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Another proposal is subjecting robots to VAT, since robots can replace humans in the supply of goods or services which are subject to the VAT. To avoid obstacles to the adoption of new technologies and innovation, a simpler approach could be levying a lump-sum tax, payable at the same level by everyone, which would not create distortions in the economy. However, lump-sum taxes present trade-off in terms of equity and distributional effects to be considered. A lump-sum tax would be regressive and bear more on small businesses. Since every business will pay the same amount of robot tax no matter the profits it runs, absorbing the fixed cost of a robot tax would be more arduous for small family businesses than for large companies.

Alternatively, the government could seek to enhance the employability of workers vis-à-vis robots by reducing employer’s NICs, and other costs of hiring them. Reducing employer’s NICs would benefit all employers, including those that were not at imminent risk of shedding jobs through automation. The government would struggle to find alternative sources of taxation to replace the very substantial revenues it derives from employer’s NICs (which comfortably exceed corporation tax receipts). It would be politically suicidal for the government to attempt to reduce the minimum wage or other employee rights.

The government might find it more politically attractive to impose a tax on robots than to abolish or reduce employer’s NICs or employment rights. A tax on robots would help it to reduce the speed of automation and safeguard its revenues, as well as raising funding for the retraining of those who are displaced and income support for them until they found alternative employment (if ever). Automation replaces labour with capital. This would increase the share of national income that goes to capital. Capital is currently taxed at a lower rate than labour income. It would be necessary to increase the tax on capital; i.e. the profits generated by robots to maintain revenue neutrality.

Adjusting to labor-saving technologies. Advances in artificial intelligence, robotics, and other technologies have called into question the future of work. The dilemma is that with these technologies productivity will increase but many people will lose their jobs (self-driving trucks are an example). Managing this transition is difficult from an economic, political, and moral viewpoint. A system where part of the increase in productivity is taxed, and then distributed as cash transfers to all citizens, whether they are working or not, could help resolve some of the tension. The programs being piloted or proposed in Finland, Switzerland, and New Zealand are essentially aimed in this direction. They challenge the basic notion that you earn your income by working in a job. While this notion has been around at least since the Industrial Revolution, perhaps it needs to be revisited in light of rapid changes in technology. We could envision a society where productivity is high enough that everyone receives a basic minimum income, and people choose to work on whatever they’re good at (including not working at all).

Second, a smart policy design would substantially increase the popularity of the policy. In particular, the carbon dividends approach would charge fossil fuel companies a fee for their emissions and return the money collected to the American people as direct checks. This would both establish the market incentive needed to accelerate clean energy and cut emissions, while also putting money back in the pockets of American workers and families. The recent Child Tax Credit and COVID relief measures underscore just how popular direct checks can be. This approach, originally mainstreamed by President Trump, would convert carbon pricing into a strategy with strong populist appeal. Given these benefits, the carbon dividends framework has been steadily gaining traction, especially among young people. Last year, over 400 college student body presidents from across the country signed a letter in support of carbon dividends—the largest-ever statement of U.S. student government leaders on any topic

Model results were able to estimate the effects of the policy on GDP, personal income, employment, prices, carbon dioxide emissions, mortality due to NOx and SOx emissions, revenues, monthly dividend amount, energy generation capacity by technology, energy generation by type, investment in power, population, and economic migration on both a regional and national level. Income and employment figures for each of 160 industry categories considered are included. These 160 industries encompass the entire economy. The results are all relative to a baseline case where there is no carbon tax (modeled by using the exact same set-up, with a $0/ton value for the carbon tax). In other words, all three models were run two times. Both times, the set-up was identical except for one thing: the price of carbon was either $0 from 2016-2035 (the baseline), or was $10 per ton in 2016 and increased by $10 every year after that (F&D).

Cumulative lives saved from reduce emissions.

Today’s economic insecurity is driven by both technological progress and globalization. As such, it does not lend itself to easy answers. A carbon dividends program provides a rare exception: a simple idea that strengthens the economy and elevates the economic prospects of the nation’s disaffected. The Department of Treasury estimates that the bottom 70% of Americans would come out ahead under such a program. Carbon dividends would increase the disposable income of the majority of Americans while disproportionately helping those struggling to make ends meet. Yet these dividends are not giveaways; they would be earned based on the good behavior of minimizing our carbon footprints. An ideal climate strategy would simultaneously reduce carbon emissions and steer America towards a path of more durable economic growth. A carbon dividends plan can do exactly that. A carbon tax would send a powerful market signal that encourages technological innovation and largescale substitution of existing energy and transportation infrastructures, thereby stimulating new investment. Second, the plan would offer companies, especially those in the energy sector, the predictability they now lack, thus removing one of the most serious impediments to longer-term capital investment. Third, because many regulations would become unnecessary, the plan would give companies the flexibility to reduce emissions in the most efficient way.

