The Future of Capitalism

John Mackey may have found the cure for our ailing economy. The Whole Foods (Nasdaq: WFMI  ) co-founder, chairman, and CEO visited the Fool recently to describe the "conscious capitalism" built into his company's DNA.

Mackey's long contended that capitalism has a brand problem -- and a bad reputation. After all, capitalism is a powerful creative force; most people who have the free time to complain about it probably enjoy that free time because of capitalism. To argue his point, Mackey once even debated great economic thinker Milton Friedman on the social responsibility of business. (He's not the only one who thinks Friedman was wrong.)

Here's a quick overview of the basics of Mackey's "conscious capitalism" concept. You may even discover that you're already a conscious capitalist -- and didn't even know it.

What is conscious capitalism?
According to Mackey, three major principles drive this philosophy:

  1. The enterprise has a deeper purpose beyond maximizing profits and shareholder value.
  2. The enterprise is managed to optimize value for all of its major independent stakeholders.
  3. Leadership is servant to the enterprise and its stakeholders.

At its core, a conscious capitalist endeavor believes that an organization is about more than making money. The late Milton Friedman may have disagreed on this point, but Mackey points out that while entrepreneurs may not be averse to making money, few ever start a business with only profits in mind. They usually have some big idea that really ignites their creative spirit -- something that owes to far more than simple self-interest.

As an example, Mackey cited Microsoft (Nasdaq: MSFT  ) founder Bill Gates, who Mackey said was motivated more by the exciting idea of a personal-computing revolution than by the simple pursuit of maximum wealth.

Purpose over profits
Mackey argued that "great companies have great purposes." He outlined four such goals that light up great companies (with a little inspirational help from the Greek philosopher Plato):

  • The Good (service to others, expressing love and care)
    Mackey noted Southwest Airlines (NYSE: LUV  ) , both for its touchy-feely ticker symbol and its aspirations to provide great customer service. As a result, Southwest has often been named one of the United States' best employers. Mackey also mentioned The Container Store; one of his own grocery rivals, Wegman's; and Nordstrom, all of which have made gold-standard customer service a major part of their missions.
  • The True (discovery and the pursuit of truth)
    Mackey's examples here included Google (Nasdaq: GOOG  ) , Wikipedia, and Genentech, all of which strive to collect and make available vast arrays of knowledge.
  • The Beautiful (excellence and the quest for perfection)
    Not surprisingly, Mackey highlighted Apple (Nasdaq: AAPL  ) , which has built a reputation for beautifully designed technology. In a less straightforward example, he offered Berkshire Hathaway's (NYSE: BRK  ) (NYSE: BRK-B  ) Warren Buffett, whose approach to investing is heavy on perfection.
  • The Heroic (changing and improving the world)
    Mackey's examples included both Microsoft and its founder's Gates Foundation, which is currently working to eradicate malaria. Mackey also mentioned the Grameen Bank, which seeks to eliminate poverty by providing Third World entrepreneurs with tiny loans to start their own very small businesses.

Make love, not war, in business?
Mackey's ideas touch on another big idea that interests most of us here at The Motley Fool: long-term performance versus short-term profitability.

Recent "earnings beat" euphoria made many investors giddy. But the more skeptical among us took the news with a grain of salt, realizing that most of those gains came from overly zealous cost cuts in the face of flagging sales. To shore up their bottom line in the near term, companies may have jettisoned their best talent, or damaged customer service in a way that will drive their former patrons away. Wall Street's subprime calamity is another prime example of the long-term dangers of "maximizing profits" in the short run.

Mackey argued that as our society and business climate evolve, the common metaphors we use for industry -- "war," "Darwinian struggle," "machinery" -- should become increasingly obsolete. Instead, Mackey spoke of "complex systems" encompassing a variety of stakeholders, all of which depend upon each other. In his world, business doesn't have to be a zero-sum game.

In a future commentary, I'll delve into this cooperative "complex systems" approach to business in greater detail. Until then, feel free to share your thoughts about Mackey's radical rethinking of capitalism in the comments section below. And to hear Mackey's argument for yourself, check out our complete podcast of his visit.

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Whole Foods, Apple, and Berkshire Hathaway are Motley Fool Stock Advisor selections. Berkshire Hathaway and Microsoft are Motley Fool Inside Value selections. Google is a Motley Fool Rule Breakers recommendation. The Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days.

