Starbucks: Commendable or Untenable?

The answer: because people like to think that they are “generating grass-roots social change” and, as a general rule, don’t particularly enjoy writing checks to charity, they can have their (coffee) cake and eat it too by supporting allegedly impoverished, illiterate, disease afflicted individuals in third world countries with the purchase of their venti-soy-iced-carmel-macchiato-with-an-extra-shot. They can sleep easily at night (provided that the caffeine wore off) knowing that they did their piece to end world hunger, or poverty, or lack of clean drinking water (that means you, ETHOS), or whatever.

In the past three days, I’ve probably frequented at least three different Starbucks coffee shops to keep my brain whirring at a relatively high RPM as I approach finals week.  I remember a while back that Starbucks made quite the stink about the fair-trade-ness of a limited release batch of coffee, how they sourced if from small, family-owned Colombian coffee growing operations, or some variation on this bucolic imagery. Why bother advertising this? The answer: because people like to think that they are “generating grass-roots social change” and, as a general rule, don’t particularly enjoy writing checks to charity; they can have their (coffee) cake and eat it too by supporting impoverished, illiterate, disease afflicted people in third world countries with the purchase of their venti-soy-iced-carmel-macchiato-with-an-extra-shot. They can sleep easily at night (provided that the caffeine wore off) knowing that they did their piece to end world hunger, or poverty, or lack of clean drinking water (that means you, ETHOS), or whatever.

This leads me to believe that the average Starbucks customer, indeed, the identity of Starbucks itself,  is at once the socially aware, un-showered, Bohemian Whole Foods shopper and the ruthless, BMW driving, MBA-ed yuppie–clearly, a contentious and awkward situation indeed. It doesn’t like to mention this latter persona. The average Starbucks customer must also have a relatively short memory, because a few years ago one of the 24-hour news outlets–ever in need of a story–did a piece on how Starbucks systematically underpays its coffee suppliers for their crop, and that because of corporate “greed” hundreds of people are living in complete destitution. Granted, newsmongers have a penchant for sensationalism, but they have a point: something doesn’t pass the smell test when, due to pricing power, a large corporate entity simultaneously drives down the market rates of its raw materials and rapidly, absurdly inflates the price (and pretension) of what was once a pretty pedestrian product: a cup of joe. 

I’m not necessarily saying that what Starbucks is doing is wrong per se, it just doesn’t sit right with me. So here’s my question: is it ethical for a corporation to engage in generating the cliched grassroots change, or any charity for that matter, to scrub clean a tarnished corporate reputation? Furthermore, is it ethical to use such charitable giving as a selling point?

I was fortunate enough to have lunch with a prominent Nobel Prize-winning economist at the University of Chicago, Robert Fogel, with a good friend of mine. On the wall of his office was a picture of himself, Gary Becker, and Milton Friedman: which makes him, rather decidedly, a member of the Chicago school of economics. Fogel made it clear that Chicago economists believe that in all situations the market efficiently distributes resources among its participants; what he didn’t say, but what Friedman said explicitly, is that the use of corporate resources–which are, after all, shareholder resources–in charitable activities is tantamount to theft from shareholders, not explicitly, because they are frittering away a portion of someone’s retirement fund, but implicitly: they are taking from shareholders the potential earnings from assets allocated to socially-minded endeavors.  The explicit cost to shareholders, in short, is the opportunity cost of the earnings from capital investment.

Does buying slightly more expensive coffee constitute what Freidman is essentially calling fraud? You bet it does; it is not the duty of publicly held companies to engage in “social business” with shareholder money; such decisions are essentially unilateral because, let’s face it, so few shareholders will go through the time to do due diligence research and vote on these issues. Because we shareholders are lazy, that’s why.

