Wednesday, June 19, 2013

Michael Greve’s Competitive Federalism and the Maturation of the Federalism Debate

Guest Blogger

Ernest A. Young

For the symposium on Michael Greve's The Upside Down Constitution (Harvard University Press 2012).

            I’m grateful for the opportunity to discuss Michael Greve’s extraordinary book, The Upside Down Constitution.  The book is both big and dense (in a good way), and it’s packed with more ideas than I can possibly do justice to here.  I’d like to focus on how Michael’s book both reflects and contributes to a change in thinking and argument about federalism.  I then make a couple of more substantive points about how Michael’s vision relates to other prominent positions on federalism’s ends and means.

            I met Michael years ago at an AEI conference that he and Richard Epstein organized on federal preemption of state law.  After trying to defend state autonomy on the academic conference circuit to mostly liberal audiences, I heaved a sigh of relief:  “This will be great—a bunch of conservatives who actually care about states.”  I couldn’t have been more wrong.  Everyone but me was for broad federal preemption, and my pleas that state law should be respected on federalism grounds fell on deaf ears.  Many participants were members of the defense bar, used to asserting federal preemption to quash plaintiffs’ state-law tort suits; their positions reflected their clients’ interests.   That “Big Business federalism” dates to the late nineteenth century, when interstate businesses argued for broad dormant Commerce Clause limits on state regulation, substitution of general commercial law principles for state common law under Swift v. Tyson, and restriction of national regulation under a narrow reading of the affirmative Commerce Clause.

            Michael and Richard provided an intellectual underpinning for these positions transcending material business interests.  The Upside Down Constitution is the culmination of that project.  It takes many of the same positions as Big Business federalists—strong dormant Commerce Clause, broad federal preemption of state law, reject Erie and return to Swift, limited national enumerated powers—but links them to a well-developed theory of “competitive federalism.” Federalism, on this view, is not about protecting the states, empowering the national government, or maintaining some sort of balance; it is about maximizing the welfare and liberty of individual citizens by forcing competition among governments.  One critical contribution is to show how “cartels” of states may use national institutions to suppress interstate competition by imposing a uniform solution congenial to entrenched interests.

            My primary point is simply to appreciate the many positions now enriching our federalism debates and the extent to which they transcend left-right political divisions.  When I started in the federalism business, conservatives and liberals thought they knew where they stood:  Progressives identified federalism with racial segregation and resistance to beneficial regulation, and they lauded national solutions to society’s problems.   Conservatives pushed federalism to limit intrusive national regulation and maintain contact with the Founders’ vision.  Now things are complicated.  Progressives like Heather Gerken argue that state autonomy should be protected in order to allow national minorities to “dissent by deciding,” and Robert Schapiro advocates “Blue State federalism” allowing some jurisdictions to protect human rights more broadly than national norms.  Michael Greve and other libertarians, on the other hand, pair their enthusiasm for limits on Congress’s regulatory powers with broad preemption doctrines limiting state governments’ interference with the free market.  My own work has argued that federalism checks national power and protects state autonomy largely without regard to the political valence of government activity at either level. 
            Our federalism debates, in other words, are maturing; they are outgrowing the traditional conservative/liberal dichotomy.  State autonomy is not just for Neanderthals anymore, and conversely people on the political right (like Professor Greve) will often support national power and limits on states.  While scholars who focus on federalism largely recognize this, it remains surprising to many in the broader academy and among reporters who cover the Supreme Court.  It was big news (in law geek land, at least) this past Spring when conservative and libertarian law professors filed a brief arguing that the national Defense of Marriage Act was unconstitutional on federalism grounds—but it shouldn’t have been.  Michael’s fascinating book should help put a last nail in the coffin of the idea that federalism questions have a reliable left-right valence.  We can then get on with a more interesting set of conversations.

            I want to use my remaining space to suggest one such conversation, and in particular to locate Michael’s work on a conceptual map suggested by Albert Hirschman’s seminal work on Exit, Voice, and Loyalty.  Hirschman focused on exit and voice as alternative responses to dissatisfaction among citizens of a jurisdiction or consumers of a product.  One can exit by voting with one’s feet and moving to another jurisdiction or switching to another brand; alternatively, one can exercise voice by complaining to customer service, working for change within the system, and voting with your, well, vote.  Michael’s book is mostly about exit and the salutary effect of mobile citizens choosing jurisdictions with an optimal mix of policies as well as the incentives provided to prudent states by the threat of exit.   Professor Gerken’s work, by contrast, is all about voice—the democracy-enhancing effects of federalism that offer policymaking opportunities to minorities and the mechanisms of “uncooperative federalism” whereby state officials exercise voice within national cooperative federalism schemes.

            Both these accounts have relatively little to say about Hirschman’s third category—loyalty.  For Hirschman, loyalty is the reason that dissatisfied people stick with a jurisdiction or product even though, at the moment, it may not be in their immediate interests to do so.  In this sense, loyalty encourages voice by discouraging immediate exit.  The critical question is whether the states remain viable objects of loyalty in the twenty-first century.  We have come a long way from the days in which Robert E. Lee chose Virginia over the Union, and some prominent scholars—such as Edward Rubin and Malcolm Feeley—deny that modern Americans identify with their states at all.  In any event, federalism theorists emphasizing voice ought to assess how much the dynamics of uncooperative federalism and state-based dissent rely on notions of loyalty to retard exit.  And I hope that Professor Greve will explore the possibility that in a frictionless world of competitive exit, state governments will have insufficient staying power to play their role as effective competitors.   If that turns out to be a real worry, then even competitive federalists will need to attend to the states as states—and possibly, heaven forbid, even notions of balance.

Ernest A. Young  is Alston & Bird Professor of Law at Duke Law School. You can reach him by e-mail at young at