First, you\'re ignoring the obvious strengths of a centralized system.
I am arguing against them. A centralised system offers more efficiency, but the most streamlined form of monopoly power is tyranny which places all power in the arbitrary judgement of one body. Not safe for liberty at any speed.
If that centralised policy is so good, then there is no barrier to the states implementing them as well. Which is where diversification kicks in, as one body making good policy will have their policies stolen by other bodies.
Centralisation can also force a step backward. A good example is when Australia federated. The dominant colony, NSW, was free trade. The others were protectionists, the good policy was swamped by other states with bad policy. It took eighty years before NSW was able to return to its roots in the 1890s when the federal government implemented economic rationlist policies.
Uniform policy for Australia is a particular problem. There is a large land-mass with three different economies and states that are more city-states than anything. Centralisation of policy would not be able to take that diversity in. Australian peculiarities require a diversified approach.
As an example the federal government managed to get petrol tabled as an excise. They pull approx 40c for each litre as taxes. Queensland has a development state model, and subsidise petrol. The federal government\'s central approach to taxation is having a direct effect on Queensland\'s economic policy.
IIRC Queensland actually gives GST money back so they can maintain the fuel subsidy. So they are subsidising a federal tax with state money.
Second, you\'re ignoring the obvious weaknesses of a de-centralized system.
It happens less at the State level in the US than at the county level. IIRC the NSW state budget is about 50 billion AUD. That is a significant economic entity.
The key is take the middle path falling off neither to the right nor to the left by architecting a system that mixes a strong centralized government within a federalist system in such a way as to both retard the abuses of centralized power and overcome the inherent weaknesses of decentralized governance.
Yes. But the current Australian system is no longer balanced. The Feds take something like 75% of all tax receipts and then give it back to the states. The feds are constantlu aggresively taking existing responsibilities from the states. As one of the articles I linked to said, they are cherry picking the good political responsibilities and leaving the states with the expensive drudge ones.
We don\'t have a federalist system atm, it has been a rapidly collapsing centralist one, to the point that the feds and major parties feel confident saying out loud that the states should be dissolved.
The Democrats and Greens had it as party platform last election. It has always been part of Labor\'s platform, announced or not. And Howard has been quoted as saying if Australia was done again he wouldnt include the states.
Australia will look like Britain soon.
Federalism is a better system than a unitary one, or a confederate one. It makes representation and policy local, makes the political entities responsibile for their own upkeep, spreads the risk of tyranny and failed policy, while advancing the possibility for policy innovation and positive outcomes.
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