Action Plan  

Winning the Battle for Freedom and Prosperity

by John Mackey

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What I hope to accomplish tonight is to challenge your thinking about the modern freedom movement. I believe the freedom movement has been its own worst enemy by foolishly limiting its appeal and impact with an overly narrow interpretation about the meaning and purpose of freedom. From a business perspective, the freedom movement faces major marketing challenges, the result of its poor job of branding itself to the world.

Let me tell you a few brief things about myself as background. Before I started Whole Foods Market I attended two different universities, where I accumulated 130 hours of electives, primarily in philosophy and religion, and ended up with no degree. I never took a single business class. I actually think that has worked to my advantage in business. I spent my late teens and early twenties trying to discover the meaning and purpose of my own life.

My search for meaning and purpose led me into the counter-culture movement of the late 1960s and 1970s. I studied eastern philosophy and religion at the time, and still practice both yoga and meditation. I studied ecology. I became a vegetarian (I am currently a vegan), I lived in a commune, and I grew my hair and beard long. I'm one of those crunchy-granola types. Politically, I drifted to the Left and embraced the ideology that business and corporations were essentially evil because they selfishly sought profits. I believed that government was "good" (if the "right" people had control of it) because it altruistically worked for the public interest.

With that background, I felt well prepared to launch my business in 1978. My initial business, a natural foods market called Safer Way, was a small 3,000 square foot store that I opened with my girlfriend, with an initial $45,000 in capital. We were very idealistic, and we started the business because we thought it would be fun. We were right — we had a blast then, and we've continued to have a great time during the last 28 years. The time has passed quickly.

Along with the for-profit business, I also created a business of "heart" and I think I have been equally successful with that venture. After running Safer Way for a couple of years, we decided to relocate to a much larger building and we opened Whole Foods Market in 1980. No pun intended, but we grew the business organically from there.

At the time I started my business, the Left had taught me that business and capitalism were based on exploitation: exploitation of consumers, workers, society, and the environment. I believed that "profit" was a necessary evil at best, and certainly not a desirable goal for society as a whole. However, becoming an entrepreneur completely changed my life. Everything I believed about business was proven to be wrong.

The most important thing I learned about business in my first year was that business wasn't based on exploitation or coercion at all. Instead I realized that business is based on voluntary cooperation. No one is forced to trade with a business; customers have competitive alternatives in the market place; employees have competitive alternatives for their labor; investors have different alternatives and places to invest their capital. Investors, labor, management, suppliers — they all need to cooperate to create value for their customers. If they do, then any realized profit can be divided amongst the creators of the value through competitive market dynamics.

In other words, business is not a zero-sum game with a winner and loser. It is a win, win, win, win game — and I really like that. However, I discovered despite my idealism that our customers thought our prices were too high, our employees thought they were underpaid, the vendors would not give us large discounts, the community was forever clamoring for donations, and the government was slapping us with endless fees, licenses, fines, and taxes.

Were we profitable? Not at first. Safer Way managed to lose half of its capital in the first year — $23,000. Despite the loss, we were still accused of exploiting our customers with high prices and our employees with low wages. The investors weren't making a profit and we had no money to donate. Plus, with our losses, we paid no taxes. I had somehow joined the "dark side" — I was now one of the bad guys. According to the perspective of the Left, I had become a greedy and selfish businessman. At this point, I rationally chose to abandon the leftist philosophy of my youth, because it no longer adequately explained how the world really worked. With my l eftist interpretation of the world now shattered, I looked around for alternative explanations for making sense of the world.

I stumbled into reading Milton Friedman, Friedrich Hayek, Ludwig von Mises, Ayn Rand — I read all of them. I said to myself, "Wow, this all makes sense. This is how the world really works. This is incredible." Then I became Laissez Faire Books' best customer for the next five years. I think I read every book in their catalog. If any of you in the audience have written books, I have probably read them.

I identify myself as a Libertarian. I am one of those people who actually votes Libertarian. I have voted strictly Libertarian since 1980. You sometimes hear that argument, "Why do you vote Libertarian? You're just throwing your vote away." I always say, "Gosh, if everybody had that attitude toward their vote, then the Libertarian candidate would get elected."

