>> and "conscious capitalism," professor raj sisodia argues the sources of business and capitalism can be combined to create value for shareholders, workers, customers and society at large. he profiles companies that is tastefully done this. he is interviewed at freedom fest in las vegas. you can watch this 20 minute interview now. >> host: "conscious capitalism." the co-authors ron mackey at vester raj sisodia. joining us at freedom fest here on booktv is professor sisodia. what is conscious capitalism? >> guest: it is a different way of hinting about business. this merited a definition of what our business is about. it's about profit maximization

for shareholders and that is something the economist created, a definition of. this is a thinking business and a realistic and mature way that great business is really built on a maximum for a higher purpose. something they're trying to do in the world that is worth doing. they are trying to create value of a certain way, which is meaningful to people. not only customers, but society at large. if you think about value creation not just in terms of shareholders in treating them as an end and everybody else as a means, but think about all the stakeholders as atoms themselves. so the focus on creating value for their lives in the name of purpose in creating buyer for customers and improving quality of their lives, not just tried to sell them. [inaudible] they are trying to create value for all stakeholders in a way

not to acquire trade-off. you cannot case simultaneously enhance if you think about it creatively. you think about it in a traditional way, you end up with a lot of trade-off. the purpose of the leaders of these come in his urges leaders. they are actually motivated first and foremost by the purpose of the organization and a surface to all of decoders. they are much less driven by power and personal engagement. missionary theaters are mercenary leaders. the last of these businesses tends to have a unique altar. a culture of authenticity and trust, transparent the n. most importantly, love and care that these businesses are built on love and care and not fear and stress. businesses tend to operate with fear and stress. that seems like the feel of what they need to get people to work hard and keep them motivated.

the old carrot sticks approach. it's really not about that. that is not when you get human beings acting to their highest potential. if the mayor driven internally with a sense of purpose and meaning by getting the autonomy and having the opportunity to grow within the work so the work becomes not just a job. so those are the elements. the interesting thing in a book that came earlier called terms of endearment show that businesses create multiple kinds of value for all the stakeholders. if you just focus on the financial, it turns out businesses perform the market within nine to one ratio over the ten-year period. knight added five more years of data. so showing that this is not about trade-offs. you can make money and to do that you must customers or

employees or externalize burdens on society. you don't have to do any of that. those are all the stakeholders. that's the beauty of this way of thinking. postcode do you consider conscious capitalism to be an evolutionary step in our capitalist system? >> guest: in a way it is. it was there in the beginning when business used to have well defined moral dimension to it. most of the businesses created really started and in many cases a religious background. over time that i take anatomy have more public when the economists came in, et cetera and started to have lots of incorporation and the definition of fiduciary responsibilities got narrowed down to a point where you must always look to maximize your value, otherwise you will get fired or is it.

that kind of got lost in the process. we lost that moral, ethical, humane, emotional dimension of work. work is the fundamental in our lives. s. ford said, it is a very human mass. we have created workplace is devoid of any caring and feeling and the power of love. now we are bringing that together. i do think it is evolutionary in the sense that we as humans beings are often rapidly in the world is changing dramatically. if you look in the last 20 years how much the world has changed. 1989, not only did we have the collapse of communism and free-market economies, but we also had the exxon valdez oil spill, the invention of the world wide web, which is fundamentally transformed the world because it created the transparency and egalitarianism. we also have a demographic

threshold, where we have more in this country. if the aging of the population. what that means a society as a whole is not driven at metallized values. much more around meaning and purpose and what kind of legacy unlikely to be behind and less about materials. more and more people are now inherently motivated at those kinds of things. we are also becoming more connect to it of course. we have people -- they spoke with over a billion members. we are woven together into a seamless fabric so we almost had a shared system of all humanity. we know everything going on and we can share with each other and not that the fact we are becoming more intelligent at a rapid rate. it shows that our human i.q. every 10 years for the last

