The Regional Restructuring of the American Continent

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Gar Alperovitz | America Beyond Capitalism

This “Chapter Fourteen” is part eighteen of Truthout’s continuing series of excerpts from Gar Alperovitz’s “America beyond Capitalism.”

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Americans committed to a renewal of democracy are likely to discover this can only be meaningfully achieved in units of scale smaller than a continent, but also of sufficient size to be capable of substantial semiautonomous functioning: the region.

The Pluralist Commonwealth model attempts to deal seriously with long-standing arguments that the sheer continental size of the United States and its very large population are ultimately inimical to a robust system-wide vision of democratic practice. Community-oriented strategies appear to be within the range of realistic political possibility in coming years. What of the larger and seemingly utopian idea that much more far-reaching – indeed, radical – decentralization is both necessary and possible?

Five major considerations suggest that, contrary to conventional assumption, the logic of regional restructuring is likely to become of increasing importance as the twenty-first century develops. These include trends in Supreme Court and congressional decision making; an explosion of state-based initiatives; the impact of global political-economic forces on the current federal system; very large-order projected changes in the economy and population; and new trajectories of expanding ethnic political power concentrated in key regions experiencing economic distress.

Over the last several decades a series of Supreme Court and congressional decisions has begun to establish new principles of decentralization in the U.S. federal system that (for better or worse) are much more far-reaching than many understand. At the same time, numerous states have launched new initiatives that are slowly altering the locus of power in the system.

The trend in Supreme Court decision making has been well documented. In United States v. Lopez the Court ruled that Congress exceeded federal authority by attempting to keep firearms out of local school yards. In Seminole Tribe of Florida v. Florida and several subsequent cases involving state employees, savings banks, and violence against women, the Court held that Congress did not have authority to establish federal jurisdiction over states that did not consent to be sued. In Printz v. United States it ruled that requiring states to implement waiting periods for handgun purchases involved a similar overreach of federal power. The Court held in Rush Prudential HMO v. Moran that states had independent authority to protect patients’ rights through legislation providing for “independent review” – a second opinion – in disputes with managed care companies (HMOs).

An equally important trend in federal legislative actions has furthered the decentralization process. Among the most widely discussed is the 1996 Temporary Assistance to Needy Families reform, which gave states unprecedented power to “end welfare as we know it.” This, however, is only one of a large number of less-publicized moves in the direction of greater state and local authority. We have noted the Community Development Block Grants, which allow great latitude in the use of federal money for various urban housing and community development programs. “Self-denying” legislation approved in 1995 limits the federal government’s ability to impose unfunded mandates on the states. Again, the Children’s Health Insurance Program allows states flexibility in designing benefits packages for uninsured children of low-income families.

Similarly, the Intermodal Surface Transportation Efficiency Act gives states considerable discretion in developing transportation programs in accord with local priorities. The independent role of the states has also been augmented through widespread use of Medicaid “waivers” authorized under the Social Security laws. Innovative and widely publicized health insurance strategies in Oregon, Vermont, Hawaii, and Maine, among others, have been developed on this basis.

The states have also increased their powers through independent legislative and legal actions of their own – often because the federal government has been either deadlocked or opposed to change. After Congress failed to enact health care legislation in 1994, for instance, the states began passing patients’ rights and prescription drug laws (more than half had enacted drug assistance legislation by 2003). “[O]ne can easily recount a long list of regulatory issues on which the feds have simply abdicated, leaving it to the states,” observes Jonathan Walters of Governing magazine. States have moved into areas where federal inaction or minimalist action has been most obvious – including growth management, dirty-air emissions, gasoline additives, genetically engineered crops, questionable lending practices, and so on.

Many states – most prominently, but hardly exclusively, California, Alabama, and Alaska – have also established innovative economic programs. Still others, like Washington and North Carolina, own or finance public railroad systems. New Mexico and California have radically reduced imprisonment for many drug offenders. Vermont has recognized gay partnerships. In 2002 California approved legislation requiring the “maximum feasible reduction” in tailpipe emissions of carbon dioxide and other greenhouse gases by cars and light trucks by 2009. Since 1993 Georgia has offered scholarships to all high school graduates with a B average that can be used at any public, private, or technical school in the state.

