Transition to a different model of business behaviour

Matthew Washington

The following was extracted from papers at the 3-day NENA (New Economy Network Australia) conference held last in November, organised by the Newcastle based NENA group. This year it was conducted online.

Origins of my perspective

I worked with business – small, medium and large – for over 25 years in my role within the Australian Taxation Office.

This meant (particularly over the last 15 years) looking at the business accounts and interviewing their staff in a range of medium to large businesses. This was a detailed process carried out over an extended timeframe.

And while accounting, commercial and corporate law, and administrative practices are favourite topics, the reality is that business and commerce in general are part of our society’s ways of socially engaging. The dynamics of those relationships (usually labelled economics) are NOT in my view well explained by neoclassical economic theory or by the way in which large public companies practice their cavalier capitalism.

The majority of businesses in Australia are actually sole traders (amounting to 61%). And 93 % of small to medium incorporated businesses have turnovers smaller than $2million, and with staff numbers lower than 19 per enterprise. They do not trade shares on the stock exchange and so cannot attract large amounts of capital. The corporate structure that is supposed to drive merciless profit seeking and hyper-competitive capitalism is largely not part of the experience or the operating capacity (or everyday rationale) of the majority of businesses.

But unfortunately the ethos of “homo economicus” and the notion that this is “how the market really operates” is alive and well and promulgated most days in policy pronouncements and deferential commentary within both business and finance circles (generating impoverish- ed narratives). The main topic appearing in journalistic commentary is often about the importance of allowing certain business interests to obtain concessions. And so, policy and rhetoric tends to ignore or embellish certain facts over others.

Some facts about our economy

The statistics that I obtained from the ABS and ASIC illustrate a few matters that might give some pause in ones thinking about how entrenched the “capitalist juggernaut” really is and how a transition to different business behaviour is not only possible but is not such a big step. The “social construction of reality”, a shared project, can be helped along and prodded towards change.

The actual elements of what supports commerce and makes it function are NOT resident primarily in the private sector. The ‘not for profit’ and “charity” sectors, as well as the “public sector” all exhibit different elements and drives within the economy and are NOT factor- ed into GDP. I suggest that they have key roles and tell a larger story about what our economy is about. I suggest they may be a locus of “regenerative forces” within our economy. The GPI (the general progress indicator, and an alternative to GDP) does include “social cohesion” and living within nature’s bounds (dealing with externalities) as worthwhile and valid components to be measured in this alternative metric to GDP. So perhaps, what I call regenerative aspects of our social engagement are a feature of GPI.

It is not that everything is OK – clearly it is not. The political power of cashed up segments of the economy is real, but the perception that suggests we are somehow locked in the capitalist juggernaut heading for the cliff is neither an inevitable future nor one that the majority of businesses are likely to endorse. So I think that if we can just take the neoclassical blinkers off, and reorientate the narrative, we can change the social construction of reality. Hence we have some hope of a root and branch transition to sustainability.

 

About the author: Matthew Washington has degrees in the Arts and Philosophy, and is also a qualified taxation professional. He has studied Sculpture and Silver Jewellery making, plays flute and Saxophone, and loves Jazz and Drama.