Pavan Sukhdev on markets of the future
Pavan Sukhdev is an environmental economist whose field of studies includes green economy and international finance. Pavan sat down with The Ethics Centre’s Dr Simon Longstaff to chat about the future of business sustainability.
Pavan Sukhdev is considered a true pioneer of sustainability. His business background champions the fusion of finance and economics with sustainability and responsible management. So how did a person interested in banking, finance and economics come to have a particular passion for the sustainability agenda?
Pavan says he owes it all to his upbringing. “I think the cultural upbringing of a child in India, in family, in networks which are community-heavy and community-oriented, never too far from nature – because India is a pretty wild place if you just care to step a few kilometres out from wherever you are – I think these things create a sense of understanding of a world that is not just an urban world, and not just a markets world.”
Pavan’s perspective on markets and value shifted drastically after taking up a job in Singapore with Deutsche Bank, when a conversation with a friend prompted him to realise that what people value – relationships, family, nature – doesn’t trade in markets. And yet our society is so mesmerised by the magic of markets that, if something doesn’t have a price, it doesn’t have value to us. He started doing research on environment economics and wrote a piece for the Economic Times in India, which helped him find a few kindred spirits at Deutsche Bank.
“I came to a point where I thought, someone needs to do something about this economic invisibility of nature.”
It was in this marriage of markets and the invaluable asset of the natural world that Pavan felt he had found his calling. He recounts a story about one evening when he was driving home from work, daydreaming about an idea for a green accounting project for Indian states. He drove past a roadside sign with a quote from Gandhi, which read: Find purpose; the means shall follow.
The message hit him “like an accident”, and Pavan called up some influential friends who, to his delight, were all very willing to help him set up his project. Four friends started working on the side-project and within a few years they had cracked it, he says. “We actually created the world’s first set of complete green accounts for the entire Indian Union of 28 states.”
While there were a number of his colleagues at Deutsche Bank at the time who quietly wondered what he was doing, Pavan is optimistic that in the years since perceptions and attitudes towards valuing the environment have changed, so much so that it has become the mainstream.
AUDIO: Listen to Pavan’s story about realising his environmental vision.
“I believe companies are not merely machines to make money for shareholders, they should have purpose. In fact, they should begin with purpose and then define their path to profitability. And these ideas would have been crazy 10, 15, 20 years ago, but they’re not anymore.”
Pavan on the corporations of the future.
“I see the corporation and its ability as similar to that of a species. A species evolves in response to its environment as the environment changes. The strong who are able to cope with that environment survive and the others die away and that creates evolution. And I see that corporations will move in that kind of direction. So the question is, what are we changing in the environment of the corporation in terms of policies, prices, and institutions that are going to create the new corporation?
AUDIO: Listen to Pavan’s ideas about how corporations need to evolve to survive.
Organisations to watch in the sustainability space:
- Capitals Coalition – a global collaboration redefining value to transform decision making.
- The Social and Human Capital Coalition – a global collaboration that brings together leading organisations to harmonise decision-making processes around social and human capital.
- The Impact Management Project – a forum for building global consensus on measuring, managing and reporting impacts on sustainability.
- The Value Balancing Alliance – enabling decision makers to act consciously.
Pavan on the markets of the future.
“Through focusing on the economic invisibility of nature and the fact that our decision-making as policy makers or business people – and these are the two largest, most powerful decision-making groups around the planet – tends to ignore what is economically invisible, has led me to understand that there’s a lot more that we ignore. We ignore human capital. So we will, for instance, account in the GDP for the cost of building and running universities, teacher salaries, and such like, but we will not account for what’s put in as a result of those teachers and those universities and the creation of human capital. And the ability to leverage [human capital] and generate future income and so on is massive.”
AUDIO: Listen to Pavan’s ideas on how to value human capital.
Pavan’s advice for leaders:
- Find purpose; the means shall follow.
- Our values become our destiny.
- Put effort into trying to discover what you’re on this earth for.
- Try to understand, appreciate and express your values, and try to accept them.
AUDIO: Listen to the full podcast discussion with Pavan.
Pavan Sukhdev is an environmental economist whose field of studies includes green economy and international finance. He was the Special Adviser and Head of UNEP’s Green Economy Initiative, a major UN project tasked with demonstrating that the greening of economies is not a burden on growth but rather a new engine for growing wealth, increasing decent employment, and reducing persistent poverty.
This episode was made possible with the support of the Australian Graduate School of Management, in the School of Business, at the University of New South Wales. Find out more about other conversations in the Leading with Purpose podcast.
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David Gonski on corporate responsibility
David Gonski sat down with The Ethics Centre’s Dr Simon Longstaff to chat about the future of business sustainability.
David Gonski is so well known in Australia, his surname has become part of Australian vernacular. He’s been a lawyer, he’s headed up corporations and banks, he’s been the chairman of major companies, and he also serves as chancellor of the University of New South Wales.
After completing a law degree, Gonski got his start in the business world 43 years ago, long before climate, sustainability and corporate responsibility were on the agenda. “Profit was key”, he says, “We lauded people who made money and those who were not tough and didn’t exploit every loophole were regarded as not very good business people.” While his peers in the law profession were driven by ethics and justice, Gonski was disappointed to find that those in the business sector were characterised by their arrogance and capacity to exploit customers and resources for profit.
“I think we are humans and as managers we must never forget that we’re humans. And we have obligations to our society as humans which we bring to every part of the world in which we work.”
Nowadays, sustainable development goals are central to boardroom discussions. Business as a whole; from the very large to the very small, is being recognised as having a major impact in the world both in society and the natural environment, which in part is why people look to businesses increasingly to address concerns where governments have failed to do so.
“Today people don’t want to work for a company that’s not socially responsible. Today people often choose the container that is more biodegradable or whatever than the one that isn’t.”
Gonski on ethics.
