Ralph Nader Q&A: How Progressives and Libertarians Are Taking on Crony Capitalism and Corrupt Dems and Reps
"The total support of the military-industrial complex and empire by Barack Obama and Hillary Clinton is staggering," Ralph Nader tells Reason TV. And don't get him started on the 2000 election.
"Everybody has an equal right to run for election. We're either all spoilers of one another, trying to get votes from one another or none of us are spoilers. We're not second-class citizens because we're a Green Party candidate or a Libertarian candidate….The brass of these two parties is they control the election machinery so they keep you off the ballot, harass you, file a lawsuit, delay you, exhaust you."
Nader's latest book is Unstoppable: The Emerging Left-Right Alliance to Dismantle the Corporate State.
The longtime consumer activist, recidivist presidential candidate, and several-time host of Saturday Night Live talks with Nick Gillespie about what he sees as a new libertarian-progressive attack on crony capitalism, whether GM cars were ever any damn good, and why the Democrats still wrongly insist that he cost Al Gore the 2000 presidential election. Oh yeah, and that article of his Reason published in the early 1970s.
It's a wide-ranging, spirited, fun, and at times contentious conversation.
About an hour long. Produced by Joshua Swain.
Transcript below.
This is a rush transcript.
GILLESPIE: Hi, I'm Nick Gillespie with Reason TV and today I'm happy to say we're talking with the one and only Ralph Nader about his latest book Unstoppable: The Emerging Left-Right Alliance to Dismantle the Corporate State. Ralph, thanks for talking to Reason TV.
NADER: Thank you, Nick.
GILLESPIE: You were born in 1930.
NADER: 1934.
GILLESPIE: You are one of the most influential public policy advocates or social figures of the past 50 or 60 years, lets call it the post World War 2 era. You've been on Sesame Street, Saturday night live, the Ali g show, everything else. Your first big book was Unsafe at any Speed. In 1966, you followed that up with the NATO Report on the FTC, which might've been as influential in a lot of ways. You've created organizations like Public Citizen as well as all the PIRGs that college students especially know about. In Unstoppable, you write about what you call the emerging left-right alliance to dismantle the corporate state. Talk about corporatism, how do you define it, and why do you see the left and right coming together to say enough already?
NADER: Corporatism is a world-view that large corporations should manage our political economy, and they should strategically plan it and things will come out okay. It's part of the overall globalization which undermines local, state and national sovereignty and which pulls down economies to their lowest levels in countries overseas.
GILLESPIE: What's the kind of growth curve of corporatism? Is this something that in a lot of ways starts with the new deal and then extends into the post war era of the government or the state and corporation saying were going to work together to stabilize everything.
NADER: Well that's one—sort of an emergency partnership, but I think the marker was around 1979, when congressman democrat from California, Tony Cuello, persuaded the democrats that they could raise a lot of money from corporate sources just like the republicans, From then on, you can see the decline in public hearings, the corporate malfeasance. You can see the decline in enforcement of health and safety standards, doctorants (2:18?) like deferred prosecution. They never had to plead guilty – the corporations – they cut deals. And you see the enormous increase in PACS, commercial PACS, and political action committees.
GILLESPIE: And that's to lobby the government, to rig markets…
NADER: Right, and they're given to most democrats and republicans.
GILLESPIE: Do you see a strong difference or a meaningful difference overall between the Obama administration's policies and George W. Bush's? And is it continuity or is it rupture?
NADER: It's very much continuity. Obviously on social services there are differences—Medicare for example, Medicaid, and social security. However, on the power areas, is there much of a difference on militarization of foreign policy between bush and Obama? Is there much of a difference between bailing out wall street and perpetuating the corporate welfare state, which libertarians call Crony Capitalism? No. Is there much of a difference in the money in politics? Well, maybe in the Supreme Court there is, but you go up to Capitol Hill and there both dialing for dollars like crazy.
GILLESPIE: What did you think in 2008, just a couple weeks before the election, it was amazing to me when John McCain, you know, because a lot of people on the left and a lot of people on the libertarian end of the right, will say there's really not much difference. It was amazing in 2008 when John McCain suspended his campaign to come back and vote for TARP, which Obama also voted for, and it kind of seemed like a signal moment, a flare almost, that these guys are effectively very much alike.
NADER: They're very much invested in the corporate state. That's what corporatism is. Franklin Roosevelt in 1938 sent a message to Congress to set up an Investigative Commission on concentrated corporate power – it's called the TNEC. In the message, he said whenever the government is controlled by private economic power, that's fascism. Those are his exact words. Obviously, World War 2 gave fascism another dimension. But the combination of corporate and government power, so that government becomes basically a service an arrangement for corporations is what we call a corporate government, a corporate state, and what you call crony capitalism. And that's where the convergence of the left and right should focus on.
GILLESPIE: Ok, so let's get to a couple cases of that. But here is a specific example. Would you grant though that in a true free economy, one that is predicated upon individual buyers and sellers, could a company legitimately without using the state grow to a massive size where it controls 60-70 or more percent of the market? Or do you think by definition, any company that controls a certain percentage of a market needs to be regulated or could have only gotten that way because of regulation?
NADER: Well I think if they have a monopoly patent for example on a drug, they're gonna have a 100% of the market for 20 years. The other theme is they grow because they get huge amounts of tax payer funded research and development. So if you look at the major emerging industries – the biotech industry, the computer semi conductor industry, a lot of the pharmaceutical industry, the containerization industry. These are industries that grew as a result of free transmission of government research and development.
GILLESPIE: What's the percentage of that though? Because pharmaceutical companies, for example there's definitely some research that gets done at state funded universities or through government grants. But it's costing pharmaceutical companies a billion dollars in ten years to bring a drug to market. They're putting up virtually all of that and there's risk involved.
NADER: First of all, most of the important drugs have NIH research sponsored input. In fact, three quarters of the anti cancer drugs, or drugs like taxol for example—they're given to them essentially free and no reasonable price restraints.
GILLESPIE: So are you saying then if there is a certain percentage of free money or government supported research going into something, the government has the right to regulate that or what?
NADER: There's a right to get some perceived return for the taxpayer and there is no return.
