The happy paradox of constitutional federalism is that two sets of government can protect liberty better than one. This promotion of liberty depends on a federalism of different governmental spheres laid down in the Constitution itself. The Constitution enumerates and thereby limits the powers of the federal government– basically to provide national defense, protection of interstate commerce, and a few other public goods that state and local governments cannot provide.
The states are thus left with very substantial powers. But they are forced to compete with one another in market for governance that is intensified by a few federal constitutional guarantees–those of the free flow of goods, people, and speech across state lines. As the limitation of power protects against tyranny of the federal government so does the ability of citizens to exit protect against state tyranny.
Moreover, by decentralizing most legislative responsibilities constitutional federalism addresses a fact that we must never forget: federal legislation is an exercise in central planning by temporary majorities. National legislators have difficulty determining what is in the public interest in different places across a continental republic. And that problem cannot be solved by the national government simply copying a state plan and putting it into effect. The diversity that constitutional federalists prize is emphatically not a way station to centralization, but the destination in an ever changing world.
Note too that constitutional federalism promotes accountability at the state level by depending on the possibility of exit and thus works with the grain of human nature. As Ilya Somin has discussed at length, voting is not much of a constraint on government, because people do have not have much self-interest in following politics: their individual vote is less likely to make a difference to policy than being hit by lightning on the way to polls. But people can benefit personally by exiting a state with a bad economic or social climate to a state with good one. That gives them greater leverage. The substance of federalism is perhaps the constitutional structures that best reflects the constrained vision of the Framers by leveraging the realities of human nature to protect liberty.
And following constitutional federalism today also reflects a realistic and constrained vision of politics, simply because it follows the constitution as written. Substituting some other kind of federalism as advocated by the new school of “national federalism” is an updating of the Constitution and constitutional updating is the essence of the unconstrained vision, because it puts trust in a small group of unrepresentative judges to do the changing.
An important part of the enforcing the Constitution as written is not permitting the federal judiciary to create new rights to restrain ability of the states to make their own trade offs between license and liberty. Abortion may be a moral problem, but the legal problem of Roe v. Wade is its assumption of a federal judiciary unconstrained by the Constitution and thus a perpetual engine of national consolidation. Any theory that permits the federal judiciary to create new rights against the states cannot be a theory that respects constitutional federalism.