The sale of prescription drugs, pornography to minors, and cigarettes and alcohol over the Internet illustrates how information technology is breeding new federal-state regulatory issues and tensions that challenge existing regulatory regimes. Of course, the Internet consumers who buy Viagra or Chardonnay across borders do not feel like victims of criminal businesses. And their actions challenge the laws' legitimacy. They force states' regulatory monopolies to face competition. In a federal system, smaller units of government can try different approaches.
States can experiment, and good ideas can spread.
This process is most valuable when states are functioning as service providers. States have also learned how to tap the competitive discovery process within the private marketplace, by contracting out functions and, in some rare cases, simply giving citizens vouchers with which to purchase services. As leftist political writer Harold Meyerson correctly observed of the 1996 Reform Party convention, Perot-style technocrats imagine that there are no substantive disagreements between the followers of socialist Michael Harrington and the followers of libertarian Friedrich Hayek. The governors' report takes a similar attitude. The inevitable result is a mandate to do just about anything, and to focus more on the states' powers and prerogatives than on the freedoms of the citizens they serve.