Visionary

NADER'S NINETIES
How To Put The Punch Back In Politics
by Ralph Nader


William Gosset, former vice-president of Ford Motor Company, said it over thirty years ago: the corporation is the "dominant institution" in our society. Today that institution is busily expanding its privilege and power through the use of computers, satellites, video imagery, "psychographic" profiling of consumers, and state-of-the-art advertising, public relations, and political influence.

"Of America's 250 most profitable corporations in 1988, 45 reduced their tax liability to less than 10%, 6 received refunds."

The future has not arrived, however, for activists who would try to balance that corporate power and let citizens have a more democratic role in society. While corporations master the tools of the Twenty-First Century, their opponents are stuck with the political equivalent of picks and hoes, nineteenth-century tools that are becoming more rusty and antiquated as the nineties rev up.

There's no trouble finding a need for a new politics. The needs have been cited so often as to constitute a litany: growing poverty, layoffs and cutbacks, crumbling infrastructure, homelessness, child exploitation, stagnant wages and family income, drugs and crime, adult illiteracy, schools in chaos, taxpayer bailouts of corporate crooks, triple deficits falling behind foreign competitors, environmental pollution, health-care costs, consumer abuse, land erosion, discrimination against color, gender, and age, inequitable taxation, government waste, fraud, abuse, and everywhere rigidity. Not many people would deny that these problems are widespread. Yet not a single mass movement worthy of the name exists to address the concentration of power that breeds these injustices.

"Between 1981 and 1987, the Justice Department received 10,723 merger notifications, and challenged only 26."

There's no difficulty in seeing the potential strength arising out of such frustration -- one can find it in, of all places, Eastern Europe. While some on the Left worry that those revolts might have been in favor of "consumerism" rather than some supposedly purer goal, such motivation should be a source of inspiration. Eastern Europeans were protesting that their governments were not delivering the goods, services, and opportunities that their monopoly of power had been promising all these years. They were fighting for what is an American ideal, if not a reality. They wanted the consumer, not the producer, to be king.

Here in the United States, the nineties promise to be a time of pent-up consumer and citizen frustration, which, if joined to a new, modernized assortment of political tools, could fuel a new political movement for real democracy. How do we get from here to there? To answer that, we need first of all to revisit the Nineteenth Century.

WE OWN IT; THEY CONTROL IT: Citizen revolt these days amounts to occasional marches where people come to voice their anger and leave litter and little other impact behind. There is nothing to compare to the farmers' drive in Texas during the late 1880s, which signed up 250,000 farmers and led to the early stage of the thirty-year progressive revolt -- still the country's most fundamental political and economic reform movement since the Constitution was ratified. And these farmers did it largely on foot and with pamphlets. How, without today's communications and transportation facilities, did the farmers manage to cover so much ground, create so many lasting institutions, and elect so many state legislators, governors, members of Congress, and almost the president of the United States? Because they owned what they controlled -- the land. And they controlled what they owned -- the land. And they aggregated their vote around specific agendas designed to limit the power of the railroads, banks, and absentee "Eastern" financial moguls.

The defense of the family farm bought time, staving off the giant "trusts" while industrial labor and the regulatory state took hold as countervailing forces to tame some excesses of these corporations. Farmers established their own credit institutions, built producer cooperatives, enacted direct democracy reforms like the referendum process, and strengthened the laws against monopoly and marketplace fraud.

However, for stamina and singleness of purpose, there has been no match in U.S. society for the modern corporation as a political, economic, and cultural force. The capacity to co-opt, absorb, or intimidate its adversaries has become ever more refined and successful in the past half century, especially since the onset of the Nixon years. Few would deny the decline in the strength of organized labor and most federal regulatory agencies to check these companies, for it is dramatic indeed.

The clearest manifestation today is the growing corporate control over other people's property. In the next decade, we risk the increasingly rapid separation of real asset Ownership from real asset control. Consider that:

The public owns one third of the United States ---the federal lands largely out west and in Alaska -- and companies, mostly multinationals, control these rich resources of amber, oil, gas, copper, iron, zinc, etc., through leaseholds. And taxpayers put up the money to make private profit possible. The cost to taxpayers to facilitate private cutting of virgin lumberlands, for example, is more than ten times what they get back in royalties -- mills pay a few dollars for a five-hundred-year-old tree, while taxpayers foot the bill for roads that make cutting possible. Under the Mining Law of 1872, companies are still able to take control of hard-rock mining resources discovered on federal lands and keep the entire profits. Third World nations demand tougher royalty agreements from U.S. oil companies than our own government does.

