It appears that the hidden hand of Adam Smith has claimed another aspirational enterprise that lacked economic viability. In Grand Rapids, Michigan, a restaurant was opened to offer vegan cuisine through a “Marxist” “collectivist” “worker-run” establishment called Bartertown. Employees were guaranteed a “living wage”,” no bosses, and a strong union. The problem was complaints about rising prices, unreliable service, and unpredictable hours. The restaurant changed its name recently to the Garden Diner and Cafe, but the business collapsed this month.
While I found very positive comments on TripAdviser for its vegan, vegetarian and raw food menu, there were complaints that it was difficult to get meals or even a sandwich. Employees would reportedly set the shop’s hours by collective decision and would reportedly close as unpredictable times.
Despite the attraction of side dishes of “Che Guevara,” the hassle proved too much for some. The lack of tipping allowed undermined rewards for exceptional service. As previously discussed how France’s poor reputation for service in cafes is generally attributed to the lack of tipping. Then there was controversies like the one caused by the restaurant admirably offering a free meal to Grand Rapids police officers as a “thank you” for keeping their neighborhood safe, customers complained that the restaurant was supporting “nearly all-white police force in this era of police violence.”
The epitaph for Bartertown might be found in The Wealth of Nation:
“Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society which he has in view. But the study of his own advantage naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to society… He intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was not part of his intention”
― Adam Smith, An Inquiry into the Nature & Causes of the Wealth of Nations
Richard Wolff* in his – very captivating and thoughtful – video-taped lectures, “The Cure for Capitalism / Alternative Solutions to Capitalism” broadcast on LinkTV, suggested the EXACT structure and style for worker-owned/controlled businesses as this diner had. And, this iteration failed miserably. Does this failure imply Marxism might not be a viable system for us plebes?
(* an American Marxian economist, well known for his work on Marxian economics, Professor of Economics Emeritus, University of Massachusetts, https://en.wikipedia.org/wiki/Richard_D._Wolff).
What Wolfe repeats over and over is that government is required to even the playing field, so that employee-ownership of private companies can be viable. Government providing that viability is the means, not the end. When government becomes the end, which it always has because some thug decides he likes power, it becomes totalitarianism, which generally has been incorrectly characterized as communism or socialism by the naysayers.
Employee ownership cannot compete with 1) publicly-traded stock where only profit is the endgame by law; and 2) stockholders and officers have fiduciary duties to maximize that profit by law. Simple changes to laws affecting these issues do not require totalitarianism.
The idea that this restaurant represents failed socialism doesn’t take into account how many business entities operating under capitalism fail.
Employee ownership cannot compete with 1) publicly-traded stock where only profit is the endgame by law; and 2) stockholders and officers have fiduciary duties to maximize that profit by law.
In other words, ordinary private enterprise of a certain scale.
The Yugoslav experience provides a guide to some of the problems and possibilities with syndicalist arrangements. In this country, such enterprises have formed fairly readily in the timber industry, but not in other segments. There was a grocery chain in Philly which had a good run a generation ago. Not sure if they’re still in business. There are the Mondragon enterprises in Spain.
I suspect your problem is really in social relations within business enterprises. To prosper, these businesses have to hit some sort of sweet spot. I have somewhere in my possession a sociology of producer co-operatives written about 20 years ago. IIRC, the author concludes that there is an optimal size for such enterprises and big hurdles if they’re any larger. Cannot recall the optimal size, but I think it might be around 250 employees.
What a bunch of idiots! They deserve an Irish Poem!
Carving Out A Knish???
An Irish Poem by Squeeky Fromm
At a restaurant in Grand Rapids, Mich—
A Patron did order a dish!
But the waiter said, “We—
Do not serve Bourgeoisie!”
Which was bad for the profits, capiche?
Squeeky Fromm
Girl Reporter
” The lack of tipping allowed undermined rewards for exceptional service. As previously discussed how France’s poor reputation for service in cafes is generally attributed to the lack of tipping.”
