Democracy & Federalism

There are many supporters of a federalist system. It is not difficult to see why. A federalist government hopes to enjoy the advantages of a large nation and without its disadvantages of crushing conformity and oppression. It enjoys the military strength and diplomatic clout that comes through sheer numbers. It also enjoys the advantages of a large heavily integrated free trade network existing within its borders. Unlike a centralized state however, as many issues and powers are held on a local level, it has flexibility in governing. Problems can be dealt with swiftly and sensibly by administrators on the ground and intimate with the circumstances. Additionally the smaller governments can experiment with various laws and social institutions as well as a adopting those successfully pioneered by others.
It is dismaying to note however, that democracy by nature seems to steadily eradicate federalism and centralize power. As an example the United States Government (USG) has undergone a steady transformation from its beginning, becoming more powerful relative to state governments and more democratic. Some of the powers it has gained are increased taxation authority, regulatory oversight of businesses/banks, a standing army, voter qualifications and many more.
To consider why this might be we will consider the Lincoln-Douglas debates. Slavery was a big issue at that time. Lincoln was unequivocal in his stance against slavery. Douglas vacillated and said that slavery was a matter for states to decide. In the later presidential campaign douglas was decisively defeated because neither pro nor anti-slavery faction supported him. So his federalist stance looked weak. Additionally it doesn’t hold any appeal for voters. Essentially the message is: vote for me so you all can settle the issues later. That’s nice but just not competitive when compared to someone who wants to settle the issue now, decisively and forever.
That seems to be the primary reason for centralization to occur if the top layer is highly democratic. Power wins elections. Not only can we see this in the context of a social crusade like that of slavery but also more crassly in machine politics. Rewarding supporters, getting benefits to the voters who elected you is all much easier in the context of expanding power of the central government.
A non democratic top layer on the other hand will run into problems if it tries to grab power. The sub entities’ (states) will band together and oppose what they see as a curtailing of their privileges. One can see this in the early American senate when senators where more like ambassadors for their respective states. Compromises where each state decides it’s policy would be an appealing solution for this body in many cases. A similar designed organization – The UN – also shows no sign of growing more powerful as time goes by.
Has this decreasing federalism been bad or good? A stronger central government was instrumental in ending slavery, and winning the civil rights fight of the sixties. On the other hand the federal government seems incapable of decreasing in size or in changing programs to meet changing circumstances. For example social security has structural flaws, most think it will fail, most want something that fills its function. However there is almost zero chance of any major reforms. One imagines that if each state had their own version that various alternatives would have been tried and a better system would be in place in most places.