Academic

Cooter & Siegel on Collective Action Federalism

By Lawrence Solum

Robert D. Cooter and Neil Siegel (University of California, Berkeley - School of Law and Duke University - School of Law) have posted Collective Action Federalism: A General Theory of Article I, Section 8 (Stanford Law Review, Forthcoming) on SSRN. Here is the abstract:

The Framers of the United States Constitution wrote Article I, Section 8 in order to address some daunting collective action problems facing the young nation. They especially wanted to protect the states from military warfare by foreigners and from commercial warfare against one another. The states acted individually when they needed to act collectively, and Congress lacked power under the Articles of Confederation to address these problems. Section 8 thus authorized Congress to promote the ?general Welfare? of the United States by tackling many collective action problems that the states could not solve on their own.

Subsequent interpretations of Section 8, both outside and inside the courts, often have focused on the presence or absence of collective action problems involving multiple states - but not always. For example, the Supreme Court of the United States, in trying to distinguish the ?truly national? from the ?truly local? in the context of the Commerce Clause, United States v. Morrison, 529 U.S. 598, 617?18 (2000), has differentiated ?economic? activity, which Congress may regulate, from ?noneconomic? activity, which Congress may not regulate.

A federal constitution ideally gives the central and state governments the power to do what each does best. Economic activity does not generally cause collective action problems among the states, and noneconomic activity is not generally free from collective action problems. Consequently, Congress is not generally better at regulating economic activity, and the states are not generally better at regulating noneconomic activity. The distinction between economic and noneconomic activity seems mostly irrelevant to the problems of federalism.

We propose a better foundation for American federalism in Section 8. Our theory distinguishes activities that pose collective action problems from those that do not. This approach flows directly from the relative advantages of the federal government and the states. We show that Section 8 mostly concerns collective action problems created by interstate externalities and national markets. We conclude that Section 8 authorizes Congress to tax, spend, and regulate to solve these collective action problems. Collective action federalism finds that the limits and expanse of congressional power in Section 8 turn on the difference between individual and collective action by the states. The theory uses this distinction to differentiate interstate commerce from intrastate commerce, not the economic/noneconomic distinction. Our distinction best explains why Congress may not ordinarily use its commerce power to regulate such crimes as assault or gun possession in schools. Collective action federalism also identifies a constitutional ?hook? for Congress to regulate multi-state problems of collective action that may not involve commerce: Clause 1 of Section 8 authorizes some forms of regulation of noneconomic harms that spill over state boundaries, such as contagious diseases and certain kinds of environmental pollution.

And from the paper:

The theory of collective action federalism conceives the ?general Welfare? as substantively defined by collective action problems involving more than one state. This interpretation suggests that it is time to revisit the Butler Court?s re- jection of the possibility that the General Welfare Clause allows some federal regulation in addition to taxation and spending.200 To begin with, the text of Clause 1 should not end the conversation; notwithstanding what generations of lawyers have been taught in law school, the Clause does not clearly include taxation and spending while excluding regulation. The relevant language grants Congress the power to ?lay and collect Taxes . . . to pay the Debts and provide for the common Defence and general Welfare of the United States.?201 The Clause thus ends the requisition practice that existed under the Articles of Con- federation,202 and authorizes Congress to use federal tax revenue to pay na- tional debts and ?provide for the common Defence and general Welfare of the United States.? One way to ?provide for the common Defence and general Welfare of the United States? is to spend federal money on public goods. An- other way to achieve this objective is by spending federal money to enact, ad- minister, and enforce federal regulations. Neither expenditures on public goods nor expenditures on regulations are explicitly mentioned in the text of Clause 1. It is not clear or obvious from the text that Clause 1 authorizes supplying public goods or prohibits imposing regulations.203

And:

Even if the foregoing arguments are deemed insufficient to displace the conventional understanding of the constitutional text, it does not necessarily follow that Clause 1 authorizes no regulation. Also relevant to the proper con- struction of the clause is the fact that many economists advocate externality taxes as the most effective way to accomplish regulatory objectives, such as taxes on air and water pollution. A federal price on pollution can be construed as a tax or a regulation. The two may be materially equivalent.205 The tenuous economic distinction between many taxes and regulations, which we will ana- lyze in future work, suggests that allowing one and not the other under Clause 1 makes no sense. Exploring the forms of regulation permitted under Clause 1 is a task that we leave for a subsequent article.206

Sure to be controversial and highly recommended. Download it while its hot!

Full post as published by Legal Theory Blog on October 18, 2010 (boomark / email).