“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.”Now let me say that it is, in a sense, refreshing to see a genuine left-liberal, or even social-democratic, argument being put forward in these circles. Genuine liberals are hard to come by these days. Most apologists for the Democrats don't even bother to argue for liberal views anymore--they simply wax poetic about the virtues of the "free market".
But, refreshing though it may be in certain respects, this argument is deeply flawed.
Warren's argument, expanded a bit, is this: all of the profits that a capitalist firm earns are premised upon a huge system of social labor that they benefit from but are not obliged to pay for unless they pay taxes. The pre-tax income of a capitalist is not really "theirs" in some natural way, because it takes for granted a huge system of institutions, laws, and goods without which their earnings on the market would be impossible. No profit is possible without roads, infrastructure, a repressive security force capable of maintaining "order", a standing army capable of defending business interests abroad, a system of schools that train the labor force, etc. Without social stability, in particular, capitalist business cannot thrive. In periods of struggle, say, when workers refuse to accept the authority of capitalists in the workplace, the profits of capitalists are threatened. When workers go out on strike, the income of business owners is strangled momentarily. As history shows, capitalists therefore require a force capable of "restoring order" if they are to continue on earning profit. In short: without a set of institutions and organizations that create a "good business climate", no profit is possible. On this much I can agree with Warren.
But Warren, and left-liberals and social-democrats in general, draw the wrong conclusions from these facts. They conclude that the rich should see that they in fact owe society rent. Because all of the things the ruling class needs to survive aren't free, they should actually take responsibility and "pay their bills". That means accepting higher levels of taxation and higher levels of social spending on these pre-conditions of profit.
There are too many problems with this approach to count, but I'll offer four criticisms.
First, it's not just that private profit is premised upon a State that performs certain functions (e.g. maintaining "order", repressing protest and strikes, "educating" the labor force, building infrastructure, etc.). Those who work for a living create all the value, and those who live by owning create nothing. If workers stop doing what they do, nothing is produced, no profit can be had. But if the bosses stop doing what they do, there is no reason in principle why anything needs to stop. To be sure, the bosses could call in the State to coercively force workers to respect the owner's authority over their means of production. But failing that, there is no reason why workers couldn't simply continue on as they were before without need of the boss. "The boss needs you, you don't need the boss."
It's therefore wrong to say that the owners of Capital deserve a huge "chunk" of anything, even by typical liberal criteria (e.g. "productive contributions"). To the extent that capitalist earn by owning, rather than working, they don't deserve even a thin slice. The succinct way to put this complaint is to say that Warren's argument assumes that the wealth of capitalists is legitimate. It is not. In suggesting that it is, however, Warren lends support to capitalist social relations, which is tantamount to rejecting the idea of genuine democratic self-governance.
Second, Warren, like everyone persuaded by social-democratic ideas, has no plausible analysis of how power is distributed in our society. She assumes that a nice, neat compromise between capital and labor is possible, such that the ruling class will be content to "pay its bills" through high levels of taxation that are used to fund social spending. All we need do is elect the right people and the ruling class will happily go along. But, as the history of the welfare state, and of social democratic regimes in general, has shown, such arrangements are inherently unstable. They depend, first of all, on a strong, politically organized labor movement capable of forcing Capital to the bargaining table. As soon as the possibility exists to undermine the political and economic power of labor, Capital wriggles off the hook and breaks the compromise. Thus follows a period of cuts to social spending and a lowering of regulation and taxes on the ruling class. This is more or less a concise history of what happened all over western Europe (and in the US) from 1973 onward.
What's more, Warren lacks a viable analysis of how we could even win the modest reforms she and other liberals favor. The New Deal is unthinkable without a mass, militant, extra-electoral revolt by the working classes in the 1930s. The fact is that to win even modest reforms--e.g. higher marginal tax rates, increased spending on health and education--we'll need a movement capable of forcing concessions out of the ruling class. Electing officials like Warren, one by one, is not going to cut it. Even if we could do that, which we can't, it's not guaranteed that, once elected, these officials would pass reformist policies. Recent history suggests otherwise. Her approach is a non-starter.
Third, Warren's argument amounts to a wonderful justification of the repression that Occupy has endured as well as the daily repression and violence that people of color endure every day at the hands of our enemies in blue. Of course, I assume that she would want to resist such a conclusion. But her liberal politics entail it. After all, she explicitly praises the police and treats them like a basic social good that we should be thankful to have. What she doesn't realize is that the police, as an institution, are there to prevent the sorts of struggles that make possible the modest reforms she favors. Her argument is addressed to the ruling class: "don't you know that you need the police to protect your own profits? why, then, won't you pay the bill for them by accepting higher taxation?". I reject this wholesale. The ruling class won't be moved by it, and everyone else shouldn't care whether they are or not. The more important question is how we can organize our side to fight back--by way of demonstrations, strikes and occupations--against austerity, even in the face of brutal police repression.
Fourth, Warren's argument assumes that education should basically serve to train the workforce. After all, her argument is that because public education trains workers and thereby adds value to the products capitalists sell on the market, the ruling class should pay the bill for education. But if you don't think that the basic aim of education is to foreground profitability, then you're at odds with Warren. I'm sure she would reject the idea that education should be subordinate to profit, but her argument forces us to endorse just that conclusion. Whether or not the ruling class pays the bill for education, there is still the question of what the point of education should be, what the curriculum should be like, etc. If we accept the profitability imperative, it looks like we should be friendly to high-stakes testing, math/science curricula that exclude art and humanities, etc. What's more, we should have no quarrel with schooling techniques that encourage passivity, deference to authority, etc. I would dissent from this view and argue that education should first of all serve to fully unfold human potential and promote flourishing and critical thinking. It should help us learn how to live well as free and equal citizens among others.