Planet Money - The birth of the modern consumer movement

Episode Date: May 3, 2024

Today on the show, the story of the modern consumer movement in the U.S. and the person who inspired it: Ralph Nader. How Ralph Nader's battle in the 1960s set the stage for decades of regulation and sparked a debate in the U.S. about how much regulation is the right amount and how much is too much. This episode was made in collaboration with NPR's Throughline. For more about Ralph Nader and safety regulations, listen to their original episode, "Ralph Nader, Consumer Crusader."This Planet Money episode was produced by Emma Peaslee and edited by Jess Jiang. The Throughline episode was produced by Rund Abdelfatah, Ramtin Arablouei, Lawrence Wu, Julie Caine, Anya Steinberg, Casey Miner, Cristina Kim, Devin Katayama, Peter Balonon-Rosen, Irene Noguchi, and fact-checking by Kevin Volkl. The episode was mixed by Josh Newell.Help support Planet Money and get bonus episodes by subscribing to Planet Money+ in Apple Podcasts or at plus.npr.org/planetmoney.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

This is Planet Money from NPR. You know how it seems like just about every day there's some sort of new product recall? Toyota recalling 1 million vehicles worldwide over a potential airbag issue. The FDA is reporting another baby formula recall. Some of Boeing's 737 MAX 9 planes are grounded right now, triggering cancellations nationwide. The idea is if a product is faulty, the government should intervene and keep it from the market. This is the result of the modern day consumer advocacy movement. This movement started decades ago with Ralph Nader.

He's well known for his presidential run in the 2000 election, but back in the 60s, he was a young lawyer who was trying to make sense of a pretty significant problem. I lost a lot of friends in car crashes. They were killed or they were permanently disabled. It's far, far worse then than it is today. Fatal car crashes were nearly five times more common back then. And that didn't make sense to Nader.

I kept thinking of people who could be living productive lives today and who were killed in totally survivable crashes. You know, I began looking at the cars and how they were crushed in. What Ralph Nader found kicked off a movement. And that movement triggered a push and pull and a flurry of questions that we are still grappling with today. Questions about how much government regulation we want in markets,

what that regulation does and doesn't do for us, even questions about the ways we go about getting the government to respond to calls for regulation. Hello and welcome to Planet Money America Baris. Our colleagues at NPR's history podcast through LINE have done some reporting about the birth of the modern consumer advocacy movement. And we wanted to share some of that reporting with you. Today on the show, how one man's 60s era battle set the stage for decades of regulation and sparked a debate in this country about how much regulation is the right amount and how much is too much. The story has faulty cars, alleged temptresses, and a fateful softball game. We're going to do something a little different today and play you a couple excerpts from

the Throughline podcast. But first, we wanted to set the stage a little. It's the 1960s and cars have become a central part of American life. People use them to commute, go on family road trips, even just to hang out at the drive-in movie theater. And Ralph Nader, a new skeptical lawyer, had noticed that there were a lot of deadly car accidents. He started sifting through court documents and studies.

He found that for decades, doctors and researchers knew that the cars themselves were unsafe, and they had recommended adding features to make cars safer. Things like seatbelts, padded dash panels, rollover bars. Car makers would sometimes experiment with adding those features into prototypes, but then not put them into the cars available on the market. Ralph believed they were designing for style and cost, rather than safety.

He put everything he found into a book. Unsafe at any speed, the designed in dangers of the American Automobile. For the rest of this story, we're gonna hand it over to our friends at Thru Line. I'm Randa Aded-Fattah. And I'm Ramtin Arab-Louis. The book opened with the case of one car in particular.

You are about to meet a true international beauty. Corvair. Nucorvair was a unique design because it had its engine in the rear. Someone once said, you were the bumper on Nucorvair. It would veer out of control and roll over and kill people. Publicly, General Motors had nothing to say. But the allegations hit hard because GM was a titan. At the time the book was published, they were the world's largest car manufacturer,

responsible for nearly half of all U.S. automotive sales. We reached out to General Motors for comment on this episode, but did not receive a response. Years later, a government study found that the Corvair wasn't any more dangerous than other similar cars. Nader disputed the study. But by that time, there was no turning back the movement

Nader had started. In response to the criticism, GM created a position for coordinator of auto safety. But Nader's book wasn't just about exposing a problem with the Corvair or even with General Motors. It was about revealing failures across the entire auto industry. It didn't take long for unsafe at any speed to start drawing the attention of important people in the capital, including a young woman who would be instrumental in turning Ralph's words into action.

My name is Joan Claybrook, C-L-A-Y-B-R-O-O-K. At the time, Joan was in Washington, D.C. on a fellowship working with James A. Mackey, a U.S. representative from Georgia. He gave me Ralph Nader's book, Unsafe at Any Speed, which had just come out a month before. The book hit home for Joan. My boss had a Corvair, and she had a car crash shortly after I got to Washington. She was very badly injured.

