Karen: What is often forgotten about people like Mackey is Joseph Schumpeter’s important distinction between owner-controlled and manager-controlled businesses. I experienced the significance of this comparison when I was representing management in the field of labor law. Owners tended to take a longer-term perspective in their decision-making (“this will all belong to my children and grand-children some day”) than did managers, whose outlooks tended to extend into a matter of months. In Schumpeter’s view, managers had the mindsets of employees, for whom short-term salary considerations, job security, etc., were dominant factors. High salaries as administrators became more important than the long-term viability of the firm, with the manager enjoying the option of moving to another firm if the policies he had created resulted in the downfall of that enterprise.
Our firm represented such owner-entrepreneurs as Sam Walton, and it was delightful to witness the outlooks of such men. I must add to my list of admired business leaders the name of Lloyd King, the owner of King Soopers, Colorado’s leading grocery chain. While I never had the honor of having him as a client, I had some indirect connections with the man back in 1966, as he made a principled and intelligent response to a “spontaneous housewife boycott” of grocery stores—a campaign it was later discovered to have been carefully orchestrated by the Johnson administration. As the managers of other grocery stores fell all over themselves to make the most foolish responses to the “housewives” demands, Lloyd took a longer-term perspective. (E.g., while this boycott was proceeding, Lloyd intentionally violated a state regulation mandating minimum prices for milk products. His firm was found guilty and fined. The next day, two front-page news stories appeared in Denver newspapers: (1) King Soopers fined $X for selling milk at too low a price, and (2) housewives’ campaign for lower grocery prices continues.)
It is nice to know that there are men like John Mackey who continue demonstrating the important role that property ownership plays in the quality of our lives. Somebody should write a book on that topic some day!
