Anthony Albanese's vision for confronting the profound economic and social challenges posed by artificial intelligence was laid out at the University of Sydney, a setting that holds personal significance. His time there in the early 1980s, though not as a scholar, honed his skills as a rabble-rousing organiser, shaping him into the political grandmaster of his generation.
Albanese lacks Bob Hawke's innate charisma or Paul Keating's acerbic clarity, but that dynamic duo provides a lodestar for confronting a changing world the Labor way. They saw the tides of neoliberalism and globalisation powered by container technology and free-market ideology and determined that the only response was to dive in rather than pretend they could stop the world at the shoreline. While Ronald Reagan and Margaret Thatcher let the market rip, Hawke and Keating built social guardrails through an accord with organised labour, centralising wage increases, embedding Medicare, and instituting universal superannuation, creating a national savings pool in excess of $4tn.
The Political Challenge of AI
Today Albanese faces similar disruption, driven again by new technology and powered by an even more extreme rightwing ideology that expects us to lay out the red carpet and then lie down for the machines. This may be the toughest political challenge he will confront this term. A rightly sceptical public sees more risk than opportunity in the technology, but there is a growing view inside the government that AI must be shaped and harnessed on the basis that there are benefits in leaning in and it cannot be stopped.
The prime minister has been here before. One of his political dogfights at Sydney University was the decade-long battle in the department of economics, where neoclassicalists defended their rational market models against political economists who saw the real story at the intersection of people and power.
Classical Economics vs. Political Economy
Through a classical economics lens, the rapid scaling and adoption of AI is compelling for a prime minister wanting to find new ways to grow the economy. The best-case scenario sees Australia as a global AI training hub, exporting renewable-powered models to the region while exercising sovereign agency through control of computing. Classic economists tell us there are productivity gains from using tools that process information faster and identify new patterns of data, leading to faster, better decisions distributed throughout the economy by rational market players.
But this is contested. Some see a massive hype bubble around frontier AI, as a growing chasm opens between investment and income. The sunk costs of powering datacentres in a climate crisis are yet to be properly factored in, and the lack of social licence adds a barrier to the investor timeline. Datacentres have become an avatar for the lived experience of AI as a 'black box' for child abuse, creepy companions, worker surveillance, job losses, creator theft, scams, data breaches, misinformation, and slop.
Political Economy and Countervailing Power
Enter the political economy of AI, as evidence grows that the rollout will widen wealth disparity, undermine secure work, and concentrate more power in the hands of unaccountable tech overlords. There is a real political risk that the populist right and left combine to challenge the inevitability of AI's march and its lack of a moral compass or capacity for self-restraint. If the government fails to get adequate safeguards in place, outright resistance will be the only rational response.
In establishing national standards and centralised control within government, the prime minister is taking necessary first steps. Coherent decision-making and internal accountability are critical to meeting this manic moment. There are big calls yet to be made across defence, copyright, safety, workplace, and environment, not to mention unfinished business of privacy reform and the financial model of any emerging industry. None of this will be easy, and power disparities will make it harder to resist big tech demands.
Like Albanese, the author was a very ordinary student, but one highlight of time at Sydney University was seeing legendary political economist JK Galbraith in 1987, who explained the 'golden rule' of capitalism: who has the gold makes the rules. Galbraith, an architect of Franklin Roosevelt's New Deal, first described the importance of 'countervailing power' in a political system to mitigate this innate imbalance.
Leverage and Civic Engagement
The neoclassicists always miss that their theories only work when power dynamics are right, and currently they are not. The good news is that the government has leverage: the flagrant breach of copyright in training AI models provides a sharp weapon to assert national laws; Australia's stability and security for long-term investment; and stronger planning, environment, and labour laws than most. Civic green shoots are emerging as the community becomes more engaged. Across the environment movement, trade unions, and civil society, there is growing focus on the urgency of setting guardrails. At next week's ALP national conference, an internal group of rank-and-file members, Fair AI, will launch to organise from within. Even the pope has called on all people of goodwill to step up on behalf of humanity.
Rather than enemies of the state, these voices of dissent will be a critical resource, a counterweight to the incessant demands of capital to privatise benefits and socialise all costs. As the prime minister embarks on this journey, it is on us to keep his feet to the fire by demanding he puts our children, our creators, our careers, and our communities at the centre of his AI equation. That is real sovereignty.
