Viktor Schvets’ Convergence of Storms is not a good outlook for Australia.
Schvets’ “Convergence of Storms” sees five converging revolutions.
The first storm is demographics: ageing populations, below-replacement fertility, and shrinking workforces reduce long-term growth potential, raise dependency ratios, and put enormous strain on pension systems and public finances. With fewer workers supporting more retirees, both productivity and social stability come under pressure.
The second storm is geopolitical fragmentation. The post-Cold-War unipolar world is being replaced by a multipolar, contested order. Rising tensions between the United States and China, renewed Russian aggression, and regional conflicts are breaking up integrated supply chains and forcing countries to prioritise security over efficiency. This fragmentation raises costs, undermines trade, and weakens the foundations of the global economic system.
The third storm is technological disruption. Automation, AI, and platform economies concentrate power in a small number of dominant firms while eroding traditional middle-class jobs. Rather than spreading prosperity, technology is intensifying inequality and weakening the social contract that underpinned democratic stability in many countries.
The fourth storm is financial and political instability. Decades of easy money have produced extreme inequality, asset bubbles, and debt burdens that cannot be sustained under higher interest rates. At the same time, populism, social unrest, and distrust in institutions are rising, making coordinated reform increasingly difficult.
The fifth storm is environmental and resource stress. Climate change, water scarcity, and the energy transition require massive capital investment while threatening existing infrastructure and agricultural systems. These pressures increase the risk of migration, conflict, and systemic economic disruption.
It is the interaction of these storms, rather than any single factor, that makes the moment uniquely dangerous. Each crisis amplifies the others: slowing growth fuels political instability, which worsens geopolitical conflict, which disrupts supply chains and raises costs, which deepens inequality, which in turn drives more unrest.
I agree with nearly all of this, but I disagree on one critical point.
Schvets argues AI might become inventive, which is a fundamental misunderstanding of what it does.
AI is inductive, not deductive, so, by definition, it can innovate, working with the known, but it cannot invent, entering the unknown.
This has implications for all structures of the political economy in reference to AI.
- It retains a place for human imagination.
- However, it will largely be elite humanity, given that most of us are also inductive.
- This inventiveness advantage is an inherent advantage for liberal systems over illiberal ones.
As for Australia, on the one hand we are already seeing how we might benefit via demand for various real assets like commodities.
On the other hand, an immigration-led economy is incompatible with the large-scale labour replacement of AI.
The more we press the current economic model, the more the labour market will have to be driven by public spending, and the productivity and disinflationary benefits of AI will be lost to capital shallowing.
The alternative of low immigration to help manage the impact of job losses, along with appropriate income transfers to offset AI, will lead to higher productivity, living standards and a fairer distribution of income.
