Federal political orders often exhibit a conflict between the ideals of equality and political autonomy, since individuals in different subunits often enjoy systematically different standards of living conditions. While federal arrangements may be theoretically attractive to avoid despotism, such federal inequality would appear to conflict with the principles of egalitarian cosmopolitanism. The paper argues that individuals' interest in equal shares of income and wealth may legitimately be weighed against their interest in political control enjoyed by their subunit, as long as (...) the inequalities do not engender misery, domination, or unfair procedures. The reasons for subunit autonomy include reducing the risk of domination, increasing the responsiveness to local preferences, and reducing the burdens of decision making. These arguments also suggest that states may not always be the appropriate subunits in legitimate federal orders. (shrink)