In Mackey’s story, crony capitalism has been exacerbated by the rising power of the financial sector and shareholder-value ideology—the idea that firms are nothing more than a stream of assets designed to maximize profits for shareholders. Mackey argues that this obsession with greed and profits has “robbed most businesses of their ability to engage and connect with people” and has created “long-term systemic problems” that destroy profitability and that can be deeply damaging to people and to the planet. “Too many businesses fail to recognize the significant impacts they have on the environment, on other creatures that inhabit the planet (such as wildlife and livestock animals), and on the physical health and psyches of team members and customers.”11
Instead of trying to get a handout from the government or make a quick buck on the stock market, Mackey says that companies need to roll up their sleeves and rethink how to run a business. The first thing they need to do is to realize that a business is a “social system,” not a hierarchy.12 Everyone matters. A company can squeeze its workers or screw over its suppliers to get a bump in quarterly sales and a boost in share price. With luck, it might rake in profits for quite a while by taking these shortcuts, but in the long run it will lose and harm everyone and everything around it.
The Consumer-Citizen
Mackey’s vision of a helping, healing company has been embraced by Whole Foods consumers and has generated an extremely devoted customer base. In a recent survey, US and Canadian consumers ranked Whole Foods first among stores providing healthy, high-quality food.13 One of Mackey’s favorite memories is the support and encouragement he received from customers and neighbors after a massive flood all but destroyed the first Whole Foods store in Austin, Texas, in 1981. The flood left the store under eight feet of dirty water, ruining all the inventory and equipment inside and, it seemed at the time, Mackey’s dreams. But after the water receded, dozens of loyal customers showed up, unbeckoned, with mops and buckets ready to help get the store up and running again because they loved it so much. The company is no less popular today. It relies heavily on word-of-mouth advertising, and even in a food mecca like New York City, customers lined up around the block to enter Whole Foods’ 59,000-square-foot mega-store in Columbus Circle when it opened in 2003.
The devotion and loyalty displayed by Whole Foods customers, and, more broadly, the growing demand for organic, sustainable food, are indicative of the changing complexion of the global environmental movement. Until the early 1990s the environmental movement was combative and largely targeted producers. Global and grassroots environmental groups focused their energies on getting states, networks of states, and intergovernmental bodies like the United Nations to implement restrictions to stop companies from dumping toxic waste in streams and rivers, clear-cutting forests, and belching exhaust into the atmosphere.
Over the past decade and a half, this state-centered focus has shifted to a consumer-centered focus as fears stoked by globalization have changed the frame of environmentalism. In the age of global supply chains, free trade agreements, and capital flight, states have increasingly come to be seen as incapable of protecting their citizens from big global problems like ozone depletion, climate change, and biodiversity loss, and even more tractable problems, like controlling hazardous waste flows or regulating toxic substances in consumer goods.14
But while processes of globalization have delegitimized states and made citizens feel disconnected from the protective embrace of their respective governments, they have also helped to forge new, global identities based on feelings of “world-citizenship.”15 Westerners in particular have become uneasily aware of their power as consumers in shaping and driving global value chains. Whereas in the past consumers were considered “small polluters” relative to the big industrial polluters, in recent years this view has changed. Current global frameworks of environmental power place consumers on an equal plane with states, corporations, and civil-society actors.
This newfound perception conflates consumption with politics and citizenship and has led to the widespread adoption of “ecological consumerism” and “lifestyle politics” as expressions of environmental awareness and concern. Sociologist Josée Johnston attributes the popularity of consumption politics, in part, to the fact that it’s really easy. “Exercising consumer choice appears as both a viable and convenient strategy—particularly when compared to the onerous demands of social movement organizing or trade unionism.”