The economic benefit and transparency of the dividend also contribute to its political feasibility. Particularly in a country where there is hostility toward taxes, a revenue-neutral dividend can sustain support for a tax that will need to rise steadily for decades. If the dividend were very small, it would not make sense to focus on it as a meaningful step toward a basic income. However, a carbon tax adequate for keeping global temperature rises from exceeding 2 degrees Celsius will support a dividend equal to or exceeding Alaska’s Permanent Fund Dividend (US$2,072 in 2015, $1,022 in 2016). For example, the carbon fee and dividend proposal favored by Citizens’ Climate Lobby (CCL) starts at $15 per metric ton of CO2-equivalent emissions, assessed at the mine, well, or port of entry. It rises by $10 per year, or at whatever rate the Department of Energy determines will bring emissions to 10 percent of 1990 emissions by 2050. All revenue (minus a small administrative cost) is returned as dividends (full for adults and half for children under 18, with a maximum of 2 child dividends per household). A majority of households will benefit. If instituted in 2015, the annual dividend for a family of four would rise to $3,456 in 2025 and $4,752 in 2035, according to CCL. Other estimates suggest even higher dividends. Using the calculator at the Carbon Tax Center, I modelled a similar carbon tax and dividend, starting at $10 per ton, rising by $10 per year, with equal per capita dividends, and counting a household as 2.6 persons. In 2025, the individual dividend would be $1,557, and household dividend would be $5,721. In 2039, the last year available in the model, the dividends would be $3,289 and $8,551 respectively. In either estimate, the dividend is significant, and can be expected to have a positive effect on poverty and inequality. If Alaska’s Permanent Fund Dividend deserves to be regarded as a partial basic income, then so too should a carbon dividend over a significant number of years. A carbon tax is not on the immediate political agenda in the US, but there is growing support for it. Legislation has been introduced in the Congress. A bipartisan caucus is exploring climate policies. CCL has 418 active chapters around the world, with a concentration in the US regularly lobbying every member of Congress. And a group of prominent (mostly Republican) elder statesmen, the Climate Leadership Council, has proposed a tax and dividend package that could achieve the same ends as Obama’s Clean Power Plan. But even if the tax comes to pass, there are competing claims that would have to be addressed before most or all of the revenue could take the form of a dividend. Firstly, labour. Many unions will favor green investments over universal dividends. For those employed in such projects, the wages can be expected to greatly exceed the per capita dividend. Moreover, a transition to a green economy will displace many workers in traditional carbon-based industries such as coal mining, and the support of these workers for carbon pricing may depend on adequate support for their transition to alternative employment. Secondly, the urgency of green investment. For independent reasons, there may be a good case for green investment in order to speed the transition to a carbon-free economy. Thirdly, consistent with the Kyoto Treaty and the more recent Paris accord, it will be necessary to support transition in developing countries toward a carbon free economy – and there will be political pressure to use the proceeds of carbon pricing for this purpose.

