Working Paper No. 12-81:
Turning Federalism Right-Side Up

Author(s):

Ilya Somin

Date Posted: December 2012

Availability:
Abstract (below) | Full text (most recent) on SSRN

Abstract:

Michael Greve’s The Upside-Down Constitution is one of the most important works on constitutional federalism in years. It is the best exposition to date of the idea that the American Constitution establishes a federal system primarily devoted to promoting competition between state governments. It is also probably the most comprehensive critique of the traditional view that federalism is really about promoting the interests of state governments. As Greve recognizes, state governments rarely want to compete, often preferring to establish cartels among themselves.

Greve praises the original Constitution for creating an effective system of interstate competition and the nineteenth and early twentieth century Supreme Court for enforcing it. But he warns that the system has broken down over the last eighty years, replacing competition with cartels and what he considers to be dysfunctional empowerment of state governments. He argues that American federalism has now reached a crisis point from which we must either restore some of its earlier, more competitive, structure, or face a decline similar to those that have beset several other federal systems

In Part I, I describe Greve’s argument, focusing especially on the ways in which it enhances our understanding of the history of constitutional federalism. Part II addresses a potential internal contradiction in Greve’s position. While he emphasizes the need for the judiciary to enforce a competitive regime and recognizes that the federal government often has incentives to promote cartelization, he endorses a broad interpretation of congressional authority under the Commerce Clause and the Spending Clause which effectively gives Congress a blank check to suppress competition in ways he deplores.

Part III briefly considers a second tension in Greve’s analysis. Greve pins his hopes on originalism as the best possible way to restore a competitive federalist Constitution.  While he argues that the original Constitution establishes a competitive structure, he also recognizes that the Founders paid little attention to interstate mobility and competition. These two positions are not completely irreconcilable. But they are more difficult to square than Greve sometimes allows.