As for the point of having a federal government, I could turn the question around and ask what is the point of having state governments when you could just decide everything centrally. You say "some kind of union", but I think you mean "exactly the sort of union that imposes the particular restrictions on states that I think is important". It's very much an open question what the "correct" set of restrictions should be, and that list has changed over the course of US history, and has different choices in different countries.
…which is the point of Federalism. The point isn’t what I think is important, the point is what we decide collectively as a country. And when such decisions are made, everyone must go along with them, because that’s how we accomplish goals. You can’t row a boat across a river if half the people on it are rowing in the wrong direction. However, if you decide you want to go back to shore, and everyone agrees, then the system should support that too (ie repealing prohibition).
For other stuff that the fed govt doesn’t care about, leave it to the states, and for the stuff the states don’t care about, leave it to the people. 10th amendment.
I admit, it's not an easy question, and my suggestion isn't guaranteed to work, but if there is complete deadlock and extreme polarization (potentially leading to violent conflict) at the national level, it's at least plausible that delegating some of those policies to smaller, more politically homogeneous, units might reduce the tensions, and make it easier for people to vote with their feet if they are unhappy with the rules they live under.
There's a lot of common sense power to the idea that smaller political units can reach an acceptable compromise more easily, and that having multiple governments offers some choice to those who can move. But there are big factors the other way too:
- The issues that most divide our definitions of liberty are aligned with differences in urban vs rural, majority vs minority, and rich vs poor. These are clustered such that they exist at state levels as much as federal.
- Smaller political units are more vulnerable to outside forces ... National parties can airdrop money into local campaigns to get strategic outcomes that have little to do with the constituents.
- The citizens of smaller units tend to have more direct power relations with each other, pulling them towards policies that explicitly maintain or redistribute power. This creates big problems for the less powerful, who see their position become more engrained and who often don't have the resources to vote with their feet.
None of this is an answer to "what's the best unit". I think that whichever personal liberties you value, you have to be pragmatic about who is protecting them where.
Sure, but liberty to do what? Liberty to not do what?
It is difficult to reconcile one person's liberty to marry the person they love without experiencing discrimination with another's liberty to discriminate against anyone who loves the 'wrong' people.
Or the right to own other people vs. the right to be free from ownership.
Does the freedom to innovate protect the generation, modification, dissemination, and implementation of ideas, or protect an inventor from having to compete with copycats?
Is the right to repair the equipment you own more or less important than the right of manufacturers to devise means of preventing unauthorized modifications?
Other than that, no.
Let's try approaching this from a different angle. Let's have X be the number of Americans who have the resources, knowledge, and paperwork required to move to a different state. And lets have Y be the number of Americans who have the same requirements, but to move to a different country. Surely you can agree that X is a much larger number than Y, right?
May be a global secular government with uniform civil laws for all is the answer?