The Meaning of Federalism; C. Carson

ClarenceB. Carson THE MEANING OF FEDERALISM Dr. Carson has written and taught extensively, spe cializing in American intellectual history. He is the author of several books and is working at present on A Basic History of the United States to be published by Western Goals, Inc. SEVERAL developments have con- ' rectly alluded to as "federal" gov tributed to making the meaning of ernments. federalism obscure. Some are old, When Felix Morley called atten some recent. Some may be more or tion some years ago "to the illogical less innocent; others are destructive practice of referring to the central of federalism itself. One of these that government as the 'federal govern may be more or less innocent is the ment' ," he declared that the confu habit ofreferring to the United States sion was "due to historical acci government as the "federal govern-dent." What he had in mind was that ment." Whether it is innocent or not, the supporters of the Constitution, it does tend to confuse the unwary. when it was being considered for These United States have a federal ratification, called themselves "fed system of government. The system eralists," and the government under embraces both the general govern-examination "federal." From that ment and those of the states. Thus, beginning, he thinks, the idea of the both the United States government general or central government being and the state government are cor-the federal government began to take hold.!

That much is correct, but there is an additional reason: the Founders devised what was essentially a new system of government. It has come 12 THE MEANING OF FEDERALISM 13 PeopleAre Governed The distinctive feature of the fed eral system of government is that the general government acts di rectly 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 gov ernment. More on this point later. - Another source of confusion about to be called federalism. But they were federalism is the doctrine of states' so intent upon promoting or pre-rights, as it is commonly called. In venting its ratification and accep-the first place, states have powers tance that they neglected to devise (as do all governments), not rights.

logical appellations for it in general In the second place, what is being discourse. Before the devising of a disputed within the federal system federal structure, leagues or unions of government when so-called states' of more or less independent states rights are asserted is the jurisdic were usually referred to as confed-tion of the national government to erations. The organizations over act in some field. It is important that these leagues could be referred to as states act to restrain the national confederation governments. There is government to the exercise of its a comparable word- "federation" - powers within its allotted jurisdic in use. But it would be inaccurate tion. They are most apt to do so in and misleading to refer to the United defense oftheir jurisdiction. But what States government as the federation is ultimately important in this is the government. Such terminology would rights of persons and the liberties of imply that the central government the people. It is easy to lose sight of is over the states rather than over this when the dispute is conducted the people. Whereas, it has a juris-in the name of "states' rights."

diction over the people primarily. Rights belong to individuals in the American constitutional system. Any government (whether state or na tional) may misuse its powers so as to violate the rights of persons. It is exceedingly important, then, that the rights of persons not become identi fied with the powers of government, either national or state. That can easily become the means for the en largement of the powers of govern ment (one or the other, or both) at the expense of the rights of persons. That can result from confusing ei ther 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 14 THE FREEMAN January implicit in the states' rights doc trine. A Mistaken Use of the States' Rights Arguments How easy it is to fall into this trap is illustrated in the opinion accom panying 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 pos sessed.) 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 Agricul tural Adjustment Act. It must follow that it may not indirectly accom plish 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 possi ble 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 vend ees the proceeds to be appropriated to the redress of its deficiency of in come.... "2 This last is about as close as he came to dealing with the vio lation of the rights of individuals in volved. 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 provi sions 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 "Con gress cannot invade state jurisdic tion to compel individual action; no more can it purchase such action."

At another point, he declared that if the princi pIe of the act were ac cepted, Congress could invade the reserved jurisdiction of the states and accomplish the "total subversion of the governmental powers reserved to the individual states." The propo nents of the act, Justice Roberts said, were trying to claim that the Con stitution "gave power to the Con gress 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 1983 THE MEANING OF FEDERALISM 15 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 or ganizations into administrative units of the national government. The way was eased for this by the habit of referring to the national govern ment 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 admin istrative 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 ple, state welfare agencies (called by a multiplicity of names nowadays) administer a great variety of pro grams funded by the national gov ernment. 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. face of the 10th Amendment, he federalism inherent in the states' charged. 4 rights doctrine and some of its corIn short, Justice Roberts did his ollaries.

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 juris diction 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 juris diction for the general government to pass one. He does not even ex plore the possibility that the states might be prohibited from passing such acts by the United States Con stitution, 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 ofjurisdictional claims of the states, of the decision the Supreme Court reached, nor of the powers of reason ing of the court. Rather, it is to illus trate the results of the confusion of 16 THE FREEMAN January 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 Federal ism." 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 na tional controls over grants made to states by the government. But the idea of aNew Federalism had been around for several years before Rea gan became President.

