Federated May, Starbucks Will


March 14, 2005


Browse in Commons

Boston was tired and a bit grimy when I was a child there in the ’50s. Even Fenway Park was just an old place where the Red Sox played, near the tire outlets and Sears Roebuck store. But then there was Christmas. You’d walk across the Commons in the biting cold, next to your father in his big overcoat. There were reindeer, crèches (butt out, ACLU) cheery Christmas music, a canopy of lights on the bare trees overhead.

You’d cross Tremont Street, and enter the shopping district where the department stores were. There were four or five of them back then: Jordan Marsh and Filenes of course, but also Raymond’s at the low end and, if memory serves, Gilchrist’s and R.H. Sterns at the high. The rest of the year the store windows had boring adult stuff. But at Christmas time they came alive. There were Santa’s workshops with mechanical elves. Little trains chugging merrily through snowy landscapes. All from Switzerland I believe, with loving attention to detail.There even was a real life St. Nick, who waved to us kids as we pushed and yammered for a look.

The dark streets became bright on those freezing December evenings. People were in a festive mood. It was as though the shopping district had become an extension of the Common — a place where commercial considerations yielded to communal ones. Of course, the windows were for selling. But I doubt that most of the people who thronged the narrow streets actually bought much, or even went inside. I know that we would trek across the river to Lechmere Sales, where my father thought he could get a better deal.

The windows were more than come-ons. They were a form of participation, a civic rite. For a kid they were close to magic, and a taste somehow of what a city was, or was supposed to be.

These thoughts came to mind when I read that Federated Department Stores has bought Mays for $11 billion. Between them, the two companies own a slew of big name chains: Macy’s and Bloomingdales, Lord and Taylor and Hecht’s. I’ve lost track of which is whom. The merger probably means the demise of some, which is not totally unexpected.The old department stores have been dying for a long time. In Boston, only two — Jordan’s and Filene’s — remain, and Jordan’s now is Macy’s, on the Federated ledgers.

The media treated all this as just another business story. We heard much about branding, niches, and “economies of scale” — a concept that gets trotted out at the announcement of every merger.(Soon the story line shifts just as predictably to the mystery of why those “economies” never materialized;.cf Hewlitt-Packard and Compaq.) The implications for media advertising, mall real estate and clothing vendors were dutifully explored. Some stories added a wistful note on the impending loss of grand old names, most of which have become little more than concoctions of the corporate marketing departments anyway.

What was missing was a sense of the world beyond the exchange of dollar bills — which is to say, the social commons. In a nation that is glutted with stuff but suffers a mounting deficit of community, this might seem strange.It might seem strange that an NPR reporter would call a professor at Harvard Business School for comment but not someone such as Robert Putnam, author of Bowling Alone, to discuss the social implications . But in American journalism, if Greenspan doesn’t say it, you aren’t permitted to think it; and so that part of the story falls into the dark hole.

An economy isn’t just a mechanism for generating stuff, as the Greenspans of the world believe. It also is a social system, an architecture that defines in large part how people interact. There is a big difference between a traditional Main Street and a mall in this regard. On the Main Street in my small town people stop frequently to chat and catch up on local news. They chat with shop owners, who are anchors of the community. These support the weekly newspaper and community radio station, and a multitude of local causes from the children’s center to the agricultural land trust. The owner of the local feed barn makes it available for fund-raisers for free.

People shop at these stores even when they could get a better deal “over the hill” as we say out here. That’s part of what it means to be a community. One evening at Christmas time we line Main Street with paper bags with little candles inside. (No fires since I’ve been here.) The shops stay open, even though they don’t do much business. There’s hot cider, and Christmas carols outside the bank. The bank, and led by bank staff. Does Washington Mutual or Citicorp do that at the mall near you?

These aren’t just businesses. They also are neighbors. Together they produce something that economists don’t know how to see: a social commons. The owners of the big local businesses of the past had something of the same spirit, many of them at least. You can find remnants in the Rust Belt today: community centers, libraries, hospitals and schools founded by the owners of the original steel mills. Ralph Nader, in his home town of Winsted, Connecticut, went to the Gilbert School, which was a gift of the owner of the Gilbert Clock Company there. (It’s long gone.) Nader’s convictions about the social responsibility of business grew out of his own small-town experience, and Gilbert was a model.

