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The Meaning of Federalism

By Clarence B. Carson
Foundation for Economic Education
January 1983


Several developments have contributed to making the meaning of federalism
obscure. Some are old, some recent. Some may be more or less innocent; others
are destructive of federalism itself. One of these that may be more or less
innocent is the habit of referring to the United States government as the
“federal government.” Whether it is innocent or not, it does tend to confuse the
unwary. These United States have a federal system of government. The system
embraces both the general government and those of the states. Thus, both the
United States government and the state government are correctly alluded to as
“federal” governments.

When Felix Morley called attention some years ago “to the illogical practice of
referring to the central government as the ‘federal government’,” he declared
that the confusion was “due to historical accident.” What he had in mind was
that the supporters of the Constitution, when it was being considered for
ratification, called themselves “federalists,” and the government under
examination “federal.” From that beginning, he thinks, the idea of the genera]
or central government being the federal government began to take hold.[1]

That much is correct, but there is an additional reason: the Founders devised
what was essentially a new system of government. It has come to be called
federalism. But they were so intent upon promoting or preventing its
ratification and acceptance that they neglected to devise logical appellations
for it in general discourse. Before the devising of a federal structure, leagues
or unions of more or less independent states were usually referred to as
confederations. The organizations over these leagues could be referred to as
confederation governments. There is a comparable word—“federation”-in use. But
it would be inaccurate and misleading to refer to the United States government
as the federation government. Such terminology would imply that the central
government is over the states rather than over the people. Whereas, it has a
jurisdiction over the people primarily.

People Are Governed

The distinctive feature of the federal system of government is that the general
government acts directly upon the people. For example, the government is
financed by taxes on persons, not by levies upon states. The government in
question can be described with sufficient precision by calling it the United
States, general, central, or national government. However, my purpose is not so
much to reform the use of the language as to remove the confusion engendered by
referring to it as the federal government. More on this point later.

Another source of confusion about federalism is the doctrine of states’ rights,
as it is commonly called. In the first place, states have powers (as do all
governments), not rights. In the second place, what is being disputed within the
federal system of government when so-called states’ rights are asserted is the
jurisdiction of the national government to act in some field. It is important
that states act to restrain the national government to the exercise of its
powers within its allotted jurisdiction. They are most apt to do so in defense
of their jurisdiction. But what is ultimately important in this is the rights of
persons and the liberties of the people. It is easy to lose sight of this when
the dispute is conducted in the name of “states’ rights.”

Rights belong to individuals in the American constitutional system. Any
government (whether state or national) may misuse its powers so as to violate
the rights of persons. It is exceedingly important, then, that the rights of
persons not become identified with the powers of government, either national or
state. That can easily become the means for the enlargement of the powers of
government (one or the other, or both) at the expense of the rights of persons.

That can result from confusing either states’ powers with rights or treating
jurisdictions as if any power that can be conceived falls in one or the other.

These are confusions of the federal system that have become implicit in the
states’ rights doctrine.

A Mistaken Use of the States’ Rights Arguments

How easy it is to fall into this trap is illustrated in the opinion accompanying
a Supreme Court decision announced in 1936. The case was The United States vs.
Butler
in which the main provisions of the Agricultural Adjustment Act were nullified.
The majority opinion was written by Justice Owen Roberts. (It should be noted
that Justice Roberts did not linguistically confuse jurisdiction with rights,
but he did rely on the states’ rights argument in such a way as to ascribe
powers to the states which they neither claimed nor possessed.)

Justice Roberts based his decision upon the fact that the act provided for
taxing food processors in order to purchase the compliance of farmers with the
programs it outlined. His main conclusion was stated in these words: “Congress
has no power to enforce its commands on the farmer to the ends sought by the
Agricultural Adjustment Act. It must follow that it may not indirectly
accomplish these ends by taxing and spending to purchase compliance. The
Constitution and the entire plan of government negative any such use of the
power to tax and to spend as the act undertakes to authorize . . . .” Then, as
if it were an afterthought, he appended this dictum: “A possible result of
sustaining the claimed federal power would be that every business group which
thought itself under-privileged might demand that a tax be laid on its vendors
or vendees the proceeds to be appropriated to the redress of its deficiency of
income . . . .”[2] This last is about as close as he came to dealing with the
violation of the rights of individuals involved.

