New Mexico’s Cartel Federalism

The folks at the Mercatus Center, a free market think tank at George Mason University, have come out with a new report comparing US states and how their versions of “federalism,” the interaction between state and federal governments, enhances or reduces liberty.

According to the report which can be found here, “it is surely reasonable to wonder how two sources of political power within the same territory can be more favorable to liberty than one. It turns out that the pro-liberty quality of federalism is a possible but not a necessary feature. This essay explores this two-edged quality of federalism to discern more clearly the relationship between federalism and liberty. It also examines how the erosion of federal liberty that has been underway for around a century might be amended in a pro-liberty direction.”

As patterns go, the “cartel” states tend to be “blue” states (like New Mexico) but there is far less of a pattern with regard to other states. One thing New Mexico policymakers should consider doing to reduce the “cartel” aspects of its economic system is to eliminate (or at least reduce) occupational licensing as Obama’s Council of Economic Advisers recently urged.