In 1978, John Mackey was 25-year-old college dropout who believed that democratic socialism was a more “just” economic system than democratic capitalism. But his views soon changed after he and his girlfriend borrowed $45,000 from family and friends to open a small vegetarian grocery store in Austin, Texas. Although he was only earning $200 a month from his struggling business, his friends on the left viewed him as a “capitalistic exploiter” who was overcharging his customers and exploiting his workers.
In a nutshell the economic system of democratic socialism was no longer intellectually satisfying to me and I began to look around for more robust theories which would better explain business, economics, and society. Somehow or another I stumbled on to the works of Mises, Hayek, and Friedman, and had a complete revolution in my world view. The more I read, studied, and thought about economics and capitalism, the more I came to realize that capitalism had been misunderstood and unfairly attacked by the left. In fact, democratic capitalism remains by far the best way to organize society to create prosperity, growth, freedom, self-actualization, and even equality.
Mackey’s small store morphed into Whole Foods Market, which now has 345 stores and $4 billion in annual sales, but he’s still an advocate of free markets who believes that capitalism is misunderstood. In a recent speech Mackey claimed that, “capitalism has a serious branding problem . . . the recent recession was . . . blamed on greedy financial corporations, deregulation, and capitalism—market failures—rather than on bad government regulations and monetary policies—government failures.”
The truth, he says, is that “Capitalism is ending poverty on planet earth. The problem is not that there is an unequal distribution of wealth in the world. The problem is that there is an unequal distribution of capitalism.”
That’s a primary theme of Mackey’s new book, Conscious Capitalism. Rather than claiming that the primary role of business it to “make money” the Texas entrepreneur says free market advocates should point out that “Business is good because it creates value for many. It is ethical because it is based on voluntary exchange.”
“Business is the biggest value in the creator in the world,” said Mackey, “That is the purpose of business; business creates value . . . Business needs to shift from profit maximization to purpose maximization.”