The late Nelson Rockefeller pro posed doing something to revive fed eralism 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 gov ernment aid in the recovery of fed eralism. About all that came out of that was the practice of providing large grants from the central gov ernment under the rubric of revenue sharing. What these various propos als and plans have in common is the notion that federalism can be re stored 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 suc ceeded 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 oftheir 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 individu als that governments are forbidden to violate and are enjoined to protect from all intruders. In short, the pre condition of extensive liberty for a people is limited government. It is, then, as a device for limiting gov ernment that a federal system of government performs its most valu able function. But to grasp the full implications of this, the meaning of federalism needs to be clearly stated as free of confusion and complica tions 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 1983 THE MEANING OF FEDERALISM 17 upon the inhabitants. Both have en forcement 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 indepen dence as one or the other govern ments 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 con cept 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; liter ally, 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 fed eralism that government is limited, not supreme. Sovereignty is a mis chievous notion, an improper ana lytical .tool for describing govern ment in this country. It sends people in quest for an authority which can only exist in defiance of the consti tutions of the states and of the Con stitution 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 ab solutist 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 jurisdic tion. Definingthe Jurisdiction The Constitution of the United States, aside from describing the method of selection of its officers and the inner workings of the govern ment, is mainly concerned with de fining the jurisdiction of the govern ment that it authorizes. Also, it den ies 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 gov ernments are federal governments as well as the United States. These United States have a federal system of divided jurisdiction in govern ment. Severally, the states exercise authority over persons in one ofthese jurisdictions. The United States government exercises authority in the other. Both, therefore, are fed eral·governments. To acclaim one as the federal government to the exclu sion of the other is to deny, implic itly, that we have a federal system of government.

18 THE FREEMAN January The other point has to do with the independence of the state govern ments 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 gov ernments are independent. Indeed, the independence of the states stands on more solid historical ground than does that of the national govern ment. James Madison noted that in this and several other matters, "The State governments will have the advan tage 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 lat ter is nowise essential to the opera tion or organization of the former." His meaning was that elections oc cur within states, and that the gen eral government depends upon the states to come into being. "On the other side," he continued, "the com ponent parts of the State govern ments will in no instance be in debted for their appointment to the direct agency of the federal govern ment .... "5 Moreover, some of the states existed before the United States. True, after the adoption of the Constitution, states are admit ted 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 ante cedent to it. The important point, however, is that both the government of the union and the states are distinct and separate entities. They are govern ments in their own right, neither being the creation of the other. Dev otees of the states have sometimes argued that the United States was created by the states. 6 Not so, how ever. 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 Constitu tion refers to "We the people" as the origin ofthe government. In any case, both governments possess the essen tials of separateness, distinctness, powers, and independence to be con sidered governments in their own rights.

Local Governments By contrast, local governments are not independent governments. Ex cept 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 sys1983 THE MEANING OF FEDERALISM 19 tern of government, but rather a part of state government. Or, to be abso lutely precise, they are linked to federalism only by their ties to state governments. If the independence ofthe 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 intolera ble, if each or either could exercise its power without restraint. That is not the case, however. Both govern ments 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 ei ther into the jurisdiction of the other. But it is of even greater importance that in the assignment of jurisdic tions both governments are limited and restrained. It is these restraints that protect the liberties of the peo ple. The bulk of these restraints are found in the United States Consti tution. In the first place, the United States government was never granted all the powers that it might be claimed are inherent in govern ment itself. It was granted only a limited jurisdiction to deal with cer tain objects of government. These powers were described in general terms in the following ways at the time of the debate over the ratifica tion of the Constitution. John Jay, speaking in the New York state con vention, maintained that the powers were largely restricted to the follow ing 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 gov ernment relate to external objects and are but few."8 Again, he empha sized that "The powers delegated by the proposed Constitution to the fed eral government are but few and de fined."9 In the Virginia convention, Edmund Pendleton argued that the general government was to act "in great national concerns, in which we are interested in common with other members of the Union .... " At an other point, and more heatedly, he insisted that the government autho rized was not clothed with all pow ers 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."lO Specified Limited Powers It is not necessary, however, to rely solely upon the comments and de scriptions ofcontents by the Founders to learn that the Constitution 20 THE FREEMAN January granted only limited powers to the general government. The document speaks for itself in this regard. The powers of the government were enu merated 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 Fe lonies committed on the high Seas and Offences against the Law of Nations. To declare War, grant Letters of Mar que and Reprisal, and make Rules con cerning Captures on Land and Water. To raise and support Armies .... To provide and maintain a Navy. To establish an uniform Rule of Natu ralization, and uniform Laws on the sub ject of Bankruptcies throughout the United States.

