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What is the purpose of business?
For the past half-century, businessmen have had an easy answer, gift-wrapped to them in 1970 by Milton Friedman. The purpose of a company, wrote the economist, was to make money for its shareholders. If he did that, like a shark focused on hunting, he would work efficiently, totally focused on the one thing he was made for.
But like so many certainties of capitalism – “healthy economies are those that grow”; “the pursuit of success is the goal of every worker” – this definition is increasingly being questioned. Today, business leaders from BlackRock in finance to Danone in food are calling on corporations to help solve some of the biggest problems of the modern world: climate change, inequality and intractable poverty.
There is a problem, however. It’s easy to make peripheral changes to a business model, and hard to make big ones. What about when the principle stifles profit, criticizes a company in valued markets, or embitters the shareholders it wants to keep meek?
This week saw a particularly stark example of a goal meeting what one might call practicality – and losing. The company in question: Ben & Jerry’s, the “mission-driven” ice cream company that was acquired by Unilever in 2000, but retains an independent board of directors. A federal judge has ruled against Ben & Jerry’s, refusing to grant an injunction against the sale of the franchise’s ice cream business in Israel.
It was a test: could a small subsidiary really resist the power of its parent company? The answer seems to be: no. The halo that Unilever has polished through its acquisition of “ethical” brands has been tarnished as a result. When the going gets tough, it seems like principles lose out to profit. All those other mission-driven small businesses building their businesses will be watching and wondering: In the future, will they be able to sell, not sell?
In July 2021, Ben & Jerry’s announced that it would stop selling ice cream in the occupied Palestinian territories. The decision, they were careful to note, was not a protest against Israel per se – in other parts of the country the dessert would still be available. Ben & Jerry’s founders are Jewish, they noted, and do not believe their protest is anti-Semitic.
Unilever, Ben & Jerry’s parent company, has come under fire from Israel, where it sells many other products, and from some shareholders. A year after Ben & Jerry’s took the stand, Unilever announced that, as a workaround, it was selling Ben & Jerry’s in Israel to the local distributor, who would market it in exactly the same way as before, with the exception of a change of Arabic and Hebrew Names.
Last July, Ben & Jerry’s sued to stop the sale as much as possible. (Much of it had already been completed.) The ice cream maker’s independent board of directors’ salaries were frozen in retaliation, its lawyers said. Extrajudicial mediation has collapsed. This week, a New York judge dismissed Ben & Jerry’s lawsuit, saying it had not proven that it had suffered “irreparable harm” or that its customers would be “confused”.
Ben & Jerry’s frequently expresses its politics in the form of limited-edition ice cream. Here’s a look at some of his savory forays into social and environmental causes over the years:
🐒“Rainforest Crunch” (1988): Aimed at supporting indigenous nut cooperatives and protecting the Amazon rainforest; notoriously fails to live up to its political premises.
🇺🇸 “Yes Pecan!” (2009): The product of “Yes Pecan!” a pun on Barack Obama’s campaign slogan, is being donated to the Common Cause Education Fund, which encourages American citizens to participate in politics.
🌎 “Save Our Swirl” (2015): The “Save Our Swirled” flavor supports action on climate change during the Paris Agreement talks that year.
🙅♀️ “Pecan Resist” (2018): ‘Pecan Resist’ protests the impact of US President Donald Trump’s policies on women, immigrants, people of color and the environment.
✊🏿 “Changing the Swirl” (2021): Football player and racial equality activist Colin Kaepernick helps create vegan flavor “Change the Whirled”.
☕ “Change is Coming” (2021): The “Change Is Brewing” flavor includes coffee, brownies and artwork from black-owned businesses in support of U.S. Representative Cori Bush’s police reform legislation.
🍫 “Chocolatey Love A-fair” (coming in 2023): A new flavor created in partnership with chocolate company Tony’s Chocolonely, to promote the “mission to end modern slavery in cocoa farming”.
