WHAT'S IT TO YOU?

I have made the point in this blog that at the beginning of our republic, the prevailing mental construct that, more than any other construct, guided our views concerning governance and politics was traditional federalism. Its dominance ended in the post World War II years when the natural rights construct ascended to dominance. We don't often, these days, hear in public discourse expressions of thought based on the ideas and ideals of the older version of federalism. Justice Antonin Scalia, the other day, expressed an opinion which reflects this more outdated thinking. Replying to a student's question about why the justice had equated laws criminalizing sodomy with laws against bestiality and murder, the justice said, “I don't think it's necessary, but I think it's effective. … It's a form of argument that I thought you would have known, which is called the 'reduction to the absurd' … If we cannot have moral feelings against homosexuality, can we have it against murder? Can we have it against other things? … I'm surprised you aren't persuaded.”

To make my point in this posting, I have to make an assumption. The assumption is that Scalia is referring to moral beliefs that are based on religious doctrine. I make this assumption because I am not aware of any other source that would reject homosexuality on the grounds it is immoral. As such, and since he was referring to state law, I find this argument, on its face, to be an expression of traditional federalist thinking.

Our early political development, as I have pointed out, was heavily influenced by congregational religious traditions. Starting with the Puritans, people banded together to form our most basic governmental arrangements mirroring the process by which they organized their churches. That is, they came together and through a covenant promised each other a set of binding provisions which, among other things, set up a government, a process of governing, a list of goals, and an expression of rights. The format can first be found in the drawing up of the Mayflower Compact and has its most encompassing form in the writing of the United States Constitution. The basic idea is that either individuals or political entities gather and see that their mutual benefit is best advanced by them joining in this manner.

A recurring question that results from organizing in this fashion is how much self rule the parties retain within the resulting union and how much is handed over to the political entity that's formed. This basic area of concern has been with us since the beginning, was central in our political conflicts – including the concerns that led to us engaging in a civil war – and is still with us today. Individual, federated partners, no matter how clear the language of the agreement is or was, when relevant issues arise, will place their support with the notion that power lies predominately either with the members of the union or with the union itself.

There will be those who place their support for retention of power with the partnering members and those who will support the union's claim of power. There have been historical incidences where, given different issues, we have had individuals who in debating one issue, argued for a strong union and with another issue, argued that power should be retained by the members of the union. The example of James Madison comes to mind. Traditional federalism places the emphasis on the members, especially when it comes to moral questions. Liberated federalism, the mental construct this blog has promoted, is not so readily disposed to this older view.

I have given the name, liberated federalism, to a view or position that evolves from the earlier form of federalism. Theoretically, we can find its origins with the founding fathers. It was already significantly a part of their theorizing when they went about forming our national government in 1787. But the bit of law that would begin the process that would undermine the parochial bias of traditional federalism was the Fourteenth Amendment to the Constitution.

Its ratification in 1868 did not provide a clear delineation between our preference for one view over the other view. It would take over a hundred years – and the influence of a completely different construct, the natural rights view – to undo the theoretical force that traditional federalism had over our common view of governance and politics. Remember that in that earlier view, as I indicated above, religion and localism had strong influence on what was seen as constitutional. This view assumed that local populations were highly homogeneous. It assumed that a given locality would have most of its residents attending the same denominational church, such as Lutheran or Baptist. Under such social conditions, local communities could express moral positions without offending people. Diversity was tolerated, but under the following formula: yes, you have a right to be what you want to be, but if that way is different, not here; you can be what you want to be over there. Here, we are this way and if you want to live here, you have to act accordingly and at least follow what we believe to be good and proper. But of course, our social development did not cooperate with this formula. Very early on, diversity became a disruptive factor. After all, we adopted the national motto, e pluribus unum.

