within the federation still ensured as much or as little additional policies as the individual states see fit. Hayek would favor his idea the rest of his life, also proposing it for the Middle East, for example.  

Who was right? That is impossible to say, I think. There are elements of both Misesian and Hayekian arguments in the real-life experiences of federations around the globe. For some it is indeed a good way to pool the core of sovereignty, while remaining as diverse as possible. Although most them do not disintegrate with violent conflict, the increase of all kind of policies at the federal center has certainly happened. However, this is not unique to federations and most importantly, it is not a question of formal legal organization. It is a question of mentality of both politicians and populations. This is another reason to keep fighting ‘the war of ideas’, because ideas have the power to change societies.

Exit, federation, and scale (from the comments)

I think you make an interesting point, but allow me a bit of push back. The world government would set the rules of how federated entities would interact. This would be like standards and protocols. You are correct that a set of shared standards can allow for enhanced competition, of the good variety (what I call constructive competition). This would be a good thing.

However the same shared standards would lock in the world to one set of protocols, thus reducing the discovery via variation and selection of the shared institutions themselves.

Thus we would see more short range constructive competition between states, and less long term exploration of new and potentially better institutional standards.

This is from Rojelio. He is pushing back against my argument in favor of world government from a libertarian point of view. He’s right, of course. There’s two points I need to do a better job of clarifying when I advocate for world government from a libertarian point of view:

  1. I don’t think federating the entire world is a good idea. I think the piecemeal federation of political units is what libertarians ought to aim for. (I think the US interstate order is the best avenue for achieving this aim.) A healthy “world federation” would govern (say) 85% of the world’s population. This brings me to my second point I need to clarify.
  2. The importance of exit needs to be addressed and institutionalized in a proper federal order. This is difficult to do, but not impossible. My argument is to make exit difficult, but not too difficult. The difficulty of exit should be somewhere on the scale between a constitutional amendment (too difficult) in the US order and Brexit (too easy) in the Westphalian order.

The bottom line is that a more libertarian world will likely be composed of a large federal polity that protects the freedoms of the vast majority of its citizens better than most nation-states do today. The other 15% of the world would live under despotism (which will center around “cultural cores”), or under sparsely-populated democratic republics (i.e Australia), or within free-riding microstates that otherwise rely on the protection of the large federal unit.

If, say, England, Tamaulipas, and Duyên hải Nam Trung Bộ were to federate with the United States tomorrow, these polities would not be agitating for exit after 10 years of experimentation in self-governance. If, say, Texas or Vermont wanted to exit after 10 years of federation with those 3 polities, they would have to go through a process (via all of the legislative branches involved) to do so. A simple majority vote would be disastrous. It is unlikely, then, that Texas or Vermont would leave such a federation. Pure freedom would be unrealized, but billions of people would be much freer.


  1. …less government means more unpaid, and too often unrecognized, work for women.” Angela Dills, RCL
  2. The Arab Spring is ten years old Hisham Melham, Newlines
  3. Federation of the Arab world? Notes On Liberty
  4. Myths of British sovereignty and isolation: common law and civil law Barry Stocker, NOL


  1. The difference between Europe and America Aron & Holland, Duck of Minerva
  2. The difference between Britain and America Chris Dillow, Stumbling & Mumbling
  3. Why didn’t the Habsburgs federate? Branko Milanovic, globalinequality
  4. What is the best book about Argentina? Adrian Lucardi, NOL


  1. A conservatism that’s multiethnic, middle class, and populist Ross Douthat, NY Times
  2. Most legal commentary is dumbed down and misleading Ken White Popehat
  3. A social-democratic federation in a multiethnic state Branko Milanovic, globalinequality
  4. The radical leftist origins of the “self-help” movement Jennifer Wilson, the Nation


  1. The self-made British working class Helene Guldberg, spiked!
  2. India and the Mughal Empire William Dalrymple, Literary Hub
  3. On decolonization in Africa Sindre Bangstad, Africa is a Country
  4. Federalism in Europe, America, and Africa (pdf) Jörg Broschek, F&D


  1. Libertarians and localism Lauren Hall, RCL
  2. The emerging world order (pdf) Michael Lee, Survival
  3. The last jihadi superstar Thomas Hegghammer, War on the Rocks
  4. A Canadian-American merger? J Dana Stuster, Foreign Policy


  1. Hayek (Streeck, Hazony) and world federation and colonialism Eric Schliesser, Digressions & Impressions
  2. The new secessionism Jason Sorens, Modern Age
  3. Winning the court, losing the constitution John Grove, Law & Liberty
  4. The quest for German national identity Anna Corsten, JHIBlog

The collapse of socialism and the sovereignty gap

When socialism collapsed in the late 1980s-early 1990s, many debates and contentions were settled, but the issue of sovereignty has only grown in importance thanks in large part to more economic integration. The European attempt at federation, undertaken after the fall of socialism, has not gone well precisely because it cannot close the Westphalian sovereignty gap. The bloodshed in the non-liberal world has largely been a product of the inability of states to fragment, an inability which is encouraged by notions of Westphalian sovereignty and institutionalized by IGOs such as the United Nations or World Bank.

If states wish to break away, but are prohibited from doing so by enormous costs (such as violent aggression from the state it wishes to break away from, or hostility from illiberal states that can use IGOs as mediums to act on those hostilities), then a federation which welcomes states into its union, and which is strong enough to deter aggression, would be a welcome, liberal development.

This is from my forthcoming article in the Independent Review. Here’s a sneak peak (pdf) at the whole thing. I’m guest editing a symposium on the subject at Cosmos + Taxis, in case any of you want to write a response, or add to the conversation…

Forthcoming: Reviving the libertarian interstate federalist tradition

One of my papers was accepted for publication in the libertarian journal The Independent Review. Here’s an excerpt:

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 security for liberal polities in the international arena as well.

2. The American federalists of the late 18th 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.

I gotta give props to the editors and the referees of the journal. I know they didn’t like my argument, but they were fair, helpful, and a whole lotta fun. I’ll have more on this soon. In the mean time, here’s a sneak peak (pdf).