Whole Foods CEO John Mackey on ending poverty, being libertarian, and more (full video)
Of, course there's the old saying, I, forget who said it but I think it was true in my life which. Is if. At the age of twenty-one you you're. Not a socialist, then you don't have any any. Heart and, if by the age thirty you. Still are and then you don't have any brains, so. That. Was kind of my experience I started, out young and idealistic and. Social. Justice and. Fair. Distribution of resources and. And. We were I didn't understand where everybody couldn't be equally, prosperous. And. Starting. My own business. Was, kind of a wake-up call in a number of different ways I had. To I had to meet a payroll every week and we. Had to satisfy customers. And we, had competitors, that that. We had to. Compete. With in order to have those customers come into our stores and we. Had to compete with other employers, for our, for. Our employees. We had to the, wages, were under competitive pressures, so there was all this competition. On us that, that. Of course made. Them operating, the business successfully, difficult, and. It's. Kind of like having to meet a payroll and, having to meet the demands of our customers is a, great. Destroyer. Of utopian. Fantasies. And utopian utopian, ideologies. You you're, in the real world and you have to you. Have to meet the market test every, day and, every week and I just, found that the belief system that I had, going into, operating. That business was was, inadequate, to explain the. Experiences. That I was having in business and I began. To. Look. Around and, read, other books and, other philosophies. To try to make sense out of out. Of my life, and out of my business experience, and it, was really through encountering, the the. Free. Market capitalist. Philosophies. Of. A Milton, Friedman and and. Friedrich. Hayek and Ludwig von Mises and. And. And many other. Free-market. Philosophers. That I came to realize that this. Explanation. Made. A lot more sense in, my business experience and, made more sense in terms of how the world really operated, and, so, that's, when my. Worldview, began to shift and I began to let go of being a. Sort. Of a Democratic, Socialist. Any. Type of political ideology is, going to have a lot of different. Variants. Of it a lot of different. Libertarians. Are. Constantly. Arguing, with each other, who's. The most pure libertarian and. Who's, most, ideologically. Pure I, have. No real interest in those type of discussions, or arguments, and. What. I resist, in one. Of the strains, of libertarianism. And I reject I reject the idea that. That. Humankind, is essentially, selfish, that. Not. Only as an observation that we frequently are selfish, but there's a strain of belief, particularly. In the in the, on Rand. Part. Of the movement that, believes. People ought to be selfish that, that. That's a virtue that, humans. Are always self-interested. And and. Altruism. Is evil, and and love, is, is. Something that makes, us weak and so, I reject, that aspect, of loot, libertarianism. I'm I'm, I'm. A caring compassionate person, and, I. Believe. That. Free. Markets, and free minds leads, to the greatest human flourishing so. I really want humans to flourish, and I believe. Liberty. And market, economies, and and capitalism. And the best strategies, for full, human flourishing, so. I don't. Identify with that strain of libertarianism. That. Is. Sort. Of uncaring. And. Kind. Of a. Social. Darwinian. Variant. Of it I'm. Very uncomfortable with, that I'm, not that way myself. I do. Believe that many libertarians are animated, by human. Flourishing they-they-they. We. Sincerely believe that human. Flourishing that. We need to be free and that, we need to be creative, and that, through. Human, freedom. Entrepreneurship. That. Humans. Are creative, they create.
New. Ways of of. Creating, value for each other that expresses, the self through the economic system and leads. To greater, prosperity not, for a few but for for. Most people and eventually all people so. There. Is a strain. Of deep. Idealism. In the. Libertarian, movement it's, again, sometimes, masked over by that. That. Ideology, of selfishness, but. The. Human flourishing element. Is, definitely. A big aspect, of I. Think, of the. Motivational. Structure of many many. Libertarians certainly it is for me. I think. The zero-sum. Worldview. Is the predominant, one I, think, it's it's, something we've we've. Evolved, with or. This idea that there's a limited. Fixed PI and. We. Have to. Distribute. That PI in an equal fair way that no one should get, unfair. Large pieces of that pie and, if. Someone, is getting a bigger piece. Necessarily. Someone else may be getting a smaller piece since there's a finite, amount of pie to go around I also. Think it comes from our our, competitive, sports and that, in. Competitive, sports there's. There's. A winner and there's a loser and. So, we. Play, games we play sports all our lives so we come to believe that that. In. The, zero-sum, world view that some. Are winners and some are losers and in, it and then, we can, adjust society. That there, should be no losers, there should be so. We need to, to. To, limit the. Pieces. Of the pie anyone gets so that everyone can have a fair and just piece of the pie and, I. So I reject, that I don't think there, is a. Necessarily. A fixed pie the beauty, of capitalism. And