Hi Tom. Economy of scale applies if there is a single organization, with a single harmonized set of goals, managing a production line: such a production line will be more efficient than a smaller one. That is not what a nation is. A nation is a collection of competing interests. But the evidence for my assertion is mainly empirical: big government services generally, in my experience, don’t work as well as small ones. I know that in the US, pretty much everything run by the US Federal government is run really poorly. I don’t want more of that.
A case in point. Near my house they recently built a new Metro (subway) stop. It was built with a very large contribution from the US Federal government. It is a monstrosity — must have cost $50 million, with gigantic flying steel beams and an ocean of concrete. But it’s a friggin’ train stop — all that was needed was a roof and walkway. About five miles from there, in the town of Vienna Virginia, there is an old train stop, from the W&OD railroad. It served the same purpose, and it is a wooden house. Do you see my point? And then there are the million dollar bus stops of Arlington. Luckily they cancelled the planned four mile street car that would have cost $250 million ($63 million per mile!) and would have received a huge amount of Federal funding.
The national government is enormously wasteful. Staggeringly so. And the bigger a government gets, the more wasteful it becomes: it becomes the target of big special interests that view it as a candy store.