Capitalism 2013

 | 

Capitalism, once lauded as the proud foundation of America's success, has had a bad rap lately. Free-market capitalism has been blamed for everything from the collapse of real estate and the stock market to the widening gap between haves and have-nots and even the onslaught of terrorism. Capitalists are the bad guys in nearly every movie, every classroom, and at least half the political speeches — or so it seems.

But there is nothing free about American markets today. Government intervention has led to a Bizarro world of crony capitalism that mimics free enterprise while tying its hands. John Mackey calls it "the intellectual hijacking of capitalism." Regulations intended to protect the consumer and the employer create unintended imbalances that limit competition and inadvertently encourage unfair practices. Capitalism gets the black eye, while government goes in for the sucker punch. But it's the consumer and the employee who end up on the canvas, knocked out.

Mackey, founder of Whole Foods Markets, and Raj Sisodia have written a book, due to come out on January 12, to counter this false impression of the business person. With the subtitle "Liberating the Heroic Spirit of Business," Conscious Capitalism is a handbook of great business practices told through the anecdotes of highly successful and highly conscientious business people. Mackey and Sisodia demonstrate that business owners can be compassionate and successful. In fact, the "conscious capitalist" will be more successful by following the leadership advice outlined in this book.

What is a conscious capitalist? One who is fully aware. Conscious capitalists make deliberate decisions based on the longterm consequences of their actions. They are aware of the impact their actions have on customers, suppliers, shareholders, the community, and the environment. They recognize that when they consider the needs of others and act fairly, others will probably do the same, and everyone will benefit.

Government intervention has led to a Bizarro world of crony capitalism that mimics free enterprise while tying its hands.

Mackey is the ideal person to write a book like this, because he has himself embarked on a philosophical journey that allows him to see the problems from one perspective and the solutions from another, uniting philosophies in what he sees as a "win-win" relationship. He describes the "progressive political philosophy" he espoused in young adulthood, when he saw problems in the world and believed that "both business and capitalism were fundamentally based on greed, selfishness, and exploitation." His personal life is grounded in the kinds of causes usually embraced by anti-capitalists, including his vegan diet, his Eastern meditation techniques, and his deep concern for animals and the planet. He is a gentle man in every way. But he has also become a fierce defender of free market capitalism. Through his experience as an entrepreneur he discovered "that business isn't based on exploitation or coercion at all. Instead . . . business is based on cooperation and voluntary exchange . . . for mutual gain." Bringing the spirit of cooperation and caring to the forefront of business management is the purpose of this book.

Throughout the book, Mackey and Sisodia return to the theme that "business is not a zero-sum game with a winner and a loser. It is a win-win-win game." They demonstrate how the conscious capitalist creates a symbiotic relationship among several stakeholders, including the business owner, the workers (or "team members," as Mackey prefers to call them), the consumers, the shareholders, the suppliers, and the community. Working together for their own betterment, they make each other's lives richer as well.

One of my favorite sections of the book focuses on worker motivation. The authors identify three main principles of motivation: job, career, and calling. A "job" is a transaction: if you put in a certain number of hours, you go home with a certain amount of money. A "career" can be more satisfying: it requires a certain amount of training and skill, and it brings a greater sense of responsibility, as well as respect and money. A "calling," on the other hand, "offers value and satisfaction beyond the paycheck." Work that feels like a calling may be time-consuming and even exhausting, but there is seldom a distinction between being "at home" and being "at work," because it is simply who we are. Many people devote their lives to a calling and earn no money for it at all.

Since, on a normal day, most people spend more waking hours at their place of employment than they do at home, a sense of purpose is essential for satisfaction and happiness. One way to instill the sense of calling, according to this book, is to broaden that sense of purpose for the people who earn a paycheck. A team member at Whole Foods, for example, is not just a grocery clerk; as Mackey sees her,she is part of a team that provides nutritious and delicious food to people who live in the community. She is proud of the charitable work provided by Whole Planet (a charitable organization sponsored by Whole Foods) and enjoys the employee benefits that she herself participated in selecting, including a health plan that should be a model for the nation. She also enjoys the trust that management exhibits toward her; Whole Foods has a policy of encouraging team members to "use their best judgment" when something unusual occurs or a particular rule or practice seems not to fit a particular incident.

Conscious capitalists exhibit this attitude of partnership and respect toward the suppliers of their companies. Negotiations with suppliers can often turn into adversarial relationships whereby one side ends up with a disproportionate amount of the benefit, and the other with a disproportionate amount of resentment. Mackey and Sisodia recommend treating suppliers as one would treat consumers. Treat them fairly, pay them on time, understand their needs, and recognize that they have to make a profit while doing business with you. In so doing, you will create an atmosphere of loyalty and favored status that could be very important when supplies are limited. And it's good karma, too.

Conscious Capitalism is full of anecdotes not only about Whole Foods but also about such successful companies as The Container Store, Southwest Airlines, Walmart, POSCO (formerly Pohang Iron and Steel Company), 3M, UPS, and many others. A lot of them adhere to one or more of the four "categories of great purpose" described in the book. The great purposes include:

  • The Good: services to others that include improving health, education, communication, and quality of life
  • The True: discovery and furthering human knowledge
  • The Beautiful: excellence and the creation of beauty
  • The Heroic: courage to do what is right to change and improve the world

These stories about modern businesses that are providing goods and services that are good, true, beautiful, or heroic in a conscientious manner bring the book to life and give the reader a buoyancy of spirit. Capitalism is good. Entrepreneurship is honorable. Businesses do contribute to the overall good. Managers do not have to demean or mistrust those whom they supervise. In fact, everyone benefits when workers are trained and trusted to "use their best judgment." Conscious Capitalism is a book you will want to share with every business owner, manager, and worker you know.


