Elizabeth Warren knew her fellow passengers were going to look at her funny. She also knew that flying around the country with a bulky photocopier strapped into the seat next to her would cost a fortune in extra airfare. But this was 1981. Photocopying was still a relatively new and expensive technology. Considering the huge number of court documents Warren and her colleagues were going to be printing out, paying to use the courthouse copy machines was simply out of the question. The only cost-effective workaround was to buy one of their own — they nicknamed it R2D2 — and lug it around as they traveled from city to city collecting data.
Warren was a young visiting professor at the University of Texas Law School, and she and her collaborators, Jay Westbrook and Teresa Sullivan, were studying bankruptcy. About three years earlier, a new federal law had made it easier for Americans in grave debt to hit the reset button on their obligations. While some applauded the law for providing a fresh start to families and businesses in financial distress, critics thought it offered dangerous encouragement to irresponsible borrowers, who would rack up extravagant debts and duck out from under them. Warren, Westbrook, and Sullivan wanted to know something very concrete: What kinds of people were actually filing for bankruptcy in the United States, and why were they doing it?
In addition to amassing court records, the three professors interviewed judges, lawyers, and debtors from around the country who had filed for bankruptcy. The majority of people seeking debt relief, it turned out, were not opportunists or deadbeats, but members of the middle class who had been suddenly driven to financial ruin as a result of life-changing circumstances like illness, job loss, and divorce. The findings challenged popular assumptions about bankruptcy in America, and proved a potent corrective to reports commissioned by the credit industry about its widespread abuse. They also made Warren realize that bankruptcy wasn’t about the margins of society: It was a lens you could use to understand what was happening to the American middle class.
At 62, Warren is now a professor at Harvard Law School, a leading advocate for reforming the financial industry, and the top Democratic contender for next year’s Senate race against Massachusetts Senator Scott Brown. Since her first foray into bankruptcy law 30 years ago, Warren has built up a national profile as an outspoken critic of banks and credit card companies, and played a central role in establishing a new federal agency designed to protect consumers from predatory lending practices.
It’s not much of an exaggeration to say that everything Warren stands for in the popular imagination — above all, her conviction that the system is stacked against the interests of regular people — has roots in her academic career, an improbable journey that began shortly after she graduated from Rutgers School of Law in 1976. Since that time, Warren has made her name in the academy as a passionate proponent of the kind of on-the-ground research she, Westbrook, and Sullivan conducted with the help of their photocopier. Unlike many other legal scholars, who tend to think about the law in terms of abstract theory, logic, and precedent, the defining feature of Warren’s scholarly work has been the priority she places on studying how people actually respond to laws in the real world.
“She wants to know how things work,” said Robert Lawless, a bankruptcy scholar at the University of Illinois College of Law, who has coauthored several papers with Warren. “She’s always been someone who let the facts take her where they will.”
Warren’s approach has also drawn strong criticism in the academic world: Some scholars have questioned her data, and others consider her fundamentally wrong about how the law should work. Her position that the social outcomes of laws are more important than the principles and ideas they’re based on has not always been widely accepted in the legal academy, and has made her a polarizing and influential figure at Harvard and beyond.
More recently, Warren’s emphasis on evidence over theory has created an irony in her young political career: Though her political opponents have suggested that her Harvard credentials put her out of touch with American reality, Warren has spent much of her time in the ivory tower leveling the very same charge against some of its other inhabitants.
From the outside, bankruptcy may seem like an arcane and technical area of the law, and the fact is it’s not a particularly popular field in the legal academy. But those who do specialize in it, like Warren, see it as crucially important: For them, it represents a test of society’s values, a breakdown that forces a host of difficult question about fairness, responsibility, and the role of government. Whose interests should come first? Is settling debts more important than considering other costs to society?
In the summer of 1987, Warren waged a high-profile public debate on just those questions with another young bankruptcy specialist named Douglas Baird. The debate was published in the University of Chicago Law Review, a top-tier journal that put Warren’s ideas in front of the biggest audience she’d ever had, and established her as a rising star in the field.
