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Thursday, 2 December 2010

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.

‘The middle class is shrinking; we are becoming much more of a three-tiered society with huge demographics at the top and the bottom of society,' he explains. ‘It is a bridgeable gap if we take a radically different approach to taxation and welfare and other ways of redistributing income. However, I think that it will take an enormous effort of political will which we haven't seen a sign of for the last 30 years.

‘For example, in the 2007 election campaign the coalition promised huge tax cuts. These amounted to a very big reduction in tax for wealthy people and a tiny reduction for poor people. There was an opportunity to say "we can do big tax cuts," so we should reverse this: give greater tax cuts to the poor and less cuts to the rich. We could do it if we wanted to.'

A Natural Part of Being Human

Mackay has never attempted to hide his politics. ‘Yes, I am a fully paid-up, bleeding heart liberal. And of course I would like to see us as a very tolerant, compassionate, harmonious, generous, accommodating society, paying excessive regard to the disadvantaged, the poor, the unintelligent,' he told Compass. But why, I ask, should more conservative or sceptical people believe in generosity?

‘I think the harsh answer is you wouldn't ever convince them,' he replies. ‘There are always people who are very stitched up or only perform generous acts because of the goods it will bring them.

‘However, in What Makes Us Tick? there's a chapter about the desire to be useful. I think all of us do want to be useful. I think that desire expresses itself in generosity, altruism, helpfulness and other ways. It's a natural part of being human and only stifled by anxiety, materialism and self-centeredness.

‘If we want to pride ourselves on being a civil society then at our core would be a generous disposition. This means being generous to the poor, to the less intelligent, and to the strangers that come here in need. It's an attitude that can permeate a culture and there are many Australians that think like that all the time.'

Ultimately, Mackay is optimistic about the future of generosity. We are a fairly generous society, he says, and all signs point to us becoming more engaged and less materialistic. After talking to the social researcher, I find it hard to disagree. Mackay has most generously given up an hour of his Eastern States public holiday to speak to me.

Finally, he asks whether I'll be at the Breakfast by the Bay event at which he will be speaking. ‘Maybe,' I reply. Only afterwards to I realise that I've given a typically Generation Y answer.

Dr. Hugh Mackay was speaking at Breakfast by the Bay on 1 December 2010 on the topic of ‘Are we becoming a less generous society?'. The event is jointly sponsored by The University of Western Australia Business School and The University Club. Hugh Mackay's latest book, ‘What makes us tick? The ten desires that drive us,' is available through Hachette.

Back to Part One

Media references

Heather Merritt
Director, External Relations
UWA Business School
T: +618 6488 8171
E: [email protected]

Verity Chia
Communications Officer
UWA Business School
E: [email protected]

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