Some of my favorite takeaways & reflections from Peter Thiel's interviews & writings, round 2 👇

Round 1 was here:
His goal: How do we how do we get back to the future? How do we get back to an accelerating progressing world of science and technology? How do we reduce violence?

Utopia: Cheaper energy sources. AI. Robotics, Space program. Nanotechnology, Cures for all diseases. New cities.
His claim: economic growth has stalled.

We've had progress around tech, around this narrow cone of progress around the world of bits, but not atoms.

The iPhones that distract us from our environment also distract us from how strangely old & unchanging our environment is.
1973 Test: Go into a room and, besides the phones, try to notice what would be different from 1973.

We attend schools and sit in classrooms that are pretty much like parents & grandparents. We live in houses not unlike theirs and drive in cars not unlike theirs.
Deceleration in:

- Biotech
- Energy
- Cleantech
- Transportation
- Food
- Nanotech
- Education
- Healthcare
- Construction
- Gov't

Acceleration in:

- Tech

IT innovation hasn't been isn't enough to save the country, not even enough to save California.
Tech itself isn't immune to stagnation.

Google & Amazon companies are worth perhaps 2-3x as much as all technology companies in the US combined created since the year 2000.

Computer Rust Belt - Cisco, Dell, HP, etc
US has taken the future for granted, and has become too gullible.

Savings rate of minus 6%. If you include government deficit spending, people think the future will take care of itself.

One bubble after another where people have been promised that the future will be fantastic
Why has this happened? Few different reasons:

Some say low hanging fruit has been picked.

Peter Thiel says it's something in the culture that's made us less ambitious, more risk-averse, scared to take ambitious swings
The easiest way to show this is if you look at all the movies that come out of Hollywood, name science fiction films that portrays the technological future in a positive light. It's often Terminator, Black Mirror, The Matrix, Avatar, etc

This is good. It means it can be changed.
Surveys show that the majority of young people think they will be less well off their parents in the US.

in Western Europe, even a smaller minority that thinks they will be better off than their parents.

"The Complacent Class":
SV Propaganda says the opposite -- things are happening too much, people will be left behind.

This doesn't show up the data. 3.5% unemployment

UBI is self-congratulatory & pre-mature.

It's a trick to divert attention from the fact that we haven't been innovating enough.
"I'm always nervous whenever we're too optimistic or too pessimistic about the future, because it means that it doesn't matter what you do, if you're optimistic, the future will take care of itself. If you're pessimistic, we're headed the apocalypse.

When really it's up to us."
Pension funds try to make ~8.5% return a year so that everyone has enough to retire. If they don't get them, the people are screwed.

The only way you can get those kinds of returns, is if you have extraordinary compound exponential growth in science & tech in the developed world
A big LP was telling Thiel they had 5% in VC and thought it too much.

PT responds -- if the 5% doesn't return b/c not enough innovation, it's not the 5% you should worry about.

It's the 95% you should worry about, b/c it won't return either w/o innovations in science & tech.
The only way our societies have worked for at least 250 yrs is by economic growth.

Parliament democracies are built on an expanding pie that they can continue subdividing. Once the pie's no longer expanding, then everything turns zero-sum. (1930s was a bad decade for growth...)
We need a return to long-term thinking.

We are too focused on hitting # s for the quarter, or winning that next election, to focus on 20 year issues.

US is better than China in every dimension except for this-- thinking long-term.
We've had this extraordinary history of bubbles in the last few decades which clearly had a psychosocial component where people were not thinking very much for themselves. Internet bubble in 90s, housing/finance in 2000s, gov't bubble now.
Often, these things were characterized by extreme lack of critical thinking, deferring to groupthink

Thus, suspicion is always when there's speech that is completely forbidden & Q's that aren't allowed to be asked, normally you should assume that those things are simply true.
Silicon Valley has a conformity problem. Intellectual monoculture.

Silicon Valley 1997: Think different

Silicon Valley. 2018: Think the same
The US is living in an increasingly competitive world.

Marginal tax rates at 40/50%, relative to 10% in other countries.

The focus on whether rich are paying their fair share is to miss the bigger point of whether US can compete globally.
There are two kinds of ways things can go wrong.

One is for ideas never to be questioned. And then the other one is for them to be questioned too quickly, distorted and, and mischaracterized.

Heterodox ideas are questioned too aggressively
Critique of Left:

The distraction machine has been driven by identity politics. It's subscale. We don't think of the country as a whole, we think of just subgroups within the country, and I think there's something insane, self-contradictory about identity politics
Identity means what makes you unique. Here it means what makes you the same.

Until the left is able to move beyond identity politics, it's not going to be able to focus on the scale that we need to be focusing on for this country.
Critique of right:

American exceptionalism is religious in its way of resisting inquiry and distracting us from our problems. Too much scale.

It leads us to being exceptionally unaware, overweight, inefficient.

The solution to exceptionalism is to settle for greatness.
The left is focused on unjustified nature of violence, the right is focused on the amount of violence needed for society

The nation state contains violence in both sense of the word "contain" -- it limits the channels but it's also part of its very being.
I'm skeptical of copying things.

