The True Value of Humanities
4 November 2016
Chief Executive Jennifer Westacott gave this speech to a University of Sydney Faculty of Arts and Social Sciences, and Australian National University Humanities Research Centre, forum on the role of humanities in the world of business.
Ladies and gentlemen.
I would like to acknowledge the traditional owners of the land on which we are gathered – the Gadigal people.
I would like to thank the ANU Humanities Research Centre and University of Sydney Faculty of Arts and Social Sciences for inviting me to speak this morning.
I’d like to start with a proposition.
To be a successful leader in the 21st century, every leader will need some form of humanities perspective and education.
And if we are to steer our global community to be a prosperous and peaceful one, we should demand this from our leaders.
I argue this because I believe our economic and technological success has not been matched with a constant orientation towards a better human condition.
And to achieve this, you need to understand what the human condition is to begin with.
You need to have some organising principles that allow you to question and think about what it means to be a good society.
And that is at the heart of a humanities perspective.
Module 1: Scene setting
So, where are we now?
Next Tuesday – four days from now – the 45th President of the United States of America will be elected.
I’m not here to hazard a guess on the outcome of the election – but I would like to make some observations.
First, no matter who wins, they will lead a deeply divided nation.
The election campaign did not trigger this divide but tapped into it.
Second, this election has captured the attention of the world.
And it’s done that because what we are potentially seeing is the break-down of the foundation of modern America.
The United States has been the country of opportunity, of hope, and of freedom.
It was the place where migrants flocked to build a better life for their children.
A country where hard work meant a good job, a house to raise your family, and a college fund for your kids.
What this campaign has shown starkly is that many Americans feel they are being excluded from the American dream.
And they feel its government and business that’s excluding them.
This phenomenon is not limited to the US, or its current election.
The Brexit decision was a case of citizens feeling disconnected from their elected government.
Some people felt their basic rights as a citizen of a modern democracy were being dictated to by bureaucrats in Brussels… and that their jobs were being taken by a flood of immigrants.
Commentators dismissed the chances of a Brexit win because people would vote based on the rational economic benefits of staying in the EU.
Similarly, commentators have dismissed Trump as someone who couldn’t strike a chord with the American people.
The commentators were wrong. They were focused on the mechanisms of the economy, rather than the reality of people’s lives.
I would argue that the United States, the United Kingdom and other parts of the developed world including Australia, are in the midst of an identity crisis.
For the Western world, the latter half of the 20th century, particularly post-World War II was about building modern, liberal democracies.
The memories of the atrocities of the Second World War set modern democracies on a path of pursuing freedom, the free movement of people, the growth of economies and mass global education.
Governments were focused on building nations that gave opportunities to all citizens, and supporting those citizens that needed help.
Social movements gained momentum to remove discrimination and rebalance power in society.
Businesses created jobs and contributed to building growth and prosperity.
Our society kept church and state separate, but our societies were built on humanist values.
The values of citizenship: honesty, compassion, respect, responsibility, and courage.
Governments, businesses and citizens had a social compact to build prosperous nations that offered opportunity to all who worked hard.
To build nations that offered the capacity for people to realise their potential.
And I would argue that it is this social compact, in its many different forms across Western liberal democracies that has begun to weaken.
People now question globalisation, migration, innovation and the value and virtues of technology.
People, like myself, ask: what now is the guiding purpose of modern, liberal democracies?
As a result, I think that people are anxious. They are disengaged. And they are frustrated.
What is behind this?
I think we’ve lost sight of the true meaning of the prosperity agenda. The promise of the social compact has not been delivered for all it was intended for.
People are working hard and contributing economically and to their community.
They have held up their end of the social compact, but they still can’t get ahead.
They can’t see a way through things, and they feel like they have no control over many aspects of their lives.
They feel what I would call a great affluence divide.
Economists tell us the Gini coefficient hasn’t moved very much – that is the technical measure of inequality hasn’t gone up.
While this may be true for Australia, we still have below average real wage growth, and the great Australian dream of owning your own home seems unattainable to many people.
In the US, there’s no doubt the numbers tell a story of a social compact under pressure.
Median incomes are gradually returning to pre-GFC levels, but the growth is primarily at the top.
The top one per cent of income earners in the US captured 85 per cent of the growth between 2009 and 2013.
In a number of states, the top 1 per cent of income earners captured all of the income growth. And in ten states, the incomes of the bottom 99 per cent, fell.
The simple truth is that people across the world in Western democracies do not feel better off.
And they don’t like being told they are better off when they don’t feel like it.
And leaders across government, business and academia need to respect that’s how people feel.
And if I go to the issue of trust, there has been a break down there too.
People across the world are losing faith in institutions such as governments, big businesses, religion and democracy.
The GFC caused immense hardship for middle- and lower-income earners.
But the long term cost of the GFC is the loss of trust. And that trust continues to be eroded by our institutions – government, religious institutions, and – even I would argue – big business.