Thirty years ago, as the atmosphere’s protective ozone layer was dwindling at alarming rates, we were serving proudly under President Ronald Reagan. We remember his leading role in negotiating the Montreal Protocol, which continues to protect and restore the delicate ozone layer. Today the world faces a similar challenge: the threat of climate change. Just as in the 1980s, there is mounting evidence of problems with the atmosphere that are growing too compelling to ignore. And, once again, there is uncertainty about what lies ahead. The extent to which climate change is due to man-made causes can be questioned. But the risks associated with future warming are so severe that they should be hedged. The responsible and conservative response should be to take out an insurance policy. Doing so need not rely on heavy-handed, growth-inhibiting government regulations. Instead, a climate solution should be based on a sound economic analysis that embodies the conservative principles of free markets and limited government. We suggest a solution that rests on four pillars. First, creating a gradually increasing carbon tax. Second, returning the tax proceeds to the American people in the form of dividends. Third, establishing border carbon adjustments that protect American competitiveness and encourage other countries to follow suit. And fourth, rolling back government regulations once such a system is in place. The first pillar, a carbon tax, is the most cost-effective way to reduce emissions. Unlike the current cumbersome regulatory approach, a levy on emissions would free companies to find the most efficient way to reduce their carbon footprint. A sensibly priced, gradually rising tax would send a powerful market signal to businesses that want certainty when planning for the future. A “carbon dividend” payment, the second pillar, would have tax proceeds distributed to the American people on a quarterly basis. This way, the revenue-neutral tax would benefit working families rather than bloat government spending. A $40-per-ton carbon tax would provide a family of four with roughly $2,000 in carbon dividends in the first year, an amount that could grow over time as the carbon tax rate increased. A carbon dividends policy could spur larger reductions in greenhouse-gas emissions than all of President Obama’s climate policies. At the same time, our plan would strengthen the economy, help working-class Americans, and promote national security, all while reducing regulations and shrinking the size of government. The third pillar is a border adjustment for carbon content. When American companies export to countries without comparable carbon pricing systems, they would receive rebates on the carbon taxes they have paid. Imports from such countries, meanwhile, would face fees on the carbon content of their products. Proceeds from such fees would also be returned to the American people through carbon dividends. Pioneering such a system would put America in the driver’s seat of global climate policy. It would also promote American competitiveness by penalizing countries whose lack of carbon reduction policies would otherwise give them an unfair trade advantage. The eventual elimination of regulations no longer necessary after the enactment of a carbon tax would constitute the final pillar. Almost all of the Environmental Protection Agency’s regulatory authority over carbon emissions could be eliminated, including an outright repeal of President Obama’s Clean Power Plan. Robust carbon taxes would also justify ending federal and state tort liability for emitters. With these principles in mind, on Wednesday the Climate Leadership Council is unveiling “The Conservative Case for Carbon Dividends.” The report was co-authored by conservative thinkers Martin Feldstein,Henry Paulson Jr., Gregory Mankiw,Ted Halstead,Tom Stephenson and Rob Walton. This carbon dividends program would help steer the U.S. toward a path of more durable economic growth by encouraging technological innovation and large-scale substitution of existing energy sources. It would also provide much-needed regulatory relief to U.S. industries. Companies, especially those in the energy sector, finally would have the predictability they now lack, removing one of the most serious impediments to capital investment. Perhaps most important, the carbon-dividends plan speaks to the increasing frustration and economic insecurity experienced by many working-class Americans. The plan would elevate the fortunes of the nation’s less-advantaged while strengthening the economy. A Treasury Department report published last month predicts that carbon dividends would mean income gains for about 70% of Americans. This plan will also be good for the long-term prospects of the Republican Party. About two-thirds of Americans worry a “great deal” or “fair amount” about climate change, according to a 2016 Gallup survey. Polls often show concern about climate change is higher among younger voters, and among Asians and Hispanics, the fastest-growing demographic groups. A carbon-dividends plan provides an opportunity to appeal to all three demographics. Controlling the White House and Congress means that Republicans bear the responsibility of exercising wise leadership on the defining challenges of our era. Climate change is one of these issues. It is time for the Grand Old Party to once again lead the way.

https://thehill.com/policy/cybersecurity/541459-blinken-to-prioritize-us-global-leadership-on-technology-after-massive/

Secretary of State Antony Blinken on Wednesday vowed that the U.S. will prioritize positioning itself as a global leader on technology to shore up its national security defenses, particularly following the recent breach of the federal government known as the SolarWinds hack.

Scharre previously served as a strategic planner at the Office of the Secretary of Defense, working to establish policies on unmanned and autonomous systems and emerging weapons technologies, and established DOD policies on intelligence, surveillance, and reconnaissance programs.

In his latest book, "Four Battlegrounds: Power in the Age of Artificial Intelligence," Scharre explores how the international battle for the most powerful AI technology is changing global power dynamics. That battle, he says, is a global competition to seek the best and most efficient data, computing hardware, human talent, and institutions adopting AI technology — which will determine the next global superpower.

https://www.wbur.org/hereandnow/2019/02/25/china-artificial-intelligence

Artificial intelligence is becoming a key factor in the future of economic and military competition around the world.

But what exactly is a global system? Our planet itself is an autonomous and selfsustaining mega-system, marked by periodic cycles and elemental vagaries. Human activities within however are not system isolates as our banking, utility, farming, healthcare and retail sectors etc. are increasingly entwined. Risks accrued in one system may cascade into an unforeseen crisis within and/or without (Choo, Smith & McCusker, 2007). Scholars call this phenomenon “emergence”; one where the behaviour of intersecting systems is determined by complex and largely invisible interactions at the substratum (Goldstein, 1999; Holland, 1998).

