1 Hour w/ Whole Foods Founder John Mackey #TheOnePercent

The great companies in this world have great purposes. That's the truth. The companies that you most admire have a higher purpose.

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Hey capitalists. This talk is from the Capitalism Conference with Whole Foods founder John Mackey. This is one of our all time favorite talks that we've never shared on the podcast before. As the author of Conscious Capitalism, John Mackey took a liking to what we were doing over here@capitalism.com and came by to share a story of growing the Whole Foods empire. Buckle in.

Hey guys, Ryan here. And as you have heard me say about a thousand times, I'm getting tired of saying it by now. I sold a company in 2017 for a nice eight figure check, which was great, but at the end of the day all I really care about is passive income. So that's why I'm in this game and that's why one of the first things I did when I sold the company was I called my friends over at Income Store and said, hey, I want to buy some income producing websites. And the reason I did that is because buying websites has some really strategic tax benefits. It also has a very attractive ROI and they can go up in value. So I called my good friends at Income Store in order to see where I could park some of this cash for tax efficiency, for upside, and for passive capital flow. I would do this on my own if I had the capacity to do so. But they're a management team that will automate the process for you. So I use them in order to make it truly passive for me again. I love this stuff. So I would do it on my own if I didn't know the good folks over there and if I had nothing else going on in my life. But it's a really interesting vehicle that I think more people should consider. I've had Ken, the founder here on the podcast. You can search Freedom Fast Lane Income Store if you want to find that episode. Or you could just go to incomestore.com and see more about what they do. But they're always at our events. They're always very compelling when they talk about their model and talk about passive cash flow. And I think you'll really enjoy hearing about their philosophy and seeing how their model works, even if you don't decide to use them.

So.

So you can go to incomestore.com or search freedom Fast Lane Income Store to find out if investing in Income Producing websites is a fit for your goals.

I'm very proud and honored to welcome Mr. John Mackey.

You know, no speaker wants to get a standing ovation before they speak. After they speak.

Hey, I like to do speeches in Austin because I don't have to travel. It's great how many people here have traveled in from out of town to come to this event. Most of you, sorry we don't have better weather, but it's usually. Well, next week is going to be great.

So.

I gotta start out by just sort of declaring my bias. I think I've got the right audience to declare this bias. When I do this at universities, some people actually get up and leave the room. But I'm a capitalist. I really, really believe in capitalism. I think that's why Ryan wanted me to talk. I think capitalism is the greatest invention that humanity has ever done. And I'm going to prove it to you in my talk today. And.

It could be so much more. It could be so much more than it is. And I'm going to talk about that, too.

So let's talk about what capitalism is. I mean, the two most. Two of the most Googled terms in the last couple of years has been socialism and capitalism, because people are trying to understand the difference between the two. And of course.

What we think of as capitalism oftentimes is certainly not a pure version of it. It's kind of a. Kind of a crony capitalism, or as my friend Michael Strong calls it, crapitalism. When you're just. People use the government to get special favors and advantages. That's not really what capitalism intended to be. So what is it intended to be? Well, These are the 10 attributes that I think best describe it. I'm not going to go into these in any detail, but you got to have secure property rights. We take that for granted. But in much of the world, they don't have secure property rights. So if you can't get title to property, you end up with a very strong underground black market economy, which means capital gets frozen, it doesn't move very easily, it can't be accumulated. The freedom to trade internationally. So one of the course, one of the questions now coming up with the Trump election is will this particular fundamental principle of capitalism be undermined? Moderate regulations on labor, credit and business. We've got a very regulated economy at this point, and it's not a question of whether we need any regulations, it's which regulations are doing harm and which regulations help support the economy. Keeping the government relatively small compared to the private sector. Good Sound money that's not being manipulated too much by the government. The rule of law, you can see it. You can go down this list.

This is interesting. These are the top countries for economic freedom in the world. They do this list every year. And if they had done this list for most of American history, we would have been number one.

The United States is so affluent and so successful for just one reason. It's because we've embraced capitalism more than any other country has. And that's what's led to our prosperity and our success. It's not that Americans are somehow or another superior beings, they just had a superior economic system. But we're losing ground on it. As little as the year 2000, we are still ranked number three on this list behind Hong Kong. Hong Kong and Singapore have been like 12 for quite a while. The US used to be number three, but ever since 9, 11 happened, we've been dropping pretty much every year. And if you want to know one reason why the economy hasn't been as strong in the last decade or so as it had been previously, it's because we keep falling on this list. We are far less economically free than we used to be. Think about this for a minute. If you look on this list, we now, of all the major English speaking countries in the world, we have the least amount of economic freedom. I mean Canada, Ireland, Australia, New Zealand, those guys are more economically free than the United States. Even the UK is now more economically free than the United States, which is sort of, this should be a wake up call. Let's look what capitalism has enabled to happen in the world. This is the guts of my argument about why capitalism is so great. Unfortunately, today most people are sort of, well, how can I put it? Ignorant about history. People do not understand the way things used to be.

For almost all of history, humanity has been really, really, really poor. I mean, look at this. GDP per capita adjusted to 1990 international dollars. You can see that from the year zero to the year 1000, it actually dropped. You know, you hear about a lost decade. This is a lost millennium. Thousand years, nothing. And then we started to ease up a little bit as we began to trade more internationally. So you had the.