the beauty of conscious, capitalism is, the. Realization. That the pie can grow that. That. Through. Voluntary, exchange. And through the. Value creation that happens when the stakeholders. Voluntarily. Cooperate and, voluntary exchange with, each other is that that the pie grows larger, and so. There. Is more to distribute, and that, distribution takes place through, the market through. The market. Processes, through the exchange process as each as, each of the traders, of course wants to get a bigger. Piece from themselves and. Competition. Sort of ultimately, determines, the the. Percentages. That each of the different, constituencies. Or stakeholders, gets in the exchanges, but, that's a growing pie and, it's. A win win win, in game, and that. Turns. Me on, I'm very, fired up and excited about that because, it means human flourishing, isn't. Trapped in some type of. Limited. Set. Of constraints it means we can innovate and, create our, ways out, of any of these traps, any of these. Sort. Of I can't. Remember or think of the phrase right now I'm trying to I'm trying to recall, but. This, idea that we're in some type of trap. Of limited, resources, and. The. Only limitations. We have in the limitations, of human creativity. Human. Imagination, and. Intellectual. Capital that's been accumulated as, we continue to gain. An intellectual, capital. And as. Human, creativity, is Unleashed and human. Entrepreneurship, is Unleashed then. The. New the. New innovations, the new creativity, that expresses, itself through the marketplace, through capitalism. Allows. Us to solve problems that previously, were thought to be unsolvable, and, human, humans. Continue. On the upward spiral I mean, a great example of this is is. People. Are very focused oftentimes, on the fact that there's still a billion, people on this planet that, say live on less than a dollar a day and that's a and, that certainly is a terrible tragedy but if, you put that in historical, context. That's, about. 15%, of the people 15. 16 17 less. Than 20% of the people alive on the planet live on less than a dollar a day whereas. 200 years ago. 85%, of the people alive on the planet earth lived on less than a dollar a day and thus in today's dollars, adjusted for inflation so. Poverty. Has always been, the default condition of the human race what's. Unprecedented. Is not poverty, what's, unprecedented. Is wealth, wealth. For not a few, but, prosperity. For, literally. Billions of people, every. Every, year now we see hundreds of millions of people escape, from poverty, just, in two countries China, and India it, is the greatest.
Revolution. In, human. Prosperity in all of human, history it's, all occurred in the last 20 years and. It's a it's. A fact that you almost never see reported. In the media instead. We tend to focus still, on there on the, remaining people, that are pas that are either too poor and we're. Back on our zero-sum, game that somehow or another that's. Because, other people are greedy and selfish, and they're keeping. These poor people down rather. Than seeing, poverty. Lesson, through. Capitalism. And through free-market. Expansion. We. Tend to condemn the, very thing that's allowing, people to escape from poverty, as the, cause of the poverty and it's. Ridiculous. It's the. Capitalism, in and, free markets or what's going to allow us to escape from poverty, Muhammad. Yunus likes to say that that. By the end of the 21st century. Poverty. Will be something that we only see in museums, that. It'll. Be something people look back on and say gosh we used to have poor people. How. Is that even possible and I. Do think, that's the future of humanity if we don't totally mess it up that. We, are going to continue to learn we're going to have our intellectual, capital spread, we're. Gonna unleash, the human, creativity. Because. I do believe humans, have limitless creativity and, we're. Going to solve a lot of these problems that are holding us back now and humanity, is going to continue to its upward spiral and then, we were going to eliminate poverty I think, there are people alive today I, perhaps. Will not live to see the end of it but there are pyeong people alive today that will probably. See the. Virtual end of poverty in the human race in the 21st century. From, a macro, perspective. As capitalism, is. Becoming, conscious of the. Framework. That. Capitalism. Has to exist and in order to in order to be successful in order to flourish there's certain key principles. That 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, and has to be it. Has to have principles, that's to be grounded. In those principles and 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. We. Need a rule of law there, needs to be laws. That, are. Just. And laws, that are predictable, and laws, that apply to everyone, in the society including the government, a rule of law is essentially, you cannot have a a, capitalistic. Order, without, the, rule of law and. Whenever. That comes into doubt or, if they're not stable property, rights you don't really have the the basis, for the capitalistic, order and finally, you need a. Freedom. To trade. Usually. The, greater, the. The. Fewer restrictions on, the freedom to trade across the. Between. People, but also between people. In different states, people in different countries the. 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, became.
