The Upside-down Constitution.

AuthorSomin, Ilya
PositionBook review

THE UPSIDE-DOWN CONSTITUTION. By Michael Greve. (1) Harvard University Press. 2012. 528 pp. Cloth, $39.95.

INTRODUCTION

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 (pp. 8-9, 189-94).

Much previous scholarship has explored the advantages of interstate competition, (3) and the idea that the enforcement of federalism cannot be equated with promoting the interests of state governments. (4) But Greve's book is by far the best and most comprehensive application of these ideas to constitutional interpretation.

Greve praises the original Constitution for creating an effective system of interstate competition (chs. 2-3) and the nineteenth and early twentieth century Supreme Court for enforcing it (chs. 4--7). 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 (chs. 8-11). 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 (pp. 279-80, 380-97).

The post-New Deal "inversion" of priorities, from maintaining interstate competition to fostering cartels and cooperation, is what gives the book its provocative title. To turn the Constitution right side up, Greve contends, we will have to rediscover the virtues of competition.

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 (pp. 8-9, 192-93), 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 some of the ways he deplores (pp. 162-65, 250-58,343-46).

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 (pp. 394-96), though he suggests that it should be an originalism that views the Constitution as an integrated whole, rather than narrowly "clause-bound" (p. 393). While he argues that the original Constitution establishes a competitive structure (ch. 3), he also recognizes that the Founders paid little attention to interstate mobility and competition (pp. 56-61). These two positions are not completely irreconcilable. But they are more difficult to square than Greve sometimes allows.

  1. A COMPETITIVE CONSTITUTION

    1. THE ORIGINAL CONSTITUTION

      Greve's central argument is that "the commitment to competitiveness is hardwired into our Constitution's structure" (p. 389), indeed that "[t]he United States has the single most pro-competitive constitution in the world" (p. 330). In a fascinating discussion of the original 1787 Constitution, Greve shows how various seemingly disparate provisions came together to force states to compete with each other for people and businesses, and limited their ability to establish anticompetitive trade barriers and otherwise interfere with interstate commerce (ch. 3).

      For example, the Privileges and Immunities Clause requires states to treat migrants from other states on par with their own citizens, thereby facilitating interstate mobility (pp. 64, 69). (5) The Compact Clause forbids states to make compacts among themselves without congressional consent, thereby preventing them from forming anticompetitive cartels (p. 69). (6) The Commerce Clause, of course, prevents states from setting up trade barriers (p. 64). (7) Article I, [section] 10 of the Constitution bars the states from laying imposts and duties on exports and imports, and from establishing duties on tonnage. This prevents states from taxing the commerce of other states, and forces them to engage in tax competition in order to raise revenue (pp. 81-82). Greve effectively explains how many other parts of the original Constitution facilitate "horizontal competition" between state governments, as well (ch. 3). For example, the Contract Clause forbidding state impairment of the obligation of contracts, prevents state governments from reneging on contractual obligations to out-of-staters or authorizing their citizens to do so.

      In addition to enumerating the ways in which various parts of the original Constitution promote competition, he also suggests that the Constitution cannot readily be interpreted as promoting some other, noncompetitive, objective of federalism. Unlike John C. Calhoun and others who saw inherent value in state sovereignty, (8) Greve contends that the leading Founders viewed states as "mere instruments" (p. 50). This is shown by the willingness of James Madison and Alexander Hamilton to advocate the complete abolition of state governments in the debates over the Constitution, and the desire of the former to establish a federal "negative" over state laws (pp. 45-50, 56-57). He also rejects the idea, commonly used to justify many federal systems outside the United States, (9) that American federalism can be seen as a way of reconciling opposing ethnic, religious, or political identities by giving minority groups a degree of autonomy at the state level (p. 49). (10)

      Greve is probably correct to argue that this idea was not much considered by the Founding Fathers. In Federalist 2, John Jay even (somewhat inaccurately) claimed that one of the advantages enjoyed by the United States is that Americans are "one united people; a people descended from the same ancestors, speaking the same language, [and] professing the same religion. (11)

      More controversially, Greve rejects the traditional view that one major purpose of American federalism is to enable the states to resist federal usurpations and threats to liberty (pp. 52-53). He dismisses the significance of Madison's famous statement in Federalist 51 that the existence of rival state and federal governments creates a "double security" for "the rights of the people" because the different levels of government will "control each other," even as separation of powers within each level ensures that "each will be controled [sic] by itself." (12) Greve is skeptical that this idea was really significant to Madison's thinking because, elsewhere in the Federalist, Madison details a variety of abuses by state governments, which indicates his belief that they were "out of control" and a threat to liberty themselves (p. 53). Greve argues that Madison's vision implies that "state resistance to federal assertions of power will typically materialize in defense of factional schemes" rather than "the rights of the people" (p. 53). However, there is no necessary inconsistency in simultaneously believing that state governments are threats to liberty in their own right and that they will nonetheless act to constrain federal threats to liberty. The latter could threaten the prerogatives of the states themselves or the "factional schemes" of the state government's political supporters. As Madison famously suggested in Federalist 51, (13) state governments might defend liberty against federal encroachment out of self-interest rather than high-minded principle.

      Greve is probably wrong to suggest that competition is the near-exclusive purpose of American federalism. (14) But he makes a strong case that the original Constitution is at least compatible with a competitive vision, and promotes it in many ways.

    2. JUDICIAL ENFORCEMENT OF COMPETITIVE FEDERALISM IN THE NINETEENTH CENTURY

      In one of the strongest and most original parts of the book, Greve gives a fascinating discussion of how the Constitution's competitive structure was promoted and enforced by the federal judiciary from the early republic through the early twentieth century.

      Interestingly, Greve contends that the judiciary, not Congress, was the main vehicle for promoting interstate competition. He goes so far as to say that the enforcement of the Constitution's "procompetitive rules and arrangements [was] supplied almost exclusively by the federal judiciary," while congressional activity in this field was "sporadic" at best (pp. 88-89). Such "judicial dominance" was viable, Greve contends, because the sectional antagonisms of nineteenth century America--which arose from conflicts over slavery, the tariff, and other issues-prevented the states from uniting to curb the judges' power (pp. 89-91).

      It would be impossible in a review to fully document the richness and insight of Greve's analysis of this period (chs. 4-7). But among the most noteworthy parts are his analysis of the jurisprudence of the Dormant Commerce Clause (ch. 4), his discussion of the ways in which the courts used the Fourteenth Amendment to protect interstate trade conducted by corporations (pp. 112-32), and his discussion of the role of federal common law in protecting commercial enterprises against exploitation by state courts (pp. 133-52).

      Greve's analysis of the issue of the status of corporations in nineteenth century constitutional law is particularly fascinating, addressing an issue little-noticed by modern constitutional law scholars. As he points out, there was considerable uncertainty in the...

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