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The Great American Gyp

Last January a confidential nationwide survey by the Opinion Research Corporation spread considerable alarm among its corporate subscribers. The poll concluded “that seven Americans in ten think present Federal legislation is inadequate to protect their health and safety. The majority also believe that more Federal laws are needed to give shoppers full value for their money.” To many businessmen, this finding merely confirmed what speakers had been telling them at trade gatherings during the previous year—that consumers were beginning to fall prey to “consumerism.”

Consumerism” is a term given vogue recently by business spokesmen to describe what they believe is a concerted, disruptive ideology concocted by self-appointed bleeding hearts and politicians who find that it pays off to attack the corporations. “Consumerism,” they say, undermines public confidence in the business system, deprives the consumer of freedom of choice, weakens state and local authority through Federal usurpation, bureaucratizes the marketplace, and stifles innovation. These complaints have all been made in speeches, in the trade press, and in Congressional testimony against such Federal bills as truth-in-lending, truth-in-packaging, gas pipeline safety, radiation protection, auto, tire, drug, and fire safety legislation, and meat and fish inspection.

But what most troubles the corporations is the consumer movement’s relentless documentation that consumers are being manipulated, defrauded, and injured not just by marginal businesses or fly-by-night hucksters, but by the US blue-chip business firms whose practices are unchecked by the older regulatory agencies. Since the consumer movement can cite statistics showing that these practices have reduced real income and raised the rates of mortality and disease, it is not difficult to understand the growing corporate concern.

That the systematic disclosure of such malpractice has been so long delayed can be explained by the strength of the myths that the business establishment has used to hide its activities. The first is the myth of the omniscient consumer who is so discerning that he will be a brutal taskmaster for any firm entering the market. This approach was used repeatedly to delay, then weaken, the truth-in-packaging bill. Scott Paper Co. ran an advertising campaign hailing the Amerian housewife as “The Original Computer”: “…a strange change comes over a woman in the store. The soft glow in the eye is replaced by a steely financial glint; the graceful walk becomes a panther’s stride among the bargains. A woman in a store is a mechanism, a prowling computer…. Jungle-trained, her bargain-hunter senses razor-sharp for the sound of a dropping price….” John Floberg, Firestone’s General Counsel, has been even more complimentary, arguing that consumers can easily discriminate among 1,000 different brands of tires.

However, when companies plan their advertising, they fail to take advantage of the supposed genius of the consumer. Potential car buyers are urged to purchase Pontiacs to experience an unexplained phenomenon called “wide-tracking before you’re too old to know what it is all about.” Sizable fees are paid to “motivation” experts like Ernest Dichter for such analysis as this: “Soup…is much more than a food. It is a potent magic that satisfies not only the hunger of the body but the yearnings of the soul. People speak of soup as a product of some mysterious alchemy, a symbol of love which satisfies mysterious gnawings…. The term ‘pea soup’—mystery and magic—seem to go together with fog. At the same time we can almost say soup is orgiastic. Eating soup is a fulfillment.”

A second myth is that most American businesses perform honorably but are subjected to underserved notoriety because of a few small, unscrupulous merchants and firms. This notion is peddled by so-called consumer protection agencies as well as by the business-dominated Better Business Bureaus. But the detailed Congressional hearings on drug hazards, unsafe vehicles, vicious credit practices, restraints on medically useful or dollar-saving innovations, auto insurance abuses, cigarette-induced diseases, and price-fixing throughout the economy have made it clear that this argument will not hold up.

Most misleading of all is the myth that irresponsible sellers are adequately policed by local, state, and Federal regulatory agencies. Years ago, corporations learned how to handle these agencies, and they have now become apologists for business instead of protectors of the public. First, the agencies are made to operate on a starvation budget. The combined annual budget of the Federal Trade Commission and the Antitrust Division of the Justice Department in 1968 is $23 million, the highest amount yet appropriated. With this sum, they are supposed to collect data, initiate investigations, and enforce the laws dealing with deceptive and anticompetitive practices of a $850 billion economy.

