Ten advantages of a federal constitution

Worldwide support for federalism is greater today than ever before. The old attitude of benign contempt towards the federal political structure has been replaced by a growing conviction that it enables a nation to have the best of both worlds, those of shared rule and self-rule, coordinated national government and diversity, creative experimentation and liberty. Within Australian political-intellectual circles, however, attitudes to federalism range from viewing it as a necessary evil to, as one recent work puts it, ‘waiting for an appropriate time in which to abolish our spent State legislatures’.

To some extent those attitudes are understandable. The pattern of constitutional interpretation followed by the High Court over most of this century has consistently tended to favour the expansion of Commonwealth power at the expense of the states. This has made it harder for the states to perform their proper role, so that the advantages of constitutionally decentralised government are increasingly difficult to identify and evaluate. These advantages are discussed below.

1. The right of choice and exit

A federal system allows citizens to compare political systems and ‘vote with their feet’ by moving to a state they find more congenial. That this right of exit is a political right as important but much older than the right to vote is obvious from the events leading up to the fall of the Soviet Union. The communist governments were the only regimes in history ever to suppress the right of exit almost completely. The Soviet authorities well knew that if their subjects should ever seize or be granted that right, the communist system would instantly collapse. And that, of course, is what happened.

The citizen in a liberal unitary state who is dissatisfied with the national government may move to another country. But it is becoming harder to obtain a permanent resident visa for the kind of country to which one might wish to emigrate. Globalisation notwithstanding, immigration is increasingly unpopular with voters the world over.

In a federation, however (including a quasi-federal association such as the European Union), there is complete freedom to migrate to other states. This has occurred on a massive scale in Australia, especially during the 1980s and early 1990s when Australians moved in huge numbers from the then heavily governed southern states to the then wide open spaces of Queensland. When centralists give federalism the disparaging label ‘states’ rights’, they are therefore obscuring the fact that it is above all the people’s right to vote with their feet that is protected by the constitutional division of sovereignty in a federal system.

2. The possibility of experiment

Federalism allows and encourages experimentation in political, social and economic matters. It is more conducive to rational progress because it enables the results of different approaches to be compared easily. The results of experience in one’s own country are also less easily ignored than evidence from foreign lands. All this is particularly important in times of rapid social change. As Karl Mannheim pointed out, ‘every major phase of social change constitutes a choice between alternatives’, and there is no way a legislator can be certain in advance which policy will work best.

Nonetheless, hardly a week passes without some activist group lamenting the ‘inconsistent’ (the term being misused to mean merely ‘different’) approaches taken by state laws and calling for uniform ‘national’ legislation to deal with a particular problem. Behind these calls for uniformity lies a desire to impose the activists’ preferred approach on the whole Commonwealth, precisely so that evidence about the effectiveness of other approaches in Australian conditions will not become available.

Centralists also tend to assume that uniformity and centralisation of the law bring greater legal and commercial certainty. But uniformity and certainty are quite unrelated. That is clear from experience with the federal tax laws and family tax law, which are uniform but at the same time severely lack certainty or predictability. Sometimes the gains from nationwide uniformity will outweigh the benefits of independent experimentation.

This will usually be the case in areas where there is long experience to draw on, such as defence arrangements, the official language, railway gauges, currency, bills of exchange, weights and measures, and sale of goods. But experimentation has special advantages in dealing with the new problems presented in a rapidly changing society, or in developing new solutions when the old ones are no longer working.

3. Accommodating regional preferences and diversity

The decentralisation of power under a federal constitution gives a nation the flexibility to accommodate economic and cultural differences. These characteristics correlate significantly with geography, and state laws in a federation can be adapted to local conditions in a way that is difficult to achieve through a national government. By these means overall satisfaction can be maximised and the winner-take-all problem inherent in raw democracy alleviated.

Paradoxically, perhaps, a structure that provides an outlet for minority views strengthens overall national unity. Without the guarantee of regional self-government, for instance, Western Australia would not have joined the Commonwealth. If that guarantee were abolished, the West might secede, perhaps taking one or two other states with it. Federalism thus has an important role, as Lord Bryce observed, in keeping the peace and preventing national fragmentation.