In a Thursday talk with the members of the Maroon Editorial Board, Democratic gubernatorial candidate Daniel Biss made clear his concerns about wealth inequality, describing the unchecked finance industry as a “massive vacuum cleaner sucking capital just up to the hands of a very, very few.”
To Biss, barriers to social mobility look almost insurmountable without systemic reforms. He described a system “built by design by capital to fragment labor,” in which “a whole different social caste, where both wealth and power are simultaneously growing faster than the rest of the economy grows, and are being handed down from generation to generation.”
Biss said his “LaSalle Street Tax” on financial transactions and his push for a progressive income tax would begin to solve for this issue, replacing an outdated tax system and directing revenue in the long run to funding free higher education. “Wouldn’t it be nice…if our tax system wasn’t relentlessly focused on everything but the financial sector?” he asked.
The state senator condemned opponent J.B. Pritzker as an immediate example of money distorting the robust functioning of democracy.
Pritzker, whose self-funded campaign is on track to make this election the most expensive governor’s race in United States history, leads Biss by 10 points, according to recent polling. To date, Pritzker has spent $56 million of his private wealth.
Biss questioned the effectiveness of self-financed campaigns, pointing out that Meg Whitman’s campaign for governor of California—the most expensive in U.S. history—ended in defeat. But he also said the problem runs much deeper than whether a Democrat wins the seat.
“Let’s say the whole thing works according to plan and he’s able to buy the nomination, and win the general election…. Who’s the next billionaire? If the Democratic Party has accepted the idea that the only way we’re going to get elected is by finding a billionaire who’s willing to fund a campaign, who’s next after J.B.?”
In the talk, we dug into specifics on Biss’s labor union backing, skepticism about the Amazon HQ2 proposal, and his break with original running mate Carlos Ramirez-Rosa over the alderman’s support for the Palestinian freedom movement Boycott, Divestment and Sanctions (BDS).
The full transcript of the interview is below.
CM: While you have voiced your support for UChicago grad students’ efforts to unionize, as well as other unionization efforts, you also have the AFL-CIO of Illinois’s lowest lifetime rating on labor issues for any Democratic state senator. Is your voting record in tension with your more current pro-labor positions?
Daniel Biss: I would say no. It’s interesting that the Pritzker campaign, which is in a desperate effort to attack me, uses that statistic frequently, and they don’t usually dig too far into the specific votes. And I think it’s worth saying that I respect the AFL-CIO a lot. I work with them closely; I agree with them much more often than I disagree with them. But what are some of those votes? For example, there was legislation in 2011 to raise everyone’s electric rates, lining the pockets of ComEd and Ameren. I think that was just the wrong thing to do; and I opposed that bill, and it was a decision that was difficult because I respected the AFL-CIO’s support of the bill. But ultimately it was just not, I think, the right thing to do, and I voted no. Another example: I’ve consistently voted against casino expansion. We need revenue, for sure, but I just don’t think that’s the best way to raise revenue. I think it’s an activity that preys upon those with the least ability to pay.
So I listen closely to the AFL-CIO, I care a lot about organized labor, I’m a strong believer in collective bargaining and workers’ rights and union rights. But I also ultimately have to make these tough decisions where there are arguments on both sides, and the weight of the decision comes down on the other side for me. And I do think it’s worth noting that that’s not a situation that J.B. Pritzker has ever found himself in, right? So it’s very easy to not have been in government, not have been called upon to make difficult decisions, not have had to weigh both options and just take potshots at those who have. That’s how we got both Trump and Rauner. And I think it’s not a coincidence that those guys are not successful in office. That experience with that difficult weighing of complicated choices is important, I think, if you want to be an effective government leader.
CM: You said that making community college free would be a drop in the budgetary bucket for the state. Being that free tuition at four year state schools is also part of your platform, I was wondering if you could outline the steps that you would take to implement this in the long term, a bit more specifically.
Biss: Well, I think that the the first major revenue step that needs to be taken is to repeal the flat tax provision of the constitution. You know, when you think about the community college price tag—which is something on the order of 2 percent of the general revenue fund—you could sort of tweak along the edges and find that money, without needing big structural reforms. When it comes to bolder revenue changes, I support taxing LaSalle Street financial transactions, I support closing the carried interest tax loophole. I think these are changes that are really important if we’re going to have a tax system that is designed to match a modern economy as opposed to a tax system that’s built for an economy that fundamentally no longer exists. And if we want to make these kind of transformational investments, like making public four-year universities free, we’re going to have to have a tax code that is actually a match for the economy we have today.
