Federalism and the American Economic Order, 1789-1910
FEDERALISM AND THE AMERICAN ECONOMIC ORDER, 1789-1910 HARRY N. SCHEIBER* University of California,San Diego From the beginning of nationhood under the Constitution to the present day, the federal system of American government- what Madison termed "a novelty and a compound," and what Hamilton declared was "necessarily a compromise of dissimilar interests and inclinations"'-has been of profound importance in shaping the nation's economic order. Power has shifted over time between the national government and the constituent state gov- ernments; and these structural shifts have had an impact upon policy process and outcomes, as well as upon the economy's institutional framework. The study of federalism has long been, of course, a concern of scholarship in constitutional law, political science, and history. Moreover, historians of American politics have lavished much attention upon the great conflicts of interest groups, parties, and ideologies, from 1787 to the New Deal and after, over the basic question of the extent to which power ought to be centralized in our federal system.2 And yet no scholarly The author thanks the John Simon Guggenheim Memorial Founda- tion, the Center for Advanced Study in the Behavioral Sciences, and the University of California for support of research from which this study derives. A briefer, preliminary version of this article was pre- pared as a paper for the Sixth International Congress, Association Internationale d'Histoire .conomique, in Copenhagen. The author is much indebted to Professor Lawrence Friedman of Stanford University for close reading and criticism of the manu- script. Professors Friedman, Paul W. Gates (Cornell University), and Willard Hurst (University of Wisconsin) have offered many val- uable suggestions during the course of research for this monograph, over several years.
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