The balance of power between state and national governments was one of the most contentious issues for the American Founders.
The states were important historically, but also as a way to keep government close to the people and to divide government power into as many hands as practical in order to preserve liberty.
At the Constitutional Convention small states wanted every state to have an equal voice in the national government. Large states desired just the opposite—representation based on population would give them more power.
It was a compromise that created the U.S. Congress, where states are represented equally in the Senate but according to population in the House. That compromise not only broke the deadlock that threatened to derail the Constitution—it became the foundation for the unique American system of Federalism.
The national government was set up to provide national defense, manage foreign trade, and referee disputes between the states—in short, to provide the states with safety and commerce similar to the way the British Empire did for the 13 original colonies. The states were left to manage their internal affairs and to compete with one another; thus the states are sometimes referred to as our “fifty laboratories of democracy.”
Federalism fosters diversity by allowing groups of people in different states to manage their affairs differently, to innovate or remain the same, to address local needs. And by keeping government local, dividing it up, and making it compete, Federalism protects freedom.
The American system of states is not just unique—it has been uniquely successful. Federalism is an American invention worth preserving.