CM: There have been calls recently, including in Illinois, for wealthy private universities like UChicago or Northwestern to pay property taxes. The question is: What do you think about those calls? Would you support that sort of proposal as a way to raise revenues?
Biss: I think that specific proposal is a pretty explicit violation of the Illinois constitution. I didn’t look it up last night, but my recollection is that the property tax clause of the constitution explicitly exempts educational institutions, whether public or private, from property tax. I’ll speak from my own hometown experience. I live in Evanston. Evanston is a sort of small-ish, medium sized town; Northwestern is a giant, important landowner, employer, economic actor in town, and it provides real strain on everybody else that Northwestern is not paying in, and as a consequence there’s been a series of negotiations that have resulted in Northwestern making a broad collection of what people call pilots payments in lieu of tax. I think that it’s really important for private institutions to be good neighbors, I think the tensions that exist in this neighborhood around the relationship between the university and the community are not coincidental. I think those tensions exist, to some extent, in every neighborhood surrounding an affluent private university, but they vary pretty significantly depending upon the conduct of the university, and to some extent the nature and conduct of the neighborhood around the university. And I think frankly these institutions could both do better. And I have to think, in light of the Illinois constitution, of what’s the best state legislative step to make that happen, but I do think we need to do better.
CM: You’ve spoken extensively about your unpopular 2013 pension plan—and this is a two-part question—but, first of all, do you believe that pensions are a form of deferred compensation, which is to say, are they part of a wage that someone receives from their employer, and secondly, if elected, what will you do to reform public sector pensions in Illinois?
Biss: So, the answer to the first question is: I don’t think it makes any difference what I think; it’s just a fact that that’s what a pension is—it’s a part of an employment arrangement, it’s part of an employment contract; it’s among the package of benefits an employee earns in exchange for their labor—that is paid later, so it’s deferred. So, yep, I think it’s deferred compensation. I literally can’t imagine anybody anywhere on the political spectrum in good faith answering that question differently.
So, what would I do to reform pensions, I believe is the question? Well, first of all, you have to respect the constitution—pensions are a promise. A pension in any context is a form of deferred compensation. The Illinois constitution says that public pensions in the state of Illinois are contractual right, which is to say that you, by virtue of being hired, then have a contractual protection prospectively for pension benefits that you will subsequently earn. That’s what the Constitution says and we ought to take it seriously. The question that some people ask is, does that mean that anything could be done to make it cheaper? And the answer is, yes, but it shouldn’t be trying to get around the constitution, it shouldn’t be trying to manipulate the constitution; instead it should be looking at the structure of pension systems.
It seems to me the best example of this is that we have 628 different pension systems in Illinois. That’s more than the state of Pennsylvania; that’s more than double in the state of Pennsylvania or Florida. Every town, almost, has two—one for firefighters and one for police officers, and it’s just an inefficient and, frankly, in some cases corrupt way to design a pension system. If you were to consolidate those, which is exactly what Ohio did in 1965, you could save real money without touching anyone's benefit, without doing anything that anyone could conceivably argue is constitutionally questionable, and, most importantly, without doing anything unfair.
CM: Chicago recently offered Amazon $1.32 billion in Economic Development for a Growing Economy, or “EDGE” tax credits, if they were to build their second headquarters here. What do you think of that and other attempts to lure Amazon?
Biss: I think we have to answer that question in the context of the question, what’s the right economic development strategy? Which, in turn, is a question we have to answer by asking, what kind of economy do we want? Well, here’s the kind of economy we don’t want: We don’t want an economy that’s run by a small collection of very large businesses that have a tremendous amount of political power, and kind of crowd everybody else out. If you go talk to people in Seattle about Amazon, certainly Amazon is an important employer, and you know, I don’t think anyone in Seattle wants Amazon to just pick up and leave, but it’s a got such a giant footprint that it tends to have undue political influence in Seattle and also undue economic influence in Seattle.
