Whole Foods keeps alive the hip style and story of its countercultural beginnings as a 1970s natural foods store from Austin, Texas. To walk through its carefully crafted “user experience” is to be impressed by the authenticity of its products, exceptionally organic and brought to you by farmers with names and faces. For almost twenty years, the company has told customers, investors, and employees that it “believe[s] in a virtuous circle entwining the food chain, human beings and Mother Earth.” But the profit-driven ethic that has enabled it to operate more than 450 stores globally and eventually to be acquired by Amazon for $13.7 billion relied on less-than-virtuous business practices, many of which are now common knowledge: low employee wages and bad working conditions, antiunion campaigns, and supply chains that are often questionably organic or fair trade. “There’s no inherent reason why business cannot be ethical, socially responsible, and profitable,” Whole Foods founder John Mackey has repeated for decades. Sure, there’s no reason. It’s just too bad that Whole Foods isn’t.
Is Whole Foods a kind of morality tale, a story of what happens when a company that started with good intentions gets too big too fast? The moral, it seems, is that entrepreneurs should be wary lest pursuing success causes them to abandon their values. But the story of Whole Foods offers other lessons. John Mackey’s libertarianism never made him much of a candidate for reforming corporate capitalism anyway. He did not share the convictions of his erstwhile fellow food activists, who believed that conventional, chemical-laden agriculture was of one piece with, for example, the war in Vietnam and the structures of economic inequality. Mackey’s relentless pursuit of business growth shows instead how easily products with countercultural origins can be separated from the politics of democratic workplaces or socially responsible corporate governance.
We now know a lot more about both the history of Whole Foods and the particular cultural and political context in which the company started, thanks to Joshua Clark Davis’s thoroughly researched and well-told book. In From Head Shops to Whole Foods, Davis recounts the history of what he calls “activist entrepreneurs” and their experiments with a different kind of business, one marked by alternative products, collective decision-making, and cooperative ownership.
Theirs is not a particularly familiar story. If we think at all about the relationship between political dissent and business between the 1960s and the 1980s, it’s usually in terms of Thomas Frank’s narrative of the “conquest of cool,” and how consumer capitalism appropriated the identity styles of hippies or the student movement. Yet far from engaging in a feckless and easy-to-appropriate identity politics, activist entrepreneurs believed that the concerns of their movements were tightly intertwined with the economy and its power structures. At their best, their projects followed in the tradition of the cooperatives of late-nineteenth-century agrarianPopulists and the parallel institutions of early-twentieth-century African Americans.
Davis draws our attention to institutions such as the Feminist Federal Credit Union. Founded by Detroit activists in the early 1970s, the company gave women the opportunity to establish credit at a time when single women had difficulty obtaining financial products like mortgages and married women could barely establish any credit of their own. Similarly, black-centric bookstores—founded in the late 1960s and early 1970s during the emergence of the Black Power movement—sold books, pamphlets, and journals that promoted African American political reeducation. In addition, shops like New York City’s Liberation Bookstore and Drum and Spear in Washington, DC, were also community spaces where customers could develop connections with the movement or activists could hold meetings.
For all their activism, however, black and feminist bookstore owners were conservative in their approach to business. The goal was to provide radical spaces as well as products tailored to the African American community or the women’s movement. With a few exceptions, such entrepreneurs had little interest in growing their businesses into larger enterprises, less in reshaping the governance of corporate capitalism.
Despite the fact that their smallness usually limited their financial success, these shops led the way in changing American business for the better in the 1970s. But generally speaking, this change came to be presided over by businesses that had no commitments to social movements or to fundamental reform of corporate governance. Many of the activist businesses were, in the end, made redundant by liberalizing trends in corporate America that made room for women’s credit, for example, or the acknowledgment of black history.
If the larger claims Davis makes for his subjects are true—that they exemplified a live, alternative model for the organization of American business—then their capitulation to prevailing business structures or their failure to persist and expand should be understood as a road not taken. They represented perhaps one of the last great attempts to change the way our country does its business. Their ultimate failure might be considered a tragedy.
But a more careful look at the activist entrepreneurs reveals a less expansive agenda. Many of them came to believe that socially responsible business practices or democratic ownership and management was inextricably tied to the scale of business operations. Some of them adopted cooperative ownership and managerial organizations that were so rigidly egalitarian that thriving, let alone expanding, became very difficult.