seven or eight decades. so what it means is the average person with 100 iqs today, take them back to 1980 in may that be in the top 2% of intelligence. there'd be considered a genius and a really average day. we have much more education. 40% now go to college an impact in some countries like south korea, the impact is more dramatic on women. so that's a trait equalizer. had access to higher education. 60% or more students in the u.s. are women and even higher at the student level. what that means its almost every white-collar profession will be dominated in years to come. that will fundamentally transform the nature of society. it is the growth of caring relationships, long-term thinking, win-win outcome rather

than the masculine approach of competition and winning. i think the last part of that is our journey apprising conscience, if you look at the 150 years of slavery, either in the work is part of the human condition in every civilization and now we cannot imagine a hundred years ago women could not vote. that's everywhere in the world. 75 years ago it is the segregation or 30 years ago we had all kinds of environmental, child labor, all kinds of abuses. 20 years ago we still had apartheid. things are changing rapidly. evolutionary markers of a higher consciousness that we recognize all the consequences of our action. we have a sense of right or wrong and that which is except the bold and the past is not accept what the future. that standard will continue to evolve in the future.

the key thing for business is as long as distances were created or the operating system was to find way back in the industrial age, based on the military metaphor. we are still largely operating on that. businesses having to adapt it to the new reality. our concerns are very different. what inspires us, what motivates us is very different. we can't use the old approach. almost everything how to motivate people. >> host: professor sisodia, how does that fit in quite status conscious capitalism fit into libertarianism? >> guest: if you look at the sub title of our book, that's what this conference is very much about. economic and political freedom. business is fundamentally a reflection of that. in our society, we tend to let down on this.

we have a negative narratives that business is about dovishness and exploitation and greed and therefore the more you can be selfish and exploited, the more successful you will be in business. that is simply not true. that change the toxic narrative to recognize hochberg yours are the real value created in this world. this is actually out of elevate humanity. as a core fundamental belief because it is based on the creation of value. business is ethical because it's based on voluntary exchange. unlike the government, i cannot force you to do anything. i cannot force to be a customer, employee, anything like that. for most of human history, most of humanity that than subsistence level. almost animalistic.

as the scope of people who don't know what it means to actually be human. the adventure per at capita income. literacy has gone on. population has gone on. so many more of us can aspire and explore art and literature. his point is people to mock the. i'm not sure the ordinary people have the ability now to engage. lastly, business lifts people out of poverty. religious organizations cannot sustainably lift people out of poverty. they can tell a church or emergency situations. they cannot create sustainable means for people to elevate. just in the last 20 years, 500 million chinese and many,

many others around the planet have seen the last fundamentally alter. the spread of freedom, the spread of humanity. so we are very much in alignment with what this event is about. but we also sees you can actually make it even better. business is fundamentally good. the security and free-market and without crony capitalism and all the kinds of distortion. but then if you apply a higher conscious is to it, people go to an even higher level. because then you start to see the bigger picture and the interconnectedness. you start to treat business as it should be treated, as a living organism. not as the machine where you put in inputs and outputs. it is a living thing that is to color that creates all kinds of names in the world. so we are very much in harmony.

my co-author, john mackey has been a regular at this event for many years. he is actually in africa. john mackey is the cofounder and co-ceo of world first markets come a company than in many ways represents what we talk about in "conscious capitalism." >> host: we have a chart in here. how does it fit into what you describe? >> guest: at the purpose of core values, what do we believe in what are we trying to do? why was whole foods created? it was started in 1878 with the original name, safer way, which is a play on safeway. that is actually a safer way for you to keep food that is more natural and whole and must process that has less artificial ingredients. so their fundamental premise and passion was to educate people about what you put into your body makes a difference to your health and makes a difference to the help of the planet and the

food system. the total energy behind that purpose. that is more relevant today. our health care spending is to be five at 7% in 1960 and now we're close to 19%. if you look at those two tram lines, we are buying a lot more cheap calories. we are paying for with our health. fundamentally, it is unsustainable. purpose is what them. that is why they exist. they are not just other food retailer trying to make money. there is a passion behind there. secondly, they look at all the stakeholders is interconnected and interdependent. they have on our website dropped a better place called the declaration of interdependence. it says we are all interdependent and interconnected. even activists and others are

all good and therefore when we make decisions at the company, we must consider the consequences for all of them not simply look at the value to include margins of profit. you need to think about what are the consequences and try to come up with win win win win for our stakeholders. that takes a lot of creativity. it's very easy to find trade-offs. most managerial decision-making. if you reject the idea of trade-off, then you actually come up with it. they also have an egalitarian culture inside. they cannot exceed 19 times the average pay. countries in the u.s. vary between 350 and 500 to mock one. he used to be 30, 40, 50. it has risen dramatically over the next two decades.