GILLESPIE: But living longer or anything like that?
NADER: That's a good benefit that's why they do it. But for example with taxol in 2000, a woman with ovarian cancer wrote me and showed that she would have to pay $14,000 for six treatments to Bristol Myers Squibb well Bristol Myers Squibb got that right through the clinical testing for free from the NIH.
GILLESPIE: So what should she have had to pay? Or should she have not had to pay anything.
NADER: Well I believe that if the taxpayer pays for the intellectual property, for the assets, there should be reasonable price provisions. Because by the definition, the government is giving a monopoly to Bristol Myers Squibb.
GILLESPIE: We'll move to a separate area, but does that mean actually why don't we get rid of patents then? Or are you saying no one should have to pay more than $5,000 a year for any drug. Because I think there's a general sense of fairness that everyone would agree with, that if the government funds something that leads to something – and that I think is a more difficult thing to determine – then there should be some return. But then the question is if Bristol Myers Squibb is only going to get $5,000 a year from patients then there not going to do it, because it isn't worth their time.
NADER: Well it is worth their time because they didn't spend any money creating the drug and testing the drug. I think the patent is antiquated for drugs. They should get a reward, a monetary reward for creating the drug. The patent is just it's a parady situation. There's this Gilead science, which you've read about—they're charging now $1,000 a pill for six weeks.
GILLESPIE: But think about it, some drugs are worth that—if they're the only thing that might save your life. I mean we could agree that some things are worth paying $1,000 a shot for.
NADER: But if you run that through the economy, it's worth a million dollars for an ambulance – especially since government research helped make that possible.
GILLESPIE: Well let's talk about a place of convergence. Because your book is actually a map saying people on the right and people on the left across the political spectrum agree that no one but the direct beneficiaries really like corporate welfare and crony capitalism. You tell an interesting story in the book about how you helped push airbags into being. It actually started not through a government mandate, but you went and talked to the guy who purchased vehicles for the federal government. Talk a little bit about that process.
NADER: The government is a big consumer. It buys almost everything we buy – food, energy, transportation, plus missiles, which we don't buy.
GILLESPIE: Let's be clear though – the government buys a lot more prostitutes than I think you or I do.
NADER: (laughing) That's another issue… The agency is called the General Service Administration, so I learned that the agency buys about 45,000 vehicles a year for government employees to do their business. I went down, and lo and behold, this man was a libertarian, right wing, supporter of Reagan, a former parts dealer in New Hampshire.
GILLESPIE: So he was saying the government really shouldn't be buying much of anything and it should get the best deal.
NADER: That's right – save the taxpayer, save the lives, and it worked. He put out a bid and GM knew it was coming, so they accosted him at a social meeting, a gathering, and said you shouldn't do this. And he said well the customers always right. So Ford bid on 5,000 Ford Tempos to put airbags in and the rest is history.
GILLESPIE: Here is a question because I find that story and a lot of stories in the book just fascinating because I know you've worked with people like Grover Nordquist from American's for Tax Reform. We see this all the time especially on things like military spending, national surveillance, and civil liberties – huge convergence between the right and the left in a way that's genuinely different than 25 years ago. But then at some point if airbags make sense, why should they be forced on the auto industry, as opposed to wouldn't consumers, say nobody had to make VCRs mandatory or remote controls for VCRs mandatory – the market drove that. Isn't it enough of a demonstration project to say hey, here's a way you can save federal employee's lives and overall money, and why wouldn't that have worked in the general population.
NADER: It ended up working – there was a mandatory standard for airbags.
GILLESPIE: But I'm saying why make the standards mandatory?
NADER: Oh, because you want to save lives – police power. I mean why have police in towns? To save lives.
GILLESPIE: By the same token, it was not a recall of all cars that didn't have airbags, so we recognize that this is going to be phased in. What's wrong with allowing more of a voluntary, opt-in rather than mandating a perceived "this is the best way let's mandate it for everyone."
NADER: Because it saves lives. I mean it's like fire prevention codes. It's like having bridge standards.
GILLESPIE: I get all of that but we understand there's not always going to be a phase in. Because we don't actually say ok, when we up fire standards we don't tear down all the old buildings.
NADER: We can rely on the auto companies to coerce a phase in – then they'd keep delaying and delaying.
GILLESPIE: We'll talk more about the auto companies that are near and dear to your heart. You do not own a car?
NADER: No.
GILLESPIE: And is that because of the auto companies won't sell you one?
NADER: (Laughing) No actually if I bought a car they would advertise it.
GILLESPIE: That's true. So one of the things in the book, and to go back to this question f convergence which I think a lot of libertarians would be very interested in, and you've been working with various groups on things is that you revisit the agrarians of the 1920s and 30s – these are people on the old right, you have some kind words about Ludwig Von Mises in the book, saying that he is often misrepresented by what you would call corporate capitalists.
NADER: Yes and Frederick Hayek.
GILLESPIE: Even Marx, I mean it's clear that contemporary people who evoke them often distort them to their own purposes. Talk a little bit about what you find powerful about agrarians in particular because you spend a lot of time talking about people like Allen Tate, and a few others.
NADER: Well they were reporters, farmers, poets – people who would call themselves conservatives. They had a very sophisticated philosophy of power. First of all they believed in the first principle of capitalism, which is defied by Wall Street, which is if you own property, you should have some reasonable control. Whereas investors today own the corporations but they have very little control over the bosses and their pay. So what they argued was that the only way you could have a Democratic society is if you decentralize property ownership. In those days, they talked about land because small farmers were being overtaken by the large farms. But they also talked about shares, and they said look if we have shares in companies, we want to control it, and we should have decentralization of shares as well. The main thing about it is they defied the Marxists and the New Dealers. They felt that the New Dealers were ready to be taken over by the big corporations and the corporate state, which is what they feared.
GILLESPIE: You would agree that that effectively happened? I mean it's what's good for General Motors is good for the USA type of stuff.
NADER: And they are remarkably pressing. That's why it's such a fresh chapter in the book, because people say, "I had no idea that people actually did this."
