delivered the opinion of the Court.

A municipal ordinance of the city of Camden, New Jersey, requires that at least 40% of the employees of contractors and subcontractors working on city construction projects be Camden residents. Appellant, the United Building and Construction Trades Council of Camden County and Vicinity (Council), challenges that ordinance as a violation of the Privileges and Immunities Clause, Art. IV, § 2, cl. 1, of the United States Constitution.1 The Supreme Court of New Jersey rejected appellant’s privileges and immunities attack on the ground that the ordinance discriminates on the basis of municipal, not state, residency. The court “decline[d] to apply the Privileges and Immunities Clause in the context of a municipal ordinance that has identical effects upon out-of-state citizens and New Jersey citizens not residing in the locality.” 88 N. J. 317, 342, 443 A. 2d 148, 160 (1982). We conclude that the challenged ordinance is properly subject to the strictures of the Clause. We therefore reverse the judgment of the Supreme Court of New Jersey and remand the case for a determination of the validity of the ordinance under the appropriate constitutional standard.

On August 28, 1980, the Camden City Council, acting pursuant to a statewide affirmative-action program,2 adopted an *211ordinance setting minority hiring “goals” on all public works contracts. Ordinance MC 1650, App. to Juris. Statement A36. The ordinance also created a hiring preference for Camden residents, with a separate 1-year residency requirement triggering eligibility for that preference. Ordinance MC 1650 § 1(5), App. to Juris. Statement A38. As subsequently amended, the ordinance requires that on all construction projects funded by the city:3

“The developer/contractor, in hiring for jobs, shall make every effort to employ persons residing within the City of Camden but, in no event, shall less than forty percent (40%) of the entire labor force be residents of the City of Camden.” Ordinance MC 1653 §C(IV)(b), App. to Juris. Statement A56.

*212The contractor is also obliged to ensure that any subcontractors working on such projects adhere to the same requirement. Ordinance MC 1650 § VIII, App. to Juris. Statement A46.

The amended ordinance was submitted for approval to the Chief Affirmative Action Officer of the New Jersey Treasury Department in November 1980. Following brief administrative proceedings, the ordinance was designated as a state-approved affirmative-action construction program. Appellant, an association of labor organizations representing private employees in the building and construction trades in various New Jersey counties,4 filed a notice of appeal with the Appellate Division of the New Jersey Superior Court challenging the final determination of the Treasury Department in approving the Camden plan. The New Jersey Supreme Court certified the appeal directly to that court to decide all the issues in the case.

Appellant challenged state approval of the resident-hiring quota as ultra vires, and as unconstitutional under the Commerce Clause and the Privileges and Immunities Clause of Art. IV of the United States Constitution and under the Fourteenth Amendment’s Equal Protection Clause.5 The New Jersey court sustained the Treasurer’s action as consistent both with state law and the Federal Constitution. Citing Reeves, Inc. v. Stake, 447 U. S. 429 (1980), and Hughes v. Alexandria Scrap Corp., 426 U. S. 794 (1976), the court held that the resident quota was not subject to challenge under the Commerce Clause because the State was acting as a market participant rather than as a market regulator. 88 *213N. J., at 338-341, 443 A. 2d, at 158-160. The court also held that the quota did not violate the Privileges and Immunities Clause because it was not aimed primarily at out-of-state residents. “It almost certainly affects more New Jersey residents not living in Camden than it does out-of-state residents. Because the Camden ordinance does not affect The States^] . . . treatment of each other’s residents,’ ... it does not violate any privilege of state citizenship.” Id., at 341-342, 443 A. 2d, at 160. Finally, the New Jersey Supreme Court held that the 1-year residency requirement did not violate the right to travel protected by the Equal Protection Clause, concluding that only a rational basis is required to uphold a residency requirement for city employment. Id., at 342-343, 443 A. 2d, at 160-161.

Appellant then filed this appeal raising the same three constitutional challenges to the resident-hiring quota. We noted probable jurisdiction. 460 U. S. 1021 (1983). Since the Council filed its appeal, however, there have been two significant changes in the posture of the case. First, the Court decided White v. Massachusetts Council of Construction Employers, Inc., 460 U. S. 204 (1983), which held that an executive order of the Mayor of Boston, requiring that at least 50% of all jobs on construction projects funded in whole or in part by city funds be filled by bona fide city residents, was immune from scrutiny under the Commerce Clause because Boston was acting as a market participant rather than as a market regulator. In light of the decision in White, appellant has abandoned its Commerce Clause challenge to the Camden ordinance.

