Hot Albo’s First Economic Rodeo

I thought it was a compelling backdrop to the speech because (i) Albo was given the speech in his old stomping ground (ii) it provides a good counterpoint in the different ways to look at AI and (iii) it’s a ripping yarn.

For good reason, the wonderful Guardian opinion editors Svetlana and Georgia give my pieces a judicious trim as I always over-write,; although the most interesting (they would argue most indulgent) pars end up on the floor.

This post gives me the chance to offer a pre-edit version as well as to provide some of further context that people might find interesting.

Original piece with dead darlings highlighted:

Sydney University is the perfect setting for Antony Albanese to lay out his government’s vision for how the nation will confront the challenge of profound economic and social change being laid down by so-called Artificial Intelligence.

His time around the jacarandas and sandstone in the early eighties was a seminal marker in the future PM’s development, not as a scholar but as a rabble-rousing organiser honing the skills that would make him the political grandmaster of his generation.

Albo is an unlikely vision-caster. He may lack Hawke’s innate charisma or Keating’s acerbic clarity, but that dynamic duo provides a lodestar in confronting a changing world the Labor way.

They saw the tides of neo-liberalism driven by both new technology like containerisation and the ideology of the Chicago School washing across the globe and determined the only way to respond was to lean in rather than pretend they could stop the world at the shoreline.

But while Reagan and Thatcher let the market rip, Hawke-Keating built guardrails to guide the change through an Accord with workers that centralised wage increases, embedded Medicare and, later, instituted universal superannuation that has created a national savings pool in excess of $4 trillion.

Today, Albanese Labor faces a similar sense of the inevitable, driven again by the combination of technology and the libertarian ideology of Silicon Valley that wants government to lay out the red carpet for the machines.

Forget cost-of-living, climate change and the War on Iran, this is the toughest political challenge Albanese 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 should be shaped and harnessed rather than resisted.

One of Albanese’s iconic political dogfights at Sydney Uni was a decade-long battle waged in the Department of Economics, where neo-classicists defended the equations and models of the rational market against the political economists who saw the real story written in the intersection of people and power.

Through a classical economics lens the idea of scaling AI is compelling for a government wanting to find ways of growing the economy while transitioning to renewables and building economic sovereignty.

The most seductive story goes like this: Australia’s stability and access to renewables makes it a global centre for the training of frontier AI models, which can be done in the desert (hello, Twiggy) where models can be powered by banks of solar panels and then pumped out to the region through secure data cables. This becomes a tangible way we can harness natural resources into a new export product to sustain our national wealth.

Classic economists will also tell us there are productivity gains by using tools that process information faster than ever and identify new patterns of data that will help people make faster, better decisions, which will then be distributed throughout the economy by rational market players.

But the economics are contested. Some see a massive hype bubble around frontier AI , that there is a growing chasm between investment and income for the hyper-scalers, while the projections on water and energy usage have yet to be properly factored into the equation.

There are also opportunity costs in leaning into building AI infrastructure, such as diverting labour and capital from the pressing tasks of building homes and renewable assets, to serving the needs of the industry for power through data centres.

But it when we get to the political economy that things get more contested because there are growing evidence that the rollout of the tools will further widen wealth disparity, undermine secure work and hand power to unaccountable tech overlords.

In concrete terms the politics of building data centres required to power any AI revolution remains a complication yet to be properly resolved. The government has set down voluntary frameworks on the need to power the centres with renewable energy and recycled water , but even if this is possible, it doesn’t account for the lack of control of what is happening inside the data centres’ four walls.

Data centres are the literal ‘black box’ of all the unresolved issues that come with this technology, a physical site where data matching and production processes enable child abuse, financial scams, cynical job replacement and the theft of creator content is allowed to go unchecked.

In the US, where the Big AI companies have been pushing the boundaries over development there are growing pushback to both the centres and the technology. Across America and the UK anti-AI movements like ‘Pull the Plug’ are gaining momentum in what has been dubbed the ‘Summer of Ludd’, a nod to the heroes of the industrial era who rather than have technology roll over their lives took action to break the machines.

There’s a real political risk for the government that the populist right and left combine to challenge the inevitability of this technology’s march and its lack of a moral compass or any capacity to self-restraint. And should the revolution come, I’ll be with them.

The campaign within Sydney Uni’s economics faculty ultimately saw the political economists sent into academic exile (although the remaining economics school was later subsumed into the Business School) . But in that time intellects like Ted Wheelwright and Frank Stilwell nurtured a generation of critical thinkers, including yours truly, who emerged with the knowledge that the real economy existed beyond the business pages.

Like our PM, I was a bog ordinary student but one of the highlights of my time at uni was seeing the legendary JK Galbraith in 1987 where he told us to remember the golden rule of capitalism: “who has the gold makes the rules”. One of the architects of Roosevelt’s New Deal, Galbraith was the first to describe the importance of what he called ‘countervailing power’ in a political system.

If Albanese Labor is to navigate the coming storm, it will only be through tapping this under-utilised resource of people demanding they receive a fair share of any upside from this technology while recognising that it is our collective effort to ensure the downsides are addressed within the Australian rule of law.

We have points of leverage at our disposal: the flagrant breach of copyright in training the AI models provides a sharp weapon in asserting our national laws and rules on global technology; Australia offers stability and security for long term investment; we have far stronger planning, environment and labour laws than most nations.

Civic green shoots are emerging as the community becomes more engaged with the challenges. The Pope has called on all people of goodwill to organise on behalf of humanity. At next week’s ALP conference an internal group of rank-and-file members, Fair AI, will be launching. Academics are increasing pooling resources to address the Safety issues in partnership with the government’s new AI Safety Institute.

Rather than enemies of the Labor Government, these critical voices will be important allies, helping to counterweight the incessant demands of capital to take all of the winnings while socialising any of the costs.

Perversely, the path Albanese must take is politically more difficult than either saying no to AI or lying doggo and letting it ride over us; and it will take all of us, including those of us who wish the government was regulating harder, to help it chart this difficult course.

Rather than enemies of the state, our voices will be a critical counterweight to the incessant demands of capital to take all of the winnings and socialise all of the costs.

**

Some curios that emerged from my research:

• This 2025 piece from Steve Keen was written on the 50 anniversary of the outbreak of hostilities and provides compelling context to the stakes -

• This from Warren Hogan in the AFR (paywalled) provides a counterpoint, through the eyes of his father who was a part of the neo-classical school.

• Some of the key protagonists have pub lished acade papers including this from Frank Stilwell and this from Gavan Butler .

• This book about the dispute was published in 2009 while the Journal of Australian Political Economy dedicated an entire edition to the dispute in 2025.

• It was incredibly challenging to find confirmation of JK Galbraith’s address. The interweb shrugged tis shoulders but a shoutout on LinkedIn confirmed I was not dreaming. Thanks to Jenna Price for sending this link to a report of the speech on Trove .

• Also big kudos to Jim Della-Giacoma who I think was a student editor a few years before me for sending me this classic - a recording of Billy Bragg at Holme B Building including a rendition of the British Beat’s political classic ‘Stand Down Margaret’ .

My final reflection from this little deep dive was how full of big ideas and cultural discover my time at Sydney Uni in the mid-01980s was, how this was part of an education for many who now shape the nation and (if the experience of my daughter is any guide) of how much of this sort of passionate pursuit of knowledge seems to have disappeared from contemporary tertiary life.