Consumer Advocate Raps Business Ethics in '90s

ALMOST 30 years after his famous book "Unsafe at Any Speed," Ralph Nader is still campaigning for the American consumer.

He spoke last week on consumer rights in real estate at a conference sponsored by the Massachusetts Homebuyers Club. In his typically pointed fashion, Mr. Nader described the $20-billion real estate brokerage industry as a "remarkably resilient cartel ... that is not going to give up its privileges and prerogatives easily."

In an interview, Nader commented more broadly about consumer rights in the '90s:

What are the prospects for consumer rights under the Clinton administration?

I think the level of enforcement will go up for existing standards and regulations - just how sharply remains to be seen. But I think we'll see more vigorous enforcement of antitrust rules, in product safety, at the Federal Trade Commission, Food and Drug Administration, and the Federal Communications Commission.

Looking back over the last 12 years, what areas suffered most under Reagan and Bush?

The [regulatory] agencies were almost effectively shut down.

People went to work, they got their paycheck, but very little happened.

For the first six years [under Reagan], for example, there wasn't a single drinking water safety standard issued, even though Ford and Carter people had laid the groundwork for a raft of control standards on various chemicals contaminating the drinking water supply.

What I'm most concerned about is whether Clinton and Gore develop a philosophy of consumer protection the way they [have said they] intend to do for environmental protection.

Do you expect the Clinton administration to pursue liability law reform?

They'll make some attempts on medical malpractice. I hope it's not to restrict but to expand the rights of victims.

Medical malpractice reform means different things to different people. To doctors it means restricting their liability. To consumers, it means getting the 9 out of 10 victims of malpractice who receive no justice at all to receive some justice.

I don't think the whole [former vice president Dan] Quayle philosophy of federally regulating state juries and judges is going to be given the time of day.

Do you see improvement in ethics and standards of big business over the last 30 years?

They talk about it. But the real key is not the ethical talk of corporations but the performance.

Where do you see changes?

Wherever the law has worked. Cars are safer today. There is less lead contamination in the air because of tetraethyl lead [levels] going down in gasoline. [There's] a heightened appreciation of nutrition for millions of people. And asbestos is on its way out.

There are examples like that, but I don't think it has developed a new institutional base within corporations except for a group that participates in what is called the Social Venture Network. These are socially responsible, relatively new companies such as Esprit [Clothing], Patagonia, Ben & Jerry's, and Body Shop.

For example, Esprit sends a questionnaire to its suppliers asking about energy conservation behavior, indicating that it wants to buy from suppliers that are ecologically sensitive.

You don't see any progress in big companies?

No. They don't have any institutional continuity. Once in a while you get a good CEO. But if the successor doesn't have the same inclination, the push declines. That's very episodic. The institutionalization of corporate accountability has not progressed very far.

What about the rights of real estate consumers?

The average homeowner is probably the least organized segment of our consumer economy.

The real estate industry has had a remarkably resilient cartel operating over these years; resilient because it has been able to withstand repeated exposures in the press....

Part of the resiliency comes from a network of very comfortable reciprocal relationships between the various parties beyond the real estate agent involving banks, insurance companies, title insurance companies, attorneys - the whole settlement network.

Why haven't consumer rights developed in this area?

The real estate cartel is extremely well organized. It has political action committees.... It knows what it wants. It knows how to get it. It knows how to influence regulatory agencies.... That's why I think the buyer-broker movement will probably be the most significant single factor in crumbling the tight-knit real estate cartel.