Alyce Lomax owns shares of Whole Foods Market. The Fool has a disclosure policy.


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  • Report this Comment On July 30, 2009, at 5:54 PM, modeltim wrote:

    John Mackey is as phoney as a $3 bill.

    Capitalism is a beast to be tamed, the tamer IMO is socialism! Pure, laissez-faire, free market capitalism is destroying the world.

  • Report this Comment On July 30, 2009, at 6:16 PM, donmartin65 wrote:

    This is exactly the kind of nonsense that makes me short a stock.

  • Report this Comment On July 30, 2009, at 6:22 PM, htownjester wrote:

    Good article, but I take issue with one part. It is a common misconception that business, and indeed the very creation of wealth, is a zero sum gain. Nothing could be further from the truth. Though energy cannot be created nor destroyed, wealth most certainly can, and is created every second. It is created by a class of creative/innovative entreprenuers and capital allocators who fund them and own the businesses they create. The massive wealth creation engine that is America did not take the wealth created over the last 100 years from anyone- it was created out of thin air by capitalism and those who can put a free market and innovation to its best use. Read Mauboussin's "More Than You Know" recommended by MDP reading list for further insight.

    It is inherently wrong to consider capitalism zero sum, and ironically many of our founding fathers believed in this outmoded mercantilist philosphy at the outset of our country's existence. See "Empire of Wealth" by Steele for more information.

  • Report this Comment On July 30, 2009, at 7:04 PM, hifibri wrote:

    Capitalism is the stimulant of life itself. Without it we might as well stay in bed and let someone else take care of it. The government can't run itself without defecits and it doesn't have to worry about the cost of goods, labor, or profit margins. How on earth could it run a business?

    Capitalism works when there is competition and it is responsible for the great standard of living in the US and elsewhere. The ironic (and dangerous) part is as the best companies dominate, competition dissapears and the consumer and economy suffers as the effective use of the economy's resources wanes. Too bad that the best eventually should be punished - this is the regulation part. So some limits are good.

    Most threatening to the US right now is the size and amount of centralization that has taken place in banking. If banks were too big to fail before they are outrageously big now. Split them up so we have competition, safety from failures, and less taxpayer exposure to a private companies risk.

  • Report this Comment On July 30, 2009, at 7:15 PM, jomueller1 wrote:

    The US society is sick. Many immigrants were extremely poor and I understand that they want to get ahead but money as a goal in life falls short of what humanity can be. The puritans with their idea that god shows his/her appreciation by letting them have lots of money is a cheap excuse for exploiting less fortunate people. On the other hand, when problems, like poor education, are diagnosed the best effort is throwing other peoples money at the problem instead of motivating teachers and pupils.

    Germany has (had) what was called a social capitalism. That worked fine except for the fact that the US were poking fun at the moderate growth rates and small profit margins. Now that international companies and hedge funds rule the German form of capitalism is turning more and more into the ruthless "pure" capitalism.

    Where is it written that Milton Friedman is right and his theories are the bible? Theories are good for debates but normally do not work in reality. So write Mr. Friedman off and look at what makes people happy (refer to the Declaration of Independence) and pursue what is good for the country as a whole.

    This morning I flipped through the pages of a boating magazine. Yachts are offered in the multi-million dollar range. Who says it is right that some people have it all and others cannot even rent a boat for a day? Since we have the anonymous companies with CEOs there is no human consideration left in business. It was better in the times of Henry Ford or the Fugger family.

  • Report this Comment On July 31, 2009, at 4:42 AM, max12345 wrote:

    The ideas about "conscious" capitalism expressed above (and I think the opposite of "unconscionable" might have been the more apt qualifying adjective, since most people would understand "conscious" as meaning "aware" and the intended meaning I believe goes beyond "aware") are not at all new.

    They can be found in any university undergraduate textbook writing about so called Corporate Social Responsibility and its various conceptual and theoretical variants.

    What is described above is a kind of "stakeholders" theory as opposed to "shareholders" theory. The latter theory considering only owners, shareholders and those to whom they in turn directly delegate authority on their behalf, (managers) as the main legitimate stakeholders of a company...(i.e. those who have a stake or an interest in the company)

    Whereas stakeholders theory recognizes a number of other stakeholders too...such as employees, local communities, suppliers, retailers, customers, the wider society of consumers, the wider society of citizens and also future generations (with respect to the environmental impacts of the company).