At issue was a fundamental question about the purpose of bankruptcy law in the business world that continues to divide Warren and Baird — as well as the rest of the bankruptcy field — to this day. Baird’s view is that bankruptcy exists for one reason and one reason only: to create an orderly way for creditors who are owed money to line up for repayment, and to maximize the amount each of them ends up recovering. Warren argues that bankruptcy should be wielded as a much more flexible tool — and that while paying back creditors should certainly be one of its goals, its primary function is to grant second chances to struggling debtors and failing businesses that would otherwise have no hope of survival.
Her position is rooted in a progressive strain of legal thinking that society as a whole suffers when debt obligations are so absolute that there’s no possibility of a fresh start for anyone. When a company is forced to shut down, Warren points out, it affects not just its creditors, but the employees and business partners that have come to rely on it for their livelihood. In light of that, Warren believes that bankruptcy judges shouldn’t always give top priority to the interests of creditors — that in many situations, they should make it easier for companies to reorganize and live another day for the greater good of society, even if it means creditors get back less of what they’re owed.
For Baird — now also a leading bankruptcy scholar, who has served as dean of University of Chicago School of Law — this amounted to an error in thinking about the entire bankruptcy process. The job of the court isn’t to ensure fairness, in his view: It’s to work with the rules it’s given. If we want to see employees and business partners as creditors, that’s fine, but society needs to pass a law that gives them those rights. As far as Baird is concerned, Warren is naive if she thinks that leaving it open to the judge will ensure the best outcome; as he put it in a recent interview, her vision of bankruptcy amounts to “everybody holding hands and singing ‘Kumbaya.’”
Like many of Warren’s harshest critics, Baird identifies with an intellectual movement in legal scholarship known as “law and economics,” which emerged in the 1970s and quickly came to dominate American law schools. Proponents of law and economics argue that laws should be evaluated in terms of the incentives they create. A law making it too easy for debtors to get bailed out and be given a second chance, as they see it, will encourage reckless behavior; by the same token, an orderly bankruptcy process in which creditors can expect as much of their money back as possible will lead to lower interest rates and more ready lending.
Warren seems to find that logic arrogant, and she questions the ability of academics to accurately predict how any given law will play out in practice. “Reality is a lot messier than these theories, and I always thought that you had to be focused on what was happening in reality — not just what theory said might happen,” she said in an e-mail last week. “Writing laws based on an abstract theory, rather than reality, is a dangerous undertaking.”
The debate with Baird made Warren the standard-bearer for this pragmatic point of view, and her profile in the legal academy started to expand. Shortly after the debate was published, she left Texas and joined the faculty of the University of Pennsylvania Law School. In 1990, she and Westbrook and Sullivan were awarded the American Bar Association’s prestigious Silver Gavel Award for “As We Forgive Our Debtors,” their book on bankruptcy in America that synthesized the research they’d been doing since 1981. Soon Warren was being called on to testify before Congress about bankruptcy and the consumer credit industry, and in 1993, she was invited to join an influential body of elite judges, scholars, and lawyers who advise Congress on bankruptcy law. In 1995, she was appointed the Leo Gottlieb Professor of Law at Harvard, where she is currently the only tenured member of the law faculty to have received her training from an American public university.
Warren has spent her career trying to coax more legal scholars to conduct the kind of hands-on research that has driven her own work, which remains relatively rare in the field. Warren and Westbrook ran an annual symposium together for five years aimed at helping young, empirically minded bankruptcy professors sharpen their research methods and get feedback on their results. Thanks in part to those meetings, which some attendees compare to creative writing workshops, Warren now has a formidable network of acolytes at universities around the country. She has also attracted critics of the technical side of her work: Todd Zywicki from George Mason University Law School and Robert Rasmussen from the University of Southern California Gould School of Law have both questioned her quantitative methods and taken issue with her use of statistics.
