While there’s a certain pleasure in pointing out the inconsistencies and illusions of business lobbyists, Australia’s governing elite — that’s everyone from politicians and public servants through to business and the media — face a serious challenge from economic populism. And it’s one that the business sector seems utterly unable to comprehend, let alone respond to effectively.

That’s the only possible conclusion from the comments reported by the AFR‘s Tony Boyd and Michael Smith from an AFR-business lunch yesterday, where Telstra chairman John Mullen, Virgin and IAG chair Elizabeth Bryan and AFL chairman and company director Mike Fitzpatrick.

Mullen, at least, called for business groups to ditch self-interest and back reforms that were in the national interest. Though as we’ve seen so often, there’s a tendency on the part of business to think that self-interest and the national interest are exactly the same. But Mullen’s diagnosis of economic populism was, in effect, that Australians didn’t understand large numbers:

“$8 billion does sound like a lot of money, but if you are looking in terms of return on shareholders’ investment, it may be only 8 to 10 per cent … a big disconnect between the laws of economics and the populist perception that a headline of that size creates among people”.

Mullen is confused — and the confusion is, unsurprisingly, self-serving. It’s not large profits per se that annoy people about, for example, the big banks, but the perception that they have been earned via unscrupulous methods — methods that have been on persistent display over many years, in areas like bad financial advice, unjustified fees, refusal to pay insurance claims, interest rate rigging and conflicted business models.

Two other areas also play into this confusion — executive remuneration which involves massive pay rises, often unjustified by performance, for executives who demand workers accept wage cuts and poorer conditions, and the remorseless attempt by large companies to evade or avoid taxation on their profits.

[The Business Council: extremist, inconsistent and out of touch]

That is, perceptions of fairness and equity are the issue, not mindless reactions against large profits. Mullen, at least in reported comments, doesn’t want to touch on fairness. He does, however, give a serve to business luminary David Murray for attacking outgoing Business Council and former Telstra chair Catherine Livingstone, calling Murray’s remarks “disgraceful” and that he “wouldn’t want Murray managing my money”. Apart from attacking another business leader for attacking business leaders, Mullen tellingly misses another important point. Murray’s remarks directed at Livingstone were in the context, Murray said, of months of rotten service from Telstra.

Think about it: you’re David Murray, Australian business legend, go-to man for governments looking for review heads, former chair of the Future Fund, whose every word — no matter how ill-informed — the media hangs off, and even you can’t get decent service from Telstra. What hope do the rest of us have? And that exactly plays into one of the core problem voters have with privatisation — the perception that privatisation has delivered them shoddy, overpriced service while corporations run up big profits at their expense. Mullen would have been wiser to acknowledge that Murray’s comments reflect, even if unintentionally, a deep vein of frustration with privatisation in the electorate.

Meantime Bryan was urging business to “take control” of the conversation about economics. Perhaps it was a poor choice of words, but business can no more take control of the conversation than governments, or political parties, or media companies, can. Politicians, at least, have begun to work out they can no longer control public debate in the way that they could when the media consisted of a few radio networks, a handful of major newspapers and three commercial broadcasters. Business, it seems, is still at the stage of thinking they can somehow steer the debate in a direction that is favourable to them.

This is bad news for the business community, internally divided, out of sorts with their political agents, the Liberal party, and feeling under siege from the community. But it’s also bad news for quality economic decision-making and our capacity to resist the pull of protectionism and populism, which is resurgent in a way we’ve not seen since 1983. The effective response to this challenge isn’t yet clear, but it almost certainly involves understanding that fairness is not just some bolt-on to policy or rhetorical flourish to be added to a media release, but must be at the core of decision-making.