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>Bureaucracies have diseconomies of scale. There is a point past which "larger" is no longer getting you significantly better amortization of fixed costs and is instead just increasing communication costs, adding layers of middle management, exacerbating the principal-agent problem and making you a more attractive target for corruption.

You write this as a self evident truth but it isn't. In what way is having a single trucking standard for the entire country less efficient than having 50? In what way is having a single currency across the entire country less efficient than having 50? In what way is having a single standard for approval of medication less efficient than having 50?

The US's advantage is precisely because of it's scale. It provides a massive addressable market allowing companies to scale rapidly.

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> In what way is having a single trucking standard for the entire country less efficient than having 50? In what way is having a single currency across the entire country less efficient than having 50?

This is why issuing currency and interstate commerce (meaning actually crossing state lines, not the modern interpretation of anything that affects commerce anywhere) are among the explicitly enumerated powers of the federal government.

> In what way is having a single standard for approval of medication less efficient than having 50?

It allows large states to set their own standards and smaller states to choose which of the standards to apply, e.g. Arizona says you can sell anything in Arizona that you can sell in Texas, without requiring everyone to agree on how the trade offs should be made, e.g. California can have more stringent rules than Texas. Meanwhile people in Texas could still choose not to consume anything if it hasn't been approved in California and people in California could go to Arizona to get things they think California is being too reserved by prohibiting.

> The US's advantage is precisely because of it's scale. It provides a massive addressable market allowing companies to scale rapidly.

Which in itself has the tendency to promote megacorps and market consolidation over competitive markets with larger numbers of smaller companies, and consolidated markets themselves have significant inefficiencies and costs.

Meanwhile why would that require the federal government to insert itself into local education policy or be issuing subsidies to oil companies etc.?

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