Elizabeth Warren announced a new bill this week which doesn’t have a snowball’s chance in hell of becoming law anytime soon, but which might help her remind primary voters in the 2020 election that Alexandria Ocasio-Cortez isn’t the only socialist on the scene. Warren announced her new bill, the Accountable Capitalism Act, Tuesday in a piece for the Wall Street Journal. A big part of Warren’s pitch is the idea that what she’s proposing isn’t new but a return to a pre-1980s business landscape in which “the obsession with maximizing shareholder returns” was not the norm. In short, she wants to make capitalism great again:

Before “shareholder value maximization” ideology took hold, wages and productivity grew at roughly the same rate. But since the early 1980s, real wages have stagnated even as productivity has continued to rise. Workers aren’t getting what they’ve earned…

Corporate charters, which define the structure and obligations of U.S. companies, are an obvious tool for addressing these skewed incentives. But companies are chartered at the state level. Most states don’t want to demand more of companies, lest they incorporate elsewhere.

That’s where my bill comes in. The Accountable Capitalism Act restores the idea that giant American corporations should look out for American interests. Corporations with more than $1 billion in annual revenue would be required to get a federal corporate charter. The new charter requires corporate directors to consider the interests of all major corporate stakeholders—not only shareholders—in company decisions. Shareholders could sue if they believed directors weren’t fulfilling those obligations.

In addition to the federal charter, Warren’s bill would mandate that 40% of the board members be elected by employees, thereby giving employees more control of the direction of the companies where they work.

Yesterday, Vox’s Matt Yglesias wrote a long piece at Vox offering a bit more detail about what Warren is proposing. Are you ready for the Office of United States Corporations:

Warren wants to create an Office of United States Corporations inside the Department of Commerce and require any corporation with revenue over $1 billion — only a few thousand companies, but a large share of overall employment and economic activity — to obtain a federal charter of corporate citizenship.

The charter tells company directors to consider the interests of all relevant stakeholders — shareholders, but also customers, employees, and the communities in which the company operates — when making decisions. That could concretely shift the outcome of some shareholder lawsuits…

The Vox goes on to note that many of the practices Warren is proposing are already pretty standard in Germany and some of the Scandinavian countries. There’s also a piece over at Forbes, written by a proponent of the idea, which fleshes out the “benefit corporation” model:

Benefit corporations are exactly the same as traditional corporations except for one important thing that is uniting strange bedfellows: Benefit corporations fix a source code error in the operating system of capitalism—a legal concept called “shareholder primacy.” Unlike traditional corporations, the boards of directors and officers of benefit corporations are required to consider the impact of their decisions not only on shareholders, but also on other stakeholders, like workers, customers, communities, suppliers and the environment.

Benefit Corporations are already legal in the U.S. but not too many companies have adopted the model. And that’s where Warren enters the picture:

In the few years since benefit corporations laws have been on the books, more than 7,000 businesses have adopted this new legal structure. Many of these benefit corporations are venture-backed, a few are publicly traded, and collectively they have raised nearly $2 billion. That sounds promising…

As reported in the current Economist story Choosing Plan B,”Danone, the French food giant, is the only Fortune 500 company to date that has been willing to state publicly its intention to meet the performance and legal requirements to become a Certified B Corp, first declaring this to investors at their 2017 annual shareholder meeting.

For Sen. Warren, this is just too slow. The risks—of growing inequality and climate change, for example—she believes, are too high to simply let the market decide the pace at which these large corporations—and the public capital markets which drive and constrain much of their behavior—decide for themselves when and how to serve the public interest.

So this isn’t about “choice and competition” as Barack Obama might say, it’s about creating a new mandate that all large corporations would be forced to accept. Vox mentions that this would likely impact some shareholder lawsuits but I’m wondering if the federal charter Warren wants to mandate wouldn’t go well beyond that. The details of how climate change concerns would constrain corporate behavior remain a bit vague. Are we talking about lawsuits from the Sierra Club? I’m also wondering how much power the Office of United States Corporations might have as a regulator over these matters.

Warren’s pitch is a return to the post-WWII economy, but a big part of her plan seems to be opening the door to more direct government control of the means of production. It doesn’t take much imagination to think this would only be a first step, a starter house if you will, for the Democratic Socialists waiting in the wings.

Update: Reason has a response to Warren’s plan:

Warren even complains in her commentary that “companies are setting themselves up to fail” by funneling earnings to shareholders rather than reinvesting them. Assuming this is true, what does this have to do with her? Let them fail. This is why there is a marketplace. Why keep a poorly managed company alive if it’s not creating value and drawing customers?

But Warren isn’t really concerned about businesses failing. She’s worried about the ones that succeed despite operating in ways that she doesn’t like. What she really wants to is put the federal government in a position of evaluating and approving how companies grow. She wants to substitute the decisions of people who run businesses with the prejudices and preferences of people who think like she does. And she wants to use the courts to enforce her ideas of how corporations should be managed.