Second, in July 1983 Camden amended its affirmative-action plan. The 1-year residency requirement was deleted, thereby mooting appellant’s equal protection challenge based on that durational requirement. Now, a resident of the city of Camden is defined simply as “any person who resides in the City of Camden.” App. to Brief for Appellees Mayor and Council of the City of Camden A-5. Also, the scope of *214the ordinance was clarified.6 It now applies to any construction project “which is funded in whole or in part with City funds or funds which the City expends or administers in accordance with the terms of a grant.” Id., at A-4. Finally, the 40% resident-hiring requirement was changed from a strict “quota” to a “goal” with which developers and contractors must make “every good faith effort” to comply. Id., at A-13.

Because of these changes, the only question left for our consideration is whether the Camden ordinance, as now written, violates the Privileges and Immunities Clause.7 We first address the argument, accepted by the Supreme Court of New Jersey, that the Clause does not even apply to a municipal ordinance such as this. Two separate contentions are advanced in support of this position: first, that the Clause only applies to laws passed by a State and, second, that the Clause only applies to laws that discriminate on the basis of state citizenship.

The first argument can be quickly rejected. The fact that the ordinance in question is a municipal, rather than a state, law does not somehow place it outside the scope of the Privileges and Immunities Clause. First of all, one cannot easily distinguish municipal from state action in this case: the municipal ordinance would not have gone into effect without express approval by the State Treasurer. As the New Jersey Supreme Court noted in discussing the constitutionality of the minority hiring goals:

“By approving the Camden plan, the State Treasurer has established a minority hiring goal for the City of Camden that operates no differently than every other minority hiring goal established by the State Treas*215urer. . . . The Council’s constitutional challenge to the Camden minority hiring goal must therefore be interpreted as a challenge to the State Treasurer’s general power to issue affirmative action hiring goals.” 88 N. J., at 330, 443 A. 2d, at 154.

The constitutional challenge to the resident hiring preference, therefore, must also “be interpreted as a challenge to the State Treasurer’s general power” to adopt such a preference.8 The New Jersey court specifically found that the State Treasurer’s approval of the resident-hiring preference was “not ultra vires or an abuse of discretion.” Id., at 329, 443 A. 2d, at 154.

More fundamentally, a municipality is merely a political subdivision of the State from which its authority derives. Trenton v. New Jersey, 262 U. S. 182, 187 (1923). It is as true of the Privileges and Immunities Clause as of the Equal Protection Clause that what would be unconstitutional if done directly by the State can no more readily be accomplished by a city deriving its authority from the State. Memorial Hospital v. Maricopa County, 415 U. S. 250, 256 (1974); Avery v. Midland County, 390 U. S. 474, 480-481 (1968). Thus, even if the ordinance had been adopted solely by Camden, and not pursuant to a state program or with state approval, the hiring preference would still have to comport with the Privileges and Immunities Clause.

The second argument merits more consideration. The New Jersey Supreme Court concluded that the Privileges and Immunities Clause does not apply to an ordinance that discriminates solely on the basis of municipal residency. The Clause is phrased in terms of state citizenship and was designed “to place the citizens of each State upon the same footing with citizens of other States, so far as the advantages *216resulting from citizenship in those States are concerned.” Paul v. Virginia, 8 Wall. 168, 180 (1869). See also Hicklin v. Orbeck, 437 U. S. 518, 523-524 (1978); Ward v. Maryland, 12 Wall. 418, 430 (1871).

“The primary purpose of this clause, like the clauses between which it is located — those relating to full faith and credit and to interstate extradition of fugitives from justice — was to help fuse into one Nation a collection of independent, sovereign States. It was designed to insure to a citizen of State A who ventures into State B the same privileges which the citizens of State B enjoy. For protection of such equality the citizen of State A was not to be restricted to the uncertain remedies afforded by diplomatic processes and official retaliation.” Toomer v. Witsell, 334 U. S. 385, 395 (1948) (footnote omitted).

