Private capital will not build Australia a world-class science system. Only the public sector can do that. And it must do so at a scale that matches the challenges ahead.

The looming loss of hundreds of CSIRO scientists has been greeted with the usual talk of “budget pressures” and managerial decisions. But this framing obscures the real story. What is happening to CSIRO is not a sudden failure of governance. It is the culmination of much deeper, longer-term failures-failures that reach back through the entire history of Australian capitalism.

The first and primary failure is not governmental but structural. It is the longstanding refusal of Australian capital to invest, at meaningful scale, in scientific research, technological development, value-adding, or complex manufacturing.

From the late 1800s onwards, Australian capitalism has found its most reliable profits in extraction, land, and infrastructure rents. The incentives that built Germany’s industrial laboratories, Japan’s innovation culture, and South Korea’s world-class technology conglomerates simply never took root here.

This is not about individual shortcomings. It is about structural conditions. Australia’s economy developed around resource abundance and a small domestic market. Because extraction generated high returns with low innovation risk, capital had little reason to develop a robust scientific research base.

That pattern has proven remarkably durable. Today, Australian business invests a fraction of what global leaders do in research and development (R&D) as a share of Gross Domestic Product (GDP).

We talk about innovation, but structurally we remain what world-systems analysis would call a semi-peripheral economy: materially comfortable, but technologically dependent, exporting raw commodities and importing complex capability.

The crisis at CSIRO cannot be understood without recognising this foundational fact. Australia has never had a private sector capable of driving scientific and technological development at the scale required for national sovereignty. And absent that investment, the responsibility must fall on the state.

Here lies the second failure: a failure of governments, over generations, to recognise and respond to the distinctive character of Australian capitalism. Instead of building a mixed economy designed for our structural realities, governments have behaved as though the market would spontaneously generate an innovation system resembling those of advanced industrial economies.

This was always wishful thinking.

Rather than compensating for private underinvestment, governments hollowed out the institutions that once provided national capability. Stable public funding for science was replaced by short-term grants and revenue-chasing. CSIRO’s long-term mission was pushed aside in favour of commercialisation models ill-suited to early-stage research. Universities were left to cross-subsidise research through international student fees. Public laboratories and scientific agencies were remodelled to mimic corporations instead of serving the public good.

CSIRO’s “budget cliff” is the predictable outcome of decades of political failure-decades in which governments refused to accept that Australia’s capitalism is structurally extractive, and therefore requires stronger public intervention, not weaker.

This erosion is now colliding with a moment of global upheaval. Climate volatility, environmental decline, shifting geopolitical power, the rise of AI, and the accelerating pace of technological competition all demand more public science, deeper capability and long-term institutional strength.

Instead, we are dismantling the very agency that holds much of that capability.

This contradiction of ambitious rhetoric paired with institutional decline is the signature behaviour of semiperipheral economies. We speak the language of sovereign capability while investing like a resource colony. We declare the intention to be a “renewable superpower” while sacking climate scientists. We promise advanced manufacturing while starving the research ecosystem that makes advanced manufacturing possible.

Fixing this requires a conceptual shift. Australia needs a mixed economy built for Australian conditions, not imported ideological templates. We need to accept what the evidence has shown for over a century: in this country, private capital will not build a world-class science system. Only the public sector can do that. And it must do so at a scale that matches the challenges ahead.

Few Australian leaders understood this more clearly than Don Dunstan, who used his Whitlam Lecture in 1998 to issue a warning that now feels uncomfortably prophetic. He did not frame it as a plea for one policy or one moment. He offered it as a principle: “Intervene or we sink.”

Dunstan understood that Australia’s structural weaknesses were enduring. He argued that without deliberate, sustained, public intervention, the country would never develop the capability required to flourish. The warning was broad, not sectoral. It applied to science, economy, democracy and society as a whole. And it captured a dilemma that remains unresolved.

Australia will not become an innovation nation by accident. It will not climb out of the semiperiphery by rhetoric. It will not achieve sovereignty by outsourcing research. Nor will it secure a safe or sustainable future if its primary scientific institution is treated as expendable.

CSIRO’s dismantling is therefore not simply a policy error. It is a mirror held up to the nation’s structural predicament. It shows us that unless Australia accepts the responsibilities imposed by its distinctive capitalism and acts with the sustained commitment those responsibilities demand it will remain a country long on aspiration and short on capability.

Dunstan’s warning was not for a day, or an issue. It was for the nation. It remains the most important sentence in Australian political thought.

Intervene or we sink. The choice is still before us. And the window for choosing is shrinking.

The views expressed in this article may or may not reflect those of Pearls and Irritations.