Since tipping is not something done in most of Europe, it may be more about the French attitude toward American arrogance. Haven’t been to France but have been to other countries of Europe. I spent the most time in Germany where the wait staff is specially trained for the occupation (not the job) and are well paid. Tipping is not expected.
I can only assume Professor Turley was joking when he used that as an example.
it may be more about the French attitude toward American arrogance.
I’m going to attribute that to an abiding belief on your part that you’re superior to the people around you. No I don’t think that sense is based on any realities.
Having seen French service personnel be gratuitously abusive to somewhat fuddled American tourists (over and over and over again), I find your characterization pretty risible.
You are spot on about the French attitude toward American arrogance, and even then it occurs mostly in Paris. Parisians will go a very long way to make someone feel welcome if they make even the smallest effort to speak French or even a few phrases. What they don’t tolerate well is the buffoon who imagines he can make himself understood by simply speaking more loudly. When that fails, louder still. It’s cringe-worthy. Americans are not the only ones to fall prey to this, but they have a particularly obnoxious way of assuming it’s their god given right rather than what it is – a bad habit. Another particularly offensive trait often – but not exclusively – characterizing Americans is the assumption that since they have money, all French customs or habits should be suspended.
Unlike Spain or Italy which will take American’s money and then spit at them (or in Italy laugh at them) behind their backs, Parisians are honest and will simply ignore the obnoxious tourist or give them the cold shoulder.
Parisians will go a very long way to make someone feel welcome if they make even the smallest effort to speak French or even a few phrases.
ROTFL.
Toads: I can’t imagine why you would have had a different reception.
Would you like to remark on the ‘reception’ of the two dozen others with whom I was traveling, or the crew of Canadians we ran into who had the same experience?
What’s amusing is that it’s doubtful ‘Brooklyn Bridge’ has ever met a ‘Parisian’ in the native element of said subspecies’.
I’ve thought about this a bit more. I stand by my previous comment, however, there might be another explanation. What is the general pace in France? Is it more laid back than elsewhere, the U.S. especially? My experience was in the Caribbean. For the first couple of days the service was absolutely terrible. It seemed to improve about the third day and was just right after that. It was I who changed after a few days of relaxation, not the service.
JT article: ” The lack of tipping allowed undermined rewards for exceptional service. As previously discussed how France’s poor reputation for service in cafes is generally attributed to the lack of tipping.”
The business/training model used at Edwins restaurant (linked above) is that you leave a tip if you wish and it is entirely tax deductible and the tip amount goes back into funding the program. It’s a win-win.
If you knew what storefront space, largely owned by the 1 %, rents for, you might have a different appraisal of the working of the invisible hand. I can tell you from experience that it’s an environment that favors the deep pockets of a Starbucks or chipotle much more than a startup restaurant. Go try it yourself before spouting off about any small business that closes. Otherwise stfu.
Inspiring story: 100 Second Chances
btw…..I’ve met Brandon and eaten at Edwins when in town and both he and his training institute are inspiring and worth supporting. It’s just one more positive step towards ending the cycle of recidivism in our country.
Here’s a restaurant business model worth emulating and spreading around the country. It’s called Edwins Restaurant and Leadership Institute in Cleveland, Ohio.
They hire and train those with prison time and felonies on their records and give them meaningful culinary and restaurant operations skills with which they can begin to rebuild their lives after getting out of prison. In addition they are given free housing, basic medical, clothing, and lots of support.
The owner Brandon E. Chrostowski started the restaurant based on his belief that, “Every human being regardless of their past has the right to a fair and equal future.”
Here’s the website: http://edwinsrestaurant.org/
Here’s a Ted Talk the owner gave: https://www.youtube.com/watch?v=qs6fEKFhI5M
Last thing to share…..
The ‘guiding principle’ written on the wall as you enter the restaurant kitchen is:
today we will win.
we’ll study our mistakes and become stronger.
we will win. each day. we will win.
Those words kind of sound like Trump to me. I remain hopeful that Trump will do some great things that improve the country for all.
Great Ted Talk. This restaurant was recommended over the summer during the RNC convention. I haven’t seen it, but I heard Bret Baier from Fox did a piece on the owner.