Secondly, political patronage has undermined local and state consumer protection agencies; it has, for example, helped to make the Federal Trade Commission as ineffectual as it is. Third, business lobbying—including campaign contributions, powerful law firms, trade associations, and public relations—works against vigorous enforcement. Finally, so many regulatory officials resign to go into high-paying jobs in the industries they were once supposed to regulate that these government posts are viewed as on-the-job training by cynical appointees.1 The Federal Aviation Agency, Interstate Commerce Commission, and Federal Communications Commission all carry on a tradition that inhibits officials from action and attracts appointees who are temperamentally reluctant to act.

The increasing irrelevance of these older agencies was made apparent by the unprecedented consumer legislation enacted under the Johnson Administration. After the dismal spectacle of the cigarette labeling act of 1964—which foreclosed action by the states and the FTC in return for a paltry warning on the package that could serve as a company’s defense in liability suits—Congress passed a string of important bills and has other legislation near passage. A shift of responsibilities for consumer protection to the Federal government now seems to be taking place: state and local governments have for years defaulted on these obligations to the consumer.

In no other period of history have the safety and prices of marketed products and services received remotely comparable legislative treatment. Sensing this climate, President Johnson has allowed his consumer adviser, Betty Furness, to speak openly to business groups. In 1964, her predecessor, Esther Peterson, could not get White House clearance even to make a public statement about rigged odometers which misled motorists about the accuracy of mileage traveled, enriched car rental companies to the amount of $4 million a year, and encouraged automobile sales. In 1968 Miss Furness was urging appliance manufacturers to tell their customers how long they can expect their products to last. This spring, President Johnson established the post of Consumer Counsel in the Justice Department—a first small step toward the creation of a Federal office which would have powers to intervene in cases before the courts and regulatory agencies as the representative of consumer interests.2 In July, Vice-President Humphrey said he favored enlarging the counsel’s powers to include making complaints about dangers to public health. He also became the first government official to endorse public disclosure of information about consumer products now in the files of the General Services Administration and the Department of Defense. These agencies test hundreds of consumer products—from light bulbs and bed sheets to washing machines—in order to determine which have the best value. But they have refused thus far to release the data that would rank products by quality—a refusal naturally supported by the business community.

The business world, meanwhile, has become increasingly adept in dealing with the rising pressures for consumer legislation. Tutored by their well-connected Washington lawyers, the large corporations and their trade associations can sense the critical moment at which it is wise to stop opposing a bill and begin to cooperate with Congressional committees in order to shape legislation to their liking. For example, after opposing the passage of any auto safety bill whatever, the auto manufacturers relented in the spring of 1966 and hired Lloyd Cutler, an experienced Washington lawyer, who succeeded in weakening the disclosure provisions of the bill and in eliminating all criminal penalties for willful and knowing violations of the law.

Although consumer measures may be weakened in this way, they do at least commit the government to the idea of consumer protection and they lay the groundwork for the stronger legislation that may be feasible should the consumer movement gain more strength. The attack on corporate irresponsibility which produced the recent flurry of legislation in Congress has not, it must be said, been the work of a broad movement but rather of tiny ad hoc coalitions of determined people in and out of government armed with little more than a great many shocking facts. They have gotten important support from Senator Warren Magnuson, Chairman of the Senate Commerce Committee, whose interest in consumer problems set in motion a little-noticed competition with the White House to promote legislation.

What has taken place during the last few years may be seen as an escalating series of disclosures. The charges made by independent Congressmen and people like myself almost always turn out to be understatements of the actual conditions in various industries when those industries are subsequently exposed in Congressional hearings and investigations. As these charges get attention, demands for new legislative action increase. This, at least, has been the case with the exposure of defects in vehicles, industrial and vehicle pollution, gas pipelines, overpriced or dangerous drugs, unfair credit, harmful pesticides, cigarettes, land frauds, electric power reliability, household improvement rackets, exploitation in slums, auto warranties, radiation, high-priced auto insurance, and boating hazards. How many people realized, for example, that faulty heating devices injure 125,000 Americans a year or that poorly designed stoves, power mowers, and washing machines cause substantial injury to 300,000 people annually? Or that, as Rep. Benjamin Rosenthal recently revealed, the food rejected by Federal agencies as contaminated or rotting is often re-routed for sale in the market? These abuses are now starting to be discussed in the press and in Congress.