BUSINESS AS UNUSUAL
Unilever is not the only multinational doing business in Israeli settlements. In 2020, the United Nations Human Rights Office created a list of 112 companies operating in the Occupied Palestinian Territory, including US companies Airbnb, Expedia, General Mills, Motorola and TripAdvisor.
Airbnb actually announced in 2018 that it would stop listing properties in the settlements. The following year, faced with a wave of lawsuits following the decision, she backtracked. The company said it would not profit from the listings, donating the proceeds to humanitarian aid organisations.
Amnesty International has criticized Airbnb, Expedia and TripAdvisor for legitimizing human rights abuses by supporting settlement tourism.
General Mills, meanwhile, sold its majority stake in the West Bank-based Pillsbury pulp mill last June. The decision follows a boycott of Pillsbury products, supported by some members of the Pillsbury family.
A 🪖 THING
Another strand of Ben & Jerry’s politics over the years has been its vocal criticism of NATO’s expansion into Eastern Europe, a stance the ice cream company maintained even earlier this year. year after Russia invaded Ukraine. Ben Cohen, one of the eponymous co-founders, once ran a full-page advertisement in the New York Times accusing US defense contractors of pushing for a NATO expansion that was in reality a “60 billion dollar mess”. For NATO to push so aggressively against Russia, Cohen said in an interview, resembled Ben & Jerry’s attempt to drive Haagen-Dazs out of business, even though Haagen-Dazs stopped selling ice cream and started sell hot dogs instead.
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⚖️ The juggernaut. Jones Day, an Ohio law firm founded in 1893, is already highly influential in its litigation work, defending companies that sell guns, opioids and oil. But more recently, he has set up a practice to help Republicans win elections, and he has advised the Trump administration on its federal judge picks. The effects of Jones Day’s work on this front are quickly becoming visible in the right-wing shift of the Supreme Court and in the Republican echelons of power. “The next Republican presidential administration,” writes the New York Times Magazine, “will most likely be filled with Jones Day lawyers.”
💎 Charming NATO. For years, NATO officers stationed in Naples met Maria Adela Rivera, a socialite who ran her own jewelry and luxury business. Rivera was Peruvian, but she had Russian connections: her adoptive mother lived in Moscow and her husband was part Russian. It wasn’t until Bellingcat revealed in 2018 that his passport was part of footage used by Russian agents that it emerged that Rivera had been spying for the GRU the entire time.
🍼 Stick to the formula. In February, tens of millions of boxes of infant formula were withdrawn from the market. A particular type of bacteria in some of these cans was making children sick, and an inspection of the Indiana factory led by their manufacturer, Abbott Laboratories, found samples of the bacteria on site. A BusinessWeek investigation tells the complicated story of this fiasco, involving a disgruntled whistleblower, a factory with a history of problems and a questionable work culture.
💲 Private iniquity. In 2019, when St. Joseph’s Home for the Aged, a tidy and comfortable retirement home in Virginia, went up for sale, it was thriving. However, no one bought it until 2021, when a New Jersey private equity firm named Portopiccolo Group added it to its portfolio of healthcare facilities. Within two weeks, staff reductions were planned, the name changed, the aviary and aquarium disappeared, and residents began eating alone in their rooms. And a house that had kept covid deaths at zero saw 17 infections and six deaths in just four months under Portopiccolo – an example, as The New Yorker explains, of how private equity firms view their investments in the care sector.
😵 The murder that wasn’t. For 20 years, Manuel Ramirez remained in a Mexican prison, jailed for the murder of a man he insisted he hadn’t killed. He was then released, his sentence commuted but his criminal record still intact. But was his supposed victim really dead? Nothing is quite as it seems in The Economist’s account of Ramirez’s work.
Have a sweet, sweet weekend with a cherry on top,
—Cassie Werber and Sarah Todd, senior reporters for Quartz and Quartz at Work
Additional contributions by Alex Citrin-Safadi and Samanth Subramanian