Time You're gain more net jobs because. The, people won't give you their goods for free they want to trade with you as well and so those jobs. And goods that they want to trade for the good and services, they want that, will create greater employment at. Home but that's, very hard for the average person, to understand, and. So. But. Anyway conscious, capitalism, is understanding. These these, basic, core. Economic, values. And becoming more conscious of them now. Conscious. Business. Is is. There. Are certain principles behind that and one, principle, is that business has a potential, for higher, purpose, that. Maximizing. Profits, if, you ask people what the purpose of business is they usually say, if you go to a cocktail party and ask that question they'll generally say well everybody knows that the purpose of business. Is to maximize, profits. It's to maximize shareholder value, and, it's. 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 need. To heal the sick or what the purpose of a teacher is to educate, people. Or what, the purpose of lawyer is or what the purpose of an architect, is or what the purpose of an engineer is so so, why is it that we would come to this odd, answer, that the purpose of business is to maximize, profits, when. I have known literally. Hundreds of entrepreneurs in my life 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 I need. To eat in order to live I need to breathe in order to live I need my 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 my life meaning and, value to, it business, is no different a, business. Has the potential for a higher and deeper purpose, and that's, the first principle of conscious business second. Principle is is that there's, a variety of stakeholders, that are interdependent, that are connected together, customers. Employees. Plyers. Investors. Communities. Both local, and larger, communities, and then. The larger environment that were part of those are the most, important, stakeholders, there are other stakeholders that are unlike an informal, wider circle, such is the. Government labor. Unions, the, media. Activists. Of various, cons but the, idea being that, these. Stakeholders. Are interdependent, on one another and that the, conscious, business. Attempts. To create value, simultaneously, for. All of these interdependent. Stakeholders, that it seeks the win-win-win. Business, strategy, that, may, be a way. To explain that in a simple model. Version as a retail, business though which Whole Foods is is that. Management's. Job is to help our is to. Hire. Good people, train. Them well and. Help. Them to be happy and fulfilled in their workplace and their work and their jobs and then. The team members job is to satisfy. Our customers help, the customers, to be happy in their, exchanges, with the business, so. Happy, team members, leads to happy customers, and happy customers do, more business with the with. The company and that leads to happy investors, so. You, have a virtuous, circle of happy. Team. Members happy customers, happy investors. That. Reflects. And a simplified version this idea of the. Interdependent, nature of the stakeholders, and why, you can't, just focus on creating value for the investors, alone because. You must create value, for the. Team members, who. Then create value for the customers, who then, create value for the investors, so. The. Conscious, business is recognized. As this is conscious, of it and works. To, optimize value. For all of the key. Independent. Or dependent stakeholders. Third. Principle, of the conscious business is what. We call conscious, leadership or, you. Might also think of a servant leadership that, that, the leaders of the organization, they're. Not there to line their pockets and. Try to maximize their own personal, gain. Instead. Their, job is to fulfill, the higher purpose of the business. Recognize. And fulfill the interdependent, stakeholder, model and in, a sense to serve the organization.
To. Sublimate. Their own ego. And their own ambitions. For the good of the organization and. Again it's not self, sacrificial. Or, I'm not talking about altruism, I'm talking. About recognizing. That in the long term they will also gain the most through. The flourishing, of the business and through flourishing, of all the stakeholders they, too will, flourish that, their identity, is linked. And their, own. Their. Own gain. Is linked to the gain of all these other stakeholders, and, then the fourth principle is is that, to realize these first three principles, you have to create a culture a conscious, culture that. Has strategies. Structures. And processes, that. Create. A culture, that. Optimizes. The stakeholder. Model fills. The purpose, and allows the conscious leadership, to. Do their jobs so the. Culture, provides. That, background. And, the. Processes. And structures that the conscious business needs in order to, to. Achieve its highest potential so. When you add those four principles together, you have a conscious, business when. You add the, conscious business, with, the key, principles, of the. Conscious. Of the conscious, capitalism, you truly, have the, larger. Ecosystem. Of. The conscious. Capitalistic. Society. One, with conscious businesses, that. Are exchanging, in a consciously. Capitalistic. Way. You've. Just articulated what. I call the trade-off myth. The. Belief that all, this sounds very good very idealistic, but, it, won't compete well in the marketplace and, when it runs up against a a business, that's not handicapped. With. This. Idealism. Then it'll be in trouble, nothing. Could be further from the truth it's the exact opposite. That in fact the conscious, business, has. Competitive, advantage, when, you work. From a higher purpose, you. You. Unleash. Greater degrees, of commitment. Greater. Degrees of loyalty. And greater. Creativity, in the workplace and that, gives competitive, advantage, when, you work from the stakeholder, model. You. Understand, you're trying to optimize the entire system. You're. Able to do that in such a way as when you optimize the entire system, you also, optimize, the the. Value. That you also you're, creating for the investors, as well the, business tends to flourish, at a higher level so. In fact, the. Conscious, business will. Win. In most. Instances, all other things being equal it will win in competition. Against less conscious, businesses, and, that's why I'm confident, that over the long term a conscious. Capitalism they're going to triumph it will I believe it will become the new paradigm in, the 21st century, not. Because it's it's. More, idealistic, or, sounds, better it'll become the dominant paradigm simply, because it will win it. Will win in the marketplace and. Nothing. Succeeds in capitalism. More, than success itself so, good, ideas that work spread. And. The. Competitive. Nature. Of the marketplace, is going to lead to these competitions, between conscious, businesses and less conscious businesses, and. The. Conscious businesses, all other things being equal are going to win most of those battles, and so, fairly, quickly meaning. When, I say quickly I mean, 25. 30, 35 years we're. Going to see more and more and more conscious businesses, and we'll make this shift towards conscious cap ballistic society. My. First instinct, is to tell you I do think retail is one of the first areas to shift. Possibly. Because they are dealing with their customers, on. A day-to-day basis, and they've, got their more labor-intensive, as, well they tend to hire and, employ more, people like. Whole Foods Market, employs 57,000. People so. We're and. We. Have millions of customers so, in. A sense, and. We're in an extremely, competitive marketplace, food retailing and we don't have any patents we.
