This chapter focuses on federalism, one of the fundamental characteristics of American government. These are the chapter's main points:

• The power of government must be equal to its responsibilities. The Constitution was created because the previous government (under the Articles of Confederation) was too weak to accomplish its expected goals, particularly those of a strong defense and an integrated economy. The Constitution created a stronger national government, particularly in the areas of taxation and the regulation of commerce.
• Federalism–the Constitution's division of governing authority between the nation and the states–was the result of political bargaining. Federalism was not a theoretical principle, but a compromise made necessary in 1787 by the prior existence of the states.
• Federalism is not a fixed principle for allocating power between the national and state governments; it changes in response to changing political needs. Federalism has passed through several distinct stages during the nation's history.
• Contemporary federalism tilts toward national authority, reflecting the increased interdependence of American society. However, there is currently a trend toward reducing the scope of federal authority.

Perhaps the foremost characteristic of the American political system is its division of authority between the national government and the states. The Constitution enumerates the general powers of the national government and grants it implied powers through the "necessary and proper" clause (also called the "elastic clause"). In a move to placate the Antifederalists, the Tenth Amendment was added to the Constitution, "reserving" many powers to the states.

From 1789 to 1865, the struggle for power between the national government and the states continued. In the landmark decision McCullochv.Maryland (1819), the Supreme Court under Chief Justice John Marshall bolstered the implied powers of the national government by upholding its right to create a national bank. The decision also declared federal law to be superior to state law, thus reaffirming the Constitution's "supremacy clause." Yet the states still argued, particularly in John C. Calhoun's doctrine of nullification, that their sovereignty took precedence over national authority. In the end, it took the Civil War to cement the idea that the United States was a union of people, not of states.

From 1865 to 1937, federalism reflected the ultimately unworkable doctrine that certain policy areas were the exclusive responsibility of the national government, while others belonged exclusively to the states (dual federalism). This constitutional position enabled the South to establish an inferior standard of citizenship for its African-American citizens and promoted the laissez-faire doctrine that big business was largely beyond governmental control.

Federalism as we know it today began to emerge in the late 1930s. In the areas of commerce, taxation, spending, civil rights, and civil liberties, among others, the federal government now has a very large role, one that is the inevitable consequence of the increasing complexity of American society and the interdependence of its people. National, state, and local officials now work closely together to solve the country's problems, a situation that is described as cooperative federalism (the "marble cake" model, not the "layer cake"). Grants-in-aid from Washington to the states and localities have been the chief instrument of national influence. States and localities have received billions in federal assistance; in accepting this money, they have also accepted both federal restrictions on its use and the national policy priorities that underlie the granting of the money. In recent years, there has been a movement toward block grants rather than the categorical kind, especially at the urging of conservatives who wish to give the states more power and the flexibility of using funds with minimum strings attached.

Define sovereignty and explain the differences between federal, unitary, and confederacy systems.

Specify the differences among enumerated, implied, and reserved powers. Explain the purpose underlying this distribution of power.

Distinguish between the "necessary and proper," "supremacy," and "commerce" clauses, explaining how their constitutional interpretations have affected the division of powers in American government.

Outline the different historical stages of federalism, including the major events and Supreme Court rulings that marked each stage.