In the most general terms, then, the Constitution provided for a general government to conduct foreign rela tions' to settle disputes among the states, and to facilitate trade and in tercourse among the peoples of the states. Further, the United States gov ernment is prohibited to do some things. For example, "NoBill of At tainder 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 fur ther 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 is sue, but upon probable cause, sup ported 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 com prehensive 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 Con tracts, or grant any Title of Nobil ity." 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 1983 THE MEANING OF FEDERALISM 21 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 prop erty, 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 gov ernment 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 numer ous and indefinite .... The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, con cern the lives, liberties, and proper ties of the people, and the internal order, improvement, and prosperity of the State."ll 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 re strictions than are contained in the United States Constitution. More over, 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 con ceived as inherent in government it self.

The object of this limitation, in deed, the highest object of federal ism itself, was the rights of individ uals 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 pre vented from overpassing their con stitutionallimits, 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 de fend 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 cen tral government and its violation of the rights of the people?

22 THE FREEMAN January Aside from clamors about "states' rights" and· an occasional suit by some state in the courts ofthe United States, the states appear to be paper tigers. They are largely unable ei ther to protect their own jurisdiction or the rights oftheir 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 Hamil ton was right about the Constitution as it then stood. To understand why, it is necessary to look at the struc ture 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 cru cial to the defense of the jurisdiction of the United States? While all the branches play a role in it, the ulti mate 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 con trol of the states to defend the juris diction 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, Sen ators were elected by the legisla tures 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 ju risdiction 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 incen tives to get along well with the Sen ate, for all their major appointees and all treaties must be approved by the Senate. Further, trials of impeach ment, including judges, are con ducted 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 re elected. State governments are no longer represented in the central government. It is not surprising, then, that the great growth and ex1983 THE MEANING OF FEDERALISM 23 pansion 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 cen tral government is no longer re strained significantly by federalism.

It has become the government, in deed, 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 shar ing. It will only be able to perform American Federalism 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 gen eral government itself. Looked at that way, the election of Senators by state legislatures was a good idea. I -FOOTNOTESIFelix Morley, Freedom and Federalism (Chi cago: Henry Regnery, a Gateway edition, 1959), p.21. 2Henry S. Commager, Documents of Ameri can History, vol. II (New York: Appleton-Cen tury-Crofts, 1963), p. 25l. 3Ibid., pp. 251-52. 4Ibid., p. 249. 5TheFederalistPapers, Willmoore Kendall and George W. Carey, intro. (New Rochelle, N. Y.: Arlington House, n. d.), pp. 290-9l.

6See, for example, James J. Kilpatrick, The Sovereign States (Chicago: Henry Regnery, 1957), p. 4. 7Elliot's Debates, Bk. I, vol. 2, p. 283. 8Ibid., vol. 3, p. 259. 9The Federalist Papers, p. 292. lOElliot's Debates, Bk. I, vol. 3, pp. 40, 30l. llThe Federalist Papers, pp. 292-93. 12Elliot's Debates, Bk. I, vol. 2, pp. 257-58. IDEAS ON LIBERTY IN its narrower sense, federalism refers to the division of authority and function between and among the national government and the various state governments. But it has come to possess a wider meaning in Amer ican political history. The idea of constitutional limitations of power, of both horizontal and vertical divisions of power, of the representative nature of republican institutions, and of a national government strong enough to perform certain necessary tasks and yet not so strong as to become a threat to liberty, is perhaps better epitomized in its unique American historical setting by the word federalism than by any other single term.

GEORGE C. ROCHE III Elgin Groseclose MANNING THE SEAWALLS THE rising tide of foreign govern ment defaults on their overseas, dol lar-denominated debt threatens to break and overflow the sea walls of international banking and inundate the capitalistic world. The recent Toronto convocation of international bankers for the an nual meeting of the World Bank and International Monetary Fund con sidered the approaching flood, but their efforts were like those of a pla toon of Dutch school boys recruited to stick their fingers in the leaking dykes. In desperation they shouted for more bags of the sand that was being washed away; that is, more Dr. Elgin Groseclose, a financial consultant in Wash ington, D.C., is the author of Money and Man (1934, 4th edition 1976) and America's Money Machine (1966, 1980). He serves also as executive director of the Institute for Monetary Research. 24 international credit, more fiat money of the sort that was already being diluted into muddy liquid.