• “We need to think deeply about what economic development is and who it is for; and, engage the larger society in that conversation.”

    Dr. David T. Barnard
    President and Vice-Chancellor
    University of Manitoba

  • “Rising income inequality undercuts the trust that is essential for the market system to work.”

    Art DeFehr
    President and CEO, Palliser Furniture.

  • “Investing in people in the new economy is now not just morally sound, but economically rational”

    Alan Freeman
    Cultural Economist

  • “Organizations and societies in which the top few appropriate most of the value are like inverted pyramids – inherently unstable”

    Dr. Hari Bapuji
    Associate Professor, University of Manitoba

  • “The present crisis has overturned many accepted truths: that poverty matters but inequality doesn't is one of the more important.”

    Radhika Desai
    Professor, Department of Political Studies, University of Manitoba

  • “The income gap between rich and poor, between skilled and unskilled workers, has been rising in both developed and less developed countries for a number of years. The trend is disturbing and we must find a way to turn this trend around.”

    Michael Benarroch
    Dean, I.H. Asper School of Business, University of Manitoba

Friday, March 15, 2013

Is Conscious Capitalism the Key To Reducing Income Inequality?

By BEIF Team

Income inequality is a serious problem affecting developed and developing nations alike. Among some of the solutions, the most audacious is the call to reform capitalism in a way that focuses on other metrics besides profit. In a recent article, Dr. James Heskett of Harvard Business School reflects on John Mackey’s call for ‘conscious capitalism’. The article is special because John Mackey is cofounder and co-CEO of Whole Foods Market, an industry pioneer in the organic food market who also posted $343m in net income in 2011, and is ranked 99th on Deloitte’s list of the 250 biggest global retailers.

Mackey may come off as a cynic who distrusts the government’s ability to reduce income inequality, but in his book he has provided a pretty compelling alternative. According to Mackey, besides Whole Foods, Starbucks, the Tata Group, Google, REI, and UPS are all organizations that practice conscious capitalism. Steve Dunning wrote an article in Forbes that provides a succinct summary of the arguments in the book Conscious Capitalism.

But if capitalism is to truly change, research must be done on how inequality affects businesses and why they should work to minimize it. Not surprisingly, the 73rd Annual Meeting of the Academy of Management - the largest gathering of business scholars in the world - chose as its theme “Capitalism in Question”. Will capitalism change? One thing is for sure, whether or not capitalism changes, the theme of income inequality and business will fill the zeitgeist.