One result of the detailed Congressional hearings has been a broader definition of legitimate consumer rights and interests. It is becoming clear that consumers must not only be protected from the dangers of voluntary use of a product, such as flammable material, but also from involuntary consumption of industrial by-products such as air and water pollutant, excessive pesticide and nitrate residues in foods, and antibiotics in meat. A more concrete idea of a just economy is thus beginning to emerge, while, at the same time, the assortment of groups that comprise the “consumer’s movement” is moving in directions that seem to me quite different from the ones that similar groups have followed in the past. Their demands are ethical rather than ideological. Their principles and proposals are being derived from solid documentation of common abuses whose origins are being traced directly to the policies of powerful corporations.

This inquiry is extending beyond the question of legal control of corporations into the failure of business, labor, and voluntary organizations to check one another’s abuses through competition and other private pressures. It is becoming apparent that the reform of consumer abuses and the reform of corporate power itself are different sides of the same coin and that new approaches to the enforcement of the rights of consumers are necessary. There are, I would suggest, at least ten major forces or techniques that now exist in some form but greatly need to be strengthened if we are to have a decent consumer society.

  1. Rapid disclosure of the facts relating to the quantity, quality, and safety of a product is essential to a just market place. If companies know their products can quickly be compared with others, the laggard will be goaded to better performance and the innovator will know that buyers can promptly learn about his innovation. On the other hand, buyers must be able to compare products in order to reject the shoddy and reward the superior producer. This process is the great justification for a free market system. Manufacturers try to avoid giving out such information and instead rely on “packaging” or advertising. Auto companies refuse to tell the motorist the safety performances of his car’s brakes and tires, and concentrate on brand-names—cougar, Barracuda, Marauder—and vehicle “personality” “Mustang makes dull people interesting….” From cosmetics to soaps and detergents, the differences emphasized are emotional and frivolous and have no relation to functions. This practice permits the producer with the largest advertising budget to make matters very difficult for a smaller competitor or potential entrant into the market who may have a superior product. The anti-competitive effects of such advertising led Donald F. Turner, the former head of the Antitrust Division of the Justice Department, to suggest that the government subsidize independent sources of consumer information. Senator Philip Hart has gone a step further in proposing a National Consumer Service Foundation to provide product information to consumers at the place of purchase. Computers could help to assemble such information cheaply and quickly. One can, for instance, imagine machines dispensing data on individual products at shopping centers, a plan which Consumer’s Union has begun to study.

  2. The practices of refunding dollars to consumers who have been bilked and recalling defective products are finally becoming recognized as principles of deterrence and justice. More than six million automobiles have been recalled since September, 1966—the date of the auto safety law. The Food and Drug Administration now requires drug companies to issue “corrective letters” to all physicians if their original advertisements were found to be misleading. Nearly thirty such letters have been sent out by drug companies during the twenty months of FDA action. The threat of liability suits and the willingness of the press and television to mention brand and company names in reporting on defects are causing companies to recall products “voluntarily” even where no law or regulation exists. Earlier this year, for instance, Sears-Roebuck recalled some 6,000 gas heaters after public health officials warned of lethal carbon monoxide leakage. After similar warnings by US Public Health officials and the threat of disclosure by a major newspaper, General Electric made changes in 150,000 color TV sets which had been found to be emitting excessive radiation. Some insurance companies are beginning to offer “defect recall” insurance.

The duty to refund remains even less well recognized than the duty to recall a product because of defects. Orders to “cease and desist,” the usual decree of the Federal Trade Commission after it catches swindlers, at best stop the defrauder but do not require him to pay back the funds. Without this sanction, a major deterrent is lost. The mere order to “go and sin no more,” which replaces it, is easily evaded.

The only enforcement action made by the FTC is pertinent here. For thirty years, the Holland Furnace Company used scare tactics and routinely deceived the public. Its salesmen were encouraged to pose as “safety inspectors” and were trained to be merciless: one elderly and ailing woman was sold nine new furnaces in six years, costing a total of $18,000. Following up on complaints beginning in the Thirties, the FTC secured a stipulation from the company that it would stop its misleading advertising. This had little if any effect. A cease and desist order was entered in 1958 but it was not until January, 1965, that the company was fined $100,000 for violating the order and an ex-president was sent to jail. At that point, the Holland Furnace Co. decided to file a petition for bankruptcy. But as Senator Warren Magnuson said: “In the meantime, Holland Furnace at the height of its business cost the American public $30 million a year.” The FTC’s ponderous procedures and anemic enforcement powers (it has no power of preliminary injunction, no criminal penalties, and no power of its own to fine, assess, or award damages) encourage the unscrupulous businessman to continue his abuses; if he is caught later on, he will merely be told to stop.

