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Have you ever thought that you might be being played like a guitar or a puppet on a string? Australia has been on an economic hold for the past few years in response to the high inflation post pandemic. The Reserve Bank of Australia (RBA) steeply raised interest rates to dampen the economy and repeatedly told the community to pull its head in. Understandably, like good citizens we obeyed and economic growth became sluggish and non-existent. Now, things are better, apparently, with inflation back in their band of acceptability at 2-3%. So, growth is back on the agenda and the conversation turns to productivity and the national figures. The productivity narrative is a scam.
What Measures National Productivity?
According to the RBA, finding this out involves a number of inputs. The output, GDP, is divided by the inputs, labour and capital, to end up with the productivity figure. Productivity growth in Australia has been low for the last 20 years. Indeed, this has been a perceived problem for most advanced economies around the globe.
“Productivity growth is a key driver of living standards, but it has slowed since the mid-2000s in Australia. The slowdown in productivity growth is consistent with the experience in most other advanced economies, suggesting that global factors are contributing. As in other countries, declining economic dynamism and competition has weighed on firms’ incentives to adopt technologies, and for resources to flow to more productive firms. Research and development have lagged other countries somewhat, though broader innovation metrics have improved moderately. Domestic policy can have significant impacts by facilitating innovation, diffusion of technologies, and better resource reallocation to move Australia closer to the global frontier.”
AI, Artificial Intelligence, is being mooted as the solution to this global problem. Yes, it will improve those productivity figures initially because hundreds of thousands of jobs being replaced by automation will make those balance sheets look a whole lot better. The productivity narrative is a scam, however, as are the economic data figures and how they are arrived at.
GDP & Productivity Are Scams
GDP, Gross Domestic Product, for instance, includes in a dollar measurement all total goods and services produced in a financial year. Have a think about the gas industry in Australia, that LPG mining sector which involves foreign multinational companies who pay little to no tax and royalties here. They contribute their multibillion dollar export figures to our national GDP but Australians get very little actual benefit from their operations because of the generous tax exemptions they enjoy. The GPD figure may make the government of the day look good but it does bugger all for our own living standards. This is a scam because in this day and age these operations do not even employ that many Australians. Bunnings employs more than the gas sector.
“Some inputs and outputs are not measured: For example, some natural resources and intangible capital inputs are particularly difficult to measure well and some may not be measured at all. Where actual inputs change but have not been measured, estimates of MFP will be distorted.”
They Blinded Us With Economics
They blinded me with science or, in this instance, with economics. Economic data is the main measuring stick by which all modern nations live by. Yet, these figures and how they are arrived at are dodgy and disguise many anomalies and injustices. Treasurer Jim Chalmers is telling us that AI will be a good thing for Australia and there will be positives for sure. However, the level of disruption to hundreds of thousands of lives will be f****** huge too. Job losses are going to be massive and, in most cases, those disrupted will never reacquire employment income at the same level again. History tells us that. Perhaps, the gig economy awaits, delivering pizzas and the like. Sacrificed on the altar of Big Tech and productivity.
The Rentier Economy
One of the clear reasons why global productivity has been in a trough for decades is that we now live in a rentier economy. Large multinational corporations in every sector make their money from rents, fees and subscriptions. Therefore, productivity is not high on their agenda, as they make their billions from this rentier model. There are few incentives for these companies to push the envelope when they are making money hand over fist via the rentier model. This idea of productivity being the be all and end all is poppycock. The productivity narrative is more about selling the AI disruption to the millions of us who will be copping it in the neck.
Low Productivity & It’s Messaging
The productivity narrative is a scam. The message going out infers that Australians are not working hard enough and this will be encouraged by employers. Yes, the bean counters say that it is about working smarter rather than longer but how can the average worker manage that? I suppose, the national messaging carries with it the subtext that you personally may be losing your job to a machine, a smart automated program, but ultimately it will be good for the nation’s productivity. Unfortunately, in this instance, age shall weary them, the them being the masses of unemployed who will enter the ‘tough love’ treatment of the unemployed downunder. Australia pays below the poverty line welfare as a matter of course- this is a bipartisan policy. Social security will be taking a huge hit but those productivity figures will be better folks.
Segmented Economy Means No Real Planning
More stuff produced by less workers. Who will buy the local output if many have lost their income post-retrenchment? The segmented nature of our economy is not designed to cope with big questions like that. Neoliberalism and privatisation has broken everything down to segmented chunks of private interests. Companies seek ever more profits and returns for their shareholders. Getting rid of workers will slash labour bills and increase profitability. However, local market sizes may shrink in response to the mass layoffs of workers replaced by AI. More machines may not make the economic utopia being spruiked by those selling the tech. One wonders whether Jim Chalmers can see beyond the next short term cycle? We know that Albo is at heart a political animal. The politics are, invariably, his survival mode main concern.
“Innovation related to artificial intelligence (AI) could displace 6-7% of the US workforce if AI is widely adopted. But the impact is likely to be transitory as new job opportunities created by the technology ultimately put people to work in other capacities, according to Goldman Sachs Research.”
For those thinking that the above estimate is for the US, just remember that Australia follows America around like a kid brother, especially in the business realm. We live in a time of oligopolies, big corporations that have swallowed up the competition via mergers and takeovers. Consumers have been rendered largely powerless by the lack of competition in markets. Groupthink runs the business world like 1984. Big Tech runs the show in 2025 and beyond. Humanity is headed for a hole of gigantic proportions. There is no one at the wheel with any overarching common sense. It is all about greed and making money. Sprinkle in some fear about the other big entity, China, and this spurs them on to make more automated weapons faster. Shifting stuff to AI is, also, a means of abdicating responsibility for stuff, as we are seeing in Israel and the genocide in Gaza. AI is big in selecting targets for the IDF with Palantir, Google and Amazon all over there making billions from war.
The productivity narrative is a scam.
“ABC investigative reporters at work, as Four Corners exposes $50 billion ATO losses. The old joke about feeling like a mushroom, kept in the dark and fed on shit, comes to mind when considering what really goes on in the halls of power. Macro corruption is the term used to describe the situation in Australia, where the amounts are very large when dirty deeds are done downunder. Scamming millions of dollars from the tax office via bogus GST claims would be an unlikely occurrence one would think. I mean, the ATO is a pillar of our whole national edifice, so it must be bristling with top line security, right? Wrong, it is a $50 billion black hole bad joke on that score.”
Robert Sudha Hamilton is the author of Money Matters and America Matters: Pre-apocalyptic Posts & Essays in the Shadow of Trump.
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