Conscious Capitalism Alliance

[Dante]

John Mackey, CEO of Whole Foods and admirer of Ayn Rand, has formed (along with The Container Store, One Natural Experience, and Satori Capital) an organization called the Conscious Capitalism Alliance. From their "about" page:

At its core, Capitalism is about voluntary association and collaboration, which is one of the reasons Capitalism works, why it won the battle with Socialism in the 20th Century, and why it continues to persist and flourish. But the abuses of the early 21st century (e.g. Tyco, Worlcom, Enron), the recent financial “meltdown,” and ongoing issues including the social costs of externalities, the extreme and widening gap between executive and worker compensation, among others, have undermined trust in business and confidence in Capitalism.

For several decades, companies emerging out of the culture of the 60s have been cultivating a new genre of Capitalism. This is a Capitalism that recognizes the power of purpose and the principle of interdependence. It is a Capitalism the sees leaders as stewards and facilitators. And it is a Capitalism that embraces the cocreative, generative nature of business, and is directed towards fulfilling the potential of business and the marketplace to be a powerful force for positive change. This is a Conscious Capitalism, embodied by Conscious Capitalists.

Many of these companies, their founders and leaders – such as Kip Tindell and the Container Store, John Mackey and Whole Foods Market, Chip Conley and Joie de Vivre Hotels, Sally Jewel and REI, to name a few – are purposefully coming together to share their experiences with each other, to support each other to address pressing issues they face with their companies, and to catalyze a broader Conscious Capitalism Movement, to spread the CC meme to other businesses, to the investment community, to consumers, employees, and other stakeholders.

From their "What is Conscious Business?"

A Conscious Business is built on three core principles:

* Deeper Purpose: Recognizing that every business has a deeper purpose than merely profit maximization, a Conscious Business is clear about and focused on fulfilling its deeper purpose.

* Stakeholder Model: A Conscious Business focuses on delivering value to all of its stakeholders and works to align and harmonize the interests of customers, employees, suppliers, investors, the community, and the environment to the greatest extent possible.

* Conscious Leadership: In a Conscious Business, management embodies conscious leadership and fosters it throughout the organization. Conscious leaders serve as stewards to the company’s deeper purpose and its stakeholders, focusing on fulfilling the company’s purpose, delivering value to its stakeholders, and facilitating a harmony of interests, rather than on personal gain and self-aggrandizement. Conscious leaders cultivate awareness throughout their business ecosystem, beginning with themselves and their team members, and moving into their relationships with each other and other stakeholders.

They don't seem completely comfortable with the idea that profit and personal gain are completely compatible with a harmony of interests and purposeful, conscious business, but overall it seems like an organization which recognizes the virtuous nature of business and production. A lot of it reminds me of hearing John Allison speak about his approach to BB&T.

[Jake_Ellison]

A lot of it reminds me of hearing John Allison speak about his approach to BB&T.

Being vague and using poorly defined terms is not really John Allison's style. The ideas are quite different too. Both the style and the content remind me of Libertarians.

[Dante]

Being vague and using poorly defined terms is not really John Allison's style. The ideas are quite different too. Both the style and the content remind me of Libertarians.

When I heard Allison speak, one of the subjects that he spoke on was his attitude towards shareholders and stakeholders. In running BB&T, he attempted to establish beneficial and positive long-term relationships with both shareholders and stakeholders. One example that he gave concerned the predatory loans and mortgages which were extended during the housing boom. Many banks took the attitude that they should simply extend as many mortgages as possible, as large as possible, to anyone who would take them. They did this because they were able to, for a time, sell off these mortgages to other entities which weren't looking too closely at how much they were worth. Allison avoided this whole fiasco, and his company was much better for it. He basically said that he avoided these sorts of activities, not out of an prescience that they would ultimately fail, but rather on the basis of the trader principle. The logic behind the trader principle encourages long-term, mutually beneficial relationships in which both sides offer value and neither side "sets up the other to fail," as often happened in the housing boom. Thus, Allison established beneficial relationships with his stakeholders, in addition to his shareholders. Allison also contributed to building up the communities where he has banks, mainly through the United Way I believe, out of a deference to the general harmony of interests and a knowledge that it is to the benefit of BB&T to do business in such environments. Thus, his business relationships are driven by the desire to always adhere to the trader principle and expect to extend genuine value in return for receiving value from others.

It is primarily this concern for building up mutually beneficial business relationships, in which businessmen do not attempt to "get the better of" their stakeholders or shareholders, that I find present in this organization. There seems to be a very strong emphasis on adhering to the trader principle and the harmony of interests that arise when one always attempts to create value, rather than looking for the easiest way to take it.

Is there something in particular that I have not mentioned that you think is poorly defined, or reminiscent of libertarians?

Edited April 7, 2010 by Dante

[Jake_Ellison]

Is there something in particular that I have not mentioned that you think is poorly defined, or reminiscent of libertarians?

No, your interpretation of the trader principle is perfectly clear and true, but, as I said, there are plenty of undefined terms and vagueness in the quotes in your previous post, and you didn't address them now either.

