Dual federalism is both a theory of how a federal system should allocate governmental powers, responsibilities, and resources and an era of American political history. As a theory, dual federalism holds that the federal and state governments both have power over individuals but that power is limited to separate and distinct spheres of authority, and each government is neither subordinate to nor liable to be deprived of its authority by the other. A government organized according to the theory of dual federalism is often compared to a layer cake where each layer represents a different level of government and the powers, responsibilities, and resources of each layer remain separate and distinct from the others.
Dual federalism appears consistent with a narrow reading of the U.S. Constitution. Such a reading must narrowly interpret the Commerce Clause, Necessary and Proper Clause, Supremacy Clause, and Tenth Amendment. A dual federalism reading of the Constitution limits the federal government’s authority to foreign affairs, military affairs, and commerce with foreign nations, between the states, and with the Indian tribes. The national government’s authority over interstate commerce includes responsibility for currency, weights and measures, patents and copyrights, and bankruptcy laws. All other powers not defined in the Constitution or prohibited to the states, according to the Tenth Amendment, are reserved to the states. These state powers, often called the police powers, include responsibility for the public’s health, safety, and welfare. Dual federalism was the predominant theory for interpreting the Constitution from 1789 to 1901.
The era of dual federalism refers to the period of American political history when the Constitution was interpreted as creating separate and distinct spheres of authority between the federal and state governments. The practice of dual federalism was considerably messier than the theory of dual federalism. Morton Grodzins and Daniel Elazar demonstrated that during the era of dual federalism some overlap, cooperation, and resource sharing between the federal and state governments occurred. These instances of overlap and sharing were more often exceptions than the rule. More importantly, a dual federalism interpretation of the Constitution cannot exactly define the proper jurisdictions of the federal and state governments and prevent one from invading the jurisdiction of the other.
Prior to the Civil War, many conflicts erupted over the proper authority and jurisdiction of the national and state governments. Thomas Jefferson encouraged a version of dual federalism in his unsuccessful effort to prevent President Washington from creating a national bank and later in his support for the Kentucky and Virginia Resolutions. The Supreme Court dealt with conflicts between the national and state governments in many cases, including McCulloch v. Maryland (1819), Gibbons v. Ogden (1824), Barron v. Baltimore (1833), and Dred Scott v. Sandford (1856). At the Hartford Convention of 1814, New England representatives approved the idea that states exist as sovereign entities with rights that could not be violated by the national government. John C. Calhoun, building on the idea of states’ rights, articulated a theory authorizing states to nullify federal laws. In 1832, the South Carolina legislature, believing that the national tariffs of 1828 and 1832 unfairly harmed southern interests, drew on Calhoun’s ideas to pass a law declaring the tariffs null and void. President Andrew Jackson declared South Carolina’s action tantamount to treason and prepared for military action to force compliance with the tariff. Congress supported the president with passage of the Force Act, but military action was allayed when Congress passed the 1833 tariff, which incrementally reduced the tariff over the next decade. While the period prior to the Civil War saw varied opinions of what the Constitution authorized and prohibited, most were consistent with a theory of dual federalism.
The theory of dual federalism survived the Civil War but was seriously challenged by the Industrial Revolution. The Civil War expanded the national government’s sphere of authority, and confirmed the supremacy of federal laws and the inviolability of the union, but the national government, consistent with a theory of dual federalism, refrained from regulating the domestic affairs and intrastate commerce of the states. Dual federalism faced a fatal challenge with the Industrial Revolution. The Industrial Revolution allowed firms to amass great wealth and economic power, which some used to exploit workers and markets. Governments appeared to be the only force strong enough to counter these large firms. State governments faced two obstacles to controlling large firms: first, a Supreme Court that favored laissez-faire economic theory over state regulatory powers; and second, a few states that, in exchange for high licensing fees and business taxes, allowed firms to engage in what most other states considered bad business practices. Unable to regulate and control large firms, states were unable to fully protect their citizens and interests, and public opinion slowly turned against the states. Federal authority grew with the passage of the Sherman Antitrust Act (1890), and the Interstate Commerce Commission Act (1887). In 1901 President Theodore Roosevelt argued that national interests had become too decentralized and the nation needed a stronger national government to protect the common man. Roosevelt laid the foundation for ending dual federalism.
Over the next three decades, dual federalism decayed. National government grants to state and local governments inserted federal programs and objectives into state and local governments. By 1920 the federal government oversaw eleven grant programs allocating $30 million. These grants grew significantly during the New Deal. The New Deal also expanded the national government’s powers to intervene in intrastate affairs. Also, the Supreme Court supported this shift when it changed from supporting laissez faire economic policies to supporting national policies regulating intrastate activities. By the end of the second New Deal (1940), the era of dual federalism had clearly ended and the nation had moved into the era of cooperative federalism.
Some claim that the Supreme Court, under the direction of Chief Justice William Rehnquist, is trying to restore dual federalism, particularly in its reading of the Eleventh Amendment. The Rehnquist Court has ruled that the judicial power of the United States does not extend to the states, and therefore workers may not sue states for discrimination under federal age and disability standards and states may not be sued by people who claim the state promoted unfair competition in the marketplace. Most of these rulings were 5–4 decisions, and whether they will stand and be expanded over time is as yet unclear.
Eugene Boyd, American Federalism, 1776 to 1997: Significant Events, http://usinfo.state.gov/usa/infousa/politics/states/federal.htm; and Sandra Osbourn, Federalism: Key Episodes in the History of the American Federal System, CRS Report 82-139 GOV (Washington, DC: U.S. Library of Congress, Congressional Research Service, 1982).
Troy E. Smith
Last updated: 2006
SEE ALSO: Barron v. Baltimore; Civil War; Commerce among the States; Eleventh Amendment; Gibbons v. Ogden; Grants-in-Aid; Hartford Convention; Layer Cake Federalism; McCulloch v. Maryland; Necessary and Proper Clause; New Deal; Nullification; Police Power; Roosevelt, Theodore; Supremacy Clause: Article VI, Clause 2; Tenth Amendment