In law there are very defined legal ethics, but when it comes to business it’s complicated. As an individual there are certain ethical things that you must do to lead a proper life, and for Gonski, the notion of asking the hard ethical questions has changed his life, and approach to boardroom decisions. Business ethics is about asking the questions: what should I do? What is good for the planet? What is good for the future – the long term versus the short term? He believes those who are successful in business are those who really think about things, rather than just learning things by rote or just accepting the status quo. Of course, sometimes you make the wrong decision but you must always be willing to ask the questions.
Gonski on responsibility.
Above all, business leaders have a responsibility to their community. Business should never be about just about making profits, or just employing good people, but rather consider what business is achieving for the long-term future of the country and our society. Responsibility should be a compulsion, because if we ignore it, it will in the end reduce the value of our business and deter us from being able to do what we want to do.
Gonski on sustainability.
Sustainability should be our longer term compulsion to look at what your short-term thinking is and how that can affect long-term growth. “I have lived through 40 plus years of people making short-term decisions. And let me tell you, they may not have themselves regretted because often they’ve made good bonuses from it, but in the long-term the business has.”
AUDIO: Listen to David Gonski chat about the three key pillars of management.
What keeps Gonski up at night?
“I do believe we should all be working together. And I am worried that our working together between corporations, government, and the community generally is not as perfect a circle as it needs to be. We need to hold hands rather than keep arguing with each other. It’s still a little too easy to make short-term decisions. And I’m often very comfortable that a decision in the short-term is right, but I wonder a lot in the wee hours of the morning ‘is it a long-term sustainable idea?’”
Is David Gonski optimistic about the future?
“I am extremely optimistic and I have a number of reasons to be. As chancellor of a university my optimism is always reinjected and reignited by meeting the students that we’ve got. We’ve got fabulous people, who are excited by concepts, who are thinking, who want to change things in their own way and do good things. That’s exciting. That’s wonderful.”
“ I think an absolutely guided and principled optimism is the way one should look at business.”
Gonski’s advice for future business leaders.
Despite having over four decades of business experience, David Gonski is still learning. Throughout the pandemic, one of his most important lessons was that canvassing broadly for advice is a strength not a weakness; that it’s vital to broaden your circle of advisors and take more advice from more people. One of the hardest things for CEOs is to admit they don’t know the answer to a question, but terrible things happen when they pretend to know the answers. Throughout his career, Gonski has watched many CEOs laud strength, which is manifested in people who can make fast decisions, in people who don’t prevaricate, but now he believes the real strength lies in an ability to put one’s thinking to one side and seek advice.
AUDIO: Listen to David Gonski chat about what he looks for in a CEO.
Five tips from David Gonski.
- Make sure you understand the history of the company.
- Learn about ethics.
- Be willing to admit you don’t know all the answers, and seek advice.
- Be open to ideas.
- Seek inspiration from your communities.
AUDIO: Listen to the full podcast discussion >>
David Gonski is former Chairman of ANZ and Coca-Cola Amatil, he is also Chancellor of the University of New South Wales, President of the Art Gallery of NSW Trust, and Chairman of the UNSW Foundation. He is a member of the ASIC External Advisory Panel and the board of the Lowy Institute for International Policy, a Patron of the Australian Indigenous Education Foundation and Raise Foundation and a Founding Panel Member of Adara Partners. In 2008, The Sydney Morning Herald described Gonski as “one of the country’s best-connected businessmen”.
This episode was made possible with the support of the Australian Graduate School of Management, in the School of Business, at the University of New South Wales. Find out more about other conversations in the Leading with Purpose podcast.
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The erosion of public trust
Christian Porter’s decision to accept an anonymous donation of one million dollars to help cover his personal legal costs has not merely raised questions about his personal judgement.
It has, once again, exposed larger issues about the extent to which some of our government ministers understand the demands of political leadership in a democracy.
To be clear, I do not see anything wrong, in general, with a person accepting financial support to cover the costs of litigation. Nor is there anything problematic about offering such support. There is not even a problem, in general, with such support being anonymous. So, if Mr. Porter were just an ‘ordinary citizen’, there would be little to discuss.
The controversy is solely related to the fact that Mr. Porter is a Member of Parliament and was a cabinet minister in the Federal Government led by Prime Minister Scott Morrison – a position that Porter freely chose to accept, presumably with knowledge of all that it requires. The fact that Mr. Porter resigned from the Ministry allays one source of concern. However, the issues at the heart of this controversy extend well beyond the treasury benches to encompass all serving MPs.
In fact, Mr. Porter’s case raises important issues of principle; namely, whether or not politicians (of all political persuasions) should be allowed, in our democracy, to receive substantial amounts of money by way of anonymous donations. In this, the acid test is not what is convenient (or not) for politicians and their supporters. Rather, the only consideration should be in relation to what supports, or undermines, the quality of our democracy.
Now, it could turn out to be the case that Mr. Porter has not broken any formal rules. Whether or not this is the case will be determined in due course. Yet, to think that this is simply a matter of compliance is, I believe, to miss the point. We are living through a time when the exemplary power of leadership is a potent force for both good and ill. And some of our politicians just don’t seem to understand this!
Ideally, I would prefer to cite examples from across the political spectrum. I am sure that they exist. Unfortunately, the spotlight tends to fall on those in power. So, when a government minister doles out public funds for a private political purpose it has a chilling effect on public trust in those who govern, even if what was done is technically within the rules. Then we have the case of Christian Porter – which, as noted above, seems to offer evidence of either ignorance of, or indifference to, basic standards of good governance.
We might all genuinely sympathise with the desire of a dad to be with his children on Father’s Day. However, when the Prime Minister takes advantage of an opportunity not available to hundreds and thousands of their fellow-citizens, it leaves the impression that there is one rule for the powerful and another for the rest of us.
As noted above, the issue I am concerned about does not concern compliance with the rules. It’s not that such questions are unimportant. It’s just not the focus of this article. Rather, I am worried about the effects of a continuing erosion of trust in our government. Some people might think this to be a trivial matter. Perhaps it is when nothing much is at stake. However, those are not the times in which we are living.