Don't Have any in the, government's not protecting. Us in some way from competition so and we have formally, competitors. Are much larger than and then I so like Walmart, Kroger. Safeway. Companies. Like that so. Retail. Is. One, of the first areas to ship some many of the conscious businesses that I know tend. To be either, retailers, or service businesses, companies like The Container Store or. Costco, or, Starbucks. Or. The Southwest, Airlines. The. These are. Our. Businesses, that Trader. Joe's these are businesses, that, our. Retailers, are service oriented so I do think maybe the conscious. Conscious. Business. Revolution and conscious capitalism. Revolution. Will see that take. Hold in a more large-scale way, in the, retail and service first I can predict also possibly, what will be last, I predict. Possibly, wall street will be last, or. The, pure. Financial, part. Of our economy which. To. A greater extent, its. Stake it doesn't have as much of a stakeholder, model it does tend to be dominated, by the the. Profit. For. Profit. Maximization, model. And shareholder return model, to, a greater, degree than. Other. Segments, of our society so I suspect, retail. And services, will be first the. Financial, sector will be last. I do, think that. The. Economy is, going to continue to evolve towards. More. Service. The. Human beings are doing more things to. Serve one another in terms of services. But. There. New things are if, you think about the whole technology area. So. Much of that didn't even exist. 10-15, years ago that there was no Facebook there was no Google, there. Was no iPods, there, were no iPhones. Really. BlackBerry's didn't even exist 15, years ago so so. Many different things changed. So rapidly. And. New, industries. And whole industries can be created, fairly fairly quickly, I. Think. It's safe. To say that we're going to see greater innovations. In education. That. Here's, an area that needs radical. Innovation, that, we don't allow competition. We, don't allow we. Haven't unleashed human creativity so education, potentially, if we could. Unmanned. Applies education, and truly allow entrepreneurs to. Get going, on that I. Can't, think of hardly health, care and. Education. Are the two most regulated areas. In our society, and they're, also the ones that are most or. Least satisfactory. To people those, are areas that we need to. 2d. Monopolize, and allow, more competition, to occur so. Those are two huge areas. Education. And. Health, care are both service, areas so that those are growth industries, I also think all types of leisure. Travel. Is, a is, a as a society, becomes more, affluent. Its its, desire, to travel increases. And to explore that the, younger generation today, people. That are in their 20s for example, they, have travelled so much more than my generation had, I mean, for me a big deal when I was in my 20s and going down to Mexico and, that.
Was Like the foreign country or maybe you get up to Canada but today. People haven't, just gone to Europe. But, they've gone all over the world by, the time they're 30 years old if they're young and well-educated they. World. Travel is going to be continued, to be. Its. Goal in particular as globalization, continues to occur we're going to continue to explore also think. Huge. Huge, possibilities. In entertainment, I mean look how much entertainment, has evolved, and shifted. In. A. Sense something. Like big think it's. Education. It's entertainment. It's. And, it's a synthesis, of those two and it's probably got lots of other things in it as well that I haven't just picked up yet. I, do. See lots more creativity, lots, more innovations, lots more entrepreneurship. Around. Around. Entertainment. And. Humans. Educating. One another entertaining, one another serving. One another. New. Ways for humans to, enjoy. Life. New. Ways for humans to learn and grow. We. Are going, to continually, try. To figure out ways to serve, ourselves better and. It's. It's. Amazing how even think, about something like Pilates. We, didn't exist in. Any kind of scale 25 years ago yoga. Existed, but hardly anybody did it now. You see those are our activities, that are also leading to greater human flourishing through. Helping. Humans to be. More. Fit and, stronger. More. Flexible. So. It's, fascinating. Watching, the world and watching. Humans. Evolve. And watching our society, evolve it's I. Love. It I'm so, glad to be part of it and to have contributed a little bit to it myself. You.