In her new book, Elizabeth Warren tells the story of her life in order to make an argument about America (the middle class is trapped in a vise of debt), which is the sort of thing politicians do when they’re running for office. Warren, who spent most of her career as a law-school professor, was elected to the U.S. Senate in 2012; she’s not up for reëlection until 2018. “I am not running for President,” she insisted at a press conference in Boston in December, pledging that she will finish her term. But the publication, this month, of her autobiography, “A Fighting Chance” (Metropolitan), ahead of a memoir by Hillary Clinton that is due out this summer, only adds to the speculation that Warren is considering challenging Clinton for the Democratic nomination in 2016. And, even if Warren doesn’t run, this book is part of that race.
Warren’s book was originally called “Rigged,” a reference to her contention that the American political system places power in the hands of plutocrats and bankers at the expense of ordinary, middle-class Americans. “Big corporations hire armies of lobbyists to get billion-dollar loopholes into the tax system and persuade their friends in Congress to support laws that keep the playing field tilted in their favor,” Warren writes. “Meanwhile, hardworking families are told that they’ll just have to live with smaller dreams for their children.”
“A Fighting Chance” is in many ways heir to a book published a century ago. “Other People’s Money and How the Bankers Use It,” by Louis Brandeis, appeared in the spring of 1914. Brandeis believed that the country was being run by plutocrats and, especially, by investment bankers, who, by combining, consolidating, and aggregating the functions of banks, trusts, and corporations, controlled both the nation’s credit and the majority of its resources—including the railroads—and yet had not the least accountability to the public or any sense that the functions they had adopted were essentially those of a public utility. “The power and the growth of power of our financial oligarchs comes from wielding the savings and quick capital of others,” Brandeis wrote. “The fetters which bind the people are forged from the people’s own gold.”
Brandeis was concerned with Gilded Age plutocrats’ use of people’s bank savings to build giant, monopolistic conglomerates answerable not to the people but to shareholders. “Other People’s Money,” which originally appeared as a series of essays in Harper’s, is a polemic, but it’s also a huge compilation of facts and figures. Brandeis pointed out, for instance, that J. P. Morgan and the First National and the National City Bank together held “341 directorships in 112 corporations having aggregate resources or capitalization of $22,245,000,000,” a sum that is “nearly three times the assessed value of all the real estate in the City of New York” and “more than the assessed value of all the property in the twenty-two states, north and south, lying west of the Mississippi River.” (Brandeis’s ability to enlist data in the service of a legal argument, a statement known as a “Brandeis brief,” is among his many legacies.) In 1933, Brandeis arranged to have “Other People’s Money” republished—in an edition that cost only fifteen cents—so that it could exert the same influence on F.D.R.’s Administration that it had exerted on Woodrow Wilson’s. In the first decades of the twentieth century, arguments made by writers like Brandeis led to a series of antitrust reforms and financial-industry regulations that, in the middle decades of the century, made possible the growth of the middle class.
Warren is concerned not with saving but with borrowing, not with monopoly but with debt. Since the nineteen-eighties, many Progressive-era and New Deal reforms have been repealed, including a cap on interest rates and a wall, erected in 1933, separating commercial and savings banking from investment banking. In the second gilded age, the fetters that bind the people were forged first from the people’s own credit cards and then from their mortgages. Credit-card companies lured borrowers in with “teaser rates.” Rates of consumer bankruptcy skyrocketed. Eying the profits made by credit-card companies, mortgage companies began selling an entirely new inventory of “mortgage products,” with low down payments, ballooning rates, and prepayment penalties. Home prices shot up, and then they collapsed. “When the housing market sank,” Warren writes, “so did America’s middle class.”
Warren speaks Brandeis’s language. “There is nobody in this country who got rich on his own,” Warren said at a campaign stop in 2011, in remarks that defined her candidacy. “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 used other people’s money. “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.” It’s the Brandeis in Warren that got her elected. What she does next will have to do with the many ways in which 2014 is not 1914.
“A Fighting Chance” begins this way: “I’m Elizabeth Warren. I’m a wife, a mother, and a grandmother.” Nowhere in “Other People’s Money” did Brandeis mention his life or his family; no doubt, these matters did not strike him as relevant to his discussion of financial oligarchy. Also, Brandeis wasn’t running for office. He was appointed to the Supreme Court in 1916, but, even if he had run for office, and had been required to write the necessary campaign autobiography, its first words would not have been “I’m Louis Brandeis. I’m a husband and a father.”
