Are Countries Getting Smaller?

The international system we live in today is a system composed of numerous states. There are, in fact, about two hundred of them, most of which exercise a substantial amount of autonomy and sovereignty. They are functionally independent states. Moreover, the number of sovereign states in the world has nearly tripled since 1945. Because of this, the international order has become much more decentralized over the past eighty years, and this is largely due to the success of many secession movements.

The new states are smaller than the ones that came before them, however, and this all reminds us that there is a basic arithmetic to secession and decentralization in the world. Since the entire surface of the world—outside of Antarctica, of course—is already claimed by states, that means that when we split one political jurisdiction up into pieces, those new pieces will necessarily be smaller than the old state from which they came.

During the decolonization period following the Second World War, dozens of new states were formed out of the territories of the old empires they left. This meant the new status quo had a larger number of smaller states. The same thing occurred after the end of the Cold War. As the Soviet Union collapsed, it left fifteen new smaller states in its wake.

So, in the current world, secession—when successful—is an event that reduces the size and scope of states. It reduces the territory and the populations over which a single central institution exercises monopoly power.

Secession and State Size as Two Sides of One Coin

So, if we’re going to talk about secession, then, it’s also important to explicitly address the issue of what is the correct size of states. Is smaller better?

Now before we go further, I know my audience here, so there’s no need to come up to me afterward and say, “Well, states are bad, so the correct size of states is that they don’t exist at all.” I get it. I agree that’s the end goal. Moreover, political communities don’t have to be states at all. They could be other types of nonstate polities. But that’s all for another speech.

For now, we’ll stick to talking about states, as we are already saddled with living in a world composed of states right now. Until the day comes that a majority of the population wants to abolish all states, it makes sense to look to ways that will reduce the power of states, localize that power, and take at least some of it out of the hands of some of the most powerful ruling state elites.

And the reason we have to address the issue of the size of states is because many people do believe that bigger is better. They believe that larger states are essential for economic success, for peace, and for trade. Also, many people think that state size doesn’t matter at all. They think every problem of conflict within a political jurisdiction can be solved with democracy. Just let people vote, and there is no need for people to have political independence or a separate polity of their own. People who believe that are going to heartily oppose secession.

And, of course, states’ agents themselves will oppose it because states want to be big. Being big and getting bigger is an important goal of every state. It’s a major part of what we call state building. States want to consolidate power, annex territories and increase their taxable population. What we want is the opposite of that. We want state unbuilding. State demolition.

For many in the public, however, the idea that bigger is good, or at least that size doesn’t matter, has its limits. For example, most people already have in their minds some upper limit as to the “correct” size of states. To see this, simply ask a person if he or she wants to live under a single global state.

Most people—not all, but I would suggest a sizable majority of people worldwide—would be opposed to this. Most people, just from casually observing the world, suspect that placing global governing power in the hands of some distant elite from another culture, from a different continent, and who uses a different language might not actually produce a desirable result.

On an instinctive level, then, many people recognize that something more local is necessary. Partly because of this instinct, radical decentralization in the form of many diverse polities has been the norm throughout human history. Even in the days of the Roman Empire, which viewed itself as having universal jurisdiction, the Romans never subjugated the Persians, the tribes of northern Europe, the Chinese, or the kingdoms of sub-Saharan Africa. The Romans didn’t even know about the Americas. The world has always been politically decentralized.

Yet, ignoring this, many people continue to insist that adding a new country to the large group of already existing countries would somehow bring on anarchy. Here’s the thing, though: the world is already in a state of anarchy. Everyone who’s read a serious book on international relations already knows this. It’s already accepted fact that the international system is anarchic. There is no final arbiter of law or policy internationally. There is no global monopolist.

So creating anarchy is hardly a danger. It’s already there.

How many independent polities should there be? How big should they be? That’s probably the harder question we must overcome with many people.

After all, thanks to status quo bias, many people seem to credulously believe that we’ve somehow magically arrived at exactly the correct number of states and they’re all of the “right size.” The UN has explicitly said as much. Among the international elites, it’s basically been dogma, since 1945, that the world’s existing borders as currently drawn shall never be moved or changed. There are exceptions, but “approved” secession—as in the case of Kosovo’s de facto secession—is only encouraged by the establishment when that secession serves the interests of certain great powers and their allies.

