Last week, the Supreme Court decided in Gonzales v. Raich that federal laws under the Interstate Commerce Clause trump state laws regulating marijuana, a brilliant dissent by Justice Thomas notwithstanding. The decision is part of a century-long trend in Supreme Court jurisprudence to limit the power of states to only those functions specifically granted by federal law. The impetus to diminish states is not coming from wild-eyed liberals but often conservative business leaders.

Many commentators have noted recent defeats of the nominally conservative view of the constitutional reservation of rights for states and the people. The New York Times on Sunday had the headline “The Rehnquist Court and Its Imperiled States’ Rights Legacy.” To read this and other commentaries, one might believe that conservatism under the rubric of states’ rights has only recently died in Washington.

The labels of “conservative” and “states’ rights” no longer coincide, if they ever did. States’ rights is more accurately a cause associated with the party out of power than a particular party.

“Federal pre-emption of states,” the supposed mantra of liberals from the 1930s through the 1970s, is now routinely trumpeted by many business interests and supposed conservatives in Washington. From tort reform to consumer safety to telecommunications, many individuals with impeccable conservative credentials will routinely assert that states are the source of all that ails America’s economy.

Echoing FDR, many self-described conservatives call for Washington to put state and local governments out of the economic policy business. To some economic conservatives, business interests outweigh the interests of state and local governments and a strict construction of the Constitution.

Many businesses come to Washington begging the federal government to pre-empt state laws and regulations they deem excessive. The federal government is an all-too-gullible audience for obsequious tales of woe at the hands of less enlightened bureaucrats at the state and local level. Federal officials want to believe that all American businesses prefer the Washington brand of regulation to the local brand.

Much can be said in favor of supplanting state and local regulation with exclusive federal regulation. New businesses, particularly those from abroad, are mystified by the layers of regulation in America. One can enter markets in most countries by dealing only with the national government. America is generally different.

We have more than 30,000 state and local governmental jurisdictions, many of which must be dealt with by even a small business, except when Congress decides to pre-empt state and local authority. Limiting the regulatory power of state and local governments can substantially reduce a business’s legal and regulatory costs. The federal government has successfully pre-empted state and local barriers to entry in many industries, including financial services, insurance, transportation, and telecommunications.

The pre-emption of state regulatory authority, however, is a double-edged sword. Federal pre-emption sometimes has the unintended consequence of eroding contract law (primarily state law) and property law (primarily state law with local zoning). Without the clear rule of law, businesses and everyone else lose. Thus, a business can spend years negotiating with state and local officials for the right to build a factory only to have the federal government decide that the property may not be developed for reasons ranging from the environment to historic preservation.

The potential for federal pre-emption encourages some businesses to deal only with the federal government. Many businesses have encouraged Congress to introduce bills that would supersede many aspects of state or local authority.

This is unfortunate. While the current federal government may be more sympathetic to business than most state and local governments, future federal administrations may have opposite sympathies. Shifting power to Washington would make business interests even more dependent on the outcome of federal elections. Once power comes to Washington, it never leaves.

Last month, French and Dutch voters, accustomed to powerful centralized governments, voted against a yet more powerful and more centralized government. American businesses may want to look at the European experience. Our Supreme Court and some in Congress are giving us exactly what the French and Dutch rejected.

A former FCC commissioner,Mr. Furchtgott-Roth is president of Furchtgott-Roth Economic Enterprises. He can be reached at hfr@furchtgott-roth.com.