What I love most about the freedom movement are the ideas of voluntary cooperation and spontaneous order when channeled through free markets, leading to the continuous evolution and progress of humanity. I believe that individual freedom in free markets, when combined with property rights through rule of law and ethical democratic government, results in societies that maximize prosperity and establish conditions that promote human happiness and well-being.

Unfortunately, despite all my enthusiasm and formidable debating skills, I have had little success converting people to the freedom movement. Has that been your experience as well? The freedom movement remains a small, relatively unimportant movement in the United States today. The question is: "Why?" I want the freedom movement to sweep the world. So how can we make the freedom movement a more vital and dominant intellectual and cultural movement in the United States?

I hope to do two things tonight. First, I will critique the freedom movement and highlight mistakes that have greatly lessened its impact and influence in the world. Second, I will challenge the movement to re-think its purpose and values. We need to evolve our paradigm along with the brand that we offer the world. As a businessman who knows something about marketing and branding, I can tell you the freedom movement is branding itself very poorly.

Let's start with the critique. How many of you have read Ayn Rand? How many of you have been influenced by her? "Atlas Shrugged" remains one of the five greatest novels I have ever read. Who can ever forget characters like Dagny Taggart, Hank Rearden, Francisco d'Anconia, from "Atlas Shrugged," as well as Howard Roark in "The Fountainhead"? These characters all demonstrated tremendous passions and drive, backed by high self-esteem. Each one inspired this young entrepreneur. I wanted to be just like those heroic characters in "Atlas Shrugged."

However, despite her literary greatness and many positive contributions to the freedom movement, I believe that Rand has also harmed the movement. How? She was overly provocative. The "virtue of selfishness" is an oxymoron. Selfishness is not a virtue. Now, I understand all the arguments — I've read all the books. I know that self-interest channeled to the social good, as expressed through Adam Smith's "invisible hand," is the single most brilliant insight about social organization ever made in history. That being said, selfishness (as opposed to self-interest) is still not a virtue. It is something to be discouraged, and not something to be supported.

Similarly, I find insupportable the idea Ivan Boesky and Gordon Gekko made infamous, that "Greed is Good." Well, greed is not good. Greed is not a virtue. Excepting a few people on Wall Street and some people in the freedom movement, almost no one else in our greater society will support selfishness and greed as "good" when they see it. So my question to you is, why doesn't the freedom movement condemn selfishness and greed? If we don't, we are inappropriately seen as supporters of selfishness and greed. In my opinion, this is a major branding mistake that continues to undermine our movement.

How many people in the audience believe that the only social responsibility that business has is to maximize profits? Before I make my next point, let me boast about Whole Foods Market for a moment. In 2005, we did $4.7 billion in sales and realized $136 million in net profits. With our current growth rates, by 2010 we should do over $12 billion in sales. On a percentage basis Whole Foods Market is the most profitable public food retailing business in the United States, with the highest net profit percentage, sales growth, and sales per square foot. I make this boast to prove that (a) I believe in profit and (b) I am quite competent in producing it.

I love profit. Profit is good and it is socially necessary. However, some people in the freedom movement have long argued that the only social responsibility that business has is to maximize profits. I believe that profits are an essential purpose of business, but I would argue that they are not the sole, or even most important, purpose of business. Profit is the most important purpose to the business owners. But owners do not exist in a vacuum. I believe the best way to think about business is as an interdependent system of constituencies connected together in a "harmony of interests."

Is maximizing business profits a goal that customers have when they patronize a business? Are customers coming in thinking, "I'm so glad I'm in Whole Foods today because I want to help you maximize your profits"? What about the people who work for a business? "I took a job a Whole Foods because I was seeking to maximize the profits of the company." Or the community: "We're so glad you came to our community and we want you to maximize your profits." This is ludicrous, right?

Free-market economists, in their legitimate defense of the value of business profits, have often harmed the value of the larger brand of business in our society. These economists have not created a paradigm of business that will ever be fully accepted by society as "good." Business instead continues to play the role of the bad guy in our society. Selfishness, greed, worker exploitation, consumer ripoffs, and environmental destruction, all in the name of maximizing profits — this is the reality of the brand that business is burdened with in the world today.

