Business School Topics
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UWA Business School
In part one of our conversation, Hugh Mackay spoke about the rapid pace of modern society and the need to make allowances for others less fortunate than ourselves. Now in part two, he talks about ethical business, the hung parliament, and the future of generosity.
Business and the Big Furphy
In 1989, Mackay became one of the founding board members of the St James Ethics Centre, which was established in order to promote ethics within Sydney's business community. Although the centre is now more than two decades old, the issue of business ethics - and generosity in business - is as critical as ever, with the finance industry's penchant for risk-taking receiving much of the blame for the recent financial crisis.
‘"Good ethics is good business" is a serious misreading of the nature of morality,' says Mackay, rejecting the fashionable trend of "green" or "socially responsible" business practices. ‘Businesses should behave ethically because that's the right thing to do. It's not just a question of doing what's morally right in order to benefit the business. That's the big furphy about business thinking. That's not why you behave well; it's like saying I'll help this frail, elderly person across the road so that we'll get a round of applause from pedestrians.'
Basic business ethics, says Mackay, are characterised by a sense of what is right and wrong - for example, ensuring fair pricing, regular and open reporting, and no exploitation of the consumer. Many businesses have gone beyond this, choosing to create ‘Fair Trade' and environmentally-sustainable products. Yet given that this generosity involves a sacrificing of profits, how has ethical business weathered the global financial crisis?
‘I think when there's a crisis, such as there has been in the last couple of years, that it makes business people more defensive, more anxious and a bit less generous - like ordinary citizens,' says Mackay. ‘We're probably going through a period through which we can expect a bit less generosity.' But, adds Mackay, it is important to remember that as the business world returns to stability it can - and should - continue to act ethically.
A Fragile Arrangement
In the Sydney Morning Herald in 2006, Mackay wrote that under John Howard's leadership: ‘Principles - whether involving human rights, ministerial propriety or care of the environment - are properly tempered by the shifting pressures of realpolitik.' Fluctuating principles were obviously not something Mackay admired. Yet with Australia now navigating its first hung parliament since World War II, is the pragmatism and compromise that Australians are witnessing leading to a further erosion of political principles and national generosity?
‘I think the fact that we don't have a government that's got the majority and can just push everything through the Parliament means there's going to be a lot more debate about all sorts of issues,' says Mackay. ‘As such, it will accelerate the process of us re-engaging with the national agenda, with social, economic and cultural issues, and the more we become engaged the more likely we are to become more generous in our attitudes.
‘I'm quite optimistic that this fragile arrangement could bring out the best in us because it does mean we have to be more sensitive to other people's points of view. Already the prime minister is considering introducing a carbon price, and so what was off the agenda is now on the agenda.'
‘But,' I ask Mackay, ‘doesn't the introduction of a carbon tax amount to a broken election promise? How will a hung parliament affect parliamentary accountability?'
‘I think what is going to happen is they'll be more accountable because more people will feel as if their vote made this happen,' he replies. Mackay goes on to point out that 30% of voters are regional voters whose priorities are often ignored by governments. Even if these voters didn't vote Labor, he says, the independents will be able to give a voice to their concerns. In other words, the government will be forced to listen to alternative or opposing points of view - and listening, as Mackay's personal experience attests to, is one of the most important elements of generosity.
Parliament, then, provides an outlet for different voices. But how significant is the prime minister's role in creating a climate of national generosity? ‘I think leaders are very influential in the way a culture values things,' says Mackay. ‘One of the reasons why people became so disillusioned with Kevin Rudd during the last six months of his prime ministership is that they had such high expectations on climate change, for marginalised groups, and when it didn't turn out like that they were very disappointed.
‘With John Howard there were very different expectations. They saw him as a very pragmatic, materialistic kind of person very much primarily concerned with economic questions, and that created a tone for Australia where we became noticeably a more materialistic society, where we created record levels of personal and household debt in order to fuel our materialism. It was an extraordinary period. It coincided with the last 25 or 30 years of really massive social upheaval and technological change.'
The pragmatism and materialism of the Howard years, says Mackay, manifested itself in policies such as the offshore processing of asylum seekers and the introduction of the GST. The burden of the tax, argues Mackay, fell most heavily on the poor, and so during these years, Australia's class gap continued to grow.
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