In an 1800 letter to Gideon Granger, Thomas Jefferson wrote: "The true theory of our constitution is surely the wisest and best, that the states are independent as to everything within themselves, and united as to everything respecting foreign nations. Let the general government be reduced to foreign concerns only..."
In other words, the only job of the federal government ought to be foreign affairs.
In expressing these sentiments, however, Jefferson was summing up a line of argument based on practical observations about the easy corruptibility of government power, the need for decentralization, and the benefits of government at the most local level.
One still hears calls for reducing the federal government to a foreign-affairs agency — more or less — but these calls are usually based on little more than a rank appeal to authority in the form of the "Founding Fathers" and their alleged original intent.
Appeals to the Founding Fathers, however, are usually unconvincing and unsatisfying. After all, not all the Founding Father even agreed as to the full extent of federal powers. Moreover, the constitution itself grants powers to the federal government beyond matters of foreign affairs, including, but not limited to, authorization for monstrous laws such as the fugitive slave acts.
And, the ink was barely dry on the constitution before George Washington decided he was perfectly fine with instituting a central bank, and with the use of federal troops to put down tax resisters. John Adams later signed off on the Alien and Sedition acts a gross abuse of the natural rights of peaceful Americans.
Needless to say, there were a great many early American founders and politicians who were quite at peace with expanding the domestic role of the federal government significantly.
Jefferson's position on the federal government as an external-relations agency only, however, is interesting today for reasons that have nothing to do with what is considered constitutional. Without resorting to any debates over what James Madison said about something 230 years ago, we can identify at least three good reasons why the US government — indeed any national government — ought to be reduced to an organization with authority only in matters of foreign affairs.
One: Foreign Relations Are the Only Area of Government in Which Physical Size Matters
When it comes to geopolitics, it's hard to deny that the ability of a nation-state to defend itself is often enhanced by physical size, and by the size of frontiers between itself and other competing nation-states. This does not trump everything else, of course. Wealthy nation-states have an advantage over poor states, even in cases where the poor nation-states are larger. Moreover, the advent of nuclear weapons has further diminished the importance of size in military defense, since a small nuclear-armed nation-state can wield truly threatening defensive power against even much physically larger nation-states.
Economic ties are also an important factor, as nearly every laissez-faire liberal in the past two centuries has understood. From Jefferson to Ludwig von Mises, liberals have noted that peaceful bonds between nation-states can be facilitated through free trade and exchange. Not only does this lead to greater peace among the nation-states involved, but a policy of free and open trade ensures a larger number of allies in case an outside aggressor state begins to make threats. The nation-states with strong trading ties will tend to stick together, thus further providing each other with greater access to resources for defense.
Size isn't as important as it used to be, but it continues to be a factor. Thus it is easy to see why even Jefferson and other anti-Federalists recognized the advantages of forming the US into a confederation for purposes of military defense.
Two: Non-Military Function Are Best Kept Local
Other functions of government, however, have nothing to do with bigness, and are best limited to the most local level possible.
The welfare state — which is by far the largest single federal spending category outside military spending — is one such example. As I note in my article "Decentralize the Welfare State," every American state already enjoys a per capita GDP that's more than large enough to support its own European-style welfare state.
Some people may argue that welfare states are a bad thing, but the fact remains that the existence of well-heeled and functional welfare state hardly requires the presence of an federal government like that of the United States. After all, if Belgium, with a population of a mere 11.3 million people, can have a vast welfare state, it hardly stands to reason that the United States, with a population of 320 million requires one enormous national state to pull off the same thing. Moreover, the issue of whether or not a welfare state is a good thing is a separate question from whether or not it requires a vast national government to execute it.
And while Jefferson likely never envisioned anything approaching the size and scope of a modern welfare state, the basics of the idea were not unknown in his own time, when liberals like himself were known to support a variety of different domestic welfare-type programs from public schooling to poor laws. Jefferson, after all, had supported poverty relief programs at the county level.
