Kaffis Mark V wrote:
And if some states dropped welfare and health standards (or some implemented them, and others didn't), the companies would *want* to run to the ones that didn't, but the employees would want to run to the ones that did. There would be a balance struck. The states would have differing levels of regulation, to be sure, and individual companies and potential employees would weigh their location's regulation vs. the ease of connecting employer with labor (and vice versa) in that location. Some companies would be okay with heavier regulation, and would hire the presumably more plentiful individuals who demanded it (and thus sought out regulated locales), others would shun regulation, and pay a premium for the scarcer market of labor willing to accept the risk in exchange for a higher value of their employment.
So, even to those points, I reiterate.. And?
I can see where you're going with health/safety standards, which would only be excluded to the lowest class of workers? But welfare? You can't do welfare when you have totally free trade and freedom of movement. The states without welfare would simply dump their entire welfare population on the states that do have it and make THEM pay for it. Hell, the state government would probably pay them to leave to lower crime rates and such. I'm not sure how you'd ever get around this, Article Four would prevent the welfare states from excluding or discriminating against the impoverished that all run to or get dumped on them.
You can look at the EU to see what happens when you implement free trade and freedom of movement amongst uneven economies. This is despite the fact that the European Comission and European Council have far more power than this theoretical American federal government. Without trade and movement barriers, the capitalist countries feed off the socialist ones. The best example I can think of was when the recession really hit in 2008. The German government was initially opposed to doing any kind of bailout. (Not that I'm saying Germany is by any means highly capitalist, but in this example they definitely take that role.) The theory was that if they didn't do a bailout, Germans would not have extra money, so prices in Germany would remain low. But every other government would do one, so prices in those countries would rise. The result would be everyone spending their bailout money in Germany due to the lower prices, allowing Germany to "bailout" itself with everyone else's money without spending a dime. This would dilute the effort in every other country, so they pretty much had to be kicked and shamed into line on this issue.