A (Left-)Neoliberal Interpretation of Elizabeth Warren

A (Left-)Neoliberal Interpretation of Elizabeth Warren

As one of the most progressive candidates in the 2020 field—even to the left of Bernie Sanders on some tellings—it may seem ridiculous on its face to make a “neoliberal” case for Senator Elizabeth Warren. And “left-neoliberal” will strike many readers as an oxymoron. I hope to explain the latter in building the case for the former.

The unfortunate bit about trade

But first, the protectionist elephant in the room. As a neoliberal I do not condone Warren’s trade policies. She would impose high and strict standards on trade partners in any new trade deals. This will be to the detriment of the global poor, who will be shut out of increased access to the American market. But it should be noted that Warren has to my knowledge not advocated increasing or introducing new tariffs. Granting other stakeholders, like organized labor, a seat at the negotiating table is not obviously invalid, even if it creates new avenues for obstruction. And at least some elements of Warren’s trade deal standards would be liberalizing reforms like weakening IP monopoly power.

Warren’s industrial policy likewise leaves something to be desired. Much of it takes the form of her laudable Green Manufacturing Plan, which would subsidize green innovation and leverage trade policy to curb greenhouse gas emissions globally. But her “Economic Patriotism” plan seeks to unfairly privilege American companies in the global market and fosters toxic zero-sum attitudes by endorsing a narrative of corporations “shipping jobs overseas.” “Buy American” has no place in the neoliberal worldview, left- or otherwise.

Free trade is a central plank of neoliberalism, and deservedly so. Protectionism and industrial policy of this sort would seem to firmly situate Warren in the progressive or social democratic camp. But neoliberalism is more than just an enthusiasm for trade deals, and the open-minded neoliberal can find much in Warren to applaud—and vote for. Looking beyond trade policy, we find a platform that is by and large—to use Warren’s own self-description—capitalist.

Bone capitalism

The linchpin in the construction of Warren as a neoliberal is her self-description as “capitalist to [her] bones.” She is criticized for this by socialists, and it’s this identity that distinguishes her from the harder left despite significant overlap on policy. Here’s the basic thrust: commerce is good. Profit is good. Economic growth is great. Creating the next big idea, taking it to market, and making a killing are all ethical, even praiseworthy accomplishments.

But Elizabeth Warren is not exactly Ayn Rand. She couples this ethical embrace of capitalism with the understanding that for any individual’s economic success story, they depended on  countless unsung accomplices distributed throughout society. Janitors and bus drivers, nurses and domestic workers, public school teachers and scientific researchers collectively comprise a background tapestry of economic potentiality. The value of this extended network of cooperation isn’t adequately captured by our system of property rights. Just because janitors are relatively easy to replace and thus cannot command a high wage in the market doesn’t mean they don’t play a critical role in a thicker social sense. 

This isn’t a knock on the institutions of private productive property or markets. These are crucial for economic dynamism. It only means that whatever the market rewards isn’t the final appraisal of social value. So while we should encourage and applaud economic success, we should also redistribute the dividends, both to provide economic security in the unpredictable environment of capitalism (not to mention just the human experience) and to develop the creative capacities of each individual. Building economic security and fostering the conditions for all persons to develop their own capacities are what’s behind several of her signature policies, from housing and child care to universal health care and college loan forgiveness.

Against oppression

This defense of the market plus welfare state is garden variety neoliberalism, which can be roughly summarized as classical liberalism plus a robust welfare state. The left-neoliberal distinguishes themselves by further recognizing that various social, political, and economic institutions are stacked systematically against specific groups of people, especially women and people of color, and policies to correct these disadvantages are warranted.

Consider childcare as an example. Like rent, childcare is a source of economic insecurity, and the inability to afford childcare can trap a parent in the home, preventing or delaying them from developing their human capital, advancing their careers, or seizing other economic opportunities. Of course, most of the parents who alter their economic plans in order to take care of their children are women, leading to a systematic disadvantage for women and a gender disparity in the development of their earning power. Warren’s plan to make childcare universally affordable corrodes this gender injustice and unlocks that potential.

Reproductive freedom, including easy and affordable access to abortion care, likewise reduces systemic social and economic disadvantage facing women, especially marginalized women. Women who are forced to carry unwanted pregnancies to term suffer—in addition to the brutal violation of their bodily autonomy and self-determination—severe economic hardship, often forcing them out of the labor force altogether. Warren’s plan to enshrine abortion rights into federal law, ban restrictions on abortion and contraception in private insurance, and bar states from restricting abortion access with unnecessary regulations would not only advance a core freedom for women and other persons capable of becoming pregnant, but it would improve and secure their economic capabilities. To a neoliberal feminist, Warren’s plans are a frontal assault on structural misogyny.

Nearly all of Warren’s policies have some component that addresses the racial wealth gap and the disadvantages facing black Americans. Warren’s housing policy doesn’t just pour money into affordable housing, but explicitly targets formerly redlined districts with first-time homebuyer subsidies. The beneficiaries will be primarily people of color, a group that did not receive the same housing assistance that whites have historically enjoyed. This redress of institutional racism complements the more straightforwardly neoliberal elements of Warren’s housing proposal: funds for increasing the supply of affordable housing and, vitally, grant incentives for state and local governments to remove regulatory barriers to building more and denser housing.

Warren’s college plan isn’t just about forgiving student loans for the poor and guaranteeing access to college, features neoliberals may be skeptical of. It also includes funding for historically black colleges and universities, “equity audits” at public universities to ensure administration practices are not perpetuating racial injustice, and banning questions about criminal or immigration history in public university applications. 

