Abundance Capitalism

SAN RAFAEL, CA - FEBRUARY 17:  A sign is posted in front of a Whole Foods store February 17, 2010 in San Rafael, California.
SAN RAFAEL, CA - FEBRUARY 17: A sign is posted in front of a Whole Foods store February 17, 2010 in San Rafael, California. Whole Foods Market reported a 79 percent surge in first-quarter earnings with a profit of $49.7 million, or 32 cents a share, compared to $27.8 million, or 20 cents a share, one year ago. (Photo by Justin Sullivan/Getty Images)

I am the CEO of an education company providing low cost education worldwide. As such, I am interested in how other CEOs run their companies and describe what they are doing. Over the past several weeks, I have heard John Mackey promote his book Conscious Capitalism and have come to the conclusion that it might have been more appropriately titled Unconscious Capitalism. I say this because in his various interviews, he managed to re-iterate a position he has taken previously, that Obamacare is somehow a form of "fascism," and that climate change is not of real concern and might actually be good in some places. To be so unconscious about two issues of such extraordinary social and ecological importance to the United States and the world produced a cognitive dissonance in my mind and made me reflect on how Mackey has been in running Whole Foods. True, he has built a virtual monopoly, but has he been "conscious"?

Whole Foods is known where I live in Mill Valley, CA, as Whole Checks because it charges premium prices on all its products. You can easily spend upwards of $50-$60 and only get a single bag of groceries. Since its founding in Austin, TX in 1980, it has been on a mission to establish a national chain of organic food "supermarkets." It has accomplished this goal with a policy of buying out or forcing out its competition. Its employees are treated pretty much the same as Wal-Mart -- starting them close to minimum wage, being stingy about benefits, and fighting any attempt to have the workers unionize. Worker turnover is very high. Unlike Walmart, which has ruthlessly cut prices and forced its vendors to cut profits to razor-thin margins, Whole Foods has taken the opposite strategy -- wiping out competition and then charging as much as it can. It has had a reasonably good environmental record, eliminating many toxins and plastics where possible and selling quality produce and meats, but it has compromised its core brand as an "organic food" company by watering down its stand on GMOs and selling GMO products on its shelves.

Like with most monopolies, disgruntled consumers like myself have nowhere to go. We are committed to organic food for the health of our families and continue to pay what we know are excessive prices because there are few alternatives. But we are not fooled. We know the use of "conscious capitalism" by the founder of Whole Foods is very much like the eco-friendly ads we see by Chevron or BP. It is image management, little else.

The basic problem for someone like John Mackey is that he has not been conscious enough to actually challenge the basic assumptions of the economic model by which he built his company. He may be selling organic food but he is a classic capitalist. He has built Whole Foods on the notion of what George Soros calls "free market fundamentalism." This is the classic economic doctrine that unfettered competition, regulated as little as possible by government regulation and which seeks primarily to maximize the return to the shareholders, is what real capitalism is and should remain. This approach characterizes Whole Foods along with the rest of the American corporate sector, indeed most of the entire global economy. Basically, Whole Foods represents business as usual with slightly enhanced environmental standards.

This model of capitalism is essentially exploitative. By seeking to maximize shareholder return as both the means and the end of a company's existence, most companies are forced into perpetual compromise on labor standards, their competition, and the environment. They are compelled to see their employees, vendors, the environment, and local communities as objects from which to benefit rather than as partners with whom to share. By "letting the market decide," companies are compelled to engage in ruthless competition, massive ecological devastation, and ruinous treatment of local communities, all for the sake of maximizing returns, ideally with little or no government interference.

Whole Foods is by no means the worst case, and in this sense Mackey has done reasonably well by current standards. A more egregious example of the current economic model is Apple. As the world's largest company, it has nearly $80 billion in the bank. Yet it pays its Chinese workers so little that over the past several years many have committed suicide by leaping off the buildings in which they worked. Steve Jobs refused to do anything about this. It was only after repeated suicides and under the duress of bad publicity that the new CEO Tim Cook acted, but only enough to stave off further bad press, not as any act of principle. There are countless other examples of companies large and small who do the same -- keeping wages and vendor remuneration as low as possible and taking minimal care of the environment or local communities.

Capitalism is exploitative by choice, not by design. Another choice is what I would call abundance capitalism. This is the choice our company is taking as one of the new benefit corporations spreading across the country. It is a choice to use as our measure the triple bottom line of planet, people, and profit as a genuine commitment to optimize returns to all our stakeholders and to our world, not just our investors. It is a choice to operate by the principle of collaborative abundance rather than free market fundamentalism. It is a choice that seeks to share the wealth, not concentrate the wealth. It is a choice not only not to exploit the environment but to enhance the environment. It is a choice to be generative, not competitive, a choice, ultimately, that it is not enough to let the market decide. What is now required, especially in a world under duress such as ours, is to turn free market fundamentalism on its head and set forth a new more abundant principle -- in deciding, the market must give primacy to the mutual generativity of the whole.