Time to Take Technology Seriously

There is a weird and false narrative in modern western economies. It is this: that we live in a purely capitalist economy. And more so — that markets will naturally find the answers to all our economic woes if we have the courage to fully embrace them. Unfettered globalisation comes to mind. Brilliant for markets, not so good for Australian auto industry workers.

The recently-published essay by Treasurer Jim Chalmers was enlightening. I preface this by saying I follow neither political team. But the article was enlightening because it focused on economic and social philosophy, which has been sorely missing from the public narrative. It seems we’ve preferred to blindly follow established doctrine, without asking if social, economic and, more importantly, technological conditions have changed. They have – dramatically.

Markets With Guard Rails

Yes, markets are one of the best mechanisms we’ve got, but they need guard rails. We’re not a purely capitalist economy and never have been. I remember back to my first-ever economic lessons in Grade 11 (before the collapse of the Berlin Wall) where we discussed the relative merits of the available economic systems around the world. And nothing was clearer – a perfect system does not exist but a mixed economy that was largely capitalist with a regulatory ballast allowed us to have the best of both worlds.

When it comes to economic policy, the order of things is all important. Just as in business, we must first establish philosophy, then objectives, strategy and, lastly, tactics. But it seems we’ve been living in a tactical spiral since Reaganomics arrived. The simple narrative was that government was the problem, unfettered markets worked, and lower taxes benefitted everyone.

And yet, we have increasing income and wealth inequality and an underperforming digital and energy infrastructure. If the recent Victoria state election and promised rebirth of the SEC taught us anything, it’s that people want government to take a bigger role in our utilities and infrastructure.

Time to Build Big

No one can argue that our public utilities were not bloated and inefficient when we began our march towards privatisation in the late 1980s. Our utilities needed to be run better and selling utilities certainly helped government coffers in the recession of the early 1990s.

But it was a very different time. Infrastructure was relatively stable at the time, and we were not in the middle of a technological reset as we are today. And while it is clear that efficiency gains have been made, it is not so clear these operational gains have benefitted the wider public.

Our energy and telecommunications sectors are front and centre in this discussion. Both are a mess of private and public interests which have us lagging the world. Our internet speed currently ranks at 59^th globally. What your speed is at your home or work (often both, these days) is largely a geographic lottery. We can argue all day over whether terrestrial broadband, 5G towers or satellite internet is better than the other, but in reality, here, we need them all.  

An effective telecoms infrastructure would include different types of connections in different geographies. For example, it may be better to have satellite in rural Australia, fibre to the suburbs and a 5G focus in cities. The point is, it needs to be well thought out and planned, rather than a mishmash of private and public interests competing and focussing on costs or short-term profits.

And all of them should be owned and controlled by the government, as all natural monopolies should. Instead, what we have is three corporations building competing 5G towers right next to each other, NBN trying to compete with them at lower speeds and Elon Muck’s StarLink selling satellite dishes for internet access to our underserved rural geographies.

Astronauts, Not Influencers

As a kid I remember thinking that only the best and brightest could go work for the government. During the Cold War, kids wanted to be astronauts, not influencers. We can and should aim for a new era where working for the government on building our future is a revered honour. This can only happen if we start building tomorrow.

Imagine the young minds we’d attract if seriously invested in the Australian Space Agency, took back our telecoms in all their manifestations and set ourselves a national goal of build the world’s best communications infrastructure? Imagine if the best paying job was building world-leading technologies for the government?

We certainly have the educational institutions, the talent and the need. What we require is leadership and courage.

Taking Back Telecoms

Taking back telecoms utilities would enable us to avoid the short termism and vagaries of the market. We’d be able to upskill our workforce, create a positive wage spiral centred around infrastructure and increase competitiveness globally and regionally within our own borders.

Private industry would benefit from an improved platforms to compete on top of. Private industry always excels when it has effective ‘platforms’ to operate on top of. Show me a rich country with reasonable income equality, and I’ll show you a rich infrastructure. We’d have new training grounds (with potential for new technical traineeships and apprentice programs), and reduce employment shock risk when the next pandemic or global black swan emerges.

The same can be said for our energy policy. While it is technologically clear we are now moving to an all-electric economy, our national policy wouldn’t suggest this. We can and should significantly increase our commitment to renewables. Not just for climate reasons, and global energy pricing risk, but for the pure growth and job creation it will facilitate.

Embracing EV Chargers

I’ve spoken before about large-scale battery projects, small-scale microgrid and rooftop. But here’s a simple statistic pointing to an opportunity we’re not embracing: EV chargers. We currently have under 5,000 in Australia. Experts agree we’ll need up to 40 million of them by 2030 (around two per car). The installation of these alone is a market of over $100 billion.

And if you’re wondering how all of this will be funded – my answer is fiscal policy. National sovereign debt to a government which never has to ‘pay it back’ thanks to Modern Monetary Theory. The important delineation that I make with MMT, is that if the debt is not for transfer payments and is destined to build infrastructure with a multiplier effect, then the inflationary impact will be minimal. It’s time for fiscal policy to supersede monetary policy.

Incentives Shape Behaviour

Incentives shape how we behave, philosophically and structurally. A modern government investing in our physical world and its people will do more for our social and economic well-being than the previous era of neo-liberalism did.

The fact that money earned from capital has a 50 per cent tax discount to money earned via work tells us what and who has been valued in society. (Hint: it isn’t wage earners.) It’s no wonder our populace is more interested in investing in property and equities than risking a new startup in robotics and reimagining our manufacturing industry. And the net result has been houses the next generation can’t afford and a populace which sweats on interest rates hikes like few others.

We can do better. And I can’t think of a better place to start than a government building out a futureproof infrastructure and taking a direct stake in our collective futures.