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The Difference Between Starbucks and The State


When the US Government implements a new law or policy, it's here to stay. Virtually no amount of complaining (short of serious civil unrest) from the taxpayers will lead to a swift reversal in Obamacare, or the TSA, or the US Patriot Act, or NSA spying, or Net Neutrality, at least not without years of "studies" and hearings, and a national "debate" which of course must answer the question: "what will you replace [government program x] with?" 

In the private sector, however, things are a little bit different. Less than two weeks after Starbucks introduced the "Race Together" initiative, it's dead and in the grave. "Race Together," in case you missed it, was a plan from Starbucks CEO Howard Schultz in which Starbucks employees were instructed to strike up small talk with customers about race relations. From the customer's perspective, this meant that they had to endure time-consuming and unwanted small talk from the mostly-white hipsters who make your Americano. 

The quick death of "Race Together" illustrates the fundamental difference between the state and private companies. Unlike the state, Starbucks can't get your money unless it convinces you to hand it over voluntarily. It can't simply take your money via taxes, or force you to come into its stores, or talk to its employees. Thus, Starbucks ultimately is forced to do what the customers want, or go out of business. When Starbucks miscalculates public desires, it is forced to change. When the state does the same, it need only fall back on the fact that it has most of the guns, and the legal authority to use them. 

And what a miscalculation it was on the part of Starbucks. In his column at LewRockwell.com today, Lew noted that Starbucks may have very much misread the degree of agreement between Schultz and the general public. 

To help push the discussion along, Starbucks also ran an advertisement in USA Today, in the form of a questionnaire, demanding to know how many times per year we’ve hosted someone of another race at our homes, and how many times customers had dined with people of a different race. It is evidently not enough for people to make uncoerced decisions regarding their friendships and social lives; they should instead choose their friends on the basis of percentages and bean counting.

The Starbucks fiasco pointed to a broader point: almost no one calling for a frank discussion of race really wants one. What they want is an echo chamber. They want to hear the same ideological assumptions behind racial differences in income, employment, and education thoughtlessly repeated. Since those assumptions are false, these discussions produce nothing of value. Just more misplaced resentment, anger, and frustration.

Mark J. Perry of AEI (of all people) zeroed in on this fact as well. Maybe America isn't interested in being lectured by Starbucks. Maybe most Americans don't actually agree with Schultz's assumptions.  And best of all, America doesn't have to be lectured by Starbucks. Unfortunately for Schultz, he's can't issue an executive order instructing everyone to do what he wants. One can simply elect to stop going into Starbucks's stores. Starbucks figured this our pretty quickly. Because stockholders. 

Try doing the same with your local friendly DMV, or the IRS, or the EPA. When they speak, you'd better listen, or go to jail.

Image source. 


Contact Ryan McMaken

Ryan McMaken (@ryanmcmaken) is a senior editor at the Mises Institute. Send him your article submissions for the Mises Wire and Power and Market, but read article guidelines first. Ryan has a bachelor's degree in economics and a master's degree in public policy and international relations from the University of Colorado. He was a housing economist for the State of Colorado. He is the author of Breaking Away: The Case of Secession, Radical Decentralization, and Smaller Polities and Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.