The ongoing COVID-19 pandemic is a case in point. While experts remain divided over the source and morphology of the virus, the contagion has ramified into a global health crisis and supply chain nightmare. It is also tilting the geopolitical balance. China is the largest exporter of intermediate products, and had generated nearly 20% of global imports in 2015 alone (Cousin, 2020). The pharmaceutical sector is particularly vulnerable. Nearly “85% of medicines in the U.S. strategic national stockpile” sources components from China (Owens, 2020).

But what if no one needed a job? What if you had enough income to live on and never had to work another day in your life? That, in essence, is the promise of universal basic income (UBI). The government gives everyone cash with no strings attached. It is an old idea with a new application. . Today, the idea has been given new life as one answer to the biggest problem we face as digitalization destroys jobs — how will people buy things? The UBI answer: simply give everyone enough money to live on. They can still work if they can find a job, but they don’t have to work to stay out of poverty.

Support for the idea is coming from all quarters. Libertarians support it as a much easier and simpler way to alleviate poverty and shrink the federal bureaucracy at the same time. Socialists and progressives support it because of its effect on poverty and the view that UBI can unleash new forms of creativity among the public. Labor leader Andy Stern, the former head of SEIU, supports it in his newest book Raising the Floor, as a way of addressing new joblessness among working people. Even leading capitalist investors like bond king Bill Gross see basic income as a new reality and one that will be good and necessary for the economy.

Since World War II, the United States has had a military second to none. Since the Cold War, America has committed to having overwhelming military primacy. The idea, as George W. Bush declared in 2002, that America must possess “strengths beyond challenge” has featured in every major U.S. strategy document for a quarter century; it has also been reflected in concrete terms.6

From the early 1990s, for example, the United States consistently accounted for around 35 to 45 percent of world defense spending and maintained peerless global power-projection capabilities.7 Perhaps more important, U.S. primacy was also unrivaled in key overseas strategic regions—Europe, East Asia, the Middle East. From thrashing Saddam Hussein’s million-man Iraqi military during Operation Desert Storm, to deploying—with impunity—two carrier strike groups off Taiwan during the China-Taiwan crisis of 1995– 96, Washington has been able to project military power superior to anything a regional rival could employ even on its own geopolitical doorstep.

All of a sudden, everyone is talking about artificial intelligence. But while most public conversations about AI center around productivity and jobs, the race to dominate technology is in fact a primary geopolitical concern. AI is already impacting warfare and deterrence, and the immense amount of computing power required to stay ahead of the curve is driving foreign-policy choices for major economies.

Who will win the AI race? What does it mean for critical minerals and mining? How will it impact global trade, sanctions, and great-power competition? To discuss his lead essay in FP’s summer print issue, “The Scramble for AI”, join FP’s Ravi Agrawal in conversation with Paul Scharre, author of Four Battlegrounds: Power in the Age of Artificial Intelligence.

Building on the theory of effective demand and modern money theory (MMT), Post Keynesians have proposed two alternative paths to full employment. The first and most common approach relies on fiscal policy to fill the demand gap. The second approach calls for direct job creation through an employer of last resort or job guarantee program (JG). Neither policy was designed to address environmental concerns and indeed both promote growth. However, when compared, it is clear that the JG offers advantages over demand management policy with respect to both employment and the environment.

The demand gap approach seeks a handle on employment via the manipulation of aggregate demand. When aggregate demand in the private sector is insufficient for full employment, fiscal policy can be enacted to boost demand (Arestis and Sawyer 2004) & (2003).The three essential goals of the demand gap approach are: (1) increasing aggregate demand (2) stimulating private investment and (3) increasing productive capacity (P. Tcherneva 2008). This approach suffers from two obvious weaknesses. On the employment front, it is indirect. If the goal is to increase employment, why not hire workers directly?9 On the environmental front, the flaw of the demand gap approach is that aims to achieve full employment through economic growth. As Tcherneva notes, “this is a pro-investment progrowth policy” (ibid.).

