Which does sound nice, but then runs into the problems of neighbors who don't follow those same rules and who decided to eat your lunch, either economically through unrestrained capitalism seeking infinite growth over sustainability, or militarily to feed their internal economic pyramid scheme, or maybe just because assholes run their country and believe they are better and more deserving and decided might makes right.

There are significant efficiency gains to be had with increasing organizational and operational sizes, the problem is many people assume those gains will benefit everyone, at least partially, rather than the more common reality of all that efficiency being redirected towards the personal gains of a few. And billions of dollars are spent year after year to convince the common people that they will get screwed more if they don't allow it to happen because all the efficiency gains, that they have never actually experienced, will disappear.

"eat your lunch .. or militarily"

Obviously all empires want to grow and devour the independent small states/societies and this is what happened and this is why only gigantic states(and those small ones siding with them) stand a chance today.

But a often tried out concept is that of federation. Meaning (semi) autonomous entieties get together for common benefits, like military defense and infrastructure. But of course also those have a tendency to turn into empires.

(The Delian League in ancient greece comes to mind, or well the russian federation today. )

But that does not mean it must be always like this. I believe there is a sweet spot that can be achieved and stays stable. But the current Zeitgeist seems to head in another direction.