Thanks, I did a search for the BB interview but didn’t find it. If you happen to have it, I’d love to get the link.
Lee, Thanks much. You taught me something new. I was a Vista volunteer assigned to a Federal Prison halfway house. My primary job was finding employment for recently released inmates. This restaurant is being truly religious in the generic sense. I know they get burned. I had some very well meaning employers hire ex cons and get burned. Some stick w/ it, but some say, “What’s the use.” I understand.
Thanks, that’s interesting, Nick. One of the inspiring things about Brandon the owner is that it takes a lot for him to give up on these people. He talks about some of the recently released cons in his program who get into trouble again, or don’t show up for work, but he will keep giving them chances to get it together b/c he understands people don’t change overnight. He tells stories about going down to get them out of jail when they mess up and get arrested again. And he will keep giving them another chance for as long as he can. He truly sees this as his mission. Baby steps, right?
There is fake news and then there is research paper bait.
This whole experiment is like tru-tv for business majors.
Vegan, Marxist, come on how more Leftist could it get?
Oh, yeah that’s right Professor Turley mentions Che, collectives and France.
You all are a bunch of stooges and have been punked.
Roscoe, I lived in Madison and now the Twin Cities. There are hundreds of thousands vegan/Marxists in just those cities alone. And many vegan restaurants. So, for there to be a vegan/Marxist restaurant is not the least surprising to me. Wherever you reside might contribute to your incredulity. If I spent my entire life in rural Mississippi, I would too be incredulous.
“Employees were guaranteed a “living wage”,” no bosses, and a strong union. The problem was complaints about rising prices, unreliable service, and unpredictable hours.”
This describes our federal bureaucracy to a tee. Unfortunately for this private sector “business”, they don’t have a weapon like the IRS to force their customers to patronize their establishment, pay whatever price is demanded regardless of the quality of service.
Nor in this humorous example do they have a nation state ready and able to subsidize them (even without lavish bonuses for the workers) the way our government subsidizes the rich bankers and gives lavish bonuses to the criminal CEOs when they screw up.
Who did you have in mind?
Brooklin Bridge – most companies that give bonus to the CEOs give bonus to the other employees.
And…? That makes the massive bank and finance bail out in 2008 OK? Why do you insist the market resolves all problems when it so obviously doesn’t. Why jump fully cocked and loaded on a humorous example of a community type enterprise as if an enterprise alone could stand for the relationships between government and business in a Socialist OR Capitalist economy?
The banks, finance companies, and securities firms in 2008 received bridge loans in the form of purchases of preferred stock. They paid dividends on the stock at a fixed rate and then repurchased the stock. As of 2013, only about 4% of the principal was outstanding.
Losses were incurred on the tripartite AIG rescue and the rescue of the auto industry components. The losses on the AIG mess were, in the final analysis, about $23 bn. AIG is an insurance company, not a bank, and was not politically well-connected. Not sure about the auto industry components (which owed about $39 bn last I checked). Keep in mind, the BO administration diverted TARP funds to assist their clients in the auto industry. It was an abuse of power and quite unnecessary, as bankruptcy court performs adequately for manufacturing concerns.
The big-mother bailouts went not to the banks (or even AIG), but to the mortgage maws, Fannie Mae and Freddie Mac. The Treasury lost something in excess of $170 bn on that project, last I checked (they could have recouped some). The Treasury also rejected in August 2008 plans to recapitalize Fannie Mae and Freddie Mac through a debt-for-equity swap which would have sorted losses to MBS holders rather than the government. The boards and senior management of the GSEs was chock-a-block with Democratic Party insiders like James Johnson, Franklin Raines, Jamie Gorelick, and Herb Moses (Barney Frank’s old squeeze). Funny thing about that.
snip
snip
http://www.opednews.com/articles/700-Billion-Bank-Bailout-by-Peter-Palms-2008-Bank-Bailout_AIG-bailout_AIG-bonuses_Auto-Bailout-140318-586.html
You didn’t understand the terms of the TARP program, and you still don’t. No amount of cut and paste is going to change that. If you’re not going to learn something, at least keep your peace.