The COVID19 pandemic has been the most significant threat to Australia in the past 50 years. Furthermore, the response to that threat has largely lain in the hands of the community as a whole. Governments can lead, they can put in place policies and procedures, they can supply critical resources like vaccines and safe quarantine facilities. Yet, none of that will be to good effect unless ordinary Australians accept the costs of lockdowns, wear masks, remain socially distant, be vaccinated, etc. This requires the public to look beyond self-interest. The community as a whole has to have a concern for the general welfare of society. Most importantly, we need to be able to trust the judgement and advice of those who govern.
At least in part, this depends on us believing that our political leaders are in this with us; that we are ‘all in the same boat’.
Also, we need to believe that our politicians will act solely in the public interest and that if, for some reason, they do not, then they will be held to account with at least the same degree of rigour that applies to the rest of us.
Leaders should not wait until a time of crisis to demonstrate their integrity. Every decision – including those that do not ‘seem to matter’ – builds (or undermines) the ethical capital upon which politicians must draw at times such as these. That is, the character of political leadership is established in fine detail over time. Mere compliance with the rules is the bare minimum – nothing more. The real ‘weight’ lies in countless acts of discretion not merely in terms of substance but equally in terms of their symbolic significance.
We should all realise that this imposes an extraordinary burden on our politicians. Their public service requires more of them than we demand of ourselves. However sympathetic we might be to their plight, that is the price that must be paid by those who choose to govern. Alas, this is the lesson that a number of our political leaders seem not to have learned.
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BY Simon Longstaff
After studying law in Sydney and teaching in Tasmania, Simon pursued postgraduate studies in philosophy as a Member of Magdalene College, Cambridge. In 1991, Simon commenced his work as the first Executive Director of The Ethics Centre. In 2013, he was made an officer of the Order of Australia (AO) for “distinguished service to the community through the promotion of ethical standards in governance and business, to improving corporate responsibility, and to philosophy.”
BY The Ethics Centre
The Ethics Centre is a not-for-profit organisation developing innovative programs, services and experiences, designed to bring ethics to the centre of professional and personal life.
The rights of children
Camilla Nelson and Catherine Lumby’s new book Broken is a “devastating account of how Australia’s family courts fail children, families and victims of domestic abuse”. In light of Parliament’s recent decision to merge the Family Court and Federal Circuit Court, they wrote about the legal and ethical imbalance in recognising children’s rights.
“Alex” was 15 years old when her parents went to court. By then, her childhood memories included a recollection of her father “holding a knife to [her mother’s] throat”, and a series of violent altercations that resulted in her mother being taken to hospital with her face “swollen, bleeding and bruised”.
In court, the judge accepted that Alex was thoughtful, articulate and mature beyond her years. He acknowledged that Alex’s “post-traumatic stress symptoms” – including “anxiety”, “panic attacks” and “hypervigilance” – became “elevated” whenever her father was near. He even stated he was “satisfied” that Alex’s wish to have no contact with her father was “genuine”. But the court still forced Alex into child-inclusive mediation with her father followed by a defended trial – because her father wanted it; and the law apparently required it.
Although in Alex’s case, the judge eventually decided that forcing Alex into a relationship with an alleged perpetrator of harm was not in Alex’s “best interest”, this case illustrates the extraordinary asymmetry in a law that states “children have the right to know and be cared for by both their parents” but does not allow mature children – like Alex – the right to rationally and reasonably refuse this relationship when a parent is abusive and violent.
A glaring contradiction
Alex’s case – and others like it – draws attention to the glaring contradiction at the centre of family law that leads to poor decision-making and dangerously spiralling litigation. These are the so called “primary considerations” in the child’s best interest factors set out in Part VII of the Family Law Act – which, at worst, pits the child’s safety against their parents’ desires, or, at best, assumes a child’s interests will be identical with that of their parents, when this is simply not the case.
Perhaps because family law constructs itself as a contest between separating parents, it lags behind other legal jurisdictions in the recognition it gives to children’s rights. In legal matters outside the family courts, parental authority is broadly understood to diminish as a child’s capacity to make decisions for themselves develops. This is most obviously recognised in the right of a mature child to access medical treatment, regardless of their parents’ views. More starkly, the age of criminal liability in Australia is ten – far too young, according to experts and advocates – and the age of criminal responsibility is 14. In this context, it seems wildly incongruous for the family courts to conclude that a mature minor – such as Alex – is incapable of making age-appropriate decisions about where they will live and who they will see.
When Gough Whitlam and Lionel Murphy drew up the Family Law Act – this was not the case. Back in the 1970s mature minors like Alex were given more – not less – rights under Australian Family Law. In the Act as it was drafted in 1975, section 64(1)(b) stated: “where the child has attained the age of 14 years, the court shall not make an order under this Part contrary to the wishes of the child unless the court is satisfied that, by reason of special circumstances, it is necessary to do so”. Until 1983, children over 14 were all but entitled to make their own decisions under the law.
Even after the rights of adolescents were curtailed by an increasingly conservative parliament and judiciary, legal professionals were still inclined to allow teenagers to “vote with their feet” – as family lawyer’s like to phrase it – when it came to making age-appropriate decisions about their lives, unless, of course, their preferences exposed them to serious harm. Then in 2006, “children’s wishes” – renamed “views” – were dropped down the list of things judges needed to consider when making decisions about a child’s life and placed in the “additional considerations” category, where they have remained ever since. Since then, the government has rejected the recommendations of the Australian Law Reform Commission to rewrite Part VII of the Family Law Act to better recognise children’s rights. In the recent Joint Select Inquiry into Australia’s Family Law System children were not even named among the “Parties to Proceedings” that the Joint Select Committee thought appropriate to consult.
