Nader Responds to Accusations of Hypocrisy

November 3, 2000 9:08 AM

Nader Responds to Accusations of Hypocrisy “I will fight for the U’wa and investor accountability by backing a shareholder resolution at the next Annual General Meeting of Fidelity Investments–one of the largest shareholders in Occidental Petroleum and I urge social and environmental screens as a filter for all holdings."
posted by snakey (13 comments total)

But will he sell his stock if they don't respond to his "urgings"?
posted by kidsplateusa at 12:48 PM on November 3, 2000

Wouldn't it be smarter to accumulate more stock, so that he can control the company? I mean, I realize that's not really feasible here, but why is it that owning stock in a company is implicit support of every action they take? As a shareholder (even indirectly), Nader has more of a voice at Occidental than he would if he sold his shares! He's using that voice to try to change things. How would his selling his shares of the mutual fund convince Occidental of anything?
posted by daveadams at 2:11 PM on November 3, 2000

Nader's public voice and access to media are much more valuable than his relatively miniscule fund-adjusted block of non-voting shares in Oxy. It would make no difference in his ability to affect change in the corporate behaviour if he sold his shares.

The issue here is: is it ethical to profit off activities which are morally reprehensible? I have no clear opinion about whether Oxy's actions are reprehensible, but Nader clearly thinks that they are. And yet he is willing to reap the rewards of others' (in his opinion) immoral action. And it is only because people want the rewards that these actions are undertaken.

It seems like most Naderites (don't get me wrong, I agree with him on a lot, but far from all issues) believe that the strings are pulled from the top, with decisions being made in behind-closed-doors meetings between businesspeople and politicians. They think that businesses have a unmediated influence on what gets reported, how it gets reported, and therefore, peoples' opinions, election results, etc.

I take another view here: strings are pulled from the bottom up. The actions of hundreds of thousands of active individual investors, tens of millions more passive investors and hundreds of millions of consumers determine corporate policy, just as these millions of voices, acting out of various degrees of goodwill, avarice, tolerance, a wish for flourishing or a desire to harm determine governmental policy.

I think it is a rhetorical necessity for, e.g., Nader, Moore, Chomsky to draw a distinction between regular people and the wicked amoral people who run corporations, and, of course, hold all the power. Just like those theologians confronted with problem of evil who choose to believe in a devil (to simplify the issue, and offload the problem onto a theoretically convenient entity) they have invented an enemy on which they can hang any injustice and a target by which they can define themselves.

Placing the responsibility on an incorrigible "them" inspires a righteous outrage, which is the primary tool of political adherence for some on the left (just as, one might claim, complacency is the tool of the Democrats, bigotry of Buchanan, self-interest the tool of the Republicans). But the same people who urge us to boycott the Gap or Starbucks cannot turn around and absolve anyone of dubious economic choices (such as investing in — and therefore funding — undesirable action).

Just as an individual vote doesn't change anything, individual consumer/investor/community/environmental/cultural action doesn't change anything either. But we get to "vote" on the kind of world we want with our dollars, just as well as we vote with how we spend our time, how we relate to other people and how we direct our energies in general. The sum of these choices is our society if anything is.

Whether or not you think Gore has acted improperly w.r.t. Oxy makes no difference (the lesser of two evils is a bogus argument, isn't it?) — as long as people put their money into (as long as "the market allocates capital to") businesses with "bad" policies, those policies will be perpetuated. The market is as democratic as the political system, and to those of you who say that that means it is not democratic at all, I say that this is what democracy is like. It mostly sucks.

But like the Naderites say, "we have to start somewhere" and "if not now, when?"

Hagelin 2000.
posted by sylloge at 3:14 PM on November 3, 2000

sylloge: I'm still digesting that comment, but I'd make one amendment - the market is as democratic as the political system iff we stipulate that every participant has the same number of dollars. If dollars are votes, more dollars means more power, and suddenly the "evil men at the top pulling the strings" point of view starts to sound more reasonable.