Silk Road and you had the ships go out to China and the Arab traders and that started to get the world's economy moving up. But it wasn't until capitalism was invented that humanity began to escape from poverty. And here you can see what's happened. It's basically exploded.

And it started. Where did it start? Where did capitalism start? It started In Holland, actually, little known fact. Then the UK followed back then Great Britain, then it went to the United States, and then it spread to continental Europe. Then when used to be said, well, it's just because these countries are exploiting the poor people, exploiting colonies and whatnot. But then we saw it go to the Asian tigers, places like Hong Kong and Singapore, remember where they were in economic freedom, Taiwan, South Korea. And that kind of proved that thesis wasn't really correct. And now it's begun to spread into Latin America. But of course, where its economic freedoms really began to increase and it's completely changing the world is China and India. I mean, that's 40% of the world population lives in those two countries. And so literally hundreds of millions of people have escaped poverty in just those two countries in the last 30 years. It's never been anything like it in the history of humanity. We've never had that many people escape poverty in such a short period of time.

So what's happened is basically unprecedented in the entire history of humanity. Consider the fact that just 200 years ago, the world's economy was at the level of Bangladesh. 90% of everyone alive was poor. I mean really poor. And since then, per capita income, adjusted for inflation, has increased globally by 10x 1000%. It's gone 16x in the developed countries, 35x in Japan since 1700, 26x in South Korea just since 1960. And of course, the most unbelievable of all, Hong Kong, the economically freest place in the world, 87 times since just 1960.

Of course prosperity is increasing. And that of course means global poverty is ending. This slide is so incredible. Look at this. If you go back to 1820, 95% of the people in the world were poor, 95% and 85% were abjectly poor, living on less than $1 a day, adjusted for currency. So 1820, 85% of everyone alive lived on less than $1 a day. I mean, can you imagine that? Of course, they didn't live very long. I'll get to that in a minute. But here you can see capitalism is, and there is no other explanation. It's capitalism, by the way. It's entrepreneurs who create the innovations, who create the businesses, who create the jobs. That's the engine. The entrepreneurs, the people in this room are the heroes of the story because they're the ones that continue to help the world to progress. Of course, business is seldom seen by intellectuals as heroes.

Which perhaps I may take a little bit of a, of a deviation to point out that there is A class enemy of the entrepreneur. We have a class enemy. That class enemy are intellectuals. It's true. Because if you know your history, you will know the intellectuals have always hated business. They've always hated commerce. They've always seen business people. Just think about if you're watching period pieces in Downton Abbey or you're watching something back in the. Not even that long ago, 100 years ago, 150 years ago. And.

When they became rich, all they wanted to do was stop being business people. They wanted to be gentlemen, they wanted to be lords and ladies because hey, businesses, it's what lower class people do. They trade, they get dirty. It's not for the. And the intellectuals have always seen business people as kind of stupid. If they were smart, they would be college professors like they are. So it's good to keep this in mind because.

I have experienced it my entire business career as basically a sort of disdain. I go speak at universities all the time, I debate at universities and I get almost no respect from the, from the intellectuals. It's just interesting.

Economic freedom per capita. This is very interesting because the freer the economy is, the richer it is. So you can see if you do, and you divide up the countries of the world by their economic freedom and you can see the mostly free ones have the highest GDP per capita and the least free have the lowest GDP per capita. Now, if you're going to be poor, it is far better to be poor in a rich country like the United States, because the mostly free poor people are making almost $10,000 a year versus the least free and they're only making $1,629 a year.

So here's the thing. Wealth isn't the problem.

Poverty is the problem. In fact, poverty is the default condition of the human race. We're oftentimes there's a mentality that there's a zero sum game. If somebody's becoming rich, then that means somebody else must become eating poor. It's like sport. Somebody wins, somebody else loses. And that's how people think about it. That's wrong. Capitalism is a win, win, win, win philosophy. People trade for their mutual gain. They trade voluntarily and that leads to their winning and it leads to whoever they're trading with winning. And that helps lift up.

The economy, creates prosperity and ends poverty. So what needs to be explained is not wealth. What always needs to be explained is poverty.

Or I'm sorry, poverty doesn't need to be explained because that's how we naturally are. What needs to be explained is wealth.

The Problem is, and I'm going to talk more about the inequality question and I'll give answers that some people will not possibly like to hear. The problem is not that there's an unequal distribution of wealth in the world. The problem is there's an unequal distribution of capitalism.

Countries that embrace economic freedom ends poverty. China and India are embracing it. After being so poor for hundreds and hundreds and thousands of years, they're embracing it and they're becoming rich.

As Jane Jacobs said, to seek the causes of poverty in this way is to enter into an intellectual dead end because poverty has no causes. Only prosperity has causes.

This is an interesting chart. For 30,000 years, the average lifespan of the human race was 30. That didn't change until capitalism. When capitalism was created, we began to escape the death trap. An early death began to decrease infant mortality. We began to increase longevity so that now the world average longevity is 71. The longest lived place in the world, Japan, has an average lifespan of about 83. Interestingly, the United States is about 78. And I just read like yesterday that for the first time in American history, the average lifespan actually dropped. In the previous year it actually got less. It's been going up every year.

