Corporate social responsibility and micro-economic reform

More broadly, what business did, from the community point of view, was far less important than what the politicians did to ensure that Australia’s relatively narrow wage dispersion was maintained, that full employment was achieved, that markets were protected for domestic suppliers and that families could plan and prosper around relatively stable assumptions of career employment, achievable home ownership and cheap public infrastructure.

In this context, where the mixed economy provided, business kept up its end as an integral part of that mixed economy. The idea of a set of separate or parallel obligations for business was weak when the mixed economy provided. Equally, while the mixed economy provided, the standing of business was also weak. Business did not matter.

After Reform, Business Matters

Now – it’s different. The mixed economy as we knew it is dead. Tariff protection has mostly gone. The labour market is not exactly deregulated, but no longer functions in isolation from the international economy as once it did. The public enterprise sector is mainly sold, although less so in some States than others. More generally, Australia’s elaborate, traditional systems to provide for social ends through the re-organisation of production are gone. Similarly, the counter-balancing compensating systems are also gone, or are in the process of being dismantled.

For instance, the traditional compensation for the costs of tariff protection paid to the efficient, exporting agricultural sector in the bush by the protected cities are going or gone. One can hear the anguish this is causing. No less anguish is emerging in the cities, where the infrastructure subsidies that underpinned Australia’s post-war suburban lifestyles, such as the subsidies of power and water provision, and enabled more to enjoy the suburban lifestyle, are also in the process of being removed.

Production has been restored to the market. In the process, business has been given back vast areas of discretion hitherto denied or compromised or qualified by social ends and interventions. So for the first time in many decades in Australia, perhaps for the first time since the devastating 1890s Depression, business matters again. The main game now involves the decisions businesses make. This is why notions such as corporate social responsibility have emerged the way they have, when they have, with all of the political risks they carry if business does not get it right.

Business is the Beneficiary of Reform

There are numerous versions of how the reforming of the Australian economy came about and who or which sectors it benefited. One undoubted element, however, was the influence of Australia’s newly emergent globalised businesses and the executives who ran them.

Business was always going to be the major beneficiary of reform, although its leaders sitting on assets in the sectors that weren’t going to survive, such as heavy machinery, some chemicals, and so on, didn’t think so. The major attraction, of course, was lowering high-input costs for Australian companies wanting to participate in international markets. But there was more to it as well. Reform, it was hoped, would produce more business-like decisions from those making infrastructure investment decisions. The arguments for reform were largely run by business organisations, using business arguments, stressing business opportunities on one hand and business costs if the reform mettle was not grasped on the other.

What Is Expected of Business in the New Australia?

It is easy to over-rate the social alienation caused by the extent of change in post-war Australia beginning in the mid-1980s. The Hugh McKay group, for example, has become specialist in eliciting and recording uncertainty, fear of the future and bitterness. This in turn is being fed back through mass media which reported even during the dot-com boom last year that while Australians have never been better off and their economy never more buoyant nor more healthy, the dwindling masses of middle Australia were apparently preoccupied by mainly private interests, having retreated to the bosom of the family, hurt and bewildered by the hard knocks of a tougher, less forgiving nation.

All this is interesting, but hard for business to respond to. But let’s look more generally at the sort of response one might reasonably expect from business. The most obvious responses are those that are within the gift of business to carry out. So, they could be employment responses or operational responses, or responses that will contribute to ensuring business sustainability, and for which can be established a clear business case.

More broadly, however, business must begin to cover to some extent, the terrain previously covered by the mixed economy. This is not to say that business should pretend to be a government, or replace government. Rather, business should expect that it cannot remain unseen in the shadows, it will need to be involved, and above all it will need to have strongly developed business cases for a broad dimension of social involvement.

Broadly, these sorts of activities are what a number of companies in the resource sector are already doing, and if they are among the first it is because they saw it coming earlier in that industry. But other companies in other sectors will catch up and are in the process of doing so right now.

In this sense, corporate social responsibility is an emerging, catch-all set of new business systems which project businesses into the respective communities and audiences of importance to them and which demonstrate deliberately that there is more to business than just business. This is new for Australia, and it may mean we are on the verge of introducing a corporate dimension to many hitherto public or predominantly social areas of Australian life.