Why Freedom Is Favored by Secession and Subsidiarity

Majority voting inevitably alienates large parts of a population. As a Swiss citizen, I am all too aware of that fact, since we go to the polls as often as six times a year. This may be the necessary price of our more direct form of representative democracy. But in Switzerland, it has also led to a degree of emotional turmoil due to conflicting visions for society.

Of course, the US has a similar problem. The election of Donald Trump has not only raised discussions about the workings of the electoral college but also about a possible exit of California from the union. Since a considerable 61.5%-majority of Californians voted for Hillary Clinton, some of them have deemed a separation to be a necessary response to a Trump presidency. Such a devolution of power is actually quite worthy of support.

Subsidiarity and the Right of Secession

For centuries, legal scholars have acknowledged the importance of the right of secession based on natural law. The German Calvinist Johannes Althusius argued in his Politica (1603) that citizens have a right to forswear allegiance to the king in the case of an abuse of power. He considered this right to be derived from the general right of resistance. To Althusius, secession was a vertical check on the power of the early European absolutist states, but also a recourse that should not be undertaken on a whim. To Althusius and others, secession remained ultima ratio, i.e., a last resort. First and foremost, the state should be organized from the bottom in accordance with the broader “principle of subsidiarity,” of which secession is a part.

Subsidiarity is a principle of social, political and economic organization. It comes from the Latin subsidium and means “support” or “reserve.” Subsidiarity holds that society is primarily based on self-determination and the individual responsibility of each person, his or her family, and private associations of individuals (cooperatives).

Subsidiarity is a principle of social, political and economic organization.

According to this principle, local government should be involved in solving problems only if private organizations are unable to resolve them on their own. If government at the local level is unable to do so, the regional government takes over or assists the local government. And finally, the central government or the king steps in if the federated states struggle to resolve it amongst themselves.

Any higher level of societal organization is subordinate to any lower level. The main advantage of a multi-level order is that individuals make decisions that most affect their lives. Delegated decisions are made as closely to the citizens as possible so they can oversee the process more easily.

Subsidiarity better facilitates a process of “trial and error” in which regulation and governance “compete” with each other in a liberal framework. As Hayek said in The Constitution of Liberty,

“It is this flexibility of voluntary rules which in the field of morals makes gradual evolution and spontaneous growth possible, which allows further experience to lead to modifications and improvements.”

Paths taken that turn out to be successful can thus be adopted by any other territorial entity or authority. Only this type of “political fragmentation” can preserve cultural diversity in the long run and lead to institutions, such as the competition of ideas, which ultimately serve individual freedom.

Althusius’s main insight was that the higher institutions should be required to rely on the consent of the more local levels and voluntary associations. Because the powers of the higher levels are derived from the consent of the people, the people must retain the ability to revoke that power whenever necessary.

Althusius’s views on political subsidiarity were quite radical for his time. Located in Emden, a German town at the crossroads of political and religious activity at that time, Althusius’s ideas should be interpreted in the light of the Calvinist Dutch Revolt against the Catholic King Philip II of Spain, which effectively ended in 1609 and resulted in the “Dutch Miracle,” a century-long period of economic, scientific, and cultural growth that helped lay the foundation for the rise of classical liberalism.

Two centuries later, these ideas found fertile ground on the North American continent with the revolt of the thirteen colonies against the British Crown. In 1848, Switzerland established a new constitution that also embodied the principle of subsidiarity, which remains in force to this day.

Unfortunately, the same people who are now in strong support of “CalExit” would probably think differently, if, say, Hillary was elected back in November. It also seems unlikely that they would be receptive to a declaration of secession by Northern California (which leans more Republican), or the city of Los Angeles. The irony in their opposition to such actions would likely escape them.

Human affairs should be entirely private. If government is going to be involved, autonomy at the local and state level should be as high as possible, meaning that all functions, excepting at most military defense, the supreme court and trade policy, should be pursued by local or state representatives.

Moreover, the tax system should be fully and exclusively devolved to the local and state level. Therefore, each state would be solely responsible for its revenues and expenditures. Only then would citizens have a reliable picture of the government’s service quality, and only then would they systemically be able to monitor the politicians in a sensible way.

Moreover, the tax system should be fully and exclusively devolved to the local and state level.

Whenever someone disagrees with a policy or the advocated values a political system implies, they can vote with their feet by leaving their present domicile. Regulatory and tax competition would ensure an attractive environment for each and everyone. To provide a last resort, and to circumvent any undue burden set on people willing to move away, the constitution should formally grant the right to secede from the union and/or the respective state.

Independence Throughout Europe

The great wave of nation-building in Europe during the 18th and 19th centuries is being reversed. Separatist movements are so common that we would easily run out of space if we attempted to describe all of them.

Consider the case of Spain. The “Reino de España” has seventeen autonomous regions. Each has ambitions to leave the Kingdom.

Many believe that secession is only practical for economically powerful regions. For example, California’s economic output has even surpassed that of France. Smaller territories can, however, successfully break away if the right policies are put in place. Indeed, a breakaway region’s lack of economic self-sufficiency is actually a benefit, because it would make a policy of free trade absolutely vital.