Even so, he was within shouting distance of the issue in the points he made that
are quoted above. But then he dragged in the dubious issue of the alleged
intrusion of the provisions of the act upon the jurisdiction of the states. He
went on at length about the dangers to the states of such action. At one point,
Justice Roberts concluded that the “Congress cannot invade state jurisdiction to
compel individual action; no more can it purchase such action.” At another
point, he declared that if the principle of the act were accepted, Congress
could invade the reserved jurisdiction of the states and accomplish the “total
subversion of the governmental powers reserved to the individual states.” The
proponents of the act, Justice Roberts said, were trying to claim that the
Constitution “gave power to the Congress to tear down the barriers, to invade
the states’ jurisdiction, and to become a parliament of the whole people . .
.”[3] This claim flew in the face of the 10th Amendment, he charged.[4]


In short, Justice Roberts did his best to bring the whole weight of federalism
to bear on his position with what were spurious arguments about the jurisdiction
of the states. If the act was not authorized by the Constitution, it was
irrelevant whether or not it violated the jurisdiction of the states. That any
or all states had power to pass any such act is nowhere proved.

The 10th Amendment does not disclose a single power possessed by the states.
Rather, it disposes of the question as to whether the general government has
some reservoir of powers not otherwise enumerated. (It doesn’t.) And, if a state
does not have the power to pass such an act, it would be no trespass upon its
jurisdiction for the general government to pass one. He does not even explore
the possibility that the states might be prohibited from passing such acts by
the United States Constitution, for which an excellent case could be made. The
most that can be said for the argument is that Justice Roberts grabbed the
states’ rights ball when it came floating by and ran with it with all his might.

None of this is said in derogation of jurisdictional claims of the states, of
the decision the Supreme Court reached, nor of the powers of reasoning of the
court. Rather, it is to illustrate the results of the confusion of federalism
inherent in the states’ rights doctrine and some of its cor ollaries.

Subordinating the States

But the greatest confusion about federalism and threat to its survival has come
from the concerted effort for more than half a century to turn the states and
their dependent organizations into administrative units of the national
government. The way was eased for this by the habit of referring to the national
government as the “federal government.” Off-the-mark talk about states’ rights
has had little more impact than dogs have upon the moon by barking at it. State
organizations have been most effectively turned into administrative units in
connection with the development of the welfare state.

More precisely, as the national government became more and more involved with
redistributing wealth, state organizations, particularly counties, became
instruments of much of the distribution. For exam-pie, state welfare agencies
(called by a multiplicity of names nowadays) administer a great variety of
programs funded by the national government. Over the past three decades, too,
the courts of the United States have asserted increasing and widespread
authority over agencies funded primarily by the states, such as schools,
prisons, mental institu tions, colleges, and what have you. There should be no
doubt that there have been large scale intrusions upon the jurisdictions of the states.

The confusion has been further compounded in recent years by what has been
called the “New Federalism.” Currently, the phrase is being used by the Reagan
Administration to designate the plan to turn over some welfare programs to the
states, to disentangle some state-national joint efforts by having the national
government take over the funding of them entirely, and to reduce national
controls over grants made to states by the government. But the idea of a New
Federalism had been around for several years before Reagan became President.

The late Nelson Rockefeller proposed doing something to revive federalism in a
book published in 1962, entitled The Future of Federalism. At the beginning of
his second term, President Richard Nixon advanced the idea of having the
national government aid in the recovery of federalism. About all that came out
of that was the practice of providing large grants from the central government
under the rubric of revenue sharing. What these various proposals and plans have
in common is the notion that federalism can be restored to its full vitality by
action of the national government. That may well be the problem rather than the
solution. At any rate, it has succeeded thus far more in confusing than in
clarifying the meaning and function of federalism.

The main point I wish to make about the function of federalism is that it is a
system for the protection of the liberties of people and the rights of
individuals. The freedom of a people consists in the voluntary use of their
property and faculties to their chosen ends. The Founders of the United States
generally understood well something that is universally the case: that
government is ever the greatest potential threat to freedom of action. The
liberties that prevail consist of those acts not prohibited by law and those
rights of individuals that governments are forbidden to violate and are enjoined
to protect from all intruders. In short, the precondition of extensive liberty
for a people is limited government. It is, then, as a device for limiting
government that a federal system of government performs its most valuable
function. But to grasp the full implications of this, the meaning of federalism
needs to be clearly stated as free of confusion and complications as possible.

Two Governments in Power

A federal system of government is one in which two governments have jurisdiction
over the inhabitants. In this country, the two governments are those of the
states and of the United States. Both governments have sanctions, that is, may
use force upon the inhabitants. Both have enforcement officers and courts. This
system is sometimes referred to as one of dual sovereignty. The phrase is,
however, misleading, and when carried very far leads to conflicts for which
there is no resolution short of the destruction of such independence as one or
the other governments may have.

