The only competition between governments should be to obtain the most ideal practice of Capitalism possible, which means the complete enshrinement and protection of individual rights translated into the economic and political (I use the terms to include the efficacy of the police, military, courts, how the system is paid for, the particulars of the laws). In this sense, yes governments should compete against each other to see who can have the best police, the best laws, the best military. These things are what a good or bad government is judged by. Any economic/cultural differences between countries’ citizens are nonessential, because government only deals with using force and protecting freedom. It does not exist for profit, or for the economic/cultural advancement of its citizens but only for political justice. There are no conflicts of interests between Capitalist governments.
Now that doesn’t mean that people can just arbitrarily start a government whenever wherever they want. In my mind it is an act of force to secede from a government, as you are saying their laws are invalid and no longer apply to you, while under their system, while establishing an armed system which forces your laws onto people (as that is a government). It is only justified if the “parent” government is using force against you (a la the American revolution). So if you are already in a Capitalist system, that doesn’t mean you and your neighbor can suddenly ignore the government and create your own state. You must either be sanctioned by the existing state or morally justified.
So, essentially, what I am saying is that governments can and should compete, but only in accordance with their nature. The rest is the voluntary exchanges between individuals.
Well, separatists movements generally do not happen by whim. There are generally a lot of reasons to take the time, resources and risk (includig the risk to lose your life) to get involved in a secesionist movement.
To begin with, since there are no perfectly free, capitalist and rational governments out there, you will frequently find moral reasons to separate.
You may be able demostrate that your province/region has been exploited, oppressed, ignored, looted, set aside in important decisions, etc. You may be able to demostrate that your province has a different history, culture, language, ethnic root, religion, mindset, etc. Your people at that province might look themselves as a different people with a different destiny.
If Quebecois people want to secede, isn’t that their right?
If Texan people want to secede, isn’t that their right?
Wasn’t the right of the 13 colonies to secede from the British Empire?
If your wife wants to leave you, will you lock the door to force her in? You may try to persuade her, go to therapy, etc. but in the end, you as a rational husband will not keep her where she doesn’t want to stay anymore.
As far as I understand, Objectivism demands to have a government (any one that is good enough to protect rights), not necessarily that specific national government (the Canadian one, the Irish one, the Swedish one, the American one)