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Thursday, September 5, 2019

Please Howard Schultz, Don’t Run for President

If Schultz really wants to make a lasting impact in this country and be viewed as a beacon of reason, he should stay in the private sector and avoid the “swamp” at all costs.

Image credit: Flickr-Chairman of the Joint Chiefs of Staff | CC BY 2.0

Howard Schultz is not the political savior the country has been searching for. In fact, given what we know about the “system,” it is doubtful that such a savior exists at all. Yet, over the last several weeks, social media news feeds have been bombarded by posts about the former CEO of Starbucks and his potential 2020 presidential run.

While on tour promoting his new book, From the Ground Up, Schultz teased that he is considering a 2020 presidential run. Presenting himself as a sound, business-savvy alternative to the absurdity displayed by both the far right and the progressive left, Schultz, who has not yet made any official announcement, has already managed to garner a fair amount of support from people who view him as a viable solution to our polarized political climate. In fact, even Reason Magazine’s own Nick Gillespie applauded him for bringing up oft-avoided topics, like the crippling national debt. However, this newfound popularity has made Schultz a target of both the right and the left.

Diehard Trump supporters fear his candidacy might impact the president’s chances for reelection. Progressives, on the other hand, are lambasting Schultz for running as an Independent and potentially “stealing” votes from the Democratic candidate, thus ensuring Trump’s victory. And since the left has taken such an aggressive stance against the “one percent” over the years, Schultz’s corporate billionaire status has only added fuel to the fire. But it is precisely his billionaire status that makes him such an intriguing figure in the first place.

Truthfully speaking, as president of the United States, there isn’t a whole lot Schultz can do to be an agent for change. Trump found this out the hard way when he learned that securing funding for something isn’t as simple as saying, “I’m the president, I make the rules.” But as a billionaire businessman, Schultz has already done more than any president could ever dream of doing. And it is for this reason that it would be a downright shame for him to leave the private sector to embark for a political wasteland. In fact, if Schultz really wants to make a lasting impact in this country and be viewed as a beacon of reason, he should stay in the private sector and avoid the “swamp” at all costs.

A Brilliant Businessman

To be sure, Howard Schultz has some admirable talking points—speaking out against the national debt and his views on trade being among them—but he is no Ron Paul. He is not running—or potentially running—on a principled platform of individual liberty or even free-market ideals. However, that doesn’t discount his unparalleled contributions to the business world.

Starbucks is so much more than just a coffee shop: It has become a staple of American culture. However, it almost didn’t survive the 1980s. In fact, without Schultz’s contributions, it is likely that Starbucks would have disappeared long ago. And while the massive success of the Starbucks brand has made him a very rich man, he wasn’t always so fortunate.

Raised in the New York City housing projects by working-class parents, some of his earliest memories are of his family struggling to get by after his father lost his job when he was just six years old. Then a truck driver, Schultz’s father had sprained his ankle while on the job, resulting in his extended unemployment. During that time, his family was left with no income and no health insurance, and he distinctly recalls how horrible his father felt by being rendered incapable of providing for his family.

Years later, when his father passed away, Schultz lamented that over the course of his life, his father had “never attained fulfillment and dignity from work he found meaningful.” Luckily, Schultz would not follow this same path.

Schultz was fortunate enough to leave home for college after earning a football scholarship that paid for his tuition. However, after he arrived on his new campus, he changed his mind about playing football and instead worked diligently to pay his own way through school, sometimes selling his blood just to make ends meet. After college, he showed great skill in sales and went on to land a job at Xerox. After Xerox, he went to work for a Swedish housewares business called Hammarplast, eventually becoming vice president and general manager. And it was here where Schultz first discovered Starbucks.

Always searching for meaning in his work, Schultz describes how he was getting restless at his job and wanted a greater challenge. He explains that he was “getting antsy. It may be a weakness in me: I’m always wondering what I’ll do next.” At the time, Starbucks was just a coffee shop with four locations in Seattle, but its operators happened to order the drip coffee makers through Hammarplast, which is how the store came to be on his radar.

After a year of persuading, Schultz convinced the two men to hire him as their director of marketing—and this is when everything changed for Starbucks.

Intrigued as to why a small shop would need so many coffee makers, he decided he wanted to meet the owners. As soon as he met with Gerald Baldwin and Gordon Bowker, he was smitten with both their business and their dedication to it. At the time, the gourmet coffee market was practically nonexistent in the United States. Yet, these two men were enthusiastic and passionate about their humble company, no matter how much of a longshot it appeared to be. After a year of persuading, Schultz convinced the two men to hire him as their director of marketing—and this is when everything changed for Starbucks.