As noted in his comments to Granger, however, handing over poverty relief functions to a far-off federal agency of distant bureaucrats would have seemed to him a ludicrous and thoroughly dangerous proposal.
Domestic law enforcement is another function of government that has never been shown to require a unified national government. After all, as I show in my articles on the need to abolish the FBI (see here and here), the states of Europe have been able to address law enforcement needs without any Europe-wide police force, and the American states could just as easily adopt an INTERPOL-type model without submitting to any national police force.
And then there is the issue of banking which has been continually federalized, centralized, and insulated from local and market control. Supporters of a huge federal financial and banking apparatus would have us believe that such centralization is necessary for economic prosperity. This, however, has never been demonstrated by the historical record. Some of the greatest strides in the American standard of living have taken place during periods of extreme decentralization in the American financial system — as during the nineteenth century's periods of huge gains in real income. And, of course, the experience of small wealthy European states such as Switzerland demonstrates that small states perform at least as well as large states when it comes to economic performance.
Three: Federal Domestic and Foreign Programs Work Together to Increase Federal Spending Overall
And finally, the mixing of domestic and foreign-policy duties at the federal level allows federal lawmakers to continually hoodwink the taxpayers into tolerating higher and higher levels of federal revenue and spending.
We see how this occurs every budget cycle: one political coalition (the right wing) favors growth in military spending, while another coalition (the left wing) favors growth in social spending. Neither, of course, strongly opposes the other. But in each case, both sides can count on increased federal spending overall so long as some of that spending goes to their pet projects. The end result is a relentlessly increasing federal budget, year after year. Sure, in some years, there is more growth in military spending. And in some other years, there is more growth in social spending. But there is always growth.
Meanwhile, if Americans ever get it into their minds that federal spending ought to be reigned in, federal policymakers trot out the same scare tactics. To the right ting they say "give us more money, or the US will be defenseless from the Chinese/Russians/Iraqis/Syrians, etc. To the left wing they say "give us more money, or people will starve in the streets!" Having convinced two major ideological groups that they must give more to the federal government to get what they want, a majority of voters thus caves and hands over the money. Once the federal government has the money, then it's a simple matter of having lobbyists and legislators divide it up in a way that benefits them politically. Without the inconvenience of any voter involvement.
By limiting federal prerogatives to foreign affairs only, any referendum on increased federal spending would necessarily be a referendum on military spending only. And this would be clear to everybody. This would then have the added benefit of depriving the federal government of one of its most reliable constituencies: leftists who want more social spending.
In practice, when it comes to increased spending, the federal government's only natural constituency should be those in favor of greater military spending — and it would then become more difficult to convince the majority to tolerate more federal spending.
The drive for more social spending would then be shifted to the state level. This by itself would not guarantee a lower tax burden for taxpayers overall. It's entirely possible that state governments would indulge in massive bloated welfare programs. On the other hand, experience suggests that only some states would do this while others would not. In other words, there would be variety among the states, and residents could vote with their feet as to where they would live and pay taxes. The realities of tax competition — as we can witness in small states of Europe — would act to restrain the local governments in their tax-and-spending practices.
In any case, it would be preferable to be able to choose among states at various levels of profligacy than be stuck with one huge federal state indulging in ever higher levels of out-of-control spending.
A Few Caveats
None of what I've said here should be construed as an argument that the federal government, even if reduced to a foreign-affairs agency, would necessarily be justified in whatever it does. Even in such a reduced form, a government of that type would still be prone to abuse, bloat, and incompetence. But if we're going to be stuck with a US government, it's best to reduce it to a single function so as to politically isolate and restrain groups that favor increases in federal spending.
Nor do I wish to imply that the federal government ought to have a monopoly on military power within the United States itself. As both the legislative and social history of the US has shown, both an organized and unorganized militia — at both the state and local levels — have long been important in acting as a counterweight to federal military power.
But, at the core of all of this is my long-standing assertion that the United States ought never have been anything more than a military-defense confederation and a customs union, and member states of the confederation should always have been free to leave. Jefferson, for one, would have agreed.