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Venture capitalist Tim Draper’s dream of six Californias, viewed as quixotic to many, seems to have come to an end with a judge’s ruling a few weeks ago that he didn’t buy enough signatures with his five-million-dollar investment. But has it?
As Walter Russell Mead notes, that it didn’t get enough legal signatures doesn’t mean that it’s not a good idea. California may not be too big to fail, but it is apparently too big to work.
The criticism of the proposal was harsh. Many claimed that it was no more than an attempt by Silicon Valley millionaires to shed themselves of the burden of having to “subsidize” the rest of the state. For instance, The Economist noted that the adjoining new states of Silicon Valley and Central California would become the richest and poorest in the nation in per capita income, with the latter being less than that of the state of Mississippi. Moreover, they argue that it would simply add 10 more Democrat senators from the currently heavily Democrat state, and would never get past Congress. There are problems with these arguments, which I’ll get into, but I think that much of the resistance to the idea arises less from concern about income inequality and more from a fundamental philosophical chasm in the nation at large.
I doubt that I’m the first to observe that, in both its geography and its people, California can be thought of as a microcosm of the U.S. itself. It has almost every environment that can be found elsewhere — alpine mountains, primeval forests, rugged coastline, sandy beaches, harsh deserts, range land and prairie, agricultured and otherwise. As with the country itself, its government is dominated by “progressive” coastal elites, almost literally lording it over the more rural and conservative inhabitants of the interior. As with Social Security and Medicare in Washington, the state has accumulated tremendous pension liabilities for its current and former employees with no obvious way to pay for them in the long run. The primary difference between the U.S. and California, in terms of such unfunded liabilities, is that the latter cannot print money.
In my view, in making his case for breaking up the now-unwieldy state, Draper was really reiterating the argument for federalism itself, that goes back to the Founding and the creation of a republic of 13 states from the original colonies. Part of the idea was as an integral aspect of the general idea of separation of powers, but a very large part of it was that they would be incubators for new ideas of governance; in Brandeis’s famous words, the states would be “laboratories of democracy.” Based on what I’ve seen of his explanation for it, Draper sees a need for the various regions of California to be given a much broader range to experiment than currently availed them by rule from the Bay area and Los Angeles, via Sacramento.
I suspect that if you scratch many of those who object to a breakup of California, you’d find underneath someone who would like to get rid of the Electoral College and directly elect the president. Such a person, in fact would likely not grieve the loss of the entire concept of a state, a level of government they find archaic and redundant, and a hindrance to beneficent majority rule from Washington itself. To put it another way, if you are a federalist, the argument for a California split is pretty much the same as that for having states in general. If you oppose it, it’s because you see it as a camel’s nose under the tent for more, rather than fewer states, as others (e.g., Illinois) decide that they are too large as well. For them, this is an idea that goes the wrong direction, “against the tide of history,” the Progressive project that has been going on for a century to dismantle the precepts of the original republican Constitution, starting with the direct election of senators.
But setting aside the philosophical underpinnings of the dispute, the more substantive criticisms of the proposal, such as those described above, have been flawed, in that they rely on a static analysis. That is, they assume that once the new states have been formed, their current electorates and economies will remain unchanged. It’s similar to the analysis that the Congressional Budget Office does in evaluating the fiscal impact of a new federal law, such as a tax-rate change. There is one thing that we can be certain of about such analyses: They are guaranteed to be wrong, because they assume that the behavior of humans is unaffected by changes in their environment.
Unlike the static analysts, I don’t claim to know what the new states would look like, but I think that in at least speculating about the behavior of their inhabitants, I’ll have a better shot at getting it right than they do in ignoring the possibility of change. I believe that, given the new states, their inhabitants will be motivated to pass new laws that create new economic opportunities, or to move to other states where they will have a better chance of joining with a majority in order to do so. This will result in both much different economies in those regions than presently exist, and much different voting patterns, contra the simplistic static assumption that it will just be more senators for the Democrats.
Accordingly, this piece kicks off a series in which I attempt to describe each of those new Californias, in the hope that it will start a more thoughtful round of discussion on the proposal, which I still consider important, and that it will help spur Mr. Draper on in his continued vital efforts.
It should, however, be clear, that this is an exercise in what might be, and almost certainly not what will be. The current proposal splits the states by county, which makes sense. It will be difficult enough to split counties into new states without having to redesign the counties themselves and create new county lines. But the final result of negotiations may end up doing this, or coming up with different county splits. If the breakup occurs, it will be intensely disputatious and rancorous. The biggest issues that make breaking up hard to do are what I call the three “P”s: pensions, plumbing, and prisons, in decreasing order of difficulty.
I’ve already mentioned California’s pension problem. None of the new states will want to inherit it and, given its size, figuring out how to allocate it will be the most difficult thing to negotiate.
By “plumbing,” I am referring to water. There’s an old saying in the west that “whiskey is for drinking, and water is for fighting.” One of the most contentious issues of a breakup for the state will be how to fairly allocate the water captured by the high Sierra to the east of Silicon Valley (and West California to the south). This will be even more contentious given the current historic drought, with minimal snow pack in the mountains and low reservoirs in the foothills. California currently has a vast network of canals and aqueducts that direct the water from the rivers that come down from the mountains to the cities and farms that need it to survive. For instance, the city of San Francisco gets its water from a reservoir on the Tuolumne River in the Hetch Hetchy Valley of northern Yosemite National Park (the flooding of which John Muir considered a crime, as the valley was considered to be similar to Yosemite Valley in natural beauty). A few years back, in fact, there was an amusing and odd alliance in which some environmentalists and mischief-making Republicans proposed to take out the dam, putting current Democrat Senator (and then-San Francisco Mayor) Dianne Feinstein in a bind, as she knew that there was no easy replacement and had to go against her usual green allies. Fortunately, unlike pensions, it is a problem that may be amenable to technological solutions.
The prison issue is probably the easiest to resolve, since there is already a lot of interstate prison business, and the costs can be negotiated as part of an overall deal. Bearing in mind that this is notional, and unlikely to look exactly as I describe (and much less likely to look like those regions currently do than the static analysis would indicate), I’ll take readers on a tour of the six new dynamic Californias, going from north to south, starting later this week.
I’ve started the series, with Jefferson.
North California is up now.
Welcome to the new state of Silicon Valley.