May 21st, 2022


America is returning to 1781

Tyler Cowen

By Tyler Cowen Bloomberg View

Published April 15, 2020

Covid-19 is not just changing Americans' daily lives, it may also transform their system of government. On many important current issues, the U.S. may end up with an arrangement that looks more like the Articles of Confederation than the Constitution.

Consider how this might evolve. First, states and regions are recovering (or not) at dramatically different rates. The worst may be over for much of California and Washington State - but New York City, because of its density and reliance on the subway, may find the problem especially difficult to control. Louisiana is on the verge of catastrophe, while some other states, such as Virginia, are still not sure how bad it will be.

In this context, covid-19 is the top political, economic and social issue. It is not simply about spending trillions of dollars or monetizing the debt, which most Americans view as abstract issues. The question is when and how to relax the current lockdowns. And the lockdown is the No. 1 feature of just about everyone's life at the moment - even in states not officially or completely locked down.

President Donald Trump appears to believe he has the authority to reopen the country and may do so as soon as next month. Whether or not that is wise, the federal government cannot reopen the country on its own.

The actual shutdown orders came from governors, and it is governors who will have to lift them - perhaps acting in concert, without the federal government. Furthermore, objective conditions will have to be sufficiently positive that people will in fact respond and head out to stores, restaurants and other public spaces once again.

As May begins, it seems highly likely that the states will be reopening at their own paces and with their own sets of accompanying restrictions, with some places not reopening at all. There is likely to be further divergence at the city and county level, with say New York City having very different policies and practices than Utica or Rochester upstate.

Such divergence in state policy is hardly new. But until now states have typically had many policies in common, on such broad issues as education and law enforcement and on narrower ones such as support for Medicaid. Now and suddenly, on the No. 1 issue by far, the states will radically diverge.

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Hence the idea that America is inching closer to what it was under the Articles of Confederation, which governed the U.S. from 1781 to 1789. The U.S. constitutional order has not changed in any explicit manner, but the issues on which the states are allowed to diverge have gone from being modest and relatively inconsequential to significant and meaningful if not dominant.

This divergence may create further pressures on federalism. In Rhode Island, for example, state police have sought to stop cars with New York state license plates at the border, hindering or delaying their entrance. Whether such activities are constitutional, most governors do have broad authority to invoke far-reaching emergency powers.

As some states maintain strict lockdowns while others reopen and allow covid-19 to spread, such border-crossing restrictions could become more common - and more important. Maryland has been stricter with pandemic control than has Virginia, so perhaps Maryland will deny or discourage entry from Virginia - in metropolitan Washington, there are only a few bridges crossing the river that divides the two states. Or maybe Delaware won't be so keen to take in so many visitors from New Jersey, while Texas will want to discourage or block migration from Louisiana.

These interstate divergences and divisions would then matter all the more, as cross-state migration would be less likely to equalize outcomes. The federal government might try to persuade the states to act differently, or Congress might try to use federal aid to leverage state-level policy. Or it might not. And it's easy to imagine Trump ignoring or even enflaming the issue, so he has someone or some place to attack and blame.

The best outcome, and maybe also the best bet, would be for this "new federalism" to end alongside the reign of panic driven by covid-19. Still, is there not at least a small chance that the federalist compact will be rewritten more permanently? It's already the case that California, Oregon and Washington State have formed a pact to govern reopening and Covid-19 control.

What if states and cities enjoy their new-found autonomy on issues that matter? In that case, the pandemic might succeed in changing the very meaning of the term "the United States."


Cowen is a Bloomberg View columnist. He is a professor of economics at George Mason University and writes for the blog Marginal Revolution. His books include "The Complacent Class: The Self-Defeating Quest for the American Dream."

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