And of course I think it's because people eat such crummy food. But that's another talk.

Illiteracy.

Okay, 200 years ago, almost everyone was illiterate. Over 90% of the people were illiterate. Look at the chart just since 1970. We're about 40% in 1970, and we've now got it down to close to about 14%.

Sometimes people will tell you, okay, I will concede that capitalism makes more money than socialism does or any other economic system. But it's still an immoral system. It's an unethical system.

And that's also not true. Capitalism is the most ethical system, economic system in the world. It starts with the principle of voluntary exchange. No one has to trade with anyone else. Unless you're getting mugged in an alley and somebody sticks a gun to your head and says, your wallet or your life. Okay, that's not voluntary exchange. That's not a win win trade. Well, I guess you don't get killed. It's, you know, at least you're not losing your life and your wallet. The socialistic claim that capitalism is inherent exploitation is proven wrong by the principle of voluntary exchange. No one has to trade with anybody else if they don't want to. Hey, I'm at Whole Foods Market. A lot of people think we're really Expensive and they choose not to trade with us. Other people think, yes, Whole Foods has a little more expensive, but it has the highest quality, has good service, it has healthy food. It's worth it to me. And since we're doing about 16 billion in sales, some people, enough people agree with that philosophy to give us a vital business.

Whereas let's contrast that with socialism. It's fundamentally based on coercion. The government controls everything. It basically sets prices, it sets wages, it sets where people can work. And it becomes more and more screwed up the more government incursion.

Coercion doesn't allow free trade to occur.

We talk about stakeholders and I'll talk about it a little bit today later on in my talk. But the customers, employees, investors, suppliers, the communities are all voluntarily exchanging with your business for their own gain. No one's forced to do it. And that is a positive sum game. It's a win, win, win game. It's a non zero game. Whereas when you have coercion, it's basically a zero sum game. And therefore socialism is static and doesn't create prosperity. Whereas capitalism creates an ever rising tide upward.

Competition occurs in free markets. Whole Foods for example, we're constantly. Everybody's copying us. Really pisses me off. They go in, study what we're doing, they copy us and they just try to undersell us in price. And we have to innovate, we have to get better and we have to get our prices lower. We have to cut cost or we don't own our customer. We rent them for a little while perhaps, but they can go down the street and many of them do. That's how we make progress in a capitalistic society. The competition is forcing everyone to get better. You know Amazon.com, in the retail business? Amazon's disrupting the entire retail sector. They're making our lives better. And if you can't keep up, too bad. That's the way it is.

Socialism doesn't allow that to happen. Anti capitalists doesn't allow it to happen because someone's going to lose. So they try to protect jobs, they try to not allow the free market to work its magic.

All you gotta do is think about.

United states Postal Service versus UPS and FedEx. Who does a better job. One's a monopoly, one uses coercion. They're not allowed to compete with the post office, at least in first class mail delivery. And UPS and FedEx if they could, would put them out of business if they were allowed to compete. Public schools. Our education continues to get worse and Worse in America. But where we allow charter schools, where we allow choice, where we allow competition, where we allow private schools to exist, we get good education outcomes. And if you wonder what DOMV means, you all have an interaction with it. It's the Department of Motor Vehicles. Think about that. And the TSA at the airports. And compare that to Amazon.com which one is more efficient?

So capitalism is based on individual liberty. It's not based on government coercion, it's based on individual liberty and it's based on freedom of choice and it's based on self responsibility. Those are highly ethical virtues in my opinion. And those are all undermined when you submit yourself to the control of government bureaucrats. Let's deal a little bit with the big one. Capitalism is actually not increasing inequality. That is a big lie that keeps getting told and it can be revealed. It's all about how you slice and dice the data. So let's take a look. This is a pretty big wide range here. 1774, 1860 and 2011. So look, look how little has changed in the last 240 years. Basically the top 20% were getting in 1774 were getting about the same amount of income as they were getting today. Same thing in 1860, same thing in 2011. There's been very little change.

We hear about the hollowing out of the middle class, right? The rich are getting richer and the middle class is disappearing. Well, yeah, it looks like this chart seems to reveal that. Right? Look, if you look at the low income people, these are adjusted for again, this is over the last 40 years, adjusted for currency parity. Well, we see the low income people making $35,000 a year or less in households. That's dropped from 38.7 to 33.7. It's not as big a drop as I would like to see, but it is a drop. It's a 500 basis point drop. 5 percentage point drop. Oh my God. Poor middle income people, they've dropped from 53.2% all the way down to 41.6%. That's terrible. It's obvious that the middle class is being hollowed out. Where'd they all go? They became rich.

We've gone from only 8.1% of the households earning $100,000 back in 1970 to 24.7 in 2014.

That's what capitalism does. It does ultimately hollow out the middle class because it creates more wealth. And it's not just for a few people. It's not that a rising tide necessarily lifts all Boats, but it lists most boats. It lists those who are participating in it.