Two developments in recent years have strengthened private actions against malpractices by established corporations with large assets. The first is the growing practice of filing treble damage suits against violators of antitrust laws. In the early Sixties, corporate and government customers of G.E., Westinghouse, and other large companies collected about $500 million in out-of-court settlements after these companies and their officers were convicted for carrying on a criminal antitrust price-fixing conspiracy. Although such punitive damage payments are tax-deductible as “ordinary and necessary business expenses,” the deterrent is an effective one. Cases brought by both private and government procurement agencies have multiplied in many other industries recently—from drugs to children’s books—and these will increase, especially with tougher antitrust action by the Justice Department and by the states.

The second development is in the use of “class actions” in which suits are filed on behalf of large numbers of people who have been mistreated in the same way. In modern mass merchandising, fraud naturally takes the form of cheating a great many customers out of a few pennies or dollars: the bigger the store or chain of stores, the greater the gain from gypping tiny amounts from individuals who would not find it worthwhile to take formal action against the seller. Class actions solve this problem by turning the advantage of large volume against the seller that made predatory use of it in the first place. Poverty lawyers, supported by the US Office of Economic Opportunity, are just beginning to use this important technique.

A case of great potential significance for developing broad civil deterrence has been brought in New York City against Coburn Corp., a sales finance company, by two customers who signed its retail installment contracts. They are being assisted by the NAACP Legal Defense and Educational Fund. The plaintiffs charge that Coburn violated Section 402 of the New York Personal Property Law by not printing its contracts in large type as specified by law. They are asking recovery of the credit service charge paid under the contracts for themselves and all other consumers similarly involved. If the plaintiffs win, consumers in New York will be able to bring class actions against any violations of law contained in any standard form contracts.

  1. Disputes in courts and other judicial forums must be conducted under fairer ground rules and with adequate representation for buyers. Here the recent appearance of neighborhood legal service attorneys is a hopeful sign. These poverty lawyers—now numbering about 2,000 and paid by the Office of Economic Opportunity—are representing the poor against finance companies, landlords, auto dealers, and other sellers of goods and services. Because of their work, the law of debtors’ remedies and defenses is catching up with the well-honed law of creditors’ rights that generations of law students studied so rigorously. These lawyers are bringing test cases to court and winning them. They are gradually exposing the use by slum merchants of the courts as agents to collect from poor people who are uninformed or cannot leave their jobs to show up in court. For the first time, poverty lawyers are challenging the routine contract clauses that strip the buyers of their legal defenses in advance, as well as those involving illegal repossession, unreasonable garnishment, undisclosed credit, and financing terms, and a great many other victimizing practices.

But even many more poverty lawyers could handle only a few of the cases deserving their services. What is important is that recent cases are documenting a general pattern of abuses and injustices in the legal system itself. This is beginning to upset influential lawyers; it may prod law schools to more relevant teaching as well as guide legislatures and courts toward much-delayed reform of laws, court procedures, and remedies. At the same time, wholly new and more informed ways of resolving conflicts are being considered—such as neighborhood arbitration units which are open in the evenings when defendants need not be absent from their work. However, if such developments seem promising they must not obscure the persisting venality of the marketplace and the generally hopeless legal position of the consumer who is victimized by it.

  1. The practice of setting government safety standards and periodically changing them to reflect new technology and uses is spreading, although it is still ineffective in many ways. Decades after banking and securities services were brought under regulation, products such as automobiles (53,000 dead and 4 1/2 million injured annually), washing machines and power lawn mowers (200,000 injuries annually), many chemicals, and all pipeline systems did not have to adhere to any standards of safety performance other than those set by the companies or industries themselves. With the passage of the auto safety law in 1966, other major products have been brought under Federal safety regulation. To avoid continuing a piecemeal approach, Congress in 1967 passed an act establishing the National Commission on Product Safety to investigate many household and related hazards, from appliances to household chemicals. Moreover, the Commission must recommend by 1970 a more detailed Federal, state, and local policy toward reducing or preventing deaths and injuries from these products.

