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.