Whose Freedom Wins? (Paul Dodds Commentary)

When Sen. Tom Cotton’s summer newsletter arrived, I read it with concern. Our senator now wants to liberate us from Consumer Protection Bureau rules that limit arbitration clauses in bank contracts. He claims they treat “Arkansans like helpless children, incapable of making business decisions in their own best interest.”

I am not a helpless child. I am a Harvard Law-trained contracts attorney, often with no leverage in America’s rigged and intentionally opaque standard form contract system. I read small print and know bad deals when I see them. Unfortunately, our system is carefully arranged to force me to accept them without negotiating. Whose freedom is Sen. Cotton protecting? Certainly not mine, nor that of the vast majority of Americans.

Americans typically have no effective individual power to refuse when companies hand us “take it or leave it” one-sided agreements of adhesion. Without regulatory limits and access to courts, we are constantly subject to corporate tyranny of contract. Conservative ideologues like Cotton enable big business to tie us all down with unassailable corporate red tape. They put us over a barrel, say we agreed freely and then deny our access to justice.

I ask you, Sen. Cotton, in truth, how often have you successfully negotiated your way out of an arbitration clause in a standard form agreement? Did you ever sign a confusing and unfair form contract to open the bank account, get the loan, rent the car, buy the required insurance, receive needed hospital care, get the job or gain the internet access? Did you ever give away your legal rights to trial or class action because collusive industry standard practice is to require arbitration?

Of course you did. We all do. We cannot do otherwise and function as economic beings in today’s America. We are all helpless babes in this world of one-sided standard forms. Your efforts serve to keep us helpless, not to affirm our maturity. They make America meaner, and funnel more money and power to the top. That is their real goal.

The freedom you defend with your regulatory repeal effort is the freedom for rich companies to leave the public even more defenseless. Armies of lawyers, lobbyists and legislators like you long ago took away our individual freedom to contract. The Consumer Protection Bureau gives us hope of having a sliver of our stolen liberty back, in an area of well-documented abuse by financial services firms. From this you want to save us?

Other advanced capitalist countries do not confuse companies with people. They reject American corporate freedom norms and do more to defend personal liberty from contractual overreach. For example, in Germany notaries write real estate contracts. German notaries are experienced attorneys mandated by law to write balanced agreements that both parties understand. Our lack of this notary function does not make us freer. It makes us all less informed signatories of worse agreements.

When I bought or sold a Berlin apartment, I would get a clear, detailed and fair contract, with no sneaky clauses shifting risk, like those American lawyers so love to hide in clever, public-duping incantations. When I buy a property in Arkansas with a broker involved, I get pages of opaque gobbledygook. The standard form is one-sided and presented by brokers without power to change anything of substance. I have the “freedom” not to purchase, but in my business, I repeatedly have to play with the bad cards the brokers’ cartel offers, always with the same bad form. It is outrageous, but it is standard practice.

I am not whining to be babied by a nanny state. I am calling out the fundamental unfairness that weaker contracting parties face in the U.S. every day, thousands of times. I grate under our mean-spirited norm of systemic, private-sector contractual oppression. I cannot stay silent when my senator piously and disingenuously says that he is giving back my lost adulthood by removing protections I welcome. Please don’t.

Please, Sen. Cotton, do your constituents a favor and do not dress up your defense of corporate convenience and greed as restoring our dignity. Spare us from fake freedom. You do a disservice to the precious concept. In this case, our freedom and adulthood are not yours to claim — they are yours to destroy in the name of your Club for Growth masters.

Paul Dodds is an attorney and managing director of Urban Frontier LLC of Little Rock, which buys and renovates for rent historic homes in the neighborhood near Little Rock Central High School. Email him at Paul@Dodds.us.