GILLESPIE: Do you worry at all? Because I look back and there was a guy who was not an agrarian but talked in the 40s and 50s, Arthur Ekirch, a political scientist, who talked a lot about decentralizing power. That's the basic principle of classical liberalism, but the agrarians were very anti-capitalist, in the sense they tended to come from the South, most were overt racists, people like Allen Tate, a racial supremacist in a way that's not even conscionable today. But is there a problem in that they wanted to keep things decentralized in a way to preserve their status quo at the cost of our ancestors, people who were streaming over from the middle east, from southern Italy and southern Europe to cities, because cities and capitalism were the place where people had more opportunities. I mean do you worry about that?
NADER: They didn't mention African Americans except for sharecroppers who thought that it was an atrocity.
GILLESPIE: And they didn't want their sisters to marry one either.
NADER: Those were the times, right? And they didn't mention women, except in the book there is a woman who taught at Vassar (16:06?), who just ripped the hell out of the men, and went after the suffrage saying you freed us, and then you didn't follow up, and then the women didn't follow up – they were just like the men. They were breaking some of the boundaries of bigotry and prejudice.
GILLESPIE: Were you always into these guys and it's just you're talking about them more now or is it something that you discovered over the course of your career?
NADER: I discovered them in the course of this research for Unstoppable.
GILLESPIE: Before we move into other topics, let me you, and I'm thinking about this in terms of how can Ralph Nader make the best pitch to a libertarian audience. You talk in the book about workfare as Clinton era mischief. At a certain point, you attack people on the left as well as on the right for saying Clinton, because liberals did not look at the hard edges of social welfare programs and allowed them to get so bad that then they were going to be reformed but often times the reform was not particularly useful. You talk about workfare basically as a sop (17:18?) to corporate America. We can discuss that a little bit, and then you also say that about other types of things like people on the left didn't attack unions for being really repressive and suppressive of their own work. Talk a little bit about the idea that workfare was not a positive reform of the welfare system and what should have happened.
NADER: Basically, there weren't any jobs, and the idea of cutting a single mom off of $300 a month when there were really no jobs or she couldn't get transportation to go from the inner city to the suburbs.
GILLESPIE: So what do we do? Because one of the things that is interesting in the book is that you're not saying the status quo is preferable to what should be. It's clear that our social welfare spending, and I would include social security and Medicare in that, we have a system where if you're well connected politically and if you're wealthy, then you can get a lot of government money, and then it gets harder the less political power you have. What's a social welfare state that you would want to see implemented?
NADER: Look at this, Milton Friedman created the minimum income plan that Nixon adopted and proposed to Congress and Congress didn't pass it. That is a reflection of a long tradition of conservative philosophers, for example Frederick Hayek was opposed to Medicare and Medicaid because they weren't universal. He didn't like discriminatory service. He talked about social insurance, and these revered conservative philosophers, which are used by Congressman Paul Ryan and others, and misused – they actually believed in public works. They believed in social insurance. They believed basically in paying a decent wage. Adam Smith would say workers are the economy. How can you not pay them a decent wage?
GILLESPIE: Two things, and let's talk about the wages in a second because you're right about, you know, Friedman proposed a plan and it ended up in a very distorted way becoming the earned income tax credit, which does something different, you know – a guaranteed minimum income essentially or a negative income. Would Hayek say well Medicare is ok if everybody had it? Because it's already killing the country, it's already bankrupting the country. There's no way to control its costs, or is it that we need a true social safety net that would not be based on age, but based on need, and it would be universally available but it would be much smaller than it is now.
NADER: Well that's the principle of Medicaid, but we know how hard it is to even get on Medicaid if you're poor and you don't have children. Those are all administrative details that are very important but the overall principle is nobody should die because they can't pay.
GILLESPIE: What about the wages then? Because you attack Wal-Mart in the book. Wal-Mart, you say at one point, and I'm quoting, "Wal-Mart has been the leader with a low-wage policy it has mercilessly inflicted on its workers and its domestic producers." Talk about that and what are the effects of that?
NADER: There are about a million Wal-Mart workers who make less today than 1968, adjusted for inflation, because the minimum wage has been stagnant. It's now at seven and a quarter. If it were adjusted for inflation, they would be making about ten dollars and fifty cents. All right, we start with this – Costco starts at $11.50 an hour plus benefits.
GILLESPIE: How many people does it employ compared to Wal-Mart? You have to pay a membership fee just to get into Costco.
NADER: That's true.
GILLESPIE: So it's more expensive.
NADER: But there's a reason. It's not more expensive according to the CEO of Costco because they have far less employee turnover, they have more worker productivity, and he said it's the right thing to do. I said, "What do you mean?" He said, "Well, it stimulates the economy." Consumer demand stimulates the economy.
GILLESPIE: I'm thinking from the consumer point of view there's no question Costco, I mean it has a different set of items for sell and it's more expensive than Wal-Mart. You can go into Wal-Mart and get a shirt and a meal for a couple bucks. You have to pay $50-60 just to walk in the door at Costco.
NADER: But you see there are other factors here. Wal-Mart has basically told its supplier in the US if you can't beat the China price, shut down and go to China, we'll buy your products and ship them back here. Wal-Mart CEO makes $11,000 an hour eight hours a day, and you know that's Crony Capitalism with the Board of Directors, you know the rubber stamp Board of Directors. That's not a market, but here's what's really important here – in the last six or seven years, Wal-Mart has spent 51 billion dollars buying back its stock. Which really helps the Walton family of course. If they had decided to pay their workers with that 51 billion, which is not a very productive way to use capital, they would give them a three dollars and 50 cents an hour raise for all their workers. This is where they'd prefer to put their money. Now, where are the investors at Wal-Mart? They don't have any role in deciding…
GILLESPIE: Well, it's a publicly traded company.
NADER: Yeah, but the investors are powerless.
GILLESPIE: I don't necessarily disagree with the idea that investors don't do what we would like them to do or that they are fully disempowered. There are real questions, one of the people that you quote in the book at several places is David Stockman, who is a friend of Reason's, a fascinating person who does not fit into a traditional left-right spectrum, and there's more of him speaking up now. But Wal-Mart according to a 2005 study by the Brennan Justice Center, which is not a right wing organization or a Walton foundation – they said that the average worker at Wal-Mart was making $19,000 a year, which at that time in 2005, was more than the average worker at other discount retailers like K-mart and target. It was a little bit less than at a UFCW supermarket if you were in the union, but overall supermarket workers it was the same. So are they actually paying their workers less than what the market bears or are you saying the market is so rigged that we're getting these people on the cheap.