The public owns the government's research findings that taxpayers fund, but corporations control the patents and profits emerging from such research. The National Cancer Institute, which developed the application of the drug AZT against AIDS, allowed Burroughs Wellcome Company to obtain an exclusive patent to market the medicine without any price restraints or royalties. A year's treatment with AZT costs $2,800 and recently ran as high as $8,000. Under Medicaid, the taxpayers are paying twice for a drug their taxes developed.

"The Alyeska corporate consortium has extracted $45 billion in net profit from its low-cost leases on Alaska's North Slope since 1970, but has spent almost no money to prevent or respond to a major oil spill there. Despite the "hardship" of the Valdez spill, Exxon's profits for 1989 exceeded $3.8 billion."

The public, say Congress and the Supreme Court, owns the airwaves; but the broadcasters control them. Workers own $1.7 trillion worth of pension monies; banks and insurance companies control their investment policies. Depositors and mutual-assurance policyholders own hundreds of billions of dollars in savings and insurance; management of these mutuals controls their disposition. It is obvious that the brokers of wealth scarcely care who owns the wealth, so long as they can get rich by controlling such assets. Meanwhile....

Citizens' hands are slipping off the levers of control over government. Voter turnout has been in a free-fall for twenty-five years, and most races aren't really races. In most congressional districts, incumbents run against little or no opposition at all. Taxpayers may revolt against tax rates every now and then, but they have virtually no say in how tax revenues are spent, wasted, or given away.

Indeed, politicians see their role as friends of sellers rather than consumers. They leap to help when faced with a case of a mismanaged or corrupt industry in need of aid, but rarely identify with the citizen who must pay. Meanwhile, the lion's share of campaign contributions comes from business, and their influence has become the stuff of legend on Capitol Hill and in state legislatures. In the name of helping "troubled industry," politicians have created a huge corporate welfare system composed of hundreds of billions of dollars in tax abatements, tax preferences, grants, inflated contracts, and a long menu of subsidies to industry and commerce. Bailouts, as in the up-to-$500-billion program for the savings-and-loan wreckage, may devour any "peace dividend."

Citizens are losing their influence in the marketplace. Parents, perhaps more than anyone, are acutely aware that they are losing control to the legal and illegal marketplace. Companies and other marketers of addictions have far more control over the time, values, and behavior of youngsters than parents do. Preteens and teenagers have become marketing mechanisms for sellers of tobacco, alcohol, drugs, clothing, medications, diets, mind-blowing music, wartoys, junk food, cosmetics, and other absorptions.

"The average American's health insurance costs have risen nearly 300% since 1980; more than 38 million Americans still lack adequate health care."

This is a young generation that has spent less time with adults, including their often absentee parents, than any generation in our history. It is also true that no generation has spent more time, through television, video games, and products, with the offerings of promoters. From infant formulas to teenage fashions, corporations are raising our children. From Kinder Care to McDonald's to HBO, the values desired by marketers are taking hold.

The boosters dismiss such criticism. What matters, they say, is economic growth and jobs; the American business economy has been a job machine. And hasn't the inflation-adjusted GNP almost doubled per capita since 1960? That question begs a more profound one: how many Americans can say that their standard of living has doubled since 1960? In many important respects -- the crime rate, education, health costs, real wages, public services-living standards for many citizens have fallen or stagnated.

"40% of the research money spent at large corporations in 1987 came out of taxpayers' pockets."

This decline in the actual standard of living corresponds to the dramatic loss of control by citizens in their roles as voters, taxpayers, consumers, parents and co-owners of property. It is conventional to describe this loss of control as inconsequential (the ruling stewards are doing all right), oppressive (the ruling oligarchies have taken away these participatory rights), or even consensual (people are not bothered delegating these powers to representatives, trustees, surrogates).

"Nuclear-industry R&D, infrastructure, and waste disposal are almost completely government subsidized. The nuclear industry now owes the government $9.6 billion for uranium enrichment. An industry-backed bailout, already Senate approved, would be second only to the S&L one."

CHANGING THE DEBATE. All these explanations, however, ignore the average American's natural inclination to want more democracy, not less, and to instinctively distrust power that is concentrated in a few hands. In order for a new politics to speak to these basics, we will have to change the terms of the current debate.

