Starbuck’s and Modern Mercantilism: No Different Than the British East India Company

Howard Schultz, like other mercantilists of today and yesteryear, made his billions on the backs of others, including, in some cases, children as young as five-years old.

Howard Schultz, the founder and current major shareholder of the ubiquitous coffee chain, Starbuck’s, wants to be president of the United States. When asked why he wants to run as an independent candidate, Schultz replied with a “glittering generality” common among new age mercantilists who run for political office: “I want to bring the country together.”

Schultz and those like him who have or are harboring political ambitions want governments to serve the neo-mercantilist elites, not the common folk. The historical precedent for this behavior is the British East India Company, also known as the “Honorable East India Company.” This London-based company controlled a vast monopoly on trade, extending from India and Southeast Asia, China, and Japan to the wharves of Boston in the British colony of Massachusetts Bay in North America.

The famous “Boston Tea Party” of 1773 was a rebellion by American colonial merchants over the imposition of the Stamp Tax on tea and other goods imported to North America from India by the British East India Company. However, the rebels of Boston were more interested in their bottom line than in political fervor to break from the British Crown. In fact, the thirteen red and white stripes on the flag of the British East India Company, with the British Union Jack in the canton, became the basis for the design of the American flag, with a field of white stars replacing the Union Jack. When Americans fight over respect for “the flag,” few realize that what they are being forced to respect is a modified form of the standard for one of the largest mercantilist contrivances in history. In effect, the British East India Company, which had its own army and navy, ruled over India and British colonies in Malaya, China, Burma, Mauritius, and Reunion.

The same mercantilist notions of trade expansion and control of commodities exists today with companies like Starbuck’s. The coffee chain distinguishes itself from its competitors by offering coffee choices with exotic-sounding names like “Sulawesi Dark Roast,” “Rwanda Blue Bourbon,” “Sumatra Dark Roast,” and “Guatemala Antigua,” and menus featuring choices written in a bastardized version of Esperanto. Schultz prides himself on being an enlightened entrepreneur, however, a close look at the Brooklyn-born mega-merchant of Seattle, yields the company he formed far from advocating any notions of progressive capitalism. As with other “new age” global corporations, including Apple, Amazon, Ikea, Microsoft, Starbuck’s has ridden the wave of corporations becoming more powerful than many countries, just as was the case with the old British East India Company and British South Africa Company, the latter founded by uber-capitalist and colonialist Cecil Rhodes.

When it came to buying coffee from some of the world’s worst human rights violators and child labor practitioners, Schultz led the pack.

Starbucks enjoyed a very cozy relationship with the Indonesian military-backed coffee-growing colonists who ran East Timor’s large plantations, during the Indonesian occupation of the former Portuguese colony. In 1999, protestors highlighted Starbucks’ practices in East Timor and other countries during the anti-World Trade Organization protests in Seattle, Starbuck’s headquarters. Starbuck’s, a company that prided itself as being progressive, turned out to be no different from than Shell, British Petroleum, Nike, Chiquita Brands, and other companies that exploit workers in poor developing nations.

In 1994, the US Agency for International Development (USAID) officially took control of East Timorese coffee plantations from the Indonesian armed forces. One of the Indonesian military bigwigs in on the deal was former Indonesian armed force commander General Benni Murdani, a favorite of the Central Intelligence Agency. Although Murdani was forced to resign as commander in 1993, his influence over East Timor’s coffee production remained significant. Operating through a local super-cooperative called the Timor Coffee Project, which acted like a modern-day British East India Company, USAID and the US National Cooperative Business Association (NCBA) administered the coffee plantations and arranged for most of the organically-grown reddish-hued Arabica bean crop to be sold to none other than Starbuck’s.

In East Timor, many of the local officials of the coffee cooperative were not even native Timorese, but migrants from Java and Bali who wanted to turn a quick profit on the backs of underpaid East Timorese farm workers.

Rather than be caught selling East Timorese coffee at its stores, Starbuck’s cleverly re-named the coffee as being from Sulawesi or Sumatra.

