Thursday, May 30, 2013

Review of Conscious Capitalism

From a review of Conscious Capitalism:

"This over-the-top adulation of the private sector, which pervades the book, might be tolerated by readers seeking the secrets of his company's success.... But those looking for rigorous analysis and informed inspiration will be disappointed....the book falls prey to the same fatal flaw of other business books and CEO treatises: namely, promotion of an oversimplified framework that ignores the complexities of the real world."

"Mackey provoked an SEC investigation in 2007 by posting comments about Wild Oats (which Whole Foods was taking over) on a Yahoo! Finance board under an alias that was an anagram of his wife's name; and inspired protests after criticizing President Obama's healthcare proposals in a Wall Street Journal op-ed. More recently, he was forced to retract his use of the word 'facism' on NPR to describe the new healthcare law."

"Describing the SEC investigation is one of a few spots in Conscious Capitalism where Mackey ignores his own advice, and drops the studied prose of the rest of the book to indulge in a bit of a rant: 'The whole thing was so bizarre to me, because I was just having fun when I did those postings. I didn't see how anyone was being harmed, and in fact no one was. Yet, it was made into a huge deal.' Failing to see why it might be problematic for a CEO to make anonymous statements that could depress the stock price of a takeover target undermines the book's central exhortation, for business leaders to understand the perspectives of others."

"The starting premise of Conscious Capitalism will be enough to turn off many: that business is 'fundamentally good and ethical.' It is true that economic development has lifted millions out of poverty. But business has also harmed individuals and communities around the world, as demonstrated by mining accidents from West Virginia to Africa, labor abuses in factories from China to New York, and the global financial crisis."

"To support his argument, Mackey shares his view that 'business isn't based on exploitation or coercion at all. People trade voluntarily for mutual gain. No one is forced to trade with a business.' That may be true for Whole Foods shoppers, but it is not true for the world's most vulnerable people. Communities living on top of oil, gas, copper or gold have no choice but to 'trade' with companies developing those resources. Garment workers in Bangladesh and artisanal miners in the Congo might have chosen to do what they do, but they're hardly swimming in viable alternatives, and are certainly not among the 'vast majority of people' for whom capitalism has enabled 'more vibrant and fulfilling lives.' Those are the people who Conscious Capitalism should be aimed at helping. But since we are a long way from universal enlightenment, government exists to provide protection and a balance of power -- not just to overreach with restrictive regulations and inspire 'crony capitalism,' as the authors seems to believe."

"The book suggests following the lead of a few companies that the authors admire, including Google and Apple. Aside from the fact that few who have interacted with either company would call them 'transparent and trustworthy,' both companies' troubles in China alone illustrate the pitfalls in taking a company's stated mission and elegant offering on face value. Again, the authors undermine the very holistic approach that they advocate."

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