To the extent you're trying to copy Silicon Valley, you're ready putting yourself in some in a weird derivative position. You know, you don't want to be the Harvard of North Dakota.

The something of somewhere is often the nothing of nowhere.

These were incredibly robust monopoly businesses in the 1980s and 1990s. And if you worked at a newspaper, you it's like, you were working at a utility company had this, you know, cushy, fairly secured position, because you were a local monopoly.
Media continued: I think the monopolies that media enjoyed were, in some ways, good b/c they provided a positive externality for our society.

You normally don't like to say, you know, I'm working at a monopoly company, and that's why we're doing so well. But that's what it was.
Media continued:

This intolerance has taken on some bizarre forms. One magazine praised me as a gay innovator only to later say I'm not a gay man b/c I don't agree with their politics. If you don't conform, you're not diverse, regardless of your personal background.
There is “the myth of the lone genius” (not belief in the lone genius, belief in the mythicism of it)

We are glad that there is online retail, but we don't appreciate Bezos

Online retail came into being b/c Progress. Bezos is just some annoying guy who captured credit & profits
We're stuck in nostalgia.

When was the last time a politician gave a speech in which he or she portrayed a future that looks really different from the present. MLK "I have a dream of painting" Reagan, "Mr. Gorbachev tear down that wall". Ppl don't believe in the future anymore
The power of positive thinking is unclear — If you think you can, you *might* — but the power of negative thinking is much clearer: If you think you can’t, then you won’t.
One critique of SV Valley: many successful ppl have Asperger's.

And I think we need to flip this around into an indictment of our broader society:

What is it about our society where the rest of us are talked out of our most interesting ideas before they're even fully formed?
Because just as people want to have monopolies, they want to also downplay them.

Once you think of a monopoly is simply an absence of competition, you might start noticing a few yourself, what's a patent, if not a monopoly backed by the government?
Advice for younger people:

Value substance more than status. Consider your projects: Are you doing it for the prestige? What do you truly believe about the world?

Go long substance, short status.
China propaganda narratives:

1—China is very far behind us, there’s no need to worry about it

2—China is so far ahead off there’s no way we can catch up

Denial is extreme optimism, acceptance is extreme pessimism—extreme optimism & extreme pessimism converge to doing nothing.
There's a generational problem where it is difficult for young people to acquire capital b/c:

1—education. $300 B student debt in 2000. $1.7 T today. Can't default on it

2—housing. main way middle class accumulates $ is through real estate. bad urban zoning laws make that hard
Lack of ideological diversity in education:

"If you're the only law professor at a top law school to endorse Trump, I think there would be like a 50% chance you would've gotten nominated to the Supreme Court or something like that. And yet no one does...Something's up"
"When I started PayPal in 1998, one of the Q's I was always asked was why can't a big bank just do this? I never really had a good answer to it.

I now think the answer is roughly that most big corporate institutions are just political, slow, & bad at innovating."
"Elizabeth Warren got more donations than anybody else [from Silicon Valley]. And so if she were to get elected I think she would be able to argue that even the ppl at the big tech companies think they should be destroyed.

...SV is completely deranged"
Three pictures of a very different future in Europe:

1- Islamic Sharia Law

2- Chinese Communist AI (eye of Sauron watching you at all times & places)

3- Green movement

"This is why green stuff has so much traction in Europe. If these are the only 3 options...I'll go w/ Greta"
American Exceptionalism is a radically monotheistic God, where it's so one of a kind & so different that it can't be compared or measured in any way.

An alternative is something more like greatness, where it's a comparative function and we would ask how are we stacking up?
"The Q question about the rate of progress of science, of innovation, is incredibly unquantified...and if you have this hand-waving where everything's exceptional...then there's no ability to really keep score, and you are certainly not exceptional and you're not even great."
In last 5 yrs if you had crazy ideas, if you had ideas that were outside the box, those were always bad and you got clobbered and you couldn't get tenure etc

The Overton window is so uncomfortably narrow that I would be long ideas more than at any other point in the last 50 yrs"
Diff btw battle w/ China & Cold war:

1- Information Age, not industrial age.

2- Global competition Q.

3- Economies are very deeply connected. We weren't deeply connected to the USSR.

2020 isn't like 1989 or 1951, 2020 is like 2020 which is much less helpful but more accurate.
Extreme optimism & extreme pessimism are both equally wrong.

We should always come back to the Q of individual agency instead of grand narratives

There's always room for history, there's always room for new ideas,& these things are never definitively decided 1 way or the other
To create a valuable company, you have to create something of value & capture fraction of value you’ve created

U.S. airline carriers:
2012 revenue: $195.6 B
2012 profit margin: 0.2%
Market cap: $112.4 B

2012 revenue: $50.2 B
2012 profit margin: 21.0%
Market cap: $393.8 B
There are 2 kinds of businesses: Those that are perfectly competitive, and monopolies. They both pretend they're the opposite.