-Mars
posted by Mars Saxman at 3:50 PM on November 3, 2000

You're right to think that not everyone has an equal (economic) vote, but I don't think it is exactly $1 = 1 vote either. Let's imagine that the poorest 75% of americans resolutely decided they weren't going eat any more fast food. I have no idea of the relative net worth of this group and fast food corporations/investors in fast food corporations, but I'd say a swiftly falling share price would cause the pooled economic power of the 75% to wield proportionately more power than a mere 1-to-1 correspondance would suggest. Concentrations of wealth can change dramatically over time (Gates, Ellison, Buffet. etc.) which would be hard to explain if "the man" truly wielded sufficient economic power to keep the money where it is (Cf., most of the revolutions of the last 300 years).

It seems more accurate to me to believe that, instead of either:

• x happens because a has poweror
• a has power because x happens

that one can't be reduced to, or explained by the other; that there is a genuine dialectic (and therefore complicated relationship) between economic (or political) power and what goes on in the world.

But fairness is certainly not assumed.
posted by sylloge at 4:14 PM on November 3, 2000

And it is only because people want the rewards that these actions are undertaken.

If you ask me, these actions are being undertaken because Clinton/Gore have demonstrated their proclivity for cooperating with large corporations like Occidental. This is happening because there are no consequences for corporate crime anymore.

Without anyone to hold Occidental accountable for their actions, the U'wa are powerless. With this shareholder resolution, Nader is already taking action on behalf of the U'wa. It's the best he can do without being in a position of real power.

BTW, I think Hagelin is a badass.
posted by snakey at 4:15 PM on November 3, 2000

I’d agree with you sylloge, that people would have enough power to control corporations through boycotts and voting stock if money and power were evenly distributed among the populace. The people about to be harmed by Occidental have no power and no money to stand up to them. Perhaps one dollar doesn’t equal one vote, but I can guarentee no dollars and no votes equals no power.

Placing the responsibility on an incorrigible "them" inspires a righteous outrage

True, but at least I know who “they” are. They are the richest 90,000 people in this country, the top 5% (or 1%, whatever) who’ve bought American politics and democracy from the people. I certainly couldn’t have done that, which means I lost all the power I had. I have become, just like the U’wa, disenfranchised from a process that holds sway over nearly every aspect of my life.

The market is as democratic as the political system

Perhaps laissez faire capitalism is as fair as pure democracy, but we have neither in this country.
posted by capt.crackpipe at 5:12 PM on November 3, 2000

If I were much more loquacious, I would have made a post similar to sylloge's first.

Without anyone to hold Occidental accountable for their actions, the U'wa are powerless.
But you can easily hold them accountable without profiting from their destructive policies, can't you? Gandhi wasn't an East India Company shareholder...

McReynolds/Hollis 2000!!!
posted by kidsplateusa at 5:24 PM on November 3, 2000

Gandhi wasn't an East India Company shareholder...

And Nader didn't own stock in the big three auto makers to radically change people's perceptions and the actions of the corporations.

Look, if you support Nader, I don't think this should make you change your mind, but I do think it is hypocritical in the extreme and I think the "he's changing things from the inside" argument is both bogus and almost as hypocritical (why not change the Democratic party from the inside?)

Snakey: "...actions are being undertaken because Clinton/Gore have demonstrated their proclivity for cooperating with large corporations like Occidental." A demonstrated proclivity caused this to happen? What about the 200 years of wrong actions that occured before Clinton/Gore? I'd say it has more to do with the presence of oil and the ability to finance exploratory and drilling operations.

Capt.: "... people would have enough power to control corporations through boycotts and voting stock if money and power were evenly distributed among the populace." Could you see Cesar Chavez saying, "Only rich people shouldn't buy the grapes/lettuce. You poor people, go on buying them. It doesn't matter what you do."

If the people are powerless no matter what, what would it take to affect change? Nationalizing every asset and then dividing it up equally among the population? You'd have to do that every six months or so, or inequalities would quickly develop. I forget all those stats now, but let's say that the top 1% have 20% of the money. Do you really believe that the other 80% is worthless? What do you advocate — killing this 1% and redistributing the wealth?