Yes it could be paternalistic. But paternalism is better than corporate moneyism, or nothingism, which is what we have today. The old entrepreneurs were not all saints. But some were pretty decent. Edward A. Filene was among the most progressive business leaders of his era. He helped pass America’s first Workmen’s Compensation law in 1911. He initiated profit-sharing, health clinics, paid vacations, and welfare and insurance programs. He favored a “buying” wage instead of just a “living” wage; and he supported the minimum wage nationally, on the grounds that any business that wouldn’t pay its workers enough to shop at other stores in the community, didn’t deserve to be part of the community.

Vibes like that spilled out into the city much the way the Christmas windows did. They were aspects of the same thing, and this isn’t mere nostalgia. It was real, and a big part of what is missing in America today. As chains destroy local businesses or buy them up, and as malls decimate Main Streets, part of the social glue disintegrates. Contributions to local causes decline when corporate bureaucrats and functionaries displace real local owners.Can anyone even name the heads of Federated and Mays? Filenes, which now is part of May’s, is likely to disappear entirely after the merger. This is not a case of survival of the best, in memory and moral stature at least.

The Alan Greenspans of the world don’t give enough credit to the businesses they champion. Their myopic accountant’s eyes miss the big point. They scold us for government spending on social problems, when they ought to look at their own economics and how it helps create the problems in the first place.. When you worship at the altar of Mammon, don’t be surprised when you ultimately have to pay a price.


Starbucks is not a name that comes to mind in connection with the social commons except in a negative sense. The chain has taken an institution that embodies that commons — the local coffee shop — and turned it into a chronic threat to it. Just ten years ago downtown San Francisco had three or four local chains and a multitude of independent shops. Now Starbucks is as pervasive as the state kiosks used to be in former Soviet Union. More so in fact.

If Starbucks has become a borderline plague in some cities, the suburbs are a different story. There the chain actually does provide a service. It’s a place to sit and chat, or read, or work, or survey the passing scene, or just let your life play out in your mind. I say this with reluctance but it is true. In the land of malls, between the parking lot and Target and Ross, Starbucks can be the closest thing to a commons you will find. Its popularity in these places is a sign of how hungry people are for unstructured social space where it is possible to be around other people without having to do anything in particular.

Malls destroy the natural version of such space that used to exist on Main Streets. Then a Starbucks comes along with a corporate substitute. Pollute the water and then sell bottled water.Build sprawling suburbs where there’s no place to walk to, then sell “health club” memberships where people walk on treadmills. Wipe out the commons in one way or another and then sell an ersatz version of what used to be free. That’s much of what we call “growth” these days and it’s not anything to cheer about. Still, I’m glad there’s a Starbucks to retreat to when my wife hunts bargains at Marshall’s and Ross. It would be better to have a local shop where they didn’t expect me to say “grande” and “vente”. But absent that, it’s better than nothing.

Now comes word that Starbucks has launched a “bold drive beyond its coffee roots”, as the Wall Street Journal put it. This includes breakfast and lunch offerings, which is pretty bold if you ask me. But that’s not all. The chain also will include Hear Music media bars in about half its stores. At these, where customers will be able to burn CD’s from a list of 200,000 musical features. It does sound a little like a company trapped in the logic of its own growth. Once you start there’s no place to stop, or else Wall Street whacks you on the head. The economics of “choice” can mean you really don’t have much.

Let’s consider the implications in this case. Those Hear Music bars will take up space, which means less space for sitting with your laptop or a book.They also will make noise, which means less aural space for thinking or talking. (Yes there will be headphones. Motorcycles have mufflers, if you get my point.) It’s all good for Starbucks and for the GDP.

But as for the larger accounting, that’s the story the Greenspans don’t tell, or even want to know. When the market grows it’s usually the commons it grows into, even within a Starbucks. If you feel hemmed in these days, as though time and space are running out, one of the reasons lies here.