Municipal residency classifications, it is argued, simply do not give rise to the same concerns.

We cannot accept this argument. We have never read the Clause so literally as to apply it only to distinctions based on state citizenship. For example, in Mullaney v. Anderson, 342 U. S. 415, 419-420 (1952), the Court held that the Alaska Territory had no more freedom to discriminate against those not residing in the Territory than did any State to favor its own citizens. And despite some initial uncertainty, compare Travis v. Yale & Towne Mfg. Co., 252 U. S. 60, 78-79 (1920), and Blake v. McClung, 172 U. S. 239, 246-247 (1898), with Douglas v. New York, N. H. & H. R. Co., 279 U. S. 377, 386-387 (1929), and La Tourette v. McMaster, 248 U. S. 465, 469-470 (1919), it is now established that the terms “citizen” and “resident” are “essentially interchangeable,” Austin v. New Hampshire, 420 U. S. 656, 662, n. 8 (1975), for purposes of analysis of most cases under the Privileges and Immunities Clause. See Hicklin v. Orbeck, supra, at 524, n. 8; Toomer v. Witsell, supra, at 397. A person who is not residing in a given State is ipso facto not residing in a city within that *217State. Thus, whether the exercise of a privilege is conditioned on state residency or on municipal residency he will just as surely be excluded.

Given the Camden ordinance, an out-of-state citizen who ventures into New Jersey will not enjoy the same privileges as the New Jersey citizen residing in Camden. It is true that New Jersey citizens not residing in Camden will be affected by the ordinance as well as out-of-state citizens. And it is true that the disadvantaged New Jersey residents have no claim under the Privileges and Immunities Clause. Slaughter-House Cases, 16 Wall. 36, 77 (1873). But New Jersey residents at least have a chance to remedy at the polls any discrimination against them. Out-of-state citizens have no similar opportunity, Austin v. New Hampshire, supra, at 662, and they must not “be restricted to the uncertain remedies afforded by diplomatic processes and official retaliation.” Toomer v. Witsell, supra, at 395.9 We conclude that Cam*218den’s ordinance is not immune from constitutional review at the behest of out-of-state residents merely because some instate residents are similarly disadvantaged. Cf. Zobel v. Williams, 457 U. S. 55, 75 (1982) (O’Connor, J., concurring in judgment).

Application of the Privileges and Immunities Clause to a particular instance of discrimination against out-of-state residents entails a two-step inquiry. As an initial matter, the Court must decide whether the ordinance burdens one of those privileges and immunities protected by the Clause. Baldwin v. Montana Fish and Game Comm’n, 436 U. S. 371, 383 (1978). Not all forms of discrimination against citizens of other States are constitutionally suspect.

“Some distinctions between residents and nonresidents merely reflect the fact that this is a Nation composed of individual States, and are permitted; other distinctions are prohibited because they hinder the formation, the purpose, or the development of a single Union of those States. Only with respect to those ‘privileges’ and ‘immunities’ bearing upon the vitality of the Nation as a single entity must the State treat all citizens, resident and nonresident, equally.” Ibid.

As a threshold matter, then, we must determine whether an out-of-state resident’s interest in employment on public works contracts in another State is sufficiently “fundamental” to the promotion of interstate harmony so as to “fall within the purview of the Privileges and Immunities Clause.” Id., at 388. See also Canadian Northern R. Co. v. Eggen, *219252 U. S. 553, 560 (1920); Blake v. McClung, 172 U. S., at 248.

Certainly, the pursuit of a common calling is one of the most fundamental of those privileges protected by the Clause. Baldwin v. Montana Fish and Game Comm’n, supra, at 387. Many, if not most, of our cases expounding the Privileges and Immunities Clause have dealt with this basic and essential activity. See, e. g., Hicklin v. Orbeck, 437 U. S. 518 (1978); Austin v. New Hampshire, 420 U. S. 656 (1975); Mullaney v. Anderson, 342 U. S. 415 (1952); Toomer v. Witsell, 334 U. S. 385 (1948); Ward v. Maryland, 12 Wall. 418 (1871). Public employment, however, is qualitatively different from employment in the private sector; it is a subspecies of the broader opportunity to pursue a common calling. We have held that there is no fundamental right to government employment for purposes of the Equal Protection Clause. Massachusetts Bd. of Retirement v. Murgia, 427 U. S. 307, 313 (1976) (per curiam). Cf. McCarthy v. Philadelphia Civil Service Comm’n, 424 U. S. 645 (1976) (per curiam) (rejecting equal protection challenge to municipal residency requirement for municipal workers). And in White, 460 U. S., at 211, n. 7, we held that for purposes of the Commerce Clause everyone employed on a city public works project is, “in a substantial if informal sense, ‘working for the city.’”