I believe that business has a much greater purpose. Business, working through free markets, is possibly the greatest force for good on the planet today. When executed well, business increases prosperity, ends poverty, improves the quality of life, and promotes the health and longevity of the world population at an unprecedented rate. This audience understands these truths, but how many people in our greater society comprehend it? The freedom movement has also poorly defended the social legitimacy of both business and free markets. A new paradigm for business and the free market is necessary — one that accepts the importance of profits, of course, but also one that recognizes that business has legitimate social responsibilities that go far beyond merely maximizing profits.

How many people in the audience believe drugs should be legalized? What about pornography? How many of you believe that prostitution should be legal? I believe all three should be legalized — within certain parameters which protect children. Who among you believes that private ownership of guns should be made illegal? I certainly don't. Gun ownership is protected by the 2nd Amendment of the Constitution. It is an important right.

I believe, however, that all four of these issues are far less critical for improving our society than creating educational choice, privatizing Social Security, deregulating health care, and enacting meaningful tort reform. The legalization of drugs, pornography, prostitution, and guns, as issues, are all too closely associated with the freedom movement. Aligning ourselves with these issues has hurt our brand tremendously, by associating the freedom movement with cultural decadence. Parents don't want their children's lives ruined by drug experimentation, or their innocence prematurely lost to pornography and prostitution, or their lives ended with a bullet.

These four freedom issues need to be de-emphasized by the freedom movement if we hope to create a mass movement and continue to evolve our society in positive directions. How many of you believe that lessening the power of government over our lives is the most important goal of the freedom movement? I believe that the freedom movement's biggest mistake today is focusing primarily on freedom "from" government coercion as its primary goal. Obviously this is a very important goal, but I strongly believe it must be accompanied by an equally important goal: the freedom "to" take responsibility for our own lives; the freedom "to" take responsibility for our own communities and our planet.

Freedom from government coercion is clearly a very, very important goal. But unless you live in a country like China, North Korea, Cuba, or Iran that lacks many personal liberties that we Westerners take largely for granted, freedom is not usually an important goal. American citizens mostly take their liberties for granted. Unlike the people in this audience, most Americans forget that vigilance is the eternal price we have to pay for protecting liberties.

Once we are free, or relatively free, to live our lives in the manner we choose, we must answer the question, "How then shall we actually live our lives?" Will we live our lives as hedonists, indulging ourselves with various amusements, diversions, and pleasures? Or will we choose the more difficult path of personal development and acceptance of social responsibility?

The freedom movement needs to reposition itself and re-brand itself. Personal freedom may be the first goal we work towards — but we can't stop there; it isn't enough. There is so much more to life. Using our freedom to take on greater social responsibility, as well as striving to reach our fullest potential as humans, needs to be a goal we support just as much as freedom from government coercion.

When I was a naive (some people in the audience by this time probably think I'm still naive) and idealistic young man, I migrated to the Left for my value system. Why did I do that? Because the Left provided an idealistic vision of the way the world could be. However, the reality of the Left's vision proved to be terribly flawed. Its socialist economic system not only didn't work very well, but in its communist manifestation it justified monstrous governments directly responsible for the murders of over 100 million people in the 20th century. Despite the horrible track record of leftist ideology, millions of young Americans continue to migrate to an intellectually bankrupt Left because the Left still seems to be idealistic, and idealism is magnetic to the young. Idealism will always be magnetic to the intelligent and sensitive young people of the world.

How sad that the freedom movement often refuses to be idealistic. We usually don't even attempt to compete. We simply forfeit the field to the Left because we pride ourselves on our "realism" and "tough-mindedness." We talk about freedom and prosperity — and that is about it. We have no real theory of either the good life or the good society except the fundamental belief that if people have sufficient personal and economic liberties (as in Friedrich Hayek's spontaneous order) we will create a prosperous society.

Freedom and prosperity are important goals, but they must be only the beginning goals for us. If we are to win the allegiance of the young people of America then we must dare to be more idealistic. We must create a vision of the good life and the good society that is irresistible to the young.

How many of you are familiar with Abraham Maslow's "Hierarchy of Needs"? For those of you who aren't, Maslow was a psychologist who did most of his work in 1950s and '60s. His theory is that we can understand human motivations with a simple model. There are various "need" levels and they arrange themselves basically in a hierarchy. At the bottom of the hierarchy are the physical needs, such as food, water, sex. Once those needs are relatively well met, you move up to the next level in the hierarchy: safety needs, such as security and physiological safety, take precedence. Next you move into needs for love and community: affiliation, acceptance, affection, community, and family. Once those needs are met, you tend to move to self-esteem needs: feeling competent, gaining approval and recognition from others, and garnering a sense that you are a worthwhile human being. The next level would be the attainment of aesthetic and cognitive needs which can be summarized as the pursuit of the good, the true, and the beautiful.