Even by the time our constitution was written, a lot of this assumed social character of our communities was being challenged as we were already becoming more diverse. Our nation would eventually experience huge immigration waves of Germans, Irish, Italians, Eastern Europeans, Chinese, Japanese, Latin Americans, and others. Today, you can go to the most traditionally leaning communities and you will find storefronts with Spanish words all over their facades. Take a car trip some day through small towns in Florida's panhandle and don't be surprised if you need a Spanish-English dictionary. The whole assumption behind Scalia's comments is that moral proclivities of local communities, to the degree his comments would have us believe they exist, simply don't. At least they don't to the extent that one can justify legal sanctions on behavior based on religious moral claims. We are too diverse for this kind of dogmatic view regarding our moral thinking. Yes, we are still concerned with morality. But, when it comes to legal restraints, especially when such restraints are aimed at prohibiting behaviors motivated by natural drives (like the sexual drive), one needs not religious reasoning but secular reasoning.

Today, natural rights thinking supplies us with a relatively simple notion that allows for a more tolerant view of divergent behaviors or beliefs. It simply holds that if a belief or behavior doesn't – on a reasonable basis – materially or emotionally hurt someone else, then a person has a right to believe or act the way he/she wishes. Applying this standard to the specific topic Scalia commented on – homosexuality – what someone does in his/her bedroom that doesn't hurt others is not the concern of others and the law has no legitimate standing to ban it. But let us say that someone kills someone else in his or her bedroom. Well then, applying a Kantian notion, what if everyone behaved that way?¹ Then anyone's life is readily in danger. Murder does not have to have a religious basis for it to be a legitimate subject for legal prohibition. On the other hand, by any secular standard, someone engaging in some non-harmful sexual behavior that doesn't pose any danger to others is, therefore, not subject to sanctions based on secular grounds.²

The problem is that by adopting a natural rights view, we lose the communal sense of a locality. We lose all sense of an “us” and, consequently, everyone is left in an extremely individually isolated social milieu. We are encouraged to view our fellow residents as just others and, except for close friends and family, we lack kinship or emotional ties to others.

But we can't seem to totally accept such a view. We just experienced watching the Northeast being battered by a huge storm. We see in the news accounts about how large sections of communities have been seriously damaged and the lives of the people profoundly disrupted. The level of physical damage and resulting heartache affects most of us emotionally. Those are our fellow citizens and the recent 12/12/12 Concert with the level of worldwide donations the concert solicited gives testimony to the fact we, at least many of us, are prone to caring not just for fellow citizens, but fellow humans. And within those areas during and immediately following the storm, we hear of selfless, courageous acts by neighbors who literally saved the lives of others and otherwise ameliorated the suffering they saw around them. To what degree they individually hold tolerant attitudes of diverse cultural mores and customs, of course, is not asked of such people in such situations. But what we can say is that we find such incidences of selflessness not only admirable, but reflective of our nature. And as such, while we might see the natural rights view as sort of a minimal way to see how we should deal with one another, we tend to yearn for more personal and interlocking relations.

We often might have natural defenses against those we don't know and with whom we have no relationship. But, when we live in communities and there exists a sense of partnership, we become emotionally involved. Given the choice, most of us seek such relationships.

These preferences encourage a federal bias, a bias to allow ourselves to enter federated arrangements. In modern life this may become more difficult and this blog has traced some of the social forces that act in opposition to more communal ties. I believe that one of the reasons for the difficulties of establishing and maintaining communal ties is our bifurcated history between the mores associated with our natural rights perspective and our traditional federalist perspective. I don't usually do this, but let me share what I found in a study I conducted.³ I asked a number of high school students in three different types of communities – rural, semi-urban, and urban – what type of strategy they would favor if confronted with different problem situations. One problem was, for example, in deciding vacation plans, what type of decision-making arrangement would be preferable. One choice was a federated – shared decision-making – arrangement. While this doesn't relate directly to the situation being considered in this posting, it does give us some insight. To significant levels, the students chose the federated option as opposed to arrangements that rely on one person deciding, rely on expertise, or rely on everyone doing his/her own thing. One can speculate that such a choice reflects the desire for the kind of interdependence upon which a community is built.

