America at its Best

We may think that the only thing we are likely to hear from modern American politicians is bellicose shouting or stock neoliberal ideology; or from a British perspective, American Presidents lecturing the British electorate about the facts of life; all facilitated by the British Government. We learned that lesson in Scotland in 2014. It is worth remembering, however that not all American politicians are like that, or need to use such a style of address, or the orthodoxy of a retarded ideology to articulate the challenge to the established order.

Here is an American politician who is unafraid to take on corporate America; even the banks; even Goldman Sachs and its CEO; and even the whole American Justice System. Here is a Democrat who is prepared to challenge the politics of Hillary Clinton, and it isn’t Bernie Sanders. Here is a voice we haven’t heard, perhaps since Roosevelt.

Here is Senator Elizabeth Warren (Democrat, Massachusetts). The Senator was a distinguished professor of law at Harvard, specialising in personal finance and bankruptcy. She turned politician because, in spite of beginning life as a Republican she became disenchanted with the Party and began voting Democrat in 1995, when she saw the effects they had on the untouchable ‘markets’. Elizabeth Warren is largely responsible for the creation of the US Consumer Financial Protection Bureau; a consumer protection Act establishing a new regulator that became law under President Obama in 2012. She wanted to lead the new Bureau, but was strongly opposed by Republicans and by ‘business’, who feared she would be a highly articulate and formidable regulator. She didn’t get the job. Her response was to run for the Senate as a Democrat.

She fought and decisively won the Massachusetts Senate seat in 2012, against the Republican incumbent; the first woman Senator to represent the State. The New York Times reported at the time that the U.S. Chamber of Commerce said that “no other candidate in 2012 represents a greater threat to free enterprise than Professor Warren”. In spite of the hostility of corporate America she raised more money for her campaign than any other candidate in America.

On the campaign trail in Massachusetts in September, 2011 she made a speech in which she made the following statement, that goes to the root of the problem of the disconnect between corporate America and the people; and it applies equally here in Britain:

“There is nobody in this country who got rich on his own. Nobody. You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did. Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along” (quoted by Steve Benen, Washington Monthly). Here is part of another of her speeches, this time on the US Senate floor, on another matter that also goes to the root of the matter, from a slightly different perpective; she is speaking on the fact that she believes that the US has a “rigged justice system”.

There is a lot to this woman. She has been trying to reintroduce Glass-Steagal; the law that successfully regulated the banking system in the US for fifty years, up to the 1980s. Glass-Steagal’s removal was the final great triumph of neoliberalism; the last bastion falling to ensure neoliberals took over just about everything, with no regulation worthy of the name to protect anyone. She believes in the regulation of banks, and bankers going to jail for gross failures.

This is America at its best.

Comments (26)

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  1. Ian Kirkwood says:

    More like this please — in Scotland!

  2. JohnEdgar says:

    A 21st century reaffirmation of the social contract. Simple, direct and to the point.

  3. bringiton says:

    The core of the neoliberal voodoo cult is that every man is an island (tax free normally) and there is no such thing as society.

  4. Graham King says:

    Thank you for this piece! It is refreshing to read of someone taking a sane stand against rampant money forces = irresponsible greed, and (instead) for collective mutualism in society.

  5. john young says:

    Hooray! a politician that seems to have integrity,she is 1 of the very few anywhere,a marriage with Bernie perchance?

  6. Elaine Fraser says:

    Stick it on a t-shirt / poster – I’d buy it! Well done Bella for promoting a wise womans words – more please

  7. John B Dick says:

    The most dangerous woman in America.

    Her initial career choice was in Speech Therapy, then aiming to teach it, then Law, subsequently also as a teacher rather than a practicioner. Then, on an academic project, she got lucky by putting together Legal profession data and long term social data.

    Her Berkeley celebrity lecture has enlightening statistics.

    Don’t miss the point of the warm-up Tommy Cooper style joke about Powerpoint. The images are astonishing, the essence of her message, and an incontovertable argument in themselves needing no words.

    Since the lecture went on the internet, there has been no high regulatory, legal or political office vacancy including POTUS for which someone hasn’t identified her as the ideal candidate except Pope.

  8. Colin McKerron says:

    Looks like I’m going to lose £100 as I tipped this woman to run for President over a year ago!
    Why she didn’t run owes much to the corrupt system that is democratic America.
    It beggars belief that the American people are voting for Clinton, or so they would have us believe!
    Long may Elizabeth’s Lum Reek!