It can certainly be argued that for purposes of the Privileges and Immunities Clause everyone affected by the Camden ordinance is also “working for the city” and, therefore, has no grounds for complaint when the city favors its own residents. But we decline to transfer mechanically into this context an analysis fashioned to fit the Commerce Clause. Our decision in White turned on a distinction between the city acting as a market participant and the city acting as a market regulator. The question whether employees of contractors and subcontractors on public works projects were or were not, in some sense, working for the city was crucial to that analysis. The question had to be answered in order to chart the boundaries of the distinction. But the distinction be*220tween market participant and market regulator relied upon in White to dispose of the Commerce Clause challenge is not dispositive in this context. The two Clauses have different aims and set different standards for state conduct.

The Commerce Clause acts as an implied restraint upon state regulatory powers. Such powers must give way before the superior authority of Congress to legislate on (or leave unregulated) matters involving interstate commerce. When the State acts solely as a market participant, no conflict between state regulation and federal regulatory authority can arise. White, supra, at 206-208; Reeves, Inc. v. Stake, 447 U. S., at 436-487; Hughes v. Alexandria Scrap Corp., 426 U. S., at 810. The Privileges and Immunities Clause, on the other hand, imposes a direct restraint on state action in the interests of interstate harmony. Hicklin v. Orbeck, supra, at 523-524; Ward v. Maryland, supra, at 430; Paul v. Virginia, 8 Wall., at 180. This concern with comity cuts across the market regulator-market participant distinction that is crucial under the Commerce Clause. It is discrimination against out-of-state residents on matters of fundamental concern which triggers the Clause, not regulation affecting interstate commerce. Thus, the fact that Camden is merely setting conditions on its expenditures for goods and services in the marketplace does not preclude the possibility that those conditions violate the Privileges and Immunities Clause.

In Hicklin v. Orbeck, supra, we struck down as a violation of the Privileges and Immunities Clause an “Alaska Hire” statute containing a resident-hiring preference for all employment related to the development of the State’s oil and gas resources.10 Alaska argued in that case that “because the oil and gas that are the subject of Alaska Hire are owned *221by the State, this ownership, of itself, is sufficient justification for the Act’s discrimination against nonresidents, and takes the Act totally without the scope of the Privileges and Immunities Clause.” Id., at 528 (footnote omitted). We concluded, however, that the State’s interest in controlling those things it claims to own is not absolute. “Rather than placing a statute completely beyond the Clause, a State’s ownership of the property with which the statute is concerned is a factor — although often the crucial factor — to be considered in evaluating whether the statute’s discrimination against noncitizens violates the Clause.” Id., at 529. See also Baldwin v. Montana Fish and Game Comm’n, 436 U. S., at 385. Much the same analysis, we think, is appropriate to a city’s efforts to bias private employment decisions in favor of its residents on construction projects funded with public moneys. The fact that Camden is expending its own funds or funds it administers in accordance with the terms of a grant is certainly a factor — perhaps the crucial factor — to be considered in evaluating whether the statute’s discrimination violates the Privileges and Immunities Clause. But it does not remove the Camden ordinance completely from the purview of the Clause.

In sum, Camden may, without fear of violating the Commerce Clause, pressure private employers engaged in public works projects funded in whole or in part by the city to hire city residents. But that same exercise of power to bias the employment decisions of private contractors and subcontractors against out-of-state residents may be called to account under the Privileges and Immunities Clause. A determination of whether a privilege is “fundamental” for purposes of that Clause does not depend on whether the employees of private contractors and subcontractors engaged in public works projects can or cannot be said to be “working for the city.” The opportunity to seek employment with such private employers is “sufficiently basic to the livelihood of the Nation,” Baldwin v. Montana Fish and Game Comm’n, supra, at 388, as to fall within the purview of the Privileges *222and Immunities Clause even though the contractors and subcontractors are themselves engaged in projects funded in whole or part by the city.