I really appreciate your viewpoint, Capt (along with many of the other Naderites) and I believe we are all want as good a life as possible for as many people as possible, but I just don't understand why you think "the corporations" are responsible for all things bad, and what, realistically, you think Nader could do about it.

The corporations are the people. This is what people, taken together and averaged up, are like.

Get rid of the corporations (or whatever) and you are still left with a few hundred million people, some of whom rape and beat each other, some of whom hold petty vendettas their whole lives which prevent them from accomplishing anything, some of whom are too stupid to accomplish anything, some of whom will raise their children to be ignorant and afraid, some of whom will exploit weaknesses of others, etc., etc., and some of whom will try to make a positive difference in the only way they really can: as individuals.
posted by sylloge at 7:02 PM on November 3, 2000

Sylloge, I have to agree with you that individual action is a powerful force. But I think you are underestimating corporate influence.

Did the US try to withdraw from WTO after Seattle? No. Did Clinton try to reform it from the inside? No. In that case, the actions of thousands of individuals went unnoticed.

Did Nader get into the debates after the large protests at both conventions, or after the protests at the debates themselves? No. A clear majority of citizens wanted Nader in the debates, but once again, individual action was powerless in the face of corporate dominance.

Nader marched with the protestors in Seattle. He's earned his street cred with the labor unions and the environmentalists. This strategy to provoke outrage among Fidelity's stockholders is strategically targeting individual action where it can be more effective.

As to your comment about changing the parties from the inside, just look to the shadow conventions.
posted by snakey at 9:24 AM on November 4, 2000

Sylloge -- Interesting post. You won't be suprised that I disagree with most of what you say. Here goes.

You characterize the "Naderite" position as follows:

It seems like most Naderites (don't get me wrong, I agree with him on a lot, but far from all issues) believe that the strings are pulled from the top, with decisions being made in behind-closed-doors meetings between businesspeople and politicians. They think that businesses have a unmediated influence on what gets reported, how it gets reported, and therefore, peoples' opinions, election results, etc.

Substitute "hugely disproportionate" for "unmediated" and this is a fair characterization. However, it is not only Nader's position. It is the position articulated by the establishment itself -- by which I mean Henry Kissinger, Bill Clinton, George Soros, Gerald Levin, Richard Holbrooke and the rest of the gang. In fact, it's the position of anyone familiar with the way Washington DC works.

Now, I don't say that kind of thing lightly or without solid evidence. To begin with, a great body of evidence exists in the form of on-the-record transcripts of meetings at various public policy think tanks. I originally got interested in this stuff by exposure to the off-the-record transcripts (virtually my whole extended family works on Wall Street), where the discussion tends to be rather more "open and frank". But the on-the-record material is sufficient to establish the general attitude that elites have concerning the purpose of public policy, and the so called "governability of democracy".

Before I get into that, let me quickly rebut your claims about the "democratic" nature of "the market". What you're suggesting would seem to be the conventional picture -- i.e., the market as a "self-organizing system", where hundred of millions of e-traders around the world gamble against each other, with the result that, in the aggregate, capital is allocated in an approximately efficient manner. I agree that the market is approximately efficient (in the long run), but you're fooling yourself (impersonal "you") if you believe that your puny $20,000 account at Datek gives you a seat at the world's parliament (so to speak). Indeed, under the present system, even if you've got $10m in investable assets, not only do you not have a "seat", but you are probably getting exploited in the usual way (even if you don't rely on the "objective research" at Merrill Lynch et al). But in any case, when elites utter the phrase "the market", they are referring (consciously or not) to a very exclusive class of investors -- roughly a thousand people worldwide. They are the "them", if you like. It's just ludicrous to suppose that "we" (the other six billion of the world's people) somehow have economic power equal to these thousand people who meet secretly with each other and with politicians on regular basis.