So, we are left with a tension – the desire for community and the desire to be left to our own business. Our history, as a nation, has led us to this point: we seem to have an uneasy accommodation between the two outlooks with the latter having a virulent default status. I don't believe a revival of a construct, traditional federalism, that was unable to meet the demands of a changing social reality, will be helpful. But, can we totally divorce ourselves from a view that served as the basic foundation for our constitution? Do we want to stray so far afield from our original ideas and ideals which were defined by the congregational model that got us started? The recent communal examples in the Northeast suggest we don't. On the other hand, looking around, I can hear some people thinking, please don't impose your personal lifestyle choices on me or anyone else. We can be caring neighbors without that; we can be functioning partners with a reasonable respect for who each of us is.

1You might ask about the victim in the bedroom. Of course, one might be concerned with his or her fate, but here I am only commenting on a minimal basis by which one would consider what can be considered legal behavior as opposed to illegal behavior. The discussion here assumes that each member of the social arrangement has no emotional ties with any other member. Of course, this isn't the way things are. We do care for others and this aspect of reality is a basis for criticizing the natural rights construct. 

 

2The secular case against bestiality, on the other hand, is more complicated, but there are secular grounds to ban it.

3Gutierrez, R. (2005). The predisposition of high school students to engage in collective strategies of problem solving. Theory and Research in Social Education, 33, (3), pp. 404-428.

COMPETING AMONG THE STATES

I have one son and no daughters. That is, as a parent, I have not had the experience of my off-spring vying for my attention or favor. My poor son got all the attention and whatever benefits my lame favors could provide. But I am led to believe that in families with multiple off-springs that competition is usually one of those conditions that constitute the basis of many family stories. I do know of friends and relatives where, sure enough, sibling competition has been a source of family tales ranging from the humorous to the near tragic. Which brings to mind the question: what is the function of competition and how does that function change or vary when the competitors are situated in a basically, non competitive arrangement? Can it be dysfunctional to a family? Should parents concern themselves with the eventuality of such interactions and can the parents affect the nature and severity of such competition?

Federalist thought relates to this area of concern in that, ideally, families are federated arrangements of the highest order. That is, if there is any relationship in which the members should see the interests of one being the interests of all, that should be in a family.

This whole concern came to mind as I read a recent New York Times article, “Empty Words, Empty Workplaces,” by Louise Story.¹ The article outlines, in some detail, how the separate states of the United States have found themselves in competition to lure corporations to open or maintain business facilities within their respective borders. Of course, the aim is to lure business activity that will strengthen their economies and with that activity the promise of jobs, either in maintaining existing ones or creating new ones. Jobs not only benefit the workers who are hired, but their wages and salaries are then spent in local businesses which results in more jobs, salaries, wages, and savings. In short, economic activity begets economic activity. And by the way, all this means increased tax revenues.

So how do these states compete? First of all, by states, I really mean state governments. And by governments, I mean politicians who feel pressure to attract or maintain as many business activities in their respective states or local jurisdictions – like cities and counties – as possible. Those politicians most apt to engage in this type of competition usually find themselves in elected office as a result of support by certain constituencies such as business associations and the like. There are different forms of this competition. For example, a long standing basis by which states compete is the manner in which they treat labor unions. Some states try to discourage or otherwise make union membership unappealing.² On the other hand, in terms of presenting a united front in these competitions, these politicians and constituents might engage others who would benefit from capturing sought-after business facilities including labor unions.