Let's deal with the Scandinavia phenomenon, because this is, of course, what's held up as the ideal Sweden, Norway, Denmark, Iceland, Finland. But the first thing you'll notice is the economic freedom index says these countries are very economically free. Denmark's right behind the United states at number 12. Norway, at 32, is still one of the most economically free countries in the world. Let's go a little deeper into Sweden, because that's the one I hear the most about. So the first thing to know about Sweden is it became wealthy when it was more capitalistic. It created the foundation for its wealth in the first half of the 20th century. It had low taxes, it had a great deal of economic freedom, and it became wealthier and wealthier. Then in the 1960s, they changed their direction. They became far more socialistic, and they raised their taxes and they cut, increased their regulations. And what happened? They started to lose it. All of that prosperity started to get washed down the drain. Their economic freedom declined, and so did their prosperity.

However, in 1993, Sweden began to shift again. They reduced their public spending, which was 67% of their gross domestic product. It dropped all the way down to 49%. The top marginal rate fell from 84% to 57%. And here's the big one. They cut the corporate tax rate to 22%. Anybody know what the corporate tax rate in the United States? 35% plus state. So we're looking at a marginal tax rate in the United States. The highest in the world. The highest in the world at close to 40%. Whereas Sweden, that socialistic paradise, is at 22%. I was having a debate this summer with this Marxist economics professor from Yale, and I asked him if he favored. He was talking about Sweden, and I said, you favor 22% tax rate on business because that's what Sweden's is for the record. Do you favor that, sir? He said, well, I don't favor that part of Sweden's economic reality, but that's the key. I will say that if Trump really comes through with his promise to cut the corporate tax rate to 15%, we will have the biggest economic boom in the lifetime of everyone in this room. It will be unbelievable when business can keep their money and reinvest it. Oh, my God. Entrepreneurism and disruption is going to go unbelievably fast.

So to understand a place like Sweden, it's capitalist. It's a capitalist country that has a very strong social welfare component.

They have a big safety Net There only got 5 million people living there and they take care of them. I have no problem with that. It's a good thing. You should take care of your people, but you should do it in such a way that allows economic freedom to create the prosperity.

So I am arguing that business is good because we are the value creators. Business creates more value in this world than all the governments and all the nonprofits put together exponentially. We, if you only want to get down to it, where does government get its money? It gets it from us because government doesn't really produce anything. Where do the nonprofits get their money? From us. Even if it comes from individual donations, they've gotten their money from jobs. It all comes back to business. Business is the engine that is lifting things up. And ultimately government and nonprofits are economically dependent on business. So if you create, if you, if you allow economic freedom and business can flourish, then government can afford to do things it couldn't otherwise afford to do. And you have a philanthropy where the non profit sector can do things that neither business nor government can do. Business is ethical because it's based on voluntary exchange. What I already talked about. No one is forced to trade with the business.

Business is noble because it can elevate our existence and it is elevating our existence. And the disciplines and the virtues that you need to be successful in business are virtues and excellent traits that lead to life success and lead to people basically thinking you're a good human being.

And finally, business is fundamentally heroic because it is what's lifting people out of poverty. It is what is creating prosperity. And yet business is mistrusted. I put all this out there. Nobody likes business. Look at these polls. Gallup says.

Confidence in big business in the United states is at 18%. 82% of the population does not trust big business.

2% of investors believe CEOs are very trustworthy. 72% believe that wrongdoing is commonplace in companies. Okay, I'm the CEO of a big public company.

Only 2% of investors don't think I'm a crooked. That's discouraging.

86% of Americans think big companies have too much influence on government. But here's the best one. 2015 Public Affairs Council. Only 10% of Americans have a lot of trust and confidence in the ethical behavior of big business.

Wow. Hey, here's an interesting little factoid for you.

What percentage of the murders that you see on television or movies are committed by business people?

Over 90%. How many in reality are committed by business people?

Even if you add Tony Soprano in there as a business person and the gangsters, it's still only about 1%.

So we're the villains in the movies and we're the ones. We exploit our workers. We dump our toxic waste in the rivers, we pollute the air. We screw our workers, we cheat the customers. That's how we're portrayed. And yet I have given you a completely different story from that. A completely different narrative. Does that mean all business people are good? No, of course not. There are many bad actors in business and there are greedy, selfish, exploitative people. But business is judged by its worst practitioners. That's what makes the headlines. The hard working Americans and people who are acting ethically each day, creating value for other people they're not paid attention to. I mean, just imagine for a second, even as we speak, there's business people are doing bad things. We'll read about them in the paper tomorrow. There are also doctors right now that are doing some bad things to their patients, but we're not going to read about that in the paper. And there's lawyers and there's bad teachers and there's bad architects and there's bad engineers, and yet we don't hear about them very often. But business people are judged by the people that are the very worst representatives. And then the rest of us are tarred by the association of being business people. So why has this happened?

Okay, the world has changed. People have evolved. And the motives of what drives business people are completely misunderstood.

We are evolving right now faster than any other time in the history of humanity. It's not even close. I mean, consider the fact that 150 years ago, slavery was still legal. Actually, 151 years ago, now half the United States allowed legal slavery.

100 years ago, women did not have the right to vote 100 years ago.

75 years ago, most of the world was organized into colonial empires.

55 years ago, the southern United States had legal.

Segregation. The Jim Crow laws in South Africa had apartheid. 55 years ago.