The movement toward greater state authority is not an unbroken trend. A counter-movement is evident in several Supreme Court decisions related to economic issues and in legislative efforts to enact “preemption clauses” mandating federal jurisdiction in connection with various regulatory matters. On the other hand, the state attorneys general have mounted important new legal challenges, most dramatically in connection with tobacco, but also with regard to inflated costs of prescription drugs, antitrust (Microsoft), and other issues ranging from securities fraud to global warming. In 2002 New York Attorney General Eliot Spitzer negotiated a settlement requiring Merrill Lynch and Company to pay $100 million in penalties to fifty states because of conflicts of interest between its sales, investment, and research services. Subsequent initiatives challenged other corporate practices and helped spur the Securities and Exchange Commission into more aggressive enforcement action.

Nor are these simply progressive state initiatives. Typical of fraud cases was one brought by the Texas attorney general against Warrick Pharmaceuticals for allegedly attempting to gain market share by charging pharmacists $13.50 per prescription while arranging for Medicaid and Medicare to reimburse them at $40.30 per prescription. In February 2003 seven state attorneys general warned the federal government of possible litigation if it did not do more to force industry to lower emissions of greenhouse gases; in April 2003 five states helped push through the largest settlement ever under the Clean Air Act.

Independent legal activism by the states has also arisen in large part because of federal inaction. Modern state attorney general initiatives first began to develop in response to the Reagan Justice Department’s failure to do much to protect consumers and the environment. The $206 billion tobacco settlement in 1998 was a major victory that helped put the general movement into high gear.

In general, University of Virginia political scientist Martha Derthick points out, the states have increasingly become the “default setting” of the American political-economic system – the level of government that acts when Washington does not because of gridlock or neglect. Alan Ehrenhalt of Governing magazine goes further: states are now increasingly the “level of government we go to because we don’t expect the others to succeed.”

Many traditional liberals, fearing a weakening of federal standards, have opposed the general trend. Others feel the only option available may be a long-haul effort to rebuild power at the base, state by state. The important point for the future, Ehrenhalt emphasizes, is that “once states and their elected leaders begin thinking of themselves as the actors of first resort on crucial questions – rather than the actors of last resort – the logic of the whole system is in for a change.”

The implications of globalization reinforce this fundamental judgment. Especially significant are pressures that create new Washington-level restrictions on state decision making – and in turn produce new and angry resistance. A recent study by Columbia University professor Mark Gordon of the implications of World Trade Organization (WTO) regulations points out that WTO rules “strike at the heart of the types of policy decisions that States use to define some of their most basic beliefs.” WTO regulations now increasingly challenge traditional state prerogatives in connection with “issues of environmental and consumer protection, set-asides to assist minority or small businesses, efforts to regulate the activities of large financial services institutions such as banks and insurance companies, and decisions about how to structure the raising of revenue through taxes and its expenditure through government procurement policies.”

Gordon and other analysts predict that as the impact of the new global trade regime hits home, an intense dynamic will be set loose that will force Washington to reach ever deeper into state power to enforce global agreements – and will, in turn, force states to develop ever more adamant counter-strategies: “[G]lobalization introduces a whole series of ‘shocks’ to the existing system.”

Numerous state leaders throughout the country have, in fact, already gone on record challenging WTO and NAFTA-imposed requirements. A resolution passed by the Oklahoma legislature – to cite only one of many examples – demands that the president and Congress “preserve the traditional powers of state and local governance” and “ensure that international investment rules do not give greater rights to foreign investors than United States investors enjoy under the United States Constitution.”

The long-term logic points to an ever more powerful “backlash” by the states – and demands for greater independence from the long arm of Washington in its role as enforcer of WTO rules.

The likelihood of structural change in the federal system over the course of the century is intimately related to even more fundamental shifts – above all, to emerging economic and population trends.

