If Mississippi Became a Sovereign Country

Let’s engage in a thought experiment: imagine if Mississippi were to declare itself a sovereign nation. The term “sovereign” implies that this new entity could make decisions independent of international law, for better or worse. However, it also means that it could enforce these decisions on its residents, with no other nation having the right to intervene. The concept of sovereignty was solidified during the Peace of Westphalia in the 17th century, which marked a turning point in our understanding of state power.

As a new country, Mississippi would find itself economically disadvantaged compared to the broader United States. According to the Bureau of Labor Statistics, the average hourly wage in Mississippi is $23.91, while California boasts an average of $38.41 (data from May 2024). This disparity indicates that wages in Mississippi are approximately 38% lower than in California, and about 27% lower than the national average of $32.66. While Mississippi would still surpass countries like Vietnam or China in wealth, its economic standing would be significantly diminished compared to the U.S.

In response, voices from the remaining United States would likely rise in protest, arguing that American businesses would struggle to compete with their Mississippian counterparts due to this “unfair” wage advantage. American lobbyists and politicians might clamour for “fair trade” and an “equal playing field” with Mississippi.

Once Mississippi establishes its national account system and customs authorities effectively measure trade flows, a new political drama would unfold. A defined border would suddenly make the trade deficit a hot-button issue. Currently, Mississippi likely operates at a trade deficit with the rest of the U.S., though this remains unquantifiable without border oversight. After gaining independence, many Mississippian politicians would undoubtedly rally against this trade deficit.

From a liberal-individualist perspective, the transition to sovereignty might not alter the fundamental nature of trade: it would still be individual Mississippians and their private enterprises engaging in commerce with their American counterparts. A variety of factors—including trade terms, potential currency exchange rates (if Mississippi minted its own currency), interest rates, and foreign investment inflows—would influence interactions between the less affluent traders in Mississippi and their wealthier U.S. counterparts.

Implementing tariffs on imports from Mississippi or vice versa would not enrich individuals on either side of the border. In fact, it would likely impoverish most, with Mississippi feeling the brunt of the economic strain due to the imbalance in the economies. The only beneficiaries of such protectionist measures would be government allies and cronies.

To prevent the majority of Mississippians from experiencing economic decline regardless of U.S. policies, the newly sovereign government could adopt unilateral free trade, allowing its citizens to engage freely in commerce with residents of the U.S. and other countries. Mississippi could aspire to be a new Hong Kong in this regard. The same principle applies to the U.S.: if its government ceased interfering with domestic trade, most Americans would benefit. While temporary disruptions might occur, they would pale in comparison to the ongoing economic turbulence currently faced by the U.S.

Collectivists, whether from the left or the right, often struggle to grasp the implications of this thought experiment, or perhaps they find it convenient to exploit their fellow citizens (as I elaborated in my article “Patriotism as Stealing from Each Other,” Regulation, Winter 2017-2018, pp. 64-69). The absurdity of current protectionist rhetoric becomes evident when contrasting it with the arguments that would emerge on either side of a new border: Mississippian wages deemed “unfair” would fuel American lobbyists, trade unions, and politicians to demand protection for domestic industries, while Mississippian representatives would seek to shield their economy from high-tech and service imports from the U.S. One can easily envision a populist leader in Mississippi declaring that “the United States has taken advantage of us and exploited us for centuries” (a sentiment that might echo the rhetoric of certain populist figures).

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