Understanding how and why children are silenced, disbelieved or ignored in society matters when considering the decisions of the family court. Cultural attitudes to children profoundly shape the way they are understood by and in the justice system. The belief that judges stand outside society and politics – or, indeed, “above” it – is a fiction. In the family courts, the opposite is true. Over the course of the last half century, the family courts have functioned as a primary forum for a series of highly charged political debates about the institution of the family, and the role that children, women and men play in maintaining or disrupting it. In recent years, debate has been driven by a minority of men’s right’s activists intent on placing their own “rights” and interests above children’s concerns – oblivious to the fact that parenting is not a “right” but a moral responsibility.
Wrong questions
What the family law lacks is a positive ethical framework with which to think about the rights of children. Instead, the ethical norms associated with family law flow from paternalistic ideas about the “vulnerable child”, with “inadequate cognitions” and “erroneous opinions about the world”. In the name of the child’s “best interests” the law steps in to negotiate the competing claims of parents. This occurs in forums in which children’s voices are largely absent, in which children are not permitted to participate, or – if permitted – are not adequately supported to do so. This is not to argue that children who are subject to family law proceedings are not vulnerable, or do not need care and protection – clearly, they do. It is simply to point out that in the absence of a positive ethics or a robust conception of children’s rights, the child’s “best interest” principle merely operates as a proxy for the interests of others, while the ethical norms of “protection” function to conceal the real power relationships that are at stake.
Essentially, the law asks the wrong questions of the separating family. Parenting does not revolve around questions of what is notionally “fair” or “equal” or “neutral” or “impartial” – the sorts of abstract and allegedly androcentric systems of rational analysis in which judges are trained and which have historically underpinned everything from criminal to corporate and property law, and which are echoed in men’s rights activists’ angry demands for their 50 per cent “shares” in a child. Instead, the question that ought to be asked is how can society best meet this particular child’s needs. What a child needs first is recognition – and once children become fully visible in the law, then their other needs will quickly become clear, such as safety, flexibility, a chance to grow, and at least one place filled with nurture and love that is called home.
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Ethics Explainer: Blame
In an age of ubiquitous media coverage on anything and everything, most people see blaming behaviour every day. But what exactly is blame? How do we do it? Why do we do it?
During the 2019-20 bushfires, the Prime Minister Scott Morrison was blamed for taking a vacation during an environmental crisis. During a peak in the Black Lives Matter movement in 2020, protestors in Australia blamed individual police and the government at large for the historical and present violent mistreatment of First Nations people.
Maybe you still blame your overly angry high school teacher for making you an anxious person. Maybe you blamed your co-worker recently for standing you up on your weekly Zoom call.
Whatever the stakes, we are all familiar with blaming, but could you explain what it is?
At a very basic level, blame is considered a negative reaction that we have towards someone we perceive as having broken a moral norm, leaving us feeling wronged.
There are several theories of blame that explore different interpretations of how exactly it works, but an overarching distinction is that of how or whether it’s communicated.
On the one hand, we have communicative blame – this is the outward behaviour that indicates one person blames another for something. When we yell at someone for running a red light, scold a politician on social media, or tell someone we are disappointed with their actions, we are communicating blame. Sometimes blame can even be communicated subtly, in the small ways we speak or act.
Some people think that it’s necessary for blame to be communicated – that blame without this overt aspect isn’t quite blame. On the other hand, some people think that there can be internal blame, where a person never outwardly acknowledges that they blame someone for something but still holds an internalised judgement and emotion or desire – imagine someone who holds a grudge against a friend who moved across the world but doesn’t speak to them anymore.
When we think about blame, we have to ask ourselves why do we blame, what does it do and when is it ok?
A common answer looks towards history and especially religion. In the Bible, for example, blame is often seen to hold us to account and discourage dissent. Blame has often been (and is still) used as a social and political indicator of what’s acceptable to citizens and/or governments.
This is more obvious when we consider communicative blame. Take for example, the way that the Australian public and news media communicated their blame of the Prime Minister during his bushfire vacation. These expressions ranged from simply showing dissatisfaction, to more complex indications of a desire for change and a serious acknowledgement of a moral failing.
And it also goes the other way. During the 2021 daily COVID-19 press conferences, various politicians have been quick to communicate their blame towards various groups of people flouting public health orders.
But is this type behaviour always okay? Is it always effective? These are the kinds of questions ethicists ask and attempt to answer when thinking at things like blame. One way to think about these questions is to look at them through different ethical frameworks.
Consequentialism tells us to pay attention to the outcomes of our actions, dispositions, attitudes, etc. A consequentialist might argue that we shouldn’t communicate blame if it would cause worse consequences than if we kept it to ourselves.
For example, if a child does something wrong, a consequentialist might say that sometimes it’s better to not outwardly blame them and instead do something else. Perhaps give them the tools to fix the mistake or praise them for a different aspect of the situation that they did well.
Less intuitively, though, is the implication that sometimes it will be wrong to blame someone for something, even if they deserve it! Say you have a friend who is very contrarian and does the wrong thing on purpose to get attention. Some consequentialists might say that it is wrong to communicate blame to them because under these circumstances you’re encouraging the behaviour, since they want the attention of being blamed. This might be a frustrating conclusion for people who think others get what they deserve by being blamed.
A deontologist might help them here and say that if someone is blameworthy then they deserve to be blamed and it is our duty to blame them, regardless of the consequences. Some deontologists might say that as long as our intentions are good, then we have a responsibility to blame wrongdoers and show them their moral failing.
Some different issues arise with that. Does this mean we are obligated to blame someone who “deserves it”? What about in situations where blaming would have really bad consequences? Is it still our duty to blame them for their wrongdoing?
Next time you go to blame someone, think about your intentions and what you are hoping to achieve by taking that action. It might be that you’re better off keeping it to yourself or finding a more positive way to frame the situation. Maybe the best consequences are to be gained by blaming or maybe you do just deserve to get that frustration off your chest.
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Ethics of making money from JobKeeper
Making money from JobKeeper is not just profit maximisation. It’s free-riding.