NADER: Well the latter. I don't know where Brennan got the data because we can't get that data…
GILLESPIE: They got it from a leaked document from Wal-Mart.
NADER: You know the statistical shenanigans when you say average. You want to ask yourself how many people in Wal-Mart are making less than 1968, and it's almost a million workers.
GILLESPIE: Yes, but it's also are they working the same number of hours, are households the same size?
NADER: We're not talking about full pay. You're right they have a lot of part time.
GILLESPIE: This remains a point of contention between libertarians and your method of things, because Costco is a great company, it's a great business, it's a great business model, it's one of many. Wal-Mart also is a different business model that has helped keep prices down. It's one of the reasons inflation has slowed most economists would agree. But it's a different model, and if we want to decentralize power and a decentralized lifestyle, we don't want everybody…
NADER: But it's classic concentration of power – Wal-Mart. The strip their investors of any type of input on this, and they go around getting free land.
GILLESPIE: This is true.
NADER: Corporate welfare, driving out small business. This book is a lot about Main Street versus Wall Street. We have like 24 areas of left right convergence where if we set aside our disagreement we could finally get something done. It's not like we're each winning because corporatism is a divide and rule, very domineering power concentrating force.
GILLESPIE: One of the huge areas of convergence, I think among the Libertarian right, and a lot of older line Conservatives and many people on the left. Do you define yourself as a member of the left or the right?
NADER: I like to call myself a moral empiricist.
GILLESPIE: I'll take that as a yes. With defense spending and the military-industrial complex, talk a little bit about why that seems so popular, I mean it's a huge part of the book, and why did the military-industrial complex grow so well to a point where you have somebody like Barack Obama runs as the peace candidate and immediately triples troop strength in Afghanistan and has not taken a hatchet or even a fingernail clipper to the defense budget. How did the military-industrial complex rise to its supremacy?
NADER: Well first of all, it exaggerates foreign perils. Eisenhower pointed this out and so did MacArthur.
GILLESPIE: Who didn't agree necessarily on much more.
NADER: It's huge business. If you can see almost an unwillingness to resist in Congress, so you create these perils and you exaggerate them, and there's always some new enemy they're going to find – the latest is China. Iran doesn't quite fit the bill; it's not big enough after the collapse of the Soviet Union. Then you wave the flag, and then you pour the campaign money into Congress and the white house candidates. Then you show them a map where this trident submarine has got sub-contracts in 300 Congressional districts. You don't want to do that and you don't want to close down your bases, right? Now who's going to challenge that? This is where there's the greatest convergence. You remember when Congressman Ron Paul teamed up with Congressman Barney Frank in 2010. That was actually a staffed Caucus to challenge the bloated military budget, but the industrial war machine has got their hooks into both Democrats and Republican parties.
GILLESPIE: So how do you fix that, because people are talking about this more than ever? Obama very loudly rattled the sabers to go into Syria, and he got pushed back on by Republicans.
NADER: There's an example. The emails were coming in like an avalanche and the members would say to the staff, "Are they coming in from the Republicans or the Democrats?" And the staff says, "Both." That terrifies them. Nothing terrifies corporate politicians and corporate bosses more than a left-right public opinion going operation on them. The key is becoming more visible, which is the purpose of this book – becoming more strategic, getting media, getting on the table of candidates and political agendas by incumbents.
GILLESPIE: Are there major party candidates that you find particularly appealing that are out there now? Can you name names?
NADER: Walter Jones – Republican from Camp Lejeune in North Carolina.
GILLESPIE: He had started out as a super war hawk. He's the guy who coined the term freedom fries, and now he's being primaried because he's anti-war now.
NADER: And he won the primary. Walter Jones believes in Constitutional procedures and as Ed Crane told me, "Ralph I oppose corporate subsidies, unconstitutional wars, the Patriot Act, and the Federal Reserve run amuck." And I said, "That's a pretty good start for convergence." So he's one. Senator Elizabeth Warren has kept quiet on militarism and foreign policy. She focuses on financial industry and Wall Street.
GILLESPIE: Where she is flat out terrible – we will disagree on that. Why do you believe she has any reason to be against military might though? If she's kept silent on it, why should we trust her?
NADER: Well that's an interesting question and she should be asked that. Basically, there's almost a loyalty oath amongst Senate and House Democrats via Obama. Just don't criticize Obama. Rose DeLauro has criticized him on a number of issues. There's not much independent thinking there.
GILLESPIE: We have Obama because we had Bush. There's a large argument out there that we had Bush because we had you. Going back to the 2000 election, the most tightly contested election of our lifetime, because it took forever to resolve. I didn't vote for either candidate, I didn't vote for you in 2000. It didn't turn out the way I wanted it to and I suspect it didn't for you either. In the 2000 election, do you think your presence – one of the arguments that third party candidates hear all the time is you cost me the election if I'm a Republican or a Democrat. Did you cost Al Gore the election?
NADER: No, and Al Gore agrees. He thinks he blew it in Tennessee, his home state. Everything else being equal he'd have been in the white house if he got Tennessee. And he thinks it was stolen in a number of ways in Florida. But here's where a Libertarian really supports – everybody has an equal right to run for election. If everybody has an equal right, then we're either all spoilers trying to get votes from one another or none of us are spoilers. We're not second-class citizens because we're a green party candidate or a Libertarian candidate. I have no trouble with Libertarians on that one, and the most interesting thing is – the brass of these two parties is they control the election machinery so they keep you off the ballot, harass you, file a lawsuit, delay you, exhaust you. You're lucky if you have an eight-week post Labor Day campaign to breathe in. And the other thing is—they created this corporation called the Commission on Presidential Debates—the two parties, and they decide who gets on and who doesn't. After Perot got on in 1992, no way was anyone else going to get on. That's why Jimmy Carter for a number of reasons, who has monitored a lot of elections, said last year the US is no longer a functioning democracy. Do you agree with that?
