Weekend Reading & Selected Links

Happy weekend! Here are some links to things I've been reading that you might also enjoy:

1. It's been a while since my last weekend newsletter. Below, two excerpts from each of my five recent podcast conversations with Martin Parkinson, Mark Cully, Mike Pezzullo, Dani Wood, and Pat Weller.
2. Europe 2031 - what getting AI wrong could mean for Europe. (With obvious implications for other middle powers.)
3. If you're an Australian looking to donate to an effective charity before the end of this financial year, can I suggest Effective Altruism Australia (EAA)? EAA is how Australians can give to GiveWell's top charities tax-deductibly and with 100% pass-through. Until 30 June, EAA (a sponsor of my pod) is matching new donations up to $300,000. Donate at eaa.org.au/joewalker.
4. 'Why American data centers can’t plug in', a new Works in Progress article.
5. I recently co-authored an essay with Greg and Ewan from e61 Research Institute (a sponsor of my pod) on how to think about Australia's data centre opportunity. To read it, go to e61.in/joewalker.
6. 'AI & Drones: Eric Schmidt On The Biggest Revolution In The History Of Warfare'.
7. 'The defence case for a bigger Australia', Sam Roggeveen, with a discussion of my podcast with Mike Pezzullo.
8. John Hempton with some Australian tax policy proposals.
9. In case you missed it: Alex Imas on what will be scarce.

Thanks, and have a great weekend,‌
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Joe

Two excerpts from my podcast with Martin Parkinson

1. Licensing requirements are preventing skilled migrants from working in the occupations we selected them for

PARKINSON: In the permanent program, about a third of all occupations claim to have skill shortages. Of those occupations, two-thirds have licensing requirements. Now, we know that there are about 700,000 people who have come in through the skilled migration program, the permanent migration program. The way that works: you apply, Home Affairs takes your application and says, “OK, Joe's applying for a skilled entry”. You go off to an assessment process whereby an independent assessor concludes whether or not your skills and experience are equivalent to what you would have if you'd been in Australia. Tick. You get to come in under the skilled migration program.

You then get to Australia and find that that actually doesn't allow you to work in the industry that you've just been told you've got commensurate Australian qualifications for. Now, by all means, there needs to be a period of perhaps training and adaptation to the Australian environment. But what's actually happening is that a quarter of a million of those people, who we've ticked as having commensurate skills and experience as Australians, get here and are not working in the areas that we've said they're skilled for, because they're subject to licensing requirements and they cannot navigate the licensing system. That licensing system is typically run by either the state governments or by professional bodies.

And so if you want to become an electrician, it's a minimum of eight months and around about $9,000 for you to get the additional qualifications. If you want to be a doctor, it can be 18 months or more and it'll be $50,000. But we've already let you in because we think you're an electrician or we think you're a doctor. And then you get here and hit this system.

Just a couple of numbers to give you a sense of this. Of that quarter of a million with qualifications in skilled professions, 20,000 of those people we let in because they were teachers, 50,000 engineers, 16,000 nurses, 5,000 psychologists, and 1,300 electricians.

If you think about the skill shortages that we talk about, not all those people are going to go into those jobs even if they could. But we've made it really difficult for them to get into those professions, even though to let them into Australia we said, ”yep, you are able to come in because we think you're commensurate with those professions”.

Go back to where you started the questioning about the size of the migration program, the impact on housing. There is a quarter of a million people in regulated professions, or close to… 650,000 people who we've decided to let into Australia because they're skilled people. So they're already here, but they're not working in those jobs. If we could better match those into the areas that we've said they're qualified for, we don't increase migration, we don't put any more pressure on infrastructure or housing, but we suddenly massively boost the supply of skilled workers. That's got to be a no-brainer.

It doesn't matter whether you want a small migration program or a large migration program; you surely want to best match people with the skills to the occupations. So this is just money for jam. This is just a productivity boost that’s sitting there on the table waiting for governments to do something about it.

2. Australia is not attending sufficiently to Indonesia

JOSEPH WALKER: One of the things in particular that piqued my interest [in the 2023 Migration Review]... was how strikingly small the size of Indonesia's diaspora in Australia is. In absolute terms, it's about 90,000 people, which is roughly the same size as the Fijian diaspora or the diaspora from Thailand. And if you put it in terms of the percentage of Indonesia's population, it's about 0.03%. For the Chinese and Indian diasporas, I think it's about 0.05%...