I think what we instead want is a more vibrant, innovative economy with a lot of churn, where people can have a new idea, turn into a new business, and where there’s a kind of entrepreneurial culture. And every time you shovel money in the direction of a single, large, famous corporation in order to lure them to come or to stay, you’re taking out of the pocket of everybody else and making life a little the harder for the entrepreneur. So I think we have to be very cautious about these kinds of corporate incentives.
I think the example that happened in Wisconsin with Foxconn is a really, really useful one. They announced proudly that Foxconn is bringing a manufacturing plant to somewhere in southeast Wisconsin—maybe from Kenosha, I forget. They offered, I think, $2 billion in incentives, and Illinois was supposed to be embarrassed, and Wisconsin was supposed to be excited; not all of us were so sure that that was such a great deal, with $2 billion. But then, the next thing you knew more and more and more money was added to the pot and the reason is that Foxconn understood that the Wisconsin government was using the alleged success story of luring in Foxconn as a public relations strategy. And once they knew that Governor Walker was committed to being able to say that he had lured Foxconn in, they knew that whatever price they named, they’d have to pay. We can’t give up the kind of leverage. We have to be willing to say no to the wrong deal, so that the kind of economy we want will actually flourish.
CM: To follow up, obviously you don’t want to shovel money in the direction of a company you’re trying to lure, but what do you make of Illinois’ proposition right now—the EDGE tax in particular?
Biss: I think there’s been no clear explanation of the benefits to Illinois of Amazon coming, and certainly no clear explanation of the distribution of the benefits. Where does it go? To what communities, and so on? So, am I at this point comfortable with that offer? No, I’m not. I’m willing to keep listening, and if someone explains why the benefit to Illinois would be greater than the cost, I’ll have that conversation, but I sure as heck have not heard that yet. And I think we have to ask the skeptical questions before signing off.
CM: Last September, just a week after announcing alderman Carlos Ramirez-Rosa would be your prospective lieutenant governor candidate, you dropped him from your ticket because of his support for the Boycott, Divestment and Sanctions, or BDS, movement. What is your stance on the BDS movement, and why was Ramirez-Rosa originally selected to be your prospective lieutenant governor, despite his previous expressed support for divestment?
Biss: I would challenge a bit of the end of that question. Carlos had made some statements about BDS that were in my opinion ambiguous. I’m happy to sit down and parse them out, but that doesn’t sound like fun for anybody. He actually voted in the city council for an extremely strong anti-BDS resolution. And so, in light of all that, I had a conversation with him before asking him to join the ticket. And the outcome of that conversation was an understanding that I thought we’d shared regarding a shared view about BDS, which is, to your second part of the question, strong support for justice for Palestine, strong support for human rights for Palestinians, commitment to a two-state solution with two politically free and economically thriving states, existing side by side, in peace and security. Quite frankly, strong opposition to many of the policies of the Israeli government, and great frustration with those policies, and the view that it would be better for the U.S. to take a more aggressive posture regarding some of Israel’s conduct, for instance around the settlements, which are officially against U.S. foreign policy, and yet the U.S. has not done an awful lot dissuade Israel from building settlements.
We agreed on all that stuff, and I had the understanding that we also agreed that BDS was not the right way to advance those goals, for reasons I can explain to you if you’re interested. Once the campaign started and questions started being asked, it became clear that that understanding was not there. Perhaps there had been a miscommunication, perhaps a change of mind, I can’t speak to that. And because of that, I felt that we were no longer able to continue—because of that really important disagreement on the question of whether B.D.S. is the best way to achieve our shared goals.
More about the shared goal: I’ve been to the West Bank. I’ve sat on the floor of a living room of a family that was unable to visit their adult children because they couldn’t get through the checkpoints. I visited a school that was in the literal physical shadow of the wall, and seen the massive, massive difference in freedom and liberty and opportunity, and physical security that exists on the two sides of that wall. And listen, I come from an Israeli background. My mother’s Israeli, I grew up spending a fair amount of time there; I care a lot about not only the security, but also the moral fiber of the Israel that I was brought up to love. And I’m really sickened by the conduct of Israel around these issues. It keeps me up at night. I’m really, really, profoundly alarmed about that. That said, I think that, for all its wrong, I don’t see Israel as analogous to 1980s apartheid South Africa. I don’t have the same goal that I think was the appropriate goal in South Africa, which was the goal that was achieved, which was the creation of a different one-state solution. And for that reason, I don’t think BDS is the way to go. And I think that we’ve got to find other approaches, and I’m here to work with people across the political spectrum, people to my right, people to my left, to figure out the right way to do this. Because we’re on a really awful path right now, in terms of both social justice and the political future of the Middle East.