GILLESPIE: Oh, I do. I don't know if I would put it quite that way, but I agree completely that no third party candidate ever cost a major party candidate an election because it presumes all of our votes rightly belonged to the Democrats or Republicans.
NADER: Exactly, like they own the votes.
GILLESPIE: Yes, do you do not feel at all responsible nor should you. Let's talk about something that I think you would want to be partly responsible for, which is your role in airline deregulation, which now when airline deregulation gets held up, it's usually by liberal Democrats who say this is a terrible thing. Talk a little bit about why you and Ted Kennedy, as well as Alfred Kahn, an academic economist at Cornell, who is a Democrat politically, as well as people like Bob Poole of Reason Foundation were all pushing for deregulation of airline tickets prices and airports in the 70s.
NADER: Well, it was not just deregulation of airlines, it was railroads, and it was buses.
GILLESPIE: And in many ways trucking gets the least juice, but it was the most important to deregulate interstate trucking.
NADER: Yeah, and it was one of the most successful. It was what we call a cartel regulation. In other words, it regulated markets, it regulated entry of new challengers by blocking them, exactly what the airlines wanted. They created the Civil Aeronautics Board in 1937. In the late 70s, we started getting Congressional hearings – we said look, there's no competition under cartel regulation, the fares are too high, the service is lousy, roots aren't being opened up. So break it up. Get rid of the cartel regulation. Allow people's express to fly from New York to Buffalo for $35 or whatever, and for a while it worked. When I testified against cartel regulation, I had two reservations: 1) There had to be strong anti-trust enforcement and 2) There had to be safety standards. Well, there wasn't strong anti-trust enforcement. The Department of Transportation approved 32 of 32 mergers. So now you have fewer airlines dominating the entire market than you had in the cartel days.
GILLESPIE: But by the same token, airfares are cheaper and inflation adjusted the terms. Direct flights are not as frequent but that's also because people live in different areas.
NADER: Well it had a lot of benefits Nick for a lot of years.
GILLESPIE: What bothers you other than that there are few firms? Because this is what a basic kind of free market or libertarian approach would be—it doesn't matter how many firms are in a business as long as there is actual free entry, no barriers to entry, because even a monopolist has to act as if they are about to be taken on in a price war. If airfares are cheaper and if air service is as good or better than it was under the cartel, it's still a success even if there are fewer companies.
NADER: But less and less of a success and if it wasn't for Southwest Airlines, it would be…
GILLESPIE: But that's a big but, right?
NADER: But you see, here's where the barrier to entry is – it's [inaudible]
GILLESPIE: So this was part of the airline deregulation, but it was also to deregulate the airports as well, which are all basically local monopolies of government authorities. So you would be in for that?
NADER: I would be in for any pro-competition enforcement.
GILLESPIE: Here's an interesting question, because as we're talking about competition your report on the FTC, the Federal Trade Commission, is fascinating reading because it reads simultaneously very much like work by the Socialist historian Gabriel Kolko, who from a progressive point of view said exactly what you said about the airlines, about the railroad barons, that progressives will say we created a regulatory body to regulate railroad rates and that's a big success, and he's like no the railroads created that to their advantage, and they froze the market when they were on top. This is also what James Buchanan and other public choice economists from a Libertarian angle say the same thing. The regulators get captured by the people they're regulating. That was the essence of your FTC Report.
NADER: And our ICC, Interstate Commerce Commission.
GILLESPIE: Talk a little bit about that, and where is the sticking point for you from a kind of full-throated embrace of a libertarian perspective on regulatory capture? How do you, unless you get rid of the regulators, once you always have regulatory capture?
NADER: You don't always have, because you win one here and one there, where you beat the automobile companies for example, now the railroads are under heat because they're carrying oil and the railroad technology's just not up to it and there's derailments. It's a matter of public health and safety; it's the most fundamental role of government – public health and safety. Instead, we spend hundreds of billions dollars abroad blowing up countries, creating more enemies and knocking our economy instead of focusing on the public health and safety.
GILLESPIE: I don't disagree with you and I know in the book you talk about a moment of convergence between people on the right and the left about war, not just on defense spending but oversea wars. One of the places that you guys started to argue was ok, if we're not spending 20 percent of the budget every year on defense. Some people wanted to say ok now we can spend that money on…
NADER: Public works.
GILLESPIE: Or no, we just give it back to people and that's a real sticking point between things.
NADER: Until they lose a tire in a pothole.
GILLESPIE: Ok here's a question, so the Corvair was a sporty car and it has its fans. That was the car that you made famous and that was really your entry into being a huge public figure that was able to change policy. You argued in Unsafe at Any Speed and there's no questions that cars back then were unbelievably unsafe compared to the crappiest car that's put out today, but do you still believe that the Corvair was less safe than other cars out there at the time?
NADER: Not less safe than the Volkswagen bug – they had the same handling problem, but certainly less safe than some of the four door sedans.
GILLESPIE: What about the Ford Falcon, the Plymouth Valiant, the Renault Dauphine? Because the NHTS in the early 70s released a study saying the handling and stability performance of the 1960-63 Corvair does not result in an abnormal potential for loss of control or rollover, and that's also been found by other people who looked at the data. Do you reject that, or do you say that cars have just improved much more because of mandated safety?
NADER: Well they took the worse comparisons like the Renault Dauphine and VW. No, it was bellows standards for even that time, and the evidence comes now heavily from inside General Motors. We rebutted that report that was by the way prepared in part by a former GM consultant. It was twenty pages in the Congressional record.
GILLESPIE: And it's true that John DeLorean who has a checkered history said that no, I was at GM and there's no question we knew all about this.
NADER: Also the leakage of carbon dioxide is indisputable. Actually, they recalled the cars because of that; you can't smell or taste it.
GILLESPIE: Here's a questions for you, without having kind of Draconian government regulation, do you think that cars would be as unsafe now as they were in 1963?
NADER: No, there's always an incremental advance. For example, Europe had radial tires and disc brakes when Unsafe at Any Speed came out. The US manufacturers didn't. If there were no auto-safety agency, probably because of the imports, they probably would have adopted radial tires and disc brakes. A lot of other things, people would have died in droves year by year. Because they knew about seatbelts in the 1910s, there were seatbelts in the World War I planes to keep the pilots from falling out. They resisted it until they were forced to do it in the 1960s.