And 55 years ago, there was virtually no environmental consciousness whatsoever. Rachel Carson's book, which is oftentimes credited with the launch of the environmental movement, was printed in 1962. Silent Spring. Thirty years ago, communism and socialism were the organizing political philosophies of over half the planet.

So I'm looking around, I'm probably the oldest person in this room, which is.

Lucky you.

But I've seen so much of this happen in my lifetime. It's astounding. I mean, I grew up in Texas and I watched racism when I was a kid. I'm not saying there's not racism today, but it's so much better than it was.

Here's the one the tech savvy people can. Twenty years ago, no one here had a smartphone, no one had an ipod, no one had an iPad, no one used Google, no one used Facebook, and no one used Twitter because they didn't exist just 20 years ago. I mean.

Look at all the ad. You know, people say, what's different about college today, John, than when you were there? And I say, well, when I was in college, people were walking around looking at beautiful women. And today.

They'Re texting, possibly texting beautiful women, but they might be looking at them on a little screen, but they're.

Technology is intervening in our lives so radically. The world is so different because of technology. And can you imagine? I get asked all the time. One of the things journalists like to ask me is like, hey, so what's the world going to be like in 10 years? Like, how the hell do I know? Because even as I'm speaking, there's probably people in this room. They're creating something that's going to disrupt the world as we know it in the next 10 years. So making predictions. I think, as Yogi Berra said, it's very risky to make predictions, particularly about the future.

Recognize this guy? I would argue he's probably one of the most important people that ever lived. Tim Berners Lee invented the World Wide Web, completely changed the world, and he gave it away for free. Just think if he had just licensed the World Wide Web just for just a little bit every time somebody used it, you know, like a millionth of a penny. I mean, he'd be so far richer than Bill Gates or anybody else. Not that.

Unnecessarily is what he should have done. I'm glad he gave it away, but it is interesting to think about.

We are better informed than ever before. I mean, it's astounding. We're more connected. There are more active phone numbers now than there are people on the planet. Some of you obviously have more than one phone number. Facebook has now 1.8 billion active users.

Ever heard of the Flynn Effect? We're actually becoming more intelligent. The studies show that about every decade, the average IQ goes up about 3%. And that's been going on for about 100 years. So.

That would mean somebody that has an average IQ of 100, if they could go back 100 years ago, would have had an average IQ of about 130. They would have been one of the Smartest people around.

People say, this cannot be true, John, it cannot be true. I know so many really stupid people.

But if you could go back in a time machine 100 years ago, you would know a lot more stupid people.

We're better educated again. I mean, I hate to keep throwing all these statistics out at you, but it's just so mind boggling. In the year 1900, how many people do you think got high school diplomas in America? 15% got high school diplomas in 1900. Now we're at 85, close to 90%. How many got college degrees back in 1900? Practically no women because they weren't allowed. It was about 3%. About 3% got college diplomas. Now we're close to 40%.

And we're becoming more conscious, we're more mindful, we're more awake. We're better connected, better understand the consequences of our actions. We have a better sense of what's right and wrong.

We're more tuned to what's going on across the whole planet. We're more inclusive. We have environmental awareness. It's astounding how fast humanity is evolving, not just technologically, but inside us, in our brains, in our social relationships.

And if we're going to be successful in the future, companies are going to have to exemplify a more conscious way of being. We need more conscious companies. We need, hey, conscious capitalism. That's what I'm going to talk about. What is it?

So we've recognized basic four higher purpose, importance of stakeholders, a different kind of leadership, and a conscious culture. I'm going to go through this pretty quickly because I'm beginning to get a little low on time.

So what's the purpose of business?

I mean, that's the first. We got to get back to brass tacks. What's the purpose of business? And if you ask that at a cocktail party or you go with friends who aren't business people and you say, what do you think the purpose of business is? What are you going to hear generally? To make money, Right? It's all about making money. That's an odd answer. What's the purpose of a doctor? Are doctors well paid?

Yes, they're very well paid. Trust me. Doctors are very well paid. And yet their purpose is not to make money, it shouldn't be. Purpose is to heal people, right? Teachers educate, architects design buildings, engineers construct things. All of the professions refer back to some type of value creation in the world, except for business. Business is told its purpose is to make money and that is seen as unethical. Because that's seen as selfish, that's seen as greedy. You should go into public service and create non profits because their motivation is different. Their motivation is to create social good.

Well, let's go back to the early part of my talk. What's the greatest value creator in the world?

Come on, gang. Business, Capitalism. Business. Business is a great value creator. It creates so much value in the world and yet it's not given any credit for it. Because we talk about money, we don't talk about purpose. And what we need to talk about when we talk about business is what our purpose is. And every business has the potential to have a higher purpose. Every business has the potential to try to maximize its purpose. And the entrepreneurs. How many of you in this room think of yourself as an entrepreneur?

You get to define the purpose of your business. Not an intellectual, not a lawyer. You do, you create. The creator gets to say what the purpose of the business is. And it can evolve, by the way, over time.

