Who is a company? If we speak of the men and women of Boeing, say, or Wal-Mart or Market Basket, a supermarket chain in New England, where this question is being posed most emphatically of late, are we referring to the company's employees? Its founders? Its founders' grandchildren, even if they play no role in the company's endeavors? Its shareholders, even if they hold the company's stock just for a few months or, in the case of high-frequency trading, a fraction of a second?
If this is a question of control, the answer is clearly the shareholders or, at privately held companies, the owners. Over the past 40 years, however, as the idea has taken hold that companies are supposed to be run solely for the benefit of shareholders, even if it comes at the expense of the company's workers and their communities, this control has hollowed out the U.S. economy.
That's why the eruption at Market Basket over the past few weeks poses such important questions. At the same time, the Market Basket uprising is sui generis: The company's workers (none of them unionized), managers and consumers have all but shut the chain down in an attempt to persuade the owners to rescind their firing of Market Basket's president.
Workers and shoppers demonstrating — 6,000 of them at one rally — to bring back a chief executive? What country are we talking about? And what manner of chief executive?
The executive in question, Arthur T. Demoulas, won the allegiance of both his employees and shoppers by delivering the kind of goods — good food, good pay, low prices — that most CEOs feel compelled to subordinate to the gods of quarterly reports and shareholder value. At Market Basket, by contrast, clerks start at $12 an hour, experienced cashiers can make more than $40,000 a year and even part-timers are enrolled in profit-sharing plans, and, yet, the goods on the shelves go for less than they would at other markets.
The key to this apparent riddle of good wages and low prices is low turnover: While revolving-door employment is standard in the retail sector, Market Basket's workers tend to stay put, developing skills, expertise and relationships that eliminate the myriad inefficiencies endemic to employers who command no loyalty or enthusiasm from their workers.
Demoulas and his extended family own Market Basket, but that family has long been divided into two warring camps — one headed by Arthur T., the other headed by his cousin, Arthur S. Demoulas. The Arthur S. faction had long complained that Arthur T. was reducing the family's take with his generosity to workers — directing $46 million of company funds to shore up the profit-sharing plan, for instance, in the wake of the 2008 financial crash. The Boston Globe has reported that the family made $500 million during the past decade, but that apparently wasn't enough for the Arthur S. group. Recently, one relative shifted her allegiance from T. to S., giving the S. forces 50.5 percent of the company's shares — enough to direct the board to dump T. and hire new co-CEOs.
Eight senior managers organized an employee protest; they were promptly fired, too. At that point, most of the chain's 25,000 employees at its 71 stores joined the protest, their ranks swelled by thousands of the company's shoppers. Confronted with increasingly bare shelves and steadily fewer patrons, the directors have announced they're entertaining bids for the chain — one of which has come in from Arthur T. How this story will be resolved is anybody's guess, though the Arthur S. forces can't long continue to run a chain that sells fewer and fewer products to a diminishing number of shoppers.
So who is Market Basket? The chain appears to have been that rarest of companies in contemporary American capitalism: a community of sorts, in which management has respected and rewarded its workers and consumers no less than its owners. If the Arthur S. wing sells its stake to the Arthur T. side of the family, this community might be preserved. But is there any way to turn the vast majority of U.S. companies into this kind of community, too? The one major nation in which employer-employee community is standardized is Germany, where seats on corporate boards are split between worker and management representatives and where managers are required to work out issues with their employees.
Like Market Basket under Arthur T., Germany is thriving under stakeholder capitalism. The one good answer to the question of who is Market Basket — or any company — is all of us.
Harold Meyerson is editor at large of the American Prospect.
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