Healthcare, Corporate Activism & the Whole Foods Boycott
Was it a mistake for Whole Foods CEO John Mackey to dive into the turbulent waters of the US healthcare reform debate?
I’ve blogged before about companies taking a position on political hot-button issues. (See, e.g., Apple & Equal Marriage Rights and Google & the Business Case Against Prop 8). On one hand, it’s often seen as admirable when companies are engaged in socially-important conversations. On the other hand, there’s clearly jeopardy involved in taking a position on questions that polarize the public — especially when you’re in the kind of business where you rely on regular folks buying your product on a daily basis.
Case in point: Whole Foods CEO John Mackey wrote this editorial, published recently in the Wall Street Journal: The Whole Foods Alternative to ObamaCare
With a projected $1.8 trillion deficit for 2009, several trillions more in deficits projected over the next decade, and with both Medicare and Social Security entitlement spending about to ratchet up several notches over the next 15 years as Baby Boomers become eligible for both, we are rapidly running out of other people’s money. These deficits are simply not sustainable. They are either going to result in unprecedented new taxes and inflation, or they will bankrupt us.
While we clearly need health-care reform, the last thing our country needs is a massive new health-care entitlement that will create hundreds of billions of dollars of new unfunded deficits and move us much closer to a government takeover of our health-care system….
Whether an editorial of this kind, written by a captain of industry, is likely to have any effect on the course of public debate is unclear. But in this case, it seems likely to have an effect on the fortunes of the company involved. See this blog entry by Richard Blair: Whole Foods Boycott Picks Up Steam
Whole Foods CEO John Mackey shot his company in the face the other day with an anti-health care op-ed screed in the Wall Street Journal. He’s managed to piss off his company’s core demographic: liberals and progressives, and in the process, enabled a boycott that could actually work….
Now, for my purposes here the soundness of the view Mackey presents is beside the point (though as a Canadian I had to roll my eyes at his rather slanted comments about Canada’s healthcare system — our system is imperfect, but generally excellent and much-loved).
I’ll just make these 2 points on the larger issue of corporate (or CEO) comments on hot-button political issues:
1) It seems to me that many of the progressives who frequent Whole Foods are generally in favour of social activism on the part of companies: they like it, for example, when companies embrace Corporate Social Responsibility, when they undertake progressive labour practices, when they donate to charities, and so on. But the present story points out an unstated caveat: corporate social activism is great, as long as you’re on the ‘right’ side of the issue.
2) I was fascinated by Richard Blair’s point about how Whole Food in effect represents a particular bundle of ethical beliefs: social responsibility, healthy food, organic agriculture, altruism, etc. The complaint now is that John Mackey and (most of?) his customers are at odds regarding whether a belief in healthcare reform, and in particular regarding universal coverage, is an intrinsic part of that bundle of beliefs. The general question, here, is whether companies (and more precisely, national brands) can hope to represent big bundles of values/beliefs — or whether consumer diversity is going to necessarily imply greater market fragmentation, as consumers seek out brands that represent just precisely the set of values they believe in.
The Business Ethics Blog 
Why would the CEO of a company that sells mostly to liberals go on the most obnoxious, extreme right rant in Rupert Murdoch’s propaganda rag, The Wall St. Journal? That’s just plain stupid.
One of the best ways to alienate liberals is to try to take healthcare from people.
NASCAR made the same mistake as Whole Foods did. One of thier drivers had his own team and placed Racing For Jesus on the hood of the car. What did NASCAR do told him he had to take the decal off his car. When it hit the press they had alienated thier core fans and within one week they recanted thier statement. Lesson was do not alieanate the people who are your bread and butter.
OF COURSE consumers care what side you are on.
Should we support companies that fund Neo-Nazi organizations, because that’s “activism”? Should we support businesses tied to Islamist terrorism, because it’s “politically active”?
Plainly not. I am proud of all the people who boycotted Whole Foods after the company decided to associate itself with opposing health care reform. If you feel that strongly about health care, you shouldn’t support companies that disagree with you on that issue.
PNRJ:
Thanks for your comment.
Yes, I agree: “of course” politically-conscious consumers care which side a company is on. I’m just pointing out that those in favour of corporate activism should be careful what they wish for.
As for supporting a company you don’t agree with: well, as far as I know, John Mackey is the only person associated with Whole Foods who is opposing Obama’s proposal. It’s not the whole company: it’s not its employees, nor its shareholders. It’s not clear that the proposed punishment, here, is on-target.
See also this useful HuffPo blog entry:
“Why I Ain’t About to Boycott Whole Foods”
Chris.
Good one, Chris. Here’s my two cents worth. As a business leader, Mackey’s intentions to thwart Obamacare may be ethical given his role as captain of a publicly traded corporation. His first responsibility is to increase shareholder reward while maintaining the ethical standards that attracted and continue to attract shareholders. His intentions were motivated by this (at least in part). Instead of shirking responsibility for one’s health by transferring, at least in part, dominion of one’s body to the state, Mackey proposes, among other things, that people choose to consume exactly what he sells: healthy food. Had people responded favorably to his argument – and were motivated by it – they would have likely gone shopping for ‘whole foods’ with names Mackey and WholeFoods in mind. This would have contributed to an increase in sales for WholeFoods, and according to what I claim is his first responsibility, this would’ve been ethical. Yet unfortunately people didn’t respond favorably to his actions. While keeping this disaccord between his intentions and his results in mind, we are confronted with a deeper issue: are we to judge the ethical merits of Mackey’s actions according to his intentions, or what actually obtained? Chris, this is where I need your help.
As an aside, what frightens me most about this is that, according to my findings, nobody has bothered to actually confront his argument head on. Not in the blogosphere, not in the papers, nowhere (I am exempting your blog from this criticism because your purpose is different). In general, the responses to his argument (or rather his conclusion) focus on Mackey, and not his argument, or on the family resemblances his argument shares with the Republicans, yet still neither the argument itself nor economics. A chilly climate, though we shouldn’t be surprised, for it’s not as though Obama’s supporters voted for him because he argued well (not to identify them with Mackey’s opponents, though I suspect there’s some overlap). Because to argue well entails arguing in the first place.
KE
Kirk:
Unfortunately, we don’t have access to Mackey’s intentions. I suppose shareholders (and customers?) are left to judge him based on the likely consequences of his actions.
As for responses: maybe no one respects his particular spin on the arguments enough to confront them. His recommendations of course are not unique (except perhaps his implication that shopping at his store is a big part of the solution). Maybe that just means that, even for people sympathetic to his view, he might simply be the wrong messenger.
Chris.
I think the best that can be said against the boycott is that it harms an otherwise ethical organization in favor of much less ethical organizations, on the basis of a relatively minor infringement by only one of that organization’s representatives. It’s a disproportionate response with too many negative unintended consequences.
But Mackey’s argument is a non-starter; eating healthy food is entirely consistent with any kind of health care system, and would be a good idea regardless of what health care system was in place. It’s true that many Americans would be better off if they ate healthier food; but that doesn’t change the fact that millions of Americans have insufficient health insurance, and the social costs of this situation are high.