While traveling in Milan for an international housewares show, Schultz fell completely in love with Italy’s coffee culture. For starters, it wasn’t just about the coffee. The patrons frequenting these espresso bars were on a first name basis with the owners, and the cafes themselves provided a welcoming and aesthetically pleasing environment. Not to mention, these Italian cafes were offering specialty espresso drinks that had yet to make it to America. “It was like an epiphany,” Schultz said when recalling the precise moment he knew the direction he should take Starbucks. Unfortunately, Baldwin and Bowker didn’t agree.

In 1985, Schultz decided to leave Starbucks and start his own coffee company, Il Giornale. You may not have ever heard of Il Giornale, but that doesn’t mean it didn’t have a major impact on American coffee shops. Striving to replicate the culture he’d witnessed in Italy, Schultz was a pioneer in bringing espresso drinks into American culture, which consumers were all too happy to consume. Ordering a latte or cappuccino is so commonplace these days, it’s hard to imagine a time when this was a new market phenomenon.

By 1987, Il Giornale was doing so well, Schultz was able to buy Starbucks and return to the company as the CEO of Starbucks Corporation. Once he was back, he turned Starbucks into the establishment that it is today.

Deeply impacted by his family’s struggles, Schultz made his employees’ well-being a priority. He never wanted any of his employees to be put in the same situation his family endured when his father was out of work, which is why Starbucks offers health insurance to all employees, both full- and part-time. The company also announced a couple of years ago that it would pay for its employees to attend college.

In addition to creating countless jobs for Starbucks employees over the years, Starbucks itself has, as unofficial office space for laptop-toting workers, become an incubator for burgeoning ideas to grow into profitable businesses. It would be difficult, if not impossible, to quantify the number of businesses and startups that have been born at Starbucks tables since so many ambitious entrepreneurs use its space as their office.

It is estimated that by 2035, there will be one billion digital nomads working outside of a traditional office. Couple this with the rise of freelancers, and there are many in the workforce in need of an office. And rather than pay for WeWork space, many people have relied on Starbucks as a workspace where they can earn money while drinking their favorite espresso drink. In fact, people actually work more efficiently when they work at Starbucks.

According to Business Insider:

Studies show that the low level of noise and casual movement of people in a Starbucks or a similar atmosphere is actually a driver for increased productivity and creativity.

Today, there are now countless other coffee shops, each an offshoot of the model Schultz brought to America, but Starbucks was the first of its kind. Commenting on his success, Schultz said, “I’ve always been driven and hungry…Long after others have stopped to rest and recover, I’m still running, chasing after something nobody else could ever see.”

And that drive has clearly paid off. Just a few decades ago, American consumers had no idea they needed gourmet coffee and Italian espresso drinks, but thanks to Shultz and his innovative foresight, this is now a major part of our way of life. Today, there are over 20,000 Starbucks locations in 62 different countries. In 2017, the company brought in more than $22.38 billion. In 2016, it was estimated that the company typically employs over 300,000 people. The president, on the other hand, cannot create jobs firsthand, nor does he have the freedom to build something as exquisite as Starbucks, which is why it would be such a waste to throw out all this talent in search of the Oval Office.

It’s Not You, It’s The System

Schultz’s desire to run for president is surely grounded in his belief that he could do a better job than the other candidates, and this may be true. But the presidency is not that simple. Even our most principled founding fathers had disastrous administrations where principle was abandoned in the pursuit of power. Just look at John Adams with his support of the unconstitutional Alien and Sedition Acts, George Washington leading US troops against their fellow Americans during the Whiskey Rebellion, or even Thomas Jefferson imposing a destructive embargo. Unfortunately, presidents are still fallible human beings.

Disciplined by profit and loss, businesses like Starbucks and business leaders like Schultz are driven to innovate and create value in the marketplace. In contrast, government offices and officials acquire power by plundering and persecuting some to pay off and pander to others.

Still, Schultz has risen in popularity because, much like President Trump, many of his supporters are convinced that his success in the business world will make him a good political leader. All too often, we hear that “if only government could be run like a business,” we’d get the nation back on track. But this is a flawed line of thinking. For starters, government stands in juxtaposition to the private sector. And the reason businesses don’t function like the government is precisely because they are not government entities. Disciplined by profit and loss, businesses like Starbucks and business leaders like Schultz are driven to innovate and create value in the marketplace. In contrast, government offices and officials acquire power by plundering and persecuting some to pay off and pander to others. (For details, read The Law by Frédéric Bastiat and look into Public Choice Theory.) By its very nature, the government is incapable of functioning like a business.

Howard Schultz might be a fine man with honest intentions, but the system is built to fail, and there is nothing he can do to change what is inherently flawed by design. Yet, his role in the business world put him in a powerful position to make real substantial change in this country. So please, Mr. Schultz, don’t run for president. We need you in the marketplace where you belong.

  • Brittany is a writer for the Pacific Legal Foundation. She is a co-host of “The Way The World Works,” a Tuttle Twins podcast for families.