1. First, the Libertarian sounding, incorrect depictions of Capitalism:

At its core, Capitalism is about voluntary association and collaboration

No, it's about the protection of individual rights.

the extreme and widening gap between executive and worker compensation

For several decades, companies emerging out of the culture of the 60s have been cultivating a new genre of Capitalism.

the principle of interdependence

It is a Capitalism the sees leaders as stewards and facilitators.

its stakeholders... the community, and the environment

facilitating ..., rather than personal gain

2. Vagueness and undefined terms:

- the social costs of externalities

- Deeper Purpose

- works to align and harmonize the interests of customers, employees, suppliers, investors, the community, and the environment to the greatest extent possible. (just doesn't offer any hints as to what that work would entail)

- business ecosystem

[Grames]

Adding a modifier to capitalism is a weasel move. "Conscious Capitalism" is not capitalism, and it implies plain old capitalism is not done consciously. This sounds like G. W. Bush's "Compassionate Conservatism", which conceded that conservatives were not compassionate.

[Dante]

Well yes, I definitely agree with your list of vague elements, and I would very much like to see a more detailed and specific statement of principles underlying these beliefs. However, I did see some some very positive elements and the potential for an overall positive organization.

Also, isn't voluntary association simply a restatement of respect for individual rights? The alternative to voluntary association is coercive interaction, which is a violation of rights. A system based on voluntary association is a system based on the principle that each individual should have the freedom to follow the convictions of his mind in deciding with whom to associate, correct? And it is this very freedom to adhere to one's own perception of reality which rights are designed to protect.

[Jake_Ellison]

Also, isn't voluntary association simply a restatement of respect for individual rights?

Not respect, protection of individual rights. Voluntary association says nothing about the protection part, a proper government which is the key to Capitalism. They instead pretend that all that's needed is some nice companies who stop being greedy, and stop causing the poor people to distrust them, and we'll all be voluntarily trading in no time.

[Dante]

Not respect, protection of individual rights. Voluntary association says nothing about the protection part, a proper government which is the key to Capitalism. They instead pretend that all that's needed is some nice companies who stop being greedy, and stop causing the poor people to distrust them, and we'll all be voluntarily trading in no time.

So you're saying that they should identify the need for a government endowed with the power to protect these? I should think it would only be important to make that distinction if one were expecting one's audience to be significantly populated with anarchists, since they are the only ones who believe that the state is not necessary to provide at least some basic functions. Within the context of America, and addressing primarily people who acknowledge the need for government, I might well have left off a clause specifying the need for a government were I to write their statement of belief.

[SapereAude]

I find myself in agreement with jake here.

It sounds good... and it will sound good to people who still feel guilt about what they produce and own.

But one has to wonder if giving a sop to people inclined towards capitalism who feel guilty is a good thing, or just further entrenching the notion that business owners/leader owe anyone.

[FeatherFall]

Because the terms are a bit vague, I think it is important to remember John Mackey's stance on Obamacare when evaluating this. He took a principled stance against state control of the medical sector that was immensely unpopular with his customer base. Perhaps he's networking with people who feel the same way about government, and keeping the wording vague until he can find a more effective way to brand his ideas. The only way to know for sure will be to wait while paying attention.

[freestyle]

Adding a modifier to capitalism is a weasel move. "Conscious Capitalism" is not capitalism, and it implies plain old capitalism is not done consciously. This sounds like G. W. Bush's "Compassionate Conservatism", which conceded that conservatives were not compassionate.

I had the same exact thought when reading that. (same example too)

In the realm of exposing Ayn Rand's ideas to a critical mass (i.e. to recruit the new intellectuals), there has yet to be a breakthrough in access.

Words like selfishness, selflessness, sacrifice, capitalism, egoism, altruism (and some others I am forgetting) evoke concepts in many people's minds that are the exact opposite of what they represent in reality. These ideas are not necessarily easy to explain and even more difficult (for some) to accept.

Anyway... I just paid a ridiculous amount in taxes yesterday to local, state and federal governments that have already wasted it. It is in my selfish interest for there to be more people that understand and truly embrace Ayn Rand's philosophy. So, to that end, I'm working on it.

"Conscious" Capitalism... Yeah, conscious people for me to deal with would be a nice start.

It would be instructive to see John Mackey challenged on the point. A rational person welcomes being challenged and would happily define more clearly his stance.

Edited April 10, 2010 by freestyle

[Hairnet]

John Mackey, CEO of Whole Foods and admirer of Ayn Rand, has formed (along with The Container Store, One Natural Experience, and Satori Capital) an organization called the Conscious Capitalism Alliance. From their "about" page:

From their "What is Conscious Business?"

They don't seem completely comfortable with the idea that profit and personal gain are completely compatible with a harmony of interests and purposeful, conscious business, but overall it seems like an organization which recognizes the virtuous nature of business and production. A lot of it reminds me of hearing John Allison speak about his approach to BB&T.

It sounds like he is trying to reject pragmatism as the moral compass of businessmen. Which would be good, but it is too vague.