  9. Alan says:

    What’s interesting here is that’s she’s espousing a liberal position that is consistent with Adam Smith (one of Scotland’s own, who Scots would do well to rescue from the defilement suffered at the hands of Thatcher, The University of Chicago, et al.). In fact, the passage you quote, in part, as others have pointed out, alludes to a passage in The Wealth of Nations: Book I, Chapter 1, Paragraph 11. She’s not anti-business; she is against a rigged system that privileges the few over the many, which is exactly the sort of corrupt system attacked by Adam Smith in The Wealth of Nations. She might have also referenced Smith’s need for banking regulation (“The obligation of building party walls, in order to prevent the communication of fire, is a violation of natural liberty exactly of the same kind with the regulations of the banking trade which are here proposed” 2.2.94) or his attack on the collusion between the merchant class and government against the public interest and take heed of his warning about what happens to people like her (“If he opposes them, on the contrary, and still more if he has authority enough to be able to thwart them, neither the most acknowledged probity, nor the highest rank, nor the greatest public services can protect him from the most infamous abuse and detraction, from personal insults, nor sometimes from real danger, arising from the insolent outrage of furious and disappointed monopolists” IV.2.43). 

    It is really important to understand the difference between neoliberalism and liberalism. It’s really important to understand that neoliberalism is a misnomner and is a breaking of the liberal social contract in a very fundamental way.

    1. John S Warren says:

      I cannot argue with much of that. I also wonder if she is (at least) an unconscious Georgist on the matter of AGR (sometimes erroneously known as LVT)? Adam Smith wrote about that too; and described it very clearly as ‘Ground Rent’; the third element of the economy, along with labour and capital – land. Elizabeth Warren’s remarks in the quote I used, are to me an implicit statement about land (where the investment in the public good she describes is automatically held).

      1. Alan says:

        John, after I posted my comment I actually rethought it a bit. The link to 1.1.11 is in the part that deals with the division of labour. So the point there is that even what appears to be quite common and simple products depend on the cooperation of many thousands of people. Which is in part what Elizabeth Warren, I think, is getting at. I think, however,  that Smith’s discussion of the role of government in Book V also needs to be referenced because that also relates to Warren’s point. The roles Smith lays out for government are defence, justice and public works (funded by the public purse). These are things that cannot be effectively provided by private individuals or corporations (according to Smith). Private enterprise depends on the transport, security, etc. that these make possible. 

        One of the features  of neoliberalism, is that government itself is hollowed out and government functions become privatized and operated according to market principles (supposedly–I think what’s going on is rather different form what is claimed). This is at odds with Smith. Smith may have been skeptical of government’s ability to do right by the public whose interests government was supposed to represent but he was even more skeptical of private corporations. The big lie about Smith is that he asserted the pursuit of private interests served public interests. Sometimes private interests do and sometimes they don’t. This is an empirical question. There are plenty of examples in the book, the banking example cited above being one, where the pursuit of private interests run contrary to the public interest and where Smith argues the need for regulations to protect the public interest and well-being.

      2. Alan says:

        My head gets a bit mixed up over some of the discussion of rent in Wealth. I do think the concluding discussion that starts at I.11.261 and continues through to 264 about the “three great, original and constituent orders of every civilized society” is very important, especially as relates to their knowledge (or ignorance), the implementation of regulations, their relative power and how they relate to each other.

        The interest of this third order, therefore, has not the same connection with the general interest of the society as that of the other two. Merchants and master manufacturers are, in this order, the two classes of people who commonly employ the largest capitals, and who by their wealth draw to themselves the greatest share of the public consideration. As during their whole lives they are engaged in plans and projects, they have frequently more acuteness of understanding than the greater part of country gentlemen. As their thoughts, however, are commonly exercised rather about the interest of their own particular branch of business, than about that of the society, their judgment, even when given with the greatest candour (which it has not been upon every occasion) is much more to be depended upon with regard to the former of those two objects, than with regard to the latter. Their superiority over the country gentleman is, not so much in their knowledge of the public interest, as in their having a better knowledge of their own interest than he has of his. It is by this superior knowledge of their own interest that they have frequently imposed upon his generosity, and persuaded him to give up both his own interest and that of the public, from a very simple but honest conviction, that their interest, and not his, was the interest of the public. The interest of the dealers, however, in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public. To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens. The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.

        See also IV.2.43 and I.8.13 for discussion of the relationships.

    2. Gralloched says:

      Oh ! Well researched.
      Pass the ammo !

  10. muttley79 says:

    Here is a Democrat who is prepared to challenge the politics of Hillary Clinton, and it isn’t Bernie Sanders. Here is a voice we haven’t heard, perhaps since Roosevelt.

    I am not sure what this means? How is Bernie Sanders not challenging Hillary Clinton, after all Elizabeth Warren was encouraged to stand against Clinton, and declined? Warren and Sanders come from the same wing of the Democratic Party, Sanders may have been technically an independent, but he has been a de facto Democrat since he has been an elected representative. Bernie Sanders’ hero is Roosevelt, and he is New Dealer. Warren’s message is essentially the same as that of Sanders’ as well.

