Overcoming the Oligarchy - creating a consumer-driven economy

Progressive, The, Jan, 1999 by Ralph Nader

The struggle for consumer justice is, in many ways, the most comprehensive of economic reform drives. If the government does not enforce adequately the consumer protection laws covering food, drugs, autos, anti-trust, and occupational safety and health, then consumer well-being is diminished.

If workers are unable to earn a livable wage for their families, consumer well-being is diminished.

If the environment is polluted or damaged, consumer well-being is diminished.

If all Americans do not have health insurance, consumer well-being is diminished.

If the media are controlled by a few media barons, they will not regularly expose corporate crimes, fraud, and abuses, and consumer well-being is again diminished.

We need to decide which yardsticks we are going to use when we measure the health of our society. When Federal Reserve Chairman Alan Greenspan testifies that the economy could hardly be better, he is using a corporate yardstick, which emphasizes profits and the stock prices he is so intent on boosting. Notice how he ignores other yardsticks: 25 percent child poverty (by far the highest in the Western world), 80 percent of workers are earning less than they were in 1973 when you adjust their wages for inflation, and consumer debt is at record levels while the GNP and corporate profits are rising to new highs year after year.

Throughout this century in America, progress for consumer justice has come when we held up more important standards. At the turn of the century, activist women started the consumer movement, aided by great muckraking articles in the new women's magazines like the Ladies' Home Journal and McClure's about price-gouging by monopolies like Standard Oil and dishonest labeling of medicines by pharmaceutical companies. The populist-progressive surges in American politics further highlighted the dangers from phony medicines, contaminated foodstuffs, and the evils of price-rigging and monopolistic practices. This activism led to the creation of the Food and Drug Administration and the Federal Trade Commission.

After a quiet 1920s (recall Calvin Coolidge's "the business of America is business"), the 1930s saw a revival of consumer activism. Led by President Franklin Delano Roosevelt, who accused Big Business of being "malefactors of wealth," more regulatory agencies were established (covering banking, securities, and airline industries) and others strengthened. The Congress of Industrial Organizations got started and so did Consumers Union, both of which had a consumer/worker protection philosophy. Consumers Union urged and informed customers to take working conditions of employers into account when deciding from whom to buy their products.

Nonetheless, consumer rights and protection remained society's poor cousin--rarely on any electoral agenda, comparatively bereft of theoretical development by scholars, ignored by data gatherers within the government, and avoided as a steady reportorial beat by newspapers.

Until the 1960s. In 1962, Rachel Carson's Silent Spring exposed to the public the peril that pesticides were causing to the environment and to consumers' health. In 1965, my book Unsafe at Any Speed pressed for democratizing technology that protects the safety of motorists. These books--along with a sharp expansion of consumer reporting by some enterprising journalists and a few influential Congressional hearings--helped usher in a new set of consumer laws, regulatory agencies, and private-sector consumer groups.

The sweep of change was dramatic. Under pressure from a reawakened consumer movement, the government imposed tougher standards on motor vehicles, meat and poultry inspection, flammable fabrics, product safety, and drinking water. The government also set occupational safety and health regulations, product recall and labeling obligations, and some state-of-the-art safety standards for products like cars. When issued in a timely way and enforced, safety regulations saved many lives, prevented many injuries, and spared enormous expense. In 1965, for example, the fatality rate per 100 million vehicle miles traveled was about 5.5; in 1997, it was about 1.7. More people turned to nutritious diets or stopped smoking as those incremental consumer advances informed and aroused the public.

In the early 1970s came the notorious memorandum by Lewis Powell, then a corporate attorney in Virginia, to the business lobby. After noting that the pressures for corporate accountability had reached new heights, Powell (who would later become a Justice of the Supreme Court) urged a large counterattack. He advised business to expand corporate-funded "think tanks" and beef up lobbying and political activity.

It took a few years before the leaders of Big Business got their propaganda and political machines geared up, but then they were rolling. The oil crisis and inflation helped turn the tables in their favor. Global capital mobility and weaknesses in labor law diminished the power of the trade unions. The elections of Nixon, Reagan, and Bush congealed the corporatist character of the federal government. An acquiescing Bill Clinton followed suit. (I call him George Ronald Clinton because many of the regulatory agencies under his regime are as bad, if not worse, than they were under his predecessors.)