Competitive governance is sometimes put forward as a mechanism of policy experimentation and innovation. Indeed, it was U.S. Supreme Court Justice Louis Brandeis who coined the term ‘laboratories of democracy’ to describe how “one of the happy incidents of the federal system that a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of country.” Examples of such political systems include competitive federalism (in this context, known as ‘laboratory federalism’) and other variations on the theme of political decentralisation e.g. devolution, autonomous regions, special economic zones, charter cities, and seasteading. But there is another model of federalism and policy experimentation that is worthy of consideration: laboratory panarchism.
Historically, people form an idea of the area that they live in: its extension and its boundaries. Groups that settle in a given area for a long period of time develop concepts of common identity and of a ‘homeland.’ Prior to the advent of the territorially monopolistic nation-state, the boundaries of political groups (e.g. tribes) were mostly determined by nature and features of the landscape, and territorial borders remained flexible. With the appearance of the nation-state came a highly developed monopoly on political authority and relative ossification of political boundaries (outside of international conflicts). Diversity and plurality were to be homogenised, an approach that led into assimilation at best and ethnic cleansing and genocide at worst.
The homogeneous national society is an artificial construct, a product of rational constructivism par excellence. Throughout history it has proved impossible to draw lines on the map in such a way that no minorities are created: politically and ethnically division tends to be the rule. On the other hand, profoundly harmful human consequences have followed from attempts to match people to borders, rather than seeking to match borders to people: large scale population displacement and expulsions of peoples from their homelands (also known as ‘ethnic cleansing’). In a certain morose sense, the history of ethnic conflict and the nation-states does illustrate the appalling failures of ‘planning.’
I will argue that from the ‘knowledge problem of the nation-state’ perspective, there should be nothing surprising about this: jurisdictional planners do not have the requisite knowledge to make such calculations, particularly when they foreclose on the possibility of non-territorial solutions. But if kings, founding fathers, and assorted other ‘big men’ aren’t to decide upon the jurisdictional contours of nations and states, then how could such an order come to be?
Citizens, as consumers of political goods, face a cost-benefit calculus associated with the decision to stay in a particular jurisdiction—a state, whether a nation-state or a regional state—or whether to exit to one with a better ratio of benefits to costs. In this way, political decentralisation and citizen mobility promotes an efficient allocation of policies and people over jurisdictions.
But at a deeper level this model highlights a basic symmetry between the redrawing of political maps—whether by war and conquest, by negotiation and purchase, or by secession or integration—and the movement of people. If people can move, states don’t have to.
From this insights, it would seem that there are two limitations of the territorial political sorting model: (1) the map of jurisdictions is given and arbitrary, and (2) the resulting constellation of citizens emerges from choice of public goods and not groups of citizens. States sometimes do move (or rather, their borders do), and citizens do seek to agglomerate with specific other citizens and choose groups as much as they choose local public goods.
It’s my claim that the jurisdictional shape of states can be understood as a spontaneous order outcome of this process at the level of personal secession and group formation. Moreover, in non-territorial solutions to political problems people seek out each other to form club-like associations and furnish public goods among themselves… states move so people don’t have to.
Twitter is a spontaneous order. More generally, ‘social media’ is a spontaneous order, and the various kinds of social orders that are cultivated on social media platforms—patterns of interaction, virtual communities, co-creation and exchange of user-generated content, and more—constitute their own spontaneous orders. This seems entirely obvious to economists trained in the Austrian tradition, but it is an observation that (to my knowledge) has not yet been made. The connection of spontaneous order theory and social media could prove very fertile ground for academic study. Perhaps more importantly, it promises to reintroduce one of the classic problems in political economy—the impossibility of socialist calculation—to the social media natives of the millennial generation. Both F.A. Hayek and Michael Polanyi would agree: social media is a spontaneous order!