So just to get started when we’re going to engage in the thankless job of pushing secession, we have to make the case that smaller and more numerous states are better for the world. From the perspective of enhancing freedom and free markets, we can see three key ways that smaller and more numerous states are better. But let’s also look at the empirical evidence while we’re at it.

1. Smaller States Allow for More Choice and More Opportunities for Exit

The first reason that smaller states are beneficial is that they offer more opportunities for exit. This, in turn, makes states more inclined to respect property rights.

Lew Rockwell summed this principle up in 2005 in a great article called “What We Mean by Decentralization.” Rockwell writes:

Under decentralization, jurisdictions must compete for residents and capital, which provides some incentive for greater degrees of freedom, if only because local despotism is neither popular nor productive. If despots insist on ruling anyway, people and capital will find a way to leave.

This is most fully realized, of course, by the type of decentralization that results from secession. As Murray Rothbard put it in 1977: “Secession … means greater competition between governments of different geographical areas, enabling people of one State to zip across the border to relatively greater freedom more easily.”

Now, of course, ideally, you wouldn’t have to physically relocate to escape despotism. But we don’t live in an ideal world. We have to work with what we have, and the fact is governments like to abuse rights. So the question is, Do we want governments that are huge and control vast swathes of land and that require us to move thousands of miles to escape them? Or do we want something smaller where exit is easier, albeit still not without cost? And, of course, keep in mind that in a world with only one state and no secession, there is no escape at all.

We’ve seen this issue of “exit” in the modern world, of course. It’s true in countless refugee situations, where the most oppressed people are only able to save their own lives by fleeing across an international border. We saw it in Venezuela over the past decade, when Venezuelans, desperate for food, had to escape across an international border just to get basic necessities. Thank goodness that border was there and limited the reach of the Venezuelan regime. Exit was possible. If only the Venezuelan state were even smaller and the people of that region had even more options for bordering states into which to exit and escape.

Historically, as well, we know this concept of exit has been an absolutely key factor in how the West rose to achieve the highest standards of living the world has ever known. As the historian Ralph Raico has noted in his essay “The European Miracle,” the fact that Europe has been so decentralized throughout its post-Roman history—in contrast to the huge empires of the East—meant that entrepreneurs and capital could indeed escape across Western Europe’s countless borders in a highly decentralized world. This was especially the case in Europe’s Middle Ages, and as historians, Nathan Rosenberg and L.E. Birdzell Jr. note in their book How the West Grew Rich, it was in these highly decentralized Middle Ages that the institutional groundwork was laid for Europe’s economic miracle.

Similarly, historian Jean Baechler showed this in his research, and he concluded, “The first condition for the maximization of economic efficiency is the liberation of civil society with respect to the state.”

So how did this liberation occur which led to the success of markets in Europe? Baechler tells us: “The expansion of capitalism [in Europe] owes its origins … to political anarchy.” That is, to the existence of a large number of small states, without any overriding imperial state power. Not since Rome has Europe been unified under a single government, and that has meant more freedom and more economic growth.

One reason this works is that in a region or world of small states, it is more difficult to even attempt autarky, so for a private entrepreneur, moving one’s capital from one place to another does not cut off one’s access to markets outside the borders of a small jurisdiction. Small states and principalities have always experienced big incentives toward doing business with surrounding areas. It means more trade. It means more efficient markets.

Opponents of secession and breaking up states are often opposed, however, on the grounds that smaller states will throw up trade barriers and be more inclined to violate rights. The reasons for this assumption are unclear, but this is a common objection.

On the contrary, small states want to attract capital, and it shows. This is why efforts to impose a single global minimum tax tend to meet the most resistance from smaller countries, like Ireland and Hungary, as they do today. Having lower taxes is a major way that small states attract wealth.

Moreover, in modern times, the empirical evidence supports the idea that small states tend to be more open to free trade, more open to a free flow of labor, more open to lower taxes.

