Short Note on the Importance of History and Governance

This post by Yglesias, linked by a lot of folks, has a lot of good in it. But it's missing one thing: a conception of politics. Why is it that San Franciscans transfer so much money to Kentuckians? After all, California could surely use the cash to shore up local balance sheets. The answer is because Kentuckians (and Mississippians and Georgians and Iowans and Alabamans and etc.) get to elect the government that ultimately controls San Franciscans. And this privilege was gained -- well lost, technically, but such are the ironies of history* -- as the result of a brutal civil war.

If we're thinking in terms of parallels, Europe has had the civil wars. They just haven't had a winner. So they don't have a federal government, so they don't have a legitimate method of transfers, so they have fiscals crises in their periphery.

*Some well-regarded conservative -- I believe it's Walter Williams, tho I can't recall with certainty -- is often quoted as saying that the best thing that happened to Africans was the Atlantic slave trade, because despite its ills the children and grandchildren of slaves grew up in America rather than colonial or post-colonial Africa. Even given the abominable record of the US w/r/t minorities, this view contends that the lot of Africans is better here than there. Perhaps this is another irony of history. Perhaps it's completely specious. Whether one thinks that claim contains truth or not, it would be hard to argue that the American South did not benefit, in the long run, by losing their bid for independence. Without it, they could not rely on the transfers from rich San Franciscans to poor Alabamans.