In modern times, the US government has arrogated to itself the right to regulate all aspects of commerce that occur within our borders, from the largest mega-corporations all the way down to the most humble sole-proprietor businesses. When the government bothers to justify its assumed powers at all, there is usually some reference to the "commerce clause" in the US Constitution.
The underlined text in the following image shows, in its entirety, the power the Constitution grants the US government regarding commerce:
"The Congress shall have Power...To regulate Commerce
- with foreign Nations,
- and among the several States,
- and with the Indian Tribes"
The prepositions are important to the proper understanding of the central government's enumerated power.
Congress regulates commerce with
other nations and with
the Indian tribes, because the US government is granted the right to regulate commercial interactions that cross the national borders of our country. Since the US government is the sole agent in our country's official interactions with other countries, it makes sense that the government should have a say in any commerce that might affect our country's relations with other countries.
When it comes to commerce that remains within the borders of our country, however, the language of the text is different: Congress has power to regulate commerce among
) the states. Businesses within those states are engaging in commerce with one another. The states are legally considered to be peers with one another, so what happens when there are disputes between states relating to these commercial interactions?
Congress is assigned the role of binding arbitrator, ensuring that no state will take unfair advantage of another as goods and services cross its borders. Congress does not have the power to dictate the size and shape of the grommets that are manufactured in Colorado, or to force Grommets, Inc. to grant its employees paid leave for yoga retreats. Rather, Congress has the power to prevent Texas (where rival company Also Grommets, Inc. is located) from erecting protectionist regulatory barriers that make it difficult for Grommets, Inc. to get its goods to market.
That is the original purpose of the US government's interstate commerce regulatory power. Anything else the government does in the arena of internal commerce is almost certainly a usurpation.
"[W]e have abundant reason to be convinced, that the spirit for Trade which pervades these States is not to be restrained; it behooves us then to establish just principles; and this, any more than other matters of national concern, cannot be done by thirteen heads differently constructed and organized. The necessity, therefore, of a controuling power is obvious; and why it should be withheld is beyond my comprehension."
– George Washington, letter to James Warren, Mount Vernon, October 7, 1785; Fitzpatrick 28:290
(Image and quote via the George Washington Facebook page)