Conscious Capitalism. John Mackey

company with over $16 billion in revenue), says it well:

      In a period of time when so many questions and doubts have emerged about major institutions in society, business has not done a particularly good job of telling its own story—not in the form of puffery, but really trying to help people understand the role of capital formation, how important it is to providing livelihoods for families, what business does for communities and for institutions like our schools and universities, and the role business has in helping solve so many societal problems. That is not the way so many people today think about business; they think of it as the source of societal problems. The great majority of companies are involved in doing pretty exciting work where people are having vital, exciting careers, earning a livelihood for their families and making a difference for their communities. That’s a story that is worth telling.¹⁷

      Far from being a necessary evil (as it is often portrayed), free-enterprise capitalism is an extraordinarily powerful system for eliciting, harnessing, and multiplying human ingenuity and industry to create value for others. It must be defended not just on the basis of the profits it generates but also on the basis of its fundamental morality. Free-enterprise capitalism must be grounded in an ethical system based on value creation for all stakeholders. Money is one measure of value, but it is certainly not the only measure.

      Marc Gafni is the cofounder and director of the Center for World Spirituality. Honoring the tremendous impact of capitalism and business on human well-being, he says:

      Capitalism has lifted more people out of poverty than any other force in history, and it has done so through voluntary exchange. Communism tried to lift people out of poverty through coercion, but wound up killing countless millions. What does it mean to lift people out of poverty? It means babies not dying, it means mouths being fed, it means girls going to school and getting educated, it means a response to slavery that never existed in the world before. It means that all the values of the great (spiritual) traditions get enacted on two levels: by ending the physical oppression of poverty, and by opening a gateway for human beings to be able to grow emotionally, morally, spiritually, and socially.

      Lifting people out of poverty was never the conscious intention of business; it was the by-product of a business well-enacted. Now business is awakening to itself and becoming conscious. It is recognizing that it is a force with enormous power and responsibility. By becoming conscious, it can do what it does even better. It can create more community, more mutuality, and paradoxically, more profit, by engaging everyone in the system.¹⁸

      Correcting the Narrative

      In a way, the practitioners of capitalism created their own trap and fell into it. They accepted as fact a narrow conceptualization of business and then proceeded to practice it in that way, creating a self-fulfilling prophecy. Had they rejected the caricaturized version and embraced a richer, more complex definition of capitalism, this would not have happened. As pioneering stakeholder theorist Ed Freeman and his colleagues write: “Business is not about making as much money as possible. It is about creating value for stakeholders. It is important to say this and to enable businesspeople to enact the story. We need to hold up the numerous companies, large and small, that are out there trying to do the right thing for the stakeholders, as the real paradigm of business, rather than deeply flawed companies like Enron.”¹⁹

      We need to discover anew what makes free-enterprise capitalism what it has been: the most powerful creative system of social cooperation and human progress ever conceived. We next need to rethink why and how we engage in business to better reflect where we are in the human journey and the state of the world we live in today. We need a richer and more ethically compelling narrative to demonstrate to a skeptical world the truth, beauty, goodness, and heroism of free-enterprise capitalism, rather than continuing to harp on the tired maxims of self-interest and profit maximization. Otherwise, we risk the continued growth of increasingly coercive governments, the corruption of enterprises through crony capitalism, and the consequential loss of both our freedom and our prosperity.

      Those who recognize and embrace the life-affirming power of free-enterprise capitalism must reclaim the intellectual and moral high ground. Gafni is eloquent on the need for a new narrative for capitalism:

      Narratives are the stories that infuse our life with meaning. The narrative of business matters greatly, not only to the business community, but to every human being alive. The majority of people on the planet work in some form of business. But the dominant narrative about business is that it is greedy, exploitative, manipulative and corrupt. The majority of human beings on the planet thus experience themselves as furthering and supporting greed, exploitation, manipulation and corruption. When people experience themselves that way, they actually begin to become that way. But the true narrative is that by participating in business, they are creating prosperity and lifting people out of poverty. They are creating stable conditions for families to be raised, they are helping build communities that can create schools, they are creating places for people to exchange value, find meaning, build relationships and experience intimacy and trust. When people realize that they are part of the largest force for positive social transformation in history, their self-perception changes.²⁰

      In the next chapter, we introduce the core tenets of Conscious Capitalism, an approach to thinking about and practicing business that holds the rich promise of elevating the narrative of business in a way that accurately reflects its enormous power for good.

      CHAPTER 2

      Conscious Capitalism and the Heroic Spirit of Business

      What does it mean to become more conscious as individuals and as businesses? Consider one of nature’s many small miracles: a caterpillar transforming into a butterfly through the seemingly magical process of metamorphosis. For its brief existence, a caterpillar does little more than eat; that is seemingly its only purpose. Some caterpillars eat so much that they grow to one hundred times their original size. However, eventually the amazing process of metamorphosis begins. When the time is right, certain cells become activated in the caterpillar and it enters the cocoon phase, from which it emerges a few weeks later unrecognizably transformed into a creature of enchanting beauty, one that also serves an invaluable function in nature through its role in the pollination of plants and thus the production of food for others to live by.

      This analogy can be applied to human beings as well as to the institutions that we have created in our own image—corporations. We humans can choose to exist at a caterpillar level, consuming all we can, taking as much as possible from the world and giving little back. We are also capable of evolving to a degree that is no less dramatic than what happens to a caterpillar, transforming ourselves into beings who create value for others and help make the world more beautiful. The same is true for corporations. They too can exist at a caterpillar level, where they strive only to maximize their own profits, extracting resources from nature and from human beings to do so. Or they can reinvent themselves as agents of creation and collaboration, magnificent entities capable of cross-pollinating human potentials in ways that nothing else can, creating multiple kinds of value for everyone they touch.

      The difference is intent. Unlike caterpillars, we cannot wait for nature to trigger our evolution to higher consciousness. Instead, we must work to raise our own consciousness and make deliberate choices that further our personal and organizational growth and development.

      A New Chapter in Human History

      We human beings did not stop evolving when we became Homo sapiens; our evolution continued, but became more culturally and internally driven. The changes are most manifest in an increase in different types of intelligence and a rise in consciousness.

      It may not seem obvious at first glance, but we are becoming smarter as a species. The Flynn effect shows that overall human analytical intelligence has been rising at an average rate of about 4 percent every decade for the past several decades.¹ In other words, a person testing at an average IQ of 100 today would have tested at close to 130 sixty years ago.

      People are also far better educated worldwide. Literacy rates have risen rapidly, but the larger story is access