Private sector can help find solutions

Published on Wednesday, 25 June 2014 21:57 - Written by

No one can be upset about the generous new plan by Starbucks CEO Howard Schultz to help provide his workers with college educations — can they? Some on the left can.

Schultz announced his plan last week, and it’s exactly the kind of creative response to a real problem that the free market encourages.

“Starbucks announced a decision to cover half the cost of an online bachelor’s degree for employees who work at least 20 hours a week in their cafes, roasting plants and offices,” Forbes magazine explains.

“This is not an expense, the way I look at it, it’s an investment in our people, in our company and in society,” Schultz said. “It is a win-win.”

So who could be upset? Those on the left, it turns out, who are angry the solution came from the private sector, and not from government.

Writing for The Century Foundation, Margaret Mattes acknowledges there are problems that need addressing.

“President Obama and his administration have promised a lot over the past six years, but, due in part to the most severe economic downturn since the Great Depression and the partisan gridlock on Capitol Hill, positive educational outcomes have been few and far between,” she writes. “Right now, however, the American system of education is plagued with many problems that need attention: student debt, the rising cost of higher education, the increased need for highly trained specialists in the workforce, the dropout crisis, underfunded public schools, and the failure of the nation to keep pace with the rest of the world in educational attainment and technological advancement.”

It’s no wonder everyone is scrambling for solutions. But she objects to solutions originating in the wrong place.

“Starbucks’ new plan to provide educational opportunities for its workers is just another step in the trend of private companies delivering social services historically provided through government funding,” Mattes writes. “We, as citizens, should be wary of these changes.”

Why?

“Though admirable in spirit, the danger of this social enthusiasm rests in its private implementation,” she contends. “While the outcome of such a sweeping educational program may have some positive impact on the lives of many lower- and middle-income families (though that is yet to be determined), the nature of that leadership is private.”

In other words, forget the good that it does — the private sector cannot be allowed to help those lower- and middle-income families, because it’s the private sector.

“Social movements and community awareness should be driven by groups, not individual billionaires such as Schultz and Bill Gates,” Mattes writes.

That’s wrong for several reasons. First, of course, is the simple fact that government is monolithic, ponderous and terrible at innovation. The private sector thrives on innovation.

Another reason is that Mattes misunderstands human society. Government isn’t the only way in which we collaborate and cooperate. She calls for the preservation of our “collective ability to steer developments,” but that’s exactly what the free market is. It’s our collective response to opportunities and options.

Schultz should be commended for offering his employees help.