Chapter 2 first shows that the question of legal competence is a fundamental issue of constitutional theory. Then, the views of two opposing traditions of constitutional thinking are sketched. Both traditions, theories of constituent power and the tradition of constitutionalism, ultimately fall prey to circular reasoning. This also goes for the positions taken by Carl Schmitt and Hans Kelsen in their discussion on law, state and democracy. The cause of these problems is that they both take for granted the dualism between constituent power and constituted power. They differ as to which pole of the dichotomy receives primacy over the other. However, neither can make sense of the doctrine of implied powers. In the end, this means that the simple conception of competence as power under law is not tenable, and that a better understanding of competence can only be obtained by rethinking the relationship between constituent and constituted power beyond the dualistic view.