Anthony Albanese, the Australian prime minister, has outlined his vision for confronting the economic and social challenges posed by artificial intelligence technology, a task that may prove to be his toughest political challenge this term. Speaking at the University of Sydney, where he studied in the early 1980s, Albanese drew on his formative experiences as a student activist to frame his approach. The PM, who lacks the charisma of Bob Hawke or the clarity of Paul Keating, nonetheless seeks to emulate their Labor response to globalisation: dive in, but build social guardrails.
Historical context and the Hawke-Keating model
Hawke and Keating responded to neoliberalism and globalisation by embracing change while constructing protective measures. They centralised wage increases through an accord with organised labour, embedded Medicare, and instituted universal superannuation, creating a national savings pool exceeding $4tn. Today, Albanese faces a similar disruption driven by AI and an even more extreme rightwing ideology that expects society to accommodate the technology without question.
A sceptical public sees more risk than opportunity in AI, according to Peter Lewis, executive director of Essential, a progressive strategic communications company. Lewis notes that the government believes AI must be shaped and harnessed, recognising that benefits exist in leaning in and that the technology cannot be stopped.
The classical economics versus political economy debate
Through a classical economics lens, rapid scaling and adoption of AI is compelling for a prime minister seeking economic growth. The best-case scenario envisions Australia as a global AI training hub, exporting renewable-powered models while exercising sovereign agency. Classical economists argue productivity gains from faster information processing and pattern identification will be distributed by rational market players.
However, this view is contested. Some see a massive hype bubble, with a growing chasm between investment and income. The sunk costs of powering datacentres in a climate crisis are not properly factored, and a lack of social licence adds barriers. Datacentres have become avatars for AI's negative impacts: child abuse, creepy companions, worker surveillance, job losses, creator theft, scams, data breaches, and misinformation.
Political economy and countervailing power
The political economy of AI suggests the rollout will widen wealth disparity, undermine secure work, and concentrate power in unaccountable tech overlords. There is a real political risk that populist right and left combine to challenge AI's inevitability and lack of moral compass. If the government fails to establish adequate safeguards, outright resistance becomes rational.
Albanese is taking necessary first steps by establishing national standards and centralised control within government. Coherent decision-making and internal accountability are critical to meeting this moment. Big decisions remain on defence, copyright, safety, workplace, environment, privacy reform, and the financial model of emerging industry. Power disparities will make it harder to resist big tech demands.
Lewis recalls seeing economist JK Galbraith at Sydney University in 1987, who explained capitalism's golden rule: who has the gold makes the rules. Galbraith described the importance of countervailing power to mitigate innate imbalance. Neoclassicists miss that their theories only work when power dynamics are right, and currently they are not.
Government leverage and civic engagement
The government has leverage: flagrant copyright breaches in training AI models provide a weapon to assert national laws; Australia's stability and security for long-term investment; and stronger planning, environment, and labour laws than most. Civic engagement is growing, with environment movements, trade unions, and civil society focusing on setting guardrails. At next week's ALP national conference, an internal group called Fair AI will launch to organise from within. Even the pope has called on people of goodwill to act for humanity.
These voices of dissent will be a critical resource, a counterweight to capital's demands to privatise benefits and socialise costs. As Albanese embarks on this journey, it is up to the public to keep his feet to the fire, demanding that children, creators, careers, and communities be at the centre of the AI equation. That is real sovereignty.
