The New York Portfolio: Rhoda Karpatkin
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Rhoda Karpatkin is president emeritus of Consumers Union of the United States, the nonprofit product-testing and consumer advisory organization that, among other things, publishes Consumer Reports, a monthly that enjoys a subscription list of 4 million. The publication’s online version has more than 1 million subscribers.
Ms. Karpatkin has also served two terms as president of Consumers International, which links some 220 member organizations in more than 100 countries. “Consumers not only ought to have a voice in the marketplace, they must find a way to have that voice,” she said.
A graduate of Brooklyn College and Yale Law School, Ms. Karpatkin says, “A market economy can only work if it provides appropriately for business as well as consumer interests. From the point of economic fairness, there needs to be a balance between business interest and consumer interest. That way, a market economy can work very well.”
She quotes Adam Smith who said that consumption should be the focus of the producers and that it was in the self-interest of the producer to promote consumers’ interest. “These two sets of interests are intertwined,” she says.
She believes that the combination of market forces, consumer activism and government regulations have generally produced safer products in the American economy, particularly in the automobile industry where, in the old days, safety was necessarily a driving concern for manufacturers. “It’s the right thing for a company to do when it shows concern for safety of its product,” Ms. Karpatkin said.
Similarly, she said, investors in securities also need protection. “There was a vast black hole for investors,” she said, “until a few activist lawyers got involved.”
And what about corporate ethics? “A corporation has many stakeholders – not just management, shareholders, the board, but also workers, the community, and consumers. That concept of a multi-stakeholder corporation needs to be reinforced so that the public interest is promoted.”
And her interest in investing leads her to what? “I favor and respect socially responsible funds,” she said. “They’re not perfect, but they come as close to functionality as it’s possible.”