More recently, the main strategy in attracting or maintaining businesses is to offer corporate entities, who have expressed plans to move or expand their activities to new sites, financial favors. Just imagine a large corporation lets it be known that it is planning to expand and is looking for a place to do so. The simplest type of business to visualize is a manufacturing business that needs a physical site to put a factory or other productive facility, but there are also examples in oil, coal, technology, entertainment, banks, and big-box retail chains. In order to attract or maintain businesses, states find it necessary to offer incentives in the form of tax breaks – abatement, tax credits, lower assessments, or lower rates – and/or loan guarantees. The article describes how corporations who are seeking to expand or move may set up at some site, such as a large enough hotel, and let states or smaller jurisdictions know that they are in the market to select a site. Responding, state agents come in and, with written proposals, detail the “gifts” the states or local governments are willing to offer.

If the deal is made, the prize is secured. That means the corporation will either stay where it is or expand into another state. For the winning jurisdiction, this can be very good, but this is true only so long as the facility remains. A lot can happen to make the deal go sour. First, the incentives, in a time of stringent state and local government budgets, can mean, initially at least, short-changing other government services such as local schooling. In addition, if the fate of the corporation changes, as has been the case within the auto industry, state and local jurisdictions can find that the presence of the newer business or facility can be short-lived. Depending on the cost of the incentive, a particular commitment can then be very expensive indeed. Once a large business enterprise enters an area, a lot of re-locations can take place and a new business environment can take time to be established. The same can be said when a business folds or moves away. The only difference in this latter case is that local economies might never again find an acceptable equilibrium.

For those of you who might be interested in the nuts and bolts of this process, I recommend the Story article (apparently, this article is the first of three pieces which appeared on subsequent days). My concern here is with the whole state of affairs which pits states against each other. As with parents or, perhaps at a less intimate level, partners, what level of competition is appropriate? Competition, no doubt, spurs us to do better. We seem to have, as a part of our nature, the need to compete. We engage in races or other sports, we play games, we simply like to match our skills against others and win. But winning, for some, also means losing for others. It is one thing to compete in games when losing, at worse, generates only embarrassment, but it is something else to lose when the consequences can mean material deprivation and/or a loss of spirit.

As parents, we would not allow our children to engage in such competition. Partners in a business arrangement would be on very treacherous grounds if they competed among themselves for such stakes. After all, the whole notion of a partnership is to align with others in order to pool resources and arrange, in return, a relationship in which benefits to one partner will be benefits to all partners. The same goes for the costs that a partnership incurs. I agree that competition motivates us to upgrade our efforts, but with partners or children, the level of competition should be gauged appropriately so that the purpose of a partnership or family does not become compromised or threatened.

While states and their local jurisdictions are not families, they are in a partnership and that arrangement is formulated through a very sacred agreement. The agreement is the US Constitution. The founding document is an agreement between two sets of entities, the people of the United States and the states of the United States. Within each of these agreements, competition is permitted, but within boundaries. The boundaries within each type of entity are different. Among the people, the boundaries are looser and each individual is given great leeway so that each can express his or her liberty to seek the opportunity to better his/her happiness. This is so because experience has demonstrated that only under conditions of freedom does the individual have the incentives to fulfill his/her capacities. This, in the words of Thomas Jefferson, is self-evident. But states are another matter.

Jurisdictions represent collectives. We have collectives comprised of local or regional populations – states, cities, townships, etc. – and a national population. In the US we decided to form a federated union in order, among several reasons, “to form a more perfect union.” Hundreds of thousands of lives have been sacrificed in order to establish and maintain that union – hence, its sacredness is well established. So, do states have a right to engage in competition where the stakes can be so high; that is, where losing in such competition has such dire consequences to their economies? Should the states, in determining how productive resources are distributed, rely on a competitive format? We should remember that because many states either do not have the resources to compete or, if they do compete, have no chance of winning, they are, in effect, deprived of a reasonable share of the wealth producing activities of the nation. Or, there is the case where a state or local jurisdiction has a chance of winning but has to invest a level of resources which deprives it of the ability to meet highly prized values. All this leads to the question: What's actually at stake?

