Starbucks is a hugely successful corporation. It has more than 4,000 branches worldwide, with three new ones opening daily. In 2000 its chairman, Howard Schultz, was paid $2.1 million (about £1.5 million). It is a familiar sight on high streets everywhere. Its rapid rise and commanding position make it an example that other companies would love
to emulate: a model of what global free-market capitalism encourages. So how does it do it?

Simple. Corporate success means profitability, and there are many obvious routes to higher profits. Among them: pay your workers as little as possible; do all in your power to deny them their legal employment rights to keep your workforce flexible; use your market position to
force down prices of supplies, and to force competitors out of the market, forcing retail prices up; and encourage industrial-scale production techniques which increase yields but are unsustainable and permanently damage the environment. Starbucks excels at all of them.

Clusters

Five branches of Starbucks have sprung up in Cambridge recently. Why so
many? Is the demand for coffee really that great? Naomi Klein, in her
book No Logo, explains the Starbucks corporate strategy of Oclustering¹.
Starbucks will concentrate a raft of new stores in one place, normally
one which already has a culture of coffee bars. The stores will be so
close that they will actually taking custom away from each other, and
the profitability of individual stores actually decreases - in the short
term. Of course, at the same time, they cause other local outlets to
lose custom, and hope to drive some of them out of business. According
to the company¹s own annual report of 1995, their strategy is to enter
markets only where they can `become the leading retailer and brand of
coffee¹.

Who does the work?

It is a cliche that Opeople are a company¹s most valuable assets¹, but
they are also among its most expensive. It costs money to give one¹s
workforce fair pay deals, decent hours, legally required standards of
job security, sick pay and health and safety conditions, and so on.
Millions of workers have gained at least some of these benefits through
unions, which provide collective bargaining power and back-up support
when things go wrong.

How is an employer to go about avoiding these bothersome expenses? After
all, employees have a legal right to join a union, and employers must
recognise a union joined by a sufficient proportion of their staff. But
if a company is big and powerful enough, they may as well be above the
law. Starbucks will do anything in its power to prevent its workers
joining a union. But how is it to be done?

The first step is to fire workers suspected of encouraging their
colleagues to unionise. You trump up a reason for dismissal if you can,
but at the worst, the disgruntled ex-employee will get a judgement
against you for unfair dismissal and you will have to pay compensation:
cheap by comparison with the cost of a unionised workforce. When workers
at a Starbucks distribution plant unionised, they couldn¹t sack the
workers so they closed the plant! Having thus shown they mean business
once, the mere threat of such an action is enough to keep employees in
fear of exercising their legal right to union representation.

Having thus weakened its employees, Starbucks has of course had no
difficulty imposing appalling pay and conditions on its staff. Where
possible, staff are employed part-time to avoid giving them the legal
rights enjoyed by full-time workers: often staff will find that their
hours, which are required to be Oflexible¹, are just less than the legal
cutoff point for full-time status. A centralised computer system keeps
track of every cup of coffee, who sells it and when, and uses labour
where it is most effective - for example by requiring an employee to
start at 5am, only to go home again at 9.30 after the morning rush. The
result is to push profits up, but not, of course, wages. Naomi Klein¹s
book No Logo records that in British Columbia, new workers Ofaced an
actual wage decrease - from Can$7.50 to $7 an hour - during a period
when the chain was doubling its profits and opening 350 new stores a
year¹.

The coffee growers

But Starbucks¹ exploitation does not stop at its direct employees. Its
buying power in the international coffee market makes it a leading
player in driving down the already disgusting prices that
coffee-growers in developing countries receive. While Schultz draws his
$2.1 million (in addition to shares and options), a Tanzanian coffee
grower, Tatu Museyni, interviewed in the Independent in May last year
earned £30 a year. Market forces had driven down the price she could
command for the produce of her 30 coffee trees by a half in the previous
year. She worked a 12-hour day, no doubt at least as hard as Mr Schultz,
and had to walk up to 14km to fetch water and provisions. She could not
afford to continue to send her two daughters to school, or to enrol her
son.