The United States is in the midst of a high-stakes competition with China for dominance in the next wave of technological innovation. Despite a flurry of activity at the federal level over the past three years, Washington has for the most part been playing catch-up. This summer, with the CHIPS and Science Act, the U.S. government committed to provide the semiconductor chip industry with more than $50 billion in federal investment over the next five years. But that was only after a supply-chain crisis had roiled the U.S. economy for two years as a result of the COVID-19 pandemic, and after the Pentagon had warned that it had become dependent on East Asian suppliers for 98 percent of the commercial chips it uses. In 2019, the United States ramped up a diplomatic campaign to thwart China’s bid to dominate the world’s 5G infrastructure. But that was only after the massively state-subsidized Chinese companies Huawei and ZTE undercut major Western competitors, seemingly cemented positions in the communications networks of U.S. allies, and flooded the zone in standard-setting bodies. And last year, the National Security Commission on Artificial Intelligence (on which both of us served) delivered its final report, calling for a comprehensive approach to sustaining U.S. leadership in education, research, and applications in AI that would mean an infusion of millions in new federal investment and a sustained government focus. But that report came out four years after China had already launched its national strategy on artificial intelligence, which generated billions in new funding, identified national-champion companies, and integrated AI into Beijing’s military-civil fusion strategy. This reactive approach is hardly a recipe for future success. The United States needs to win on these tech battlegrounds and make sure it is not caught by surprise again. Even taking into account the important steps Washington has taken in the past three years, it is hard to say with any confidence that the United States is now better positioned or organized for the long-term contest. Washington cannot sit by and allow Beijing to gain an advantage on the next round of emerging technologies, which will extend beyond the digital domain to include biotechnology, smart manufacturing, and new methods for producing and storing energy. Technology is at the heart of the U.S.-Chinese competition to build a thriving society, a growing economy, and sharper instruments of power. At stake is the future of political freedom, open markets, democratic government, and a world order rooted in democratic values and cooperation rather than authoritarianism and coercion. Washington needs a national plan that brings together commercial, academic, and government sectors to carry out a techno-industrial strategy. And the federal government needs to make a serious commitment to revamp the instruments of U.S. statecraft, including the military, to weather a prolonged period of danger. LOSING IS AN OPTION As Washington fiddled, Beijing’s centralized system for high-tech research and development churned, investing billions of dollars, training students, and subsidizing tech companies. It is entirely possible to imagine a future where systems designed, built, and based in China dominate world markets, extending Beijing’s sphere of influence and providing it with a military advantage over the United States. Under that scenario, countries that come to rely on technology made in China, including some U.S. allies, could be pulled into Beijing’s political orbit, slowing international progress on issues such as climate change, human rights, and the fight against corruption and eventually eroding the U.S.-led, rules-based international order. What is more, as China’s demographic trends darken and growth slows, the Chinese Communist Party could fear that its window of opportunity is closing and decide to press its newfound technological advantages in dangerous ways. The United States has a withering technology manufacturing base. It is fair to wonder how Washington allowed things to get this bad. The explanation is rooted in a paradox: the United States is a technological superpower that nevertheless suffers from significant technological vulnerabilities. On the one hand, the country seems to have it all: enormous companies with huge global platforms, the world’s leading chip designers, a rich startup ecosystem, and innovation hubs sprouting far beyond Silicon Valley. The United States still boasts the best universities in the world and serves as the destination of choice for global talent in technology. On the other hand, there is plenty of evidence that something is amiss: a withering technology manufacturing base, a military that struggles to adapt quickly to innovations, and a general paralysis when it comes to new technologies such as AI. For most of the post–Cold War era, the high-tech ecosystem in the United States evolved according to the logic of globalization rather than in response to strategic considerations. High-margin and high-value-chain investments and the search for cheap suppliers abroad made good business sense for U.S. companies and investors but devastated the U.S. technology manufacturing landscape. The absence of national technology priorities set by the federal government and a relative decline in government-funded R & D allowed commercial interests to drive the tech agenda, indifferent to the international strategic implications or U.S. competitiveness. Additionally, the rise of venture capital added a powerful new category to the so-called innovation triangle that had long brought together government, industry, and academia. Venture capitalists jolted the innovation landscape but largely stayed away from “deep tech” (technology requiring major scientific research, engineering innovation, and significant capital) and from attempts to commercialize basic R & D —both of which would have required enormous patience and less promise of sizable returns. The government’s relative power to shape and drive innovation weakened, and Washington lost its focus on national technology priorities.