Finally at the top of this hierarchy is self-actualization (and the Army's advertising firm must have read Maslow): "Be all you can be." This means reaching your fullest potential as a human being. I believe that one of life's purposes is fundamentally to learn and grow. If we move up Maslow's hierarchy and don't stagnate at lower levels, life becomes an adventure of learning, growing, loving, and rejoicing. If we are not growing as human beings, then we are diminishing.

The freedom movement, in my opinion, needs to embrace the ideal, not just of economic growth, but also of personal growth. If we use Maslow's hierarchy of needs as our criterion for evaluating the freedom movement, we see that it is primarily focused on the lower need levels: meeting the physical needs and safety needs through increased prosperity. To be perfectly blunt about it: the freedom movement is largely materialistic in its approach to life, stuck in the lower levels of Maslow's hierarchy. The higher need levels — love, self-esteem, the good, the true and the beautiful, and self-actualization — are either taken for granted or simply ignored.

Study after study shows that material prosperity, by itself, does not create happiness. We have higher needs, as expressed in Maslow's hierarchy, and the freedom movement needs to stop ignoring them. The freedom movement needs to consciously create a vision that addresses meeting the higher needs of Americans, beyond basic physical and safety needs.

That is the secret of the success of the Left, despite its bankrupt economic philosophy. The Left entices the young with promises of community, love, purpose, peace, health, compassion, caring, and environmental sustainability. The Left's vision of how to meet these higher needs in people is fundamentally flawed. But the idealism and the call to the higher need levels is magnetic and seductive, nonetheless. The irony of the situation, as I see it, is that the Left has idealistic visions of higher human potential and social responsibility but has no effective strategies to realize its vision. The freedom movement has strategies that could meet higher human potential and social responsibility but lacks the idealism and vision to implement these strategies. I assert that the freedom movement can become a successful mass movement today if it will consciously adopt a more idealistic approach to its marketing, branding, and overall vision, and embrace a vision of meeting higher human potentials and greater social responsibility.

Now let us discuss some of the ideals and goals that I think we should embrace as a movement. Who among you believes that socialized medicine is the answer to the health care crisis in America? The Left believes this is the answer: equal access to the health care system for all Americans — no one denied for financial reasons, in a single-payer system. Socialized health care seems very idealistic, and as such, appeals to many people. However, as Milton Friedman taught us, there is no such thing as a free lunch — in health care or anywhere else. We know the single-payer system means health care rationing through queuing up in long lines for expensive treatments and denial of some services to many of the elderly as too expensive. We know that uncaring government bureaucrats will run a single-payer system and, without the discipline of competitive markets, won't provide quality customer and patient service. We know that health care innovation and progress will slow down tremendously, because much less money will be dedicated to medical research, since such research is long-term by nature and easily sacrificed to current budget limitations.

The United States continues its steady movement toward socialized health care partly because the freedom movement has not articulated an idealistic vision of what would be possible if we deregulated health care. We have fought a strictly defensive battle on this issue, and that strategy needs to change.

First of all, health is not merely the absence of disease. It is vitality and a sense of well-being. Health is partly about eating a healthy diet. Regular daily exercise and minimizing the poisons we take into our bodies, such as sugar, alcohol, nicotine, and caffeine, are also very important. Health is about getting adequate sleep, and also about having a sense of personal life purpose and maintaining an optimistic and positive attitude. Most importantly, our health and well-being are our own responsibilities. Our doctors cannot assume these responsibilities. Nor can the bureaucratic "experts" controlling a health care system.

The freedom movement must first advocate the ideal of self-responsibility for health. We own our own bodies, don't we? This is no minor thing, because the Left, by supporting socialized medicine, demonstrates a belief that common citizens are too stupid to take responsibility for our own health and therefore need the "experts" to step in and control things for our own good.