By the way, vis-a-vis wealth inequality, here are the actual statistics:

**The world's 225 billionaires alone have combined financial assets greater than the combined annual incomes of half of humanity. (3 billion people)

**Even in the United States, the top 1% of stock owners hold almost half (47.7%) of all stocks, while the bottom 80% own just 4.1% of total stock holdings.

**In the United States, the upper one percent of the population own more wealth than the bottom ninety percent combined.

**Worldwide, the top half-dozen investment managers now direct $3.5 trillion in combined assets.

Now, what you say about "the problem of evil" is interesting, but your criticism actually applies to the opposite view from the one I'm sketching. On the conventional view, evil comes from the actions of a few "bad actors" (e.g., the price-fixing executive at ADM) who ruin it for the rest of us by deviating from "the rules of fair play". But what Chomsky et al are addressing are not the "personal lifestyles" of particular plutocrats, but the institutional structure that allows plutocracy to flourish. As you point out, even if all our beloved plutocrats were to die in a freak plane crash, their roles would quickly be filled by current plutocrat-wannabes. So what's the problem? The real problem, according to a growing pro-democracy movement, is the very notion of a ruling class, the very idea of system that allocates political power in proportion to economic power. Briefly, the solution -- a more democratic system of government -- is obtained by passing legislation to block the influence of big money in the political decision-making process. Easier said than done, naturally; but every vote for Nader is a small contribution towards spreading this pro-democracy meme.

Getting back to the mechanics of elite rule, the question that comes up again and again in elite meetings -- in an obsessive, almost paranoid way -- is: Given that the US is formally a representative democracy, how do you keep the people from asserting their own interests? That is, how do you prevent the infamous "crisis of democracy" which always seems to loom over the horizon? The answer (an old one, but refined through the ages) has two parts. The first is simultaneously elegant and obvious: you simply own the information providers. And so, flip on CNN and you find corporate protectionism being sold, perversely, as "free trade"; you find investor-pleasing street demonstrations -- however violent (e.g., in Belgrade) -- being portrayed as joyous and overflowing with political content, while largely peaceful but investor-unfriendly demonstrations (Prague) are portrayed as unorganized gatherings of violent extremists without a cause. And so on.

The second part is trickier but more familiar: divide and conquer the political sphere by owning the two major political parties and using divisive social issues to pressure voters into one camp or the other. ("Not voting for Gore?! You must be against a women's right to choose!"). What, after all, is the Christian Coalition? It's a tool designed to direct the votes of religious conservatives toward corporate-owned Republican candidates -- Dole in 1996; Bush in 2000. (A very revealing quote from Ralph Reed: "I didn't build this movement just so Pat Buchanan would steal it away!") And what, after all, is the "Democratic Coalition" (as defined by EJ Dionne)? It's a tool designed to direct the votes of progressives toward corporate-owned Democratic candidates -- Clinton in 1992/6, Gore in 2000. It's really a brilliant (not to mention time-tested) strategy, giving elites license to dismiss as "extremist" anyone who stands outside the bounds of "political reality" as defined by the Republicrat duolopoly. Of course, the notion that the Republicrats represent the "center" of American politics is egregiously mythological (however successfully inculcated). In reality, the positions advocated by third parties -- withdrawal from the WTO, campaign finance reform, etc -- are overwhelmingly popular and correspond to the real center of American politics at the grassroots level.

Now, obviously, American plutocracy is not a new thing. Chomsky likes to quote the founding fathers on the subject, for example James Madison, who objected to democracy on the grounds that it would "undermine the responsibility of government to protect the minority of the opulent against the majority." John Jay (president of the Continental Congress and first chief justice of the Supreme Court) expressed the elite consensus more concisely when he said "Those who own the country ought to govern it."

Fast forward to the 20th century -- as Chomsky notes in a talk earlier this year -- and you find the same views expressed in "liberal" elite circles:

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[In this century], the population are regarded as "ignorant and meddlesome outsiders" whose role is to be "spectators," not "participants," apart from periodic opportunities to choose among the representatives of private power. These are what are called elections. In elections, public opinion is considered essentially irrelevant, if it conflicts with the demands of the minority of the opulent who own the country. We’re seeing that right now, in fact.