The Commission’s recommendations will probably go beyond household products to the problem of a safer man-made environment. So far, most state and Federal efforts to set meaningful safety standards and enforce them have failed miserably. The only organized and effective pressures on the agencies responsible for setting standards have come from the same economic interests that are supposed to be regulated. Two illustrations of this failure have been the flammable fabrics act of 1953 and the oil pipeline safety act of 1965. In both cases, little has happened because the laws have not been administered. It took three-and-a-half years before the Federal government even proposed oil pipeline standards, and these were taken almost verbatim from the pipeline industry’s own code. Similarly, when the General Accounting office recently reviewed the enforcement of the pesticide law by the Department of Agriculture it found that repeated mass violations of the laws between 1955 and 1965 were never reported to the Department for prosecution. This is a typical example of how consumers are deprived of legal protection in spite of a statute intended to protect them.

  1. If the government is to impose effective standards, it must also be able to conduct or contract for its own research on both the safety of industrial products and possible methods of improving them. Without this power, the agencies will have to rely on what is revealed to them by industry, and their efforts will be crippled from the start. They will, for example, be unable to determine whether a better vehicle handling system is required or to detect promptly the hidden dangers in apparently harmless drugs. The government could also bring strong pressures on business by using its own great purchasing power and by developing its own prototypes of safer products. The existing safety laws, however, do not even permit the government to find out quickly and accurately whether industry is complying with the law. The National Highway Safety Bureau, for example, has little idea whether or not the 1968 automobiles meet all the safety standards since no government testing facilities yet exist.

But full enforcement of the law also depends on the existence of effective penalties, and in this respect the recent safety laws are feeble, to say the least. There are no criminal penalties for willful and knowing violation of the auto safety and gas pipeline laws; nor have criminal penalties been written into other bills about to be signed into law, such as the radiation control bill. The civil fines are small when considered against the possibility of violations by huge industries producing millions of the same product. Of course, the Washington corporation lawyers who lobby to water down the penalties in these safety laws have no interest in the argument that stronger sanctions would not only act as a deterrent to industry but make enforcement itself cheaper.

  1. In the ideology of American business, free competition and corporate “responsibility” are supposed to protect the consumer; in practice both have long been ignored. Price-fixing, either by conspiracy or by mutually understood cues, is rampant throughout the economy. This is partly revealed by the growing number of government and private antitrust actions. Donald Turner, the former head of the Antitrust Division, has despaired of effectively enforcing the law against price-fixing with the existing manpower in the Justice Department. Price-fixing, of course, means higher prices for consumers. For example, the electrical price-fixing conspiracy, broken by the Justice Department in 1960, involved not only G.E., Westinghouse, Allis Chalmers, but several small companies as well; the overcharge to the direct purchasers of generators and other heavy duty equipment was estimated at more than a billion dollars during the ten-year life of the conspiracy that sent several executives to short jail terms.

Even greater dangers arise when the failure of large industry to complete prevents the development of new products that might save or improve the lives of consumers. When such restraint is due to conspiracy or other kinds of collusion, it should be the task of antitrust enforcement to stop the practice of “product-fixing.” Traditional antitrust enforcement has been slow to grasp the fact that the restraint of innovation is becoming far more important to big business than the control of prices. New inventions—steam or electric engines, longer lasting light bulbs and paints, and cheaper construction materials—can shake an industry to its most stagnant foundations. For eighteen months the Justice Department presented to a Los Angeles grand jury its charges that the domestic auto companies conspired to restrain the development and marketing of vehicle exhaust control systems. When and if it files its complaint, a pioneering case of antitrust enforcement in a health and safety issue could reveal much about this as yet unused weapon for public protection.

Ideally, one of the most powerful forces for consumer justice would be the exercise of corporate responsibility or private “countervailing” and monitoring forces within the corporate world. Unfortunately for believers in a pluralist economic system, recent decades have shown that the economics of accommodation repeatedly overwhelms the economics of checks and balances.

The casualty insurance industry is a case in point. Logically it should have a strong interest in safer automobiles. In fact it has chosen to raise premiums instead of pressuring the auto industry to adopt safety measures that have been available for a long time. The casualty insurance industry has not demanded legislation to improve the design and inspection of motor vehicles; nor has it encouraged the rating of vehicles according to their safety. It has been equally indifferent to the need to reform methods of fire prevention (where the US is far behind Japan and England) or standards of industrial safety and health. What the industry has done instead is to spend large sums on advertising assuring the public it is concerned about the consumer safety it has declined to pursue in practice.