CM: Just to follow up before we get to the next question, do you think that supporting BDS is a dealbreaker, in terms of people working on your campaign?
Biss: Oh, no—I’m sorry, that’s a great question. I asked Carlos in advance about BDS, because I was not comfortable having a running mate who was supportive of BDS. And the way in which our difference emerged made it especially clear we have to part ways. I have friends who are well to my right on this issue; I have friends who are well to my left on this issue. I have friends who would have found what I just said about the Israeli government pretty impressive, frankly, or at least would have stridently disagreed with it; I have friends who support BDS. I have staffers on my campaign who are in both of those two camps, and I imagine a lot of people in my administration are in both of those two camps. I don’t support banning BDS. It’s an approach that I disagree with. And some of the people who believe in BDS have the same goals that I have. Others probably don’t.
CM: You propose a tax—and you’ve talked about this before, in this conversation—on financial transactions—known as the LaSalle Street Tax. You’ve said that it would bring $8–10 billion a year to the state. Your critics have said that such a tax would convince some of the financial firms, like on the Mercantile Exchange, to leave the city of Chicago. With that in mind, why do you think that this is a sound tax policy? Do you think they’re making an accurate judgment of the situation?
Biss: I think you ask that question in a really, really telling way. There are accusations that some firms would leave. An exchange is a collection of relationships. If I’m going to do a trade with you and you leave the exchange and I stay, then there’s no trade anymore. And so, there are two different kinds of arguments that get made. One is, hey, if you structure the tax in the wrong way, then some of us move a server across the state border, then the tax will just be entirely avoided. If you were to structure the tax in that way and with that consequence, there wouldn’t be any negative impact on the state, except we wouldn’t get the revenue from the tax. So the doom and gloom of, oh, you’re going to break the state’s economy by chasing people away is not consistent with that particular bad theory of the case.
The other theory of the case is that the exchange and the people who work there and the physical infrastructure and everything else would simply cease to exist and everyone who does that work would just leave Illinois and go to some other place. And the challenge of doing that is, again, that the exchanges are built up on a series of existing relationships. And one person can’t leave Illinois to go to New York, while another person leaves Illinois to go to London, and they still manage to sit in the same room with one another. And so that’s why there are financial transaction taxes in various places, in many countries. Historically, New York City used to have a financial transaction tax as well. I take the concern seriously, I think that you’ve got to design it really carefully and really thoughtfully. And I’m committed to working in a very meticulous way, to do that.
The argument that the opposition makes proves too much. What they really are saying, in my opinion, is, “we don’t believe in a financial transaction tax, but we know that’s a popular thing to say, and so instead of saying that, we’re pretending we don’t think it’s feasible.” And what I would say is, if you really think its the right thing to do but it’s unfeasible—dude. The U.S. economy has basically financialized itself. The share of the economy that’s in the financial sector has more than tripled, I think, since World War II; certainly since the depths of the depression.
If we take off the table the concept of building a tax code that is in keeping with the shape of the global economy we’re never going to be able to afford a government that works. And so, instead of turning this into a political potshot of “hey, I think it will not work so let’s not talk about it,” I would think the critics, if they actually were genuine in having only logistical and not philosophical objections, would find the time better spent working with me to figure out the right way to overcome the logistical objections, which I believe can be done.
CM: Just to follow up on that, $8–10 billion is obviously a lot of money. How crucial is this tax towards your plans for the state? Because you have several ambitious plans; several very ambitious proposals, for pensions, etc.
Biss: I think for the most ambitious plans—things like single-payer health care—it’s crucial. I think for balancing the state budget, fixing our school funding system and funding our pensions properly, it’s not. I think we can have a normal school funding formula, unlike what Illinois has, and dig our way out of this debt by repealing the flat tax provision of the Constitution, and having a normal progressive income tax like so many other states do. And I think I appreciate the question, I think it’s really important, if you look at our whole platform.