In the eighties, conservatives and all too many liberals arrived at a consensus that production is the engine of consumption (supply-side thinking). Moreover, they accepted that production should lead and shape consumption. Both conservatives and liberals make the unexamined assumption that production is king; production puts people to work so they can be more-liquid consumers. Therefore, the pre-eminent yardstick of a "healthy" economy -- the gross national product -- counts money but does not describe quality of life.

Here is the flaw in such thinking: it is the number of cars and drugs sold that is the measure, not what the auto and drug industries add and subtract from the transportation usage and health of people.

"Tobacco companies spent $3.25 billion on advertising in 1988, several hundred million of which was taxpayer subsidized."

The present seller-sovereign economy is quite different from the classical market model, where consumer sovereignty is supposed to reign supreme. A seller-sovereign economy includes monopolistic or oligopolistic sellers who are not confronted by consumers organized in monopolistic or oligopolistic modes. It is an economy where sellers work overtime to control their customers through unrebutted advertising, using sensual images or contrived complexity, rather than providing reliable, comparable information that nourishes rational choice. If consumer were really king, would there be shortages for millions of Americans in housing, food, and health care, while there are ample supplies of cosmetics, video games, soft drinks, and entertainment?

"Dependence, not critical capability, is what firms seek from consumers."

Government regulation, the liberal answer, is not enough of a solution to foster a consumer- sovereign economy. When it comes to regulating oligopolies, government invariably adopts the seller-sovereign priorities. Take the energy industry. If the consumer were valued, there would be much more pressure for energy efficiency-renewable, self-reliant, safer, and competitively priced energy. More highly valuing the energy seller encourages what we have today: more centralized energy, supplied by often interlocked sellers whose technologies create waste, pollution, disease, and political corruption. Exxon makes money when gas-guzzling motor vehicles are sold -- and the consumer loses money. Energy waste for the consumer equals energy profit for Exxon. If in the last fifty years the consumer value had the power to prevail, our nation would be humming along on one-third of the energy now used, with highly advanced passive and active solar energy.

"A common pharmaceutical- industry justification for increasing prices is the huge amount of money needed for R&D. But between 1982 and 1986, price increases for existing drugs generated additional revenues of $4.7 billion for 25 companies-which spent only $1.6 billion on R&D during that period."

How, apart from election day and its narrow choices, can the citizen balance the scales? There has been little in the regulatory laws to give consumers the power to initiate or challenge any of numerous economic and safety rules regarding food, drugs, transportation, communications, housing, banking, insurance, energy, health, and other services. Consequently, the administration of these laws ebbs and flows according to who is in office, which breeds poor agency morale and public cynicism.

A new politics, a populism for the nineties, could break out of the current producer-versus- government debate by identifying a new target: the corporate state's "transfer economy." Aided by the government, companies transfer their risks, failures, waste, and corruption onto the consumer with increasing ease. Where this is recognized, it often drives conservative and liberal groups into active alliances, crossing race and class lines. Such coalitions came forth in struggles against the Alaska gas pipeline, the breeder-reactor subsidy, and, most recently, California's insurance industry rip-off. In the new decade, more liberals and perhaps more conservatives will begin to view the megacorporations as principal subverters of the market-enterprise system.

"Since 1981, when the Clean Air Act became due for reauthorization, GM has spent over $1.8 million fighting clean-air legislation."

GETTING CONTROL BACK. The right to vote, the right to speak, the right to homestead 160 acres of farmland, the right to collective bargaining and social security, the right of judicial redress by consumers, have all expanded the frontiers of justice, opportunity, and well-being. Yet these rights need to be kept up-to-date. The right of freedom of speech has to be more elaborate in an age where the decibel imbalance is huge between a person on a soapbox and a broadcast commentator over television. The right to petition one's government must be modernized to give the consumer better leverage with utility companies, banks and insurance firms, cable companies, and pension trusts.

In short, it is time to bring the citizens' agenda into the Twenty-First Century, so that it can keep pace with the corporate agenda. We must create new democratic mechanisms by which citizens can make their will felt, and regain control of what they already own. Some new tools to fashion and fight for:

Let taxpayers sue. Today, the federal courts rarely grant taxpayers "standing to sue" so that they can plead their cases against corporate subsidies, loan guarantees, or giveaways. For example, why can't you, who foot the bill, bring suits challenging the endemic Pentagon procurement fraud, since Congress clearly is not willing or able to step up to the job?

Claim the airwaves. Although there is an abundance of available communications technologies, it will take a public-access drive to make them usable by the nation's people. For starters, Congress should establish an "audience network." Since public airwaves belong to the public, Congress would charter a nonprofit viewer and listener group and revert back to this organization (open to membership for five dollars a year) one hour of prime or drive time each day on each television and radio station. The audience network would use that time locally and nationally for a vast variety of consumer-informing subjects that are largely ignored by today's advertising-driven or corporate sponsored media monopolies.