Another important piece of context here – which again I think is a prediction that's super-underrated in the Australian discourse – is that on the central projections, Indonesia will probably be the fourth-largest economy in the world by about 2045. And presumably at that point it cashes out some of that economic power to military might. And then we've got a great power on our doorstep, which is something that we've never had in our history.

How much do you think it would improve our soft power if the size of that Indonesian diaspora was, say, doubled or tripled?

MARTIN PARKINSON: It's a really good question. But let's step back for a minute. Indonesia being the fourth-largest economy in the world does not make it automatically a significant military power. That would be a function of its living standards and the choices it makes about what it prioritises.

WALKER: Defence as a percentage of GDP, for example.

PARKINSON: Yeah. But also, you can be a military power, but you've got the combination of projecting hard power and soft power. What has the US historically done? It's projected both. What did the Soviet Union achieve? It projected hard; it didn't project any soft power. Nobody ever sat around and said, “I want to model my economy on the Soviet Union”, or “I want a lifestyle like that of the Soviets”.

China's a more interesting case – hard power, and I think now learning that actually hard's not enough; you've got to have soft.

Australia's done very well in not having that much hard but projecting quite a lot of soft power and influence. But we've been able to do that because we've done it on the back of economic success at home. If you can show economic success at home, you make yourself more attractive to others.

So irrespective of who you're talking about – but I think it's particularly germane to Asia and Southeast Asia – we need to get our own house in order economically, because that helps us be able to project both hard and soft power.

To come to the specifics of Indonesia, if you go back to when John Dawkins was Treasurer [from December 1991 to December 1993] … John was making comments about how – I'll get this wrong, the exact quote – but it was like there were more Australian kids studying Japanese than there were in the US and UK and Canada, for example. At that time, we had really thriving Indonesian studies programs at our universities too.

And we had this commitment with Julia Gillard and the Asian Century white paper [that] we were going to be teaching Indonesian, we were going to be teaching Japanese, we were going to be teaching Chinese, we were going to be teaching Asian languages in schools in Australia. All that's gone. [In] the last decade, you can't find reference to that “Australia in the Asian century” white paper anywhere nowadays. The previous government basically expunged it from history.

Now fast-forward to your question: where is our relationship with Indonesia? We don't have very many Australian firms that do business in Indonesia. We don't have very many Indonesians here as part of the diaspora. We don't have very many Indonesians studying here. We don't have very many Australians going to Indonesia – and if they do, they go to Bali and they think they've gone to Indonesia. And Bali and the rest of Indonesia are very different places.

I actually think from a geostrategic perspective, cultivating our relationship with Indonesia is absolutely central. Particularly, as you said, on all of the projections Indonesia gets into the top five economies in the world in terms of size. And it's a population of a couple of hundred million sitting on our doorstep.

It is an economic opportunity for us in terms of two-way trade but [also] two-way investment. And it's a people-to-people opportunity for us. And they both bring with them, then, positive benefits in terms of our national security.

WALKER: And, you know, God forbid if things were ever to get tense geopolitically, just in terms of the game theory, you want a deep wellspring of mutual understanding.

PARKINSON: Absolutely.

WALKER: You want translators.

PARKINSON: Exactly.

WALKER: And we're not even well-positioned for that if you look at the withering of Indonesian language studies.

PARKINSON: Exactly. Or just look at the map. Where does Australia want to stop threats to it? It doesn't want to stop it on our border. It wants to stop it from getting here.

What becomes critical, actually, is Indonesia. It’s Papua New Guinea. It’s the Pacific. That's the focus we should have. And that's not about a military focus. It's about “how do we help nurture thriving, economically prosperous democracies?” And recognising we won't have the same global priorities and we won't necessarily have the same values, but where can we find the mutual interests that reinforce the relationships as much as we can?

Two excerpts from my podcast with Mark Cully

1. We're increasingly taking migrants from poorer countries

MARK CULLY: I think one of the things that intrigues me, because it goes partly to this question about living standards and partly about who benefits from migration, is if you weight the migration intake by the incomes of the countries from which they come, that weighted average figure has not altered since the 1970s. And world incomes, average world incomes, have more than doubled in that time. So that means that our intake is increasingly coming from poorer countries.

