We All Need To Make Money and Interact With Capitalism. Is There a Non-Icky Way To Do It? | David Gelles
David Gelles, NYT climate correspondent and author of "Dirtbag Billionaire," discusses Yvon Chouinard's Patagonia, exploring how ethical business practices, deep environmental commitment, and employee care can coexist with capitalism, culminating in Chouinard giving away his fortune.
Deep Dive Analysis
15 Topic Outline
Introduction to Yvon Chouinard and Patagonia's Philosophy
Yvon Chouinard's Background and the 'Dirtbag' Ethos
Patagonia's Unique Corporate Practices and Employee Care
Patagonia's Political Activism and Supply Chain Standards
Yvon Chouinard's Character: Contradictions and Nuances
The Decision to Give Away Patagonia and Its Structure
Motivations Behind Giving Away the Company and Its Influence
Dissatisfaction with Capitalism and Business as a Force for Good
Buddhism, Right Livelihood, and Patagonia's Self-Inquiry
The Impact of Ethical Practices on Patagonia's Bottom Line
Personal Impact of Reporting on Patagonia for David Gelles
Limitations of Public Companies on Ethical Business Practices
Outlook on Climate Change and Future Societal Challenges
Advice for Individuals Living in a Capitalist System
Talking to Children About Capitalism and Finding One's Role
4 Key Concepts
Dirtbag (outdoors community)
In the outdoors community, a 'dirtbag' refers to someone so unenamored with material possessions that they are content to sleep in the dirt, preferring to be closer to nature and their next adventure over modern luxuries. Yvon Chouinard proudly identifies with this label.
Purpose Trust
A legal entity that can be set up in California to hold a bucket of stock or money and is instructed on what to do with it. Patagonia used a purpose trust to hold the 2% of its voting shares, which then instructs the company on its operations and profit distribution.
Holdfast Collective
A series of new 501c4 non-profit organizations created by Patagonia. These entities receive 100% of Patagonia's profits not reinvested in the company, and then give those monies away on an ongoing basis to support conservation and grassroots activism.
Right Livelihood (Buddhist concept)
An entry in the Buddha's Eightfold Path that emphasizes not doing harm through one's work. It implies trying to avoid trades that actively create additional suffering in the world, and ideally, doing work one cares about and is passionate about.
8 Questions Answered
The episode suggests that while the capitalist system has flaws, individuals and companies can choose to behave ethically within it by adhering to principles like 'right livelihood,' minimizing harm, and using their agency to create positive change.
In the outdoors community, a 'dirtbag' refers to someone who is so unconcerned with material possessions that they are content to sleep in the dirt, prioritizing nature and adventure over modern luxuries. Yvon Chouinard proudly identifies with this label, though he bristles at 'billionaire'.
Chouinard and his family transferred 2% of the company's voting shares to a newly formed purpose trust and 98% of the non-voting shares to a series of new 501c4 non-profit organizations called the Holdfast Collective. The purpose trust instructs the company to donate 100% of profits not reinvested to the Holdfast Collective, which then gives the money away.
The Chouinard family was never motivated by money, but rather by their passion for the outdoors and conservation. A key trigger was Yvon Chouinard's distress at being listed as a billionaire by Forbes magazine in 2017 or 2018, which prompted a multi-year process to divest his fortune.
David Gelles believes it's highly unlikely, as public companies are beholden to shareholders and quarterly earnings reports, making it very difficult to prioritize ethical considerations over growth and profit in the same way a privately held company can.
While global warming is accelerating and human efforts to counteract it are not keeping pace, leading to significant suffering and a 'profoundly different planet,' David Gelles believes human civilization will still exist in 100 years, albeit with many challenges and potential tipping points.
He advises individuals to seek 'right livelihood' by doing work they care about or at least work that does no harm, to be mindful consumers by reflecting on essential material goods, and to spend time in nature for profound experiences.
Parents should acknowledge the validity of younger generations' concerns about the system, but also emphasize that there's always work to do and people to help, encouraging them to find their own way to 'show up like bodhisattvas' and contribute positively.
21 Actionable Insights
1. Renounce Fortune for Purpose
Structure your company to legally transfer ownership and profits to trusts and non-profit organizations, ensuring 100% of profits not reinvested are donated to conservation or other causes, thereby renouncing personal fortune.