At this time of low trust, people are watching and experiencing change on a massive, global scale.
This is when we need our institutions the most, when we look to government to be creative and solve problems.
When we look to business to be the one continuous source of wealth creation.
This combination of feeling worse off and low trust, is the essential conundrum we are facing.
The conundrum being: if we turn our backs on institutions like democracy, government and business, we will spiral into low growth, low living standards and put our social cohesion and peace at risk.
Module 2: what do we mean by a humanities mindset?
What does all of this have to do with the humanities?
Everything. Because, if anything, this erosion of the social compact and trust has made the human element more, rather than less, important.
For me, the humanities is not about a list of subjects in an Arts degree.
Humanities is about giving people an organising framework that goes to the heart of the human condition.
It’s about giving people the philosophy and the understanding to apply values, ethics, and morals to a range of situations.
It’s about giving people a world view and an historical perspective to allow them to balance complex issues and make good judgements.
The true value of humanities is the kinds of people they produce – people who can ask the right questions, think for themselves, explain what they think, and turn those ideas into actions.
I studied humanities as an undergrad, and while I don’t remember every detail, I distinctly remember the act of exploring ideas, of grappling with different ways of thinking.
I recall how a humanities mindset was about people. Take history. It wasn’t just about dates and events.
It was about people and our place in the world.
How and why people behaved the way they did. How national identities were formed, how society worked, and how we ended up in a state of war.
So much of society’s great social progress came about from people applying a humanities mindset to the society in which they lived.
Deconstructing that society, examining it from a different angle, and questioning it.
Was the society a fair one, was it one they wanted their children to grow up in?
21st century leaders need this humanities mindset. They need to understand the human condition.
They need the qualities of critical thinking, synthesis, judgement and an understanding of ethical constructs.
Rather than an abstract appreciation for Aristotle, leaders need to be grounded in a deep understanding of what is going on in the world, and how people feel about it.
When our leaders in business, government and the community are making decisions on our behalf, we want to know they are guided by a clear organising framework.
One that builds a renewed social compact that can deliver prosperity, and that has people at its heart.
That’s how we build confidence, and that’s how we earn trust.
Module 3: Leadership challenges
I’ve briefly mentioned the big challenges and disruption our leaders are facing.
I want to now elaborate on these issues and what they mean for leadership and the humanities mindset.
We face economic challenges – with the shift away from manufacturing and mining towards a services-driven economy.
We face political challenges – with the rise of China, the spread of extremism, and more than 65 million refugees in the world.
We face demographic challenges – with growing and ageing populations reshaping economies and societies.
We face environmental challenges – how to continue to grow our economies without adversely impacting on our natural environments.
We also face an unprecedented pace and scale of technological change, that is changing the way we work, and the way we communicate.
And in the face of these challenges we need a mindset that considers all angles. The humanities mindset I’ve just described.
But we also need leaders of substance and purpose.
Real leadership – moral and purposeful leadership – is not easy.
If we return to our values of citizenship, these are where our leaders need their greatest strengths - honesty, compassion, respect, responsibility, and courage.
And, critically, they need intellect, empathy and aspiration.
As Winston Churchill said, ‘Courage is what it takes to stand up and speak; courage is also what it takes to sit down and listen.’
The hard truth is that leaders of that kind are thin on the ground.
Many of our leaders across all domains are focused on the position, not the purpose. And the purpose should be paramount.
Sometimes you need the position to achieve the purpose.
I wanted to be the Director of Housing because I wanted to change the culture of a system I grew up in.
I saw behaviours I didn’t like as a child – treating people as second class citizens, making people ashamed to be poor, taking away people’s dignity and power.
As an adult I wanted to change those behaviours. I knew I had to get to a position of power to create that change.
I’d be a liar if I said I didn’t care about the position. But the purpose was to fix the system.
Moral leaders – great leaders – realise that in the face of overwhelming challenges nations, people, and communities need a collective purpose.
I believe that purpose must be the pursuit of social progress through enduring prosperity.
That was the fundamental thesis of the Business Council’s Economic Action Plan released in 2013.
I’m not suggesting we got this all right, but we did try and grapple with balancing economic and social progress.
And I would be the first to say we need more of a social progress agenda as a business community.
We recognise that we are the agents of change alongside government, and the community sector, but we are the agents that create wealth.
And my starting point is that you can’t make social progress with economic failure.
Module 4: The importance of business and growth
As Harvard economist Michael Porter has said, “there’s no such thing as a good society without business” because “only business can provide prosperity”.
I know that some people are sceptical about the sincerity of business leaders in arguing for prosperity.
I know that people are seriously thinking about the ethical dilemmas of growth.
When I hear this, I draw from the organising framework I learned from studying people like Karl Popper. You have to think about the counterfactual, the potential falsifying statement.
Therefore, if we imagine, a world without business, without growth – what will be the reality of that world?
It is clear, it will be a road to nowhere.
