Read: “Food Fighter”

05 Jul 2010

What’s a libertarian free marketeer doing running America’s crunchiest supermarket chain? Nick Paumgarten tries to find out, in his profile of John Mackey, CEO of Whole Foods.

It’s a great read, with catchy summaries of or commentaries on Mackey’s views, such as the fad diet that’s got Mackey’s attention lately, where you chew mainly vegetables, and eschew anything processed: “Basically, you eat plants: you are a rabbit with a skillet.”

It seems typical of Mackey, based on the profile, that he’d get caught up with a fad diet like this. I would think that anyone who’s been in the alternative food business as long as he has would have a bit more nuanced view of what makes for healthy eating, but apparently not.

Before I get to Mackey’s libertarian, free marketeer ideas, let me take a brief detour into an episode from a few years back which the article mentions, and which I’d forgetten about.

“The Bush Administration, in an uncharacteristic spasm of antitrust vigilance, was fighting Whole Foods’ purchase of a competitor, Wild Oats,” Paumgarten writes. The purchase went through in the end, but it really is uncharacteristic.

As Antonia Juhasz points out in her book The Tyranny of Oil, there’s been a revolving door between the Federal Trade Commission and the Department of Justice and many big law firms that represent huge companies that have been merging a lot in the past couple of decades. (The section starts on page 238, for those who are interested.) The problem is, the FTC & DOJ are supposed to be regulating these mergers, and perhaps blocking them. Judging from Juhasz’s account, service in the government’s antitrust arms in recent years seems geared mainly toward rubber-stamping merger applications, and learning how best to prepare those applications so that they can be rubber stamped.

Anyway, with huge mergers of companies like Exxon and Mobil, to form the world’s biggest company (second to Walmart), then it is odd that the Bush administration would both to take a look at Whole Foods. Odd, that is, if you think they actually cared something about trusts forming.

But if you think that the Bush administration, or people they’re aligned with, see Whole Foods as a threat, then the antitrust investigation makes more sense.

Getting back to the article, Mackey’s gotten a lot of flak from his customer base, who not surprisingly tend to be left-wing. Mackey’s views on markets, government regulations, and unions, on the other hand, would seem to put him in the Bush camp.

So it’s interesting to speculate on what it was, exactly, that Mackey’s business might be challenging that would get the antitrust machinery fired up to work against its expansion.

But nothing is simple. As Paumgarten explains, Whole Foods “is a welter of paradoxes,” one of those being that it’s “a staunchly anti-union enterprise that embraces some progressive labor practices.”

And Mackey is no straight capitalist, seeking to maximize profit alone. “Mackey is adamant,” Paumgarten writes, “that his company—any company—can and should pursue profits and a higher purpose simultaneously, and that in fact the pursuit of both enhances the pursuit of each.”

As an example of how Whole Foods bucks the capitalistic trend, take executives’ pay. In most companies, upper management’s pay is rising fast, so there’s an ever-expanding gulf between the average worker’s pay and that of the guys (it’s almost exclusively guys) at the top. But at Whole Foods, the New Yorker article says, “no one at the company can have a salary more than nineteen times what the average team member [that is, regular employee] makes.” Compare that, the article says, with the average S&P 500 company, where the CEO makes 319 times as much as a production worker.

Besides his enthusiasm for the Engine 2 diet, Mackey definitely has some wacky ideas. He told Paumgarten that “no scientific consensus exists” on climate change, which is simply wrong. The scientific consensus that people’s greenhouse gas emissions are warming the planet, you still have to admit that the vast majority—around 95%, according to a recent study—of scientists are convinced that this is the case. You can challenge this consensus, and say that those scientists are wrong. But if you say there’s no consensus in the first place, you’re just talking out of your ass.

Mackey also says about Keynesian economics: “It’s been proven it doesn’t work, but Keynes was such a brilliant and fascinating guy that he hypnotized this whole generation of economists.” Making a comment like this on the heels of the Great Recession seems crazy.

The crash is widely credited to deregulation, spurred by the enemies of Keynes. And the solutions that most countries have grasped for are all based on Keynes’ big idea that a foundering economy needs an injection of government spending to help get it growing again. That idea has been so well accepted that even Milton Friedman, that biggest of all free marketeers, wrote “We are all Keynesians now.”

So take anything John Mackey says—including his comments on health care—with a grain of salt.


books I've read on failure & grace

The World Without Us
The Last Oil Shock: A Survival Guide to the Imminent Extinction of Petroleum Man
A Paradise Built in Hell: The Extraordinary Communities That Arise in Disaster
Hell and High Water: Global Warming--the Solution and the Politics--and What We Should Do
The Worst Hard Time: The Untold Story of Those Who Survived the Great American Dust Bowl
The Tipping Point
Three Cups of Tea: One Man's Mission to Promote Peace... One School at a Time
The Upside of Down: Catastrophe, Creativity and the Renewal of Civilization
Out of Poverty: What Works When Traditional Approaches Fail
The Little Ice Age: How Climate Made History, 1300-1850
Confessions of an Eco-Sinner: Tracking Down the Sources of My Stuff
Deep Economy: The Wealth of Communities and the Durable Future
The Geography of Bliss: One Grump's Search for the Happiest Places in the World

Mason's favorite books »