  1. Professional and technical societies may be sleeping giants where the protection of the consumer is concerned. Up to now, such groups as the American Society of Mechanical Engineers, the American Chemical Society, and the American Society of Safety Engineers have been little more than trade associations for the industries that employ their members. It is shocking, for example, that none of these technical societies has done much to work out public policies to deal with the polluted environment and with such new technological hazards as atomic energy plants and radioactive waste disposal. Except in a few cases, the independent professions of law and medicine have done little to fulfill their professional obligations to protect the public from victimization. They have done less to encourage their colleagues in science and engineering to free themselves from subservience to corporate disciplines. Surely, for example, the supersonic transport program, with its huge government subsidies and intolerable sonic boom, should have been exposed to careful public scrutiny by engineers and scientists long before the government rather secretively allowed it to get under way.

The engineers and scientists, however, had no organization nor procedure for doing this. None of the professions will be able to meet its public responsibilities unless it is willing to undertake new roles and to create special independent organizations willing to gather facts and take action in the public interest. Such small but determined groups as the Committee for Environmental Information in St. Louis, headed by Professor Barry Commoner, and the Physicians for Automotive Safety in New Jersey have shown how people with tiny resources can accomplish much in public education and action. If such efforts are to be enlarged, however, the legal, medical, engineering, and scientific departments of universities must recognize the importance of preparing their graduates for full-time careers in organizations devoted to shaping public policy; for it is clear that professionals serving clients in private practice will not be adequate to this task. Had such organizations existed two or three decades ago, the hazards of the industrial age might have been foreseen, diagnosed, exposed, and to some extent prevented. During the recent controversy over auto safety I often speculated that the same kind of reform might have occurred thirty years ago had a handful of engineers and physicians made a dramatic effort to inform politicians about scandals that even then took more than 30,000 lives a year and caused several million injuries. Instead the doctors were busy treating broken bones and the engineers were following corporate orders, while their technical journals ignored a major challenge to their profession. For all the talk about “preventive medicine” and “remedial engineering,” this is what is happening now.

  1. During the past two decades, the courts have been making important if little noticed rulings that give injured people fairer chances of recovering damages. These include the elimination of “privity” or the need to prove a contractual relation with the person sued; the expansion of the “implied warranty” accompanying items purchased to include not only the “reasonable” functioning of those items but also the claims made in deceptive advertising of them; and the imposition of “strict liability” which dispenses with the need to prove negligence if one has been injured through the use of a defective product. At the same time, the laws of evidence have been considerably liberalized.

This reform of the common law of “bodily rights”—far in advance of other common-law nations such as Great Britain and Canada—has been followed by some spectacular jury verdicts and court decisions in favor of the injured. These are routinely cited by insurance companies as a rationale for increasing premiums. The fact is, however, that these victories still are rare exceptions, and for obvious reasons. Winning such cases requires a huge investment in time and money: the plaintiff’s lawyers must collect the evidence and survive the long and expensive delays available to the corporation defendant with its far superior resources. But now the rules give the plaintiff at least a decent chance to recover his rights in court or by settlement. It remains for the legal profession to find ways to cut drastically the costs of litigation, especially in cases where a single product, such as a car or drug, has injured many people.

However, the law of torts (personal injuries) still does not protect the consumer against the pollution of the environment which indiscriminately injures everyone exposed to it. Pollution in Los Angeles is a serious health hazard, but how may the citizens of that besmogged metropolis sue? A group of eighty-eight residents of Martinez, California, is suing Shell Oil’s petroleum refinery for air pollution and its “roaring noises, recurring vibrations and frightening lights.” In an increasingly typical defense, Shell claims that it meets the state’s mild pollution-control regulation. But such standards are largely the result of political pressures from corporations whose profits are at stake. Thus, increasingly, justice in the courts must be paralleled by justice in the legislatures. However, there are some signs that the courts are beginning to take account of the right to a decent environment in cases against industrial pollutants. Last year, a lady in Pennsylvania recovered about $70,000 for injuries sustained from living near a beryllium plant which emitted toxic fumes daily. (The case is being appealed.)

