The Corner

Politics & Policy

Answering my Critics

Sen. Elizabeth Warren (Joshua Roberts/Reuters)

My post on Elizabeth Warren’s cynical/bonkers proposal to effectively nationalize every American firm with revenue of $1 billion or more has met with predictable criticism. I will address two points here.

One, some have complained about the use of the word “expropriation,” or more broadly about characterizing Warren’s proposal as a plan for seizing property. In answer, I will quote Matthew Yglesias, an admirer of the proposal:

Instead of advocating for expensive new social programs like free college or health care, she’s introducing a bill Wednesday, the Accountable Capitalism Act, that would redistribute trillions of dollars from rich executives and shareholders to the middle class — without costing a dime.

I am not sure how the forcible redistribution of trillions of dollars from x to y amounts to anything other than a seizure of property. I’m particularly fond of Yglesias’s claim that this will happen “without costing a dime.”

Without costing whom?

Yglesias is in fact touching on an aspect of the plan that I discussed in my column: These kinds of programs are attractive to politicians because they allow them to spend money without putting a spending line (or a line) on a budget. Raising taxes to transfer trillions of dollars from one group of Americans to another would be politically difficult. Much easier to take the cowardly way and force businesses to do that work for you.

A second line of criticism is that Warren’s plan incorporates some policies that are common in countries that I admire and think are reasonably well-governed, including Denmark and Germany. Those countries have developed along their own lines for their own reasons, modern-day German corporatism being not entirely without precedent in the country’s history. But moving from where we are to where they are would indeed require using the machinery of the state to wrest control of businesses from their current owners and turning them over to boards whose composition is determined by politicians. I don’t think that’s a particularly good policy in Denmark or Germany, but the question is what would it mean to adopt such a policy here in the United States.

Think of it this way: Germany has some heavy restrictions on freedom of speech. Certain kinds of political advocacy are verboten. I don’t approve of that policy and would not support it if I were a German voter. I don’t think it’s a very good policy, but one can understand where it came from, and its existence does not make Germany a savage hellhole of totalitarianism. But if you proposed adopting such a policy in the United States, you would be stripping Americans of their First Amendment rights, a radical and destructive move irrespective of the fact that similar policies exist in other decent countries. Free-speech rights would be diminished. In the same way, property rights would be diminished by the adoption of Warren’s plan.

It isn’t a difficult thing to understand, unless you have an investment in failing to understand it.

(It should be noted that Warren’s plan differs from what’s practiced in Germany in important ways, and is significantly more heavy-handed, for instance in its interference with political activity.)

As I think I’ve made clear here many times, I think Switzerland is a very well-governed country, but I don’t think it would be intelligent or responsible for the United States to adopt many of its policies. Many of my progressive friends think Switzerland is well-governed, too — the Affordable Care Act was in part an attempt to graft the Swiss health-care model onto the United States — but they would not like the United States to replicate Switzerland’s capital-gains tax system or its policy of handing out actual military rifles to the prime criminal demographic (young men). I am not sure how progressives feel about conscription these days.

One suspects, from Warren’s authoritarian daydreams, that they may be tempted by the principle.

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