JOSEPH WALKER: This feels important, but I don't know what to make of it.

CULLY: It feels important, but I don't know what to make of it too. Because by and large those people who are coming are coming through skilled channels or they're coming through as spouses of skilled migrants. So they've been vetted on their occupations and vetted on their educational qualifications and vetted on their English proficiency. And … many of them are doing as other migrants have done: they're either succeeding in their preferred jobs or they're doing well in their less preferred jobs, but they're making sure their kids are doing really well.

WALKER: What do you think we should make of it, that fact that we're increasingly taking people from poorer countries?

CULLY: I think that's probably true for other countries besides Australia. That, you know, in the aggregate, the overall picture is four per cent of people in the world are living in countries in which they were not born. So 96 per cent of people are. But in Australia, it's about, you know, 32 per cent. So it's kind of 8 times that four per cent. So it's a huge magnitude difference.

But in the OECD countries, that four per cent becomes about 15 [per cent].

It's been rising, and rising in all OECD countries. And I think people like Hein de Haas, who analyses these kind of movements, would say you have this kind of development hump where people in very poor countries don't have the resources or wherewithal to migrate and people in rich countries don't need to migrate, but it's the countries in the middle of those – so you get this inverted U shape about the propensity to migrate from given countries – and that more of the world now is in that hump and have the wherewithal to get to OECD countries.

And OECD countries have been since the 1990s, as in Australia, liberalising the opportunities for people to migrate to their countries as workers and as students. And the pressures for them to continue to do so because of population ageing are going to remain high. So it's hard to see that tension that exists in almost all OECD countries over migration dissipating because there's this economic need to find workers to do jobs that locals don't want to do and just to help them manage their … shrinking. Otherwise their participation rates would come off.

We have not seen that in Australia, which has been interesting and surprising in many ways, but we will, eventually, without continuing to have moderate to high levels of immigration.

2. The international education lobby

WALKER: You were the inaugural chief economist of the Department of Immigration. I'm very curious whether you could share some of the more interesting questions that you worked on...

CULLY: So I started in that job right at the end of 2008 and the beginning of 2009. And it was not long into the life of the first Rudd government. And the minister, Chris Evans, wanted somebody who could help him think through the interactions between immigration and the labour market and the economy. The Immigration Department was full of lawyers, and there's not a solution to a problem that a minister faced at that time that somebody in the department would write a regulation about. And he just wanted a fresh set of eyes to help him think through some of these things.

The thing that I got involved with that had the most consequence – and I worked with several other people on this – was … This was when the very first spike in international student numbers had taken off, and there were a range of overnight colleges that sprung up offering diplomas in cooking, for example, hairdressing. And a number of them were pretty dodgy.

At the time, under the existing rules in the Migration Act and particularly the rules for applying to become an independent skilled migrant … you could have basically 100 per cent probability that if you were under 30 and your English was pretty good and you enrolled in one of these courses and completed it, you would meet the points test pass mark. And there was a backlog emerging of applicants who were waiting their turn in the queue to be processed. So the current blowout that we have in bridging visas was starting to take place then as well.

And the minister wanted a review to be done. In particular, he wanted a review done of this regulatory instrument that Phil Ruddock had introduced called the Migration Occupations in Demand List. So this list was updated two or three times a year by officials in the department in consultation with employers and with the Employment Department around evidence on jobs that were in skill shortage ...

...

And if you could demonstrate that you had a skill – that you're in this occupation that was on the list as a cook or as a hairdresser, for example – you got 15 extra points in the points test. And that was one of the main things that tipped you over the pass mark.

And so I got asked to lead the review of that on the Immigration Department side, and then we worked jointly with colleagues in the then Department of Education and Employment...

You can see the outcome of that review in the discussion paper because it just articulates a very clear set of principles about how to think about skilled migration policy. And the government ended up agreeing to a bunch of proposals to end the Migration Occupations in Demand list.

And then a really important initiative which wasn't in my discussion paper but was worked up by other people in the department was to make the application for skilled migration a two-step process. So the first step was an expression of interest, and after the expression of interest you would be invited to apply. Whereas [under] the prevailing law, if you applied, you had to be given a decision, and if you were over the pass mark you had to be given a visa. So it basically tried to prevent the backlog emerging, by only inviting the number of people to apply consistent with the number of skilled migration visas you wanted to issue in any given year.

