JAKE SILVERSTEIN: In your new book, Conscious Capitalism: Liberating the Heroic Spirit of Business, you say that capitalism needs both a new narrative and a new ethical foundation. Why?
JOHN MACKEY: Two hundred years ago, 85 percent of the people on planet Earth lived on less than $1 a day, in today’s dollars. Today that’s down to about 16 percent. For 40,000 years the average human lifespan was 30 years or less. And in the past 150 years, we’ve gradually been able to raise that up to 68.9 years. Almost the entire planet was illiterate throughout history, and now we’re down to 15 percent. That is due to business. That is due to capitalism.
JS: So you think capitalism doesn’t get credit for the good it’s done.
JM: It has not yet gotten credit. Instead, it’s generally portrayed as selfish and greedy. So we need a new narrative and a new ethical foundation based on a higher purpose than just making money. Not that there’s anything wrong with making money. My body needs to produce red blood cells for me to live, but the purpose of my body is not to produce red blood cells. Business cannot exist without making money, but that’s not
its purpose. Its purpose should refer back to the contribution it’s making
to the good of society.
JS: In the introduction to the book [which was co-written by Bentley University marketing professor Raj Sisodia], you write about how you came out of the co-op movement in Austin in the seventies, a very liberal milieu, but that later you “abandoned the social democratic philosophy of my youth because it no longer adequately explained how the world really worked.” Were you attacked for being a sellout?
JM: The co-op movement has an ideology: it’s food for people, not for profit. When I created SaferWay [the precursor to Whole Foods], I had to make payroll every week, and I found this interesting paradox. My customers thought my prices were too high—many of them still feel that way—but the team members working for us thought they were underpaid and the benefits were [bad], and the suppliers didn’t want to give us additional discounts, which put us at a competitive disadvantage. We were losing money. The nonprofit sector still wanted us to make donations, the government was still taxing us. It was really difficult. And my political philosophy didn’t explain where I found myself. I knew I wanted to make the world a better place, but I’d be criticized and castigated as somehow evil because I was in business.
JS: You say in the book that “a more constructive way to think about competitors is as allies striving for mutual excellence.” Is that how you think of the Trader Joe’s that is about to open up a few blocks away from your flagship store?
JM: There has been no competitor anywhere in the United States that has helped Whole Foods as much as Trader Joe’s.
JS: Why is that?
JM: They’re very aggressive in price, and that’s forced us to become more aggressive in price. That’s going to make us a better company, because it helps us compete not only against Trader Joe’s but against H-E-B, Randalls, and everyone else.
JS: I read an interview where you said, “Human beings are obviously self-interested. We do look after ourselves, but we’re capable of love, empathy, and compassion, and I don’t see that business is any different.” When I read that, I thought instantly of Mitt Romney saying during the Republican primary that corporations are people. Do you think he was unfairly maligned for that line?
JM: Organizations are treated legally as people, and this bothers some people. But they are collections of people, and I do think an organization like Whole Foods has sort of a collective consciousness. That could be what Romney was referring to. You’d have to ask him.
JS: In some sense the election itself became a referendum on capitalism. What did you think as you saw that debate playing out?
JM: Let me put it this way: Romney did a very poor job of defending [capitalism]. He was on the defensive all the time. For whatever reason, he was afraid or resistant to go to the heart of the matter.
JS: Which is?
JM: Business is good! It’s the greatest value creator in the world. He needed to say that. That’s why I say business needs a new narrative. We cannot defend things that are greedy and selfish and exploitative. You’ve already lost.
JS: One of the outcomes of the election is that Obamacare is here to stay. You caused a firestorm when you wrote a 2009 op-ed in the Wall Street Journal called “The Whole Foods Alternative to ObamaCare.” Three years later, would you make the same points?
JM: I didn’t write that headline, and I don’t think [that the health insurance plan Whole Foods offers] is the alternative to Obamacare. It’s not big enough. But it works very well for us, and I know the government is not going to allow us to do some of the things we’re doing, and that’s going to raise our costs. And that’s going to be a very bad thing.
JS: The election was notable in other ways. Colorado legalized recreational marijuana. If they allow it to be sold in retail stores, will Whole Foods carry it?
JM: I don’t know the answer to that. But no doubt, if we sold marijuana it’d be organic. We’ll probably do an experiment with it to see whether or not the entire world freaks out. If they do—
JS: So you’re saying there are internal discussions about it?
JM: No, no. No internal discussions at this time. Look, it’s still illegal on a federal basis. We don’t want to be the ones the feds raid. Let them raid these other guys.
JS: Why not? You guys can take it.
JM: No, we can’t take it. We’d be all over the national news. People would be sending me pictures of their kids on heroin. We will not be the leader in this. But if you’re asking whether we may follow someday? It depends what happens.
JS: Let’s turn back to groceries. What’s the next great revolution in the grocery business going to be?
JM: The way we eat in America seems normal today, but in any historical perspective it’s an aberration. And it’s killing us. Sixty-nine percent of Americans are overweight. We die from diseases that are primarily diet-related. I think we’re beginning to wake up to that. Twenty years ago, we opened up our first store in San Antonio. My wife is from San Antonio, and we were touring this store on the first day, and she says, “This store’s not going to work. You don’t know the people in San Antonio like I do. Look around, these people aren’t going to embrace this.” That store really struggled, so we relocated it to Alamo Heights, and it became so successful that we opened up a second store close to where the first one had been. I’m touring the store on opening weekend with my wife again—twenty years later, right?—and it’s packed. And I said to her, “Remember when you told me that these people would never shop at Whole Foods?” She said, “Yeah.” I said, “Those people are dead.” It was a generational change. I really believe that one hundred years from now, people will look back at what we eat now in utter horror.
JS: So we should stock up on Oreos while we can?
JM: Yeah, they’re not going to be eating Oreos one hundred years from now.
This interview has been edited for clarity and length.