Is Wholefoods’ ‘Conscious Capitalism’ Effective Altruism

by Antony Sammeroff | Jul 27, 2021

Wholefoods, one of the most consciously ethical companies in the world, was picketed by animal rights activists in 2003. At first, CEO John Mackey was incensed. After all, Wholefoods are the good guys! Couldn’t these would-be revolutionaries take their complaints to McDonalds or Walmart?

After some reflection Mackey, the libertarian author of Conscious Capitalism (2013), decided that it might not be a bad idea to sit down with the activists and hear what they had to say. Asking them, “Why did you attack us?” he received the rather touching response: “Because we thought you would listen. Nobody else will.”

As a consequence, Wholefoods made the decision to undertake a long and wide-ranging ethical review of how they sourced their meat. In meetings spanning months, they consulted experts in farming, sustainability, animal welfare, economics and lord knows who else. They brought ranchers together with animal rights activists and scientists and worked collectively on establishing objective standards to measure animal welfare. Ultimately, they were able to significantly improve the living standards of the animals they sell. Mackay himself was motivated by what he learned to go vegan.

Mackey is extremely keen to rehabilitate the image of capitalism, especially among young people who tend to perceive the market economy as cutthroat, exploitative and alienating. He believes the perception that businesses as driven entirely by the “selfish” profit motive is partly responsible for capitalism’s poor standing. He is eager to help people understand that business enriches lives, and fears that unless we rehabilitate the image of capitalism, we may soon slay the goose that lays the golden eggs. After all, free markets have created unprecedented leaps in living standards since the industrial revolution.

I agree with Mackie that business is about creating value for others rather than cutthroat competition. I think most people go into business because they have an idea for a product or service which they think is cool and that people would benefit from, and fantasize about making large sums of money helping people—rather than exploiting them.

Mackey’s vision, and the story of Wholefood’s ethical reforms is awe-inspiring in a way, and certainly demonstrates what big business can achieve in serving a higher purpose that speaks to the values of consumers. After all, a man does not live by organic, wholegrain, einkorn bread alone!

However, in the interests of rigor, I would like to open a discussion about whether this kind of “ethical” or “conscious” capitalism is really the most effective way for companies to “do good” in the world.

I confess I have not been able to reach an answer yet.

On one hand, the standards that Wholefoods has created for measuring the welfare standards of animal rearing will help all consumers and businesses who want to make ethical choices and minimize the suffering of the animals which they buy and sell.

On the other hand, everything comes at an opportunity cost.

The book Doing Good Better (2015) demonstrates that if you want to donate money to charity then making a choice based upon the best data will make a tremendous difference, because the best charities are literally thousands of times more efficient at allocating resources than the least efficient ones. (Happily, the entire audiobook is available free of charge on YouTube.)

The book was written by William MacAskill, professor at The University of Oxford. MacAskill is one of the pioneers of “Effective Altruism,” a philosophical movement seeking to bring empirical evidence to people on how to best have a positive impact in the world, be it by their choice of where to donate and spend their money, what career to pick, or where to volunteer their spare time.

Some of the fascinating conclusions MacAskill’s book presents are counterintuitive, and may even infuriate many a would-be conscious-consumer, for example:

1. If you want to reduce your carbon footprint, a donation of $110 a year to the most efficient carbon-offsetting company will help more than giving up your car, turning off all your lights, and taking a train instead of a plane. In fact, it will make you carbon negative, which not even giving up electricity in your house will do!
2. If you want to reduce the suffering of animals you better achieve that by donating to an efficient pressure group than by going vegetarian. (MacAskill is nonetheless a vegetarian.)
3. If you want to help the world’s most impoverished people, buying fair trade products is not the way to do it. If you take the difference between the cost of the cheaper non-fair-trade product and the fair-trade product and donate it to one of the most effective poverty charities, your money will do hundreds or even thousands of times as much good per penny.

To summarize the key insight here: most well-intentioned people will assume that the best way to make a positive impact in the world is to make better consumption choices, but usually, donating a relatively small amount of money to an organization that knows how to spend it efficiently will often have a far greater impact then buying a product with ethical credentials or abstaining from the luxuries of civilization.

This is similar to how critics of capitalism tend to think that taxing the rich and giving it to the poor is the best way to alleviate poverty, when actually this creates a trade off in capital investment, which drives all the technology and innovations that increase living standards.

It is well known that our brains are wired to respond to stories rather than statistics. For example, people are more likely to donate to a cause advertised by the moving story of one little girl and her tragic disaster than the details of thousands in dire straits, even if the second cause is more urgent and would allow fewer resources to go farther.

If the defense of capitalism is what we seek, then perhaps it will prove to be more important that businesses are seen to be doing good than the measure of how much good they are actually doing. It certainly seems to be important enough for many consumers to pay more for products or round up the cost of their purchases to donate to whatever inefficient charity has been selected by the owner of the kiosk they are shopping at.

As we know, shopping at Wholefoods is expensive. The question for the conscious consumer is whether they are doing better for the world by shopping there to support their policy of ethical meat sourcing, or if they’d have more impact by grabbing cheap animal products in a budget store and donating the difference to the right cause. (My writing on this matter, may strike some as somewhat ironic, as I, mystelf, am known by some in the libertarian community for being an ethical vegetarian.)

A more profound query still might be to ask whether Wholefoods would have reduced more animal suffering by investing in the best evidence-based causes than holding expensive consultations with environmentalists and agriculturalists.

The Whole Planet Foundation, which has alleviated poverty by issuing microcredit loans, is a credit to the world. The question is whether this is a case where the conspicuous benefit is seen, while what is unseen is that the same amount of resources allocated to the most efficient already existing organizations would have done far more good.

I don’t know how we would get the evidence to answer these questions, but there is someone out there who does. (Perhaps we could consult William MacAskill.)

I do not mean to be cynical. This is not an attempt to condemn Wholefoods, or the great John Mackey for their attempts to do good by consumers, animals, and the capitalist system. What Wholefoods have done is revolutionary, and I am happy that there is somewhere where people know for certain that they can get meat that is reared humanely.

But for us nit-pickers—obsessed with hard facts, efficiency and clear answers—the question will remain, what is the ideal libertarian strategy for is doing good in the world?

It is not a trivial question either. The welfare—and even lives—of real people depend upon the answer.