2. Maintain Private Ownership for Values
For companies aiming to prioritize values and ethics, maintain private ownership to avoid being beholden to shareholders and quarterly earnings reports that often prioritize short-term profits.
3. Scrutinize Supply Chain Ethics
Deeply investigate your company’s entire supply chain, including tier two and three suppliers, to ensure ethical working conditions and product sourcing, discontinuing use if conditions are unacceptable.
4. Embrace Self-Inquiry & Correction
When discovering imperfections or harm caused by your products or practices, engage in extensive, even expensive, efforts to remedy the situation, including public disclosure and accepting financial hits.
5. Practice Right Livelihood
Choose work that does no harm and aligns with ethical principles, understanding it as a core Buddhist precept for correct or wise living.
6. Support Working Mothers Extensively
Offer generous maternity benefits, on-site childcare, and pay for travel companions (like nannies) for new mothers on work trips to comprehensively support their careers and family needs.
7. Fund Grassroots Environmentalism
Use company profits to support local grassroots environmental activists and conservation efforts, starting small and scaling up over time for greater impact.
8. Practice Mindful Consumption
Reflect on what material goods are truly essential, be clear-eyed and deliberate about spending money, and question compulsive consumption to align purchases with actual needs.
9. Regularly Connect with Nature
Spend time in nature, such as woods or mountains, to foster presence, deepen your connection, and experience profound personal and Dharmic benefits.
10. Respond Actively to World Problems
Acknowledge the validity of global concerns (e.g., capitalism, climate) but focus on taking action and helping others rather than being passive or fatalistic.
11. Prioritize Purpose Over Profit
As a founder or entrepreneur, prioritize purpose and mission over personal financial gain, being willing to renounce fortune to ensure the company’s values endure.
12. Draw Inspiration from Zen Simplicity
Use Zen Buddhism’s focus on simplicity and getting to the essence of things to inspire product design, problem-solving, or other creative and life endeavors.
13. Embrace Human Complexity
Recognize that individuals are a ‘jumble of contradictions’ and may work at cross-purposes, avoiding a ‘Manichean view’ of purely good or bad people.
14. Accept Short-Term Financial Hits
Be willing to deliberately throttle sales, reduce product lines, or limit growth to prioritize ethical sourcing and responsible practices, even if it means short-term financial losses.
15. Build Value-Driven Companies Early
For new companies, build in value-driven principles from the outset and protect control to prevent external investors from compromising ethical decisions.
16. Teach Responsibility to Help Others
Remind yourself and your children of your blessings and the less fortunate, and take every opportunity to help others through your work or charitable acts.
17. Act Ethically Within Capitalism
Recognize you are born into a capitalist system and have agency to choose how to behave within it, using your position to do good and influence commerce positively.
18. Find Right Livelihood in Context
Understand that your ‘work in the world’ is tied to your specific context; seek to figure out what ‘right livelihood’ looks like organically within that environment.
19. Prioritize Employee Well-being
Implement policies that allow employees flexibility, such as surfing when waves are good, to prioritize their well-being and personal lives over rigid work schedules.
20. Acknowledge Climate Suffering
Be clear-eyed about the accelerating pace of climate change and the inevitable suffering it will bring to people, animals, and communities.
21. Find Opportunity in Crisis
Even in scary situations like climate change, look for opportunities to help out and create common cause with others.
5 Key Quotes
If we don't write stories about people who are doing good work in the world, we sort of forfeit the opportunity to have positive role models.
David Gelles
I don't care if we lose money. We're going for it.
Yvon Chouinard (recounted by David Gelles)
If you're beholden to shareholders, if you're at the mercy of quarterly earnings reports, like good luck being ethical, good luck telling your investors that like, sorry, we're going to throttle growth because we don't like, you know, how a factory in Vietnam is treating its laborers. Like, great. We'll find a new CEO. Like, fuck off. It's just not, not the way most companies work.
David Gelles
I still believe that 100 years from now, people are going to be having conversations. I still believe 100 years from now, there's going to be education and entertainment and commerce.
David Gelles
You are born into the world you are born into. And if you are fortunate to have optionality and energy and resources, then his invitation to me, as I understood it was to figure out what right livelihood looked like in that context and in an organic way.
David Gelles