To deal with the public relations debacle caused by its exposure in East Timor, Starbuck’s agreed to place “Fair Trade” labels on its products as proof that it was paying coffee farmers a fair price for their coffee. The Fair Trade labels were the brainchild of Trans Fair USA, the American branch of a self-regulatory international industry watchdog group that guarantees coffee, tea, chocolate, and banana growers receive a fair price without the markup of middlemen, and that farm laborers work under safe conditions.

Starbucks, as the first company to adopt the Fair Trade labeling scheme for coffee, offered its “fair trade” coffee free to passers-by during the World Bank protests in Washington, DC in 2000. Although Starbucks wanted to get ahead in the public relations contest, fair trade labels were not found on most of the company’s products. Also, there has never been a real way for determining how much of Starbucks’ business is really conducted through “fair trade” entities, or if only a small percentage of its wholesale coffee purchases are “greenwashed” for public relations reasons. Many have argued that such “mercantile activism” is nothing more than a corporate smokescreen designed to hide more unsavory business practices.

As East Timor slowly drifted toward independence from Indonesia, Washington, DC lobbyists, some employed by Starbuck’s, went to work. Following East Timor’s overwhelming vote for independence in a 1999 referendum, every statement issued by the US State Department concerning the Indonesian genocide against the people of East Timor was tainted by assertions that any United Nations relief operation would have to be worked out with the authorities in Jakarta. Oddly, no such preconditions concerning Belgrade’s acquiescence were ever attached to NATO’s invasion of Kosovo taking place at the same time. Starbucks’ lobbyists were clearly trying to buy time for the status quo in East Timor.

One place where Starbuck’s phoniness on fair trade coffee was exposed was in the rebellious Mexican state of Chiapas. There, a Starbuck’s “greenwashing” effort was in full operation. In an attempt to drive independent squatters off of the sensitive rain forest land in Montes Azules, where farmers slash and burn for agricultural land, groups such as Conservation International and the World Wildlife Fund (WWF), as well as the always suspect USAID, began a campaign to protect the land for 66 surviving Lacandon Mayan families. However, it was discovered that the non-governmental organizations and their USAID partners had other motives, which included gaining access to the Montes Azules rainforest for the exploitation of coffee, fruit, oil, and pharmaceutical precursors. Leading the parade of the firms wanting to exploit Montes Azules was Starbuck’s, with ExxonMobil, Chiquita Brands, and Coca Cola in tow. The Zapatista National Liberation Front, which is active in Chipas, said it would fight any attempt to remove any villagers from Montes Azules, once again pitting Starbuck’s and its agents of influence against the poorest of the poor.

Starbucks’ support for unsavory regimes did not end with the Indonesian military occupiers of East Timor. After Rwandan President Paul Kagame transformed his country into a virtual one-party state, Starbuck’s announced it was interested in buying Rwandan coffee. In April 2004, Kagame made a pilgrimage to Seattle, the home of Starbucks, with his trade and agriculture ministers in tow. Rwanda’s coffee industry received financial support from the Bush administration, anxious to bolster its client in Kigali. The “Assistance a la Dynamisation de l’Agribusiness au Rwanda” (ADAR), a Rwandan enterprise designed to spur entrepreneurship in the coffee industry, received US government funding.

In an appearance in Seattle to promote his movie, “Hotel Rwanda,” director Terry George, used the occasion to promote Rwandan coffee: “If Starbuck’s would carry Rwandan coffee—which is extremely good, by the way—that alone could save the country from economic disaster.”

Under Brazil’s new far-right president, Jair Bolsonaro, the nation’s child labor laws are being rolled back, with companies like Starbuck’s at the ready to take advantage of the situation to purchase cheaper coffee beans.

Howard Schultz, like other mercantilists of today and yesteryear, made his billions on the backs of others, including, in some cases, children as young as five-years old. It does not help Schultz’s political case to have signed on to his nascent exploratory campaign staff, Steve Schmidt, the former Republican Party strategist who convinced 2008 Republican presidential nominee, John McCain, to select Alaska’s Governor, Sarah Palin, as his running mate. The United States has already experienced the ravages brought about by a self-seeking billionaire currently occupying the Oval Office and it can ill-afford to replace him with another.

Starbuck’s and Modern Mercantilism: No Different Than the British East India Company