It caused a huge outcry when this came out, particularly amongst Indian authorities. I can remember we had to go and see the Indian ambassador, who said "You've left my people high and dry," to me and the minister. There [were] various grandfathering arrangements put in place, but it would all have been pretty sensible.

And then it all progressively got undone, particularly by lobbyists from the international education [sector] – the universities in the main – because the numbers went down quite a lot the following year, and they lobbied really hard. They got Michael Knight, the former New South Wales Minister for the Olympics, to do a review. And he's the one whose review came up with the recommendation for a very generous post-study work visa for overseas students. And the numbers of international students have grown to levels that I thought were unimaginable back in 2010, but here we are.

WALKER: It's funny when people talk about the influence of special interests over Australian policy outcomes, the classic examples are the mining companies, around the mining tax. But I think the international education sector, the universities, is a very underrated example of people digging in very ferociously to defend their rents.

Two excerpts from my podcast with Mike Pezzullo

1. Acculturation: France vs Australia

JOSEPH WALKER: Is there a country in the world, to your knowledge, that's being intentional about how it acculturates migrants? Or a country that we should look to as a model? Are we the model?

MIKE PEZZULLO: Look, I think we're the model for us, if that's not too much of a contradiction... I will actually give you one example. I was originally contemplating not naming a country. I think France has had a huge problem. Because it precisely invested so heavily in a unitary version of the French identity, largely from the imperial experience. French imperialism was quite different from British imperialism. When you're in a French colony, you're in France. It was metropolitan France.

...[W]hen migration then started there was no need to enculture because you're already French, because it was such a function of being a French speaker. And that was largely the francophone position. So people like de Gaulle would talk about “there is no need to enculture because you speak French”... Language was carrying so much of the burden of identity... Now, the French themselves have recognised this. I remember some of the most intriguing discussions I used to have in government were with my counterparts in the French system.

WALKER: Oh really?

PEZZULLO: Who were fascinated [by] Australian multiculturalism, and indeed for that matter Canadian multiculturalism. There's a separate issue because of the Quebec issue, but they were fascinated [by] Australia because they said, “but you're kind of English”. And I said, well, no, our institutions are English. Our culture has become an ever-evolving [thing] – and it'll evolve again as more people out of the Indian community, so Indian Australians or Chinese Australians, become more senior in academia, in commerce, in cultural life, et cetera… Australia itself will gradually, through increments, change. So we don't have a fixed idea of Australia. You tend to have a very fixed idea of France, the grandeur of France. A lot of it's invested in language, because they're so proud [of having] such a beautiful language. 

And now you have the situation where by not having an approach to multiculturalism which accepted that you were going to, if you like, blend different ethnicities together … you go to places like Paris – and we know this from some of the terrorist incidents – there are areas of Paris, the greater Paris area, which are terrorism hotspots, because the idea of “France”, which was supposed to overcome all difference, has never really taken root – simply because someone whose background might have been African, they speak French, but they don't necessarily accept the institutional design of France as a parliamentary democracy which is plural, courts of law, et cetera, et cetera. 

Some would argue that Australia has been monocultural; I don't fully accept that, [although] it's certainly British in antecedents, that's true – language, culture, sport, et cetera. But I think what we've done is [that] we've evolved and we've, if you like, taken the best of different groups as they've come – but still, we're still recognisably Australian in an institutional sense.

I think France is potentially in a world of hurt. And that's why you have a much more extreme version of One Nation. I mean, National Front is very different from One Nation. It's basically proto-fascist, because of the problem, as they would describe it, of these ghettos. We have virtually none of that here.

...

WALKER: …What kind of questions did your French counterparts ask you about Australia? Was it just stuff like, “how did you do it?” Or anything more specific?

PEZZULLO: In part it was “how would you do it”. But the big difference [is that] they still don't think they've broken up. Because they think there's still this sort of francophone world – and the British Empire broke up … I found myself constantly in a sense of repartee with my French counterparts, saying “we never assumed that there was ever an Australia abroad”.

The difference between us is, for you, someone in Nouméa, in New Caledonia, or French Polynesia in Tahiti, is French because they speak French. They might have locally adopted a dialect and an accent. And they used to rib the people from Quebec, they said, “well, they don't really speak French”. They kind of do, but they don't. So you had an assumption that anywhere in the world where you went, if you were tied in a francophone sense back to the idea of France, you were the same.

