If people face a high price for failure, they will quickly learn to be attentive and concerned. The major reason for America’s recent decline is that while people can still fail (we are not yet Bolshevists), failure is inconsequential when bureaucrats do all the thinking and provisions for the body politic.
No system is perfect, but mine seems to be the best solution to guarantee that there will be no amount of governmental tyranny. Localizing governmental authority admittedly does not allow for tyranny to the same extent the federal government does, but there is still the invetability of some measure of government tyranny. To slightly modify Reagan’s famous quote, “Government is never the solution to the problem.”
If people face a high price for failure, they will quickly learn to be attentive and concerned.
Yours IS a good solution, in theory. It will just not work in practice. Humans have very different ideas of “their own best interests” than what your theory proposes.