Editor's Note: Review of "Conscious Capitalism: Liberating the Heroic Spirit of Business," by John Mackey and Raj Sisodia. Harvard Business Review Press, 2013, 322 pages.



Share This

Comments

Geezer

I sometimes wonder if Harrison is a real human being or a present-day version of Ethan O. Waters. Professor Cox, is that you?

Jon Harrison

I really exist, though undoubtedly you are perplexed by the fact that I can have form and substance in your own little universe. Like antimatter, I should be annihilated when I come into contact with your thought particles. But I'm still here. -- Jon Harrison

Geezer

Dear Professor Cox,

I did not use the word "Harrison" in the comment I submitted. I said "the troll." The moderator apparantly concluded that "the troll" = "Harrison" and changed my wording accordingly.

I can understand why you made your fictional foil an archetypically sophomoric know-it-all, but why did you make him so ill-tempered? Ethan O. Waters may have been deliberately provocative, but he was not, as I recall, snotty, snarky, and paranoid.

Jon Harrison

I may be snotty and snarky, but I am not paranoid -- even though everybody on this site is against me.

Geezer

A sense of humor! It took me by surprise. Nicely done.

LibertyUnbound

Geezer—

You have made (or attempted to make) similar comments in multiple threads now, always in the context of a Harrison reply. I apologize if I misunderstood your intent, but the context forbids any other interpretation.

Calling him "the troll" seems like a way to provide some sort of deniability, however implausible, to the odd campaign of stalking him across the site and warning others against him. However, you can see for yourself that others find little difficulty in either ignoring his messages, or responding in ways that actually further discussion.

Also, I assure you Harrison is no editorial invention; his words and views are his own.

In Liberty,
drew

Geezer

When Harrison uses a word, it means just what he chooses it to mean – neither more nor less. Most of the rest of us prefer common usage. (Using a word to mean what others believe it to mean promotes communication.) I define "libertarian" as being in favor of liberty (i.e., the absence of coercion). My dictionaries define it the same way. Harrison's definition is not entirely clear, but it appears to be broad enough to include being in favor of whatever form of coercion is currently fashionable. He can call himself a unicorn if he wants. The rest of us are not obliged to indulge his idiosyncratic definition.

Jon Harrison

When a government elected by a majority of voters imposes a policy that you don't agree with, is that coercion? I may not like a policy that the majority imposes upon me, but that's the price I pay for living in this society.

If you answer yes to my question, then I would say you're an anarchist. Is that a fair statement? I am utterly opposed to anarchism.

I always called myself a libertarian conservative -- until the Bush II adminsitration turned conservative into a dirty word. Today, if I have to label myself, I would use the term libertarian pragmatist. I believe in the greatest freedom possible for the individual consistent with the maintenance of a civilized society. I am not, and never have been, a libertarian with a capital "L".

Frankly, I've been reaching out to conservatives who are turned off by the Republican Party in its current state. The libertarian movement seems more and more to be filled with cranks and people largely out of touch with reality -- a movement going nowhere except the trash bin of history. I say this with regret.

Jon Harrison

Based on this review (for I have not seen an advance copy of the book), I would have to say this book fails to grapple with the most important questions we face. If you want to stop living in la-la land, start by reading George Friedman's short piece, "The Crisis of the Middle Class and American Power" in the Jan. 8 edition of Stratfor.

Prosperous knowledge workers and intellectuals with comfortable academic berths are just so out of touch with real trends in the American economy. For example, an academic I know persists in denying the fact that income disparity has been growing in America since the 1970s. The Economist has run a series of excellent articles on the subject, yet my tenured friend, self-satisfied and quite well-off on the salary and benefits provided by the taxpayers of the state in which his public university is located, denies there is a problem.

Half of the American population can't even afford to shop at Whole Foods. The bromides delivered by the upper crust do nothing to relieve the difficulties of those less able and less fortunate Americans who are quite lost in a world of financial excess, globalization, and knowledge-based prosperity.

Mark this -- I am NOT saying that government has the answer to this or any other problem. Indeed, as a determinist, I don't believe there are answers. But I do know that John Mackey's world view will not lift the 47% up, up and out of their increasingly hardscrabble lives.

Jo Ann

Jon, I'm surprised at you, using an ad hominem attack against a book's author instead of reading and commenting on the contents of the book itself. Conscious Capitalism is about business management practices, not the price of groceries. And frankly, your knee-jerk criticism of Whole Foods products ignores the fact that hundreds of thousands of people choose voluntarily to shop there. Should they be denied the higher quality of produce they want, simply because you think the price is too high? That kind of thinking has led to the tasteless fruit and high-corn-syrup offerings we now find in most grocery stores. Whole Foods is one of the few places where non-gardeners can still get a real tomato. Thank goodness there are still places like Whole Foods where people who care more about quality can shop and find what they want to eat.

Companies that focus on lower prices tend to sacrifice quality of product and quality of work place in order to do so. Employees are often overworked and under-appreciated. Hourly workers are often sent home early on slow days. By contrast, the people who work at the companies described in Conscious Capitalism are happy, productive, and engaged. They express satisfaction and pride in the work they do. And many of them do come from "the 47 %."I urge you to read this book. It is a great example of the compassionate side of the free market.

© Copyright 2013 Liberty Foundation. All rights reserved.



Opinions expressed in Liberty are those of the authors and not necessarily those of the Liberty Foundation.

All letters to the editor are assumed to be for publication unless otherwise indicated.