The great companies in this world have great purposes. That's the truth. The companies that you most admire have a higher purpose. Southwest Airlines. I had a little more time, I'd tell you the story of Southwest Airlines. It's an amazing story. They basically invented discount fares. They created an entire industry that had been very regulated. All fares were fixed. And when they began to deregulate that, Southwest came up and changed the world. They gave people the freedom to fly. I'm throwing more statistics at you. If you go back to 1968 when Southwest Airlines got going, what percentage of the adults in America had ever in their entire lives been on an airplane? 15%. 15%, why not? It was expensive to fly on an airplane back then. Today about 90% of adults have been on an airplane in America. That's Southwest Airlines. Google, organizing the world's information and making it easily accessible. As Sergey Brin and Larry Page say, how can that not get you excited?

Quick question. How many people have used Google in the last 24 hours?

Thank you. I've been a long term shareholder in Google.

But they speak to purpose. They are deeply purpose driven company. I'll put Whole Foods out here. Our highest purpose, to improve the health of people, the food system and our planet.

Stakeholders. This is a map, a graphical representation of the way Whole Foods thinks about our business. The major stakeholders, I would say the retail business is pretty simple. Management's job is to hire the very best people they can find and make sure they're well trained. The purpose of the job of the team members or employees is to make the customers happy, whatever it takes to make the customers happy.

And then when the customers are happy, they become the best advertising a business ever has, word of mouth and they become repeat customers. And that makes the investors very happy. Happy team members results in happy customers, results in happy investors. It's a win, win, win philosophy. And once you understand that as a business leader, as an entrepreneur, you have a job to take care of and help all of your stakeholders to flourish. Once you get that, you are going to have a competitive advantage in the marketplace because most people don't understand that you have to. And they're all interdependent on each other. So once you begin to think in terms of optimizing stakeholder relationships as a way to optimize, you're optimizing an entire system. You will have a competitive advantage over most other people because most people don't understand that.

Leadership, you're all leaders if you're entrepreneurs. And I'm going to talk a little bit more about this. As Gandhi said, we must be the change that we wish to see in the world. Here are some of the qualities and virtues that we've identified conscious leaders tend to have. They tend to be very purpose driven, they tend to be authentic, they tend to be service oriented, emotionally intelligent. They have high integrity, more loving and caring, and they tend to be more spiritually evolved. It's a high bar if you want to be a conscious leader.

Let me talk differently briefly about different kinds of intelligences that show up if you're a conscious leader. So we're all familiar with iq, right? We talked about the Flynn effect a little while ago. Average IQs are going up. School is geared to teach us how to think rationally, logically. It's a great accomplishment. Most people never really learn how to think very rationally.

So that's important. I count that having a high IQ is like, it's like being in a poker game. That's the ante to get in the game. You don't have that, don't play.

But it's just in the complex world we live in today, I would argue that it's far less important than say emotional intelligence. And Daniel Goleman, who wrote the book on it, defined it as your own self awareness. Most people don't have a clue.

The emotions they're experiencing, they can't identify them, they don't understand why they're having them. They just seem to happen to them. So most people don't have much of a clue about what's driving them, what they're motivating them, what their passions are.

So learning about yourself, becoming self aware is one of the first things you have to do if you want to develop high emotional intelligence. Then empathy, the ability to listen, the ability to put yourself in another person's shoes and understand where they're coming from. Those two things together, self awareness and empathy, are the keys to having a high degree of emotional intelligence. And at Whole Foods, what we've learned is that's actually more important because we're in a service business than just having an iq. Give me people with high emotional intelligence any day. You'll have a successful business if you select for that.

What do I mean by spiritual intelligence? This is not about religious beliefs, it's not about rituals, not about dogma. These are some of the characteristics of it. First, a person with high degree of spiritual intelligence is able to discern purpose. Here's the thing. Purpose is everywhere. We live in this incredibly purpose filled world and universe. It's the exact opposite of the nihilists who say life is meaningless, the universe has no purpose to it. Very, very low degree of spiritual intelligence. In fact, the entire universe is rippling with it. And those you can learn how to tune into that. And you will discover that the universe is far more purposeful than you can possibly imagine. Highly developed ethics. A person with a high degree of spiritual intelligence has a strong sense of what the lines are when you don't go further because it's simply wrong to do it. Ethics matter greatly. Love, care, compassion. We gotta open our hearts. We really do. Love is the most important thing that needs to be released. I'll talk about this briefly in a couple of minutes.

Love is mostly in the corporate closet in corporations, because it's seen as weakness. In fact, it's the strongest thing you could possibly unleash in your organization. And then creating, expressing the good, the true and the beautiful, the highest ideals of humanity.

Servant leadership.

Ultimately.

When you learn that it's not about yourself, that you have a responsibility to serve the higher purpose of your organization, to serve the stakeholders, that your life.

Matters and is found. Part of the purpose that you'll find is when you can understand what service is and you can begin to live it.

If I had more time, I would tell you a story about Albert Schweitzer. I'd tell you a story about Buckminster Fuller, because I've rambled on earlier. I can't ramble on now.

If we're going to become a conscious leader, it requires high intentionality. It doesn't happen automatically unless you want to Grow. Unless you intend to grow as a human being, you'll stop growing, you'll plateau. That's just the way it is.