The conclusion that Camden’s ordinance discriminates against a protected privilege does not, of course, end the inquiry. We have stressed in prior cases that “[l]ike many other constitutional provisions, the privileges and immunities clause is not an absolute.” Toomer v. Witsell, 334 U. S., at 396. It does not preclude discrimination against citizens of other States where there is a “substantial reason” for the difference in treatment. “[T]he inquiry in each case must be concerned with whether such reasons do exist and whether the degree of discrimination bears a close relation to them.” Ibid. As part of any justification offered for the discriminatory law, nonresidents must somehow be shown to “constitute a peculiar source of the evil at which the statute is aimed.” Id., at 398.

The city of Camden contends that its ordinance is necessary to counteract grave economic and social ills. Spiralling unemployment, a sharp decline in population, and a dramatic reduction in the number of businesses located in the city have eroded property values and depleted the city’s tax base. The resident-hiring preference is designed, the city contends, to increase the number of employed persons living in Camden and to arrest the “middle-class flight” currently plaguing the city. The city also argues that all non-Camden residents employed on city public works projects, whether they reside in New Jersey or Pennsylvania, constitute a “source of the evil at which the statute is aimed.” That is, they “live off” Camden without “living in” Camden. Camden contends that the scope of the discrimination practiced in the ordinance, with its municipal residency requirement, is carefully tailored to alleviate this evil without unreasonably harming nonresidents, who still have access to 60% of the available positions.

Every inquiry under the Privileges and Immunities Clause “must... be conducted with due regard for the principle that *223the States should have considerable leeway in analyzing local evils and in prescribing appropriate cures.” Toomer v. Wit-sell, supra, at 396. This caution is particularly appropriate when a government body is merely setting conditions on the expenditure of funds it controls. See supra, at 221. The Alaska Hire statute at issue in Hicklin v. Orbeck, 437 U. S. 518 (1978), swept within its strictures not only contractors and subcontractors dealing directly with the State’s oil and gas; it also covered suppliers who provided goods and services to those contractors and subcontractors. We invalidated the Act as “an attempt to force virtually all businesses that benefit in some way from the economic ripple effect of Alaska’s decision to develop its oil and gas resources to bias their employment practices in favor of the State’s residents.” Id., at 531. No similar “ripple effect” appears to infect the Camden ordinance. It is limited in scope to employees working directly on city public works projects.

Nonetheless, we find it impossible to evaluate Camden’s justification on the record as it now stands. No trial has ever been held in the case. No findings of fact have been made. The Supreme Court of New Jersey certified the case for direct appeal after the brief administrative proceedings that led to approval of the ordinance by the State Treasurer. It would not be appropriate for this Court either to make factual determinations as an initial matter or to take judicial notice of Camden’s decay. We, therefore, deem it wise to remand the case to the New Jersey Supreme Court. That court may decide, consistent with state procedures, on the best method for making the necessary findings.

The judgment of the Supreme Court of New Jersey is reversed, and the case is remanded for proceedings not inconsistent with this opinion.

It is so ordered.

dissenting.

For over a century the underlying meaning of the Privileges and Immunities Clause of the Constitution’s Article *224IV1 has been regarded as settled: at least absent some substantial, noninvidious justification, a State may not discriminate between its own residents and residents of other States on the basis of state citizenship.2 See generally Hicklin v. Orbeck, 437 U. S. 518, 523-526 (1978); Toomer v. Witsell, 334 U. S. 385, 395 (1948); Hague v. CIO, 307 U. S. 496, 511 (1939) (opinion of Roberts, J.); Slaughter-House Cases, 16 Wall. 36, 77 (1873); Paul v. Virginia, 8 Wall. 168, 180 (1869).

