Austrian economist Friedrich Hayek died in 1992, years before Elizabeth Warren began her rise in politics. But the progressive Massachusetts senator, currently seeking the Democratic presidential nomination, represents a personification of what Hayek labeled “the fatal conceit.”
With Joe Biden beginning to sink under the weight of the Ukraine scandal, many polls now rate Sen. Warren as the front-runner in the Democratic race. This makes it even more essential that her destructive and statist agenda be subjected to heightened scrutiny.
Sen. Warren advocates further jeopardizing the nation’s solvency by creating new entitlements that involve free health care, student-loan debt forgiveness, free child care and free college tuition, among other giveaways. But more intricate aspects of her populist economic plan are even more radical — and dangerous.
To pay for the massive costs associated with the largest expansion of the federal bureaucracy in the nation’s history, Sen. Warren proposes a “wealth” tax, which The New York Times labeled “an enormous transfer of money from the wealthy to ordinary people.” This may work as a cynical vote-buying mechanism, but as a moral and ethical matter, Sen. Warren’s redistribution scheme amounts to legalized theft.
Practically, the confiscatory approach is no less troublesome. The Times notes that Sen. Warren’s wealth tax — which would be based on an individual’s assets, in addition to income — “could fundamentally reshape the U.S. economy.” The paper adds that “redirecting” — what an interesting term — such vast sums could have unintended effects … that go beyond promulgating fairness.” Such deleterious consequences include stifling innovation, inhibiting business investment, creating economic stagnation and triggering job losses.
But Sen. Warren would go even further to undermine the system that has made the United States the envy of the world. As part of her Accountable Capitalism Act, Sen. Warren proposes that the Washington dictate the makeup of corporate boards and manipulate corporate priorities through bureaucratic mandates intended to achieve leftist political objectives rather than to maximize shareholder value.
Her plan appears to be a fascistic way station on the road to industrial nationalization. “I expect that you will wholeheartedly support the reforms laid out” in her bill, Sen. Warren recently wrote to CEOs on the Business Roundtable. The message is clear: “Nice company you’ve got there. It would be a shame if something happened to it.”
Hayek’s “fatal conceit” identified the basic flaw of socialism: the idea that government central planners can more efficiently allocate resources and produce “fairer” outcomes than a thriving marketplace receptive to the free choices and preferences of millions of Americans. The 20th century serves as a testament to the validity of Hayek’s thesis. But rest assured: Sen. Warren is from the government, and she knows what’s best for all of us.