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Red and Black Cafe closes: Lessons in capitalism from a socialist coffee shop

Portland’s Red and Black Cafe recently announced its closing via Facebook with a sad kitten photo.

Red and Black sounds like a coffee shop straight out of a Portlandia episode or an article in The Onion. It’s an all-organic, wheat-free, vegetarian coffee and food shop. It’s run as a collective, it’s employees are represented by the IWW union, and was once a popular hangout of the Socialist Party USA’s candidate for president.

So, naturally, there was a bit of schadenfreude at the news that an anti-capitalist business would fall victim to market forces.

But, instead of focusing on the cafe’s failure, let’s take a look at it’s success …

Red and Black Cafe stayed in business for 15 years.

In a world where 95 percent of small businesses fail in the first year, Red and Black’s 15 years in business is a major achievement.

And, that’s the lesson in capitalism from Red and Black Cafe. A free market has room for a wide range of businesses with a wide range of business models. Some succeed and some fail. In a world of Starbuck’s and Stumptown, Red and Black carved out a niche and succeeded for a decade and a half.

Another lesson in capitalism from Red and Black is that diversity rules—one size does not fit all. Just because one coffee shop has union employees doesn’t mean all coffee shops should have union employees. But we see this play out over and over: One business who offers generous paid sick leave will testify before politicians pushing a law saying all businesses should offer generous paid sick leave. But what if the employees want bigger paychecks with less-generous sick leave?

Next time you sip your non-fat soy latte, think about the amazing world of capitalism where a socialist cafe can survive for 15 years.