Warren has also exerted her influence through a series of textbooks that reflect her belief that people who study law should deal with reality instead of theory. Unlike the vast majority of textbooks used in law schools, hers are structured not around significant legal opinions written by judges but on detailed, hypothetical scenarios that law students might actually face as lawyers. (Warren herself practiced law only briefly, after her graduation from Rutgers.) “What we do is try to describe the system as it operates, not the system as it appears through legal opinions,” said Lynn LoPucki, a professor at the UCLA School of Law who has coauthored two textbooks with Warren.
Warren’s belief that the law is not just about logic and reasoning but grappling with its real-world effects is also reflected in her approach to teaching. According to Katherine Porter, a former student who is now a law professor at University of California Irvine, Warren makes a point of being open about her opinions when she’s in front of a class, instead of remaining steadfastly neutral, as is customary in law schools. “The traditional model in law is that you’re not supposed to reveal your own opinions to your students,” said Porter. “You’re supposed to teach them to argue one point, then you flip and you teach them to argue the other side. It doesn’t matter what’s right, it just matters if they can make the argument.”
Last summer, Porter said, Warren told her that she felt increasingly unwilling to take that approach — that she didn’t want to give her students the impression that “there is nothing right and wrong in the world.”
Though politics might seem like a natural step for a scholar focused on real-world impact, Warren says it was not always an arena she was eager to enter. Her first interaction with the political system came in 1995, when she reluctantly agreed to compile an extensive report on the status of American consumer bankruptcy law for Congress.
At that time, credit card companies and banks were spending millions of dollars lobbying Congress to tighten bankruptcy laws and make it harder for families to file. Warren, who had just joined the Harvard faculty, initially hesitated about getting involved, but was ultimately convinced by the commission’s chairman, Michael Synar, who for 16 years had been a congressman in Warren’s home state of Oklahoma. Synar promised Warren that if she handled the substance of the report, he would “take care of the politics.” When Synar died of cancer less than a year later, Warren says, she considered quitting the commission, but worried that if she did, “it would be taken over by the credit industry.”
“I had to make a choice — recede into the academic world, or wade into politics,” Warren said. “I thought that if I didn’t do it, no one would. So I did it. It was one of the hardest things I’ve ever done because so many people made arguments that were simply unsupported by the data on who goes into bankruptcy and why.”
Ultimately, Warren’s recommendations — laid out in a 1,300-page report and submitted in 1997 — were largely ignored by Congress, and in 2005 President George W. Bush signed a bill aimed at curbing supposed abuses of the system by imposing stricter rules about who could declare bankruptcy and under what circumstances. According to Melissa Jacoby, who worked with Warren on the commission report and is now a professor at University of North Carolina School of Law, the experience amounted to a “political education” for Warren. “We saw it doesn’t happen by itself,” Jacoby said. “That if you let the natural processes do what they do, some really great ideas end up on the floor.”
Three and a half years later, in the wake of the 2008 financial collapse, Warren was made chair of the congressional panel that reviewed the government’s use of TARP funds to bail out the financial industry. Warren used her position to publicize what she saw as the government’s irresponsible coddling of big banks, conducting severe and YouTube-ready interviews with officials like Treasury Secretary Timothy Geithner. Logging long hours in Washington, she pressed Congress and the Obama administration to launch a new government agency designed to protect consumers from predatory lending. The result was the Consumer Financial Protection Bureau, and though Warren was ultimately passed over for the job of leading the agency, the experience dramatically changed her public profile, and cemented her transformation from professor into legitimate political star.
Colleagues who have known Warren throughout her long career in the law are watching with interest but not necessarily surprise. Though professors have a very mixed track record when it comes to running for office, it’s fair to say that most of the ones who have tried did not spend their early years lugging a photocopier from one courthouse to the next.
“If you look back at her career,” said Porter, “there’s always been this real interest in how law gets made, and how law works in the real world, and how policy makers figure out whether something’s broken — and if it is, how to fix it.”