When the Federal Treasurer announced JobKeeper in March 2020, the COVID-19 pandemic was expected to wreak economic havoc across Australia. Thousands of businesses would go bust. Millions of people would be unemployed. Billions in economic output would be lost. The Australian Government declared the (then) $130bn scheme would maintain “the connection between the employer and the employee” by making cash payments to eligible companies (those anticipating, through self-assessment, at least a 30% fall in revenue) for each employee kept on the books. Australia was bracing for economic ‘Armageddon’ and JobKeeper seemed rational and just.
Economic ‘Armageddon’ never arrived, yet billions in Jobkeeper were paid. And instead of payments going only to businesses in need, JobKeeper was paid to businesses for which coronavirus has been a boon. Shareholders and managers have profited from a scheme which the Business Council of Australia described as “fair and common-sense”, and which now appears to be neither of the two.
But in profiting from JobKeeper, have businesses done anything wrong?
Some people continue to argue that companies are obliged to maximise shareholder profit because they have a principal-agent duty to shareholders to do so (the shareholder primacy theory). But even so, there are constraints on what is allowed to be done by a company seeking to maximise profit. Nearly everyone agrees that companies should not break the law. It is not acceptable when a restaurant replaces mincemeat with sawdust in order to reduce costs. It is not permissible when a technology company increases revenue by spying on users. Beyond the law, however, most people also agree that companies have moral obligations to society.
Beyond the law, however, most people also agree that companies have moral obligations to society.
Even the individual most closely associated with ‘shareholder primacy’, Milton Friedman, argued profit-maximising companies should not only obey the law, but also must act in line with society’s ethical norms:
“There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits as long as it stays within the rules of the game, which is to say, engages in free and open competition without deception or fraud…conforming to the basic rules of society, both embodied in law and those embodied in ethical custom.”
As Friedman argues, these obligations should act as constraints on a company’s profit maximising motive. A company that orders an employee to drive past an accident on a remote freeway because rendering assistance doesn’t maximise profit, certainly fails our basic moral intuitions of what is acceptable.
To determine whether profitable companies ought to return their JobKeeper payments, we must determine whether companies have a moral obligation to do so. As the Federal Treasurer has made clear, companies have no legal obligation to return the funds. JobKeeper was intentionally designed by the Federal Government to impose minimal obligations on companies when receiving public funds – a position in stark contrast to the policy applying to individual citizens. It has been argued these minimal reciprocal obligations were essential to ensure the impediments to JobKeeper take-up were minimised.
If tax avoidance is “morally wrong”, as claimed by Gerry Harvey, so too is profiting from JobKeeper.
So, what of the moral obligation? Perhaps the best place to begin is by recognising that subsidies are simply a negative tax. So, if tax avoidance is “morally wrong”, as claimed by Gerry Harvey, so too is profiting from JobKeeper.
One way to argue the wrongness of tax avoidance (and by extension profiting from JobKeeper) is to consider Herbert Hart’s “principle of fairness”. The principle, in short, posits that those who benefit from the efforts of others have a moral obligation to reciprocate. The argument behind this principle is that when companies or individuals avoid tax, yet enjoy the public benefits provided by the State (the protections granted by the military; the law and order provided by the police and the judiciary; the well-educated citizenry; the functioning health-care system) they free-ride on the contributions of other taxpayers.
There are specific examples that illustrate this principle well. When James Hardie relocated its head office to Ireland, where the corporate tax rate is 12.5%, it is hard to see how this was making a fair contribution to Australia, where the majority of its shareholders reside. As Nick Kyrgios uses the Bahamas as his tax residence, where the personal tax rate is 0%, it is hard to see how this justly contributes to the nation which has not merely supported his career, but created the foundation for it. While donating to bushfire victims $200 per ace that he hit is meritorious, it does not offset tax avoidance because taxation is not charity. And in any case, making hundred-dollar donations is not equivalent to millions in avoided tax that did not fund the bushfire recovery.
Profiting from JobKeeper should be considered no different to tax avoidance. If companies who set up off-shore trusts to minimise their tax bill are considered free-riders on Australian society, so too should companies who unfairly profit from JobKeeper. These companies place the further profits of their shareholders ahead of alternate uses of taxpayer dollars. Ahead of more ventilators, more ICU beds and more nurses. And ahead of lower Government debt which will one day need to be repaid by the next generation of Australian taxpayers – the youth who are amongst the hardest hit by COVID lockdowns.
Personally, I find Hart’s principle of fairness has substantial force, as it seems most Australians do. But judging from the fact that many companies have refused to repay the profits they have generated from JobKeeper, it is clear that not everyone agrees. These companies and their shareholders are claiming they have a right to be held to a standard different to that which applies to everyone else in Australia. They claim they have a right to free-ride.
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BY Joshua Pearl
Joshua Pearl is the head of Energy Transition at Iberdrola Australia. Josh has previously worked in government and political and corporate advisory. Josh studied economics and finance at the University of New South Wales and philosophy and economics at the London School of Economics.
BY The Ethics Centre
The Ethics Centre is a not-for-profit organisation developing innovative programs, services and experiences, designed to bring ethics to the centre of professional and personal life.
Australia's ethical obligations in Afghanistan
After 20 years of waging war in Afghanistan, the United States and its allies (including Australia) have withdrawn from the field – leaving the Taliban back in power.
The temptation is to label this outcome a resounding defeat. But how does one judge in such matters? Perhaps the Taliban of 2021 has learned, over the past 20 years, how to be better governors of Afghanistan – at least better than they were in the period leading up to 2001; and better than the series of governments that have muddled along in the interim. Perhaps the quality of the peace that will now prevail in Afghanistan will be better than that which would have otherwise existed if no war had been fought. If so, then the loss may not be as great as first thought.
Countries like Australia will need to act on their obligation to stay the course and help the Afghan people as best as they can.