The term sovereignty came into currency in the modern world in the 16th century.
Monarchs came to be referred to as sovereigns. The concept was used to buttress
absolute monarchy. It means the supreme, or ultimate authority, over a land,
state, or country. The United States does not have a monarch, or king;
literally, it does not have a sovereign. It goes deeper than that, however.
Neither the Constitution of the United States nor the constitutions of the
states vest supreme authority in any man, any group of men, or the people as a whole.

It is the genius of American federalism that government is limited, not supreme.
Sovereignty is a mischievous notion, an improper analytical tool for describing
government in this country. It sends people in quest for an authority which can
only exist in defiance of the constitutions of the states and of the
Constitution of the United States.

Federalism is best understood, not as a political concept, but as a legal
concept, which is what it is. Sovereignty is a political concept (an absolutist
authoritarian one, at that); jurisdiction is a legal concept. Thus, the
conclusion that in the United States the states have a jurisdiction, and the
United States has a jurisdiction.

Defining the Jurisdiction

The Constitution of the United States, aside from describing the method of
selection of its officers and the inner workings of the government, is mainly
concerned with defining the jurisdiction of the government that it authorizes.
Also, it denies jurisdiction to the states in cer tain areas, prohibits states
to act in certain ways, and reserves powers to the states, and rights to the
people. Before offering some proof for this and delineating the jurisdictions,
however, there are two basic points that need to be nailed down.

The first is to show why state governments are federal governments as well as
the United States. These United States have a federal system of divided
jurisdiction in government. Severally, the states exercise authority over
persons in one of these jurisdictions. The United States government exercises
authority in the other. Both, therefore, are federal governments. To acclaim one
as the federal government to the exclusion of the other is to deny, implicitly,
that we have a federal system of government.

The other point has to do with the independence of the state governments of the
central government and the powers of action independent of state governments by
the United States government. That is not to say that each does not rely on the
other in important ways—they do—but to affirm that their operations as
governments are independent. Indeed, the independence of the states stands on
more solid historical ground than does that of the national government.

James Madison noted that in this and several other matters, “The State
governments will have the advantage of the federal government.” As proof, he
pointed out that “The State governments may be regarded as constituent and
essential parts of the federal government; whilst the latter is nowise essential
to the operation or organization of the former.” His meaning was that elections
occur within states, and that the general government depends upon the states to
come into being. “On the other side,” he continued, “the component parts of the
State governments will in no instance be indebted for their appointment to the
direct agency of the federal government . . . .”[5] Moreover, some of the states
existed before the United States. True, after the adoption of the Constitution,
states are admitted to the union by act of Congress. But they come into being at
their own instance, draw up their own constitutions, and select their own
officers. Their independence of the general government, then, is antecedent to it.

The important point, however, is that both the government of the union and the
states are distinct and separate entities. They are governments in their own
right, neither being the creation of the other. Devotees of the states have
sometimes argued that the United States was created by the states.[6] Not so,
however. The states did send delegates to the Constitutional Convention, and
they did hold elections for the consideration of ratification of the
Constitution. But the latter dele gates were chosen by the electorate, and the
preamble to the Constitution refers to “We the people” as the origin of the
government. In any case, both governments possess the essentials of
separateness, distinctness, powers, and independence to be considered
governments in their own rights.

Local Governments

By contrast, local governments are not independent governments. Except for the
District of Columbia, all local governments are creatures of the states. They
come into being by authority of the states, and derive such powers of
governments as they exercise from the states. They are not, then, a part of the
federal system of government, but rather a part of state government. Or, to be
absolutely precise, they are linked to federalism only by their, ties to state
governments.

If the independence of the state and United States governments were all that
could be said about federalism, however, it would be a fearful and monstrous
system of government. To have one independent government over the inhabitants is
bad enough, but to have two would be intolerable, if each or either could
exercise its power without restraint. That is not the case, however. Both
governments are restrained, restrained by each other by the delineation of their
separate jurisdictions, the denial of powers to one or the other or both, and by
the specified manner in which they are to exercise their powers. Their
independence of each other is important, because it provides a safeguard against
intrusion by either into the jurisdiction of the other. But it is of even
greater importance that in the assignment of jurisdictions both governments are
limited and restrained. It is these restraints that protect the liberties of the people.