For example, Sergio Castello and Terutomo Ozawa conclude in their study on small states that in a world of specialized and growing trade, small economies naturally grow more trade-oriented in both exports and imports…. Ceteris paribus, small nations thus become more trade-focused than large ones.

Economist Gary Becker in 1998 noted, “Since 1950 real per capita GDP [gross domestic product] has risen somewhat faster in smaller nations than it has in bigger ones.” Becker concluded that the statistics on actual performance show that dire warnings about the economic price suffered by small nations are not all warranted…. Smallness can be an asset in the division of labor in the modern world, where economies are linked through international transactions. Of the fourteen countries with populations over 100 million, only the US and Japan are wealthy.

William Easterly and Aart Kraay conclude from their own study on small states: “Controlling for location, smaller states are actually richer than other states in per capita GDP…. Microstates have on average higher income and productivity levels than small states, and grow no more slowly than large states.”

So it turns out Rothbard was right when he suggested that small states are more likely to embrace free trade. As he wrote in the 1990s, this was also due to sociological reasons:

common response to a world of proliferating nations is to worry about the multitude of trade barriers that might be erected. But, other things being equal, the greater the number of new nations, and the smaller the size of each, the better. For it would be far more difficult to sow the illusion of self-sufficiency if the slogan were “Buy North Dakotan” or even “Buy 56th Street” than it now is to convince the public to “Buy American.” Similarly, “Down with South Dakota,” or “Down with 55th Street,” would be a more difficult sell than spreading fear or hatred of the Japanese.

In other words, bigness brings delusions of self-sufficiency, and it is actually large states that more often turn to protectionism and economic nationalism and control. Small states know that exit is easier for their residents, and thus these small states must be more responsible to capital to attract wealth.

2. Reducing the Size of States Offers a Solution When Democracy and Constitutionalism Fail

A second benefit of small states is that they offer a solution when constitutions and democracy often fail to protect minority rights.

We often encounter the argument that the size and scope of states don’t matter so long as there are elections and there are words written on parchment somewhere saying that the government—cross my heart and hope to die—will not violate our rights.

It’s great if that works for a time, but it quite often fails.

In reality, neither constitutions nor elections protect minority rights when minority groups are a permanent minority or minority interests diverge sufficiently from the interests of the ruling majority. We see this frequently with ethnic and linguistic minorities. Ludwig von Mises himself understood this when he wrote that

the situation of having to belong to a state to which one does not wish to belong is no less onerous if it is the result of an election than if one must endure it as the consequence of a military conquest.… At every turn the member of a national minority is made to feel that he lives among strangers and that he is, even if the letter of the law denies it, a second-class citizen.

Similarly, problems exist for ideological minorities, especially on issues where there is little room for compromise. For example, consider a state where about half the population thinks abortion is a basic human right and the other half thinks abortion is a grave violation of human rights. We can see a problem here, even in an allegedly decentralized political system like the United States. The Supreme Court has told the states to set their own policies, yet both sides continue to call for nationwide laws forcing their own preferred policies on the entire nation. Confederations only work when people in one region are willing to tolerate the “deviations” of the people in other regions. But much of the time, the impulse to impose uniform national policy on everyone within a state’s borders is inexorable, and without breaking states up to match regional preferences, the only choice losing minorities have is to turn to violence or simply accept their status of powerlessness.

In cases like this, democracy and constitutionalism offer no answer. Parchment guarantees of rights can be ignored by judges. We see it all the time. Elections are won by majorities. Constitutions may work for a time, but what happens when the majority gets large enough to amend the constitution and abolish the protections for the increasingly beleaguered minority? The losers become permanent losers.

In other words, over the long term, the ruling majority coalitions tend to win. And if you’re not a part of that coalition and it doesn’t serve your interests? You’re out of luck. Because Mises understood this, he supported the idea of local self-determination via secession and other types of decentralization. In Nation, State, and Economy, he wrote: “No people and no part of a people shall be held against its will in a political association that it does not want.”

And in Liberalism, he writes:

Whenever the inhabitants of a particular territory, whether it be a single village, a whole district, or a series of adjacent districts, make it known, by a freely conducted plebiscite, that they no longer wish to remain united to the state to which they belong at the time, but wish either to form an independent state or to attach themselves to some other state, their wishes are to be respected and complied with.