Yet, if this possibility is ever to amount to something more than a feeble dream, then those who fought war need to do more than ‘hope for the best’. Rather, countries like Australia will need to act on their obligation to stay the course and help the Afghan people as best as they can.
Some might challenge the idea that Australia is bound by any obligation to the Afghans. After all, it might be said, have we not already invested a small fortune in treasure? Have we not already sent our sons and daughters to shed blood and to die under the Afghan sun?
My answer begins with the simple truth that, for the most part, we found ourselves expending blood and treasure for our own benefit – and not, primarily, for the good of Afghanistan. Much as we might be comforted by the rhetoric of ‘noble causes’ and ‘high ideals’, when it comes to the realpolitik of statecraft, our politicians send our forces into harm’s way in service of what they plainly believe to be the national interest. As has so often been the case, we went to war to support our most important ally, the United States of America. We went to war so that we could sleep more soundly in our beds – by blunting the edge of terrorism. So, our arrival in Afghanistan (and all that followed) was not driven by an overarching desire to improve the lives of Afghans.
Of course, we also aimed to do some good – and indeed we did. Many Afghans have led better lives due to Australia’s investment in aid and development. Indeed, I have first-hand knowledge of the efforts we have gone to in helping to improve, say, the circumstances of women and girls in Afghanistan. The good we did is real. However, let’s not pretend that it was the product of altruism alone.
I have made much of the self-interest of nations because I think it is key to our understanding the ethical obligation that still binds the Australian government – despite our withdrawal.
As we know, thousands of Afghans rallied to our cause. They served as locally engaged staff in our embassy. They worked as interpreters – both in civilian and military settings. They were our partners in aid and development projects. All of these people directly enabled Australia to realise – as far as possible – its strategic objectives. They did so at considerable personal risk – openly assisting a self-declared enemy of the Taliban (and even more extreme groups like ISIS-K). This risk was exacerbated by the work they did – on our behalf – not just in areas of conflict. For example, what would a hardline opponent to women’s empowerment think of those who have worked tirelessly to achieve that outcome? Surely, those who worked to help women now have a target on their back!
It’s not just specific individuals we need to think of. Large numbers of apparently unconnected Afghans have borne the brunt of 20 years of war waged for our benefit. They were the ones maimed and killed – whether as ‘collateral damage’ or as the intended victims of fundamentalists bent on dominating and pacifying through terror.
It was shameful that our response to the growing power of the Taliban was to do ‘too little, too late’.
Given all of this, it was shameful that our response to the growing power of the Taliban was to do ‘too little, too late’. In saying this, I acknowledge that very few people predicted the speed or comprehensive nature of the Taliban victory. However, I suspect that the larger problem was that too few in government truly understood the depth of our obligation to those Afghans who have assisted us. As much as anything else, it is the sense of indifference that has led many in our armed forces to feel that we have betrayed those left behind – and to express a sense of shame on behalf of our nation.
We should have had much to celebrate. Despite the dark shadow cast by the findings of the Brereton Report, there is much to be proud of in terms of Australia’s overall contribution. That legacy is at risk of being sullied by the manner of Australia’s departure and the sense that we will do the minimum that decency requires – and then wash our hands of the whole thing, leaving our faithful collaborators to pay the price of our failure.
I mentioned before that talk of defeat may turn out to be illusory; that there is a chance that 20 years of war has led to a better future than could otherwise have been hoped for. This brings to mind an old Islamic proverb, “Trust in Allah! … but tie the camel’s leg”.
If we are to find honour, then we must not abandon our Afghan colleagues – not even now when the evacuation has been declared ‘complete’. We need to make it easy for those we left behind to secure visas. We need to ease their passage to safety. We need to continue to invest – if at all possible – in programs that improve the plight of ordinary Afghans – even while they live under Taliban rule.
That much we owe them for bearing their share of the burdens arising out of our self-interested invasion of their country.
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BY Simon Longstaff
After studying law in Sydney and teaching in Tasmania, Simon pursued postgraduate studies in philosophy as a Member of Magdalene College, Cambridge. In 1991, Simon commenced his work as the first Executive Director of The Ethics Centre. In 2013, he was made an officer of the Order of Australia (AO) for “distinguished service to the community through the promotion of ethical standards in governance and business, to improving corporate responsibility, and to philosophy.”
BY The Ethics Centre
The Ethics Centre is a not-for-profit organisation developing innovative programs, services and experiences, designed to bring ethics to the centre of professional and personal life.
Why we need land tax, explained by Monopoly
Most people know the game Monopoly. But few are aware Monopoly was inspired by political economist Henry George’s warning against a dystopic society where land, water and minerals are owned by the dominant few.
To win in Monopoly, first you buy natural resources. Then you monopolise the land. Add some houses and hotels. And finally, force your adversaries into bankruptcy. In the game, it helps to be strategic, but mainly it helps to be lucky. Lucky to arrive first. Lucky to be able to hoover up the best land. In the end, lucky to crowd out the others, making them indigent losers.
Henry George was a brilliant self-taught 19th century American political economist. An advocate for free-trade and an opponent of protectionism, George is however best known for his criticism of the monopolisation of natural resources, arguing this both inhibits economic efficiency and is manifestly unfair. To achieve natural resource equality, George argued natural resources should be taxed at the level it would cost to rent the “unimproved” land. These taxes could be used to abolish other taxes (George’s position was to abolish all taxes except land tax), help fund government expenditure, such as the military, or redistribute in equal proportion to citizens.
Georgism is not an argument for material equality in any meaningful sense. Equal natural resource ownership is consistent with large levels of inequality when it comes to income and the ownership of non-natural assets. A Georgist might argue individuals own 100% of their labour income; that the industrious builder deserves his multiple houses (but not land), cars and boats, and that these are his alone; that the tech entrepreneur deserves her billions but has no right to buy up huge swathes of land. A Georgist position is consistent with minimal state intervention across welfare, education funding and paid parental leave.