    The main issue regarding what kind of "capitalism" we may wish to have in the future (we already pretty much know which kind we've got in the present) is what kind of an entity (legally speaking) should one consider a company to be?

    The legal frameworks and company laws that now mostly exist as concerns ownership and management are basically aligned with shareholders theory. (though there are of course other "surrounding laws, rules and regulations" -such as labour law, environmental law and etc .etc.- that also obligate or condition the company to take into account the interests of some of the other stakeholders above....all of whom certainly have "an objective" stake in a company and its operations and this whether company law then chooses to recognize that fact explicitly or not.

    Another important aspect involved is whether corporate social responsibility (or "not unconscionable" capitalism) is something that should be voluntary or whether it should be mandated by law.

    And within these two main schools of thought there also exist some different variants.

    Basically should a company be free to either be very responsible or very irresponsible depending only on what its owners and managers wish to do and on whether the market rewards their behavior or punishes it, or should legal and regulatory frameworks be established that basically would compel (by law) for the company to take into account the interests of some of those "other stakeholders". (and should this legal and regulatory framework be the same for all sectors and industries and for all sizes of companies -micro, small, medium, large and very large- or should it be a one size fits all (basic company law) kind of a legal framework?

    Right now we have mainly a voluntary system. Is that system producing adequate results? That is, is it producing the sorts of companies that behave in the ways most voters would like them to, or not?

    I think that's the right question to ask, and then based on the answer society (and lawmakers) can come up with a policy and legal response and regime that matches the answer.

    All the other rest of the stuff is mainly pie in the sky wishful thinking and assorted pious moralism.

  • Report this Comment On July 31, 2009, at 6:27 AM, marktsgooch wrote:

    modeltim: "Capitalism is a beast to be tamed," I agree 100%

    " the tamer IMO is socialism! Pure, laissez-faire, free market capitalism is destroying the world." I disagree 100%

    Capitalism is a system, or a tool. It serves society very well as long as it is used appropriately by society, by being constrained within boundaries of laws, regulations and taxes. Every 'failure' of capitalism I can think of has actually been a failure of government to constrain the market appropriately.

    Compare that to the failures of socialism - which is an inherently broken system.

  • Report this Comment On July 31, 2009, at 3:57 PM, desertfox43 wrote:

    Economics 101.

    1. The U.S. is NEOcapitalist. That is, the state plays a major role in maintaining and regulating production and consumption.

    2. The incontrovertible definition and history of pure capitalism is: the mandatory subordination of the exigencies of human need to the exigencies of maximal profit.

    Mr. Mackey is either consciously dissembling--or on acid.

  • Report this Comment On July 31, 2009, at 6:41 PM, Bionicjoe555 wrote:

    "Victory has 100 fathers, but defeat is an orphan." -- Napoleon

    In business:

    "Positive quarters have 100 Chief-Executive-somethings, negative quarters have 10,000 angry shareholders with no responsible parties."

    Corporations are built so that there is no personal responsibility, but everyone has a stake in the profits. Once businesses reach the corporate level there can be no compassion. It has been designed out of the system.

    As an example:

    Shareholders & CFOs may demand more profits by moving an industry to China, outside of environmental laws. But will any shareholder or single CFO stand up and proudly say 'We did it for profits' when asked why there are entire towns full of children with birth defects in China?

  • Report this Comment On July 31, 2009, at 11:00 PM, Panth wrote:

    How can we expect corporations to 'do the right thing' when we do not reward them for doing so? Companies that outsource to save on labor, environmental cost, taxes, etc. are rewarded with higher profits because consumers buy their products regardless. If consumers started basing purchases not just on cheapest cost, but on overall value and benefit to our society, then companies will be rewarded for that.

    American automakers are suffering due to doing the right thing with pay and benefits for their workers (not always willingly, I grant) and are suffering as cost for cost they cannot compete with the foreign competition. Other American industries suffered and will continue to suffer the same fate until the consumer decide to take these factors into account.

  • Report this Comment On August 01, 2009, at 1:40 AM, max12345 wrote:

    I agree with what Panth just said immediately above. And one way to encourage "the consumer to take these factors into account" would be to slap a 100% or 200% import or sales tax on any products - for instance most of those made in China - that were made by abusing labor -or any other people in any way- and /or by abusing the local and the global environment.