This reticence to “think big” was bound up with broader postwar understandings of how large organizational systems were fundamentally alienating or even violent. Sociologists and early New Left critics deplored both the conformity of postwar consumer culture and the anomie that characterized work in the corporate bureaucracy. To get involved in big business was to risk becoming an “organization man” or an anxious “other-directed personality.” More pointedly for many radical African American and feminist activists, corporate capitalism was an inherently repressive regime structurally tied to a complex of governmental and military systems. A campaign of corporate reform, then, was difficult to countenance.
For many students and activists, resistance took the form of qualified retreat. Some pursued authentic experience with like-minded rebels in burgeoning hippie enclaves such as Haight-Ashbury. Others chose the option of agrarian self-help, going “back to the land” (many for the first time).
The activist entrepreneurs retreated in their own ways. Unlike others in the counterculture, to be sure, they never eschewed economic activity per se. As Davis writes, they “force us to rethink the widespread idea that the work of social movements and political dissent is by definition antithetical to all business and marketplace activity.” By and large, however, the subjects of From Head Shops to Whole Foods focused on the specific needs and interests of their own communities.
The limited aims of activist entrepreneurs might be brought into greater relief when we compare these objectives to those of other activists at the time, whose story Davis sidelines. The crusading reformers in the late 1960s and 1970s brought their resistance to corporate capitalism into the boardrooms and annual meetings of large, publicly traded firms. They challenged corporations to change their practices and governance to reflect the interests of African Americans, feminists, consumers, the environment, and certain religious communities.
The politics of what came to be called “corporate social responsibility” provoked a crisis in American business in those years. A variety of campaigns were launched to compel major corporations to change their business practices and address, among other things, issues of minority employment and representation, consumer protection, and environmental pollution. A crucial battlefield was annual meetings, where reformers tried to use the mechanisms of shareholder activism to bring attention to their causes. “Corporate America says it desires active stockholder participation, that it’s our American duty to participate,” Saul Alinsky said, “but, in fact, they won’t allow it. We propose to bring reality in line with that rhetoric.”
Perhaps the most prominent movement was the “Campaign to Make General Motors Responsible.” Led by young lawyers like Ralph Nader and black leaders like the Reverend Leon Howard Sullivan, it sought to force GM to ensure more equitable racial representation in employment, on the board, and among car dealers. Many activists also wanted to change the structure of corporate governance. The incorporation system, Nader argued, needed to be elevated to the national level, and charters should bind corporations to a socially responsible and democratic business structure. These activists weren’t opposed to bigness per se or big corporate structures; they wanted to force them to be decent. In response to mounting public pressure, many large firms made key concessions, even while resisting real structural changes in corporate power.
Conservatives such as the economist Milton Freidman pushed back and called on business to likewise stand firm. Beginning with his popular book, Capitalism and Freedom, Friedman had long maintained that the corporation was nothing more than an instrument of the stockholders and that social concerns should not pollute the rational logic of the marketplace. He distilled these arguments in a much-read 1970 piece for the New York Times Magazine in which he wrote that the only social responsibility of business was to make profits. Anything else undermined the neutrality of the “market mechanism” and constituted a step toward socialism.
Friedman was right when he argued that the status of the corporation as a private institution was the central issue at stake in debates over corporate social responsibility. In their efforts to change the accountability structures of corporate America, activists relied on an older tradition that understood the legitimacy of corporations to be founded on their public utility, their service to the common good. Corporations ought to reward private interests, they argued, but these business institutions were ultimately accountable to more than just shareholders. Other stakeholders included employees, suppliers, local communities, consumers, the environment, and vendors.
That brings us back to Whole Foods. The natural foods grocer was able to translate what were once countercultural products and sensibilities into almost an entirely conventional business structure. Mackey and his colleagues were never interested in making their corporate governance democratically accountable to the company’s various publics. The problem, then, is not the pursuit of bigness or ambitious expansion, but rather that American politics has been unable to consider consistently and capaciously how democratic interests can finally be brought to bear on large, publicly traded firms. For most would-be reformers of the American way of business, the real tragedy has been thinking too small, not too big.