A Greek Tragedy: The Demise Of “Compassionate Capitalism”?

The story of New England’s Market Basket Supermarket chain (currently at 71 stores) is a contemporary Greek tragedy. To get up to speed on the company’s backstory & how it has contributed to the current drama now unfolding, unfamiliar readers should consult online sources that cover Market Basket, the Demoulas family, or both.

It’s latest chapter was written over a week ago when CEO Arthur T. Demoulas & several of his senior managers were ousted from their respective positions by a majority of the company’s board of directors led by Demoulas’ cousin, Arthur S. Demoulas. The move had been anticipated ever since Arthur S. managed in the previous year to “flip” one member of the board of directors to support his faction. But his desire to quickly remove his cousin was initially thwarted by the spontaneous show of support given to Arthur T. by thousands of Market Basket workers from across the region. Customers publicly groused about the situation with many individuals offering unsolicited testimonies in praise of Arthur T. the man & his business philosophy which could be best described as “compassionate capitalism”.

It’s a philosophy, laments The Lowell Sun, that’ll be the latest casualty in the fallout from this family blood feud:

And what does this mean for the future of Demoulas Supermarkets?

While product branding is key in merchandising, without Arthur T, it’s lost the face, heart and soul of the company co-founded and built by Telemachus “Mike” Demoulas and nurtured by his son, who’s devoted 40 years to this enterprise, the last six as CEO.

Even as the supermarket chain grew to more than 70 stores in three states, it managed to maintain its family feel and ties to the community– appreciated by both employees, customers, and the many charities that benefited from their philanthropy.

Workers have enjoyed a generous profit-sharing plan the envy of others in the industry and shoppers always know Market Basket’s prices can’t be beat.

And over the last decade, charities affiliated with the Telemachus Demoulas side of the family have donated more than $41 million to schools, churches, hospitals and community groups like the Boys & Girls Club and the YMCA.

Because Market Basket is a private company, many individuals and groups have been loathe to do anything but provide sotto voce commentary as they watch the drama unfold before their eyes. To their credit, many of the employees have banded together to figure out ways to protect the culture that has been good to them & to their (in some cases multi-generational) families. Save Market Basket is a Facebook blog that remains the best forum for employees to obtain or exchange information among themselves. The leaders of the blog have recently asked their comrades to “resist” the questionable blandishments of both Arthur S. & his hand-picked management team:

They will try to say that they want what is best for us and our company. We know that what is best for us and our company is for them to go away.

We must be resolute in our commitment to each other and our company.

We must understand that ATD is fighting harder than ever every minute of every day to get his company back.

We must resist ASD’s handpicked executives.

There is no middle ground.

WE ARE MARKET BASKET.

Arthur T. Demoulas IS MARKET BASKET.

In an alternative universe from an earlier time, such an unusual situation would’ve compelled labor leaders such as Samuel Gompers, George Meany, or even Lane Kirkland to have their members swiftly picket Market Basket stores as a show of solidarity with the company’s workforce (as well as a strategic play to get Market Basket’s employees unionized). It would’ve prompted a capitalist like Henry Fordno stranger himself when it came to “compassionate capitalism” – to publicly damn Arthur S. & to demand the reinstatement of his cousin as the company’s CEO.

It would’ve triggered a bidding war between Democrats and Republicans as to which party best represented the interests of enlightened capitalists AND empowered employees. Religious groups would pray for a return of the status quo ante. Hollywood would remake IT’S A WONDERFUL LIFE with Arthur T. playing the saintly George Bailey role & Arthur S. cast as the satanic Mister Potter. At least Market Basket would have a happy ending in the movies!

But we don’t live in that kind of alternative universe. Hence the public disinterest. Hence the sound of crickets.

It isn’t in my nature to be a helpless spectator so I’ll offer the folks at Save Market Basket the following advice:

If you truly think that Arthur S is as bad as you repeatedly claim that he is, then you have ONE option – the ONLY option – of reinstating Arthur T. & his management team to their former positions within the corporate hierarchy.

You & your colleagues are going to have to force a boycott of all the stores in the chain. Isn’t a boycott risky? Yes & there’s no guarantee it’ll succeed. But it’s clear from the evidence of the past year that Arthur S. responds ONLY to the bottom line. The only way he’s going to respond to YOU is when YOU affect the bottom line. A boycott does just that.