I’m not naive. I’m not confused about the fact that our platform is big. And our platform is not going to be fully enacted in our first year, or my first term. There are things like single-payer health care that are long term goals, that I think are important to have in the platform, because the only way to achieve something that’s not yet politically possible is to begin fighting for it now, as opposed to waiting for someone else to do it in the hope that in 10 years it will become possible by magic. That’s not how political organizing works. And there are other things I think are just moral emergencies, like having a progressive income tax and a fair school funding formula, that I just believe cannot wait, and need not wait.
CM: We wanted to address the perception that you, Pritzker, and Kennedy have a lot of similar stances on issues. What you think sets you apart from the other two?
Biss: Great question; I could answer that question all day long. Some might say that I do. Well, let’s start with policy. I agree that J.B. has done a really good job of adopting a lot of my policies during the course of this campaign, and I’m appreciative of that; it is definitely the sincerest form of flattery.
You know, just to give an example, I’ve been talking about a progressive income tax since I started running for state representative, close to 11 years ago. You can find questionnaires I filled out on my 2008 campaign that said progressive income tax is really important.
I’m not like bragging about how this stuff is really great. I’m making the point that when it comes to something that’s difficult to achieve but people have talked about for a long time, and not found the votes for—if you want to actually see it happen, you need someone whose commitment to it is ironclad, not just someone who checks a box when asked. And, on that issue, I cannot tell you how useful it would have been, when we were fighting this fight in 2013 and 2014, for J.B. to get up and say, “You know what, I would pay more under this plan but that’s the right thing to do; that’s the way a modern tax system ought to work. And, by the way I want to spend $56.2 million funding a campaign to make it happen.” We would have a progressive income tax today if J.B. had been willing to do that back then. But he was utterly silent when it counted.
Now that he’s running and I’m saying I’m for a progressive income tax, he’s responding with saying, “Oh yeah, me too.” And the question becomes, once he becomes governor, when I’m no longer breathing down his neck, is he going to—I know he’s not going to change his position, he won’t say, “I oppose it,” but is he going to put his full political capital behind it, or will he just sort of say, “nevermind”?
So there are issues like that where he’s come around to my position, and I congratulate him for for joining the party. There are things like taxing, financial transactions tax, and closing the carried interest loophole, single-payer health care, free college, that we just differ on. We just disagree. I will admit, to your question, those are not tomorrow things. But I think they are fundamentally right. I think they’re fundamentally important in how they speak to what government is supposed to be, and what values we’re supposed to be moving toward, and I think there is incredible value in saying we’re going to get there eventually. It may not be in my first term as governor, it may not be while I’m governor, but that’s where we have to go. And then we just start marching in that direction. And the difference between someone who’s willing to say that and someone who is not willing to say that is the difference between an Illinois where we’ve gotten there in 20 years and one where we have not.
So I think those differences are very very important, even though some may say, hey, you’re going to become governor in 2019, and that may not get done in 2019. So anyway, on these core progressive questions, I think there’s just a clear difference here between myself and Pritzker, or myself and Kennedy, for that matter. Kennedy, there’s even more differences interestingly; feels like with legalization of cannabis it’s very very confusing to know what his position is. Rent control he opposes; Kennedy is being less meticulous about copying me than Pritzker. Because Pritzker’s got a lot more resources, so he’s able to videotape me more often so he can study me more carefully. So that’s what I would say about policy.
I think the other stuff really matters, though. I really do. I think experience matters enormously.
Government is complicated, it’s weird; it’s not business. I think the notion that just being successful in business means that you’ll be effective as a government leader is frankly absurd. I know the legislators, I know the legislature, I know the agencies, I’ve sat in many of the state agencies and had detailed conversations about specifics of what they’re supposed to be doing to improve their public service.
Coming into office and not knowing that stuff just makes you an empty shell, that could be filled by anybody else. And I think if we’ve learned anything about J.B. Pritzker during the course of this campaign, it’s that indeed he is an empty shell, and right now that empty shell is being filled by whatever Mike Madigan wants to put in it. And when he becomes governor, it would be that much worse. Where the already most powerful person in state government would then, for the first time since he became speaker in 1983, have the opportunity to himself to govern.
