Wednesday, August 10, 2005

The Hippie Wal-Mart

From the Economist:
NO ONE admits to being more surprised by the runaway success of Whole Foods Market than its boss. “In all my profound wisdom I decreed a maximum of 100 stores, and thought that would saturate the United States,” recalls John Mackey of the time when his company went public in 1992. That in itself was quite a milestone for a grocery retailer that he began in 1978 in a garage in Austin, Texas, when he was living in a vegetarian co-op. At first, hippies and college students were his main customers. But now, with over 170 stores feeding America’s organic-food-addicted middle class, Whole Foods Market has become firmly established as the world’s largest natural-foods chain.
Of course, rapid growth has brought Mackey some critics and some controversy.
Yet Mr Mackey’s organic idealism and greenery should not be confused with a lack of hard-nosed business acumen. He can quote Adam Smith with the best of them. He is often criticised for wiping out the small, local natural-food businesses that, not so long ago, were what the industry was all about. He is also opposed to trade unions. Whole Foods Market workers in Madison, Wisconsin, caused a stir three years ago when they voted to join a union, but the company persuaded them to back down. Currently his stores remain non-union. Mr Mackey says he dislikes the “adversarial nature” of labour unions—the “zero-sum mentality” whereby “if shareholders are winning, labour is losing”. The market, he says, is the “best check against exploitation, because people can vote with their feet.” Indeed, says Roy Bingham of Health Business Partners, an investment bank, Whole Foods Market benefits from the undying keenness to work for it of the “sandals brigade” of young idealists. The firm is regularly cited by Fortune as one of the top 100 places to work in America.
One of the virtues of capitalism is that it tends to absorb all kinds of new fads, movements and even cults. And indeed, from a scientific standpoint the organic food movement is close to being a cult. Critics of capitalism, both left and right, had complained that it is immoral and soulless. The reality is that capitalism gives people what they want and what they deserve.

Nobody has figured out how to do better than this, and many societies have done much worse.

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