Elizabeth Warren’s Theory of Capitalism

While so much of the action on the American left in recent months has come in the form of revived enthusiasm for socialism, Senator Elizabeth Warren has positioned herself quite differently. During the past two weeks, she has expounded about the prospects for capitalism in a much-covered speech and in a Wall Street Journal op-ed.  Instead of championing the system’s demise, she presents herself as its savior.

Embedded in her musings were two aggressive proposals for overhauling American business. One is the Accountable Capitalism Act, which would require the largest corporations to allow workers to choose 40 percent of their board seats. The proposal is meant to provide an antidote to short-term thinking in the biggest businesses—and to short-circuit the ease with which CEOs make decisions that enrich themselves at the expense of workers and the underlying health of their firm. A similar system exists in Germany, and it goes by the name “codetermination.”

A second set of proposals is what Warren calls the Anti-Corruption and Public Integrity Act. Warren has called for a frontal assault on lobbying, including a lifetime prohibition that would prevent federal officeholders (including the president, members of Congress, and Cabinet secretaries) from ever becoming paid influence peddlers. Her argument is that lobbying undermines the functioning of markets, by permitting corporations to exert outsize control over the regulatory state and use government to squash competitors.

When I heard