Next, we must advocate the ideal of free markets and competition in health care. The monopoly that medical doctors largely have in medical treatment must be broken. They should have to compete fully with other practitioners, such as chiropractors, acupuncturists, naturopaths — and yes, my skeptical friend, John Stossel, even homeopaths. Competition is beneficial in every market and it will be so in the health and wellness market as well. Doctors don't compete on quality or price right now. They don't post their prices, and it is almost impossible to get any real idea of the quality of their services except through trial and error. We don't currently have an efficient, competitive market in health care.

The final thing we must do in health care is to change the tax structure. Eliminating tax incentives for health care would change everything. Most companies (like Whole Foods) would stop offering free or subsidized health insurance if the benefit wasn't tax-deductible. Individuals would no longer receive "free" health care and would start spending their own money. The power of the markets would increase both the efficiency and effectiveness of our health care system enormously.

Try to imagine, for just a minute, how much we could improve the health of Americans if we embraced the ideals that I have outlined here: self-responsibility, competition, deregulation, and tax incentives. Let markets truly work in health care and I have little doubt that the health of Americans would improve immensely. I predict that we would see an increase in longevity to nearly 100 years within just a few decades — true freedom and innovation. Are good health and increased longevity worthy ideals for our movement to embrace? I think they are!

Peace. Why should the Left own the peace ideal? Why should the idealistic young turn to the Left to find peace? Global peace is within our reach for the first time in history. Let me quote from Johan Norberg's wonderful book, "In Defense of Global Capitalism":

The number of wars has diminished by half during the last decade. Today, less than 1% of the world's population is directly affected by military conflicts. One reason is that democracies simply do not make war on each other. Another is that international exchange makes conflict less interesting. Cross ownership, multi-national corporations, and investment in privately owned resources make it hard to tell where one country really ends and another one begins.

Despite the war in Iraq, which looms large in our minds, the truth is that wars in the world are actually in decline. The majority of the world's nations are now committed to democratic governments and market economies. As this global network strengthens, peace will increasingly become the world norm.

The freedom movement should own the peace ideal; we do not own it now. Let us retrieve the peace ideal, because we know the truth: democracy + free markets = peace between nations who share these social, economic, and governmental structures.

Who in this room believes the United States has an excellent kindergarten through 12th grade educational system? Who here believes that the way to improve education in the United States is to increase bureaucratic control by the government? Socialism doesn't work. This was proven beyond a doubt in the 20th century. Nation after nation tried to replace capitalism with socialism and without exception their efforts to improve the quality of their citizens' lives failed. Most Americans know that socialism doesn't work as an economic system. We allow competitive markets to produce our food, our housing, our clothing, our transportation, and most of the goods and services that we consume. Why then do so many people embrace socialism in health care and education? Because we have not created an idealistic vision of the way things could be if they were grounded in freedom instead of governmental control. What is the alternative to socialism in education? The free-market alternative is competition, innovation, and choice. The monopoly of the government over education needs to end. The domination of our children's education by the teachers' unions needs to stop.

What other reforms are needed? The following reforms are old news to people in the freedom movement: school choice through vouchers and tax credits, along with privatizing public schools and selling off their assets to the private sector. What would happen with true competition in school choice, with students and parents becoming truly empowered consumers instead of virtual prisoners and slaves, as they are in the socialized system that exists today? We would have an explosion in educational innovation, and unprecedented improvements as competition and choice systematically eliminated poor teachers and poor schools. In the marketplace, a series of successful educational organizations would grow and spread throughout the nation. We would see incredible diversity in types of schools and styles of education meeting the diverse needs and desires of students and parents, instead of the dictates of the educational bureaucracy and teachers' unions.

Educational empowerment is a noble ideal and one that I believe mainstream Americans will embrace, once parents understand how their own children will be the true beneficiaries of these reforms. Where the freedom movement has failed is in creating and articulating a vision to promote this ideal. We're too afraid to be seen as utopian or near-utopian in our thinking. There is so much cynicism in response. You have all heard "it's not realistic," and "it's a fantasy, you've got to be realistic." But for people to give up ideals like socialized education and medicine — equal access to schools and health care for everyone regardless of income — they need to believe the replacements are going to be substantial improvements. The way to lead them to support change is to create an idealistic vision of what is possible. Next, you need to evangelize this vision to create a sense of excitement. Then they will agree to travel down that road with you to create the necessary changes. If there is no exciting, idealistic vision of what is possible, most people won't bother to join the struggle. Life is simply too short and most people have better things to do.