"A Federal Reserve study found that banks make an average profit of 27% on checking and other non-interestbearing accounts. Nevertheless, almost all banks charge a service fee to cover the "cost" of handling checking accounts."

Self-power consumer groups. An idea called the "consumer checkoff" can revolutionize the consumer movement into voluntary, mass-based policy organizations with professional staff backed at the grass roots by active members. Periodically, citizens of Illinois find that a small, postage-paid envelope comes inside mailings from their state government. The envelope contains a stimulating headline and several paragraphs explaining why consumers should band together as part of the Citizens Utility Board. By joining the CUB, they can represent themselves with technical skills, public information, and political power, before all branches of government, on electric, gas, and telephone matters affecting them. Minimum dues are five dollars a year, and over 150,000 residential customers have chosen to join. Pressure from the Illinois CUB has helped pass utility-reform packages and save ratepayers $3 billion. More important over the long term, the group's meetings and activism are increasing knowledge and self-confidence among Illinois consumers.

The structure is in place for this form of advocacy in many areas. Legislatures can give consumer groups the right to insert their solicitation message in the billing envelopes or printed contracts of utilities, banks, insurance companies, auto companies, etc. The postal service could be required to deliver, free of charge, two envelopes a year inviting residential postal users to join their own advocacy group. National Park Rangers could hand visitors environmental consumer-group solicitations at the entrance kiosk.

Giving Americans more democratic muscle is not on the agenda of elected officials. Although these proposals cost taxpayers little or nothing to enact and implement -- since they are facilities open to voluntary membership and are self-financing -- they test well the depth of indenture into which legislators have fallen on behalf of their powerful patrons.

During the House banking committee's markup of the then $150 billion S&L bailout last year, we suggested to the members that they require the S&Ls to regularly insert a solicitation in their monthly deposit statement, inviting customers to join a congressionally chartered, nonprofit depositors' consumer group in each state. It was suggested that the least Congress could do was to empower these fully staffed action groups, funded by voluntary membership dues and controlled by depositors who join, so that this huge debacle will not recur. It would be no burden on the taxpayer, voluntary to join, and self-governing, yet the proposal introduced by Congressman Charles Schumer (D-NY) never even got out of committee.

The bailout bill passed both houses and was signed by President Bush as the first step in charging taxpayers, who had nothing to do with the S&L crimes and did not benefit from them, at least $3,200 each.

While it may not be surprising that elected and appointed officials show little interest in the consumer power agenda, it is astonishing how little attention is paid by the citizens' groups themselves. So absorbed are they in dealing with daily unjust incursions that they end up bringing obsolete hoes and picks to the fray. Working to update the tools of democracy does not naturally inspire the emotional fervor that specific, substantive conflicts, from students' rights to flag burning, possess. Yet without acquiring these tools, people can have the soundest grounds for demanding changes, but their voices will neither be heard nor heeded. We need to bring citizen democracy into the next century.

-- This article first appeared in Mother Jones with
additional research by Trey Simmons


Ralph Nader is America's most famous and effective social critic. "What sets Nader apart," writes The New York Times, "is that he has moved beyond social criticism to effective political action."

This crusading attorney first made headlines in 1965 with his book Unsafe at Any Speed, which resulted in a national uproar and the tightening of safety standards for the auto industry. Since then, Nader has played a key role in the passing of eight major federal consumer protection laws which have saved numerous lives and dollars. Groups founded or inspired by him are: the Center for Study of Responsible Law (home of "Nader's Raiders"), the Aviation Consumer Action Project, the Center for Auto Safety, the Clean Water Action Project, the Disability Rights Center, the Pension Rights Center, the Freedom of Information Clearinghouse, the National Insurance Consumer Organization, and the largest of them all -- Public Citizen (100,000 members), which includes Congress Watch, Health Research Group, Critical Mass Energy Project, Buyer's Up, and the Litigation Group.

Nader also helped establish the PIRGs -- Public Interest Research Groups -- the student-funded and controlled organizations which function on campus sites in 26 states. In 1980, Nader founded the magazine Multinational Monitor, and he recently co-authored the book Winning the Insurance Game. Nader's overriding concern and vision is presently focused on empowering citizens to create a government that truly responds to citizen's needs.

Copyright © 1996. The Light Party.

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