32. The Viability of the Nation-State

WHAT DOES THE FUTURE hold for today’s nation-states? Reality will continue to take its toll on central planning and strain the State’s ability to control exploding, complex world markets. Innovative entrepreneurs, exploiting communication networks, coupled with human mobility, will play havoc on the continued potency of States. Naturally, States with higher takings and market restrictions will see their most productive citizens and capital gravitate to States with more favorable conditions.⁶⁰ Entrepreneurs subject to lower taxes and regulations will gain a competitive advantage over entrepreneurs where such expenses are higher. States with unfavorable business climates will see their labor forces migrating to neighboring States where the business climate has made their labor more valuable to entrepreneurs.

Those States with attractive welfare entitlement programs will be forced to rely increasingly on fiat currency as their source of funding, since tax increases will only repel those upon whom they rely for their other source of funding. Some States may prohibit their citizens and capital from leaving their jurisdictional borders, but creative minds will discover ways around such obstacles, as they do with all other prohibitions. The day of patriotic State allegiance as a means of keeping the citizenry in line is disappearing.

Eventually, even the most devoted socialists and central planners will lose much of their enthusiasm for pushing utopian ideas when they realize (without actually understanding why) that these ideas only worsen matters for the very people they want to help. Regulations, by their sheer quantity, will become impossible to enforce, and any stigma associated with noncompliance will continue its current trend downward and gradually disappear.

Will the impact of the role of the democratic State as the current exalted master over the lives of people gradually fade, as has the impact of such roles that once were held by monarchs, emperors, and popes? Probably. The residual States may become insignificant pests, unworthy of being extinguished. The decline of the State may be so gradual that, in centuries to come, it will be impossible to mark a date to celebrate the beginning of its decline.

In the meantime, because of the accomplishments of science, markets, and the human spirit, our progress toward better lives will probably continue in spite of the State (provided, of course, that some State doesn’t blow us off the planet). And while that progress takes place, most people in today’s world will probably continue to attribute the progress to the State. However, such attribution will eventually wane as more realize that, in fact, the State is the greatest hindrance to peace and prosperity.

Today, many may fear a world void of States, but that void is not a void of people. States don’t produce—only people do! Teachers educate, engineers build roads, financiers create financial markets, arbiters resolve disputes, guards provide safety, and doctors supply health care; these are very real people. But these same people do not become more brilliant, energetic, efficient, moral, creative, or superhuman at the hands of the State. The facts are overly abundant that the very opposite is engendered in people when at the hands of the State.

In his essay “The Harm That Good Men Do,” Bertrand Russell closes with these words:

Reason may be a small force, but it is constant, and works always in one direction, while the forces of unreason destroy one another in futile strife. Therefore every orgy of unreason in the end strengthens the friends of reason, and shows afresh that they are the only true friends of humanity.⁶¹

⁶⁰Molly Moore, “Old Money, New Money Flee France and Its Wealth Tax,” Washington Post Foreign Service, 16 July 2006. On average, at least one millionaire leaves France every day to take up residence in a more wealth-friendly nation, according to a government study.

⁶¹Bertrand Russell, “The Harm That Good Men Do,” 1926; complete text at http://www005.upp.so-net.ne.jp/russell/0393HGMD.HTM