Unless you are Professor Turley, you will confine such remarks to yourself. With his permission, utterly irrespective of shills such as you, I’ll make comments when and as I please.
As to the article about the bank bail out, perhaps you could grace us with something equally substantial and that does not include your opinions which is all you have given to date.
Why not read the reports of the inspector-general of the TARP program and the summary statements of the Federal Reserve on the Maiden Lane enterprises, pumpkin? They’re all readily available.
The word ‘substantial’ does not mean what you think it means.
As to Tarp, here’s just a snippet from Matt Taibbi , one of the best writers to explain the economic fiasco called Tarp and what a ponzi scheme it was. Hold your tongue. Supporting documentation is an excellent way of making a point clearly. You would challenge it in my words anyway – your rhetorical tricks are neither interesting nor original. 🙂
http://www.rollingstone.com/politics/news/secret-and-lies-of-the-bailout-20130104
Taibbi’s article is one of the best descriptions of a what boils down to a pure Ponzi scheme that enriched the banks far beyond what they had to pay back. It’s called bailouts and yes bailouts of banks (among other institutions)
Anyway, enough of you, now and future.
I started out simply pointing out that the restaurant whimsically presented as Communist like would certainly have enjoyed a similar bail out (or State as owner supplied funds) and it would be incomplete to call it a Communist restaurant without taking the State into account.
Taibbi’s article is one of the best descriptions of a what boils down to a pure Ponzi scheme that enriched the banks far beyond what they had to pay back. It
Taibbi has no academic or professional background in accounting and finance or even any experience on the business beat. What he has is audacity. He writes for Rolling Stone, who employ Sabrina Rubin Erdely. Only a willing mark would ever cite Taibbi as an authority on anything.
They paid the money back. Get over it.
Taibbi cites no documentation and understands nothing. The only sources of credit would have been the Federal Reserve or the Treasury. The credit extended by the Federal Reserve was paid back and the preferred stock purchased by the Treasury was repurchased. This isn’t that difficult. The Federal Reserve’s summary statements reveal the following: credit extended by the Federal Reserve Banks through Term Auction Credit, Loans, and Repurchase Agreements amounted to $422 bn at the end of May, 2009. It stood at $36 bn at the end of December 2011. The banks paid 92% of the money back by that date. These sum to $47 million dollars as we speak, less than the outstanding credit extended as of 1 August 2007.
Entertaining to read the two of you challenging each other here.
My favorite: “Unless you are Professor Turley, you will confine such remarks to yourself. With his permission, utterly irrespective of shills such as you, I’ll make comments when and as I please.”
Tell it like it is baby.
Once upon a time, I was a ski bum up at Stateline, Nevada for a winter. Significant Other worked at Heavenly Valley, so I was able to ski for free during the day and worked second shift handing out change to slot-machine tourists at Harrah’s.
Every other weekend, a tour bus from Sacramento would deposit at the adjoining hotel a woman, who I’d guess was in her sixties and wore a huge piece of ice on her ring finger. She’d come into the casino about the same time each night and sit for hours on a stool at the same one-dollar slot machine (which went for long periods unused back then, when a dollar meant something), pulling down the arm while looking around to see who was watching her. No emotion whatsoever came out of her.
I remember one time she won a jackpot of $5,000.00, and, while she awaited her payout and the bulbs flashed and the siren blared, as was her routine she sat there looking around to see who was watching her. No emotion whatsoever came out of her.
For some reason, you remind me of her.
For some reason, you remind me of her.
OK, you have a taste for random attempts at insulting analogy. This is of interest just why?
Well, apart from you talking out of both sides of your mouth half the time and one-hundred percent of the time like a computer computation, perhaps it’s free association. You can have a whack at just why, though, but unless you’re trained as a psychologist or psychiatrist, you’ll probably be venturing into an area you know nothing about.
Well, apart from you talking out of both sides of your mouth half the time and one-hundred percent of the time like a computer computation,
I have a quite conventional set of views which I give voice to here. No clue why this seems inconsistent to you.