GILLESPIE: Here's a question though and this is without ideological animus. It's a question that, you know, there's no question that seatbelts save lives, that airbags unbalanced save lives. There's always an adoption period where there're fluky results. Why isn't it better to inform people of potential risks and allow them choose, as opposed to saying at this point going forward everyone has to do this exact standard. How do you make a cost-benefit analysis of pricing somebody out of a market because of safety regulations or something?
NADER: There are obvious things, you know, obvious safety devices that don't cost much and reduce your auto-insurance premium, things you can't see like toxic chemical gases. You can't rely on people to be scientific detectors of what their children are exposed to. But you know, one thing about all these conservative philosophers, Nick, is they didn't like government coercion, but they didn't like corporate coercion, and corporate coercion is massive. We have destroyed our freedom of contract with these fine print contracts. They don't compete with American Express and Visa or Ford and General Motors. I have yet to see Libertarian material on the destruction of one of the pillars of freedom in our country, which is freedom of contract.
GILLESPIE: Well, I think, you know, how it happened is nobody reads contracts online, nobody reads terms of agreement, or terms of service.
NADER: And they make sure you don't read them.
GILLESPIE: But in the end it doesn't matter because I know I can go from American Express and if they start jerking me around I can go to Visa and if I don't like that one then I can go to another bank. So there is competition.
NADER: Same contract, same contract.
GILLESPIE: But it doesn't matter because the next person will take me and it's the same thing with phone contracts. Yeah, there's no question that these guys want to ding you, but they have less and less power to because there is more competition.
NADER: But they all have this arbitration clause which takes you off your constitutional right to go to court, which is a big libertarian right.
GILLESPIE: Well this is your biggest thing, right? You're against tort reform.
NADER: Day in court, trial by jury – concrete libertarian philosophy.
GILLESPIE: And one of the things that you did that is probably more influential than any of the actual policy studies you did. When it came out that GM had actually hired private investigators to follow you around, there were stories about trying to get you in honey pot situations, where you would be caught in a compromising situation. How did that make you feel and how do you think that changed attitudes towards corporations in America?
NADER: Well it was frightening at the time because I didn't know who was trailing me down Connecticut Avenue going into a savings and loan and saying that I changed a 50 dollar check with 10 fives. I mean that's pretty close right? That's in the detective report. Fortunately, the press was outraged. People were outraged, never mind their political backgrounds. I mean they were trying to discredit someone who was raising legitimate issues about public safety and unsafe cars. And it helped get the motor vehicle and highway safety laws through in 1966, which it saved a lot of lives.
GILLESPIE: DO you think the Federal government should have bailed out GM? First under Bush, and then under Obama? Should that have happened?
NADER: That was a tough one.
GILLESPIE: What was tough about it?
NADER: It was tough because if they didn't, it would have wrecked a lot of communities and a lot of worker's lives. So, the bailout to me was for the workers and the communities and the suppliers. This is a company that if it weren't saved by Uncle Sam, it would have closed down. I mean we're not talking about oh, we'll close a factory here…
GILLESPIE: But wouldn't it have been better off in the long run and it's one thing to say a lot of people in a once vibrant, now less vibrant industry lose their jobs and that's gone, and then we help them until they can get on their feet, as opposed to saving a company which we know is now back, I mean they managed to hire their first woman CEO just to have her testify about faulty ignition switches in front of Congress. I mean why are we propping up a company that has again and again earned the public ire.
NADER: I mean normally I couldn't agree more, but they had hundreds of thousands of workers by the throat.
GILLESPIE: But those workers would go elsewhere, I mean they would be picked up by other companies.
NADER: But when would they go elsewhere?
GILLESPIE: But then are we stuck where if we live to be another 100 years old we will still be talking about the next GM bailout because we can't allow…
NADER: No, because what brought down GM, especially, was their finance. They shouldn't have been in that business – they start playing around with derivatives. You see, back in the 60s, when GM had 65% of the market…
GILLESPIE: Because of the protection, because imports couldn't come in.
NADER: The anti-trust division actually had an indictment ready to break them up under the anti-trust law. Now had they broken them up into five different companies, you would not have had this problem with the GM bailout.
GILLESPIE: By the same token, the finance arm was the only arm that was making money for them.
NADER: Well that was part of GM's mismanagement. It's bad management about their cars as well.
GILLESPIE: Absolutely, but should it be the role of people that don't drive a GM car and don't own stock in GM, why should they be involved in their governance. Shouldn't that be up to their stockholders and the people who are foolish enough to drive a GM car?
NADER: Well obviously if they bailed out, then in return the US government owns 62% of GM, and what they should have done with that ownership is restructure the company so that it never happens again. That's the problem.
GILLESPIE: I think the only way it'll never happen again is let it die. Again, a point of disagreement, but there's a lot of convergence here. Now I want to talk about the most shameful, probably the most shameful episode in your career, which is in November 1971, Reason republished a story of yours called "You can Fight City Hall" which had originally been published in the Freeman, the oldest continuously published Libertarian magazine in the country. This was about a public housing project in your hometown of Winston, Connecticut that was going to be passed and then individuals in your community rose up to put it down. What was that story? Talk a little about that, and what is interesting here is you're in favor of mass movement, of mass mobilization, and against experts telling people how to live their lives.
NADER: Well, that's a long discussion. In this particular case, there were empty apartments reasonably priced owned by private real estate people.
GILLESPIE: And who were willing to rent? It's not like there was some reason they weren't renting.
NADER: No they were empty. The argument was why should local taxpayers who pay federal taxes set up public housing units when you have available housing in the area. I mean the whole principle of public housing, by the way Senator Robert Taft supported public housing in the 50s, Mr. Conservative, was when there was no housing, and that wasn't the case in this town, so I spoke out against it.