Today, however, the Court casually extends the scope of the Clause by holding that it applies to laws that discriminate among state residents on the basis of municipal residence, simply because discrimination on the basis of municipal residence disadvantages citizens of other States “ipso facto.” Ante, at 216-217. This novel interpretation arrives accompanied by little practical justification and no historical or textual support whatsoever. Because I believe that the Privileges and Immunities Clause was not intended to apply to the kind of municipal discrimination presented by this case, I would affirm the judgment of the Supreme Court of New Jersey.3

HH

The historical underpinnings of the Privileges and Immunities Clause are not in serious dispute. The Clause was derived from the fourth Article of Confederation4 and was *225designed to carry forward that provision’s prescription of interstate comity. Austin v. New Hampshire, 420 U. S. 656, 660-661 (1975); United States v. Wheeler, 254 U. S. 281, 294 (1920); Slaughter-House Cases, 16 Wall., at 75. Both the text of the Clause and the historical record confirm that the Framers meant to foreclose any one State from denying citizens of other States the same “privileges and immunities” accorded its own citizens. See Austin v. New Hampshire, 420 U. S., at 660-661. James Madison complained during the Constitutional Convention of “Acts of Virga. & Maryland which give a preference to their own citizens in cases where the Citizens [of other States] are entitled to equality of privileges by the Articles of Confederation.”5 Alexander Hamilton, who deemed the Privileges and Immunities Clause “the basis of the Union,” The Federalist No. 80, p. 502 (B. Wright ed. 1961), expressly linked the Clause with the concern over state parochialism that gave rise to the federal courts’ diversity jurisdiction under Article III:

“[I]n order to [ensure] the inviolable maintenance of that equality of privileges and immunities to which the citizens of the Union will be entitled, the national judiciary ought to preside in all cases in which one State or its citizens are opposed to another State or its citizens. To secure the full effect of so fundamental a provision against all evasion and subterfuge, it is necessary that its construction should be committed to that tribunal which, having no local attachments, will be likely to be impartial *226between the different States and their citizens . . . Ibid.

While the Framers thus conceived of the Privileges and Immunities Clause as an instrument for frustrating discrimination based on state citizenship, there is no evidence of any sort that they were concerned by intrastate discrimination based on municipal residence. The most obvious reason for this is also the most simple one: by the time the Constitution was enacted, such discrimination was rarely practiced and even more rarely successful.6 Even had attempts to practice the kind of economic localism at issue here been more widespread, moreover, there is little reason to believe that the Framers would have devoted their limited institutional resources to bringing such conduct within the ambit of the Privileges and Immunities Clause. Whatever the weaknesses of the new state governments in suppressing sectional conflicts that gave rise to outright physical violence, like Shays’ Rebellion in 1786-1787, the States had more than adequate powers to prevent localities from disrupting the States’ internal economic affairs through discriminatory ordinances and regulations. By the time the Constitution was adopted, most state legislatures had assumed the power to grant and alter municipal charters and the power to legislate with respect to municipal affairs.7 Even before the Revolution, the colonial legislatures had shown themselves willing and able to exercise this authority to override local protectionist ordinances. In 1746, for example, the New York Assembly dismantled a cartel of New York City lawyers by requiring the city to open its Mayor’s Court to qualified lawyers from *227throughout the colony.8 As a result, the Framers had every reason to believe that intrastate discrimination based on municipal residence could and would be dealt with by the States themselves in those instances where it persisted.9

