Margaret Thatcher’s description of herself as a “conviction politician” alarmed some Britons but delighted others because her convictions were incompatible with the flaccid centrist consensus that had produced their nation’s 1970s stagnation. In 1979, voters rolled the dice, sending her to Downing Street. In Massachusetts senator Elizabeth Warren, Democrats have their Thatcher, if they dare.
When elected leader of Britain’s Conservatives, Thatcher, disgusted by a colleague’s rhetorical mush about a glorious “middle way,” slammed onto a table Friedrich Hayek’s tome The Constitution of Liberty and exclaimed, “This is what we believe!” Today, with a forthrightness perhaps more bracing than prudent, Warren advocates a radical agenda that is approximately Thatcherism — capitalism invigorated — inverted. Furthermore, Warren bristles with a progressive’s version of Thatcher’s pugnacity that caused one of her Conservative colleagues to say that “she can’t look at a British institution without hitting it with her handbag.”
Warren is too busy inveighing against “corruption” to define it precisely, but she probably means what economists call rent-seeking, which in the context of politics means bending government power for private advantage, either by conferring advantages on oneself or imposing disadvantages on competitors. Although Warren’s inveighing is virtuous, her program would substantially exacerbate the problem by deepening government’s involvement in the allocation of wealth and opportunity.
She was a registered Republican from 1991 to 1996 because, she says, “I thought that those were the people who best supported markets.” Today, she favors “big structural change.” Her Accountable Capitalism Act would produce the semi-nationalization of large corporations, with federal charters requiring (among other things) 40 percent of their directors to be elected by employees. Such accountable-to-government (not to markets) corporations must have “a material positive impact on society . . . when taken as a whole.” This gaseous metric will be defined and applied by government. Such federalization of corporate law would inevitably be the thin end of an enormous wedge of government control, crowding out market signals. As would her Climate Risk Disclosure Act. And her American Housing and Economic Mobility Act. And her Affordable Drug Manufacturing Act (government-run production of generic drugs).
What law professor Richard Epstein calls Warren’s “surreptitious socialism” would, he says, “likely lead to the largest flight of capital from the United States in history.” Foreign investors — domestic ones, too — will not want to put wealth in corporations subservient to the political agendas of government. And the agendas of various “stakeholders” deemed to have rights comparable to those of shareholders who actually own corporations, and to whom corporate directors have the fiduciary duty to maximize their shares’ value.
Warren exemplifies progressivism’s sentimental belief in disinterested government that, unlike human beings (except government employees), has motives as pure as the driven snow. She should read his 2003 essay “What Is Public Choice Theory?” — wherein economist James M. Buchanan, a Nobel laureate, used economic reasoning, determining how incentives influence behavior, to demystify politics. He argued that politicians and bureaucrats seek to maximize power the way many people in the private sector maximize monetary profits.
She leavens her sentimentality with nostalgia: “When I was a kid, a minimum-wage job in America would support a family of three. It would pay a mortgage, keep the utilities on and put food on the table.” Well. The Adam Smith Institute’s Tim Worstall suggests some pertinent arithmetic: When Warren was ten, in 1959, the federal hourly minimum wage ($1, which would be $8.55 in 2018 dollars) for 2,000 hours (40 hours a week for 50 weeks) would provide $2,000 a year, below the poverty threshold ($2,324) for a family of three.
Wielding one of the president’s favorite adjectives (“rigged”), Warren says that today’s government “works for those at the top.” Indeed. Sprawling, complex, opaque, redistributionist government usually does. It redistributes wealth upward to those — the confident, affluent, articulate, well-lawyered — who can manipulate its pulleys and levers. By multiplying those devices, Warren would, inadvertently but inevitably, make government even more regressive.
Although Warren is criticized as “divisive,” serious politics should divide the polity by tugging its public arguments up from the superstitions and fetishes of identity politics to the realm of ideas. Columnist Murray Kempton said that the similarity between American politics and professional wrestling is the absence of honest emotion. Not the way Warren goes about it. She is a clenched-fist candidate, boiling with indignation and bristling with proposals, including some that are punitive toward disfavored Americans. Most progressives feel this way, but most voters might prefer someone who will lower the political temperature by lowering the stakes of politics.