Lifestyle politics also provides an extremely wide scope for expressing more general feelings of angst and unhappiness with “late” capitalism. People who are stressed about personal debt, aghast at unfair trade policies, or newly interested in free food movements and global social justice are told they can make a difference by buying better things like organic food and sustainably produced furniture. “By harnessing the power of consumer choice, ethical consumption appears to shape the market in a way that preserves the environment, addresses poverty, and promotes democracy.” In the ethical consumption framework the consumer-citizen becomes a powerful agent, able to augment the waning autonomy and agency of states and shape the behavior of firms through her purchasing choices.16
However, lifestyle politics has not been accompanied by a clear idea about how consumers and their choices can save the planet. Some take a radical stance that eschews consumerism and calls for dramatically reducing consumption, particularly for wealthy Westerners. Others propose an ameliorative, middle-way approach that focuses on buying sustainably produced things rather than fewer things. In the United States, lifestyle politics is all the rage and both consumption messages are omnipresent. Minimalism is chic and restorative—thousands of people have embarked on Dave Bruno’s “100 thing challenge,” paring down their belongings to 100 items. People scrub their hands and souls with the “conscience clearing power” of J.R. Watkins natural soap. Graham Hill, an environmental entrepreneur, has developed a new line of luxury micro-apartments for urban dwellers. The 420-square-foot prototype debuted in 2012, complete with moving wall, telescoping coffee table ($3,325) and high-tech Murphy bed ($21,250) to save space. Hill argues that Americans of all socioeconomic backgrounds simply buy too much stuff. All this stuff puts us in debt, hurts the planet, and generally makes us unhappy. He encourages us to “clear the arteries of our lives” by downsizing our stuff to an “edited set of possessions” that reflect who we really are. “Small is sexy!” By experiencing the “joy of less” we can achieve happiness and heal the planet in the process.17
Nature, Capitalism, and the Entrepreneurial Spirit
Shopping at Whole Foods quenches this desire to clear the arteries of our lives. We can buy organic abate gretel pears from Argentina and Brillat-Savarin cheese from France and feel like good consumer-citizens knowing that our dollars are helping farm animals and poor women in the Global South. Yet while Mackey acknowledges the power of consumers, they are not the keystone in his conscious-capitalism model. The protagonist is himself, the entrepreneur:
Entrepreneurs are the true heroes in a free-enterprise economy, driving progress in business, society, and the world. They solve problems by creatively envisioning different ways the world could and should be. With their imagination, creativity, passion, and energy, they are the greatest creators of widespread change in the world.18
The roots of Mackey’s earth-friendly entrepreneurial vision and belief in holistic, free-market capitalism stretch back to the Physiocrats, eighteenth-century French philosophers who believed that markets were part of the natural order and followed natural laws just as living organisms did. For Mackey, a well-managed, conscious firm becomes “self-managing, self-motivating, self-organizing, and self-healing like any evolved, sentient being.”19 The expansion of capitalism to every nook and cranny of the planet is seen as an organic process, stemming from humanity’s “natural” inclination to truck, barter, and trade.
The story of markets and firms enmeshed with nature (and following the laws of nature) differs from liberal, Kantia
n notions of nature in which society is fundamentally separate from nature. While humanity’s relationship with nature has changed over the centuries—from fear of its wildness, to nostalgia for it as “a place to go back to,” and recently back to fear at the thought of destroying it—in the liberal framework, society always remains external or opposed to nature. This view, illustrated by NGO names like EarthFirst!, sees the firm, markets, and society as violating nature by their very existence, fouling its pristine, prehuman state.20
Mackey doesn’t see markets and firms as alien forces violating nature and thinks that environmentalists need to “open their minds” and stop obsessing over “environmental Armageddon.” In the conscious capitalism model, the environment is a stakeholder with rights equal to those of the investor, supplier, worker, customer, and community. The needs of the environment are built in to the business model, as demonstrated by Whole Foods practices such as ethical purchasing, LEED certification, waste reduction, and use of reusable packaging and nontoxic cleaning products. For Mackey, a smart entrepreneur running a conscious business isn’t an external force damaging the planet. Instead, a conscious business “genuinely cares about the planet and all the sentient beings that live on it, … celebrates the glories of nature, [and] thinks beyond carbon and neutrality to become a healing force that nurses the ecosphere back to sustained vitality.”21
Corporations have not always been friends to the environment (or people), as disasters like Bhopal, Love Canal, Brightwater Horizon, and the ongoing horror show of Shell Nigeria clearly demonstrate. Chronic, long-term environmental problems like water shortages and erosion are expected to become acute for many communities and countries in coming years. But Mackey is confident that as business continues to evolve to its next phase, conscious capitalism, it will be able to solve these problems because conscious entrepreneurs (like himself) have a “fundamentally more sophisticated and complex way of thinking” that derives from “high levels of analytical, emotional, and spiritual intelligence.”22 While we may be tempted to fix environmental problems by demanding restrictions on firms, Mackey urges us to hold back: when firms follow a conscious business model they are naturally in tune with the world around them—they are a sentient, symbiotic part of it.
Free Market Seductions
The free market story is appealing. It references values like freedom, creativity, and beauty and counterposes itself against images of drudgery, dictatorship, and starvation. But the history of markets (and the firms that operate within them) is not a nature story.
Today, the dominant discourse governing discussion of markets, states, and companies is neoliberalism, and Mackey’s free market business model and historical narrative fit neatly within this framework. In this vision, the economic sphere is “an autonomous, self-adjusting, and self-regulated system that [can] achieve a natural equilibrium spontaneously and produce increased wealth.”23 But the free market historical narrative lacks empirical weight. As economic historian Karl Polanyi argued decades ago, capitalist markets are a product of state engineering, not nature.24
The history of industrial development in the United States, often considered the epicenter of free markets, demonstrates the political nature of markets. The history of market formation in the United States reveals an industrial structure supplied by goods and capital extracted from slave labor and facilitated through a state-sponsored, genocidal land grab. Far-reaching government legislation protected domestic markets and infant industries from external competition, and federal and state governments played a central role in the development of physical infrastructure (canals, railways, telegraphy) and the creation of huge bodies of agricultural and industrial knowledge—all essential elements in the genesis of American industrial capitalism.