Valuing the Work of Women of Color” targets both racial and gender disadvantage, and it does so by harnessing the scope of the government itself as a buyer and contractor: as executive she would require contractors to meet diversity and equal pay standards, as well as forbid the illiberal practices of non-compete clauses, forced arbitration, and requiring employees to disclose criminal history.

“Black capitalism” has been a popular approach among conservatives for improving the lot of black Americans. Give favorable loans to minority entrepreneurs and watch those communities thrive. But the racial wealth gap also manifests in a startup capital gap and a subsequent investment gap. Black capitalism has been more rhetorical dressing than it has been transformative. Warren thus includes $7 billion in grants to entrepreneurs of color, rather than mere loans. Warren would further require federal pension funds to seek out investment managers of diverse backgrounds, as such managers are more likely to fund entrepreneurs of their own race or gender. 

Warren’s comprehensive plan for empowering indigenous nations and persons follows similar contours. She situates economic inequality and poor socio-economic outcomes of indigenous populations in the context of historical and ongoing injustice. And she presents a comprehensive plan to repair those damages with a combination of economic and infrastructural development and political commitments, including creating a new Cabinet-level council on Native American affairs.

A neoliberal approach to inequality

As central as race and gender are to Warren’s approach to inequality, her most infamous bête noir is extreme economic inequality itself. This is at first blush not very neoliberal, and yet it resonates with Adam Smith, a patron saint of neoliberalism. Smith famously noted that capitalists and industrialists never meet in secret except to conspire against the public. Like Smith (and the neoliberal Niskanen Center), Warren understands that economic elites often have privileged access to how the rules are written and they use that access to secure unjust and inefficient advantages

Early liberals were animated against unjust economic privileges of the landed gentry, of primogeniture and entail. Smith specifically wrote against not only monopoly privileges, but the importance of being able to be seen in public without shame, suggesting an expansive view of what it means to ensure the conditions sufficient for flourishing in society. Undermining unjust or perverse sources of inequality has always been part of the liberal project

Many neoliberals have inherited from libertarians a skepticism about the dangers of wealth inequality. In principle extreme inequality can arise—indeed theory predicts it will arise—from perfectly ethical capitalist acts between consenting adults. In such cases it would be unjust to “correct” wealth inequality, rather than poverty. But in the real world actual inequality owes significantly to racial, gender, and other forms of oppression, as well as more mundane flavors of incumbent advantage. 

Redistribution to reduce inequality thus really can rectify injustice as detailed in so many of Warren’s plans: give women money and they can more easily avoid or escape abusive relationships or better provide for dependents; give people of color money and they have greater means to build capital and pass on wealth. The unjust privileges deriving from legacies of oppression and ongoing marginalization of women, indigenes, immigrants, and descendants of slaves are exactly the kinds of privileges Smith might target if he lived today. The redistribution and integration policies that Warren advocates to address economic inequality are power balancing measures aimed at disabling the “conspiracies against the public” that Smith condemned.

Reining in economic inequality is about balancing the power in society, and a similar logic applies to Warren’s codetermination and union-boosting policies. There is an inherent asymmetry in negotiating positions between singular employees and large, established employers. Collective bargaining mitigates this imbalance of power, and in the wider political system unions can act as an important intermediate institution through which workers can influence politics and policy.

Anti-majoritarian, (anti-)democratic structures like the Senate, the Electoral College, gerrymandering, and voter suppression tactics are another form of power inequality. These are the political foundations that secure the policies perpetuating white privilege: mass incarceration, de facto segregation into public goods-starved areas, and a failure to repair the legacies of Jim Crow, redlining, black exclusion from the New Deal and GI bills, etc. Warren would abolish the Electoral College, and one of her most important plans would use federal muscle to ensure voting is not only protected, but easy and secure.

An open America

Warren is no isolationist. She favors a foreign policy of peace, withdrawing from America’s over-extension in calamitous and never-ending wars of choice, but reengaging with international institutions. Her plan to “rebuild the State Department” would reinvigorate diplomacy while once again seizing an opportunity to integrate marginalized Americans into positions of power and influence.

Warren further makes up for her trade populism with a brave stance on immigration. Warren would decriminalize immigration, returning us to the de facto situation that prevailed prior to 9-11. While falling short of #AbolishICE and #openborders, she would reorient both ICE and CBP towards preventing smuggling and trafficking. She further gives this reform proposal teeth by calling for investigations of human rights abuses occurring during Trump’s Administration. Warren would increase refugee caps and expand legal immigration. Her speeches make it clear that Warren views immigration and diversity as sources of strength.

A radical liberalism

Neoliberals tend to focus on institutions—markets, rule of law, constitutional body of law supporting long term contracts and investment, democratic procedures, etc—in contrast to isolated moral reasoning (as a  libertarian may analogize taxation to theft) or even narrow utilitarian policy outcomes (like progressives). The purpose of liberalism on this view is to create, maintain, and secure an institutional environment in which each person can develop to their full potential and freely fashion and pursue their own projects. It is better to secure the right fixtures that will tend to produce the best outcomes over time even if supporting those institutional fixtures in any given election might require holding one’s nose. This is why neoliberals are seen as moderates or centrists, certainly not radicals. 

However, even the best institutions can be captured by incumbent elites and warped by ideologies that justify unjust, illiberal, and inegalitarian hierarchies. Warren understands better than other candidates the specific maladies that most acutely afflict our institutions and the most effective remedies to achieve the full promise of the liberal order devoted to the freedom and equality of all.

Featured image is U.S. Senator Elizabeth Warren speaking with attendees at the 2019 Iowa Democratic Wing Ding at Surf Ballroom in Clear Lake, Iowa. By Gage Skidmore.