GILLESPIE: You bring up an interesting question, and it's a huge threat and it's unstoppable about how the model right winger is now very different from you know Robert Taft, if Robert Taft wouldn't have recognized Newt Gringich as a conservative, something has changed, or Paul Ryan as a conservative for example. Do you think there has been a similar shift on the left or in the Democratic Party? I don't know who would be an archetypal Democrat, say John F. Kennedy, would he have recognized Barack Obama as being in the same party? Or has the model Democrat moved as far out as you would argue a typical conservative has.
NADER: No, actually they've been very consistent and not bold enough. I mean, the total support of the military-industrial complex and empire and war by Barack Obama, Hillary Clinton is staggering. It would stagger Eisenhower. It would even blush Nixon. You know Reagan, when he called the evil empire the Soviet Union.
GILLESPIE: Which you would agree with? You're a critic of the Soviet Union. You're not a commie.
NADER: When he saw 200,000 people marching for nuclear arms control, and when he saw well-dressed republicans among them, he turns around and breaks ground with Gorbachev. And it was Nixon who went to China with Kissinger.
GILLESPIE: Well some of us wish he had never come back.
NADER: And they don't get freaked out by challenges from the right like Buchanan. The Democrats go nuts from challenges form the left. I mean we were sued in 24 times in 12 weeks in the summer of 2004 to get us off one state ballot after another.
GILLESPIE: And it kind of worked? You had a much weaker showing in 2004.
NADER: It did work, it totally did work. It totally exhausted us. One time we got a notice to be in nine Pennsylvania state courts on Monday Morning
GILLESPIE: Here is a, speaking of criticism from the left, people on the left identify heavily with you, so they have the most criticisms, because we always hate our twin brother or sibling more than somebody on the other side. This quote of yours from the Washington Post in 1984 gets a lot of play on the left. "I don't think there is a role for unions in small non-profit cause organizations any more than in a monastery." Do you stand by that and what is your general attitude towards unions?
NADER: Unions are needed for large companies, who can basically abandon our country, close them down, and move to Fascist and Communist regimes where they put their workers for 80 cents and hour in their place. For non-profits, first of all, nobody is making money, you don't have a guy making $10,0000 an hour, and second, it's a completely different mission. It's a charitable mission, an educational mission, and it's overwhelmingly white collar, you don't have dungeon factories, you don't have asbestos, you don't have chemicals.
GILLESPIE: I'm glad we didn't show you the first floor of the Reason office where we're doing all of that.
NADER: (laughter)
GILLESPIE: What about in the public sector? Because Franklin Roosevelt was against public sector unions, a lot of people were. Should there be public sector unions.
NADER: I think so for things like social services. Even though there are unions in the Federal government, there's no maternity leave, no paid maternity leave. They give you three months – a mother delivers a child – three months unpaid maternity leave and then they have a daycare center at the Department of Education for $15,000 a year, probably contracted out. I agree with Hayek and these conservative philosophers. I really believe there should be a safety net and life is too short to spend every living minute trying to figure out how to make the basic necessities payable. Here's the difference, probably between Libertarians and me, I believe people should get a living wage, they should have the right to associate through collective bargaining because that's what investors do through corporations, and they should get a return on their taxes. The taxes should not go to football stadiums, they should not go to the 12th aircraft carrier that we don't need. It should go back to the common good that people cant do for themselves, like public transit, like a sewage and water systems. It's simple like that. It's amazing and why I put so much in this book on the conservative philosophers – they got that, they got that in the 18th century, the 19th century, and the 20th century. But you don't see that among the so-called conservative politicians in Congress, because they're not conservative, they're corporatists. I've never met a conservative who calls himself corporatist, but I've met a lot of corporatists on Capitol Hill who call themselves conservative.
GILLESPIE: As we wind up, here's another question that flitters around the edges of your biography: are you gay, and does that matter?
NADER: No, of course not.
GILLESPIE: What do you mean of course not?
NADER: I mean it's well established that I'm not gay.
GILLESPIE: People from the left say you dismiss what you call go-naddle politics, meaning issues about gay marriage and civil unions and things like that. Do you find those types of issues less important than other types of issues?
NADER: First of all, I don't dismiss go-naddle politics. I told Bill Sapphire of the New York Times I'm not into it. I'm into corporate coercion and corporate domination of our society. Second, I support it, I support civil unions and I support the civil rights of gay people.
GILLESPIE: What about in terms of the Left Business Observer run by Doug Henwood, he finds a lot to like in your life and your politics.
NADER: Except for when I'm running for president.
GILLESPIE: That's right. That's everybody on the left. They brush off that old letter every four years saying Ralph, we agree with you on everything which is why you shouldn't run for president. But he talked about your brand of humorless hair shirt politics, that there's a lot of pain but not a lot of laughter, or not a lot of humor in your politics. Is that a fair estimation of what you're about.
NADER: Of course not, five times on Saturday Night Live. I came in third to Grover Norquist in a humor contest a few months ago. In humor, there's truth. Humor really is a great lubricant in hard times. Some of the people who suffer the most in the world have the best humor.
GILLESPIE: And does that include being Lebanese in Connecticut? Talk a little bit about growing up in the 30s and 40s in old New England as a Lebanese
NADER: It's surprisingly placid. My parents never made a big deal out of ethnicity or ethnic politics.
GILLESPIE: Well they didn't have to, right? Because that's what mainstream society was doing.
NADER: It was a very mixed ethnic community. Obviously you hear a slur once in a while – camel driver or something like that.
GILLESPIE: How does that factor into your views on immigration? Do you think that we should have open borders? You don't believe in open borders for goods and services, do you believe in open borders for people?
NADER: No, I don't believe in corporate managed trade agreements. I don't particularly like barriers between countries. We have to control our borders because we oppress people in Central America. We side with the oligarchies and the statists in these areas and dictators. These people are so desperate to head north, why don't we have a more benign foreign policy where these countries can economically develop.
GILLESPIE: I don't disagree with that, but if we are siding with Oligarchs, isn't the least we can do is let them come here and have a better quality of life?
NADER: Yeah, but then you have to ask how it drives down wages in this country.
GILLESPIE: And you believe that immigration in general and illegal immigration, which tends to have a higher percentage of low-skilled people, drives down wages?