As we have noted, the United States is much larger in geographic scale than most Americans commonly realize – in fact, larger geographically than all the other advanced industrial countries taken together when Canada and Australia (nations with large empty land masses) are excluded. In Kennan’s phrase it is “a monster country.” Again, the current $10 trillion U.S. economy is over five times the size of the German economy, and more than seven times the economies of France and Britain. Leaving aside Germany and Japan, it is larger than the combined economies of all the remaining OECD countries taken together.

The conservative estimating assumptions used in official Social Security projections suggest that the U.S. economy will more than double by mid-century to roughly $29 trillion (in 2003 dollars) – three times that of the current European Union. It will reach more than six times its current size (roughly $70 trillion in 2003 dollars) by the end of the century. If the more optimistic short-term economic assumptions used by the U.S. Council of Economic Advisors are projected forward, the figure could easily be $100 trillion or more by 2100. The latter estimate is roughly ten times the U.S. economy’s current scale. Discounting either projection substantially, of course, still yields an extraordinary figure.

The present U.S. population of over 280 million is also huge by world standards. It is the third largest after China and India and more than twice as large as any other OECD nation – greater, in fact, than the combined populations of twenty-one of the other twenty-nine OECD countries taken together. U.S. population is also projected to increase dramatically over the course of the twenty-first century. Mid-range Census Bureau projections suggest it will reach 400 million by 2050 – and 570 million by 2100. If the Census Bureau “high-series” projection is taken as a baseline, these numbers will increase to 550 million by 2050 – and to 1.18 billion by 2100.

Accurate demographic projections are notoriously difficult to make. The critical variables are future birth and death rates and immigration flows. Census Bureau demographers do not include political analyses in their projections, even though political factors can also be extremely important. When such factors are introduced, two quite obvious considerations suggest something in the direction of the higher-range projections may well be closer to reality than the mid- and lower-range estimates.

First, immigration from Mexico – now over 300,000 a year (roughly 160,000 a year documented and an estimated 150,000 undocumented) – is all but certain to be significantly affected by politics in the future. The Mexican American vote has now become sufficiently large to force both political parties to respond to its strong interest in immigration and in making immigrants already here citizens. It is all but impossible to win the presidency without winning either California or Texas, and in both states the Mexican American vote is critical.

A political tipping point may well have been reached prior to the events of September 11, 2001, when both the Bush administration and leading Democrats signaled a desire to be responsive on immigration issues related to Mexico. Corporate interests in cheap labor have also encouraged Republican support for a relaxation of immigration policy; and new community alliances, especially in California and key Southwestern states, have brought labor to support Democratic positions favorable to immigration.

Recent studies by the Census Bureau and the Center for Labor Market Studies at Northeastern University show that there was little change in (legal and illegal) immigration over the 2001 to 2002 period. And although new legislative activity was put on hold by war on terror concerns after September 11, Bush offered a proposal to allow undocumented immigrants already in the country permanent residence under certain circumstances in early 2004. “[T]he long-term dynamics encouraging a new approach to immigration remain in place,” Los Angeles Times columnist Ron Brownstein observes – especially the fact that as the economy recovers, business demand for new workers will become increasingly important.

A second political factor likely to impact immigration and thereby population growth is the Social Security financing problem. As has been noted repeatedly, although there were five active workers in the labor force for every retiree in 1960, currently active workers number only 3.4 per retiree. By 2030 the ratio of workers to retirees is projected to fall to around 2.1 (and to a mere 1.8 by 2080). Although such figures have commonly been used to bolster arguments for a reduction in Social Security benefits, an obvious alternative – as several economists have urged, and many other countries have realized – is to increase the number of workers per retiree through immigration.

If even a modest long-term immigration increase is included as a response to considerations related to the Hispanic vote – and as a political alternative to cutting Social Security benefits of great importance to large numbers – movement in the direction of the higher-range Census Bureau projections becomes more rather than less likely. A very cautious and respected analyst, Harvard sociologist Christopher Jencks, suggests in any event that 500 million, rather than 400 million, is a likely number by 2050. Political and quasi-political considerations – plus the fact that Mexican American Catholic immigrants have birth rates almost twice those of the general non-Hispanic U.S. population – suggest that long-range projections in the 1.18 billion range are not nearly as speculative as some may think.