    Which then brings into consideration another issue which is that of the so called "sovereignty" of nation-states...i.e. if we are all swimming in a public swimming pool (which is in fact basically what we are doing) do we have the sovereign right to urinate in it at will? And if not, why do nation states have the right to emit gargantuan amounts of C02 into "their atmosphere"; do they maybe own the atmosphere which the rest of us are trying to breathe?

    But we have now enshrined so called "free trade" in the WTO and anything like what I am tacitly suggesting above would be called "protectionism". And IT IS indeed protectionism!

    It's the protection of people and the environment (and even of long term corporate profits) instead of only protecting business' short term profits.

    And I said " corporate profits" instead of just "profits" in general above because on the societal balance sheet - whether in China or in the U.S. or anywhere else- by producing stuff using low labour, people, and environmental standards the "societal profit" is in fact much lower, not higher. (we end up paying in all sorts of ways including -but not only limited to -

    having to spend more on medical care, prisons and a whole lot of other "non-obvious" national budget items)

    It's just that the various so called economic "externalities" are not counted in. For instance if the cost of polluting and despoiling an entire particular locality (and then restoring it to pristine condition later) were to be factored in, "corporate "profits" would be a heck of a lot less.

    But some people are arguing that the "polluter pays" is also moving towards a form of "socialism". (have they been to the former Soviet Union and seen how much their "socialism" ruined the local and national environment there?)

    WTO should not only be about "fair trade" instead of "free trade" it also should be about "sustainable trade" which would take into account the interests of all relevant stakeholders both present and future ...rather than only whether some particular sort of trading can benefit the two nations involved equally. (fair trade)

    ....meaning that it also would take into account the rest of us living on the planet today -including all the folks (employees and communities) working in or around the assorted supply chains- and also our children and grandchildren who will be living here on planet earth tomorrow....(if they're lucky)

    ...since we are now rapidly heading towards being a desertified, barren, toxic and thoroughly despoiled planet and landscape full of all kinds of garbage with only ourselves and some insects left over to represent "biodiversity"; (we are definitely "getting there" and a lot faster and more irreversibly than most people think)

    But apparently most of our leaders think that if we can just find a few magic bullets that will help us come out of this recession or depression (or whatever the heck it is, which hardly matters) and "restore" "3% economic growth forever" everywhere

    and all of the time....we all will be just honkey dorey.

    Poor fools!....(but definitely not Motley!)

  • Report this Comment On August 01, 2009, at 11:08 AM, ChairSpeaker wrote:

    I don’t think Milton Friedman ever-never thought business was a zero-sum game. Quite the contrary. And the thing about profit as being strictly expressed in money is bothersome. If you mowed the lawn for the elderly lady next door and she later brought you a bowl of peaches, you might think of yourself as having profited from the exchange, so would she.

  • Report this Comment On August 01, 2009, at 12:36 PM, jmack3156 wrote:

    I know that you all are aware that all ecomomic systems must have government support. sometimes all of the "smart" guys forget that man-made wealth is based upon natural or environmental wealth. To htownjester: wealth is not CREATED, it is GENERATED by manipulation and exploitation of what is available to us from imagination, conception, and production. Many silver spoons no nothing of work ethic or ethics of any kind. I am thankful for blood, sweat and gears! Know how it operates and you can control it!

  • Report this Comment On August 01, 2009, at 3:44 PM, beetle50 wrote:

    I really weary of these kinds of dialogues, particularly during times of economic stress. The implication being: "See? see? Now if only we had resurected that old 19th century answer to the industrial age abuses. Socialism." In all its various forms. By gosh now THERES the answer to 21st century economic evolution. Lets just try that old saw out again (and again).

    We'll be enjoying smooth progress and economic stability in no time.

  • Report this Comment On August 01, 2009, at 7:07 PM, xetn wrote:

    The stock market crash of 1929 was a result of an economic boom in both the economy and the stock market due in large part by the inflation of the money supply from 1921 through 1928. Although the US was on the gold standard, the Fed and fractional reserve banking allowed a large expansion of credit (money) during this time frame. The money supply increased, via credit, by roughly 68 % leading up to the the crash. The resulting crash of the market is just like the housing bubble crash or the dot.com bubble crash; easy credit and low interest rates, coupled with people buying stocks on margin in hopes of making a killing.