I’m now forgetting who, but I’m willing to wager it was Miamonides (or maybe it was just uninterpreted Talmudic law) that dictates to followers that it is unethical to do charity work and tell people about it. All charity, according to this principle,  should be anonymous. This seems to fly in the face of modern, “enlightened” social business.  Why does what Starbucks is doing seem so, well, icky? Because they are doing “good work” not necessarily because it is the ethos of the company dictates it, not because the shareholders gave explicit approval, but because (a) they are trying to reinvent themselves as a socially minded business to garner approbation from socially minded consumers and (b) telling a good sob story with a readily available quick fix (buying a pound of super-ethically-sourced coffee) is a fantabulous way to boost sales… even if, on the surface, it “is for all the right reasons.” Keep in mind, it’s not Starbucks giving the money, it’s you to whom Starbucks passes on the burden of giving, and it’s your stock portfolio that could suffer for it. But, again, you’ll be able to sleep, and you’ll be able to keep real social problems at arm’s length: out of sight, out of mind, but in your favorite mug.

Are you too smart for college?

What I believe the value of a “college education” to be is the following: the formalistic academic environment provided by our nations’ colleges and universities provides its young people with the framework–the papers, the reading assignments, the problem sets, etc.–to undertake the rather formidable task of consuming and digesting giant quantities of information, and, hopefully, be able to articulate it come the time for an exam or term paper.

Over the course of the past week, as I begin to say good byes and good lucks to my friends graduating from the University of Chicago, I’ve been doing some thinking. Why am I going through the process of “getting a college education?” Which I suppose can be rephrased as “what is a ‘college education,’ what’s so important about it, and why do I have to pay so much for one when all I’m doing is writing papers and reading books?” This quickly degenerates into an eggheaded discussion about what, ontologically, “education” is: I am not here to have that discussion, nor do I want to have it. Ever again.

What I believe the value of a “college education” to be is the following: the formalistic academic environment provided by our nations’ colleges and universities provides its young people with the framework–the papers, the reading assignments, the problem sets, etc.–to undertake the rather formidable task of consuming and digesting giant quantities of information, and, hopefully, be able to articulate it come the time for an exam or term paper. It is assumed by unwitting and idealistic faculty that “critical thinking” skills, among others, are picked up along the way. However, and I am not the first to say it, the internet and its attendant social networks and carefully hidden pockets of clandestine information have fundamentally changed the way that my classmates and I undertake the learning process; to wit, it is easier to get academic work “out of the way” without much intellectual effort in order to develop other projects. In short, we’ve hacked college. Most of us “get it done,” not for its own sake–”to learn and to grow”–but to GTFO, so to speak, and, as one of my fellow economics major friends so eloquently put it, “make shit-tons of money.”

If there is one thing that this year has taught me, it is the two flavors of motivation: does one pursue a goal as a means to some other end or as an end in itself? I, personally, have been straddling both sides of this duality, but as of late firmly decided that I only get to “do” college once, and thus I will devote myself as fully to the academic portion of it as possible. However, it seems that the pedagogical focus of the “modern college experience”–building a social network and padding a resume–is, effectively and convincingly, the cynosure among business-minded students–even at the ferociously eggheaded UChicago.

Consider the following conjecture: If you are the entrepreneurial type, the type who wants to get out there and get something started, or if you believe that academia is holding you back from what you want to do, take it from someone who’s read way too much in his life: Aristotle, Nietzsche, Adam Smith, and Karl Marx won’t make you successful. They will, however, help you find significance in your accomplishments. If you’re the retrospective type, one that cerebrates post hoc, you’ll be able to educate yourself later not because society is telling you to, but because you can approach that process with the same zeal with which you approach your current projects. If you have all of these great world-changing ideas, the wherewithal to see them through to execution and are willing to forego the short-term social cache of a college degree, then find an experienced mentor or two, build your network, and get cracking.

Parents often counter their college-bound teens’ assertions that many of today’s most prosperous companies were started by college drop-outs with the fact that their founders were smart enough to get into college in the first place. Bill Gates was also smart enough to realize that if he didn’t start Microsoft, somebody else would.

I’m not making any claims to being too smart for college. I enjoy academic life, and I want the social validation of a degree. I am, in fact, too cowardly to take the plunge into starting my projects in earnest now; few are willing to make that leap, and that’s the point. That said, I am currently researching options for a gap year.