Are Nation States Beginning to Splinter?

The Counterrevolution to the EU's Centralization

By Pater Tenebrarum: Venice just held a 'non-binding' referendum on whether the city should once again become an independent city-state and secede from Italy. An astonishing 89% voted 'yes' (which makes the outcome of the Crimea referendum no longer look 'strangely one-sided'). This happens just as Scotland's vote whether to remain part of the UK is approaching and Catalonia is preparing to vote whether to remain with Spain.

“Venetians have voted overwhelmingly for their own sovereign state in a ‘referendum’ on independence from Italy. 
Inspired by Scotland’s separatist ambitions, 89 per cent of the residents of the lagoon city and its surrounding area, opted to break away from Italy in an unofficial ballot.
The proposed ‘Repubblica Veneta’ would include the five million inhabitants of the Veneto region and could later expand to include parts of Lombardy, Trentino and Friuli-Venezia Giulia. The floating city has only been part of Italy for 150 years. The 1000 year–old democratic Serenissima Repubblica di Venezia, was quashed by Napoleon and was subsumed into Italy in 1866.
 
Wealthy Venetians, under mounting financial pressure in the economic crisis, have rallied in their thousands, after growing tired of supporting Italy’s poor and crime ridden Mezzogiorno south, through high taxation.

Activists have been working closely with the SNP on their joint agendas, even travelling to Scotland alongside Catalonians and Basque separatists to take part in pro independence rallies. Campaigners say that the Rome government receives around 71 billion euros  each year in tax from Venice – some 21 billion euros less than it gets back in investment and services.
Organisers said that 2.36million, 73 per cent, of those eligible to take part voted in the poll, which is not recognised by the Rome government. The ballot also appointed a committee of ten who immediately declared independence from Italy. Venice may now start withholding taxes from Rome.”

(emphasis added)
And while the Scottish and Catalan pro-independence forces are toying with the idea of joining the EU, there is another part of Italy that wants to secede as well and wants to definitely get out of the EU – in fact, this goal appears to be one of its motives. The island of Sardinia – which contrary to Venice is actually quite a poor place – wants to leave Italy and join Switzerland instead (this would of course be a brilliant move for the Sardinians):

“As familiar as it is, however, the secessionist spirit has never manifested itself in quite the way a small group of activists is advocating in Sardinia. Angered by a system they say has squandered economic potential and disenfranchised the ordinary citizen, they have had enough. They want Rome to sell their island to the Swiss.
"People laugh when we say we should go to become part of Switzerland. That's to be expected," said Andrea Caruso, co-founder of the Canton Marittimo (Maritime Canton) movement. While many have dismissed the proposal as a joke, its supporters insist they are serious. "The madness does not lie in putting forward this kind of suggestion," said Caruso. "The madness lies in how things are now."
A ruggedly beautiful gem in the middle of the Mediterranean, Sardinia – one of Italy's five autonomous regions – has always had a strong identity of its own. DH Lawrence, visiting in 1921, described it as "belonging to nowhere, never having belonged to anywhere". For a minority of Sardinians, independence remains the island's best chance for success. Caruso and Enrico Napoleone, the two 50-year-old school friends behind Canton Marittimo, disagree with them. After decades of keeping faith in Rome, they now believe that staying in Italy can do no good- but fear that going it alone could end badly, too.
The answer, they say, lies more than 1,000km to the north. "Having good teachers is something which in life everyone considers positive. We don't educate our children at home; we try to find the best teacher in the school," said Caruso, a dentist from Cagliari. "Why, when we have this mentality with our children, do we have to renounce it when talking of our people? "We think of Switzerland as a good teacher who could lead us on a path of excellence."
As the 27th canton, Sardinia, so goes the argument, would bring the Swiss its miles of stunning coastline and untapped economic potential. Sardinia could retain considerable autonomy, while also reaping the benefits of direct democracy, administrative efficiency and economic wealth.
The fact that Switzerland is not in the EU is "definitely" a plus, say the activists. Like many Italians, they no longer believe in Brussels's ability to deliver the dream – both economic and cultural – they once thought it could.

(emphasis added)
One of these days, one of the secessionist movements in Europe is likely to succeed and then a domino effect may be let loose. The Crimea's recent change of allegiance has probably energized these movements further.

Italian States prior to Italy's unification – click to enlarge.