Monopolies pretend they’re in high competition to avoid regulation

Competitive businesses pretend they’re unique to attract capital, differentiate, etc
Say you’re trying to open a British food restaurant in Palo Alto, you’re likely to come up with the narrative: “We’re the only British food restaurant in PA”

Startups do something similar: They try to differentiate by throwing in buzz words (“We’re a mobile sharing social app”)
Google, who has a monopoly on search, never describes itself as a “search engine”

They might, instead, call themselves an “advertising market” (search advertising is only a small fraction of global advertising)
Start small:

Amazon started as an online bookstore

eBay first focused on the Beanie Baby market

Facebook first went after Harvard students

If the market you’re going after is enormous, it likely means there’s tons of competition, and it’s hard to differentiate
“You don’t want to be the fourth online pet food company. You don’t want to be the tenth thin-film solar panel company. You don’t want to be the hundredth restaurant in Palo Alto.”
Aim to be the last mover—the last company in a given category (b/c you’re DRAMATICALLY better than everybody else)

Google was the last search engine

Facebook might be the last major social networking site

Ask “Why will my company be the leading company 30 years from now?”
We think of “losers” as people who aren’t good at competing

In business, it’s the opposite: The losers compete

“Don’t always go through the tiny little door that everyone’s trying to rush through. Instead, go around the corner and go through the vast gate that no one’s taking."
A lot of innovation is prohibited because of governmental regulation:

- It costs $1.3 billion to develop a new drug

- You can’t fly supersonic jets because of noise levels

- You aren’t allowed to build nuclear power plants
A lot of tech cos have billions of excess capital that they simply keep in the bank b/c they don’t know how to invest it

e.g. Google is investing in self-driving cars & other projects, but it still has billions that can be applied somewhere instead of just sitting in storage
Although there has been a lot of great tech development in the last 40 years, median wages have been stagnant – meanwhile, from 1930 to 1970, median wages grew six-fold
There was a tech bubble in the 90s, a housing bubble in the 00s, and now, if there’s anything in our society that’s a bubble, it is education.
Education costs have increased by 300% since 1980, but it’s not clear if quality has gone up at all

Millennials are becoming indentured servants with the amount of students debt they owe – even if you declare personal bankruptcy, you still have to pay off the student debt
University presidents should be able to speak truthfully abt the progress of university research

They’re so focused on convincing alumni to continue donating money that they’re forced to keep the “everything is great in the research department” narrative going, even when untrue.
In 2000, college debt in the U.S. totaled $300 billion

It’s now ~$1.7 trillion

In 2005, student debt became non-dischargable in bankruptcy

If you don’t pay off your student loans by the time you’re 65, the government will garner your social security wages.
It’s always dangerous to be burdened with too much debt especially early in your career

If you’re $100k in debt right out of college, you’ll likely be severely demotivated & pushed into high-paying, uncreative professions that are “less good at moving our whole society forward.
Peter would make college debt dischargeable in bankruptcy (it's currently nondischargeable) AND if people went bankrupt, part of the debt would have to be paid for by the university
"I always come back to thinking the problem of political correctness is our biggest political problem. We live in a world where people are uncomfortable saying what they think.

When we can’t talk about things, we can’t solve them"
In the last 40 yrs, things have been slow & we’ve been told things will accelerate like crazy. I hope it’s true. But if one was simply extrapolating from the last 40 yrs, perhaps the default is that we should be more worried about the lack of automation than excess automation.
If we can get the GDP growth back to 3% per year on an annual basis, there would be a lot more room for various social programs… there would be a LOT of things we could do

But I’d be uncomfortable starting with social programs [like UBI] without the growth first to support it.
“One of the challenges, and we should not understate how big it is, at resetting science and tech in the 21st century is how do we tell a story that motivates sacrifice, hard work, and deterred gratification for the future that’s not intrinsically violent.”
Sure ppl are scared where runaway AI or biotech might end humanity, but we should also be considering how a tech stagnation might lead us to negative situations too

I’m more scared of the world where nothing happens than too much. The stagnation world goes straight to apocalypse
Excuses on why we haven't had more progress in biology:

1- "What?! we're gonna cure cancer in next 5 yrs!"
Counter: Been saying that for 50 yrs

2- Not enough $
Counter: You've been getting more $ every yr.

3- It's an impossible problem.
Counter: Prove it!
University is successor to catholic church.

Runaway tuition costs are runaway indulgences.

Priestly class had tenure like professor class.

Theory of salvation -- go to Yale or go to jail

Reverence is dogmatic, as in, without inquiry

Reformation couldn't come from within.
globalization projects on four separate metrics:

movement of people: immigration

movement of goods: trade

movement of money: banking & capital markets

movement of ideas: internet
Christians project morality & internally feel sin

Atheists project rationality & internally feel empty of thought

The medievals believed in the weakness of the will but the power of the intellect & the moderns believe in the power of the will, but the weakness of the intellect
Envy is the one mortal sin that is still completely taboo.

All the others can be sort of turned into something positive.

e.g. Greed is good Gordon Gekko.

Envy is is the one we still don't talk about.
You can follow @eriktorenberg.
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