SADIE’S post on Iceland and the Fatal Conceit

SADIE submitted the following comment and link to one of my earlier posts, which merits its own discussion:

Iceland is drawing up a new constitution
(they’re currently using a revised Danish version)

The constitutional assembly will be made up of 25 to 31 delegates, the final number to be determined by a gender and equality ratio.

It will be made up of regular citizens elected by direct personal voting.

Anyone is eligible to stand for election, with the exceptions of the president, lawmakers and the committee appointed to organize the assembly.

They will use material from project earlier this year in which 1,000 randomly chosen Icelanders — aged 18-89 — offered their views on what should be in the constitution.

523 people are in the running. Truck drivers, university professors, lawyers, journalists and computer geeks are all among the candidates. All have been given equal air time on Icelandic radio to make their platforms known.

http://news.yahoo.com/s/ap/20101126/ap_on_re_eu/eu_iceland_election_2

This is interesting to me, in light of DQ’s early comments regarding the appeal of socialism: Iceland is a tiny country, more like a small town. Its population of 300,000 is uniquely homogenous. On a trip to Iceland a number of years ago, my host pointed out Iceland’s president, seated in his car parked at the curb, reading a newspaper. More like a mayor, really. People would walk up to him and share their concerns of the day.

I submit that, in a small town, it is easier to govern in a socialistic manner whereby the “state” represents and is accountable for the electorate’s well-being. Those in need can be looked after by and held accountable to their neighbors. Those that fail to contribute can be shunned or penalized. Can this work in large, more diversified countries?

One of Friedrich Hayek’s other memorable publications (after Road to Serfdom) was The Fatal Conceit: the Errors of Socialism , in which one of the arguments he made was that socialism reflects an ingrained longing in people for the perceived simplicity and interdependency of small communities (villages or shtetls) , that have defined most of recorded human experience.

http://www.amazon.com/Fatal-Conceit-Errors-Socialism-Collected/dp/0226320669

In small communities, decisions can be made by popular vote and it is easier thereby to achieve consensus. In large, diverse societies, consensus is much more difficult to achieve and government dictates must more often be imposed by force.

So, along comes Lichtenstein’s Prince Hans-Adam II, monarch of an even more homogenous (and very capitalist, with the world’s highest GDP) country /village of 35,000 people, introducing his new book, The State of the Third Millenium, as profiled in the very excellent National Review’s “Uncommon Knowledge” interview series hosted by Peter Robinson. If you aren’t yet familiar with the “Uncommon Knowledge” interviews, I highly recommend this series!

http://tv.nationalreview.com/uncommonknowledge/post/?q=YzJmMTI2YmZjMzc1MzgxY2U4ZDM2NmRjZmExZTIyMTE=

In this interview, Prince Hans-Adam II promotes the idea that societies like the U.S. or the EU have simply become too big to govern and that we should consider a decentralization of governance to more local levels where the diversity of preferences can better be accommodated. In states such as Massachusetts or Vermont, where there is a strong preference for socialism, the states can govern themselves as socialist communities whereas people are free to move to and assemble in more capitalist, free-market states such as New Hampshire. Let the best model win!

I confess to a certain appeal to this model: what if the Federal government was able to dismantle all of our social welfare programs and distribute available monies to states based on populations (like Congressional seats) to utilize as they they saw fit, based on more local needs and preferences? Wisconsin might opt to apply such resources to education, whereas New York might apply them to social welfare payments. Ditto with regard to the relationship between states and communities: why should the State dictate education instead of the local communities that know best what the needs of their students would be? We are a highly mobile society and people would have an option to change their local societies from within or move.

The Federal government, meanwhile, would be best left to concentrate on those roles that it was originally empowered to pursue, such as defense or negotiation of foreign treaties.

Is there merit to this? How could it work? I see the appeal in such a system but have trouble discerning all its implications.

For example, how could such a model accommodate the virtually certain bankruptcies of states such as California, New York and Illinois (not a matter of “if” but “when”)? Is it fair that people can feed off the benefits of socialist systems in California and simply pick-up stakes and move away to rich, capitalist states such as Texas and Arizona and let the surviving residents of their former homes absorb the penalty of their demise (while corrupting the voting bodies of their new homes with the same failed ideas from whence they left)?

Your thoughts?