In light of the historical context in which the Privileges and Immunities Clause was adopted, it hardly is surprising that none of this Court’s intervening decisions has suggested that the Clause applies to discrimination on the basis of municipal residence. To the contrary, while the Court never has addressed the question directly,10 it repeatedly has proceeded on the assumption that the “Privileges and Immunities of Citizens” to which the Clause refers are entitlements held equally by all citizens of a State. Thus, in Paul v. Virginia, *228supra, the Court stated that the Clause safeguards the enjoyment of “those privileges and immunities which are common to the citizens [in a State] under their constitution and laws by virtue of their being citizens.” 8 Wall., at 180. In Blake v. McClung, 172 U. S. 239 (1898), the Court condemned a Tennessee statute that granted a priority to resident creditors over nonresident creditors on the assumption that the State’s rules governing debtor-creditor relations “will be applied by its courts in all appropriate cases between citizens of that State, without making any distinction between them.” Id., at 254 (emphasis in original). In Travellers’ Insurance Co. v. Connecticut, 185 U. S. 364 (1902), the Court rejected a Privileges and Immunities Clause challenge to a Connecticut statute that taxed nonresident stockholders at a nominally higher rate than resident stockholders, on the ground that the direct differential was roughly offset by municipal taxes paid only by residents. The Court recognized that the burden borne by nonresidents might exceed that borne by residents in a particular year, but pointed out that “a like inequality will exist between residents of different localities in the State by reason of the different rates of taxation in those localities”; the disparate burden was permissible under these circumstances because “[y]ou cannot put one resident against one non-resident stockholder and by a comparison of their different burdens determine the validity of the legislation any more than you can place a stockholder resident in one municipality over against a stockholder resident in another municipality, and by comparison of their different burdens determine the validity of the tax law in respect to resident stockholders.” Id., at 369 (emphasis added). In each case, the underlying assumption has been that the constitutionality vel non of a particular statute under the Privileges and Immunities Clause turns on whether the statute deprives nonresidents of benefits enjoyed in common by state residents by virtue of their residence simpliciter.

Indeed, I had understood the Court to have reaffirmed this principle only two Terms ago in Zobel v. Williams, 457 U. S. *22955 (1982). In Zobel, the Court held that an Alaska statute which allocated state treasury refunds to state residents on the basis of the length of their residence violated the Equal Protection Clause. The Court declined, however, to hold that the statute violated the Privileges and Immunities Clause. It observed that the statute “does not simply make distinctions between native-born Alaskans and those who migrate to Alaska from other states;” instead, it “also discriminates among long-time residents and even native-born residents.” 457 U. S., at 59, n. 5. As a result:

“The statute does not involve the kind of discrimination which the Privileges and Immunities Clause of Art. IV was designed to prevent. That Clause ‘was designed to insure to a citizen of State A who ventures into State B the same privileges which the citizens of State B enjoy.’ Toomer v. Witsell, 334 U. S. 385, 395 (1948). The Clause is thus not applicable to this case.” Id., at 60, n. 5.

I am somewhat at a loss to understand how the Court’s decision today can be reconciled with its reasoning in Zobel.11 The Alaska statute at issue in Zobel fell outside the scope of *230the Privileges and Immunities Clause for the elementary reason that it did not discriminate between state residents and nonresidents on the basis of state residence; rather, it discriminated among state residents in a way that disadvantaged nonresidents as well but did not thereby implicate the underlying concerns of the Privileges and Immunities Clause. The Camden ordinance presently before the Court occupies precisely the same position.

The Court’s decision clashes with other Privileges and Immunities Clause precedents as well. The Court recognizes, as it must, that the Privileges and Immunities Clause does not afford state residents any protection against their own State’s laws. See, e. g., Bradwell v. Illinois, 16 Wall. 130, 138 (1873); Slaughter-House Cases, 16 Wall., at 77. When this settled rule is combined with the Court’s newly fashioned rule concerning municipal discrimination, however, it has the perverse effect of vesting non-New Jersey residents with constitutional privileges that are not enjoyed by most New Jersey residents themselves. This result is directly contrary to the Court’s longstanding position that the Privileges and Immunities Clause does not give nonresidents “higher and greater privileges than are enjoyed by the citizens of the state itself.” Bank of Augusta v. Earle, 13 Pet. 519, 586 (1839); accord, Shaffer v. Carter, 252 U. S. 37, 53 (1920); Detroit v. Osborne, 135 U. S. 492, 498 (1890). When judicial alchemy transmutes gold into lead in this fashion, it is time for the Court to reexamine its reasoning.

Finally, the Court fails to attend to the functional considerations that underlie the Privileges and Immunities Clause. The Clause has been a necessary limitation on state autonomy not simply because of the self-interest of individual States, but because state parochialism is likely to go unchecked by state political processes when those who are disadvantaged are by definition disenfranchised as well. The Clause remedies this breakdown in the representative process by requiring state residents to bear the same burdens that they choose to place on nonresidents; “by constitution*231ally tying the fate of outsiders to the fate of those possessing political power, the framers insured that their interests would be well looked after.” J. Ely, Democracy and Distrust 83 (1980). As a practical matter, therefore, the scope of the Clause may be measured by asking whether failure to link the interests of those who are disadvantaged with the interests of those who are preferred will consign the former group to “the uncertain remedies afforded by diplomatic processes and official retaliation.” Toomer v. Witsell, 334 U. S., at 395; see Austin v. New Hampshire, 420 U. S., at 662.