This is significant because Mises was a democrat, i.e., he thought democracy often worked. But he also recognized that without the safety valve of secession and a process to dismantle states and change their borders, it could lead to a loss of self-determination and basic human rights. Moreover, Mises specifically acknowledged that breaking states up into smaller pieces is a means of avoiding civil wars and revolutions.

We can see this issue illustrated with a thought experiment.

Suppose that in twenty years, some groups of elites in eastern Asia suggest it would be a great idea to form a confederation of states from the region: the United States of East Asia (USEA). It would include China, South Korea, Japan, Vietnam, and Indonesia. This new union could be put together to facilitate free trade, free migration, and to generally increase economic prosperity and peaceful multilateralism. How should the governance of this organization be organized? Systems of democratic representation present an obvious problem: the Chinese themselves would easily outvote all the other countries on a regular basis. Even if South Korea, Indonesia, Vietnam, and Japan all voted together as a block, their relatively small population sizes could not possibly allow them to veto pro-China measures pushed by a majority of Chinese voters. Because of China’s size, any other members of the confederation would quickly realize that the USEA is really just a union dominated by China most of the time.

Sure, we could attempt a bill of rights or a senate with equal representation to temper these effects, but over the long term, state institutions have a way of favoring the largest groups and most numerous groups. Eventually, the Japanese and the Koreans would want to leave this union. But if secession is not allowed? Then what? Endless civil wars are a likely outcome. It’s a prescription for disaster.

Along these lines, Rothbard often supported secession as a matter of national liberation. He considered the American Revolution—a secessionist cause, of course—to be among the world’s first wars for national liberation. He said the same about the secession of the new republics from the Soviet Union and the breakup of Czechoslovakia. And he supported all this in contradiction of the dominant elite narrative. At the time, the US foreign policy establishment and its friends in the national media actually opposed the breakup of the Soviet Union. Why? Because New York Times writers and Bush administration hacks were devoted to mass democracy rather than local self-determination. Although the Latvians would continue to be horribly outnumbered by ethnic Russians in the imagined new democratic USSR, we were told the USSR’s new democratic constitution would somehow allow a million Latvians to make their voice heard in the midst of one hundred million Russians. The real threat, the official narrative went, was that Europe was being “convulsed by nationalism” and that national minorities required large, powerful states to keep them in line. Taking a page from Mises, Rothbard instead insisted:

In short, every group, every nationality, should be allowed to secede from any nation-state and to join any other nation-state that agrees to have it.

3. Limiting the Power of Aggressive States

Finally, a third reason for opposing large states is that large states tend to be the most dangerous ones. On this, Rockwell writes: “Tyranny on the local level minimizes damage to the same extent that macro-tyranny maximizes it.… If Hitler had ruled only Berlin, [and] Stalin only Moscow,” the history of the world may have been considerably less bloody. Large states are playgrounds for despots and dictators, while small states provide far fewer opportunities for ambitious politicians to spread their mayhem beyond their local communities.

But we don’t have to take Lew’s word for it. The highly influential political scientist Hannah Arendt has discussed how only larger states can hope to be truly totalitarian. She notes that a number of states in Europe at the time had pushed totalitarian ideas, but, outside the Soviet Union, none managed to actually achieve the goal. She writes:

Although [totalitarian ideology] had served well enough to organize the masses until the movement seized power, the absolute size of the country then forced the would-be totalitarian ruler of the masses into the more familiar patterns of class or party dictatorship. The truth is that these countries simply did not control enough human material to allow for total domination and its inherent great losses in population. Without much hope for the conquest of more heavily populated territories, the tyrants in these small countries were forced into a certain old-fashioned moderation lest they lose whatever people they had to rule. This is also why Nazism, up to the outbreak of the war and its expansion over Europe, lagged so far behind its Russian counterpart in consistency and ruthlessness; even the German people were not numerous enough to allow for the full development of this newest form of government. Only if Germany had won the war would she have known a fully developed totalitarian rulership.