And that is not the worst of it. Much of the world¹s chocolate and
coffee is produced using slave labour. The term is not an exaggeration:
parents in poorer African states can sell their children to work in the
wealthier ones on coffee, cocoa or cotton plantations. It¹s thought that
15,000 Malian children, having been sold for an average of $30 each, are
working on cocoa plantations in the Ivory Coast, producer of half the
world¹s chocolate. According to local director of the Save the Children
Fund, OPeople who are drinking cocoa or coffee are drinking children¹s
blood. It is the blood of young children carrying 6kg of cocoa sacks so
heavy that they have wounds all over their shoulders.¹

It doesn¹t have to be like that. The Fairtrade Foundation in the UK, and
its partners elsewhere, support and certify ethically-traded brands.
These give producers a fair wage, including a social premium to enable
the producers to improve their living and working conditions. They pay
in advance to avoid producers falling into debt, ban child or slave
labour, and encourage producers to form co-operatives and unions.

As any successful capitalist can tell you, however, no-one ever grew
rich by paying a fair wage when they didn¹t have to. Selling Fairtrade
products would hit Starbucks in the profit margin - which is why they
don¹t do it in the UK. In the US, as a sop to public opinion, they do
stock it in principle. But you have to ask for it specially, it costs
more, and most of their staff don¹t seem to know they have it, it¹s
hardly something they¹re committed to.


Capitalism Inc.

Investment by high-tech companies, and changing demography, is causing a
boom in Cambridge: it is supposed to be one of capitalism¹s success
stories. Supporting that boom are the coffee growers, agricultural
mechanisation, and workers that give us the pleasant if disconcertingly
homogeneous and soulless surroundings of Starbucks outlets. How do those
workers, even the ones here in Cambridge, benefit from that boom? Well,
they get the same insulting wages, but property and rental prices have
spiralled to obscene levels, so that they can hardly afford to pay their
rent.

As for the growers themselves, their dividend from Starbucks¹ success is
even more offensive. The chain can use its market dominance to screw
down already low prices to literally starvation levels. The need to buy
in enormous bulk makes it convenient to buy through routes with plenty
of middlemen, lowering further the amount paid to producers, and to
impose growing conditions which damage the environment and the
producers¹ long-term sustainability.

This is a textbook example of how global free trade encourages
neocolonialism: the complete subjection of the world¹s poor by the
powerful. Poor nations have not the resources to push for advantageous
trade rules, and have no effective recourse even when such rules as are
in place are broken. By contrast, a country like the US can, by imposing
trade embargoes, smash a smaller country that dares try to act in the
interests of its own citizens. To take another example: in May 1999, US
patents were granted for medicinal herbal remedies that have been used
in India for thousands of years. (Two of the patentees are US-resident
Indian nationals, who knew perfectly well what they were doing.) It
seems that the existence of prior art in India was not relevant to the
granting of these patents under US law. On the other hand, under
international treaties, the patents will be enforceable in India! The US
administration has shown no inclination to correct this grossly immoral
state of affairs, which happens to benefit its own citizens.

How different from their reaction when, in the wake of the September 11
attacks, a panic-stricken America wanted large supplies of anti-anthrax
drugs. They did not like the price charged by the German patent-holder,
Bayer, and threatened to allow US companies to manufacture the drugs in
breach of the patent unless the price were reduced. Media stories were
run asking Owhether it was ethical¹ for Bayer to enforce its patent (the
result of years of development) in the face of a potential public health
crisis! Persumably, public health in impoverished countries such as
India is a less pressing ethical matter than public health in developed
countries such as America.

Anti-capitalism

It¹s important to understand that Starbucks isn¹t some specially evil
monster. It is just a large corporation using the system of capitalist
free trade to its own best advantage - as any company must if it is to
stay ahead of its competitors in a free market. If Starbucks went out of
business tomorrow, its market position would be taken in short order by
the company next best able to exploit the rules - because they would
have the edge over their less rapacious or less competent competitors.
Capitalism measures success by exploitation. The only way to end the
systematic exploitation of the poor and rape of the world¹s natural
resources is to smash the system of capitalism that encourages it.

One of the small ways in which we can do this is to boycott the worst
offenders, of which Starbucks is one. (Borders, just up the road, is
another. But that is another story.) Another is by making a conscious
decision to break our own part in the cycle of exploitation wherever
possible - for example, by drinking Fairtrade products such as those
we¹re giving away at our stall. We even think they taste better. We hope
you agree that the taste of freedom is sweeter than the taste of Othe
blood of young children¹.



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