The Coop: Anachronism in Action

Alas, that socialist holdout otherwise known as the Harvard Coop will not offer any discount to its student "members" for the third consecutive year. I would take the opportunity to rail against this decision by Coop President Jeremiah P. Murphy Jr. '73, but such invective would prove futile. There is no hope that the Coop can or will turn a profit. The store's business "strategy" is, of course, the fault of its managers. But any such entrenched bureaucrats with zero financial incentive to improve performance would likely do the same thing that the Coop does: maintain a not-for-profit inertia.

The logic behind most capitalist business operations is simple: Provide what the customers want at prices they will pay while attempting to increase profit margins. This task is best accomplished by holding down operating and wholesale costs and raising retail prices and/or sales. The end of the process is profit; without that incentive, the owner of the business would not and should not be concerned with the business. True commercial co-cooperatives can easily be included among such legitimate businesses (at least until competing claims on profit or loss force its disintegration). Even nonprofit organizations (like the University) believe it is in their best interest to maximize their capital through private investments.

The Coop, however, is in a league all its own when it attempts (unnecessarily) to provide students with goods and services which they do not want, doing so inefficiently and at noncompetitive prices. The Coop has--believe it or not--discovered that students aren't buying its tailored clothing, shoes, "fashionable" items, computer hardware, televisions, stereos or cameras. It promises to take them off the floor this year. Regarding its other items, however, the Coop still lives in retail fantasy land. Delusions of un-coerced sales are the only thing keeping it from shutting down.

So what, exactly, does the Coop maintain it is in the business of?

* Insignia items, for one, which are quite easily hawked to tourists with a psycho-erotic attraction to Harvard. Still, the Coop doesn't turn a profit. Don't you think J. August and the Harvard Shop might be willing to pick up the slack as replacement retailers for those products?

* School supplies, second, which beside being wholly inadequate, don't do much for the student pocketbook as the Coop specializes in $500 pens. Surely, Bob Slate and the two CVS's in Harvard Square might be able to supply students with needed items.

* Foodstuffs, third, which might just as easily be purchased at neighboring convenience stores with more of a selection. Or maybe a short T-ride or long walk to the Porter Square Star Market might be appropriate for students who want to buy food in bulk at decent prices.

* Books. Discounting the relatively pathetic selection offered on its two lower floors, the Coop is still heralded as the textbook king (a.k.a. monopolist textbook hoarder). Why? Harvard gives the Coop a monopoly on the needed texts for all of its classes, except when the professor chooses to purchase elsewhere. Wouldn't it make sense to supply reading lists and class enrollments to all the local bookstores so that students would benefit from price competition?

The Coop must die the death of an anachronism and pass from our midst. Its recent acquiescence to turn over the management of its operations to Barnes & Noble provides a case in point. Within one year of privatizing operations, the Coop's costs of advertising, data processing and employee salaries and benefits have declined. Isn't it surprising that a firm interested in making a profit will prevent excess spending! Obviously, the Coop hasn't learned that lesson. And to judge from the its less-than-helpful permanent sales clerks, management isn't taking any pains to enforce capitalist dictates.

The Coop should sell its buildings and its wares. The proceeds should be donated as to Harvard for the purpose of undergraduate financial aid. The stores which should be recruited to populate the vacant spaces should be national or regional chains that specialize in textbooks or office supplies. (If this attempt fails, sell to the highest bidder.) In any case, not only will students have access to better goods at lower prices, future generations of students will benefit from interest earned on the now-stagnant equity housed in the Coop.

I am not surprised by the Coop's recent failings. But I am shocked that the organization still exists. Students will continue to lose the value of their Coop "membership" in terms of opportunity cost as long as the Kremlin on the Square is controlled by an inept politburo headed by comrade Murphy. Privatization would cure such economic ills and would serve students well.

Joshua A. Kaufman's column appears on alternate Tuesdays.