To me, the most immoral thing we can do, is to condemn people to poverty and long-term unemployment.
To allow intergenerational inequality to grow, rather than offer social and economic mobility.
It’s well-managed economic growth that gives us employment, rising wages, a social safety net, and choices and freedom.
It’s growth and prosperity that contribute to social cohesion.
But it must be well-managed growth.
I am the champion of the free market, but markets must have purposeful and ethical parameters.
Economic policy must be linked to social progress through sound policy and action.
And the moral responsibility does not just reside with governments.
The purpose of progress – and prosperity – is the domain of us all. And that social compact should continue to be between government, business and citizens.
Therefore, business needs to buy into the concept of being a participant in the social compact.
We need to reinforce that growth and profits are part of a broader prosperity agenda.
That business has a responsibility to tackle social challenges, as well as a fundamental responsibility to create employment and provide returns to shareholders.
In other words, the community and the economy are linked.
You cannot have one without the other.
People who question the policies of growth need to remember that it is the poorest people who pay the price for stagnating growth, not the richest.
Whenever you have slow growth, you have disparity of wealth and loss of opportunity.
So we need courageous leaders who will stand up and explain why growth will help everyone.
Leaders who also understand the sources of the community’s frustration.
Who have the patience and commitment to explain how economic growth unlocks prosperity and advancement.
Leaders who understand that economic growth is not statistics, but a way of giving people dignity, opportunity and a chance for a better life.
Leaders who understand that technology, robotics, and artificial intelligence are not the end game. They are the means to the end game.
Leaders who think pro-actively about how we manage the human impacts of technological change, rather than adjusting after the event.
Against this backdrop, business leaders will have to think about the purpose of their companies.
They’ll have to have an unprecedented understanding of global forces.
They will have to make change quickly.
They will have to galvanise the people who work for them, and build customer loyalty in the face of fierce competition.
They will have to deepen their commitment to shared value.
Government leaders will have to think about how they equip a society for change.
How they rethink a safety net for an economy where full-time work is not the norm, and people will go through multiple careers.
Where people will live well into their nineties and will want to participate throughout their lives.
How do governments think about security in the cyber-age, and in the age of mobilised actors not just nation states?
All of these are humanistic issues, not technical issues.
I’m not proposing leaders have a particular ideology or philosophy.
It’s about having a mind to history, a perspective on culture, a global mindset and fundamentally having a set of values.
That kind of awareness and thinking comes from having worked through some of the big questions.
The kind of awareness and thinking that comes from the humanities.
Module 5: Practical actions
So what does this mean in practice?
I have proposals for both capacity building and institutions.
First to capacity building.
It means our leaders need broader development, including at university.
Every degree should give a broader set of skills, not just technical skills. Graduates should be able to think, design and solve problems.
It means making it easier to do subjects across faculties. Similar to a broad-based education in school that covers maths, science, history and English, a university education should have breadth.
We shouldn’t devalue the humanities courses as the ones that the not so bright kids do. We need our brightest kids studying the humanities.
Universities should not be just about producing accountants and lawyers, they should be producing leaders and good citizens.
Our executives and our companies should be constantly nurturing their talent in a broad way.
The Harvard Executive program is a great example of this. People come back after doing the course and they say it’s life-changing.
And our universities and academic communities need to see the important role they should play in developing the business community.
We should encourage Directors of Boards to do Cranlana and similar programs.
People in the humanities, like you, should be creating symposiums and sessions for people in business.
Not 6 month or 6 day off-sites, but programs that are built around the reality of how people work in business.
And in the business community, we need to make sure we walk the talk.
When we say we want well-rounded people, we should make sure our recruitment practices do just that.
And we need to work hand-in-hand with the universities, rather than simply complaining that graduates aren’t work ready or well-rounded.
Turning to institutions.
It is imperative that we do not give in to this tide of anti-institution sentiment and give up on our growth agenda.
We must reform our institutions. We might end up with different ones, but we can’t walk away from them.
After all, without our institutions don’t we just have anarchy?
We cannot afford to see an anti-growth agenda because, I say again, the people who suffer are the poorest people.
The beacon that guides us should be an imperative that every action contributes to a better society.
We have to remember that peace and social cohesion are inextricably linked to prosperity.
And that’s our challenge – to build a cohesive and flourishing society.
In conclusion, it’s time for us remember our social compact is between government, business and citizens.
We need to renew that compact and bring it back to the human condition and prosperity for all.
And we need to develop the capacity, particularly in our leaders, to do this.
And education is central to this. Humanities are central to this.
Education is the greatest gift to humanity and to society, but it should advance the human condition.
I was very privileged to study the humanities and thinkers like John Stuart Mill and Edmund Burke in my education.
My life was greatly enriched by it and it helped bring me to where I am today.
It is this enrichment that all our leaders need so they can face the challenges in front on them.
I’d like to close with one of my favourite quotes. It’s from Margaret Mead:
“Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.”