Anachronism Nation State

And it is about time, too. The concept of the centralized, large-scale nation state is anachronistic and should be abandoned. The increasing centralization of the EU is going in the wrong direction. Once again it must be stressed that for the individual citizen, it matters not one whit whether self-important EU politicians and bureaucrats can 'throw around their weight on the international stage'.
What matters far more is that they would likely be treated a lot better and become more prosperous if everything fell apart into tiny independent territories. That would definitely not mean that there could be no free trade zone, or that every region would necessarily use a different currency. The main goals of the founders of the EU, namely free trade and free movement of capital and people need not be abandoned – on the contrary, they would likely be adopted without hesitation (see below why). When a great many small territories compete with each other for citizens, then they are all going to be forced to make a good offer that makes people want to stay. Large declines in taxes would be an immediate effect, but not the only effect that could be expected.
As Hans-Hermann Hoppe points out in this interview, the unification of the German states (Germany consisted of over 360 independent territories before 1794, and 39 were still left prior to the 1871 unification) was in many ways a big mistake in hindsight:

Q: “You want a return to “Kleinstaaterei”, the system of mini-countries of the 19th Century? 
A: “Take a look at the economic and cultural development. In the 19th century the area of what Germany is today was then the leading region in Europe. The major cultural achievements came at a time when there was no great central state. The small territories were in intense competition with each other. Everyone wanted to have the best libraries, theaters and universities. This region was significantly more advanced culturally and intellectually than France, which by then was already centralized. All culture in France is focused on Paris, the rest of the country fell into cultural obscurity.”
 Q: ‘But free trade would be threatened by secession and a return to fragmented nations
A:  “On the contrary. Small states have to trade. Their market is not big enough and they are not diversified enough to live independently. If they are not running free trade, they are finished after a week. However, a large country like America can be largely self-sufficient and is therefore less dependent on free exchange with other states. In addition, small and sovereign states cannot permanently dump the blame on others when something goes wrong with them. In the EU, Brussels is often blamed for all sorts of ills. In independent small states governments would, however, have to take responsibility for abuses in their own country. This has a pacifying effect on the relations among nations.”
Q: “If small states have their own currencies, that would be the end of the integration of capital markets.”  
A: “Small states could not afford their own currencies because of the transaction costs. They would therefore strive for a common currency that is independent of and uninfluenced by the individual governments. There is a high probability that they would agree on a commodity money such as gold or silver, whose value is determined in the market. Kleinstaaterei leads to more market and less state intervention in the monetary system.”
Q: “If Europe were a collection of small states then on the international stage it would have no economic clout next to the large states.”
A: “How then do Switzerland, Liechtenstein, Monaco and Singapore manage to be economically at the top? My impression is that these countries are wealthier than Germany and that the Germans were wealthy before they embarked on the adventure of the euro. We should free ourselves from the idea that business takes place between states. Business takes place between people and companies that produce here and there. Economies don’t consist of states competing against states but companies against companies. It is not the size of a country that determines its prosperity, but the ability of its citizens.”

(emphasis added)
Indeed, the facts support every one of Hoppe's contentions.

Secession Brought to its Ultimate Conclusion

In 'Power and Market', Murray Rothbard discusses among other things whether the free market could provide judiciary, police and defense services. In this section of the book there is also an interesting remark on secession. Rothbard not unreasonably asks why it is e.g. not held that Canada and the US are in a 'state of anarchy' relative to each other. After all, they don't have a single, centralized government. Why is it fine for Canada to be independent, but not, say for Texas? However, he follows this thought further to its ultimate conclusion:

“[...] once one concedes that a single world government is not necessary, then where does one logically stop at the permissibility of separate states? If Canada and the United States can be separate nations without being denounced as being in a state of impermissible “anarchy,” why may not the South secede from the United States? New York State from the Union? New York City from the state? Why may not Manhattan secede? Each neighborhood? Each block? Each house? Each person? But, of course, if each person may secede from government, we have virtually arrived at the purely free society, where defense is supplied along with all other services by the free market and where the invasive State has ceased to exist.”

(emphasis in original)
Indeed, there is no reason why one could not arrive at a stateless society at some point. Small territories such as those Germany consisted of prior to 1794 could probably no longer really be called 'states' anyway.
Germany prior to the 1871 unification – 39 independent states (and they all used precious metals as money, so it didn't matter whose face was on the money – it was a unified currency anyway).

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