Whole Foods CEO aims to give nuance to capitalism in new book

AUSTIN, Texas — John Mackey defies most labels, but “unabashed capitalist” is one of the few that sticks.

In “Conscious Capitalism,” Mackey’s first book, the founder and co-CEO of Whole Foods Markets Inc. offers nothing less than a full-throated psalm for the power of free markets to create value and lift humanity.

Yet at its core, and true to Mackey’s ability to avoid those hard-and-fast labels, the book out this week also delivers a pointed critique on how capitalism can lead business astray if its practice isn’t grounded in a sound ethical foundation.

“If everybody is always calculating what’s to their advantage, and no one comes with generosity, or kindness, or compassion, or forgiveness — higher virtues — your society starts to break down,” Mackey said in an interview at his company’s Austin headquarters. “I actually think that’s what’s happening in America right now.”

For much of American industrial history, Mackey said, free-market capitalism was underpinned by a sense of Judeo-Christian values. A sense of empathy and care softened the cold, hard forces of self-interest.

But that ethical underpinning has eroded as American society has grown increasingly secular, Mackey said. And with that decline, the trust in both public and private institutions has evaporated.

“We have to find our purpose again,” he said. “Busi- ness needs to rediscover its purpose, or evolve to discover it.”

Mackey and his co-author, Bentley University marketing professor Raj Sisodia, wrote “Conscious Capitalism” as a guidebook for rediscovering that higher purpose.

As humanity has evolved, their argument goes, so also must business evolve to integrate the needs of all the stakeholders.

Conscious business leaders don’t think in terms of win and lose, they write, but in creative terms that “deliver multiple kinds of value simultaneously.”

While it’s a marked change from how many business leaders think today, Mackey admitted, it has become second nature as a guiding principle at Whole Foods.

“I can do this very quickly,” he said. “I quickly run through every one of the major stakeholders and say, ‘Is this creating more value for them? Is somebody losing here?’ And if somebody is losing, then really we haven’t been creative enough, and probably it’s not a good decision.”

“Conscious Capitalism” includes several anecdotes that illustrate that process. When vendors argued that Whole Foods didn’t put them on equal terms with customers and employees, for example, the company added suppliers to its list of core stakeholders.

When animal rights activists picketed the company’s annual meeting in 2003, Mackey was initially offended by their accusations.

After meeting with them and studying the issue, he wrote, he overhauled Whole Foods’ animal welfare standards and became a vegan.

Those who have followed Whole Foods know that Mackey has drawn his fair share of critics in recent years, including government regulators who investigated him after he posted online messages about the company online under a pseudonym.

In the book, he notes that the investigation and media scrutiny forced him to open his heart and mind further.

Ultimately, it’s that notion of a constantly evolving and progressing consciousness that lies at the heart of both Mackey’s ardent support for, and his concerns about the direction of, free-market capitalism today.

Once, underpinned by an ethics of compassion and care, capitalism created more value for humanity than any other political or economic framework in history, he said.

As business rediscovers a higher sense of purpose — one that seeks to create value for employees, suppliers, investors and customers alike — it can create value for all stakeholders, he said.

Because humanity is more conscious today than ever before, he argued, business has the capacity to integrate a new, necessary ethical foundation on which capitalism can thrive and benefit humanity as a whole.

“In a way, our book is a criticism of capitalism,” Mackey said. “It’s basically saying, ‘If it’s not going to disappear, it’s going to have to go higher. It’s going to have to get to a higher level of consciousness, and the practitioners of it are going to need to be more conscious as well.’ ”

He added: “There are all kinds of challenges we have. Unless we become more conscious, we’re not going to be able to deal with it.”