it is a fundamental belief inegalitarian is sent. the front-line people are paid as an average. they are paid modestly compared to other companies of the chief financial officer of this company might make $100,000 another cub the $80 million. they want people driven by purpose who care about the business who are not just higher mercenary leaders who work for anything as long as you pay them. they are more inspirational and ultimately more successful. and then of course the internal culture response to that. when people look around, everybody knows that everybody else gets paid. if you want to find out, you can do that. it is equity within the company. so when you do all that company

creates a virtue and diagram you are looking at. creating value for team members and the experience for customers, making sure their needs are well met, et cetera and then become loyal shoppers. you don't need the spent a lot of money and marketing. how i got involved in all this was looking for companies that did not spend much at all and marketing. customers really don't care. these companies actually have very high levels of insurance, but they don't spend money and accurate indexing coupon and all of that. when you do that, that of course leads to higher revenue, higher sales with which you operate. happy investors and resources to be able to donate games into the community, to do things for

society, but also invest back into growth. the idea is these are highly profitable companies. their purpose is their purpose and higher profits enable them to fulfill their profit. so they can now change that have a greater impact on people's house because now they are $13 billion company versus when they were just starting out. there's 350 today. so that's the driver. the purpose is defined by them. but being profitable is very important because if you're not in you can't achieve that. >> host: professor sisodia, how did you and john mackey could have dip on this book? >> guest: i had written about called firms of endearment. that really started as a study of companies that despite not

spending much on marketing, actually i'm loved by their customers interested. the reason i did it is because i'm a marketing professor at a lot of research showing all the time we spend more of our money on are kidding. up to a trillion dollars in 2007. that is equal to the gdp of india. on a per capita basis, more than 85% of the worlds population. we are spending on ads and coupons. i was frustrated. we're wasting a lot of money. in order to address that question, i said let's find companies that don't spend so much. [inaudible] so we found a bunch of other companies. it wasn't about marketing at all. employees also have suppliers

loyal to them. they get hundreds of letters a week staying where you going to open your next-door because we are planning to move, but we are going to have unless you have a story there. so we found that they existed in the sort of network of love and care, but all the stakeholders not only were loyal and trusting. hence the title of the book, firms have been your name. these are companies we love and there's tremendous power that. we don't recognize in the world of business the most powerful force reason the universe and yet we choose to stay away from it. in that connection, they had not spoken with john. if a policy of not speaking to book authors. when the book was almost done, talking to somebody who mentioned the book as a conclusion to that person. john mackey would love that.

e-mailed me the documents and send a word file which the prepublication was john actually read it. he invited us to come and meet and have dinner together. at that time i had in mind not vision that i had created. after 25 years of teaching business does discover a whole other way from a disillusioned marketing professor of is not as excited. i think your companies do these wonderful things and they are more successful. how come we don't know about this? i had in mind not been efficient for what i was going to institute a new capitalism. the acronym being ink. i wish i was not to people to get some kind of non-profits at that point they get a movement

and studies professors change the way we teach business. i wasn't getting much headway in that. i showed it to johnny said that's exactly what i do, my vision of what i want to do, but i just color conscious capitalism. seemed like an odd phrase at the time to me, but over time really grown to love it because it's exactly what we are talking about. you apply the higher consciousness, which includes the capacity for love in care and all of that and for oneness. then you start to see a wonderful thing called business become even more. so if you want later we had a retreat and we invited a few other people to get involved and set up capitalism ain't. now we do multiple conferences a year. in brazil and australia and u.k. and india.

