The states of the United States are often called the “laboratories” of the federal system. “The states are the laboratories of democracy” or “the states are the laboratories of legislation” are popular sayings.
 
New Jersey Governor Woodrow Wilson (1856-1924) said at a luncheon in Dallas, Texas, in 1911, “The states are the political laboratories of a free people.” “The suffrage States are laboratories for sociological germ culture and all manner of freak experiments in legislation” was cited in print in 1915. Maryland Governor Albert Ritchie (1876-1936) told an annual conference of governors in 1931, ‘The states are the governmental laboratories of the nation.”
 
United States Supreme Court Justice Louis Brandeis (1856-1941) popularized the expression in his dissent in New State Ice Co. v. Liebmann, 285 U.S. 262 (1932), writing that “a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country…”
 
   
Wikipedia: Laboratories of democracy
Laboratories of democracy is a phrase popularized by U.S. Supreme Court Justice Louis Brandeis in New State Ice Co. v. Liebmann to describe how a “state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” Brandeis was an Associate Justice on the Supreme Court of the United States from 1916 to 1939.
 
This concept explains how within the federal framework, there exists a system of state autonomy where state and local governments act as social “laboratories,” where laws and policies are created and tested at the state level of the democratic system, in a manner similar (in theory, at least) to the scientific method.
 
Wikipedia: New State Ice Co. v. Liebmann
New State Ice Co. v. Liebmann, 285 U.S. 262 (1932) was a case in which the Supreme Court of the United States held that due process prevented a state legislature from arbitrarily creating restrictions on new businesses only on the claim that their markets affected a public use.
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Justice Brandeis dissented from the court’s opinion, saying that federalism allows that “a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country…”
 
29 October 1911, Galveston (TX) Daily News, pg. 1, col. 6:
GOVERNOR WILSON SAYS
Texas Has Set a Notable Example—The States Are Political Laboratories of a Free People.
(...) (Continued on Pg. 4, col. 4—ed.)
Political Laboratories.
The states are the political laboratories of a free people. Their self-adjustment is the most vital process of our life. The danger of a too great concentration of authority in the government at Washington is not so much a constitutional danger as a practical danger. It is the danger of an artificial uniformity, of an arbitrary unity, of a system without elasticity, of regulation without local accommodation.
 
29 April 1915, Springfield (MA) Union, pg. 8, col. 5:
OPPOSED TO GIVING
WOMAN THE VOTE
Argument Against Equal Suffrage Advanced by Prof. Prince of Dickinson College.
Letter to the New York Sun.
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Utah is polygamous. Colorado is a paradise of muckrakers and the rest of the suffrage States are laboratories for sociological germ culture and all manner of freak experiments in legislation.
       
29 April 1918, Syracuse (NY) Herald, ‘The Real Colonel House—Most Powerful Citizen of the World,” Illustrated Magazine Page, pg. 32, col. 4:
The Governor’s address made an excellent impression, and was read throughout the country. It is amusing to note that in this speech, Mr. Wilson—who has used New Jersey as a laboratory in which to test out the theories he had been formulating during years of study, exactly as Mr. House had used in Texas for the same purpose—spoke of the States as “the political laboratores of a free people.”
 
6 February 1924, Joplin (MO) Globe, “Wilson’s Literary Craftsmanship” (editorial), pg. 10, col. 1:
He wa a maker opf epigrams, a most natural result of his felicity of expression. Here are a few that deserve remembering:
 
” ... The states are the political laboratories of a free people ...”
 
3 June 1931, Bradford (PA) Era, pg. 1, col. 6: 
RITCHIE TELLS OF DANGERS IN LACK OF WORK
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French Lick, Ind., June 2—Governor Albert C. Ritchie pf Maryland told the annual conference of governors here this afternoon that “you can not have from five to eight million people wanting to work, and unable to get it, without knowing that this constitutes a challenge to our social order and that it is the strongest argument for Communism unless it is solved.” Governor Ritchie was presiding at the conference session.
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‘The states are the governmental laboratories of the nation,” said Governor Ritchie. “They are the agencies for political trial and experment. Yet we, the representatives of the states, refrain from debating those questions which are the realities of our national life. For instance, if any one thing is clear, it is that our people are becoming tired of the old conjure words in American politics, and are concerned instead about getting or keeping their jobs.”
 
