Starbucks Job-Creation Campaign Embraces Altruism

via Mises.org

Perhaps a worn out, yet relevant, proverb – “Give a man a fish and he eats for a day.  Teach a man to fish and he eats for a lifetime.” – needs some re-emphasis.  If we look closely at our society today, it is not difficult to see this proverb shattered to bits.  Yet, we are often too busy with our day-to-day jobs and family responsibilities to see just how large a fissure is opening up in the social bedrock of America. Simply, it is one of ideology, and consequently, is often dismissed as such, as if ideology has no practical application in our lives. Starbucks CEO Howard Schultz echoed this sentiment during a recent CBS interview.  “And we need to literally put our feet in the shoes of American people. They’re not worried about ideology. They’re worried about schools for their kids, jobs, housing. This is a problem that is not based on partisanship. This is based on citizenship.”  Whether Mr. Schultz believes ideology plays no part in the American conscience or not, such a statement is worrisome.  For an ideology is nothing less than a set of perceptions, or moral rulings if you will, that we as individuals use to make decisions from what to feed our children, who to work for, or where to spend our money.  It is my contention that the most efficient way to diagnose many of today’s problems is to examine where ideologies conflict with reality.

As a Starbucks partner (employee), I was surprised at their recent job-creation campaign.  My initial shock came from its obvious association with government-backed funding (CDFI’s are funded by the U.S. Treasury Department, and the  Housing and Economic Recovery Act of 2008 authorized CDFI’s to become members of the Federal Home Loan Banking System, the latter being a government-sponsored banking institution). However, Adam Stover’s piece, highlights the fundamental contradiction of a “job-creation” campaign based on donations instead of profit creation.  After all, since when does the free market divorce job  growth from profit creation.  The following is an excerpt from Stover’s article.

While well intentioned, Starbuck’s zeal is misplaced. The microfinance firm that they have partnered up with uses donations rather than actual sales transactions to raise money. One of the key requirements for a “sustainable” job is a profitable business. Profit cannot be calculated without a value scale, which measures a good or service versus some quantity of money; donations do not provide this. Donations represent money without the value of profit and consumer need, both of which are vital to the sustainability of a job or business. When the donations cease, so will the job or business.

Perhaps a more interesting question enters the forum when one reads the Opportunity Finance Network’s mission statement: “Opportunity Finance Network® (OFN) is the national network of Community Development Financial Institutions (CDFIs)—private financial institutions that are 100% dedicated to delivering responsible, affordable lending to help low-income, low-wealth, and other disadvantaged people and communities join the economic mainstream.”  Two points are worth mentioning here.  First, any institution sponsored by government dollars cannot, by definition, be “private” as claimed.  Moreover, I call your attention to the last line concerning the “economic mainstream.”  The logical inference to be drawn from our discussion then becomes whether the “mainstream,” or status quo, has shifted from an economy based on profit and growth leading to job creation versus one dependent upon donations emboldened with the altruistic spirit of what our dear politicians term the “public good.”   And here lies the contradiction, for free-market job creation cannot exist in an economy based on donations and stimulus, at least not in a sustainable fashion.

While Starbucks rightfully claims the revered title of global corporation and the success inherent with that label, one has to wonder why Starbucks promotes values contradictory to those which paved its own road to success.  Examples such as these are warning signs of a society and an economy that is fundamentally at odds with itself.  For what this campaign concludes is that donations, charity, and altruism are as valuable in practical and ideological terms as profit, ingenuity, and the individual.  Yet to any entrepreneur,the backbone of American progress throughout the last century, these two sets of ideals are in direct opposition and cannot coexist.

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• Can a Jobs Campaign Create Real Jobs? (mises.org)
• Starbucks’ Crackpot Solution to Jobs Crisis (alternet.org)
• Starbucks’ Job Creation Plan (forbes.com)