Discovering that the Poor Pay More: Race Riots, Poverty, and the Rise of Consumer Law

Abstract

Introduction 1319 I. Unraveling Dreams for a Great Society 1320 II. Race and Economic Justice 1321 III. The Search for Good Explanations 1322 IV. Explaining Urban Unrest as Consumer Revolt 1325 Conclusion 1327 INTRODUCTION David Caplovitz earned a Ph.D. in Sociology from Columbia University in 1960, became a director of Columbia University's Bureau of Applied Social Research, and then a Professor of Sociology at the City College of New York. (1) His Ph.D. thesis, which investigated the spending habits of low-income urban consumers, was published in 1963 by the Free Press, with the title, The Poor Pay More. (2) He is remembered today primarily for that book, and for other writing on the subject of the financial difficulties faced by poor consumers. (3) The insights of David Caplovitz helped courts, law-makers, and many middle-class Americans appreciate the complicated relationship between culture, law, and the exploitation of poor consumers. This Symposium Issue is centered around the fiftieth anniversary of the publication of The Poor Pay More, but please note that a hardcover edition appeared earlier, in 1963--not 1967. This means that we are celebrating, now, the fifty-fourth anniversary of the book. Nevertheless, I applaud the Journal for its decision to hold an event this year, which is the fiftieth anniversary of the paperback, and it is the paperback whose publication occurred at the height of its major impact. (4) I would like to offer a short explanation about why The Poor Pay More came to be among the most significant factors stimulating the reconstruction of consumer financial protection law in America and around the world. I. UNRAVELING DREAMS FOR A GREAT SOCIETY The assassination of President John F. Kennedy in November 1963 brought with it a period of political anxiety and social upheaval. (5) Hoping to mitigate traumatic discontinuity, Lyndon Johnson almost immediately pushed forward plans for a "War on Poverty" as well as a new Civil Rights Law that would, hopefully, become Kennedy's legacy as well as his own. Johnson took up these objectives and other measures to build a "Great Society" with the determination that the nation would combat racism and would combat poverty. But combat in Southeast Asia interrupted his domestic crusades. Military troops in Vietnam increased from approximately 16,000 at the end of 1963 to 184,000 two years later. (6) The buildup did not defeat the enemy, however, and the difficulties of military success emerged through daily news reports. The War became increasingly unpopular. Particularly divisive was the class-biased, compulsory military draft, which depended on the urban poor and readily permitted college students' deferments. The War also devoured the domestic goals of the Johnson Administration. Budgetary resources for the Great Society diminished, despite assurances that the nation could afford guns, and butter, too. Along with diminished resources came the disintegration of a social consensus over domestic priorities and methods. The very spotlight that had been cast by civil rights leaders and political progressives also highlighted disagreements over the causes and cures for poverty and for racism. From the mid-1960s, social indicators exposed a generational divide between young people and their elders, a divide over proper relations between the sexes, a divide over proper policing and the treatment of criminal defendants, and--perhaps most explosively--heightened racial antagonism. II. RACE AND ECONOMIC JUSTICE During the Johnson years, violence, vandalism, and civil disorder appeared in scattered cities nationwide. (7) During the summers of 1964 and 1965 riots happened in Rochester, New York; Harlem; Philadelphia; and Watts, California. In 1966 there were race riots in predominantly poor black neighborhoods in many more cities, including Chicago, Atlanta, Cleveland, Lancing, Michigan, and Waukegan, Illinois. …