Whole Foods Co-founder John Mackey on Conscious Captialism (Archival) | Big Think

From a macro perspective, conscious capitalism is becoming conscious of the framework that capitalism has to exist in order to be successful, in order to flourish. There are certain key principles that have to be in place, and we have to nurture those principles, or we won't have a capitalistic order. It's not something that automatically exists; it has to be grounded in those principles.

Some of those principles include property rights. We have to have the right for people to be able to own property. At the same time, there needs to be the freedom to exchange property. We need to be able to trade it; we need to be able to create something and then trade it or sell it to someone else. We need a rule of law. There needs to be laws that are just, laws that are predictable, and laws that apply to everyone in the society, including the government.

A rule of law is essential; you cannot have a capitalistic order without the rule of law. Whenever that comes into doubt, or if there are not stable property rights, you don't really have the basis for the capitalistic order. Finally, you need the freedom to trade. Usually, the greater the freedom to trade across people, but also between people in different states and people in different countries, the greater value creation that occurs.

So, anytime you see a society that's beginning to restrict the ability to trade, you see a society that is going to lessen its prosperity. It tends to happen when people get preoccupied with loss of jobs, not understanding that you may lose some jobs to a foreign country if you allow freedom to trade. But you’re gaining jobs because you are gaining more net jobs. The people won't give you their goods for free; they want to trade with you as well.

The jobs and the goods that they want to trade for, the goods and services they want, will create greater employment at home. But that's very hard for the average person to understand. Anyway, conscious capitalism is understanding these basic core economic values and becoming more conscious of them.

Now, conscious business has certain principles behind it, and one principle is that business has the potential for a higher purpose. Maximizing profits is often seen as the purpose of business. If you ask people what the purpose of business is, they usually say, "Well, everybody knows that the purpose of business is to maximize profits; it's to maximize shareholder value."

But that's a very odd answer, because that's not the answer we would give if you asked what the purpose of a doctor is—to heal the sick—or what the purpose of a teacher is—to educate people—or what the purpose of a lawyer is, or what the purpose of an architect or an engineer is. So, why is it that we would come to this odd answer that the purpose of business is to maximize profits?

In my life, I have known literally hundreds of entrepreneurs, and with very few exceptions, very few of them actually created their businesses to try to maximize profits. Of course, they need to make money, but that’s like saying I need to eat in order to live, or I need to breathe in order to live, or I need to create red blood cells in order to live. But that’s not the purpose of my life—to eat, to breathe, to create red blood cells. I have a much more transcendent purpose in my life that gives it meaning and value.

Business is no different. A business has the potential for a higher and deeper purpose, and that's the first principle of conscious business. The second principle is that there's a variety of stakeholders that are interdependent, that are connected together: customers, employees, suppliers, investors, communities—both local and larger—and then the larger environment that we're part of. Those are the most important stakeholders.

There are other stakeholders that are in a formal wider circle, such as the government, labor unions, the media, and activists of various kinds. But the idea...