many of them around the u.s. we are really trying to build a movement to create awareness of these ideas. among entrepreneurs, ceos, executives and business as well. >> host: "conscious capitalism" is the name of the book. "conscious capitalism: liberating the heroic spirit of business". raj sisodia is the author. conscious capitalism.org. >> it also tells you about his father who was a permanent freedom fighter who spent many, many years in jail. a cousin told me when i was in calcutta interviewing her in 2011, she said jill was like a house to him. so i'm going to start with that.

ever since he was born, he was like into his father. he was as handsome as his father with the same strike and a chiseled jaw line that gave those many distinguished air, since they belong to a secret world of privilege that went beyond wild, intellect above mine. in a society where skin color was a defining force. a clear advantage that afforded them a natural superiority. both were known for their generosity of spirit and obliging by bit over the course of their lives would win them steadfast friends and loyal followers. beneath the surface, the similarities ended. unlike his son, he came of age in an occupied country. and in the fêted by birth in 19 away to live in deference to an imperial power. as the descendent of the bloodlines, was also ironically

one of the chosen ones. he would be trying to deny his indian and perform all in the service, while he would receive a command. on november the fifth, 1964, the eldest son, 15-year-old carefully draping his over his body. growing up in a post in a family of four children, two girls and two boys among the youngest born after the family moved to delhi in the 1950s. rajiv was accustomed to responsibility. he and his older sister rover is looking younger sibling. the economic assessor to his parents were two career couple long before it was invoked. the montessori school in upon

his release from prison took up journalism as a means to support himself and his family. his old revolutionary ties to the leaders of the nearly free india helped him rise. after india's independence, his dispatch to start to delhi standard. he was a frequent visitor, the official residence of the president in indianapolis on the that the country's first prime minister call him by his first name. so entrusted they would often seek his counsel on how to deal with the press. is a british subject through hard work and sacrifice, became an insider in modern india. he walked into the room of his uncle's calcutta home to say farewell. shrouded with heaps of miracles, fragrant, his father's day in a coffin. as is customary, the body was

washed and purified water and dressed in a waco type computers fitting shirt. when he arrived at the hospital the previous day, he was told his father was dead. but as he stood at the entrance to his father's term, he saw plastic bags still attached, bubbling with air from his father's last gasps. for a moment he thought they had made a mistake. the years of struggle and incarceration had taken their toll. at 56, he was dead of kidney failure. in the months leading up to his father's death, he spent a lot of time with his father, campaign him on long walks and listening to stories of time in the freedom movement. his father had been intentionally exposed to tv in prison, which ultimately cost him the long run. over and over again during one particular brutal interrogation. yet in spite of it all, the

father he knew was kind and obliging to everyone. he would later recall he never spoke ill of anybody and he would've had a lot of us in adults into them. it wasn't true. this is true of most of my father's generation. they were quite extraordinary in terms of simple living and high thinking and not think ill of other people. this morning in front of his uncle's house, neighbors, friends and admirers december that pilgrims a powerful journey. door-to-door launderers and the donkeys watched as the coffin was placed into a class taught parts in front of the red house with green shutters. in tribute, they solemnly cleared a path to the procession. at 9:00 a.m., closely followed by cars. the media family departed. as they approach the top of this

treaty could make it a small shrine with the hindu god of distraction. after the offices of his father's employers, the newspaper group led the crowd to wait time. on the other side of town, mhr, ushered the group is former jailer race to catch one final? of the man. he ran and then to the funeral parlor to no avail. on his last guess he found the right destination. finch in a fist full come the public through a crowd of hundreds of friends, family and admirers interested made his way down the road oddities that can align to be cremated. at last come after pushing his way past, the former prison guard made it to the coffin. i should make his teenage son was just completing the final. in the silence that followed,

was able to place who is left of the bunch of lotus flowers on the feet of his fallen friend. rashid group had been holding his beloved fathers body into calcutta select trick. overcome with grief, offered a prayer to his dead friend. preying on a great of history at. ..