The leading intellectuals of the American right should send Elizabeth Warren a thank-you note. Unable to defend the actual behavior of the President of the United States, these writers have been forced to critique the Anti-Trump movement in a way that must feel nearly as pointless as it actually is. Because their audiences don’t want to read criticisms of those actually in power, instead they’ve turned their ire to the statements of some of the left who have no power and are do not represent the views of the vast majority of Democratic voters.
That is until the Massachusetts Senator rode to the rescue Thursday with the release of her Accountable Capitalism Act, which would require companies with more than $1 billion in revenue to obtain a federal charter and ensure that those companies allow its workers to elect 40% of the board. “For decades, American workers have helped create record corporate profits but have seen their wages hardly budge,” says Warren in a statement. “To fix this problem we need to end the harmful corporate obsession with maximizing shareholder returns at all costs . . . my bill will help the American economy return to the era when American companies and American workers did well together."
There is an overwhelming case to be made that Corporate American culture has changed over the past forty years in a way that has helped increase the value of companies while reducing the rate at which the standard of living increases for the vast majority of Americans. This has helped create a surprising degree of support for radical reform of tax and regulatory policy. A majority of Republicans even agree that taxes on the rich should be raised, while only a slight majority of Republicans are against Warren’s proposal to give a company’s workers a greater say over the company’s decision making. The country overall loves the idea, by a 53% to 22% margin.
Of course, you won’t hear any of these data described by right wing critics of the plan, like the National Review’s Kevin Williamson. He calls the proposal a plan to “nationalize everything,” arguing that the Accountable Capitalism Act “ entails the wholesale expropriation of private enterprise in the United States, and nothing less. It is unconstitutional, unethical, immoral, irresponsible, and — not to put too fine a point on it — utterly bonkers.”
This has been the rhetorical strategy for the conservative movement for more than a generation: attack any new federal law that aims to improve economic opportunity for most Americans as socialism. And a funny thing has resulted from this strategy—a majority of young Americans now say that they’d prefer to live in a socialist country than a capitalist one. In an attempt to discredit left-of-center policy ideas, the Republican Party has instead improved the brand of socialism for a whole new generation of Americans.
But we must give Warren’s critics a break. They argue that her proposal is radical, and would likely lead to a crash in stock market values as investors would be forced to reckon with the fact that the largest corporations in the country would have to begin taking their workers interests into their decision making, rather than just profits. Such a policy could very well lead to a sharp drop off in corporate investment, and therefore economic growth, as Corporate America became obsessed with the uncertain effects of this sea change in policy.
But the conservative movement has left the Democratic Party with no choice but to pursue these more radical avenues for reform. Whatever problem the country attempts to address in a market-friendly way—whether it be carbon pricing to curb the warming of the planet, or universal healthcare system reliant on private insurers and state-based marketplaces, the right has attacked as a socialist takeover of private enterprise and sabotaged at every opportunity. The American voters' aversion to taxes has been a saving grace for this strategy—because these market-oriented reforms necessarily involve changes to tax policy, they can be successfully stopped or contained through mobilizing an anti-tax political constituency. And so the American people are only left with command and control regulatory measures that are blunter and more distortionary to the overall economy, but much more popular with the voting public.
It’s quite possible that the conservative critique of Elizabeth Warren’s proposal is correct: that it would disrupt business and destroy value without providing real gains to the American worker. After all, Germany’s application of policies that require worker representation on company boards has not saved German workers from the scourge of stagnating wage growth, though it has led German companies to be worth less than American ones, all else equal. But if the only alternative medicine you offer for the disease of stagnant living standards is more tax cuts for corporations, you can’t blame the public for experimenting with stronger, but riskier, cures.
Christopher Matthews is a writer who splits his time between New York City and Accra, Ghana, with an interest in the intersection of markets, the economy, and public policy. He previously held staff positions at Axios, Fortune Magazine, and Time Magazine, and has been published in Forbes and Debtwire.