The British rejected that a long time ago, and Australia is … evolving within the British context – mixed. We never had that, from the start, because of course we had a strong Irish quotient. You didn't have the class system. You didn't have that sense of manners that John Hirst and others have talked about. So that's why we might have been British in antecedents, in institutions, in a parliamentary democracy, in our common law, our jurisprudence, et cetera. But very early we, if you like, synthesised an Australian culture, in part irreverent and anti-hierarchical and all the rest of it, which was never exported anywhere. In other words, you only ever experienced it by being in Australia.

WALKER: Yeah, yeah.

PEZZULLO: The difference with France is that the French … They've got such a beautiful language, a deep culture, extraordinary literature. Of course you'd be proud of it. But the problem is that they – if I can say this respectfully, I hate to think what your French viewers are going to make of this – are still caught in this 18th or 19th century of France abroad.

WALKER: Yeah.

PEZZULLO: And that's where you get the difficulties with integration … France might have been in West Africa for even a century. It probably didn't change the cultures of those countries, whether it was Senegal or anywhere else that was in the francophone empire. They were only in Morocco for a couple of decades. So why not accept that someone coming from Senegal or someone coming from Morocco is probably going to have deeper roots [and will] go back generations and generations in their own customs, religious traditions, et cetera. And then say, that's fine, but in metropolitan France, true metropolitan France, here are the house rules.

And by not having that house rules idea … We talked about the Menzies period. You came to Australia, you left all your hatreds behind, whether it was Serbs and Croats, or later on Jews and Muslims, or whatever the case might be. Leave all those hatreds behind. Because we've got house rules. I don't know that the French ever [had them]. And Britain ironically also … through the '70s and '80s with their immigration program – particularly from the former parts of the British Empire – I don't think went hard enough on house rules.

We have house rules here. And it goes back to the very first thing we talked about, which was the deliberate institutional design, and everyone signing up to those rules: parliamentary democracy, courts of law, courts dispense justice. We don't have any extrajudicial or extralegal way of resolving difference. We have politics. That's all we have. That was intrinsic to Australia's design almost from the get-go. Largely because in the settler groups – leaving aside the soldiers and the officials, but in the settler groups – you had a mix of both Protestant landed [people] and in some cases wealthy groups, and you had the Irish.

So right from the get-go, even though there was sectarian differences and sensibilities – Protestants tended to dominate in certain professions, for instance, Catholics in others – when we then came to federate – and you see this in the constitutional protection for the freedom of religious expression that's embedded in our constitution – we were from the get-go not going to be a sectarian society. And we were not going to be a stratified society. I don't think you get that in former empires.

And I think that's one of the material differences with France.

2. The return of 'populate or perish'?

WALKER: Do you predict ‘populate or perish’ will make a comeback, and should it?

PEZZULLO: I think yes, and that's simply a function of –

WALKER: Sorry, yes to which part?

PEZZULLO: To both. It'll make a comeback. And should it? Yes, because as much as we might generate leverage through AI agent capability – so [we have a] relatively small population, but we've become super-productive because everyone's got their AI agent in their workplace – there still is going to be a requirement, whether it's in building, whether it's in military services, whether it's in healthcare, for humans.

And to secure Australia, just as a military problem, a population of 28 million – and that's even if you allow for a degree of national service or a degree of conscription – is only going to generate a defence force, if you have to mobilise it to defend Australia in a war, to a certain level. Now, AI can help offset that to some extent, but as a military strategist and a military defence planner, I look at Australia – I'd want to be protecting Australia with 40 or 50 million people rather than 28.

Now, there's all sorts of issues. I mean, where are those 20 million people going to live? Do you double or triple the size of Sydney or Melbourne? No. [Are you] in a better place where somewhere like Perth has five million people? Yes. But can Perth take five million people? Don't know. Don't understand enough about sustainability there.

Kevin Rudd was probably the last prime minister who talked in those terms. He talked in general terms. I think he mentioned it in his memoir, for instance, of talking about an Australia of 40 million people.

WALKER: Well, the irony of Rudd's big Australia is that he got a lot of pushback for talking about an Australia of, I think, 35 million people.

PEZZULLO: I think it was about 35, maybe 40.

