Tuesday, January 27, 2009

Should we support Secession?

Always. Given two conditions.

Why is secession good? Because small states (governments) must trade and compete leading to more laissez faire governments.

A large state can harbor the belief that it is self-sufficient. By having an abundance of land, the random distribution of natural resources should dictate that it has large enough sources to sustain itself. A small state, is unlikely to be so fortunate. There are few places in the world with ample supplies of farm land, forests, iron, oil, and water all within a few thousand square miles. This puts pressure on that state to trade with other countries.

On a basic subsistence level, a large state is an unlikely victim of regional droughts or other natural calamities. Broad swaths of land allow it to hedge bad weather or pestilence with other areas not affected. A small state can easily fall to this sort of misfortune. If a small state does not trade, it faces great risks to its people. This again, puts pressure to trade.

As a state increases in wealth, the benefits of trade to a small country become ever more apparent as the gains from specialization are too great to ignore. In order to reap the full benefits of trade a society must drop tariffs and industrial subsidies. Protectionism, on the scale desired by some large countries, seems delusional for a small country.

Opening trade also exposes countries to the pressures of competition. If corporate taxes in your neighboring country are lower, you will lose business to them. If your regulatory environment is less complex, you will gain businesses. This will put pressure on these countries to seek lower taxes and less regulation.

Small nations lead to more competition that pressure governments to be smaller (as a percentage of the economy) and more business friendly. This is pressure, not certainty. Because I believe less government leads to more prosperity, more countries will be forced to compete regionally and internationally by shedding the economic and moral ill effects of socialism and protectionism.

The two caveats I mentioned for recognition are these:

1) The secession has to be by popular vote. I would not support some gangster creating a fiefdom by force.

2) The citizens have to be allowed to emigrate out of the state. Other countries may not allow them to immigrate, but that’s not the fault of their nation of origin. I would not support some cult or other totalitarian regime forming and trapping an unwilling minority.

Note - Because I have mentioned Somaliland before, I figured I would add that I now fully support Somaliland's international recognition. By all accounts that I can find, they now meet both of these conditions. I know that they have had democratic elections, but I'm not certain as to their emigration policies. Since my last blog post about Somaliland was linked by several Somaliland groups perhaps one of them can leave a comment about their country's emigration rules.

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