However the window of opportunity for a boycott is closing fast. The longer you dither, the more the employees at Market Basket are going to acquiesce to the gradual destruction of their company’s unique culture. Last year, thousands of employees showed their support for Arthur T. This year only a few hundred did. That’s no accident. It’s human nature – something that in my opinion Arthur S. will exploit to the hilt in order to maintain his control the company.

You don’t need to be a community organizer of the dark arts like Saul Alinsky to act in the following manner:

1) Have a meeting with the key leaders in your movement & decide whether or not to boycott. If the answer is “no”, then accept the inevitable demise of your company’s unique culture (& with it probably the company itself).

2) If key leaders agree with you on the boycott strategy, all of you need to bring into the fold key managers from each store in order to sell them on the boycott plan. All 71 stores must be part of the boycott or else the boycott will fail.

3) Once the resistance leadership structure has been established at all the stores, you must establish sub-committees (SC). One SC can be devoted to internal/external media/propaganda; another SC can be devoted to establishing & maintaining a fund for employees whose lives will be significantly disrupted due to the boycott (with money, food, medicines, et al provided to those members who need it during the boycott); yet another SC can be devoted to lobbying the public (via business groups, labor groups, religious groups, et al) to put pressure on Arthur S to reinstate his cousin & restore the status quo ante ASAP. Arthur T. can’t be involved in the boycott but your actions will give him the ammo he needs as a company stockholder to take legal actions as a way to save the company if his cousin decides to play “chicken” with Market Basket employees & in the process neglects or violates his fiduciary responsibilities.

The management team assembled by Arthur S. will be too new & too inexperienced to deal with the crisis engendered by a boycott. He may have a few “moles” embedded within rank-and-file but they won’t be able to help him once a boycott goes into effect. I imagine Arthur S. will gamble that the weakest link of your chain will be the pivot point that’ll help him ride out any boycott. Count on him to use uncertainty, fear & threats as his divide & conquer strategy. He might tolerate a whole day boycott just to see if you folks have the organization & (more importantly) the chutzpah to pull it off. Your first day is THE crucial day. If you succeed on the first day, I think the public will rally around you (which you’ll discern through the activity of each SC) & the public will put tremendous pressure on Arthur S.

Will he blink? Will he tolerate financial losses that will mount with every passing day? Will he resist the screams of company creditors, vendors, & customers to give in? Conversely will YOU seize the day before time runs out? Will YOU do what is required to face down Arthur S? How badly do YOU want to save your company’s culture?

America is currently celebrating her birthday but we sometimes forget that our nation’s existence was made possible by 56 courageous men who “pledged their lives, their fortunes, & their sacred honor” & that some of them paid a high price for their respective freedoms & the freedoms of other people they would neither know nor meet. People like you.

Don’t forget the seeds of the American Revolution were planted in New England. Resistance is in our blood. When it comes to defending the rights of workers, you’ve got history on your side. Remember it took 30,000 mill workers in Lawrence (MA) during the “Bread & Roses Strike” to force changes in the ways workers were treated by their employers. You won’t have as many people if you boycott Market Basket but your actions will induce a similar kind of shock across the region, across the country, & across the world. People will be shocked that employees dared to stick up for themselves, for enlightened management, & for a form of capitalism that has too few defenders these days.

You have the power to truly change the dynamics of your industry, if not the dynamics of American capitalism itself. But time is NOT on your side. You need to ask yourself if the “compassionate conservatism” exemplified by Arthur T. is worth saving. Is it? Only YOU & your co-workers can answer that question. Good luck & Godspeed.

As for the rest of us here at RedMassGroup (RMG), I hope that most (if not all) of us will support the resistance at Market Basket should it manifest itself. Some will dismiss the situation as a private matter not worthy of our movement’s money, time, or efforts. Such an attitude betrays an obliviousness usually associated with ostriches who bury their heads in the sand. If we can’t fight for a “compassionate capitalism” that benefits workers AND shareholders, then what good are we as a movement? It’s not just the fortunes of a private company that are at stake; what’s also at stake is the ability of capitalism to be more than just a left-wing caricature of the system – a system viewed as one that exploits the many for the benefit of the few. “Compassionate capitalism” is an ideal worth fighting for & it’s a reality worth defending. I hope most (if not all) of you here at RMG join me in this fight.

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