Here are a couple of quotes from the article:

A Times investigation has examined and tallied thousands of local incentives granted nationwide and has found that states, counties and cities are giving up more than $80 billion each year to companies. The beneficiaries come from virtually every corner of the corporate world … .³

Nationwide, billions of dollars in incentives are being awarded as state governments face steep deficits. Last year alone, states cut public services and raised taxes by a collective $156 billion … .⁴

Of course, these incentives can be viewed as investments and, if successful, can parlay into economic gains. But the article describes the competition as zero sum; a win for one state is a loss for the others. Such competition needs to be judged in terms of how it affects the total union.

If the total union experiences a net benefit, then the competition is functional and in accordance with the demands of a functional partnership – a benefit for one is a benefit for all. But the article, in its description of what is going on, documents how the competition is causing real hardships and, in most cases, does not result in greater wealth or income for the whole. In most cases, competition is simply shifting production and business resources from one locality to another – in one case the process resulted in a production facility moving across a state line; the same workers are employed only now they have a longer commute. And, in the interim, the costs to varied government services, which can also be considered investments, are sacrificed for the benefit of corporate shareholders. Often, accrued lower levels of production costs which are secured by this competition and their resulting higher profits do not offset the total costs the polity absorbs. Among these costs might be some that are difficult to measure but are real nonetheless. For example, if a jurisdiction sacrifices its efforts in environmental protections in order to garner the resources for an incentive package, the resulting damages to the environment, while they might be hard to monetize, are still costs to everyone. Yet many of these added costs are not taken into account.

But undermining all of this is the harm done to the legitimacy of the union. Are we in this together or not and if not, why sacrifice for it? I find it interesting that a number of states had to make changes to their constitutions in order to engage in this type of competition. Also, incentives, especially in the form of differentiated taxes among taxpayers, have been challenged in the courts. The claim on the part of non-privileged taxpayers has been that by granting tax breaks to some, the rights to equal protection of others have been transgressed. Unless, as I suggested above, a tax break to one does not demonstrably accrue benefits to all, then the unequal tax policy does not provide equal protection.

In a 2006 Supreme Court case, Cuno vs. Daimler-Chrysler, involving tax incentives given by the states of Ohio and Michigan, the Court did not even consider the extent to which the incentives worked to benefit the whole citizenry. In other words, the Court didn't address the question of total benefit. Instead, it ruled that the non-advantaged taxpayers did not even have standing to bring their challenges. Since this competition between states and jurisdictions is a recent trend, at least to the degree it is being practiced today, this judicial decision can be considered an early attempt at interpreting whether it is constitutional. I believe the Cuno case to be an early one in what will eventually be an evolving jurisprudence and that this issue will make its way through the court system again.

Corporate incentives offered by state and local jurisdictions is an issue that gets at the very meaning of what it means to be in a federated union. It is an issue that secondary students can understand and can relate to because it affects the amount of entry jobs available to them. I suspect, as the years go by and its occurrence and significance become more pervasive, the citizenry will become more sophisticated about it and more demanding in terms of its effects. When this happens, there will either be pressure to pass legislation to ameliorate the effects of competition or there will be cases in the courts that will further challenge its constitutionality.

1Story, L. (2012). Empty Words, Empty Workplaces. New York Times, December 2, Front page section, pp. 1 & 30-31. By and large, the factual information of this posting is derived from this article.

2There are “right to work” states and non “right to work” states. These designations refer to laws in some states, the non “right to work” states, which mandate that all workers who work in a business that has union representation have to pay union dues or some administrative fee to cover the expenses involved with union costs. “Of course, whether a worker is forced to pay dues or fees or not will go a long way in determining whether he or she will belong to a union. Why join a union if you get the benefits of membership one way or the other? “Right to work” states, on the other hand, have no such mandates. “Right to work” states have a competitive advantage in attracting businesses since they generally have lower union membership and, consequently, have lower wage levels. 

 

3Op cit., Story, pp. 1 & 30.

4Ibid., p. 30.