rope generally, or Lebanon and Jordan, or even Ireland.nThe Soviet Union itself may be a prime candidate, as AmosnPerlmutter and James H. Billington have both recentlynargued.nAn even older notion, confederalism, may be ready for anrevival. It is already the model for Europe ’92, and is thenmost obvious solution for bringing together East and WestnGermany. Looking even longer term, it may be a solutionnfor Hong Kong/Macao, China (and eventually Taiwan), orneven parts of Latin America. Solving problems (mostly bynthe parties involved themselves) would not just be annacademic exercise, but could determine whether there maynbe regional or even world peace and prosperity.nTo sell abroad, reform must begin at home. Herenfederalism is in dire need of revitalizahon. Both deregulationnof the economy and decentralization of governmentalndecision-making has barely begun. Some major programsnwere block-granted to the states and cuts in Washington aidnhave encouraged local government and voluntary associations.nBut the national government still dominates domesticngovernment policy. While its revenue has gone down fromn61.7 percent of the government total in 1970 to 56.9npercent in 1985, the national government’s percentage ofntotal government expenditures has actually grown from 62.5nto 65.3 percent, a long way from the Founders’ federalnsystem. The Reagan-Bush era has merely slowed the pace ofncentralization.nFederalism is the essential term because it focuses uponnthe real threat to freedom — excessive centralized power, anpower that frustrates the solution of problems by othernmeans, claiming resources that could be better utilized inndifferent ways. Take the “conservative” solution to usenvouchers to replace direct Washington regulation. Withoutna notion of federalism, vouchers could be thought of as annideal alternative to the status quo. It is true that vouchers arena freer solution than a rigid central plan implemented by annational bureaucracy; but vouchers are, at best, a secondbestnalternative. Indeed, as was noted by the finest analyst ofn20th-century social processes, Joseph Schumpeter, vouchersnare a socialist solution.nVouchers assume that the national state knows how tondole out the correct amount of resources to pay for ournvarious needs. The central planning board would determinenhow much in vouchers would be spent on health, welfare,neducation, housing, and so forth. This would be a freernsocialism, since people could spend the vouchers within thenbroad categories, but a socialism nonetheless; for such ansystem imposes the “correct” amount of health, education,nand welfare upon society. Those libertarians who dismissn”market socialism” as a contradiction in terms are wrong.nIndeed, voucher socialism, as Schumpeter noted, is the onlynrational and potentially human form of socialism, andntherefore much more attractive politically.nBut vouchers do not change power. As the Foundersntaught and Acton demonstrated, the only successful way tondeal with power is to divide it; and the history of destructionnwhere this insight has not been heeded has merely emphasizednits wisdom. While restructuring Congress as a citizennlegislature to make it more representative, giving the Presidentnmore authority over the bureaucracy, and selectingnjudges more sensitive to the original intent of constitutionaln24/CHRONICLESnnnrights, do readjust power in a more federalist manner, theyndo not reduce it. Central government power is diminishednonly by placing it somewhere else. If it moves from executivento legislative or judicial, it is still liable to abuse by the capital.nThe only solution to the problem of power is to privatize it,nwhich means the central government simply moves out, ornto de-nationalize it by switching revenue sources to somenmore local power.nThe practical point is that as long as people demandngovernment solutions to domestic social problems,nfederalism — the shifting of national government programsnto local governments — will be an attractive alternative.nLocal government can solve problems better, is closer andnmore humane, and offers freer choice. The major problemnof government still is central planning, which has annincredible ordering appeal for those without a philosophicalnor theistic explanation of the world. The goals of managingnthe economy, or rationalizing the environment, or recreatingnthe world in the image of the family evoke deepnemotions no matter how poorly central planning has workednin practice. A political program that cannot accommodatenreasonable desires for government services (primarily utilizingnmarket mechanisms to make them efficient) will not benrelevant. If demands are limited by reasonable property andncivil rights, local governments can satisfy those demands,nand if there are many of them, can still allow freedomnthrough popular choice of a community that most closelynfits individual preferences for public good.nThe conservative vision for the 21st century is as simplento conceive as it is difficult to accomplish. The goal is toncomplete the transformation from the national welfare statento a federalist society by making the recreation of federalismnthe vision for the Republican Party, and then for the nationnitself George Bush and mainline Republicans can be reliednupon to fight the good fight until 1996. But “no new taxes”nis not a program for the long run. By definition, it is withoutna positive meaning, unable to inspire, especially for idealisticnyouth seeking new worlds to conquer.nThe conservative movement’s mission is to transform thendebate. It is not freedom or community, but communities inna structure of freedom. Federalism creates an economicnmarket but also a market of governments, which allowsndifferent preference orderings for public goods to be establishednin different locations within geographical areas, andnthe national freedom to choose between them. In such ansystem, power is divided into a natural hierarchy thatnrespects freedom and community, by relying first upon thenindividual and the family; then on local voluntary andncommunity organizations, private businesses and corporations;nthen municipalities, counties, and states; and only, asnlast resort, Washington — a definition of the free societynGallup still finds supported by 80 percent of Americans.nThe welfare state, crafted in the eady 20th century bynWoodrow Wilson, collapsed in stagflation under JimmynCarter because it did not work. Then Ronald Reagan begannthe long climb back to free and federalist principles, withnGeorge Bush still carrying the mission forward. But thenconservative movement must now complete the march bynraising the bold colors of federalism as the center of itsnagenda to extend freedom into the next century.