If we are concerned with the way state government has gone since 1983, if we think that the concentration of power is too great in the state of Illinois, if we think that the fabled political machine that has screwed so much stuff up over the course of these many decades, is too powerful, electing J.B. Pritzker governor is literally the worst thing we could possibly do.
And then I just feel like I cannot answer this question without talking about the money. You know, I don’t mind that J.B. is wealthy. I’m sure it’s nice. I do think it’s kind of a coincidence that he’s never had to make a life decision based upon a complicated stressful calculation about what would work to ensure that his child had access to health care, and then he’s not for universal single-payer health care. I do think these lived experiences that I have had, that are what an overwhelming majority of Illinois families go through a regular basis, have informed my policy positions and have a lot to the differences between my positions and his.
But to me, the money issue is more profound than that, even. J.B. isn’t really saying—I know he kind of says this, officially sometimes—but in no serious way is J.B. saying, “hey, I’m the best person to be governor of Illinois, and what a nice coincidence that I have all this money to fund the campaign too.” He’s just not saying that. He’s saying, “Bruce Rauner has all this money, so we need someone with as much money or more to go toe to toe, and that’s me.” That’s the only real argument he has. Everything else is dressed up because of what the political consultants told him to say. But that’s the actual argument that he has. “We need a billionaire to go up against a billionaire.” And I mean, God help us if that’s true. God help us if that’s true.
What I always tell people is: Let’s say it works. Let’s say the whole thing works according to plan, and he’s able to buy the nomination, and win the general election, become governor and let’s say he’s even a pretty decent governor. It’s all best-case scenario for team Pritzker. Who’s the next billionaire? If the Democratic Party has accepted the idea that the only way we’re going to get elected is by finding a billionaire who’s willing to fund a campaign, who’s next after J.B.? What’s the long term trajectory for the Democratic Party or for ordinary people or for the state of Illinois in the world where that’s something that we’ve accepted?
And so when I say we’ve got to decide if we’re going to have an election or an auction, that’s what I mean. I don’t mean that J.B. happens to be rich, I don’t even mean that J.B. happens to be spending a disgusting amount of money in this campaign. (Though, FYI, he’s spending a disgusting amount of money in this campaign.) What I mean is that when you strip away all the political nonsense and all the talking points that are programmed by the consultants, what he’s actually saying is, “vote for me because I can self-finance a campaign.” And that should be an unacceptable argument. It should be an unacceptable argument in a democracy, and it should be terrifying argument in a society that is absolutely overcome with metastasizing income and wealth inequality. That should give us tremendous concern.
You know, J.B. has now spent more in this primary than Trump has spent to get nominated president of—you know—the whole country. He’s the now the second-biggest spender in the history of non-presidential primaries in all of American democracy. By the way, the number one biggest spender Meg Whitman, who was nominated for governor of California in 2010, lost the general election. So I just think that there is a fundamental difference in theory of change. I guess that’s the real thing I’m saying here. J.B.’s theory of change is write a bigger check. My theory of change is build a better movement. And if the question is what’s going to give Illinois we want 20 years from now, I think we all know the movement is what’s going to actually get us there.
CM: I don’t think you use the word “globalist,” but you describe LaSalle taxes as part of the global economy, and I wonder if you could speak more to that. How do you see your progressive platform fitting in with more globalist tactics?
Biss: Glad we only have five minutes for that question! I mean, let’s start from the beginning. Let me say two things, which are different from each other, and you can pick your favorite.
Number one is simple: There’s this series of interlocking trends in the advanced economy of the world, and particularly America, we put under the broad heading of increased income inequality, or just increased inequality, but actually it’s a lot of things. It’s massive concentration of wealth in the hands of very, very few. It’s not that even the person in the 80th percentile is doing so much better, or even the person in the 90th percentile. They’re doing better, the person in the 95th, the 99th percentile are doing way better; but the person in the 99.9th, and 99.99th percentile are doing immeasurably better than what would have been the case a generation ago.
