Friday, March 17, 2006

In Defense of the Green Circle

At dinner last night, one of my friends attempted to tell me about a "really funny Starbucks rant" that he'd read on some website. Disregarding any sense of diplomacy that I usually try to carry, I went straight for flippancy: "I don't deal well with Starbucks rants." You see them all over the damn place. In the Technique. In sketch comedy. In stand-up comedy. And, yes, in blogs. And my first reaction to any of them is always the same: "If you don't want to pay $4 for a cup of coffee, then you don't have to."

My second reaction typically goes a little something like this: "You're wondering where they 'get off' charging that much for coffee? If you knew the first thing about economics, you would know exactly why they have the right to charge that much. It's called the market." I could get groteqsuely in-depth and sart busting out elasticity of demand and marginal cost/revenue curves... but that's not necessary. Starbucks charges exactly how much for a cup of coffee that will maximize their profits.

One of the points that the aforementioned rant brought up was apparently that some guy paid seven bucks for a piece of cake and some coffee at a Starbucks, and immediately regretted the decision because he could have gone next door and paid that same amount for a meal that would have filled him up. Well, yes. He could have. As a rational consumer in a market economy, that choice is inexorably his to make. But "personal choice as part of a market economy" doesn't make for a very sensational rant, so of course we must shift the blame from ourselves to some evil external source.

I leave with a quote from Adam Smith: "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest." Id est, we do not expect Starbucks to sell us coffee for the purposes of doing anything nice or kind for us, but for them to provide a service that makes them money.

1 comment:

10W40 said...

Ah, my capitalist friend – you’ve learned your lessons well. The world is a safer place knowing that you are going to extend the great green spending line. Unlike a certain now-retired Alan Greenspan (seriously, is anyone besides insomniacs and New Economy-hating groupies going to read his memoirs?), you understand that people will pay what they want to pay for stuff they want to buy. The buyers set the price. How else can you explain spending $200 gym shoes that have microprocessors? If people did not buy wired shoes, the manufacturers would not make them. But mom, all the cool kids have USB enabled sneakers!

While you are correct in your assertion that we have the absolute free will to spend our hard earned 5 bucks on what ever fancies us, be it a cup ‘o Joe, or 10 homies, or 3.25 Happy Meals, understand that the Green Circle sells much more than just exquisite dark roast.

They sell lifestyle.

While summers in the South of France, 35-foot yachts, McMansions, and daily meals at Fogo de Chao are out of the reach of most of us, 4 bucks for a luxury cup of coffee is affordable, fashionable and more palatable than, say your average cup of office sludge.

So I say, spend early and often. Buy what ever you want, just make sure that you can afford it. And, under no circumstances ask me to bail you out if you choose to spend more than you earn.