At the same time, society’s greatest inventions and innovations of the past two hundred years—rockets to the moon, penicillin, computers, the internet—were not bestowed upon us by lone entrepreneurs and firms operating in free markets under conditions of healthy competition. They were the work of institutions: CERN and the Department of Defense created the internet, while Bell Labs—a subdivision of AT&T, freed from market competition by federally granted monopoly rights—generated transistors, radar, information theory, “quality control,” and dozens of other innovations central to our epoch.25 Nearly every advance in science, technology, and mathematics emerged from people working together at universities supported by government funding. Creativity and innovation come from many places. Companies produce influential innovations, but so do other institutions that operate outside the confines of the profit motive, competitive markets, and the bottom line.
As Cambridge professor of economics Ha-Joon Chang argues, this is neither theoretical quibbling nor simply a quest for historical “truth.” Instead, getting the historical narrative right is important because the stories we tell “deeply affect the very way in which we understand the nature and the development of the market, as well as its interrelationship with the state and other institutions.”26 In the neoliberal narrative states are interlopers, under the thumb of rent-seeking politicians and bureaucrats, whose field of action should be restricted. The market, and the firm within it, is a natural thing following nature’s laws, and the state is an unnatural, potentially dangerous thing, following human laws. The implication of this historical narrative is that the state must always justify its actions—justify why it is messing with natural market processes that, according to neoliberals, don’t need its intervention.
This is disingenuous: What this model does not specify is the type of state intervention it requires or presumes. Many neoliberals and libertarians (like Mackey) say the state should stick to protecting private property and people against crime, minimal infrastructure provision, and basic laws to protect society from people or companies who wish to break laws (like environmental and public health laws).27 But there is no natural explanation for why these interventions are justified and others, like free higher education or single-payer healthcare, are not. Recent battles at World Trade Organization (WTO) meetings over child labor and toxic dumping, and whether banning them constituted justifiable state interventions, demonstrate just how historical and contestable is the relationship between the state and the market.28 It is a political relationship, formed according to existing norms about rights and obligations that change over time and space.
Designating the market as natural and the state as unnatural is a convenient fiction for those wedded to the status quo. It makes the current distribution of power, wealth, and resources seem natural and thus inevitable and uncontestable. But of course this isn’t true. States shape, sustain, and often create, markets, including neoliberal markets. The complexion of those markets depends on the balance of class forces at any given point in time. Capitalist markets, and the inequality and degradation they engender, are a political creation not a product of nature.29 Nature and society (and states and markets) are inseparable—simultaneously produced by humans through ideological, political, and economic processes. Understanding this enables us to challenge the dominant idea of natural, free markets and the emancipatory potential of the firm promised by Mackey.
Saving the Planet
Fine. Free markets don’t exist and other institutions like states clearly matter. But how are these other institutions going to stop global warming and rainforest destruction and species extinction? States, aside from the big players, appear weaker than ever (with less autonomy, power, authority), and their ability to tell corporations what to do is limited by their need for economic development and their membership in international bodies like the World Trade Organization that explicitly prohibit most environmental restrictions.
On the flip side, transnational corporations are stronger than ever. One giant company, like Unilever or Walmart, affects millions of people around the world every day through its global supply chains. Free markets don’t exist, but maybe corporations are still the best, most sensible, way to heal the planet. They have reac
h, influence, and an unrivaled ability to coordinate action quickly. In Mackey’s story an enlightened corporation with a positive mission that honors all its stakeholders can heal the planet. He says that a company can create a virtuous cycle of production and consumption that will stand the test of time if it treats its suppliers, its workers, and its community and the environment right.
Many companies like General Electric, Walmart, IKEA, SC Johnson, Pepsi, and Puma seem to be starting down the path of conscious capitalism, particularly in the adoption of sustainable, “eco-business” practices such as supply-chain tracing, auditing, green procurement, certification, eco-labeling, and life-cycle assessment to radically streamline their operations, reduce their waste, and raise profits. These eco-business practices improve the image of big corporations through “greenwashing.”30 But an even bigger part of their appeal stems from their utility in helping companies gain control over their supply chains (which account for 60 to 90 percent of costs at big companies) in an increasingly competitive and uncertain global economy. More efficient and transparent supply chains allow companies to support the suppliers they like (and need) through logistical and financial support and dump the ones that produce shoddy, toxic products that cause embarrassment and lawsuits. Eco-business practices also boost profits that are then channeled into developing new, lower-cost products to compete in emerging markets and cutting costs on existing products for established, wealthier markets.31
At the same time that big companies are building in sustainable business practices, environmental NGOs (such as Greenpeace and the Sierra Club) are moving to embrace the eco-business model. The probusiness environmental message of the 1987 Brundtland Report, in combination with the weakened power of states to control the actions of corporations, have pushed big environmental NGOs to change their stance toward corporations over the past decade and to focus on the marketplace as the most viable lever of change.32 As Gerald Butts, CEO of World Wildlife Fund Canada, explains about WWF’s decision to partner with Coca-Cola:
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