An Inverted System
From the March 19, 2012, issue of NR.

Michael S. Greve, author of The Upside-Down Constitution


Ramesh Ponnuru

Wickard itself is misunderstood. Greve observes that Parker v. Brown (1943), argued at the same time, upheld California’s program to cartelize its raisin growers to extract rents from the rest of the country. The two cases have opposite logics. Since California’s scheme regulated in-state production, Parker treated it as irrelevant to interstate commerce; but Wickard treated in-state production as subject to congressional regulation because it affected interstate commerce. Beneath the apparent contradiction is a common impulse: to allow cartelizing actions by either the federal government (in Wickard) or state governments (in Parker).

At the same time, cooperation replaced competition in fiscal matters. The best example of this phenomenon, though it postdates the New Deal, may be Medicaid, a joint federal-state program. States may expand benefit levels and eligibility criteria, subject to federal restrictions, while the federal government provides roughly half the funds. State governments that do not wish to participate are forfeiting their citizens’ federal tax payments to other states, so nobody refuses. Benefits expand because state officials may confer them without imposing an equal amount of taxes on the voters who elect them, half the cost being paid by taxpayers elsewhere. During budget crunches, for the same reason, states reap only half the savings from each benefit cut.

Greve theorizes that the New Dealers involved state governments in these spending programs, notwithstanding the obvious inefficiency of the arrangement, as a response to the weakness of the coalition for redistribution in national politics (the same weakness that Madison celebrated in his remarks about the “extended republic”). If that coalition managed to create pilot programs in a few states, it could then agitate for federal help. Even people within the state who had opposed the program initially might join that agitation to reduce their own costs. In later decades, the federal courts would strengthen redistributive coalitions even further by granting them the right to sue under vaguely worded statutes to force state agencies to expand entitlements; in many cases, the agencies have been happy to be forced.

These cooperative arrangements generate more spending than a program run entirely by the federal government or the states would produce. Over the last five decades, federal tax revenue has tended to stay flat as a proportion of the economy, while state and local revenue has climbed up and up. Government has been growing at its lower levels, with federal help. Other results of cooperative federalism include persistent conflicts in which the states demand more “flexibility” in spending federal dollars; a pervasive sense that the programs are beyond any government’s control; and recurrent demands, increasingly met, for federal bailouts of states.

Instead of enforcing the structural limits on state governments, the Supreme Court turned to vindicating various constitutional rights — many of them previously unimagined — against the states. Instead of being disciplined by competition, states’ political choices would be constrained by the justices themselves. The Constitution was thus inverted. States could no longer adopt their own policies with respect to abortion, but their attorneys general could regulate commercial activity nationwide. Faction was no longer to be feared, as in the old Constitution, but to be empowered to produce robust local experimentation. (This was the real point of Justice Brandeis’s famous paean to the states as “laboratories of democracy.”) Where the old Constitution made a virtue of its fixity, the new one celebrated its mutability as a way of responding to the ever-changing necessities of history.

Instead of a federal government limited to its enumerated powers but supreme in their exercise, we now have a government of unlimited powers that must be exercised concurrently with the states. The federal government may attempt to regulate commerce in pharmaceuticals by setting labeling standards that balance the risk of nasty side-effects against the good the medicines can do. But the Supreme Court says that states may undo that balance by piling on their own additional standards, with drugmakers subject to all of them — and all of their judges and juries, who may be making them up on the fly.

Greve is not a merchant of hope. Recent attempts by conservatives to revive federalism in both the legal and political arenas have often shared New Deal assumptions — with justices seeking to protect the dignity of state governments, and legislators trying to give them more control over federal money. Originalists have sometimes even trained their fire on those remnants of the pro-competitive constitutional order that the New Deal left standing, such as the dormant commerce clause, out of a misguided fear of drawing inferences from the structural logic of the Constitution.

If there is to be a recovery of the Constitution’s federalism, it will involve a retreat by the federal courts from the culture wars and, simultaneously, a renewed commitment by them to policing the boundaries of state authority over national commerce. A precondition for any such recovery is the conservative intellectual reorientation that Greve is attempting to advance. Thoughtful conservatives understand, as he notes, that the free market is not the same thing as “the opportunistic demands of the Fortune 500.” They ought to begin distinguishing as well between federalism and the desires of state governments.

 — Ramesh Ponnuru is a senior editor of National Review. This article appears in the March 19, 2012, issue of National Review.