Even assuming more modest population projections, the numbers become very large as the century unfolds, no matter what. At some point, large enough in all probability to force even the most reluctant to consider large-order moves away from the current centralized concentration of major governmental decision making.

Twenty-one states have populations of less than 3 million (of these, seven have less than a million). Another nine have populations of less than 5 million. Most of these thirty states (and perhaps others) are too small to deal effectively with many economic, environmental, transportation, and other problems on their own.

Long-term federal restructuring that might ultimately come to rest on a unit of scale larger than most states but smaller than the nation – the region – most likely would begin with states that: (1) are themselves very large; (2) have a sense of their own political and policy identity; (3) are experiencing trajectories of growing racial and ethnic change different from the rest of the nation; (4) are experiencing particularly painful economic and fiscal distress; and (5) are already constituted as organized “polities.”

An obvious candidate to initiate long-range change is the regional-scale “mega-state” of California.

California, in fact, is already the equivalent of a very large semi-autonomous political-economic system. Its economy is roughly the size of France’s, the fifth-largest economy in the OECD. The economy of the five-county Los Angeles area alone is roughly the size of Spain’s, the OECD’s ninth-largest economy – and is greater than the economies of Brazil, India, and South Korea.

California’s population of 35 million is greater than that of Canada (31 million), Australia (19 million), the Netherlands (16 million), Portugal (10 million), and all four of the Scandinavian countries combined (24 million). Los Angeles County is larger in population than forty-two of the fifty states. The state is also larger, geographically, than numerous important nations – including Germany, Japan, the United Kingdom, Poland, and Italy.

In recent years state political leaders of both parties have also begun to take ever more challenging and independent positions. In 1994 Republican governor Pete Wilson came head-to-head with Washington in a bitter fight over the results of Proposition 187, a ballot initiative that would have denied public services – including public education and subsidized health care – to undocumented immigrants. “California will not submit its destiny to faceless federal bureaucrats or even congressional barons,” an angry Wilson all but shouted. “We declare to Washington that California is a proud and sovereign state, not a colony of the federal government.”

In 2001 Democratic governor Gray Davis confronted the Bush administration over its energy policy after rolling blackouts and extortionate prices had drained billions from consumers and the state treasury alike: “If you’re looking for a culprit, I’ll give you a culprit. The culprit is the Federal Energy Regulatory Commission.” Representative Henry A. Waxman coolly observed that the issue sharpened battle lines; it was the state in general against Washington, not one party versus the other: “It didn’t make any difference whether you were a conservative Republican or a liberal Democrat.”

The current California economy of $1.36 trillion is likely to increase to roughly $9.4 trillion – and possibly to $15.2 trillion – by 2100 (assuming no major order-of-magnitude changes in its share of national GDP). Under similar general baseline assumptions, its population will reach on the order of between 68.7 million and 83.3 million, on the basis of mid-range census projections.

Under all projections, California’s population changes are also laying the demographic foundations for a different Hispanic-dominated political-economic identity and developmental path – one that is likely to further intensify the state’s growing sense of independent direction and difference from the rest of the nation. In 1940 just 6 percent of the population was Latino (roughly 415,000 of the state population of 6.9 million). By 1970 it had reached 13.7 percent. The non-Hispanic white population in California is now a minority – less than 47 percent (in 2000), down from 57.2 percent just ten years earlier. Non-Hispanic whites are projected to constitute a mere 31 percent of the state in 2040.

What will happen beyond 2040 is anybody’s guess. “There will be no place in the state that is not touched by immigration and these racial and ethnic changes,” observes Mark Baldassare of the Public Policy Institute of California. “We will be inventing a new kind of society.”

Though few have fully grasped the implications, such changes in fact point to the kinds of long-term regionally defined cultural and ethnic shifts that have intensified the logic of regional restructuring in nations throughout the world. A major difference is that the United States is, and will increasingly become, truly mammoth in comparison to most other advanced nations.

California’s massive fiscal problems – and recent electoral events – suggest the likelihood of ongoing political volatility. Given its economic difficulties and the emerging pressures, in many ways it would be surprising, in fact, if a large and inherently wealthy regional-size state like California did not at some point demand greater powers to better manage its own affairs.