    Then, in an attempt to head off the depresion, first Herber Hoover and then FDR tried in vain to inflate the economy out of it troubles. These actions (including outlawing and confiscating private ownership of gold and the elimination of the gold standard except for international exchanges) prolonged the depression, and although many think that WWII ended it, this was not the case. It is true that unemployment dropped tremendously during the war years, but it is due to millions of men engaged in the military and women building the machines of war. But the living standards during the war years were horrible; massive shortages, and having to use coupons to purchase many commodities were common. The real end of the depression came after the end of the war as the US started converting from building war materials to consumer goods and our supplying Europe and Japan with goods to rebuild their respective infrasturtures.

    So, it looks like history is repeating itself; the Fed and the fractional reserve banks creating lots of low-interest rate, easy credit, (increases in the money supply), the resultant collapse of the housing bubble, and the Bush/Obama stimulus/bailouts of banks, auto companies, etc and an injection of over 2 trillion dollars into the ecomony, and the 50% loss in the stock markets.

    As for laissez-faire capitalism being the "Great Satan" that everyone on this site seems to believe, consider the definition of laissez-faire capitalism:

    Free exchange between buyer and seller;

    No government interference (main purpose is to protect the individual from aggression or the threat of aggression; both foreign and domestic)

    Private ownership and respect for the means of production;

    Little or no taxes.

    Does this sound like anything we have in the US, or for that matter, anywhere in the world? We haven't had anything close to a free-market since 1913 when the FED and the federal income tax was created.

    It is simply amazing that the people on this site, who are supposed to be trying to get rich by investing in stocks, have such little understanding of economics or history.

  • Report this Comment On August 02, 2009, at 12:09 PM, max12345 wrote:

    In any case, regardless of what any of us think here on this blog -or any other one- things are only going to change slowly and gradually if at all. Probably the only thing which is a certainty is that our natural environment will be ruined ever more and more. For that, the writing is already on the wall and the many and various effects are already visible all around us. (of course another solution could be for everyone to put on a blindfold or some horse blinkers)...(or is that what a lot of folks already have got on?) Hi ho Silver....away!....

  • Report this Comment On August 02, 2009, at 2:32 PM, globalsailor wrote:

    I like this article. People treat business as a selfish endeavor and to some degree it can be. However, selfish people don't last in business very long, except of course, if they get bailed out by the government.

    In truth capitalism is not meant to be a cutthroat business (nobody likes cutthroats too much). Rather it is an "I scratch your back, you scratch mine" way of living.

    Given all of this, I don't think that Mackey is advocating anything squishy. Rather, he is advocating good business. There are two ways to move a product: one is to increase quality (or sometimes the perception of quality) while the other is to decrease cost. Either way the customer benefits. Apple customers feel good about their trendy products while Walmart customers feel good about saving money.

    This philosophy, however, needs to be applied to the employee world as well. When people say "We want jobs!!" they are in fact saying something quite selfish. You aren't entitled to a job. Rather, a job should be thought of as such: I am doing you a favor (working) so in return will do me one (pay me). This way we can stop talking about things like living wage (I think minimums help the poor avoid getting abused or enslaved). The worst example of this is what the unions did to the car companies. They made contract rules that employees could only work specific jobs and thus got rid of the "you scratch my back I scratch yours" deal that makes capitalism work.

    On a personal note: I hate hearing people talk about creating jobs. There are always plenty of ways to get a job sometimes you may have to move to another city, but you can always find one.

  • Report this Comment On August 05, 2009, at 10:43 AM, Robinjain wrote:

    To some extent I am agree with John Mackey.

    Today in the era of recession businesses are not suppose to just suck up the hard earned money of the people but there must be some principles which guide the business to come out from this devastating era.

    The examples of Google and Microsoft are correct in this context.

  • Report this Comment On August 05, 2009, at 1:18 PM, ReadEmAnWeep wrote:

    "This morning I flipped through the pages of a boating magazine. Yachts are offered in the multi-million dollar range. Who says it is right that some people have it all and others cannot even rent a boat for a day? Since we have the anonymous companies with CEOs there is no human consideration left in business."

    Sounds like this guy like communism...

    Those better off people can afford those boats and you can’t because they are a luxury item. It is crazy to just open a magazine and say “Hey, I did nothing to earn this… But I should be given one of these! What’s wrong with capitalism!?!”