  1. One of the more promising developments of the last two years is the growing belief that new institutions are needed within the government whose sole function would be to advocate consumer interests. As I have pointed out, the Johnson Administration has done no more than create earlier this year an Office of Consumer Counsel in the Justice Department—a post that has not yet begun to function. The Executive Branch is hostile to a proposal by Congressman Rosenthal and others for a new Department of Consumer Affairs on the Cabinet level. This proposal has been criticized by Federal officials on grounds that it would duplicate what government agencies are now doing. The fact is, however, that most of the government agencies that are supposed to be concerned with the health and safety of consumers are also promoting the interests of the industries that cause the consumer harm. The US Department of Agriculture represents the farmers and processors first and the consumers second—whether in controversies over the price of milk or over the wholesomeness of meat and poultry. The regulatory agencies themselves at best merely act as referees and at worst represent business interests in government.

Clearly it would be useful if a new bureau within the government itself could both expose these regulatory agencies and challenge them to take more vigorous action. Senator Lee Metcalfe has introduced legislation to create an independent US Office of Utility Consumer’s Counsel to represent the public before regulatory agencies and courts. This approach is different from that of Congressman Rosenthal and it remains to be seen which scheme can best avoid the dangers of bureaucratization and atrophy. What is not generally appreciated however is that if they are to succeed, such new governmental units will badly need the vigorous support of organizations outside the government which would have similar concern for the consumer and would also be able to carry on their own research and planning.

  1. I have already pointed out the need for independent organizations of professionals—engineers, lawyers, doctors, economists, scientists, and others—which could undertake work of this kind. But they do not as yet exist. Still, we can draw some idea of their potential from the example of people like Dr. Commoner and his associates who have managed to stir up strong public opposition to government and private interests while working in their spare time. Similarly, other small groups of professionals have saved natural resources from destruction or pollution; they have stopped unjust increases in auto-insurance rates; they have defeated a plan for an atomic explosion to create a natural gas storage area under public land, showing that excessive safety risks were involved.

Is there reason to hope that the high energy physicists who lobbied successfully for hundreds of millions of dollars in public funds might be emulated by other professionals seeking to improve the quality of life in America? Certainly there is a clear case for setting up professional firms to act in the public interest at Federal and local levels. While thousands of engineers work for private industry, a few hundred should be working out the technical plans for obtaining clean air and water, and demanding that these plans be followed. While many thousands of lawyers serve private clients, several hundred should be working in public interest firms which would pursue legal actions and reforms of the kind I have outlined here. Support for such firms could come from foundations, private gifts, dues paid by consumers and the professions, or from government subsidies. There is already a precedent for the latter in the financing of the Neighborhood Legal Services, not to mention the billions of dollars in subsidies now awarded to commerce and industry. In addition, groups that now make up the consumers’ movement badly need the services of professional economists, lawyers, engineers, and others if they are to develop local consumer service institutions that could handle complaints, dispense information, and work out strategies for public action.

Notwithstanding the recent alarm of industry and the surge of publicity about auto safety and other scandals, the consumer movement is still a feeble force in American power politics. The interests of consumers are low on the list of election issues; the government’s expenditures to protect those interests are negligible. Some would argue that this situation will inevitably prevail in view of the over-whelming power of American corporations in and out of government. But, as I have tried to show, new approaches to judging and influencing corporate behavior have begun to emerge in the last few years. It seems possible that people may begin to react with greater anger to the enormity of their deprivation—each year consumers lose half a billion dollars in securities frauds and a billion dollars in home repair frauds, to name only two of thousands of ways in which their income is being milked. The current assault on the health and safety of the public from so many dangerous industrial products, by-products, and foods has resulted in violence that dwarfs the issue of crime in the streets. (During the last three years, about 260 people have died in riots in American cities; but every two days, 300 people are killed, and 20,000 injured, while driving on the highways.) What the consumer movement is beginning to say—and must say much more strongly if it is to grow—is that business crime and corporate intransigence are the really urgent menace to law and order in America.

  1. 1

    The last two chairmen of the Interstate Commerce Commission are now President of the National Association of Motor Business Carriers and Vice-President of Penn-Central. Both industries are supposedly regulated by the ICC.

  2. 2

    The first appointee to this job was Mr. Merle McCurdy who died in May. His successor has not been appointed.

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