Power is, by definition, a threat to liberty. Accordingly, liberal democrats mistrust all power, and state power most of all. They seek to limit and channel government power through a system of checks and balances consisting of any or all of the following: (1) a constitution or basic law that defines and limits power; (2) fundamental rights that are beyond government’s lawful reach; (3) separation of powers, whereby state power is divided among different departments; (4) a federal system that diffuses power among national and regional governments; and (5) a rule of law system that ensures fairness and requires everyone, especially the government, to follow the rules.

Free democrats expect more from government, and are willing to give it greater power to meet its broad responsibilities. Free democrats are comfortable with a robust state, because in a participatory society the government and people are one and the same thing, and government needs to be able to do whatever the community decides to do. A strong state, however, does not mean a state with unlimited or unchecked power.

Federalism is one aspect of government that both liberal and free democrats value, although for different reasons. Liberals see federalism as one of several useful checks on state power; free democrats see federalism as the indispensable means to make participatory democracy work in a world of nation-states. Federalism preserves freedom on a large scale by ensuring that power begins at the local level and works its way upward. It allows any number of small towns, communities, counties, and provinces to be linked together to create a nation of any size, preserving the core free democratic principles of direct popular participation and subsidiarity – the idea that decisions should be made at the most local levels practicable.