  • Report this Comment On August 06, 2009, at 2:35 AM, piratelover wrote:

    "Free market capitalism is destroying the world?" "...there is no human consideration left in business." Why are you following Motley Fool? Stocks are not possible without capitalism. Without corporations there are no non-profits either. How are there so many socialists posting here?

    As to companies being founded by the entrepreneur's passion and ideals -- in many cases true, but that doesn't mean the resulting corporation maintains those ideals and supports the mental health and best interests of its employees. They need to earn profits to stay in business and employ people. Successful companies have boards who must be more responsive to shareholders than the talent the company employs. That said, there is still no more creative, wealth-producing, problem solving system in the world. No other type of economy has ever delivered more medical advancements, economic prosperity and paradigm-shifting innovations than capitalism. Give me liberty and free enterprise.

    And to max12345 concerned about our CO2 emissions. Please. You breathe out and you're polluting the atmosphere. China and India outpace our evil selves on multiple levels. And natural events far outpace what humans can or will do. You're kidding yourself Captain Planet. What are you afraid of? Greater warmth means greater biodiversity, doesn't it? But not to worry. I'd invest in icebreaker manufacturers if I were you. We'll be heading for an ice age soon. Is that why we now refer to "climate change" instead of global warming?

  • Report this Comment On August 06, 2009, at 8:10 PM, ZouZiPai wrote:

    Bill Gates motivated more by enthusiasm in personal-computing revolution than by profit? What is Mackey smoking? Bill Gates has his little hiney dragged to the Supreme Court of the USA for anti-trust----the man existed to beat out competitors, as the most cutthroat, immoral, money-making machine on the planet, which everyone seems to have forgotten, now that he and Melinda are media whores on covers everywhere, giving aid (the repair money we all spent because we used Windows) to poor Africans. PUH-LEEZ.....

  • Report this Comment On August 07, 2009, at 11:19 AM, dbwolfe2009 wrote:

    For all those cynics of conscious capitalism (and John Mackey) I suggest they ponder the chart in "Firms of Endearment" on page 138 which can be seen by going to Amazon.com, pulling up the book by title, and typing "G2G" in the "search inside" box under the book's image. The chart shows the 10-year, 5-year and 3-year performance of companies that follow the conscious capitalism gospel. Interestingly, their 10-year performance in equity markets far exceeded the record of Jim Collins' 11 "From Good to Great Companies." The record: CC companies increased shareholder value by a staggering 1023% vs. shareholder gains in Good to Great companies of only 331%. In that same 10-year period the S&P reflected increase in shareholder value of 123%.

    I recently received a report on how well the public companies in "Firms of Endearment" have weathered the current financial crisis. They have significantly outperformed the S&P 500. At a financial management firm I know of that manages 28 funds, the fund that is restricted to CC companies has out performed the other 27 funds since it was set up last Fall.

    I believe that John Mackey is one of the sharpest CEOs on the planet, and I firmly believe that Whole Foods' recent unexpected financial performance and where it is headed now support my confidence in John Mackey as a CEO of uncanny instincts. The same holds true for most of the other CEOs of companies cited as exemplars in "Firms of Endearment."

  • Report this Comment On August 07, 2009, at 1:08 PM, czbill wrote:

    CEOs who take a larger, strategic approach are to be applauded and rewarded. But I also look at this through a lens reminiscent of my days in competitive intelligence. Unless there is a bonafide, proactive approach (versus reactive), where intelligence and process is reviewed by the proper authorities, there will be little change in either the short term or the long run. Witness the analyst who found Madoff's scheme years in advance--with no action from the SEC. The list goes on.

    Sadly, for every Buffett there's a Bernie (Madoff, Ebbers, et al). So how do you foster INTELLIGENT entrepreneurship in a beaucracy? Ay...there's the rub. And until that is solved, you will have pendulum swings that over-correct these problems, compounded by cronyism in boardrooms and cabinets.

  • Report this Comment On August 07, 2009, at 1:48 PM, CaraClaudel wrote:

    Capitalism is freedom to buy and sell what we want to buy and sell. People figure out how they will fill a need in the economy, fill it, and reap the rewards of their efforts. Those who get wealthy are those who have found ways to best serve many people or to serve people with a specialized skill.

    If the people want to support companies with a social conscience, you have the best of both worlds: freedom to buy and sell at will while helping all those involved to create a better quality of life.