The ideas of Henry George have garnered support from various quarters. Economist Joseph Stiglitz has argued Henry George’s proposal could fund the optimal supply of local public goods. Leader of the Chicago School of Economics Milton Friedman said, “in my opinion, the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago”.
One reason why equal natural resource ownership is preferable is because the alternatives are so underwhelming.
The alternatives of the ideological left, crudely speaking, have disastrous economic consequences. Under collective ownership, government ineptly decides what is produced from natural resources, undermining individual choice and failing to respect citizens. While under common ownership, people use natural resources whenever and however they choose, destroying the environment and economy, as predicted by the tragedy of the commons.
The alternative approaches of the ideological right, again crudely speaking, have their own problems. Primacy is given to first arrivals (though curiously, this line of argument is seldom extended to First Nations people), treating citizens unequally. Like Monopoly, first arrivals win, and second arrivals lose. These arguments typically rest on the ambiguous liberal Lockean proviso that “enough, and as good, left in common for others” or the harsher libertarian Nozickian argument that non-landowners need only pass a subsistence baseline living standard (essentially, non-landowners can eat and have water). But these claims ignore that natural resources are not made by anyone. And if no one has done anything to deserve the unimproved natural resources, and citizens of a country are equal, why are they granted such unequal rights over natural resources, the literal foundation of a country?
To Henry George, every citizen has an equal moral claim to the earth and without this, there is no equality among citizens.
In Australia, we are something of a Hasbro Monopoly ‘Special Edition’. Tech billionaires and their ilk hold some hundreds of millions worth of natural resources, while the mob from Broken Hill have somewhere closer to, and more likely very near, zero. Foreign investors such as Canadian pension funds and the Chinese Government own 14% of Australian agricultural land and 11% of Australian water assets.
Overall, Australian natural resources are worth more than seven trillion dollars (about 85% of which is land, driven by city land values), equating to around $300,000 per person. However, the bottom 20% of Australian households (typically younger folk, most likely regional or outer suburban people) have an average natural resource wealth of under $20,000 (and an average net wealth of around $25,000).
Yet there are reasons to be optimistic. The ACT is 10 years into their 20-year plan to abolish stamp duty and replace this with a land tax, providing instructive “dos” and “do nots” for other jurisdictions. And the NSW Government, with a coalition of support from real estate bodies, accountants, economists and community representative bodies, has proposed a land tax which sensibly considers a gradual introduction of land tax, ensuring fairness for those who have already paid stamp duty, although the proposal insensibly considers making land tax optional.
Overtime, a NSW land tax could be used to reduce other taxes, such as payroll tax, levied by the state government, or income tax, levied by the federal government. Reducing income taxes would reverse the peculiarity of the Australian tax system that we socialise the largely privately created wealth of labour, and privatise the naturally created wealth of natural resources.
Economists boast that a land tax boosts economic productivity, stimulates investment and increases efficiency, all neat reasons for a land tax. But the overwhelming case for an Australian land tax is fairness: that Australian dirt, water, ore and air, are owned by each Australian equally. The overwhelming case for a land tax in Australia is to ensure we don’t become a game of Monopoly.
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BY Joshua Pearl
Joshua Pearl is the head of Energy Transition at Iberdrola Australia. Josh has previously worked in government and political and corporate advisory. Josh studied economics and finance at the University of New South Wales and philosophy and economics at the London School of Economics.
Meet Daniel, helping us take ethics to the next generation
At The Ethics Centre, we believe ethics is a collaboration – a conversation between diverse people trying to figure out how to act, live and make good decisions.
This means we need a range of people participating in the conversation, of all ages. Thanks to our donor, Chris Cuffe AO at Third Link Investment Managers, we are excited to share that we have recently appointed Daniel Finlay to Youth Engagement. Daniel is a graduate from the University of Sydney with a Bachelor of Arts and Science (Hons) and a Postgraduate Certificate in Publishing. He also received Class I Honours for his thesis in ethical philosophy. To welcome him on board and introduce him to you, our community, we sat down for a brief get-to-know-you chat.
Tell us, what attracted you to philosophy?
My first philosophy-related class was called Bioethics and I actually took it because I had come back from a break and couldn’t continue my psychology units until the next semester. But from the moment I left the first tutorial, I knew this was where I would end up going. The unit was practical ethics with a focus on humans and their bodies. The topics we covered ranged from black-market organ selling to sex work to people suffering from body integrity identity disorder (BIID). The BIID discussion particularly made me realise how many questions we have to face that simply don’t have neat or obvious answers. BIID is a very rare disorder where a healthy person very strongly desires to amputate one or more of their limbs. And here we were, a group of fresh-faced 19-year-olds, trying to figure out what the hell to do with that information.
That sounds like an interesting place to start. Let’s jump over to COVID and restrictions. How are you dealing with it and what do you hope we’ll be able to bring out the other side?
Honestly, I’m part of the lucky few who haven’t been too flipped around by the lockdowns. I do very much miss rock climbing and have admittedly fallen back into lazy habits without it, but on the whole I can deal with being at home very easily because that’s where I like to spend most of my time regardless.
I’m hoping that we all come out of this with a bit more patience. COVID has obviously slowed a lot of things down for a lot of people. Media content is coming out slower, packages are constantly delayed, work projects put on the back-burner. Hopefully most people come out the other side of this with the realisation that most things aren’t as urgent as they sometimes seem, and a little patience when dealing with fellow humans can go a long way.
With all that time at home, you must have developed some guilty pleasures during the pandemic. Can you share one with us?
I wish I had something quirky or funny to share but the sad reality is my guiltiest pleasure is just watching TikToks at midnight in bed instead of getting a reasonable night’s sleep.
Pretty sure that you aren’t alone there. So, what does a standard day in your life look like?
Mostly playing games, watching Netflix/YouTube and managing an online Discord community I run. At the moment, I’m researching how, when and why young people engage with ethics in their lives and offering a younger perspective on a range of projects. Whenever I find the energy, I do try to make time for reading (I’ve recently gotten back into some fantasy novels), walking, listening to podcasts, rock climbing, writing and annoying my cat, Panda.