One striking example (there are many) has to do with the international economic order--what are called trade agreements. The general population, as polls make very clear, is strongly opposed to most of what’s going on, but the issues don’t arise in the election. It’s not an issue in the elections because the centers of power, the minority of the opulent, are unified in support of instituting a particular kind of socio-economic order. So therefore the issue doesn’t arise. The things that are discussed are things that they don’t much care about, like questions of character or questions of reform, which they know aren’t going to be implemented. So that’s what’s discussed, not what people care about. And that’s pretty typical, and it makes sense on the assumption that the role of the public, as the ignorant and meddlesome outsiders, is just to be spectators. If the general public, as it often does, seeks to organize and enter the political arena, to participate, to press its own concerns, that’s a problem. It’s not democracy; it’s what’s "a crisis of democracy" that has to be overcome.
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In a talk from 1993, Chomsky discusses the how such "crises" periodically erupt -- e.g., the social movements of the 1960s -- and create problems for ruling elites:

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Sometimes the rabble breaks out, as in the period when Wilson had to institute his Red Scare, for example, crushing independent thought, unions, organizing, in effect, setting the country back with the support, enormous support, of the liberal intellectuals, media and so on, until the time it began to hurt business interests -- they were kicking out too many immigrants and they need the workers -- and then they sort of cut it off. And that led to a period of quiesence, and things broke out again in the thirties, and they had some problems.

It happened again in the 1960s. In the 1960s there was a lot of ferment, and it showed up all over the place, and it led to great concerns. It led to concern over what was called a "crisis of democracy." In fact a very intriguing insight into the ideas about democracy on the part of elite elements, again liberal elites in this case, the more libertarian end, is the book which I advise you [reading], it's called the "Crisis of Democracy." It's the first, and in fact only, major publication of the Trilateral Commission, which is a commission made up of sort of liberal elites from Europe, the United States and Japan....And what is the crisis of democracy? Well, the crisis was that in the sixties sectors of the population that are normally marginalized and apathetic began to become active. So young people and women and minorities and others who usually are quiet -- they're spectators like they're supposed to be -- they became more active and organized, and they even tried to enter the political arena and press their demands. Now if you're naive, you would regard that as democracy, but if you're sophisticated, you understand that that's a crisis of democracy which has to be overcome. They were in complete agreement on this; the only question was on how do we overcome the crisis.

The American contributor, who was the chairman of the government department at Harvard, a political scientist named Samuel Huntington, in his contribution looked back nostalgically to the old days before the crisis, the days of Harry Truman, when as he described it, Truman was able to "run the country with the help of a few Wall Street lawyers and financiers." It's a bit of an exaggeration. Incidentally this kind of vulgar Marxist rhetoric is rather common in high levels of discussion [laughter], you know, Red Books, business journals, secret documents, you find this kind of thing. Obviously it wasn't just a few Wall Street lawyers and financiers, but he got the point. And in those days, he said, there was no crisis of democracy, and everything was fine because the rabble were just spectators. But in the sixties they got out of hand and caused this crisis, and it's therefore necessary to institute measures to return them to their proper place, so the ignorant and meddlesome outsiders go home. And in fact there have been major efforts to that end ever since the early seventies....
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These efforts culminated, in the last decade, in the "Washington Consensus", a term which refers to the global economic policy advanced by such institutions as the IMF and World Bank, and in trade agreements like GATT and NAFTA (as well as the WTO, created two years after this talk). Chomsky stresses that the purpose of the Washington Consensus is to protect the plans of the opulant minority -- now increasing global and corporate-based -- from democratic influence; that is, to increase the "democratic deficit":

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[T]he point of these [trade] agreements is to increase the democratic deficit, to establish it, to lock it in place with international treaties that public opinion will not be able to modify, because they're international treaties. That's the idea. And things like the IMF and the World Bank and the GATT and the NAFTA and the EC and so on are efforts to create that network of international institutions which is completely uninfluenced by the rabble -- can't be influenced because for one thing they don't even know what's going on. Who knows what's going on in the GATT negotiations? Who knows what's happening in the G-7 executive meetings? I mean, unless you're a specialist, you can't know. You know, you got to take out a major research project to find out what's going on, but that's the major framework of decision-making to which all of the institutions influenced by the rabble, like parliaments, will be subject. That's the idea.

