Trouble brewing

<strong>Starbucked: a Double Tall Tale of Caffeine, Commerce and Culture</strong>

Taylor Clark <e

In the centre of Xi'an, the ancient Chinese capital, there is a gleaming concrete and glass Starbucks. Although a caramel macchiato costs more than a slap-up lunch for four in any of the city's traditional cafes, this has not stopped it from doing brisk business. Its customers will pay these astronomical sums because they want to buy in to what seems to them to be an aspirational and sophisticated brand. It is difficult to know what is more disturbing about this outpost of the Starbucks archipelago: the astonishing commercial vertigo of its product pricing, or the fact that it has created yet another enclave of the Starbucks "non-place", which, despite the location, could just as easily be in Manchester, Mumbai or Montreal. Like it or loathe it, Starbucks is at globalisation's cutting edge.

In Starbucked, Taylor Clark sets himself a double task - first, to explain how a company selling coffee and hot milk grew in such a short time to a position of such global dominance, and second, to assess the range of ethical objections Starbucks has attracted. Clark performs the first task entertainingly, with lashings of surprising trivia (for example, there is a branch of Starbucks at the Guantanamo Bay naval base). However, in the book's move from anecdote to ethical analysis, it becomes much less sure-footed.

The rise of Starbucks is the story above all of one man, the coffee visionary Howard Schultz, Starbucks CEO. After experiencing an epiphany on a visit to Milan in 1983, Schultz transformed the firm from a gourmet coffee retailer into the American home of the cappuccino and caffè latte. He comes across on the pages of Clark's book as a hyperactive megalomaniac, given to flights of rhetorical fancy bordering on pure nonsense: he maintains that Starbucks is "built on the human spirit", and is a deep believer in the "passion" of the "Starbucks experience".

Schultz's success is instructive. He managed to sell a cheap commodity (until Starbucks came along, American diners typically charged 25 cents for a cup of coffee) at hugely inflated prices because he tapped into a need that no one else had noticed. In an age of increasing social dislocation, Starbucks is a "third place" (one other than home and work) where people can spend time. The company caters to "people who want to be alone, but need company for it".

Starbucks also fitted in perfectly with the 1990s economic boom: as people worked longer and longer hours and slept less and less, it met the constant need for self-medication with caffeine. While the conditions were propitious, their exploitation was imperial: Starbucks developed an inspired expansion plan, driven forward by the most aggressive real-estate division the world had ever seen and by inspired marketing that created (if only for a while) an exclusive and aspirational brand. Accordingly, its growth has been stunning: from 11 stores in 1987, to more than 15,000 worldwide today.

Clark's charge sheet against this global behemoth is extensive: Starbucks kills off independent coffee shops; it produces cultural homogeneity and extends US cultural imperialism; it exploits and impoverishes third world farmers; and it creates mindless and unrewarding "Mc Jobs" for its employees.

Clark's treatment of the charges is uneven. He convincingly shows that Starbucks has not done much to damage its competitors, precisely because it largely created the lucrative market for overpriced coffee drinks. Needless to say, while this may well be true, it is despite, rather than because of, the company's plans for total market domination. Clark is also curiously unexercised by Starbucks's vicious anti-union activities. He takes the view that unions don't really make much sense in the context of Starbucks, given that it would be absurd to expect too much from "dehumanised fast-food labour". Rarely has a point been so comprehensively missed.

Where Clark really loses his grip is on the most important ethical issue regarding Starbucks: the plight of the world's coffee farmers. Coffee is the world's second most traded commodity, after crude oil. Yet, in contrast to the fortunes made by oil producers, coffee producers remained impoverished. Although the world is consuming ever more coffee at ever higher prices, producers are worse off financially than they were in the 1980s. Only a minuscule sum - about 2p - out of the cost of your cappuccino gets anywhere near to the coffee grower (and the figures are often little better for "fair-trade" coffees).

Revealingly, the best time for coffee growers was at the height of the Cold War, when the US introduced guaranteed prices and quotas, because of worries about economic chaos in South America leading to socialist revolution. Since the fall of communism, however, the plight of world coffee producers has been horrific, the free market leaving them painfully exposed to the vagaries of fluctuating prices. Little wonder so many are diversifying into producing khat (in East Africa) or cocaine (in South America).

Clark's Panglossian solution is that we should all just keep on buying more and more high-end gourmet coffee, on the grounds that producers of high-quality coffee generally make more than producers of the rougher varieties. But this "solution" does nothing to increase the economic security of coffee producers or to cure the mal-distribution of the profits from coffee. It also ignores the fact that, as more farmers move into "gourmet" beans, the premium for such varieties will decline quickly. The global politics of coffee are complex; Clark offers a useful crash course in the problems without suggesting any plausible solutions.

Martin O’Neill is a political philosopher, based at the Centre for Political Theory in the Department of Politics at the University of Manchester. He has previously taught at Cambridge and Harvard, and is writing a book on Corporations and Social Justice.

This article first appeared in the 25 February 2008 issue of the New Statesman, Pakistan reborn