Why does a latte cost so much? Where does all that money go?

CJ Trowbridge

Urban Studies 401G


Social Justice Essay: Final Draft

Why does a latte cost so much? Where does all that money go? Capitalism is the enemy of markets, where vampires suck the wealth out of the supply chain in order to get fat on the work of others. Kyriarchy is the enemy of progress, holding most people down while holding a privileged few up. A socially just city is one that rejects capitalist hegemony and kyriarchichal social order in order to make sure everyone gets their needs met.

In cities around the world today, capitalism reigns supreme. People live and die as cogs in a machine which only benefits a tiny number of people at the expense of the vast majority of people. Capitalism is different from mercantilism or markets. Mercantile markets are where things are bought and sold between actual people. Capitalism is about capital, not output.

Baristas have been described as the modern factory worker. They take raw materials like milk and coffee beans and add value to them, producing output like lattes. Somewhere in America, a barista is making a latte which a customer is buying; this is an example of a market. Elsewhere in the country, a speculator is making a bet on the future of lattes or perhaps the beans or milk. The bet they make is worth more than the barista will ever make in their life. Elsewhere yet, a fourth person is making a bet on the first speculator which is worth more than the first speculator will ever see in their life. This is what we call capitalism. It’s not about making things or doing things in the world. It’s about speculating on things, and often breaking them in the process.

Maybe a bet on milk is not going well, so speculators force the market to dump half the milk down the drain. (Exactly what’s happening during coronavirus quarantine.) Now the price of milk goes up, speculators have a great day, but the farmer and barista can’t pay their bills. The thing that’s actually happening in the real world – making a latte – is disrupted by the system of bets being placed on it; capitalism disrupts and harms markets. Capitalism is not about making lattes, it’s about making bets on lattes. We need more lattes and less bets on lattes. The same thing is true for housing, food, and everything else capitalism touches.

Adam Smith famously wrote The Wealth of Nations which is often cited as support for capitalism, but Smith was not a capitalist. Smith was a mercantilist. Smith said that the rights of landlords are rooted in robbery, and landlords try to reap what they did not sew. Smith is talking about the same problem. Capitalist oligarchs withhold the means of producing lattes in order to artificially inflate the prices and extract wealth from markets. Imagine lattes as the wealth of nations, and capitalists as vampires sucking the nations dry.

The unit cost of a cup of coffee at Starbucks is about a quarter of a cent. The cup itself is about 10 cents. Workers are paid about 12 cents to grind, brew, and serve each cup of coffee. The coffee sells for about four dollars. The vast majority of the value created by the workers is extracted by capitalists on many levels between the farm and the customer. An honest and just alternative scenario might be the workers earning a much larger share of the value they create, or the customers paying a much lower price, with taxes being paid only on consumption rather than earnings and production. The end result being that the capitalist intermediaries who presently extract almost all the wealth bring produced by the workers (without contributing any valuable work to the products) receive a smaller share of the wealth being produced.

A socially just city is one that rejects kyriarchical social order. Remember our big-bets-speculator from before? Statistically speaking, he is a white, cis-gender, heterosexual, Christian, man and he lives in a big mansion on top of a hill. Kyriarchcial order means that some kinds of people are on top (literally) while other kinds of people are on the bottom (literally). Halfway down mansion hill, we find a suburb where our small bets speculator lives. Maybe he has a little more diversity, and he lives in a McMansion; it’s nice looking and completely identical to a hundred others in the same sprawling suburb. Everyone has the same grass lawns out front and the HOA comes by every week to measure the grass and make sure the suburbanites are following the rules. The rules are important because up the hill, our big-bets person has given loans to the suburbanites and Mr big bets wants to see a return on that investment. Finally, down in the valley we see our barista sharing an apartment with several friends. Here we finally see real diversity. Few if any white, cis-gender, heterosexual, Christian, men can be found. The appliances are broken, the building is falling apart, and the owner (who lives up the hill in the suburb) never gets around to fixing anything.

The problem with kyriarchy should be obvious. It’s not just the living situations of these people that are discordant, but their health outcomes, their access to education, and their potential for personal growth and lifetime potential. Maybe little Johnny in the suburbs wants to go to college and become a doctor. Well that’s easy to do up there, but good luck to a child born into the tenements in the valley below. It’s not just financially impossible, but it’s not something kids are even socialized to want or expect because their parents and grandparents grew up in the same situation lacking access to the same things.

Eliminating kyriarchy in the urban process means no single-family development, no residential height restrictions, and strong regulation on landlords forcing them to maintain their rental properties. It means no one should need a car to survive, and having a car should be inconvenient and expensive compared to taking transit. It means public transit should be available everywhere and free for everyone. It means building enough affordable housing for everyone, even if the developers and NIMBYs try to stand in the way. On all these issues, it comes down to the duty of a city to represent all its people, not just the wealthy. It means deciding as a community that we value our citizens and want to represent their interests. We decide that the common good means everyone gets access to food and healthcare and education; that everyone’s basic needs must be insured under the social contract that underlies the urban process.

We can change these broken systems because they are new. It wasn’t always like this and it won’t always be like this. A few more decades of the status quo will mean the extinction of humanity. One way or another, this system is going to end soon. Dismantling the vampire of capitalist hegemony which sucks the wealth out of workers will be challenging but possible. Eliminating kyriarchical barriers to progress will mean everyone can finally get healthy, get an education and pursue the lives they really want to be living, instead of fighting to subsist on the scraps of capitalists in this dystopian kyriarchical nightmare where we find ourselves.