4 November 1933, Boston (MA) Herald, “Our Mail Bag: Industry, Workers Should Share Unemployment Cost,” pg. 14, col. 6:
In the mean time, there is much that each state within its own jurisdiction can accomplish. The states are the laboratories wherein experiments may be tried, wherein rogressive measures supported by the genuine public opinion of the particular state affected, are appropriate and salutory.
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GASPAR G. BACON
Jamaica Plain, Nov. 3.
 
Google News Archive
26 June 1935, Spokane (WA) Daily Chronicle, “Today and Tomorrow: What Is Supreme Court Status?” by Walter Lippmann, pg. 4, col. 1:
They believe also that many vigorous local governments are the best training schools for politics, that the states are laboratories in which social experiments can safely be made, that the adantages of uniformity are greatly exaggerated, that progress made slowly by local consent is usrer than progress imposed from Washington.
 
Google News Archive
1 July 1939, Miami (FL) News, “Notes Good Governors” by Raymond Clapper, pg. 5, col. 3:
ALBANY, N. Y., July 1.—
THE governors’ conference here this week has brought together some capable fresh figures, several of whom may play prominent roles on the national stage in future years. If the states are laboratories of governmental experience, the state governorships also serve as minor league training posts for men headed for national public service.
 
21 January 1950, The Oregonian (Portland, OR), “Civil Rights Legislation May Gain Ground By Compromise” by Marquis Childs, pg. 6, col. 6:
Eleven states now have fair employment practice laws of one kind or another. As has been aptly said, the states are laboratories for testing legislation.
 
Google News Archive
8 October 1958, Spartanburg (SC) Herald, “Nelson Rockefeller Gives His Views” by Roscoe Drummond, pg. 4, cols. 3-4:
ROCKEFELLER— The states are the foundation on which our economic and political wellbeing rest. Ours is a Federal union. If the states, which are its components, are weak, our union is weak.
 
The states are the laboratories of free government. In a very real sense they are competing laboratories — a fact we should welcome as a challenge to political and economic engenuity and leadership.
 
17 January 1971, Sunday Advocate (Baton Rouge, LA), pg. 4-B, col. 2: 
California Unique
In Revenue Sharing
By ELIOT JANEWAY
(Consulting Economist)
NEW YORK—“The states are laboratories” the late Justice Brandeis used to say in that happier era when the keynote of life in America was optimism, And, again and again, state after state in America has taken creative legislative intitiatives representing milestones of practical progress.
 
But, more recently, conflict, with overtones of worse, has been the rule—thanks increasingly to the unremitting pressure on the country’s governors to reach out for new ways to latch on to money already spent.
 
Google Books
Public Papers of the Presidents of the United States:
William J. Clinton, 1994
By William J. Clinton
Pg. 154:
Remarks to the National Governors’ Association
February 1, 1994
Pg. 155:
I do believe the States are the laboratories of democracy. I do believe that where people are charged with solving the real problems of real people, reality and truth in politics often is more likely to give way to making progress.
 
The Democratic Strategist
Are States Really ‘Labs of Democracy’?
Posted by staff on April 12, 2013 10:02 AM
One of the treasured cliches of American politics is that the “the states are the laboratories of democracy.” It’s an appealing notion. It would be great if the 50 states were truly innovative in enacting cutting-edge legislation, which encourage other states to emulate what works and avoid what doesn’t.
 
It’s possible to cite recent examples of bold statewide initiatives, as do Ronald Brownstein and Stephanie Czekalinski in their National Journal article “How Washington Ruined Governors.” But there is mounting evidence that the states are now mimicking national polarization, more than experimenting with creative policies that have the potential for building consensus.
     
The Huffington Post
Hillary Clinton Leaves Door Open On Marijuana Legalization
By Matt Ferner
Posted: 06/17/2014 8:11 pm EDT Updated: 06/18/2014 9:59 am EDT
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Clinton also sounded supportive of new Colorado and Washington laws that have legalized recreational marijuana for adults.
 
“On recreational, states are the laboratories of democracy,” Clinton said. “We have at least two states that are experimenting with that right now. I want to wait and see what the evidence is.”
     
New York (NY) Times
Left Coast Rising
BY Paul Krugman
JULY 24, 2014
The states, Justice Brandeis famously pointed out, are the laboratories of democracy. And it’s still true. For example, one reason we knew or should have known that Obamacare was workable was the post-2006 success of Romneycare in Massachusetts. More recently, Kansas went all-in on supply-side economics, slashing taxes on the affluent in the belief that this would spark a huge boom; the boom didn’t happen, but the budget deficit exploded, offering an object lesson to those willing to learn from experience.