Posted by: erichosemann | October 15, 2009

Elinor Ostrom, John Mackey and Milton Friedman

No sooner do I post about John Mackey, than this appears:

John Mackey is an entrepreneur, and an intelligent, thoughtful man concerned with the welfare of his employees.  This debate between Mackey, Milton Friedman and T.J. Rodgers is well worth a read.  Milton counters Mackey’s claim that corporate social responsibility is an end in itself by quoting himself circa 1970:

“Of course, in practice the doctrine of social responsibility is frequently a cloak for actions that are justified on other grounds rather than a reason for those actions.

“To illustrate, it may well be in the long run interest of a corporation that is a major employer in a small community to devote resources to providing amenities to that community or to improving its government….

“In each of these…cases, there is a strong temptation to rationalize these actions as an exercise of ‘social responsibility.’ In the present climate of opinion, with its widespread aversion to ‘capitalism,’ ‘profits,’ the ‘soulless corporation’ and so on, this is one way for a corporation to generate goodwill as a by-product of expenditures that are entirely justified in its own self-interest.

“It would be inconsistent of me to call on corporate executives to refrain from this hypocritical window-dressing because it harms the foundations of a free society. That would be to call on them to exercise a ‘social responsibility’! If our institutions and the attitudes of the public make it in their self-interest to cloak their actions in this way, I cannot summon much indignation to denounce them.”

I have to say I’m with Milton on this one. I don’t want to be crude, but I can’t think of any other way to put it: Mackey is deluding himself. His entrepreneurial sense helped him find his productive niche within the scarcity and inequality of life. Part of the scarcity he identified was the need members of an increasingly wealthy society have for assurance that what they consume is safer, produced “equitably” and environmentally sustainable. But like Milton said: I cannot summon much indignation to denounce him.

Nevertheless, Mackey’s effort to justify his noble actions on grounds other than profit maximization looks sad to me. It looks sad in light of the video above. Mackey did everything he could–he’s doing everything he can–to be socially responsible and yet the zeitgeist-surfing schmucks, the professional placard carriers and the yellow-shirted lay-abouts still hate him. What deal do you make with yourself to skip work and protest the fact that others are working productively? And what does it mean “not to give a shit about his Latino-based workers”?

Look at Mackey. He looks so learned and sincere and caring. But all that is for naught. Maybe his run-in with the ignorant hordes has chastened him and turned him around to Milton’s way of thinking.

Enough pity–Mackey’s a big boy, he’ll manage. The Ostrom angle in the video?

“Every three years we vote on what is in our health care package.”


“There are many people who are not able just to roam and steal. They have a time and place that is theirs. And it isn’t ‘the government’s’ it is theirs.”

Whole Foods is the time and place of John Mackey and his employees. It is their community. The employees are voluntarily associating with Whole Foods, trading their skill, knowledge and hard work for the benefits Mackey and Whole Foods provide. They–the employees, Mackey and Whole Foods management–are working this health care thing out. TOGETHER. Albeit not with ham-handed, ignorant government “help.” Which is probably what angers the protesters the most.

H/T Radley Balko, The Agitator


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