The bulk of these restraints are found in the United States Constitution. In the
first place, the United States government was never granted all the powers that
it might be claimed are inherent in government itself. It was granted only a
limited jurisdiction to deal with certain objects of government. These powers
were described in general terms in the following ways at the time of the debate
over the ratification of the Constitution. John Jay, speaking in the New York
state convention, maintained that the powers were largely restricted to the
following objects: “They comprehend the interests of the states in relation to
each other, and in relation to foreign powers.”[7] James Madison observed that
“the powers of the general government relate to external objects and are but
few.”[8] Again, he emphasized that “The powers delegated by the proposed
Constitution to the federal government are but few and defined.”[9]
In the Virginia convention, Edmund Pendleton argued that the genera] government
was to act “in great national concerns, in which we are interested in common
with other members of the Union . . . .” At another point, and more heatedly, he
insisted that the government authorized was not clothed with all powers of
government. “It only extends,” he said, “to the general purposes of the Union.
It does not intermeddle with the local, particular affairs of the states.”[10]

Specified Limited Powers

It is not necessary, however, to rely solely upon the comments and descriptions
of contents by the Founders to learn that the Constitution granted only limited
powers to the general government. The document speaks for itself in this regard.
The powers of the government were enumerated in several places in the
Constitution, above all, in Article I, Section 8. For example, such powers as
these are granted:

To define and punish Piracies and Felonies committed on the high Seas and
Offences against the Law of Nations.

To declare War, grant Letters of Marque and Reprisal, and make Rules
concerning Captures on Land and Water. To raise and support Armies . . . .

To provide and maintain a Navy.

To establish an uniform Rule of Naturalization, and uniform Laws on the
subject of Bankruptcies throughout the United States.

In the most general terms, then, the Constitution provided for a general
government to conduct foreign relations, to settle disputes among the states,
and to facilitate trade and intercourse among the peoples of the states.

Further, the United States government is prohibited to do some things. For
example, “No Bill of Attainder or ex post facto Law shall be passed.” “No Tax or
Duty shall be laid on Articles exported from any State.” “No Title of Nobility
shall be granted by the United States . . . .” and so on. The government is
further restricted by amendments, such as the Fourth, which reads: “The right of
the people to be secure in their persons, houses, papers, and effects, against
unreasonable searches and seizures, shall not be violated, and no Warrants shall
issue, but upon probable cause, supported by Oath or affirmation, and
particularly describing the place to be searched and the persons or things to be
seized.”. Beyond all these, there is a blanket limitation contained in the 10th
Amendment: “The powers not delegated to the United States by the Constitution,
nor prohibited by it to the States, are reserved to the States respectively, or
to the people.”

Limits to State Powers

The jurisdiction of the states was conceived as being much more comprehensive
than that of the United States at the time of the drawing of the Constitution.
The Constitution does prohibit certain powers to the states. For example, “No
State shall enter into any Treaty, Alliance, or Confederation; grant Letters of
Marque and Reprisal; coin money, emit Bills of Credit; make any Thing but gold
and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex
post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.”

There are further prohibitions on the states in amendments, the most general of
which are to be found in the Fourteenth, and the central ones are embodied in
these words: “No State shall make or enforce any law which shall abridge the
privileges or immunities of citizens of the United States; nor shall any State
deprive any person of life, liberty, or property, without due process of law;
nor deny to any person within its juris diction the equal protection of the
laws.” Beyond such prohibitions, however, the main powers of government over the
lives of persons were reserved to the states.

James Madison stated the case for the residual powers of the states this way.
“Those which are to remain in the State governments are numerous and indefinite
. . . . The powers reserved to the several States will extend to all the objects
which, in the ordinary course of affairs, concern the lives, liberties, and
properties of the people, and the internal order, improvement, and prosperity of
the State.”[11]

State Constitutions Also Limit

It should be noted, however, that the states are further restrained by their own
constitutions, and most of these have much more extensive restrictions than are
contained in the United States Constitution. Moreover, as already noted, since
the time of Madison, further extensive pro hibitions on the states have been
added to the Constitution. Thus, it is correct to say that both the United
States and state governments are limited and that neither possesses all those
powers which may be conceived as inherent in government itself.

