About a decade before the U.S. independence, Jean-Jacques Rousseau made the case that humans were born free, but live in the chains imposed on them by the political system. The promise of the West was to fix that and create governments of the people, by the people, and for the people (as declared by Abraham Lincoln almost exactly 100 years later).
The West has failed to fully live up to its claims and is now backsliding. That’s not inevitable, but to move forward, we need a vision of what a better system looks like.
A broader approach
It starts with avoiding a trap.
Almost every “what comes next” conversation treats economic and political power as separate problems with separate solutions. Get the economy growing through tax cuts, deregulation, or fiscal stimulus. Fix government by cutting red tape, tightening or loosening election procedures, or streamlining administration. But the problems were never separate, because the problems are systemic.
The piecemeal approach also sidesteps the social question: the hidden trigger in this trap. It’s fundamental, but typically absent from the discussion because doesn’t fit easily into the West’s conception of itself.
As Rousseau articulated, Western liberalism is based on the idea of the free individual. It’s what’s made liberalism so appealing, because any self-aware person wants to see themselves as “free.” The social (i.e., the interplay between the individual and society) consequently takes a backseat.
But Western-style individualism has a dark side.
When people consider themselves self-contained, the “other” is everywhere. That creates fertile territory for division. When the system provides only isolation and atomization, people will create their own forms of belonging and latch on to concepts like ethnicity, nationalism or sectarianism.
To fulfill its promise, the liberal system consequently has to provide a more constructive pathway for individuals to engage.
It’s all connected
That’s not how things work now. Economic and political power are structured by and for the elites.
An isolated worker has no real leverage over their employer, and neither does a voter of the government. Instead of self-determination, individuals are subjected to decisions made by people, institutions and structures too powerful to influence.
That’s the fundamental dissonance between the theory of liberal freedom and the practice. When the gap between what the system claims and what it delivers gets wide enough, legitimacy dies.
To illustrate what I mean, here’s a scenario from modern America:
A young woman graduates with a bachelor’s degree owing $35,000 (the average student loan debt, which has doubled since 2000). She attended university because society sends the signal that that’s the path to a better life. Her freedom of choice is already restricted by starting out in a hole.
To find a job, she’s competing with millions of other graduates, but she manages to land a low-level white collar job. The starting salary is commensurately low, but it’s a foot in the door.
This image is AI generated
To be close to her new job, she needs to rent living space and that subjects her to a real estate market that is structured to restrict supply so that existing owners can see the value of their assets rise and property developers can generate profit. Neither her job nor her home are secure.
An election rolls around, but her district has been gerrymandered to ensure it swings a certain way. That means the outcome has been effectively decided in a process she has little opportunity to participate in. When the general election arrives, her vote is little more than an act of futile protest or rubber stamping the status quo. She has been effectively disenfranchised.
An economic slump hits and her company’s management at headquarters in a distant city decide to impose job cuts to protect shareholder value. As a new hire, she’s still cheap labor and survives the culling. As colleagues depart, she has more work and less free time.
She hopes to climb up the ladder, a decision over her advancement will be made by someone up the chain. Her room to demand more money and improve her living standards is limited by the precarity of her position.
Her life might not be terrible relative suffering elsewhere and in the past, but where’s the liberty and pursuit of happiness she was promised?
A person’s sense of freedom is not determined by voting once every few years. It’s whether they have real influence over the decisions that shape their existence — where they work, what happens at their employer, whether the community they live in gets to decide its own future, and whether they even feel part of that community.
That’s economic and political power operating as one system.
The postwar order tried to manage the limits to economic autonomy with political representation. When growth was strong and institutions were less captured by the economic elite, that worked well enough. It doesn’t anymore. Pretending the fix is doing the same, but slightly better is not going to cut it.
Devolution by design
So here’s the alternative. It runs on two tracks, because running on one is how you end up with the failed versions and half measures.
Political devolution means community and regional bodies with genuine authority. It’s actual decision-making and spending power over the things that affect a community most directly: housing, infrastructure and education. It’s not toothless advisory panels nor the performative theater of “public consultations.”
This isn’t theoretical. It’s a practice called sortition, which dates back to ancient Greece and has had modern implementation.
In Ireland, a Citizens’ Assembly of 99 randomly selected people broke a political deadlock on abortion. After deliberating over several weekends with expert input, its recommendation was ultimately endorsed by 66% of voters in a referendum. That’s what devolved deliberation can do even in its mildest, purely advisory form.
Devolution has been tried badly before, too. Hollow decentralization shifts blame downward without shifting real authority along with it. Any serious version has to devolve the power along with responsibility. Otherwise, it’s just providing a scapegoat or cover what was going to be decided anyway.
Economic devolution is the same logic applied to ownership and enterprise: cooperatives, worker-owned firms, community-owned utilities and land trusts. These are structures where the people who generate the value and live with the consequences also have a claim on the outcomes.
The largest working example is the Mondragón Corporation, the federation of worker cooperatives based in Spain. With over 70,000 employees, it’s the leading business group in the Basque region. Executive-to-minimum-wage ratios are democratically capped at levels the worker-owners themselves vote on.
Active since the 1950s, its domestic employment growth between 1983 and 2019 outperformed Spain’s overall economy by a factor of 3.4 and the OECD average by 6.3, according to a peer-reviewed study in the Journal of Labor and Society.
Like any real world enterprise, it’s also not a clean success story. Only around 30% of Mondragón’s total workforce are actual worker-owners, since many overseas subsidiaries and newer hires remain conventional employees rather than co-op members. And in 2024, two of its largest member cooperatives voted to leave the network over disputes about autonomy.
Devolved ownership doesn’t dissolve the ordinary friction of running a business. It just changes who has skin in the game and the terms of the fight. That messiness is a reason to build these structures carefully, not a reason to give up on the direction.
Less isn’t more
Run separately, either of these is incomplete.
Political devolution on its own gives communities authority over public budgets while leaving them with no power over the private capital that actually shapes the outcomes. Economic devolution on its own creates worker-owned firms operating inside a political system still designed to serve concentrated capital everywhere else.
You need both, moving together. In this stage of rapidly accelerating AI automation and the accumulation of power that comes with that, the case for broad-based stakeholder society is more urgent than ever.
This isn’t a call for smaller government for its own sake and it isn’t libertarianism with different branding. Some of what devolution requires — breaking up economic power, building cooperative and worker-ownership structures and redistributing budget authority downward — needs deliberate, muscular state action.
With wealth and power already highly concentrated, the only durable answer to a legitimacy crisis is giving more people a structural stake in the system. The alternative is fewer people having one, and we already know where that leads.
As an American libertarian, I instinctively support the idea of a smaller government (and especially at the federal level). But I share the concern that smaller government alone might just increase economic power for the elites.
And having lived over 25% of my life abroad, there are a few things I have noticed. One of which is that there is no perfect system. And that whatever new system that is created to replace another, will have its own challenges for society.
It will be fascinating to see how this idea of 'synchronous reform' plays out. And how to create more economic freedom for the masses without punishing those who have successfully ‘navigated’ the system that was offered them.