On August 15, 2018, a little over three months before she would form an exploratory committee for the Democratic presidential nomination, Elizabeth Warren issued a press release announcing new legislation. The Accountable Capitalism Act, a hilarious contradiction in terms, promised to “eliminate skewed market incentives” and return America to an era when corporations and workers “did well together.” Neglecting to describe how workers and companies ever “did well together,” or what would make a market incentive skewed—as opposed to a fair incentive, presumably—the release goes on to present Warren’s legislation as a solution to a “fundamental problem with our economy.”
Anyone familiar with Warren knows what this problem is: our economy is unfair and the reason it’s unfair is because those in power have selfishly rigged the system for their own gain. But her press release begins to address this with a claim that every student assigned Howard Zinn’s The People’s History of The United States would recognize as false: “For most of our country's history, American corporations balanced their responsibilities to all of their stakeholders—employees, shareholders, communities—in corporate decisions. It worked: profits went up, productivity went up, wages went up, and America built a thriving middle class.” Apparently, the brief period between the end of World War II and the fall of the Bretton Woods system in 1971, the only era in which a claim like this could be remotely plausible, is “most of our country’s history.”
More importantly, this claim ignores an entire history of organized labor that fought for, among other rights, higher wages, reduced hours, and a shortened work week. Many organizers and workers were punished, some with their lives, amidst violent strikes and collective action that corporations and their shareholders most certainly did not support. From the beginning, American corporations have sought not to “do well together” with workers, but rather to exploit them, to make their labor increasingly efficient and productive while discovering new ways to maintain low wages.
This history demonstrates, along with the fundamental antagonism between labor and capital, that the middle-class has historically functioned as an intermediary between these antagonists, and almost always on behalf of capital. And yet Warren, repeatedly touted as one of the most progressive Democratic senators, follows with a set of embarrassingly ahistorical remarks:
But in the 1980s a new idea quickly took hold: American corporations should focus only on maximizing returns to their shareholders. That had a seismic impact on the American economy. In the early 1980s, America's biggest companies dedicated less than half of their profits to shareholders and reinvested the rest in the company. But over the last decade, big American companies have dedicated 93 percent of earnings to shareholders—redirecting trillions of dollars that could have gone to workers or long-term investments. The result is that booming corporate profits and rising worker productivity have not led to rising wages.
Leaving aside the stupid claim that “maximizing returns to their shareholders” was something corporations only discovered in the early 1980s, Warren’s remarks here do not criticize the imbalance in power between workers and corporate entities, despite their tone of restrained outrage. A supply-side Republican turned New Deal liberal, Warren isn’t bothered by inequality, so long as it isn’t too extreme. As the passage indicates, America’s biggest companies dedicating “less than half” of their profits to shareholders is the ideal from which we have strayed. That 93 percent of earnings are now going to shareholders suggests that something has gone wrong. Warren incorrectly attributes this decline in investment to greed and corruption, when in fact it is a symptom of capitalism over which capitalists have very little control. As Marx noted, and as we have witnessed over the last several decades, the rate of profit has a general tendency to decline over time; in response, capitalists invest less, leading to what Warren perceives as the “unfair” practice of directing a smaller fraction of profits back into company and its workers. This is not a problem that can be solved with a new set of rules and regulation.
This, however, is precisely the core of Warren’s broader platform, which despite its rhetoric of “big, structural change” merely wants a liberal cop around to make sure no one is getting screwed too badly. Every one of her sloganized “plans for that” is means-tested, even those that are cynically touted as “universal.” Her student debt plan is a prime example. As stated on her website, this “truly transformational” plan “cancels $50,000 in student loan debt for every person with household income under $100,000. From there:
It provides substantial debt cancellation for every person with household income between $100,000 and $250,000. The $50,000 cancellation amount phases out by $1 for every $3 in income above $100,000, so, for example, a person with household income of $130,000 gets $40,000 in cancellation, while a person with household income of $160,000 gets $30,000 in cancellation.
It offers no debt cancellation to people with household income above $250,000 (the top 5 percent).
Like all mean-tested policy, this is overly complicated and confusing. Why the $50,000 cutoff point for those making less $100,000? Why no relief for those making over $250,000? Why cancel 95 percent of debt and leave the remaining 5 percent? Everything about this seems arbitrary.
That is, until you realize that Warren’s progressivism is fundamentally aesthetic, a fake populism that attempts to mask her centrist ambitions with sentimental appeals to the working class. In this light, the arbitrariness of her plans appears more calculated. Mean-testing is the logic of fairness, which doesn’t want to change anything, really, except the way people feel about an unjust system. The $50,000 cutoff will cover most borrowers, so that seems reasonable, right? But it is this very reasonableness that makes Warren’s policies so conservative. “It may not be socialism,” her supporters can concede, “but it seems like a good deal. Don’t you want to help the people you claim to be fighting for?”
