6/22/00 11:10 a.m.
Nader Inc.
The rumors about his financial empire are true!

By Jaime Sneider, editorial page editor of the Columbia Daily Spectator

he recent disclosure of Ralph Nader's personal financial information reveals that the consumer advocate himself has ties to big business. Although reluctant for years to release any information about his financial records, including even the name of his stockbroker, Nader finally succumbed to the challenges and made a 21-page filing with the Federal Election Commission. Well-known for giving lectures on college campuses across the country, the Green Party's nominee for the Presidency has no qualms about the $5,000 to $15,000 speaking fee accompanying his services.

The biggest surprise, however, was not the $512,000 the long-time critic of big business earned in the last 16 months, mostly from the student fees he extracts each time he visits a college campus to speak. The surprise was that the jokes made by conservatives for years alleging that Nader held a secret financial empire turned out to be completely true. In fact, a significant portion of the $3.8 million fortune amassed by Nader was gained from investments in technology stocks. His largest investment is also the most suspect: $1,158,750 in Cisco Systems stock, a company controlling over half of the business-network market and 89 percent of the high-end router market.

As an outspoken critic of Microsoft and its alleged "anti-competitive" tactics, Nader has placed himself at the forefront of the debate. In an article for the Microsoft-owned Slate, Nader writes, "Microsoft has never been known for its innovations. Yet, Microsoft operating-system software is used to run between 80 percent and 90 percent of the world's personal computers now." Notice that Nader, like the court prosecuting Microsoft, defined market share in terms of "personal computers," or rather, single-user desktop PCs running on an Intel microchip. Economist Alan Reynolds has criticized this narrow definition of Microsoft's market because it excludes Apple PCs, a close substitute, because they use Motorola chips. Once one includes Apple and all computers that serve as substitutes for PCs running a Microsoft operating system, Reynolds estimates that Microsoft's market share is less than 70 percent.

The Associated Press quotes Nader as saying that he has two requirements for investing. "Number one, they're not monopolists and number two, they don't produce land mines, napalm, [and] weapons." (Don't these conditions disqualify him from being Commander-in-Chief?) Arguably, however, Cisco Systems is as much a monopoly as Microsoft.

Cisco has been investigated by several government agencies for potential antitrust charges. In becoming the third-largest company in the world, Cisco has demolished a number of inferior opponents, including 3Com, Cabletron, and Bay Networks. The left-leaning editor of The American Prospect, Joshua Micah Marshall, notes, "When I raised charges of Cisco's monopolistic practices with Nader spokesman Teresa Amato, she asked whether any of the government inquiries into Cisco's behavior had resulted in sanctions or prosecutions." They have not.

Of course, because the term monopoly is theoretical and the government instead considers how much "monopolistic power" a company exercises over a given market, whether the government decides to prosecute Cisco is irrelevant in determining whether it is in fact a monopolist. The fact of the matter is that Nader has invested in the same type of company he makes a fortune ridiculing.

In his statement announcing his candidacy, Nader writes, "Over the past twenty years, big business has increasingly dominated our political economy. This control by the corporate government over our political government is creating a widening 'democracy gap.'" If big business is truly the foe of a free society, rest assured that Nader is now a co-conspirator. In joining the 50% of households and 80 million Americans who have money in the stock market, Nader has become a member of America's investor class.

And like Microsoft, as Cisco has grown, it has created vast fortunes for its employees. Of Cisco's 23,000 employees, 2,500 are stock-option millionaires. The stock has split eight times and risen 8,000 percent in the decade since it went public. As distrust in Social Security continues to motivate Americans to depend on the stock market for their retirement, the investor class will continue to grow. As it does, Nader's support will dwindle. Only out of nostalgia and fear of the future has the Green Party been able to maintain such support as it enjoys.

Eventually, all Americans will have money in the stock market — and as the investor class grows, an all-enframing capitalism will emerge. The only question that will remain is how an all-encompassing system could in any way be alienating.