Who among you has read Bjørn Lomborg's book, "The Skeptical Environmentalist"? I cannot recommend this great book to you more highly. It convincingly demonstrates that the doom-and-gloom, apocalyptic crowd has greatly exaggerated the decline of the global environment in many important areas such as air and water quality and the decline in natural resources. With that qualifier said, I still believe the freedom movement has erred strategically by letting the Left own the ideal of environmental sustainability.

The ideal of environomental sustainability is certainly going to grow in importance over the next several years. It isn't going to fade away. I personally think it is the Achilles heel of the freedom movement, and until it is proactively embraced as an important ideal by members of the freedom movement, the movement will become less and less relevant to the idealistic young in American society.

My company currently employs over 39,000 people. I estimate that nearly 100% of them care greatly about environmental sustainability. I know that I personally do. At Whole Foods, Team Members drift to the Left primarily because of the environmental issues.

Maintaining environmental sustainability is in the collective best interest of everyone. No one will argue that premise. The real question is, "What are the best ways to do it?" What are the trade-offs we need to make? When the freedom movement ignores the issue of environmental sustainability, the Left will dominate the discussion of the issues.

Remember that the Left's goal remains either to cripple or to destroy capitalism. The freedom movement must embrace the ideal of environmental sustainability but must bring to the debate its commitment to property rights, markets, and proper incentives to effectively resist the inevitable leftist arguments for more bureaucratic controls and regulations. Why should the Left own the ideals (and it does own them right now) of love, caring, and compassion — especially with its track record? How can a movement that in its extreme form is responsible for the murders of more than 100 million people, slaughtered in the name of its ideals, own those three words? What the Left has done is create a world of victims and a cult of victimology. Then the Left accuses everyone who disagrees with it of lacking love, caring, and compassion. What a bunch of baloney! The freedom movement must embrace the ideals of love, caring, and compassion, and return these words to their true meanings. Love, caring, and compassion do not equate to guilt, and they do not mean pandering to the demands of the various victims of the world. Spreading freedom through the world is the most loving, caring, and compassionate thing we can do for people. True freedom allows people to create prosperity and gives them the opportunity to move up Maslow's hierarchy of needs towards self-actualization. True freedom gives us the opportunity to take social responsibility and to work towards making the world a better place. The freedom movement needs to support economic globalization.

Globalization is the most caring and compassionate strategy we can implement to help the developing world lift itself out of poverty. This is the simple truth. But how many people understand this truth? The Left has convinced the idealistic young that globalization is harming the developing world — that it is a plot by greedy corporations to rule the world. The freedom movement has a responsibility to explain the wisdom of globalization and to hold it up as a noble ideal.

I began my talk tonight by telling you that I spent my late teens and early twenties searching for the meaning and purpose of my life. My strategy was really a very simple one: I decided to follow my heart wherever it took me. My heart has led me to distant places and to great worldly success. What I have learned on this journey is that in the core of my inner being there is endless creativity and there is limitless love. I believe if each of you look deep within your own inner being, you will likely also discover these two passions within yourself.

It is my belief that we should act in this world with open loving hearts, and that we need to channel our deepest creative impulses in a loving way toward other living beings. Do we really want to win the battle for freedom and prosperity in the world today? If we do, then let us bind these words together, as tightly as we can, with the words love, care, and compassion.

Freedom belongs with love. Prosperity belongs with compassion. This is the vision I hold for the future; this is the world I strive to create. I urge you to join me. Together we can create a world where people have lives full of purpose, love, adventure, a world of freedom, prosperity, and compassion.

Now, I have a brief commercial. Along with a few friends, I am starting a new initiative within the freedom movement. We call this initiative "FLOW", for Freedom Lights Our World. What we envision will bring into the freedom movement the idealistic young that are being lost systematically to the Left. Many of the ideas I've talked about tonight are core concepts of FLOW. If you're interested in learning a little more about FLOW, visit our web site: www.flowproject.org.

I am going to end with a quotation from Goethe. This sentiment should be memorized by every aspiring entrepreneur in the audience:

Whatever you can do, or dream you can, begin it.
Boldness has genius, power and magic.

© Copyright 2010, Liberty Foundation

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