If (when?) it did, its example would likely be followed in one way or another by other large states. Texas, which now numbers 20.9 million, is projected to reach 27.2 million by 2025 and, on reasonable assumptions, 46 million by century’s end. Within a decade non-Hispanic whites are projected to be a minority – and a mere 33 percent of the population by 2040. Florida and New York are also of substantial interest. Florida is larger geographically than many midsize European countries; its current 15.9 million population is projected to reach 35 million by 2100. New York’s population of 18.9 million could reach 33.5 million and its economy grow to over $8 trillion by 2100. All three states might follow the lead of California – or at some point launch independent initiatives of their own that would have repercussions throughout the system.

Other plausible decentralization scenarios involve groups of smaller states. Numerous precedents and a long history of states working together could be drawn upon either in response to an assertion of power by larger states or simply in order to achieve positive goals that few small states can achieve on their own. Regional strategies have long been common, for instance, in connection with environmental issues. Some regions, such as New England, have developed multiple forms of interstate cooperation involving groupings of governors, attorneys general, environmental administrators, and others.

Nearly two hundred Interstate Compacts – which are already authorized by the Constitution – also currently coordinate various state efforts in connection with matters ranging from economic development to high-speed intercity passenger rail service. Federal precedents also abound – including the Tennessee Valley Authority and previously noted presidential proposals for many similar authorities. The Appalachian Regional Commission currently involves some thirteen states in common efforts related to industrial development, energy resource coordination, tourism promotion, and other matters. Both the Johnson and Nixon administrations experimented with various additional forms of regionalization – the former by establishing regional commissions, the latter through regional administrative strategies.

Such precedents for regional coordination do not reach to the many larger issues of political-economic authority and power that system-wide restructuring would clearly require. On the other hand, the historical record offers evidence that states working together when problems are larger than any one state can handle have been effective in many, many instances. The regular reappearance of regional efforts also points to a certain political appeal that regionalist ideas appear to have – especially when traditional alternatives are incapable of dealing with pressing political-economic problems.

Few in the United States are aware that in recent decades an intense exploration of regionalist constitutional changes has been under way throughout the world – in Britain and in nations as diverse as China, Italy, Indonesia, the former Soviet Union, and Canada. In 1989 a comprehensive international report concluded that decentralization had become a “subject of discussion in all countries regardless of whether they are old or young states or whether they have a long unitary or federal tradition.”

It is possible that the United States will be immune to the global trend – and that as the nation moves toward 500 million and beyond, it will continue to be managed, administered, and fundamentally governed from Washington without significant change in what by century’s end will be a constitutional structure that is more than three hundred years old. However – and even though few Americans have yet imagined the possibility – given the various changes under way, the odds are that population growth alone will ultimately create conditions that demand consideration of some form of major restructuring.

The specific shape a new Pluralist-Commonwealth-oriented regionalism might take over the course of the century is obviously indeterminate. Initial changes would likely involve greater state/regional autonomy in connection with economic and environmental matters, reductions in federal preemptive powers with regard to corporate regulation, limitations on the impact of WTO and other trade treaties on state/regional legislative authority, and alterations in current Constitutional Commerce Clause restrictions related to state/regional economic rights. Beyond this, much larger issues concerning the apportionment of power might well be posed.

The nations of the European Union are currently groping toward a constitutional structure that begins with highly decentralized nation-state political units (roughly similar in scale to U.S. regions) – and attempts to move from this basis centripetally, toward greater power at the center. The United States may well find itself moving in the direction of a similar long-term structural end-point – beginning, however, from the other direction and moving outward, centrifugally, to greater independence of regional-scale units away from the center.

Quite apart from population and other pressures that may force change – and the many uncertainties that would ultimately have to be confronted and resolved – over the long arc of the twenty-first century, Americans who are committed to a renewal of democracy are unlikely to be able to avoid the truth that in all probability this can only be meaningfully achieved in units of scale smaller than a continent but also of sufficient size to be capable of substantial semi-autonomous functioning: the region.