The correct term for state push-back against the feds is interposition. James Madison first applied that word to state constitutional checks on federal power. Interposition is built into our constitutional system. I’ve been advising state officials on interposition for nearly 30 years. In 2016 I examined the topic in a Heartland Institute issue paper (). This essay summarizes some of the paper’s conclusions and adds further observations. The methods of interposition range from very weak to the strongest possible constitutional approach. Several methods overlap, and state officials can use any or all of them. But some forms don’t always work and some backfire. Educational Methods One educational device is a state legislative resolution condemning some aspect of federal overreach. During the Clinton years, several state legislatures adopted “Tenth Amendment Resolutions.” The first of these, passed in Colorado in 1994, included the following language: “Be It Resolved … That the State of Colorado hereby claims sovereignty, under the 10th Amendment to the Constitution of the United States, over all powers not otherwise enumerated and granted to the federal government by the United States Constitution. “That this Resolution shall serve as Notice and Demand that the federal government, as our agent, is hereby instructed, effective immediately, to cease and desist, any and all mandates that are beyond the scope of its Constitutionally authorized powers.” This “Notice and Demand” was toothless, and federal officials ignored it. Sometimes even state officials ignore a legislative resolution. In 2011, the Montana legislature unanimously adopted a resolution opposing the Real ID program. Montana’s executive branch continued with the program, and the legislature eventually backed down. I believe the time for passing mere resolutions is long past. Whatever educational value inheres in them also inheres in more efficacious measures. Lobbying Congress State legislative resolutions memorializing Congress on federalism issues are one form of lobbying, but Congress figuratively consigns them to the circular file. In 1995, Michigan Gov. John Engler made it more personal. He camped out in congressional lobbies promoting a bill curbing federal mandates. He had some success. However, that was 26 years ago, when Congress was controlled by a new GOP majority eager to scale down federal excess. I don’t consider state lobbying efforts to be worth much today, except perhaps in moderating bad legislation that’s going to pass anyway. Judicial Challenges States have sued the feds repeatedly in recent years. States’ most significant victory probably was persuading a 7–2 Supreme Court majority to strike down Obamacare’s mandate that all states expand their Medicaid programs. A carefully considered judicial challenge is often worth the time and expense. But victories are rare and often narrow in scope. Litigation can be very slow. The Supreme Court upheld the remainder of Obamacare only because it was supported by a “tax” designed to force citizens to buy government-approved health insurance. Yet Congress repealed that “tax” four years ago, and by the Supreme Court’s logic, Obamacare should have collapsed. But litigation continues and the feds continue to force Obamacare on us—driving up costs, spreading arteriosclerosis throughout the medical system, and depriving states and families of health care freedom. Coordination Among States Interstate coordination is old, tried, and true: The first convention of American colonies was held in 1677 and the most recent convention of states met in 2017. There have been about 40 in all. The basic procedure is that a state calls a convention to consider a common problem, other states agree to attend, and the state delegations meet to consider the issue and propose a solution. Since the 1960s, conspiracy theorists have attacked interstate conventions on specious, often ridiculous, grounds. For example, in 1994–95, Nebraska Gov. Ben Nelson, a Democrat, and Utah Gov. Mike Leavitt, a Republican, proposed an informal “conference of the states” to explore common responses to federal mandates. Conspiracy fans claimed the proposed conference could become a “constitutional convention” that might stage a coup d’ état! As absurd as their claim was, it gave lukewarm lawmakers in many states an excuse to avoid participating. Fortunately, in these days of teleconferencing, in-person consultations usually are no longer necessary (except for constitutional amendment purposes; see below). In addition, several national organizations of state officials regularly meet to facilitate communication. These groups include the American Legislative Exchange Council (ALEC) and the National Conference of State Legislatures (NCSL).

Interstate Compacts Can Powerfully Coordinate Collective State Action

As their proliferation suggests, interstate compacts are a powerful tool for exerting state sovereignty. Each state to a compact has the power to enforce the compact through the remedy of specific performance because the enforceability of compacts is guaranteed under the Contracts Clause and an exception to the rule that one legislature cannot bind future legislatures.425 Thus, the coordinated action that interstate compacts make possible could exponentially increase the effectiveness of all the tools discussed previously by enabling a unified front among the states and by helping overcome collective action problems

Cooperation Through Interstate Compacts The states enter into interstate compacts (i.e., contracts) to administer a of services, such as infrastructure, water allocation, environmental protection, natural resource conservation, and interstate parks. An illustration is the Palisades Interstate Park Compact (), entered into between New York and New Jersey to administer a sprawling and beautiful park in the Hudson River Valley. In theory, states can use compacts to “interpose” against federal power. As just noted, for example, the Western water compacts were adopted to forestall federal interference. Similarly, a group of states might enter a compact pledging that none of them will allow state employees to enforce an overreaching federal law.