The incomes in the middle are just flat. Many people at the bottom are actually doing worse and worse by many measures. The share of the economy that goes to labor is diminishing; the share of the economy tied up in corporate profits is increasing. The global markets just put a massive downward pressure on worker power, on wages. That exists in parallel to a kind of new employment environment where, instead of having, you know, 473 employees working in a factory together where they can organize with each other, you have a sharing economy and temp agencies and staffing agencies and part time work and all these different phenomena that are built by design by capital to fragment labor, and weaken and dilute worker power. And that, of course, is directly connected to all the previous phenomena I talked about.
And then, on top of that, or sort of intermingled with all of it, you have this massive increase of the share of the economy that’s eaten up by the financial sector. I don’t want to present a fully formed theory of exactly where the causality lies in all this—that would be a presumptuous thing for me to do—but what I want to tell you is that I think the financialization of the economy is an important engine of this machine.
And the more of the economy tied up in the financial sector, the more you have the global effort to push down wages, this global effort to make life worse for both workers and, ultimately, probably, consumers as well. And so the question is, do you accept that as inevitable, or do you try to build a series of policies that will push back against it? Dude, I get it; the best place to implement those policies is not state government; the best place is a better place, because you need as big a footprint as possible to be as efficacious as possible. But the notion that the state shouldn’t try when facing this existential threat to the social fabric—right, it’s worse than just democracy—it’s the social fabric that is under threat if there is this massive vacuum cleaner sucking capital just up to the hands of a very, very few, that is somehow irrevocable.
So, that's the first thing I would say. And the second thing I would say, which is a little wonkier, is that if you believe Piketty—if you believe him, then the sort of fundamental issue is that returns to capital are just dominating economic growth. And I don’t know, dude, look around—it sort of feels that way. That there’s this kind of generational transfer of massive amounts of wealth that just grow and grow and grow and grow, without any apparent connection to particularly productive economic activity. Wouldn’t it be nice—if you believe that to even be maybe true—if our tax system wasn’t relentlessly focused on everything but the financial sector, but instead actually paid some attention to the financial sector? Isn’t that a really, really important place for a tax policy to play a role? Isn’t that, like, the best socially beneficial thing tax policy could ever do?
After the cameras were shut off, we followed up on two further points with Biss.
CM: Should there be billionaires in America?
Biss: I think the question is, what’s the appropriate level of concentration of wealth? I don’t think we’re ever going to have 100 percent equality, it’s hard to imagine such a world. But we don’t have trillionaires—and it sort of sounds laughable to talk about trillionaires, except, in the direction that we’re going, one day we’ll have them if we don’t change something. So, do I think the amount of concentration of wealth that results from having a billionaire is healthy for society? No, I don’t think it is.
I think it results in a kind of concentration of power that becomes irrevocable, that creates a whole different social caste where both wealth and power are simultaneously growing faster than the rest of the economy grows, and are being handed down from generation to generation, and that’s the definition of creating inequality of mobility, if there’s a separate caste, that will always be above all else because of the rate at which capital accrues further return, together with the role of inheritance. I think that’s dangerous.
CM: Any shout-out for UChicago students? Anything you want to say to undergrads, specifically?
Biss: Did I just go through that entire thing without doing that? Fail.
Yeah, I used to teach here; I was here back in the olden days, when fun came here to die, before—yeah, it it was a different world; you have no idea what sort of hardship we went through.... I was here first for six years. And it was really really fun, and it was fun for the reason that we just experienced, which is that the students that I encountered here had a level of intellectual curiosity that is like nothing I’ve ever seen anywhere else, that’s different than being academically elite, which is about actual intellectual curiosity and a hunger for learning, and passion for questioning ideas and pushing back. And to me, that’s what builds a better world and that’s why this interview, I think, was so much fun—that there are all these questions that were two or three layers deeper than you might otherwise expect. Because it’s a community that revels in the social benefit that comes from asking really, really hard questions. And what I would say is, thank you for that, but take that with you everywhere you go. That’s the thing to evangelise. That’s the thing that makes the world better when brought to places that aren’t necessarily used to that culture.
And I think that it actually ties into what we were talking at before a little bit, because we have a world now where there is such a monolithic power structure that we’re not supposed to ask the difficult questions of people who are at the top of that pyramid. Democracy works when we find ourselves able to ask those questions in vigorous ways, so keep asking.