Joan knew that Nader's allegations against the auto industry were monumental, and Representative Mackey tasked her with tracking down Nader and getting him into the office for a discussion. When he walks in, he's a towering presence. He's six feet four and lanky. But when he sits down…

He's very shy. Unless you ask him something, he's not going to interrupt you or start the conversation. And Mr. Mackey was a very talkative Southerner. And so he'd talk for about 45 minutes. Just a straight monologue. And then he looked at his watch and he said, oh my goodness, I have to go to a meeting in 15 minutes. Mr. Nader, what should we do?

And so Nader set his piece. Write a bill with teeth that wrangles this wild west auto industry and saves lives in the process. And with that, their work together really began. And so did the pushback. General Motors decided this was a great threat. They had been unleashing private detectives month after month, following me everywhere. Nader suspected they were wiretapping his phone.

He says he'd get strange calls in the middle of the night threatening and harassing him. They used ex-FBI agents often for their so-called investigation of critics. They tried to seduce me with young ladies. They followed him into the Safeway. I would be shopping. And he was area of the cookie counter, and he loved sweets. And this woman approached him and said he he like to come up to her apartment? Another time a young lady came up and she said you look like a studious fellow. We're forming a study group to study foreign affairs. How would you like to join us? And he said no thank you. A private

detective who investigated Nader later denied making any attempt to put him in a compromising position with these women. But he did admit to surveilling Nader and trying to dig up dirt on his private life. There were just endless attempts to kind of document that he was a bad person or he was taking money from somebody to do this. The press got wind of the story along with Congress. And so Senator Rubenstein decided to have a public hearing. And I was invited to testify.

I don't want to have a climate in this country where one has to have an ascetic existence and steely determinations in order to speak truthfully and candidly and critically of American industry. And he commanded the president of John Amotus, whose name was Roach. He asked Mr. Roach, told Mr. Roach to come and testify. Roach got up and said that when he first heard of the allegations against GM, he was shocked. He immediately ordered a statement to be released denying GM's involvement. But he discovered, quote, To my dismay, we were indeed involved.

Let us assume that you found something wrong with his sex life. What would that have to do with whether or not he was right or wrong on the car there? Nothing. Senator Ribicoff declared in front of the Senate committee that Ralph Nader was squeaky clean. He said, quote, They put you through the mill and they haven't found a damn thing out against you. I want to apologize here and now, the members of this subcommittee and Mr. Nader. This public apology couldn't have been a better press moment for Nader's crusade. People were outraged that a major American corporation

would attempt to intimidate a whistleblower. GM's plan to discredit Nader had backfired. And within a few short months, the National Traffic and Motor Vehicle Safety Act passed into law. This law created new federal standards that would include provisions for safety glass, dual braking systems, safety tires, and it required manufacturers to let consumers know

of safety-related defects in cars. And Ralph didn't stop with this one win. He had received a settlement from General Motors and used that money to fund more investigations. He recruited law students. They were dubbed Naders, Raiders. They decided to look into government agencies and they had a series of successes, like getting lead out of gasoline and paint.

They lobbied for the Clean Air and Clean Water Acts. And across the nation, all kinds of consumer advocacy groups cropped up. But just as this movement was growing, so too was skepticism. For example, the famous economist Milton Friedman, he had some strong thoughts on Ralph Nader and his approach to regulating consumer products. Have you ever met Ralph Nader? Of course, I've debated Ralph Nader many times. And I assume you feel that...

What is it that troubles you about him? I think he's wrong. The heart of the debate between Ralph Nader and Milton Friedman was this. What is the right amount of regulation? Ralph Nader said consumers need the government to protect them. But Milton Friedman argued consumers don't need all this regulation. That consumers would not buy cars that would kill them, which would incentivize car makers to make safer cars.

He argued the market would self-regulate. And he argued too much regulation could stifle creativity and it could harm the economy. A new movement was forming, one that would compete with the consumer advocacy groups that Ralph Nader inspired. That's after the break. Hey, Adrienne Ma here. Millions of Americans are behind on saving for retirement and face

the possibility of working longer. In our latest bonus episode, it's my extended conversation with economist Teresa Ghilarducci, who's written a new book on retirement in the U.S. We talk about where the current system falls short and policy ideas she says could help workers struggling to retire. You can check that out if you're a Plenty Money Plus listener. If that's you, thanks. And if it's not, it could be. You get bonus content, sponsor-free listening, and support the work of NPR. Just go to plus.npr.org.

The debate between Ralph Nader and Milton Friedman between more and less regulation intensified in the 1970s. And not everyone was on board with the growing consumer movement and Ralph Nader's vision. Here's the next part of the story from the Thru Line team. I think you see an immediate backlash to him from corporate interest. This is Paul Sabin. He's a professor of history and American studies at Yale University.

Business leaders and, of course, the car industry had long been wary of Nader. I have some very serious reservations about some of his positions and some of the levels of expertise that he professes to have. But as the power of the consumer movement grew, a conservative political backlash started to take shape, spearheaded by a soon to be U.S. Supreme Court justice named Lewis Powell. There's a very famous memo that gets written by Lewis Powell, the Powell memo.

Lewis Powell, who becomes a justice. But at the time time he is working with the Chamber of Commerce and he publishes this sort of confidential memo at the time, which later gets leaked, in which he is warning of these threats on the horizon and Nader is very prominent in that. Perhaps the single most effective antagonist of American business is Ralph Nader, who thanks largely to the media, has become a legend in his own time and an idol of millions of Americans.