So some of the things, if you want to accelerate your own growth as a leader and a human being, I'm back to knowing yourself. Know thyself. Socrates said it. I'm saying it to you again. You must understand who you are if you're an entrepreneur. First of all, you need to understand what you're good at. More importantly, you need to understand what you're not good at. Because there's nothing that corrupts the mind more than success. Because you begin to think you're brilliant, you're a genius. Oh, my God, you think you've got the Midas touch or whatever.

Ego begins to take over and you're just heading for a fall there. Hubris is just going to sink your ship. So know thyself and know what you need help in and how you need to. Where you need to evolve. You need to follow your heart. Most entrepreneurs already get this one. But I'll tell you a very brief story, how I discovered this in my own life. So I'm 19 years old. I'm a student here in Austin, Texas, at the University of Texas. I'm studying philosophy, and I got this course that I need to take if I'm going to get my degree. There's just one problem. I hated the course and I hated the books they were making me read. So I had this battle go on within my own soul for about a month where it's like, I gotta read this book and I've gotta. I've gotta take this course or I'm not gonna get a degree. Versus, I don't wanna read this book. I don't like this book. I don't want to take this course. Well, you have to take the course. You don't get your degree. I don't want to read this book. So this book battles going on within my own soul. And then one day, I'm trying to force myself to read this book. And I remember I stood up and I threw the book on the ground. And I'm not going to give you the exact language I said at that time, but you can imagine, I'm not going to read this book. I threw it away. I dropped the course the next day. My entire life changed when I did that. Completely changed. It was like, wow, okay, I'm just gonna take courses I want to take. I'm only gonna read books I want to read. So I just started auditing classes. I only Took courses I was interested in. Maybe I stayed and got a grade, maybe I didn't. I didn't care. I have 120 hours of electives. I have no degree.

I took no business classes.

Well.

When I tell that story at the universities, people don't generally clap.

But just a few years after that, I finished my education for my own. Finished my college education anyway, and I went and got a. I started Whole Foods and I was really on my path and I was being true to myself. I was following my passion, following my bliss, following my heart. And you know what? Life, everybody I'm looking at is pretty young. Here's an older person's advice to you. But you don't know this yet, but you're going to remember it. I hope life is a lot shorter than you think it is. See, you've only known youth.

But you have the same disease everybody else has. Youth is fleeting.

And life is just too darn short to do anything except what you really care about. That's the bottom line. You don't want to get to the end of your life and think, ah, you know, I played it safe. I chose security. And then you discover there is no security, there is no safety. Death finds us wherever we go. So you do what you care about, you do what you're passionate about. If you do that, I can't guarantee you success, but I will guarantee you you're going to have a very interesting life.

Life is ultimately, I think, about learning and growing, and we have to be willing to take chances. The things you'll learn the most about will be in your relationships, without a doubt. My wife has taught me more than everything else in life combined. I mean, she's been my great guru. It's a little trick life played on me. I'm an entrepreneur. I can't work for anybody else. I can't have a guru. So I married the guru.

Practice forgiveness. I just got to press on.

Here's one tip I can say, though. If you want to be successful and successful entrepreneur, don't get stuck in an ideology. Now, ideology is something we use as a framework. It's a shortcut. And you begin to see it through the frame. You begin to filter everything you encounter through your ideology. And you will stop learning when you do that. You won't listen, you won't learn. You only interact with people that already agree with you, that think the way you do. That's a dead end. If you want to keep learning and growing, get away from your ideology, whatever it might be. Coaches, mentors, very Important. Remember, I got 120 hours of electives. I had no business classes. Oh, my God. If I didn't have a mentor, that mentor, in my case was this guy on the right. That's my dad. My father was my mentor. He had been an accounting professor at Rice University in Houston. And then he went into business, and he became a CEO of a public company. My dad was my mentor, and he saved Whole Foods. I would have wrecked the car so many times. My dad said, john, don't do that. That's a big mistake. And the reason I'm telling you this is because.

Mentors are very helpful. Coaches are very helpful, but there comes a time when you have to leave them behind. In my case, that happened when I turned the age 40, and Whole Foods had gone public two years before. And all of a sudden, my father discovered he was wealthy because he'd own stock. He had an ipo, and he was a rich guy. And he was also, you know, 75 years old. And all my dad could think about is, oh, my God, I'm rich. I don't want to blow it. So we began to fight in the boardroom. We were actually screaming each other because I wanted to grow the company. I wanted to put the pedal to the metal and medal to the pedal. Pedal in the middle, you know? You know what I'm talking about? Yeah, pedal the middle. Well, my dad just wanted to play it safe. He didn't want to lose what he had. So we were fighting all the time, and our whole relationship was going on the tubes. And I said, dad, I'm like 40 years old. I can do this. He said, 40? You don't know shit. You're just 40 years old.

I said, I know, Dad. I know a few things.

So I said, you know what I want you to do? I want you to leave Whole Foods. I want you to get off the board. I want you to sell half your stock and get all the money off the table that you need. And I want you to hold on to the other half, because I'm going to make a lot more money for you. So you don't want to miss out on that. So that's what he did. And a year later, the stock had doubled. So my dad was kind of mad that he sold half of his stock, but he was happy that his stock had gone up, and our friendship and relationship came back, and he still stayed in as kind of an informal advisor for me. So the point of it is, we need coaches. We need mentors. And there may come a time when you have to leave them behind.