Step, Great comments. Taibbi is a hack reporter who speaks to the choir. The Rolling Stone is the template for “fake news.” But, I don’t want them censored, I want them to print libelous stories and SUED out of existence. Free market will take care of it.
Those who have been so indoctrinated in capitalism and its required attitude of competition have a hard time converting to the more lucrative, to society as a whole, attitude of cooperation. This restaurant’s attempt at a cooperative business model was admirable, but it had too many workers who didn’t appreciate the needs of the customers beyond the menu. There are good, successful models of what was being attempted. Studying success in similar cooperatives would make for a better start.
Free enterprise is based entirely on mutual cooperation (the “free” part in the name is the clue). Employees freely negotiate for a job. If neither the employee nor the employer can mutually agree to acceptable terms, no coercion is used to either force the employer to offer the job or the employee to accept the job. The employer then hopes the employee will help the employer create value in the products or services the employer produces that people freely want to buy. The end customers will only buy what the producer is selling if he perceives he is getting the best value in the exchange.
The customer is always in charge. The customer decides which products, businesses and industries succeed and which ones fail by voting with their dollars in the market. 50 years ago Eastman Kodak had a near monopoly on film and enjoyed near monopolistic profit margins. But when digital technology came along, EK was unable to adapt to changing consumer preferences fast enough. Consumers did not take a vote and decide to put EK into bankruptcy. But unwittingly through their collective action by pursuing their own best interests that is what happened. It was all based on mutual cooperation and voluntary exchange. In two minutes Milton Friedman illustrates how people pursuing heir own self interest via free trade create a pencil. It requires the mutual cooperation of people from all over the world, many of whom may hate each other.
Scott, Superb comment and video clip.
Bettykath, I would be genuinely interested in your thoughts on the Milton Friedman clip Scott linked @ 12:33p.
Some thoughts on running a cooperative restaurant, minus some of the mistakes in this case. In no particular order:
Maintain a focus on customer needs, e.g. cleanliness, regular hours, reasonable and stable prices, etc.
If the workers are the owners and make the decisions, why union membership? The purpose of a union is to negotiate with management, but if the workers are the management it means they are negotiating with themselves. Get rid of the union membership or drop the idea of a worker-run business.
Guaranteeing a living wage is self defeating. Having a guaranteed minimum wage and having a living wage as an objective is better. The living wage can come from a sharing of the profits, not forgetting the need for a capital fund.
Assign specific skill-requiring tasks to those with the specific skills. Their basic wage may be somewhat more, as would the wages of those workers taking on additional responsibilities, e.g. ensuring that the fresh foods are secured in appropriate quantities and in a timely manner, experienced chef, etc.
bettykath – the only reason I could see for joining a union was the availability of affordable insurance. Otherwise the union is counter-productive.
“The root cause of Venezuelans’ empty stomachs and barren Christmas trees remains collectivist policies that, attempting to apportion goods evenly, distribute only hunger and disappointment.”‘
Illusion? Meet reality.
http://thefederalist.com/2016/12/13/socialist-venezuela-steals-toys-impose-version-christmas/?utm_source=The+Federalist+List&utm_campaign=f1f02d7ff3-RSS_The_Federalist_Daily_Updates_w_Transom&utm_medium=email&utm_term=0_cfcb868ceb-f1f02d7ff3-79248369
Or the fact that all external sources, the predatory rent extractor oil companies backed up by Mr. regime change CIA, that we no longer trust – remember?, and much of the Executive and Legislative body of the US cut your country off with economic sanctions and all manner of mischief until your economy can be held up limp and lifeless as an example of what happens to anyone who dares to oppose the international status quo.
Add such overwhelming thum on scale to some typical mistakes (exploited ruthlessly) and you get the wonderful collapsing USA Empire preening what few feathers it has left.
http://www.miamiherald.com/news/nation-world/world/americas/venezuela/article4636689.html
https://panampost.com/pedro-garcia/2016/05/02/us-extends-sanctions-venezuela-2019/
So they international status quo, led by the mischievous United States has forced the Venezuelan government to devour their own people? Got it.