    1. John S Warren says:

      Perhaps my phrasing was less adroit than warranted. I was simply making the observation that many people would think I must be talking about Bernie Sanders (who, at least in Britain, will be much better known), as Clinton’s opponent; when I was talking about Elizabeth Warren, who isn’t running in the primaries.

      It was not an attempt to outflank Sanders. Nevertheless, more than one American commentator has run an article comparing Elizabeth Warren with the outstanding Secretary of Labor in Roosevelt’s administration (and whom he particularly respected), Frances Perkins; who is said to have devised Roosevelt’s social security programme.

    2. J Galt says:

      The only problem with the New Deal is that it did not work!

      By 1938 all the economic indicators for the U.S. were bad and like similar rogues before him Roosevelt took the road of fomenting war.

      1. John S Warren says:

        Given we have had two world wars in the 20th century, and have managed to make a mess of everything so far in the 21st century, with the benefit of all that historical experience and legacy, clearly there are “problems”, for all of us.

        Nevertheless if you are going paint all the efforts made by such as Frances Perkins, or Glass-Steagall or whatever as equally black and nefarious as everything else in the 1930s (Hitler, Stalin) then I think that is simply too easy to do, even lazy. It takes us nowhere, and after the least reflection absurd; and I say this knowing that in WWII nobody, absolutely nobody (save perhaps some of the casualties) emerged white as snow. Perfection, and even some way short of it is clearly beyond the capacities of mortal humanity. I assume you do not need proof of this obvious fact, that is as secure as the Second Law of Thermodynamics. So I suggest you start from there; in the world we are all condemned to live in.

        Some things did work, and they helped to provide a basis for financial stability in the US (no major bank crashes in the US for around 50 years, until the appalling neoliberals began their moment in power); and the framework for the creation of Bretton-Woods after WWII. We tore that up and replaced it with nothing: except an open invitation to every charlatan, chancer and even crook to exploit the lack of relevant law or regulation to rip-off everybody, everywhere, and to crash the banks and the guarantee that the victims would rescue them – forever.

        Since it affects us directly in Britain I do not find it comforting that the triumph of neoliberalism (which in the US was an attack on Roosevelt’s legacy) largely created the mess we are in. So, no I do not find your ‘argument’ persuasive, but it is glib.

      2. Alan says:

        I am going to remain neutral on it working or not. I think the more significant issue is that it was a massive expansion of state power and the state’s (largely unaccountable) administrative bureaucracy. This continues apace during the Cold War with the so-called military industrial complex and, in the post Cold War world, the surveillance industrial complex. The state has continued expanding under both the Right and the Left. Neoliberalism has itself a very particular conception of the role of the state. Don’t take their mutterings about socialism and the evils of the state run amok seriously; neoliberals are as much in favour of a strong state as anyone. Thatcher went on and on about the nanny state but the neoliberal state is a nanny state and she was one of the biggest, most obnoxious nannies of all. The neoliberal state imposes a certain types of social relationship on everyone across multiple social domains and creates certain types of subjectivities. they speak of freedom but you are only free in the sense that you are free to act within the constraints of the neoliberal conceptualisation of personhood and valid types of individual action. It’s a type of totalitarianism.

        1. John S Warren says:

          The leap that you make to the “so-called military industrial complex” is, I think the more telling matter. The rise in state power was far more a function of fighting two world wars than of any of the “-isms” that fuel so many dead-end debates. The experience of learning how to run a ‘command’ society is something, once begun, states are typically loathe to give up; however they present the rhetoric.

          1. Alan says:

            Yes, they are loathe to give it up. No one says, I don’t need these powers, I’ll hand them back. They just accrue.

            What links the welfare state through the surveillance state is data collection and processing. This continues at a tremendous pace as technology advances. There are good things that come out of this that allow for the easy rationalisation of the expansion, but also enormous threats to civil liberties.

  11. john young says:

    America is the worlds biggest nightmare in every sense of the word,yet we slavishly hang on their every word/deed.

    1. Jamie McIntyre says:

      It’s a real special relationship when the US tells you are the bottom of the queue if you don’t do as they ask.

      I am glad to be a cheese eating surrender monkey who has the ability to tell the US to feck off when their being an ass.

      There’s none more impressive sight in all the world than watching a brit trying to crawl up the ass of and American.

    2. Alan says:

      I think they took over the role of the “worlds biggest nightmare” from the the Brits.

  12. Justin Kenrick says:

    Excellent piece by JW, as ever. What are the chances of her running in 2020?

  13. Mike Curtis says:

    What Elizabeth Warren said was not only true and she had the nerve to say it. Over a hundred years ago Henry George said the same thing. He explained why it was true and he gave a simple yet sovereign solution to the problem of falling wages and unemployment — the Single Tax on the rental value of land.

  14. lionel beale says:

    Encourageably awesome!
    Rock on !

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