John Mackey is co-CEO of Whole Foods Market and co-author of a new book, Conscious Capitalism. I recently sat down with Mackey to talk about what he’s learned from crisis, the purpose of business and how to fix health care in America. Video and a transcript of our conversation follows.
Steve Forbes: John, good to have you with us. You’ve got a new book called, Conscious Capitalism. And it reminds me of what my grandfather, who founded our magazine in 1917, what he said in the first issue. He said, “The purpose of business is to produce happiness, not to pile up money.” And certainly, that seems to be in the spirit in which you wrote the book.
John Mackey: I think I’m channeling your grandfather then.
Forbes: One question at the beginning. You’ve studied philosophy. You’ve studied Smith and Hayek. You know about free markets, voluntary exchange. Reciprocity. Needs and meeting the needs and wants of others, which is not recognized. Even if you’re greedy in the real world, you don’t get something unless you provide something that somebody else wants.
You recognize that free markets focus you on the future. Misers do not found Whole Foods, or Walmarts, or Microsofts, or Apples. Brings about enormous circles of cooperation, which we don’t even realize, the famous essay, I Pencil. All that goes into something seemingly simple. Brings about innovation and creativity. Real artistry resides in business.
What Henry Ford did, for example, with the moving assembly line was really, in many ways, on a scale of what Michelangelo did. Very different spheres, but the creativity was extraordinary. And we all know there are bad actors, but that’s like saying, if you have fraud in elections, you should get rid of democracy. No, you deal with the problem; you don’t get rid of democracy. So, understanding all of that, why did you feel the need for the book?
Because at first flush, not if you read it, it sounds as if there’s a little bit of defensiveness about capitalism. So, what brought you to do the book, given the understanding you have of free markets, when even among business people there’s not that understanding?
Mackey: Well, we wanted to write the book because as you pointed out, business has a great tradition of creating value for other people. It is a value creator. It’s the greatest value creator that humanity’s ever invented. We did the research. We discovered that 200 years ago, when capitalism really got going, 85% of the people alive lived on less than a $1 a day – 85%. Today, that’s down to 16%. Two-hundred years ago, illiteracy rates were over 90% across the world. Today, they’re down to about 14%. Two-hundred years ago, the average lifespan was only about 30. Today, it’s 68 across the world, 78 in the United States, almost 80 in Japan.
Humanity has been lifted out of the dirt in the past 200 years, primarily through capitalism and through business – and doesn’t get credit for it. We see that the narrative about business has really been defined by the enemies of business, who see it is as fundamentally selfish, and greedy, and exploitative, and it only cares about making money. I just think that’s fundamentally wrong.
We also know that our economy is struggling and as little as 13 years ago, the United States ranked number three in the Economic Freedom Index behind Singapore and Hong Kong. Today, we’ve fallen down to number 18.As our economic freedom declines, so does our prosperity. So, I think the book is important because we need to recapture this narrative from the critics. Too often the defenders of capitalism and business just do it strictly on the basis of the prosperity that it’s created. And they don’t deal with the ethical foundation of it.
So, they play into the hands of their enemies. The enemies say they’re selfish and greedy. Too often, the defenders say, “That’s right, what about it? Selfishness is good, greed is good.” Because they so believe in the invisible hand of Adam Smith, they don’t understand that that really undermines the reputation of business.
For example, Gallup now ranks big business. Polls now show an approval rating of only 19%, which is only two points higher than Congress. That means 81% don’t approve. So, we’ve got to recapture this narrative. The defenders have got to do a better job of explaining the great value that business creates and how capitalism is helping us, or we’re going to lose it, and our prosperity’s going to continue to decline. READ MORE