But even if we’re not talking about something as terrible as totalitarianism, the fact remains that larger states are more able to monopolize more people, more wealth, and more resources with minimal transaction costs. This makes larger states more able to carry out truly abhorrent crimes.

The Problem of International War

So we’ve seen three advantages of using secession to reduce the size and power of states. But we’re still likely to hear one big objection to breaking up today’s states into smaller states. That is the possibility of any remaining large states subjugating small states. It’s a frequent refrain: “Sure, secession sounds nice in theory, but if we reduce the power of the US government or any other Western states, then China will step in and conquer the world.”

To this objection, there are several answers. One is that small states are always free to enter into voluntary defense pacts, just as they always have been. States with similar interests, cultures, and languages can do this with relative ease and have done so.

Moreover, assumptions that large states will always dominate in international relations are based on the mistaken notion that larger states (in terms of GDP and current access to military resources) are necessarily the more powerful ones. More accurately, however, it is wealthier states and blocs of states—not necessarily the larger states—that tend to be at an advantage in terms of military deterrence. In his innovative research, China expert Michael Beckley, for example, notes that the biggest variable here is actually GDP per capita, not overall GDP. And this helps explain why we can find many cases of smaller states successfully deterring and defeating larger states. During the nineteenth and early twentieth centuries, for example, both Japan and the United Kingdom repeatedly defeated and humiliated the much larger China. GDP and military manufacturing statistics alone would also suggest that the Soviet Union—three times the geographic size of the US and with an immense weapons industry—should have outlasted the United States.

The GDP measure also suggests that Israel is the weakest military power in the Middle East. Clearly, that is not the case. The Israeli case is instructive because it shows us that small states, rather than having to become big themselves, can simply free ride on larger states—as the State of Israel has managed to long exploit American wealth and taxpayer revenues without giving up its own independence.

Moreover, the possibility of nuclear deterrence diminishes the need for immense and expensive conventional forces, as—again—demonstrated by the State of Israel. Deterrent defense capability can thus be obtained even by Switzerland-sized states.

I go into some detail on this in my new book, Breaking Away. So, for example, were the United States to break up into smaller pieces, there is no reason to assume the new, smaller successor states would be at the mercy of larger states. There is every reason to assume that the new American states would be just as unified on foreign policy as they are now—which is to say, almost totally in lockstep.

Unfortunately, no matter what might be said about small states and international relations, many will cling to the idea that—because of alleged foreign threats—virtually nothing could justify secession.

There is, of course, nothing new about this attitude. For centuries, states have justified their growth, strength, and taxation on the grounds that all that is necessary to protect against foreigners. It is a common habit to downplay concerns about the preservation of rights against abuses by one’s own state in order to focus on a perceived threat— however unlikely—from foreign states.

This was, after all, the dominant posture during the Cold War. Concerns about American freedoms were put on hold in the name of fighting the Communists. Conservatism’s standard bearer, William F. Buckley, said as much when he declared,

We have got to accept Big Government for the duration— for neither an offensive nor a defensive war can be waged, given our present government skills, except through the instrument of a totalitarian bureaucracy within our shores.… [We must endure] large armies and air forces, atomic energy, central intelligence, war production boards, and the attendant centralization of power in Washington.

In other words, accept everything the central government wants to do to you. To do anything else is to invite conquest from the Commies. Or else the Commies win.

Yet, real-world experience suggests that fortune favors the decentralized in terms of wealth, freedom, and economic development. And on a moral level, decentralizing is always the right thing to do.

It is for these reasons that Rothbard supported what he called “universal rights, locally enforced.” As an adherent of natural rights, Rothbard believed rights are certainly universal. Yet he also understood that their enforcement must be local. As Rockwell explains, these two concepts— universalism and localism—are frequently in tension. But, Rockwell concludes,

if you give up one of the two principles [i.e., universal rights and local control], you risk giving up liberty. Both are important. Neither should prevail over the other. A local government that violates rights is intolerable. A central government that rules in the name of universal rights is similarly intolerable.

Experience has already shown—since at least as early as the Middle Ages—that the Western world has always embraced and benefited from some degree of radical political decentralization. We would benefit from much more of it today.