WALKER: By 2050. But today, 17 years later, that's the ABS's midpoint projection for 2050.

PEZZULLO: Correct. We're on track, so our population growth has been well out relative to 20 years ago.

WALKER: Yeah.

PEZZULLO: More recent population projections are likely to be more accurate, particularly with the establishment of the Centre for Population in Treasury. But you go back to …

WALKER: And was that just net migration catching them off guard? Is that why we were always underestimating?

PEZZULLO: Yes. And not a turnaround in fertility, but less of a decline in fertility than what was predicted.

WALKER: Okay. So if the ABS's midpoint projection for 2050 is about 35 million people, from a defensive standpoint, what would you prefer to see by 2050?

PEZZULLO: About 40 [million].

WALKER: Okay, that's only an extra five [million] – that's not too much.

PEZZULLO: … Yeah, but that's another Sydney or another Melbourne.

WALKER: Yeah. And … just exactly what [does] that extra five million get us defensively?

PEZZULLO: So 40 million, it's a function also of how much you spend on defence. But from a defence point of view, you go from a full-time ADF of about 60,000. [That’s] very light, and you don't have any depth. And even with AI and automation and digitisation, you don't have the hitting power that you need.

And... a Defence of Australia podcast is an entirely different –

WALKER: We'd have to do that another time.

PEZZULLO: We'll have to do that another time. But for an ADF of 60,000, you just don't have enough coverage. But with a defence budget of, let's say, 3% of GDP – just, there's nothing magical about 3%, just more cash. So it's about a percentage point on top.

WALKER: Because we're about 2% currently.

PEZZULLO: 2%. Let's say 3%, ideally a bit more than that, because it's going to become a pretty tough world. But there's lots of trade-offs. Where do you get that percentage point? In population terms, if you carry through current ideas about recruitment, retention, your life in the military – “do I want to do 20 years or whatever?” – and exclude for a moment national service, you get an ADF of about 100,000. And that is probably the minimum viable.

A 3% budget and an ADF of about 100,000 gives you the number of people you need to then – even if you've digitised, automated, gone heavily into drone warfare – it gives you the kind of size of a defence force that you'd need for the most credible contingency that we would face, which is basically a theatre-wide war where Australia's not been attacked directly because someone's attacking Australia, but we're part of a theatre war which extends from the middle of the Indian Ocean probably right up to Alaska. And it's a bit more like the conflict that we faced in 1942.

In that war, or in that kind of credible contingency, because there's for the next century at least, all things being equal, unless Indonesia turns into a very different sort of country, it's almost impossible to see a circumstance where Australia is engaged in an existential military conflict where it's fighting for its life, absent a broader war.

WALKER: Yeah, I see. So it's actually quite an important assumption here that you're not contemplating the defence of Australia – you're contemplating a theatre war [outside of Australia’s immediate region]. 

PEZZULLO: Where the defence of Australia is a subset, is a subcomponent of that war.

WALKER: Right, right. But we're not trying to repel an invasion to the continent. Okay, so that makes more sense in terms of beefing up the ADF's numbers.

PEZZULLO: Because what you'd want is an army in rough terms, is about a 60,000 army, and an air force of 20,000 roughly, and a navy of 20,000 roughly. They're very much at the low end, and then probably through reserve service and/or national service, the ability to probably double those numbers in relatively short order. So you get to an army of about 100,000 or so and Navy and Air Force of roughly 50,000 each.

Two excerpts from my podcast with Danielle Wood

1. Why Australia shouldn't pass an AI Act

DANIELLE WOOD: Is an Australian AI Act going to protect Australians from the existential risks of AI getting out of control? No. This is going to happen overseas, and we will get taken out in the crossfire, whatever it looks like. And so I don't see that putting in place cumbersome or complex or unnecessary regulation… it’s actually not going to protect against that potential harm, would be the right way that we should think about it here.

Essentially, it's a problem for regulations in the countries in which these models operate, but it's also a global problem. We've just launched an AI Safety Institute in Australia that is working with AI safety institutes that exist in a range of other countries – Korea and Japan and Europe and Canada. And I think probably some global coordination that is playing a role in improving the transparency and auditing of these models, that is kicking the tyres on these risks of lack of alignment, is probably the way we play the role.