The Powell memo is really a calling to action to conservatives and to business that they need to develop an ideological counterbalance to this new public interest and citizen movement. Business must learn the lesson long ago learned by labor and other self-interest groups. This is the lesson that political power is necessary, that such power must be assiduously cultivated, and that when necessary, it must be used aggressively. It's the summer of 1976. Democratic presidential candidate Jimmy Carter, a self-proclaimed consumer advocate, is playing a game of softball with family, secret service agents, and Nader is appointed to be the umpire.

Ralph Nader. And Nader's behind the base, you know, in a suit and in a tie, jacket and tie, you know, calling balls and strikes and things like that. Nader had traveled down to Georgia to outline what he thought needed to be done to further consumer rights. Number one on that list, create a consumer protection agency. Carter declares that he wants to be the great representative of the consumer. And Nader, you know, supports him and is very excited.

So back to the ballgame. Carter doesn't always agree with Nader's calls. It's a spirited game. And in many ways, it's a symbolic one, too. Is Nader going to be an umpire or is he going to be a player? You know, so you're going to join the administration or is he going to stay on the outside watching over the administration and judging it? And this was a real question. A few months after their softball game in Georgia, Jimmy Carter wins the presidential election. At the election celebration, he promised to be a president for the people.

If we could have a government as I've said a thousand times as good as our people are, that's all we can hope for and that's all we can expect and that's enough. We're going to have a great government, a great nation and it's because of you, not me." And it looked like a real win for the consumer rights movement. Many former Nader's Raiders actually joined Carter's administration. But not Nader. He would have easily had a high level appointment in the Carter administration. He decides he's

going to be an umpire. He believes in the permanence of this whole sector that he's been involved in creating and they need to stay outside the government and they need to watch over the agencies and hold even their allies accountable. Former allies like Joan Claybrook, who he publicly accused of going too easy on the car industry's rollout of airbags. He blasted me, having betrayed my own personal standards. And so I didn't talk to Ralph for quite some time after that. Nader wasn't going to hold back against friends or foes.

He was still fighting for the consumer. And his number one goal was to finally get the consumer protection agency he'd been fighting for for years created. This little agency that could take other regulatory agencies to court and make them change their behavior, make them go from inaction to action,

or make them strengthen weak standards into stronger standards. And it would be the voice and the muscle of the consumer movement. The build created had come close several times, but never quite made it through. The hope was that Carter would be able to create it had come close several times, but never quite made it through. The hope was that Carter would be able to push it through. But unfortunately, the crown jewel of the consumer movement never made it into law. In 1978, the effort to create the Consumer Protection Agency came to a grinding end. People who want to work but can't find jobs are part of

today's other bad economic news. By the late 70s, early 80s, the political climate was beginning to change as high inflation, unemployment, and gas shortages rattled the country. Isn't this disgusting? Why doesn't anybody contact the president? Why is he letting this happen to us? So you have inflation and issues about employment and you know these things start to get blamed on environmental regulation and safety. If only we would get rid of these regulations, you know, things would be cheaper, the economy would be doing better.

Basically it boils down to the country is going to the pits. Carter had lost the trust of the people, and Nader's call for more regulations wasn't resonating anymore. In their stead was a new voice. Many Americans today, just as they did 200 years ago, feel burdened, stifled, and sometimes even oppressed by a government that has grown too large, too bureaucratic, too wasteful, too unresponsive, too uncaring

about people and their problems. In 1981, when Ronald Reagan became president, he immediately started to roll back many of the regulatory protections that Nader and the consumer movement had fought for, including gutting the EPA's budget and refocusing OSHA to benefit small businesses rather than workers. I put a freeze on pending regulations and set up a task force under Vice President Bush to review regulations with an eye toward getting rid of as many as possible. The heyday of the consumer movement was over. To this day, we're still engaging in this debate that Ralph Nader and the consumer movement started.

Over the last few decades, the pendulum has swung back and forth on how much to regulate consumer products. In the mid-70s, corporations ramped up their lobbying efforts. Lobbying expenditures increased from tens of millions of dollars to billions of dollars a year. These days, corporations spend two and a half billion dollars on lobbying annually. And as that pendulum swings back and forth, more regulation, less regulation, we can look back on this one historical moment

when this debate kicked off. ["Planet Money"] kicked off. This Planet Money episode was produced by Emma Peasley and edited by Jess Jang. Big thanks to the ThruLine podcast team. Their episode has so much more on Ralph Nader and the history of the consumer advocacy movement. It's called Ralph Nader Consumer Crusader. Go check it out. ThruLine has a fun way of doing their credits,

so we'll let them take it from here. I'm Randabdel Fattah. And I'm Ramtin Adablui. This episode was produced by me. And me and. Laurence Wu. Julie Kay. Anya Steinberg.

Casey Miner. Christina Kim. Devin Kadiyama. Peter Valanon Rosen. Irene Noguchi. Fact checking for this episode was done by Kevin Voelkel. The episode was mixed by Josh Newell. Thanks for listening.