The object of this limitation, indeed, the highest object of federalism itself,
was the rights of individuals and the liberties of the people. Alexander
Hamilton put it this way: “This balance between the nation and state governments
ought to be dwelt on with peculiar attention, as it is of the utmost importance.
It forms a double security to the people. If one encroaches on their rights,
they will find a powerful protection in the other. Indeed, they will both be
prevented from overpassing their constitutional limits, by a certain rival-ship,
which will ever subsist between them.”[12]

From our perspective, it is easy to conclude that Hamilton was wrong, at least
in part, in his prediction. He was right, of course, in holding that the
national government would defend its jurisdiction from intrusion by the states.
He was right, too, in maintaining that this would provide security against
states’ encroaching upon the rights of the individual. It has worked that way
historically, and it is still working that way. But what of that “rivalship” of
the states over their jurisdiction and the security that was supposed to afford
against concentration of power in the central government and its violation of
the rights of the people?

Aside from clamors about “states’ rights” and an occasional suit by some state
in the courts of the United States, the states appear to be paper tigers. They
are largely unable either to protect their own jurisdiction or the rights of
their inhabitants from the central government. Either Hamilton was wrong or
something has happened in the interval.

An Important Balance

It will be my position that Hamilton was right about the Constitution as it then
stood. To understand why, it is necessary to look at the structure of the
government and how it has been changed so as to effect the power of the states
to defend their jurisdiction. The answers to two questions should lay open to
view the crucial structure of the government. First, what branch or organization
in the central government was crucial to the defense of the jurisdiction of the
United States? While all the branches play a role in it, the ultimate power for
the defense lies in the Supreme Court. By its power of review of legislation,
both national and state, where a constitutional question is raised, it can
vigorously and effectively assert and defend the jurisdiction of the United States.

Second, in what branch of what government is there an organization with the
power and under the control of the states to defend the jurisdiction of the
states? There is no such organization today. There has not been one in the
United States since 1913. Until 1913, the United States Senate had power to do
it (and it still does), and state legislatures had crucial leverage over the
Senate. That leverage was removed in that year by the 17th Amendment. The
amendment provided for the direct election of Senators.

In the original Constitution, Senators were elected by the legislatures of the
states. In effect, the state governments had representatives in Congress; they
were the members of the Senate. The Senate is well placed in the government to
defend the jurisdiction of the states, if it will and must. It can refuse to
pass any bill which intrudes upon the jurisdiction of the states. Moreover,
Supreme Court, indeed, all court, appointees of the United States government,
have to be approved by the Senate. Presidents, too, have large incentives to get
along well with the Senate, for all their major appointees and all treaties must
be approved by the Senate. Further, trials of impeachment, including judges, are
conducted before the Senate.

Since 1913, state legislatures have had little or no effective control over
Senators. No longer do they have to please the state legislatures to be
reelected. State governments are no longer represented in the central
government. It is not surprising, then, that the great growth and expansion of
power of the national government have occurred since 1913. The main balance
wheel for the states in the Senate no longer operates to restrain it. The courts
have ever more vigorously asserted and expanded the jurisdiction of the United
States, and the presidents and Congress have not been far behind.

That is not to say that federalism is meaningless today. It is still used to
restrain the states. Moreover, the states still retain much jurisdiction, or
portions of it, thanks largely, I suspect, to the voters. But the central
government is no longer restrained significantly by federalism. It has become
the government, indeed, the federal government, as we acknowledge in our
references to it.

If the above analysis is correct, federalism can hardly be restored by
redistributing welfare programs. It will hardly be revitalized, in any case, by
federal aid or revenue sharing. It will only be able to perform its salutary
function of protecting its jurisdiction so as to defend the rights of its
inhabitants when it has a means for doing so within the general government
itself. Looked at that way, the election of Senators by state legislatures was a
good idea.

1. Felix Morley, Freedom and Federalism (Chicago: Henry Regnery, a Gateway
edition, 1959), p. 21.

2. Henry S. Commager, Documents of American History, vol. II (New York:
Appleton-Century- Crofts, 1963), p. 251.

3. Ibid., pp. 251-52.

4. Ibid., p. 249.

5. The Federalist Papers, Willmoore Kendall and George W. Carey, intro. (New
Rochelle, N. Y.: Arlington House, n. d.), pp. 290-91.

6. See, for example, James J. Kilpatrick, The Sovereign States (Chicago: Henry
Regnery, 1957), p. 4.

7. Elliot’s Debates, Bk. I, vol. 2, p. 283.

8. Ibid., vol. 3, p. 259.

9. The Federalist Papers, p. 292.

10. Elliot’s Debates, Bk. I, vol. 3, pp. 40, 301.

11. The Federalist Papers, pp. 292-93.

12. Elliot’s Debates, Bk. I, vol. 2, pp. 257-58.
 

The Pragmatic Side of Principle in Pursuit of Public Policy