This logic is also at work in Warren’s insistence that the top 5 percent of income earners receive no debt cancellation: it seems “fair” in some abstract sense, and provides Warren plausible coverage when someone with less money inevitably asks, “Why should my tax dollars pay for some rich person’s debt cancellation?” This ignores the fact that anyone making more $250,000 likely has no student debt in the first place, while also doing nothing for those students with substantially more than $50,000 in loans. Having to repay $100,000 in high-interest loans instead of $150,000 is, for someone making $45,000 a year, not a “truly transformational” change.
If Warren truly wanted the sort of change she frequently claims to champion, she might begin with a serious, universal approach and eliminate all student loan debt, as Bernie Sanders has proposed. Why then, is she often given credit for “inspiring” Bernie’s plan, with some accusing Sanders of taking Warren’s plans and merely “making them bigger”? Why, given the media’s transparent hostility toward Bernie Sanders and his crusty, loud, working-class aesthetic, have so many media outlets breathlessly attempted to conflate Warren’s policy positions with his, even going so far as to refer to them as the “progressive wing” of Democratic nominees and frame a significant portion of one debate to “their” ideas?
One explanation is that, as mainstream outlets with a bottom line to protect, they want a mainstream politician who won’t challenge their class interests: Joe Biden, perhaps, whose toothless politics might as well be replaced by a recording of Barack Obama telling jokes. But in recent months, it’s become evidently clear that Warren has now become the mainstream candidate, the “compromise” between the other two serious contenders, Sanders and Biden. Months before the first primary, more than one publication had already urged Sanders to drop out and back Warren. So, when the news of his heart attack broke in early October, it provided the perfect cover for others to question his legitimacy and manufacture consent for Elizabeth Warren.
The alternate explanation, I argue, is far more cunning than blatant attempts to delegitimize Sanders. By framing Warren and Sanders as “basically the same” on policy, it papers over their important differences and allows people to ask: if you have two versions of the same platform, why not go for the one that is younger, “less divisive,” and “more realistic” in its mean-testing? As a bonus, she also happens to be a woman, which means you can easily label attacks on Warren as de facto sexist. After all, if she and Sanders are the same, it follows that attacks on her platform would necessarily apply to Sanders’s platform—unless, of course, what you dislike about Warren has something to do with who she is and not the ways she differs from Sanders.
Warren, unlike Sanders, never talks meaningfully about the working class, a fact echoed by her dismal working-class support. Her means-tested proposals are geared toward affluent Democrats who still find Clinton’s defanged “invest and grow, not tax and spend” language inspirational—hence, Warren repeatedly dodging questions of how she will pay for her non-existent Medicare for All plan by saying “overall costs will go down.” Her claims that she “wasn’t that political” during the years she was registered as a Republican are transparently false, contradicted by the academic papers she wrote in support of the very supply-side agenda she now claims is the source of our ills. She is a self-described “capitalist to her bones,” and while there are legitimate criticisms of Sanders’s democratic socialism, his antagonism toward the ruling class stands in stark contrast to Warren’s billionaire-supported “Accountable Capitalism.” Sanders genuinely wants to empower workers; Warren wants to give them a nicer boss.
Like the broader Democratic establishment, Warren fetishizes the nebulous “middle class” that existed for a brief moment in the post-war era and believes the best way to “rebuild” it is through the sort of managerial regulation this very class perfected as its raison d’être. She repeatedly touts her accomplishments with the Consumer Financial Protection Bureau (CFPB) as evidence of her commitment to progressive ideals, claiming that she “took on” Wall Street and the banks in the process. In reality, this agency returned to consumers about $2 billion a year in egregious fees, which may sound like a lot but amounts to less than 2 percent of JP Morgan’s annual revenue of $111 billion; when you consider that $2 billion was returned from the entire banking industry, the idea that she “took on” big banks in any meaningful way is dubious, even if it did provide some relief to consumers. At best, it amounted to forcing some of the wealthiest, most powerful institutions in the world to pay a parking ticket.1
Warren, it goes without saying, is not interested in the sort of class-oriented politics that would address real inequality. As she herself often says, her platform is centered on rooting out corruption. The whole point of regulation is to stop bad actors from “corrupting” the market in ways that are advantageous to themselves but disadvantageous to consumers. Indeed, the CFPB was never an attack on banking fees as such, just those deemed “unfair.” Warren’s approach to regulation, much like the middle-class she eulogizes, is a way of managing capital so that everything runs more smoothly. It is a way of “leveling the playing field,” rather than changing the game. As she wrote in 2007:
It is impossible to buy a toaster that has a one-in-five chance of bursting into flames and burning down your house. But it is possible to refinance an existing home with a mortgage that has the same one-in-five chance of putting the family out on the street–and the mortgage won’t even carry a disclosure of that fact to the homeowner... Why are consumers safe when they purchase tangible consumer products with cash, but when they sign up for routine financial products like mortgages and credit cards they are left at the mercy of their creditors?2
“The difference between the two markets,” she says, “is regulation.” In fact, the differences between a toaster, a mortgage, and a credit card are all differences in kind. Her equivocation, which treats all three assets as effectively interchangeable, suggests that she doesn’t want to change the structure of high-interest credit, she only wants it to be as “safe” as the toaster on your kitchen counter. Apparently, it is quite fine to go into credit card debt, so long as you the consumer are able to make the fair, informed choice to do so.
