The Supreme Court of the United States has not articulated a general account of the division of authority between the federal government and the states in Article I, Section 8 of the United States Constitution. Instead, the Court has tried to distinguish the “truly national” from the “truly local” in the specific context of the Commerce Clause, United States v. Morrison, 529 U.S. 598, 617–18 (2000). The Court has distinguished “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. Congress is not generally more competent at regulating economic activity, and the states are not generally more competent at regulating noneconomic activity. The distinction between economic and noneconomic activity seems mostly irrelevant to the problems of federalism. We propose a more promising foundation for American federalism in Article I, Section 8. Our account distinguishes between activities that pose collective action problems for the states and those that do not. This approach is superior because it flows directly from the relative competences of the federal government and the states. We show that Section 8 mostly concerns collective action problems. According to our interpretation, the clauses of Section 8 authorize Congress to tax, spend, and regulate to solve these problems. We use modern economics to analyze interstate collection action problems. Our account distinguishes interstate commerce from intrastate commerce. It also provides a new constitutional “hook” for Congress to regulate interstate problems of collective action that do not involve commerce. Specifically, our framework extends federal regulatory power under Clause 1 to some problems, including environmental harms, that are not essentially commercial.