When he runs out of specious excuses, he’ll just flip you the bird.
No Olly, for all your eloquence when it comes to the Constitution, when it comes to economic reality you apparently do not got it.
https://www.treasury.gov/resource-center/sanctions/Programs/Documents/venezuela_eo.pdf
The sanctions contra Venezuela restrict the franchise of a discrete menu of individuals to park property in the United States. They’re not of much consequence to anyone bar the short list of Venezuelan government officials.
“Socialism denies basic economics and human nature.” Nonsense.
LOL! Steve, I love your chameleon persona. On this topic, we simply disagree. Growing up in a restaurant family, I do understand just how capitalistic it is.
Uh huh. The Venezuelan government followed the neo-Peronist model of extravagant public spending, seizures of property, price controls and big stealing. The Soviet government followed their own model of state allocation of (all) capital, comprehensive use of state enterprise, administered prices, queues queues queues, and connections connections connections. Yes, navigating the ruins does require a rough-and-ready sense of human nature.
Making this company appear as the prototypical socialist business is disingenuous. Of course all companies require a supervisorial hierarchy, which this one apparently didn’t have. There’s nothing about employee ownership that prevents agreeing to supervisors and to their management, which is implied in this blog post.
McCarthyist genetics abound.
I heard of a bread making company (I think in Chicago) some years ago that had a wonderful attitude/policy toward it’s employees including college education, having them train and assume management positions right to the top, and so on, with the sole exception of the owner who refused to sell out or even go public, because he was happy just running a bakery and knew that any change at that level would mean either the company went for pure profit over good bread, or potentially dissolved in issues of ownership.
The company was a huge success in that everyone loved the bread and the place was run well enough, and untied to shareholders enough and the whole dog eat dog ideology of the corporate world enough to keep on producing it.
A little bubble of something Adam Smith might recognize surviving (probably not longer than the owner) in a huge economy of predatory international vulture rent extraction.
It proved nothing about Communism, Socialism or Capitalism what-so-ever.
in a huge economy of predatory international vulture rent extraction.
Who are the vulture rent extractors?
Feminism denies basic biology and socialism denies basic economics and human nature. The left is into denial on a grand scale. That prowess has come in handy in denying why Lady Macbeth was denied her throne last month. The Germans are now preemptively blaming Russia for Merkel’s coming defeat.
Would that be the basic biology that causes far more men then women to be in prison and homeless? And the basic economics and human nature that makes socialist Scandinavian countries far more successful than the US?
Scandinavian countries are not ‘far more successful’ (and Sweden’s taken little interest in state allocation of capital).
“The problem with the US is denial. Americans live under the illusion that they do not live in a socialist society. America is a socialist society but its failure to recognize this limits a forward thinking approach to socialism.” issacbasonkavich
That illusion just closed a restaurant. Those silly, backwards-thinking Americans. Won’t they ever learn.
Aboslutely spot on. Socialism for the rich and the dregs of monopoly/crony capitalism for the poor. Nail meet hammer. Bankers meet
ObamaTrump. Plus ça change, plus c’est la même chose.The king is dead, long live the king!
That sounds like restaurants in former East Germany. They told you where to sit and if you could pull up a chair from another table in case you had 1more person than your reservation. A cafe worker in East Berlin actually told me he thought I was an arrogant capitalist who wanted to exploit him because I wanted a cup of coffee at 3pm (German coffee time) !
Riesling, It is always to get your down to earth German perspective.
Finally, proof positive that Communism is bad, bad, bad. 🙂
Oh well, at least this is un tout petit peu more substantive than the 200 un-American web sites fake news story.
Well, if they had not put up the mural, they could have feed food to anyone. However, having branded themselves they were hoist on their own petards.
The placed closed because they refused to serve fish, which was Karl Marx’s favourite food.
Seems the business (was it a business or an experiment?) was more about the employees (revolutionaries?) and not so much about the customers. Such an inverted imperative is a perversion of the intent of commerce.