Contrary to the Court’s tacit assumption, discrimination on the basis of municipal residence is substantially different in this regard from discrimination on the basis of state citizenship. The distinction is simple but fundamental: discrimination on the basis of municipal residence penalizes persons within the State’s political community as well as those without. The Court itself points out that while New Jersey citizens who reside outside Camden are not protected by the Privileges and Immunities Clause, they may resort to the State’s political processes to protect themselves. Ante, at 217. What the Court fails to appreciate is that this avenue of relief for New Jersey residents works to protect residents of other States as well; disadvantaged state residents who turn to the state legislature to displace ordinances like Camden’s further the interests of nonresidents as well as their own.12 *232Nor is this mechanism for relief merely a theoretical one; in the past decade several States, including California and Georgia, have repealed or forbidden protectionist ordinances like the one at issue here.13 In short, discrimination on the basis of municipal residence simply does not consign residents of other States, in the words of Toomer, supra, to “the uncertain remedies afforded by diplomatic processes and official retaliation.” The Court thus has applied the Privileges and Immunities Clause without regard for the political ills that it was designed to cure.14

*233It still might be possible to redeem the Court’s decision if it were compelled by the language of the Privileges and Immunities Clause. The Court itself, however, concedes that its interpretation of the Clause does not attach readily to a constitutional provision phrased solely in terms of state citizenship. Ante, at 216. The Court seeks to defend its excursion beyond the frontiers of the constitutional language on the ground that it never has read the Privileges and Immunities Clause literally to apply only to classifications based on state citizenship. Ibid. The examples it cites, however, are hardly compelling support. Mullaney v. Anderson, 342 U. S. 415 (1952), held not that the Privileges and Immunities Clause applies ex proprio vigore to discrimination by a territorial legislature based on territorial residence, but rather that Congress had made the Privileges and Immunities Clause applicable to the Territory of Alaska by statute. See 342 U. S., at 419-420.15 See also Haavik v. Alaska Packers *234Assn., 263 U. S. 510, 515 (1924). Even if Mullaney v. Anderson set forth the proposition for which it is cited, moreover, the practical similarity between discrimination based on territorial residence and discrimination based on state residence has no parallel here. Similarly, while the Court unquestionably has come to treat the terms “citizen” and “resident” in this area as “essentially interchangeable,” Austin v. New Hampshire, 420 U. S., at 662, n. 8, it has done so not out of a general disregard for the Constitution’s language, but rather because the practical relationship between residence and citizenship is close enough that discrimination on the basis of the one criterion effectively amounts to discrimination based on the other. Cf. Travis v. Yale & Towne Mfg. Co., 252 U. S. 60, 79 (1920); Currie & Schreter, Unconstitutional Discrimination in the Conflict of Laws: Privileges and Immunities, 69 Yale L. J. 1323, 1344 (1960). These decisions are not, therefore, license for the Court to set aside the language of the Privileges and Immunities Clause as an inconvenient obstacle to a preferred result. Whenever this Court has departed from the literal language of the Clause in the past, it has remained faithful to the underlying purposes of the Clause. For the reasons already set forth, I believe that the Court’s decision today does not satisfy that requirement.

II

Needless to say, my view of the constitutional question in this case does not depend on my personal opinion about the desirability of the course on which Camden has embarked. I do not find “beggar thy neighbor” economic policies any more *235attractive when practiced by municipalities than when practiced by States or nations. The unedifying sight of localities fighting for parochial gain at one another’s expense gives new urgency to Benjamin Franklin’s reputed warning that “we must ... all hang together, or most assuredly we shall all hang separately.” R. Clark, Benjamin Franklin 286 (1983). At the risk of restating the obvious, however, the issue before us is not the desirability of the ordinance but its constitutionality — more particularly, its constitutionality under the Privileges and Immunities Clause.16 Because I believe that the Clause does not apply to discrimination based on municipal residence, I dissent.