    Socialism is theft. The government uses force to confiscate the wealth created by individuals, keeps much of that wealth for itself and reassigns some of it to its supporters to keep itself in power. Those who get wealthy are thieves and thugs, those who use force to enslave others and confiscate the fruit of their labors.

    Government interference in free trade should be kept to a minimum. Government should set some basic ground rules and then referee. It should arrest those who defraud others and penalize those who violate their contracts. It should protect the environment in a reasonable, not a fanatical driven way. It should not stack the deck, pick sides, or favor one group over another.

  • Report this Comment On August 07, 2009, at 2:01 PM, TMFLomax wrote:

    Hi everyone,

    I've been enjoying all the discussion here. There are a lot of very solid arguments here.

    I think the conscious capitalism message is a great one. And, as globalsailor said, this is not a socialistic message, to my way of thinking, it's more about voluntarily embracing ethics and running a good, solid business for the long term. As stockholders and consumers, we can support such businesses with our dollars. And personally I agree with everyone who says there should be little government interference but that means we all need to think about what we do and support and foster.

    I have a lot of respect for Milton Friedman, his messages fit my philosophy in many ways, but many of his proponents have taken the message as one of short-term profit gains that really has been a base and destructive influence. Really, thinking of all stakeholders and thinking about the consequences of all our actions seems good on both an individual level as well as one I'd personally like to see from more business leaders.

    And dbwolfe2009, thank you so much for the tip on the "firms of endearment." I'm going to look into that, and it seems to me to stand to reason. And htownjester, I have the Mauboussin book on my to-read list.

    Alyce

  • Report this Comment On August 07, 2009, at 7:00 PM, dwculver wrote:

    I enjoyed this article. I agree with the 3 points of fundamental motivation on the part of many people including myself. If it was only and always only about money we'd all be crack dealers. However a comment above seems off base to me and that capitalism practice comes out of thin air. The rewards of prior effort can last for generations. You personally may not receive a check or helping hand but the fact that for 300 years slavery did not pay a living wage certainly created a powerful infrastructure upon which we have all benefited.

  • Report this Comment On August 08, 2009, at 10:31 AM, kellan45 wrote:

    flat out!!!!

    this country is reelling from a goverment that is radicial and run by the same people that got us here radicial democats anticapialists ,if your real in your thinking it's not hard to see. all thats being do is taking us in the wrong direction.

    more taxes, national healthcare, take over the banks,car companies,ins companies rat out your nabor because of thier views etc,etc,etc

    capitalisim? i dont think so

    thanks for you time

  • Report this Comment On August 08, 2009, at 4:32 PM, Mamamia100 wrote:

    Random Thoughts:

    In many ways the wealth of this country stems from the vast natural resources we started with. Countries like Japan don't have that advantage. Now that we have used many of them up and have to import most of the metals and even oil that we use, it will be hard to maintain our premier place in the world economy.

    And a significant part of our profits and standard of living increase is derived from using up non-renewable resources. We still do not pay full price for energy, since we don't require the energy costs to include the cost of environmental protection and remediation in their costs of doing business (e.g. oil spills, coal and uranium mining remediation, and, nuclear plant decommissioning, and radioactive waste storage and disposal). Just as we don't require manufacturers to pay the cost of disposal of their products and packaging.

    Also, regarding the bad old government, let's not forget the role the government played in growing our economy by developing and subsidizing the transportation network. The government still greatly subsidizes air and highway transportation.

    Let's face it, no one knows how the world economy works. There needs to be a balance between capitalism and government regulation. We have a lot of levers and knobs to push. We push a few and see what happens. And usually there are unintended consequences, so we push a few more.

    A final thought: As we outsource our production to other countries, we raise their standard of living. On the plus side, decreasing the wealth disparity among nations should improve stability and reduce the threat of war. On the down side, our standard of living will probably go down. I worry about the future for my grandchildren.

  • Report this Comment On August 08, 2009, at 5:53 PM, annimoon wrote:

    Nordstroms should be removed from the status of good customer service. The store was built on that principle, however when the sons took over the business, that is no long the motivating force within the company as much as expansion and profit are. You should do your research better.

  • Report this Comment On August 08, 2009, at 8:45 PM, kellan45 wrote:

    sorry mamamia, you have got a little backwords,yes we have great resources witch would be mean nothing with out our FREEDOM and that is what I fear is being taken from us be the radicals running thing today!

    you have good reason to wooy for your family

    good luck to you

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