...in the business press, which is usually quite honest about these things, it is described with quite engaging frankness. So if you read say the London Financial Times...they had a front-page article a little while back about what they called the New Imperial Age, which I thought was terrific incidentally. In the New Imperial Age, they said, there's a de facto world government developing, namely just the institutions I mentioned, you know, GATT, IMF, World Bank and so on, which is making very broad decisions to which everyone is going to have to conform, and thankfully doing it in secret. And representing the interests of the real centers of power, namely transnational corporations and supranational banks. If you look through history, there's nothing surprising about this. Government institutions, governing institutions, have usually, almost always I guess, coalesced around domestic power. Now in the last couple hundred years, domestic power is mostly economic power. In the modern period, it's mostly corporate power. In the very modern period, it's mostly transnational corporate power. So naturally it's developing its own governing institutions, as always, and it's always doing it with the same purpose in mind, to keep the rabble out. There are now new ways of doing this, and that's the new imperial age which is hailed.
-------------------(end of quotation)----------------

As I said before, this talk was from 1993, and you can see the progress we've made just in the last few years. "WTO", "IMF", and "World Bank" are now household names, and these institutions are increasingly being seen by the public at large as undemocratic, and as lacking moral legitimacy -- largely thanks to the efforts of hundreds of thousands of activists around the world, in the streets of Seattle, Prague, New Delhi, Sydney and so forth.

So how are elites reacting to the new anti-corporate activism? Without a transcript of off-the-record discussions, it's hard to know for sure. But in any case, for an official, on-the-record response, I recommend watching a roundtable discussion between Robert Reich and Jagdish Bhagwati, called "Trade Policy After Seattle", sponsored by the Council on Foreign Relations. It's actually rather revealing in its own way (and amusing too). [Bhagwati is far more clueful than Reich in acknowledging the existence of what he calls the "altruistic agenda" -- in particular, concern about the global "democratic deficit", (which is really the core concern, pace Reich); of course, neither participant impugns the intellectual coherence of including sanctions related to intellectual property but not child labor, etc]

Well, enough said for now (plus a bit extra).
posted by johnb at 10:11 AM on November 4, 2000

Incidently, with regard to the original topic, Nader's response makes perfect sense.

Remember, though, that boycotting a particular stock doesn't accomplish anything in itself. It's not like boycotting a particular brand of consumer goods, which by definition lowers demand for the product, however minutely. In contrast, boycotting a particular stock has no impact on demand at all.

In general, shareholder activism and stock boycotts only make sense as expressions of a larger media campaign to discredit a particular brand. And that's precisely what Nader is suggesting.
posted by johnb at 10:43 AM on November 4, 2000

Of course socialism isn't the answer, sylloge, but curtailing corporate power and abuses is. I've always found it hard to believe that people willingly side with multi-nationals believing that they have humanity's best interests at heart because they are made up of humans. How misguided is that? Corporations, and I'm talking about multi-nationals with billionaire CEOs and far more power than any small business consortium, hold no other value than amassing money. A corporation is not the equivalent of the people working in it. It is an artificial entity willing to eploit and usurp democracy for monetary gain. They have more power over me than my government because they've bought the government. So, no, I don't trust business to do what's best for me, for the environment or my country.

Nor do I trust government to do the same, but in democracy the people are supposed to own the government. It was designed to work on my side to beat back what Thomas Jefferson called the "monied interests" what Eisenhower partially termed "the military-industrial complex" what Nader is calling "corporations." It's always the same: good people fighting back a constant coup on my right to choose representation.

Communism is uneccessary if our government keeps corporations out of politics.
posted by capt.crackpipe at 6:50 AM on November 6, 2000