NADER: No, of course surplus labor it's called, rather cruelly in economics literature. The Wall Street Journal…
GILLESPIE: No, I mean if the Wall Street Journal does there are plenty of reasons to believe that's not the case and that illegal immigrants tend to compliment existing areas.
NADER: But my objection is the H1B Visa, where we import scientists, engineers, doctors, nurses when we can develop our own, and there's plenty of surplus technical people in this country. Silicon valley wants these people to come in from the third world because they're more pliable.
GILLESPIE: Do you think it's because they are more pliable and its not because they're desperate for as many people as they can get their hands on?
NADER: I think they're more pliable. It's a brain drain – we tell the third world use your human resources, develop your country, grow your markets, then we such out of them the entrepreneurs, the scientists, the civil engineers for our benefit. We're hogs in that way.
GILLESPIE: All four of my grandparents came over, and its like they wouldn't have been able to come over now. Ireland and Italy deserve the brain drain they had on them, I suspect Lebanon did too.
NADER: You don't have to have actual incentives. It doesn't mean you don't come in. But to have an affirmative magnet to depopulate these areas of their skilled workers, the people who are going to transform the political economy – it's short sighted.
GILLESPIE: Well I do agree that, or I like the fact that you're consistent because I think this is one of the things that drives a lot of libertarians nuts is conservatives say yes to goods and services coming across the border but not to people, and libertarians have a bug up their butts about consistency.
NADER: But it's interesting libertarians have criticized NAFTA and the World Trade Organization.
GILLESPIE: Certain people like Ron Paul does quite a bit as managed trade. The question is, is it better than what existed before? I would certainly argue that NAFTA is better than no NAFTA.
NADER: Well you need to do more research then.
GILLESPIE: Two final questions, one is Nader's Raiders. When you were younger, when you were starting out, you didn't just write books, you created a movement that is still felt, I mean the people in various think tanks, and government agencies, and journalistic outlets all have some root in an organization that you started or directly descended from you. What was it about the zeitgeist in the late 60s that allowed things to happen? And do you feel we're in that moment again, where anything is possible and radical change for the good can happen?
NADER: That's a really interesting question. First of all, I decided early in the 1960s when I became very well know, I wasn't going to be a lone ranger. I was going to build, I defined leadership as producing more leaders and not followers, and that's the way you produce a movement. The zeitgeist was really interesting. People's routines were disrupted by the civil right's struggle, the women's struggle, the Vietnam War, the environmental crisis. That produced a lot of young people who saw as their life's work trying to better society. You don't see that now because they're not part of any risk – they don't have to go to Iraq or Afghanistan from college campuses, they don't see their jobs going although their jobs are going because they're not blue collar workers, and you don't get that kind of committed leadership coming out of there.
GILLESPIE: You're saying that over the 20 years with the rise of networked computers and the rise of kind of instantaneous communication and radical shifts in the way people live their daily lives. Do you see that as disruptive in a positive way?
NADER: Well, it is in terms of invading people's privacy and generating huge outlets for gossip. I was just told there was a pew poll where the 13-16 year olds in this country average 11,500 test messages a year each. I think its shredding their brains. I think this massive dedication of time looking at screens, here in the hand, everywhere, TV, computers.
GILLESPIE: You don't have a cell phone?
NADER: No.
GILLESPIE: Do you use a computer?
NADER: No, never touch it. I use an underwood typewriter, when the lightning strikes, I'm still working.
GILLESPIE: How are you in a position to know this stuff? I mean clearly the Internet helped your candidacy in 2000.
NADER: To raise money, not to get votes.
GILLESPIE: Aren't those two things connected?
NADER: Well its important.
GILLESPIE: So you're saying the shift in the zeitgeist in the 60s, it was because people's lives were being disrupted with the threat of violence, either being killed or if you were a woman, not having equal rights, or if you were a minority, and that the disruption now is not moving towards a positive social end.
NADER: No, basically its anesthesia, its addiction, its Internet addiction.
GILLESPIE: So this is like Brave New World, the Internet is soma, the drug that people drank in Brave New World.
NADER: We're beyond the Brave New World, except for Soma – that's the NSA. It's a very serious problem. We have to examine what this technology is doing to us, at all ages. It's not getting people to show up. Half the democracy is showing up – marches, demonstrations, city council meetings, going to vote. People are not doing that. They're watching screens.
GILLESPIE: I would be remiss if I didn't ask you about this. A couple years ago, you referred to games and gamers as electronic child molesters. Do you stand by that?
NADER: The companies are seducing the young. At their weakest point, where you have two or three million people of young age immediately playing a new video game.
GILLESPIE: Isn't that community? That's going around the campfire.
NADER: That's fine. But it's a proportion. Do you really want to be addicted to this? I mean some parents tell me these games take ten hours a day of some of these kids.
GILLESPIE: Well, if you let them, but it could be something else.
NADER: Virtual reality is ok, watching Internet, but where things really happen is reality. If the young generation is spending more and more time in virtual reality watching screens, and the quality of what they're watching, they're not going to inherit civic engagement and responsibilities of their elders.
GILLESPIE: As a final question, and I would disagree that those two things are in parallel. They intersect – virtual reality or online communication and the real world are intersecting.
NADER: Except in the allocation of time.
GILLESPIE: We've seen vast changes in the past 50 years in American society. You've been a huge part of that without exaggeration. Do you think the potential 50 years from now will have moved us as far forward as we did in the past 50 years? Or are we going into darkness.
NADER: Contrary to a lot of opinion, I think science and technology is being used by concentrated power to close out deliberative democracy, to close out thinking for oneself, to increase conformity under the guise of liberated text messaging. When you go into genetic engineering controlled by Monsanto, the seeds, the flora, the fauna, you go into nano technology – these are hugely transformative technologies that are not under a frame of democratic processes. I am always optimistic, as I like it as a strategy. When I was at Princeton, I studied the philosophers of pessimism like Schopenhauer. I was not convinced, and I see pessimism as a self-indulgence and a cop out.
GILLESPIE: Well we will leave it there with Ralph Nader who's latest book is Unstoppable: The Emerging Left-Right Alliance to Dismantle the Corporate State. Ralph I'll look forward to the next book and the next conversation.
NADER: Thanks Nick.
