The social responsibility of business.

• Author: Lazar, Tony
• Position: Letters - Letter to the Editor

John Mackey's "new form of capitalism" ("Rethinking the Social Responsibility of Business," October) is as suspect as an organic label on a Whole Foods apple. Before we concede that Mackey has somehow superseded the Darwinian forces that shape all free-market businesses, let's remember this: Social responsibility is a defining feature of the niche that Whole Foods has carved out of the cut-throat grocery business.

Consumers can buy an apple anywhere. They go to Whole Foods to buy a Socially Responsible Apple. A small but loyal segment of mostly rich liberals have sustained Whole Foods because they buy into this larger "value proposition." Thus for Mr. Mackey, social responsibility is not an option, or even just good PR. It is a mandatory cost of doing business, without which Whole Foods would become just another commodity retailer.

T.J. Rodgers is guilty of a different offense. He argues that irrational value propositions, like organic labeling, are scams unworthy of the free market. Not so fast: If both sides of the transaction derive value, who are we to tell them otherwise?

Businesses like Starbucks, REI and Whole Foods--who sell upscale commodity products to affluent, urban, white, liberal consumers--engage in overt social responsibility because it gives them a Darwinian advantage. This only reaffirms the rules of capitalism; it does not supersede them.

Tony Lazar

San Carlos, CA

I like John Mackey's refreshing approach to business. Last year I invited him to speak at Columbia Business School on "A New Business Paradigm" It was the biggest event on campus that year, attracting a standing room only crowd of nearly 300 MBA students. It was clear that the "best of the brightest" were hungry for the new "stakeholder" brand of capitalism that Mackey and Whole Foods Market offer.

Being in the trenches in academia, I can tell you that Mackey is on the right track. The old-style Randian philosophy of capitalism, that "greed is good" and "selfishness is a virtue" does not resonate well with future business leaders. Today's students are more attracted to the Smithian virtues of sympathy and friendship than the Randian virtues of selfishness and greed. If Mackey can successfully build this new business model without force or fraud, I say more power to him.

My only concern is how well Mackey's stakeholder methodology will work during a downturn in his business. Everything looks great right now as the company expands, but he may find his concessions...