Such would be the case if, for example, Murcia, an autonomous region in southeast Spain, succeeded in separating from the Kingdom. The Murcians have many differences with the population in the rest of the country (not only from the Madrilenians in the capital city). For example, they have developed a dialect, much of which is derived from the Aragonese, the Catalan, and the Arabic language. Murcia is a comparatively poor region with an unemployment rate of over 25%. Without the benefit of a large economic hub like Barcelona in the Catalan area, the Murcian economy has lagged behind that of the Catalans.

According to the principle of subsidiarity, the Murcians should be allowed to set their own fiscal policy and respond to the Euro crisis in their own way. However, governments in Brussels and Madrid are the ones attempting to manage the economic recovery of Murcia. There is no guarantee that the arsenal of unorthodox monetary policies being employed by the European Central Bank will end well for the Murcians, even if it were to help other areas.

This is also true for the separatist Sardinians, the independence-seeking Scots, the Flemish Belgians, and the people in Veneto Italy, to name but a few.

Bad Incentives

Many people recoil at the idea of some regions permanently living at the expense of other regions. Economically strong regions have a strong incentive to break their commitments to less wealthy regions by seeking autonomy, and eventually formal secession.

In the German fiscal equalization system, for example, only four states out of sixteen and less than half of the German population foot the bill for the entire population. The originally unintended consequence of this perverse system of income redistribution is that the politicians in the taker states have no incentive to improve their policies, while the states that pay into the system, such as Bavaria, have little hope of voting against those policies or monitoring the spending process. Politicians can run unprofitable projects at the expense of the contributing states, such as the embarrassing Berlin Brandenburg airport, for which the cost has tripled to 6 billion euros. Unsurprisingly, the Bavarian separatist movement has gained traction in recent years, although it has also suffered setbacks in Germany’s Federal Constitutional Court.

Germany’s faulty system design is probably the main reason why chancellor Merkel has shown skepticism toward a Europe-wide “transfer union” that would benefit Southern European countries the most. Under such a system, citizens cannot expect the careful handling of tax money and incentives to engage in tax and regulatory competition are stifled, especially for those states who have to pay into the “solidarity pot.”

Challenges for Subsidiarity

The European Union has explicitly enshrined the principle of subsidiarity in its main agreement, the Treaty on European Union. Article 5 says:

“The use of Union competences is governed by the principles of subsidiarity and proportionality. […] Under the principle of subsidiarity, in areas which do not fall within its exclusive competence, the Union shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States, either at central level or at regional and local level, but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level.”

However nice the wording, the EU Commission can easily come up with any justification for the use of a non-exclusive competence. And even if they wanted to question the Commission, individuals, municipalities, and regions in member states would have difficulty satisfying the requirements for nullifying an EU law. Moreover, the European Court of Justice, financed and justified by the acts of the European Union, is well-known as the “motor of integration”. There is little to expect from the efficacy of the EU’s principle of subsidiarity, and looking at the numbers, there hasn’t been a single action brought forward by a member state or a private person so far.

Switzerland is hardly better in this respect. According to the Swiss Federal Supreme Court, the constitutional principle of subsidiarity (article 5a, 43a) is not enforceable. It’s only a political guiding principle in favor of strong federalism. However, Switzerland is far smaller in terms of size (less than 16,000 square miles) and population (8.4 million) than most European countries, let alone the supranational EU. Yet, the Swiss Confederation possesses three layers: the federal level, the 26 cantons, and the 2,300 municipalities. This system has developed historically, and given the cultural and linguistic diversity (German, French, Italian, and Romansh), it has served the country well in the past.

However, even Swiss federalism has been in decline. In 2016, the number of municipalities was down to 2,300 from 3,200 in 1848, when the Swiss federal state was founded. It’s mostly for economic reasons, such as cost savings, that municipalities have been merging faster than ever. However, these alleged cost savings are, to use Bastiat’s words, only the seen effects. The unseen effects include the loss of closeness to citizens and the increase in their rational apathy towards political commitment that could increase costs over the long run.

If cultural cohesion changes, we should not only allow communities to secede but also allow individuals to vote with his or her feet.

Unlike many outside observers, I doubt that we should credit the relatively small size of government in Switzerland to the more direct form of democracy alone. (If anything, it has also contributed to the expansion of the federal government lately.) Swiss limited government is, as Dan Mitchell also points out, mainly owed to the consistent implementation of the principle of subsidiarity, which has led to a relatively high degree of decentralization and sensible policies, such as the “debt brake” and cantonal tax competition.

Silver Lining Liechtenstein

The Principality of Liechtenstein is to my knowledge the only country in the world that recognizes a right of secession in its constitution (article 4 II). Prince Alois of Liechtenstein seems to be serious about the principle of subsidiarity:

“The fact that we have a right to secede in our constitution is a strong signal that the government can’t simply do as it pleases.”

The effective enforcement of the principle of subsidiarity is an important safeguard for freedom. Government should be backed by real consensus about the shared values of the community in which it operates. Britain and maybe California appear to be such cases in which the consensus has begun to crumble.

If cultural cohesion changes, we should not only allow communities to secede but also allow individuals to vote with his or her feet. In today’s rapidly changing world, it is more important than ever that people should be as free as possible to choose the rules and rulers governing them.

Published on Fee.org