Let’s wrap up close to home. What does ethics mean to you and why are you interested in bringing it to the attention of young people?
To me, ethics is about learning to live with ourselves in a way that is sustainable. Part of that process is learning how to question ourselves, other people, systems and structures. It’s about identifying assumptions and patterns in our beliefs and behaviours and learning to discard or modify the unfounded ones.
I’m interested in bringing it to a younger audience because I think studying ethics and critical thinking is such an important part of developing the cognitive resources needed to make significant change in the world in a responsible and empathetic way. I’ve already seen firsthand, from being a Primary Ethics teacher, the immense good that this can do, so if I can help bring these resources into the brains of passionate teenagers then I think the world will be much better off.
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The Ethics Centre is a not-for-profit organisation developing innovative programs, services and experiences, designed to bring ethics to the centre of professional and personal life.
Seven Influencers of Science Who Helped Change the World
We’re all familiar with the Einsteins and Hawkings of history, but there are many who have influenced the direction and development of science. Here are seven scientists and philosophers who have shaped how science is practiced today.
Tim Berners-Lee
Sir Timothy Berners-Lee (1955-present) is an English computer scientist. Most notably, he is the inventor of the World Wide Web and the first web browser. If not for his innovative insight and altruistic intent (he gave away the idea for free!), the way you’re viewing this very page may have been completely different. These days, Berners-Lee is fighting to save his vision. The Web has transformed, he says, and is being abused in ways he always feared – from political interference to social control. The only way forward is pushing for ethical design and pushing back against web monopolisation.
Legacy: The World Wide Web as we know it.
Jane Goodall
Dame Jane Goodall (1934-present) is an English primatologist and anthropologist. Over 60 years ago, Goodall entered the forest of Gombe Stream National Park and made the ground-breaking discovery that chimpanzees make and use tools and exhibit other human-like behaviour, including armed conflict. Since then, she has spent decades continuing her extensive and hands-on research with chimpanzees, written a plethora of books, founded the Jane Goodall Institute to scale up conservation efforts, and is forever changing the way humans relate to animals.
Legacy: “Only if we understand, will we care. Only if we care, will we help. Only if we help, shall all be saved.”
Karl Popper
Sir Karl Popper (1902-1994) was an Austrian-British philosopher, academic and social commentator. He is best known as one of the greatest philosophers of science in the twentieth century, having contributed a new and novel way of thinking about the methodology of science. Against the prevailing empiricist idea that rationally acceptable beliefs can only be justified through direct experience, Popper proposed the opposite. In fact, Popper argued, theories can never be proven to be true. The best we can do as humans is ensure that they are able to be false and continue testing them for exceptions, even as we use these assumptions to further our knowledge. One of Popper’s most enduring thoughts is that we should rationally prefer the simplest theory that explains the relevant facts.
Legacy: The idea that to be scientific is to be fallible.
Marie Curie
Marie Curie (1867-1934) was a Polish-French physicist and chemist. She was a pioneer of radioactivity research, coining the term with her husband, and discovered and named the new elements “polonium” and “radium”. During the course of her extensive career, she was the first woman to be awarded a Nobel Prize, and the first to be awarded two Nobel Prizes in two scientific fields: physics and chemistry. Due to the underfunded research conditions of time and ignorance about the danger of radiation exposure, it’s thought that a large factor in her death was radiation sickness.
Legacy: Discovering polonium and radium, pioneering research into the use of radiation in medicine and fundamentally changing our understanding of radioactivity.
René Descartes
René Descartes (1596-1650) was a French philosopher, mathematician and scientist. Descartes is most widely known for his philosophy – including the famous “I think, therefore I am” – but he was also an influential mathematician and scientist. Descartes’ possibly most enduring legacy is something high school students are very familiar with today – coordinate geometry. Also known as analytic or Cartesian geometry, this is the use of algebra and a coordinates graph with x and y axes to find unknown measurements. Descartes was also interested in physics, and it is thought that he had great influence on the direction that a young Isaac Newton took with his research – Newton’s laws of motion were eventually modelled after Descartes’ three laws of motion, outlined in Principles of Philosophy. In his essay on optics, he independently discovered the law of reflection – the mathematical explanation of the angle at which light waves are reflected.
Legacy: “The seeker after truth must, once in the course of his life, doubt everything, as far as is possible.”
Rosalind Franklin
Rosalind Franklin (1920-1958) was an English chemist and X-ray crystallographer who is most famous for her posthumous recognition. During her life, including in her PhD thesis, she researched the properties and utility of coal, and the structure of various viruses. She is now often referred to as “the forgotten heroine” for the lack of recognition she received for her contributions to the discovery of the structure of DNA. Even one of the recipients of the Nobel Prize for the discovery of the DNA double helix suggested that Franklin should have been among the recipients, but posthumous nominations were very rare. Unfortunately, this was not her only posthumous brush with a Nobel Prize, either. One day before she and her team member were to unveil the structure of a new virus affecting tobacco farms, Franklin died of ovarian cancer. Over two decades later, her team member went on to win the Nobel Prize in Chemistry for the continued research on the virus. Since her death, she has been recognised with over 50 varying awards and honours.
Legacy: Foundational research that informed the discovery of the structure of DNA, coal and graphite.
Noam Chomsky
Noam Chomsky (1928-present) is an American linguist, philosopher, cognitive scientist and social/political critic. While Chomsky may be better known as a political dissident and social critic, he also played a foundational role in the development of modern linguistics and founded a new field: cognitive science, the scientific study of the mind. Chomsky’s research and criticism of behaviourism saw the decline in behaviourist psychology, and his interdisciplinary work in linguistics and cognitive science has gone on to influence advancements in a variety of fields including computer science, immunology and music theory.
Legacy: Establishing cognitive science as a formal scientific field and inciting the fall of behaviourism.
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