A great growth opportunity is going to be when the shit hits the fan. Crisis. When we're under intense stress, the human reaction is to contract. Go back to a safe place. We're scared. Go back to where we're not scared. That's what everybody wants to do. I'm telling you, you should do the exact opposite. When a crisis hits, you'll never have a better opportunity to evolve. Instead of contracting, open wider, make yourself more vulnerable, let more in, let the fear be there and just move through it. If you do that, you will accelerate your own spiritual development amazingly fast. And if you don't do it, if you contract, then you're stuck. If I had more time, I would tell you some crises that happened to me, but I'm really out of time. I will argue entrepreneurs, we're like the busy people. Okay.

But I'm telling you, take some time. We're doers, but take some time every day to just center yourself. Even if it's only for five or ten minutes. I'm telling you, that can make a huge difference. I'm really proud of myself. If I ever meditate for like 15 minutes, my wife meditates two hours every day. Like two hours. No time to do that. But I can do 10 or 15 minutes. And it makes a huge difference.

We live in this era where we can learn.

All the smartest people that have ever lived that wrote books, they've made it all available to us. We have this timeless wisdom available to us. And just like we though, unfortunately, just like we fill, we had to. You can eat the healthiest food. There's never been healthier food than there is right now. And the whole world's bounty is available to us. And yet people eat junk food. That's a fact. Americans are 69% overweight and almost 38% now obese. So we're poisoning ourselves, but we're also poisoning our minds with junk. So you need to take responsibility not only for your body and your health, but you should take responsibility for what goes into your mind.

Culture. Culture eats strategy for breakfast. That's Peter Drucker. If you haven't read his stuff, do it. It's still very relevant and timely for us today as entrepreneurs.

I don't have time to get into each of these. I'm not going to do it. But tactile trust, accountability, caring, transparency, integrity, loyalty and egalitarianism. It is in our book, Conscious Capitalism. I will just talk about two very briefly. The importance of caring and love and integrity.

Can you Build an organization or business based on love. The answer is yes, you can. But it starts with ourselves. You must be the love that you wish to see in the world. Bring it out of the corporate closet. It's in the corporate closet because people think love is one weak. What are the metaphors that we use to think about business? I would argue metaphors that we use in business come from three major sources. The first one is war. First one is war. We're going to kill those guys. Those guys are dead meat. Or they come from sports metaphors. Hey, we're winners, they're losers. Get over it. It's the way it is. It's the way life is. There's winners and there's losers. I'm a winner, you're a loser. Nah, nah, nah, nah, nah. That comes from sports metaphors. Or they're biological Darwinian metaphors. Survival of the fittest. It's a jungle out there. Only the paranoid survive. As Andy Gross said.

Yeah, there's no place for love. Yeah, love's good. We'll get it when we get home. But.

It'S about survival. It's about conquering. It's about winning. It's about destroying the enemy, the competitor. As long as we use those metaphors to think about business, we are going to prevent the most important virtue that we can release in our organizations are going to be trapped. Love is the most important thing you can do in a business. It's what holds your community together. It's what we came here for. You have to eliminate fear to do that.

Integrity. Integrity is more than just not lying. It means being trustworthy. It means being authentic. It means.

Showing up in the real world, not spinning things, not saying what you think people want to hear.

Here's a sad truth.

In my entire lifetime, there's never been a president that I didn't think was a complete liar. They just lie and they lie because they don't think the American people can handle it. And that's a very sad thing, but it's true. And we cry out for authenticity. Now, if you're going to be a leader of an organization, don't lie. Tell the truth. Show up. Be who you are. Yes. If you're like, if you do that. I'm a very authentic human being. I believe. And I'm also attacked all the time. I say things that people upset, people that people think are not politically correct. I don't intend to hurt anybody. I'm just trying to show up real. Just trying to be a real human being. And I do think the world wants authenticity. It wants integrity.

Those of us who are alive today. So I'm concluding now, those of us who are alive today have the opportunity to live the most meaningful lives that have ever been lived in the whole history of the planet. Our challenges are great, but so is our entrepreneurial creativity. We have all the tools we need. We just need to unleash human innovation and creativity on our challenges. There are no problems that we are incapable of solving.

Collectively because our creativity is limitless.

So in conclusion, free enterprise capitalism, if it's engaged with an evolved consciousness of purpose and stakeholders, integration and leadership, is going to transform the world in the 21st century. It's unbelievable. When we get to the end of the century.

We'Re not going to recognize this planet anymore. If humans can unleash their creativity and combine it with love.

We have a responsibility as entrepreneurs to create value for all of our stakeholders, our customers, our team members, our suppliers, our investors, our communities. And to do it as much as we can with minimizing our environmental impacts. We need a different kind of leader now. One who's more spiritually awake, one who has a higher degree of emotional intelligence. That's what the world needs now. As with so much else in life, culture is extremely important. If you're creating an organization, you're creating a culture. You need to take responsibility for it. Make it a culture where human beings can flourish. We must continually evolve ourselves, our leadership, our organizations, and our world.

Do you like this? Buy my book.

Okay, gang, thanks very, very much.

Thank.

You.

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