Business value creation serves the public interest

In a commentary published by mbl.is, Jón Ólafur Halldórsson, chairman of the Confederation of Icelandic Enterprise, argues that businesses should be debated on the basis of their arguments rather than assumed motives.

In a democratic society, it is natural to disagree over major issues. Companies should face criticism just like political parties, the media, trade unions and other institutions. No one should be beyond substantive debate.

However, it is concerning when people’s motives are questioned instead of their arguments being discussed.

The debate over European Union membership has increasingly taken this form, Halldórsson writes. When companies express doubts about membership, they are sometimes accused of simply fearing increased competition or seeking to protect their own interests.

A recent Gallup survey of member companies of the Confederation of Icelandic Enterprise tells a different story. Two out of three business owners said they opposed Iceland joining the European Union. More importantly, the companies were asked what shaped their position. Sovereignty, natural resources, regulation and economic stability carried the most weight.

It is therefore wrong to dismiss the views of this diverse group as fear of competition, he writes.

The issue goes beyond the European Union and concerns how society views business. Companies are too often portrayed as a separate group whose interests stand against those of society, as if businesses were on one side and the public on the other.

That is a false picture.

Business is not outside society but part of it. Most people work in the business sector, where new ideas, jobs and opportunities are created. It is also where the value is generated that makes it possible to fund healthcare, education, transport, law enforcement and the public services society wants to build.

Before value can be distributed, it must first be created. Value creation is therefore not a special interest but a matter of public interest.

This does not mean companies are always right. They make mistakes like everyone else. They must comply with laws and regulations and operate under effective competition. They must also take responsibility for their environment, employees and the communities in which they operate.

But there is a fundamental difference between criticising companies for what they do and assigning motives to them when they participate in public debate.

If business representatives point out that the tax system discourages investment, it does not automatically mean they are merely protecting their own interests. If they call for simpler regulation, it does not automatically mean they want less accountability. And if they have a view on the European Union, it does not automatically mean that view is driven by fear of competition.

In a democratic society, people should engage with arguments as they are presented, rather than as they imagine them to be.

Iceland faces major challenges, including reducing inflation and interest rates, increasing investment and productivity, and creating more companies able to grow and compete in international markets. More good jobs must also be created so that young people can see their future in Iceland.

These goals cannot be achieved without a strong business sector, Halldórsson writes. The way companies and their leaders are discussed therefore matters. Public language shapes attitudes, attitudes shape decisions, and decisions shape the future of society.

Society should not be afraid to criticise business when there is reason to do so, he concludes.