The “business scares me” crowd frequently turns to a group of organizations and like-minded individuals who, oxymoronically, refer to themselves as “consumer advocates”.  Let me be blunt: consumer advocacy is nothing but a thinly veiled scam designed to convince the gullible to embrace a liberal philosophy and demand that government must get ever more involved in the operations of business.

It wasn’t always that way.  Underwriters Laboratories Inc. was founded in 1894 as a private sector means of testing the reliability and safety of consumer products.  The A. M. best Co. was founded in 1899 to evaluate for consumers the viability of insurance providers.  Consumers Research was begun in 1929.  None of these organizations were involved in public policy matters.  Their roll was to fill the market demand for information about products and services made available to consumers.

How did that change?  A look at the automotive industry gives some insight:

In 1899, when the US population was about 76 million, there were 26 traffic fatalities in this country.  Vehicles were assembled by hand – the use of assembly lines in auto manufacture wasn’t introduced until the next year by Ransom Olds (and perfected by some guy named Ford by 1906).  No government regulation existed regarding the safety of automobile manufacture.  Clearly we were in serious danger.

Fifteen years later, the number of automotive fatalities had risen to 4,468.  While that appears to be a huge jump, it is still far smaller than the increase in the number of automobiles on the road.  That was the year that Henry Ford introduced the previously unheard of $5/day wage (typical wages at the time were half that) to combat excessive turnover.  He somehow managed to offer this in absence of a federal minimum wage mandate (surely, there’s some mistake).  Federal safety guidelines for automobiles were still a quarter century away.

It wasn’t until 1921 that statistics were captured not just on the total number of traffic fatalities but on the total number of vehicle miles traveled (VMT).  In that year, there were 13,253 traffic deaths and 55 billion vehicle miles (a fatality rate of 24.09 per 100 million miles traveled – the NHTSA standard).  Driving is clearly a tremendously dangerous endeavor.  Still no safety regulation had been put in place.

The United States began its love affair with auto safety regulation in 1940 with a law mandating the use of sealed-beam headlights.  That this essentially froze innovation in headlight technology for four decades is an issue for another day.  In 1940, the number of traffic fatalities had risen to 32,914, but the vehicle miles traveled had skyrocketed to 302 billion.  In the absence of governmental interference, that necessary evil to protect the public from the greed of evil businessmen, the fatality rate went from 24.09 to … 10.89.

Over the next couple of decades, more and more regulations were implemented in order to “save the American public” from unsafe automobiles.  In each case, the new regulation represented not some innovation on the part of government.  Quite the contrary, in each case some safety feature developed by the private sector in order to make their products more attractive to customers … were summarily imposed upon every automaker without regard for costs or practicality.  In other words, the market was working just fine, but the state felt compelled to intervene anyway.

Fast forward to 1965.  In the quarter-century since safety regulations had been implemented, the fatality rate was slashed in half, arguably due to factors that had nothing to do with those regulations.  While fatalities rose to 47,089, vehicle miles jumped to 888 billion, yielding a fatality rate of 5.30.  That, however, just wasn’t good enough.

In 1965, Ralph Nader, arguably a wholly owned subsidiary of ATLA (the American Trial Lawyers’ Association) and future presidential candidate (for the Greens, whose economically suicidal platform included a maximum wage of about $100,000 – ten times the legal minimum at the time), wrote a book that essentially libeled the Chevrolet Corvair out of existence.  The book, Unsafe at Any Speed, made a number of suspect claims about alleged safety weaknesses in American automobiles, particularly in the Corvair.

Chief among the claims about the vehicle were that its use of a swing-axle rear suspension design was inherently dangerous (hence the over-the-top title).  It was, of course, complete nonsense and the claims were unfounded.  In fact, a number of other car manufacturers used the same design including Volkswagen, Mercedes-Benz and Porsche.  But that isn’t the real injustice.

General Motors had, in fact, begun using an improved suspension design beginning with its 1964 models – a fact that was readily available to the public before Nader’s book was submitted for publication.  Moreover, both NHTSA data and independent tests found that the 1960-1963 Corvair compared favorably to other contemporary cars including the Ford Falcon, Plymouth Valiant, Volkswagen Beetle and Renault Dauphine.  Comparisons to the Ford Pinto, which disappeared in the wake of claims by Mother Jones that “hundreds” had burned to death in them when in fact the number was only 27 – comparable to other vehicles, are precisely on point.

The thesis of the book was that automakers were inherently indisposed to offer improved safety features on their products because “safety doesn’t sell” – a point that would appear to be pretty silly after decades of Volvo advertising, the development of airbags, crumple zones, built in child safety seats and on and on… all by the private sector.  That the claims were specious did not prevent Nader from amassing a huge following and the “consumer advocacy” industry essentially took off.

Nader has been the force behind literally dozens of such “advocacy” organizations, including the Consumer Federation of America (which I’ll come back to), the Citizen Advocacy Center and the Center for Auto Safety.  Many of these organizations were eventually brought under the Public Citizen umbrella organization that undertakes the bulk of Nader’s “advocacy” work.

Over the next 30 years, auto safety continued to improve exponentially.  By 1996, the fatality rate had fallen to 1.69, less than a third of what it was when Nader penned his attack piece.  In that year, Consumers Union, a spin off of Consumers Research created in 1936 when management refused to become both activist and pro-organized labor, decided that the Isuzu Trooper was a rollover hazard and said so in their Consumer Reports publication.  Unsurprisingly, new rollover regulations were being considered at the time by the NHTSA.

Isuzu sued and the court ruled that Consumers Union had published “numerous false statements” and had put the vehicle through tests other vehicles had not been subjected to.

This week, two “consumer advocacy” groups, Ralph Nader’s Consumer Federation for America and the aforementioned Consumers Union, testified before Congress that something must be done about the rise in gasoline prices.  Their position is that more “oversight” over oil industry “market practices” is needed.  It, of course, never occurred to them that the chief driver of higher gas prices has more to do with governmental regulations and environmental controls that demand different fuel “blends” as summer approaches.

Is anyone really surprised?

Can any rational individual really trust these “advocates” to act in the consumers’ best interests?  Not a chance.