2. Should Australia subsidise data centres?

WALKER: I'm told that Anthropic is looking for its “second country” [for training compute] at the moment outside of the US, whether that's Australia or Japan or somewhere else, I have no idea. But if there was some MoU or bargain struck with Anthropic, which was "okay, we're going to do up to a third of your next however many training runs and in exchange, we would like access to the next versions of Claude Mythos Preview to help with our cybersecurity when they become available". That's the kind of things I'm contemplating here.

WOOD: Look, I can see what you're saying. I just wonder if it's – if you're talking about that as a motivation for government investment in data centres, I think it's a fairly long bow.

Two excerpts from my podcast with Patrick Weller

1. Prime ministers and technology

JOSEPH WALKER: I don't know if many people know this, but [Billy] Hughes governed Australia from Britain for about 16 months.

PATRICK WELLER: Yes, that's what I'm about to say. And he was insisting that he see every cabinet decision, and I worked out the price. By the time you've got a decision, you've coded it, you've sent it to him, you've decoded it, he replies – the cost of each of those was about the price of a small house in Melbourne.

WALKER: So they must have been spending millions of dollars on telegrams.

WELLER: Yes. And an awful amount of time. Yeah, he governed for 15 months and he didn't want them to make any decisions...

WALKER: And so just for people's context, it's towards the end of the First World War, 1918, 1919, and that's why he's in Britain.

WELLER: He's in Britain because he's got Versailles.

WALKER: Right. And he originally goes via maybe Canada, then America and to Britain, then Versailles.

WELLER: Outrageous behaviour. And then Watt, as deputy prime minister and treasurer, wants to be asked about his own portfolio, and Hughes said, “why?” So Watt resigns because Hughes wanted to be treated one way, and he treated other people with complete disdain. I mean, eventually he lost government because of it. Lost the position because of it. I mean, he was a horrible little man.

So the notion that somehow modern politicians are greedier, more cynical than people like Hughes, I think, is a nonsense. So what we need to understand is how systems have changed and how technology's changed, and how the role of government has changed. They're doing things in government now they wouldn't have dreamt of doing 100 years ago. A lot of the things now being done, they're getting involved in with state problems that are not theirs.

So I think what you need to do is actually say to prime ministers: what's different? I mean, Menzies went to Britain by boat. It took three, four weeks – he was out of touch.

WALKER: What would you have been doing on those voyages? That seems like such a luxury for a modern politician.

WELLER: Yes, of course. He was going from London to New York. When the Korean War broke out.

WALKER: Yeah, but how do you think he would use his time? Would he be reading?

WELLER: I haven't got a clue. I've got pictures of him walking around the deck with the secretary of the department. 

But the deputy prime minister, Artie Fadden, was asked by the British, “are you going to be there in Korea?” And he couldn't contact Menzies, so he had to make the decision, and he was dead scared. So Menzies arrived in New York…

WALKER: Why was he scared?

WELLER: Because he had announced that Australia would support the UN in the Korean War without asking the prime minister, because he couldn't contact the prime minister because he was on the boat. So they get there and Menzies says, yeah, okay. But there was this time in which Fadden couldn't contact him. 

Now, you're never out of contact now. I mean, in Fraser's time, you we're okay when you were flying somewhere.

WALKER: Yeah. The irony is that it would be much easier to govern Australia from Britain today because of modern telecommunications.

2. PMs have lost thinking time

WELLER: The whole telecommunication thing has changed how government works... Say you get on a plane, you use the time flying to Britain or something as an opportunity to work because you're on the phone with everyone, whereas you used not to be.

WALKER: Feels like there's less thinking time. If we go back to Menzies, Menzies' three-week voyages, I imagine those would have been quite productive because ideas are kind of gestating. He might have moments of insight.

WELLER: As I said, he was walking around the deck with the secretary of his department; you know, “What are we talking about, Alan?” Yeah. I think pace is the thing. I mean, people can react within moments and do, and feel they have to. So the way in which government works strikes me as [now] being much more rushed.

WALKER: Do you think prime ministers need more time to just be able to think uninterrupted?

WELLER: Well, that depends if they have a sensible capacity to think!

WALKER: There's this Amos Tversky quote, which is, “People waste years by not being able to waste hours.”

WELLER: Yeah. Yes, they need time to think. Yes, they need time to talk it over. Do they have it? Not necessarily.