It is hardly surprising that Warren’s support comes overwhelmingly from primarily white, affluent, educated voters. After all, this is the demographic for whom the politics of fairness is most appealing: materially comfortable, the system worked for them, and they aren’t interested in shaking up the class relations from which they benefit. Their concerns are decidedly divorced from the precarious working class, who many view as either uninformed or downright reactionary. To this class, what Barbara and John Ehrenreich labeled the professional-managerial class, “working class” is a temporary position on the way to becoming something better (and, perhaps, more respectable). This is why working-class politics befuddles them, and why Warren is such an attractive candidate: their liberal stances on race, gender, and sexuality may have some superficial overlap with working-class critiques of exploitation, but certainly it’s not rooted in such exploitation. Much like the greed that drives CEOs and bankers to hoard their profits, reactionary attitudes appear as the result of a personal, moral failing. That being the case, changing the structure of exploitation won’t change anything.
So, what’s the takeaway? First, while some have sought to derisively characterize Warren as a second iteration of Hillary Clinton, I would argue it is more accurate to see Warren as a second iteration of Bill Clinton. But whereas Bill Clinton famously triangulated between the interests of two parties, Republican and Democrat, Warren has found a way to triangulate between two interests within one party: the wealthy liberals that comprise its base, and workers who find Sanders’s populism more inspirational and believe he is genuinely committed to helping them. The media’s portrayal of her as “no different” than Sanders is an obvious example of such triangulation, as is Warren’s own aversion to the language of taxes and “big government.” The starting point may have shifted, but the maneuver is strikingly similar.
The pillar of Bill Clinton’s 1992 presidential campaign was James Carville’s famous, three-word slogan: “the economy, stupid.” Carville knew voters would respond positively to an economic message after suffering the impacts of the early 1990s recession, and like any political operative was not conflicted about using the economic anxiety of voters to move them to the polls. In many ways, it encapsulated the cynical approach to politics Clinton and the New Democrats would make the standard party line: a kind of plausibly deniability, one which mirrored the language of the dying, post-war labor movement, but which promised just enough to not promise anything at all. “Prosperity” was the buzzword, a vaguely uplifting idea that could allow people to believe that, while they may be getting screwed, things are somehow looking up.
Warren’s oft-repeated “big, structural change” does something similar. It promises both everything and nothing, appealing to a broader sense that “something” must change while not having to say what that something is. In fact, nothing will change, and that is precisely the point. Warren’s policies promise that everything will be as they are now, only fairer and less corrupt. Her “big, structural change” is rarely big, and never structural. Its emphasis on corruption is politically impotent: there is nothing “corrupt” about paying workers an hourly wage of $7.25; starvation wages are not the result of “bad actors” within a capitalist economy, but rather an inevitable outcome for certain sectors. It is a feature of wage-labor, not a bug. But again, Warren is less interested in that problem than she is in ensuring middle-class families lead the comfortable life they thought their careers would promise them.
Here lies the second, more troubling takeaway: Warren’s base overlaps nicely with the base of the Democratic party, which has become increasingly affluent, educated, and concerned with cultural issues. And while voting turnout does increase with income and education, it is not enough to win elections, as 2016 proved. The majority of workers do not vote, and will likely remain home unless someone offers them a reason to participate in an otherwise futile process that often asks them to choose between the rich, racist fool or the rich, educated snob. So, while Warren’s popularity among Democratic primary voters may seem to suggest a promising outcome for 2020, it is likely her showing will be considerably less strong should she secure the nomination. Warren may indeed “have a plan” for just about everything, satisfying the managerial cravings of professionals and political pundits. Unfortunately, she doesn’t have a plan for the working class.
- 1. My criticism here of Warren's CFPB record is indebted to Benjamin Studebaker, who covered this with Aimee Terese on their podcast, What's Left?
- 2. Elizabeth Warren, “Unsafe at Any Rate,” Democracy, Summer 2007. https://democracyjournal.org/magazine/5/unsafe-at-any-rate/