tv Peter Thiel on Technology Innovation and Globalization CSPAN December 26, 2019 1:43pm-2:28pm EST
me this time, i appreciate you coming out. at least you are dry. thank you. [applause] dr. dean: thank you. thank you guys. [captions copyright national cable satellite corp. 2019] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] >> here is a look at some of our featured programming this holiday week on c-span. today, a joint economic committee hearing on the high cost of raising a family. litigatortitutional talks about occupational licensing requirements at the federalist society. there were three types of constitutional abuses you tend to see. the former slaves and white allies he would have their arms taken away, their right to vote taken away, at a right to be
economically self-sufficient taken away. you observe horror stories of having to go back and work for former slave owners because of laws preventing them from being able to be self-sufficient. >> watch this week on c-span. c-span2 life campaign 2020 coverage continues saturday with congresswoman tulsi gabbard in new hampshire. biden vice president joe in new hampshire. yang in newew hampshire. elizabeth warren in boston. watch the candidates live on c-span.org, orat listen on the c-span radio app. up, peter thiel, then
a senate judiciary committee hearing on the opioid epidemic. later, neil gorsuch. on technology,l innovation, and globalization. >> good evening everyone. the 33rd lecture. this lecture has become an important night in america's intellectual life. to the force and consequence of ideas offered at this podium through the years, the formula for that success is simple. whonvite bright speakers offer bold perspectives. perspectives which get a hearing in manhattan ballrooms or progressive covens. lecture in a 95,
that was a huge laugh mine. are we napping? [laughter] delivering the lecture in 1995, james wilson asked why americans were unhappy with a country that was more prosperous and powerful than ever. wilson drew attention to several insufficiently addressed signs of disorder, crime, failing schools, and deteriorating civic life. wilson argued that these problems had begun with the dissolution of the family. then, as now, a controversial view. today, disorder is rising again. i am not just referring to mayor de blasio's much lamented turn from iowa. [laughter] >> you are getting there. [laughter] [applause] disorder is the
consequence of a nationwide effort to go back many of the successful policies that scholars have spent their careers advancing. deb laws euros presidential campaign may have ground to a surprisingly, but the preposterous policies he supports are moving full steam ahead, carried on platforms of less and confident, but equally radical candidates. can a new york, we face an opioid and single parenthood crisis, overlooked for too long by experts. america's labor market and civil well-being suffer from an education system that continues bureaucrats and administrators, as well as entrenched power over students. not to mention the curriculum,
now ubiquitous, that indoctrinate our students to be ashamed of western civilization and despise private enterprise and economic freedom. campus culture, let just say it welcomes a broad diversity of ideological viewpoints from noam chomsky all the way to robespierre. [laughter] >> wilson's remarks in 1995, and their echo today, are typical of the work and approach of the manhattan institute. scholars have never been afraid to challenge conventional thinking and offer bold diagnoses and solutions. we are persistent, and when we have a view about something we do not back down under pressure from elites and cloistered cabals of holier than thou academics.
m.i. adapts with "the times," but more so with "the journal." [laughter] [applause] >> where is dan? [laughter] >> but we have also stood for certain principles, rule of law , public safety, free markets, and the belief that culture is a key determinant of the welfare of societies. in investing, where i spend much of my time, this combination, the ability to adapt without losing sight of core convictions, is a necessity. you must be able to think independently and form strong contrarian views while at the same time maintaining a good deal of humility about how much you do not know. when i first started investing, my dad thought if his son was brilliant enough to get into harvard law school, he must be smart enough to make money in the stock market.
wrong. [laughter] >> i learned the hard way that listening to the so-called authorities and blindly following the trend was no substitute for starting from a few core principles and applying them in innovative ways to the unique investing challenge that each new era brings. it is the same in policy and politics, and the manhattan institute's embodiment of this at those is what gives us our competitive advantage. it is embodied in the outlook a of our new president. [applause] >> back in 2008, he and his co-author were challenging the gop to adapt its guiding principles to the new political realities. he is bringing the same spirit
to his leadership here, and we're looking forward to the leadership he has in store. our lecture tonight is another example of this a spirit of independence, persistence, and innovative thinking. he is also one of the most effective critics of groupthink, whether in business, politics, or philanthropy. peter thiel is an entrepreneur, a venture capitalist, and in the words of economist tyler callan, one of the most important intellectuals of our time. peter has spent his professional life in silicon valley. he helped found paypal, and more recently cofounded data security giant pelletier, as well as the venture capital firm founders fund. while he has been one of the most successful architects of the information age, he has also
been one of its most incisive critics. he argues that our technological imagination has been to modest, too content to fiddle along the margins when what we need are transformational breakthroughs. the country that brought the world the automobile, the skyscraper, the airplane and the personal computer has become enamored with kitschy applications that facilitate things like take out delivery, late-night car rides, and being able to tell your friends that you liked what they had for lunch. [laughter] >> these are no substitute for the pathbreaking, world changing innovation that america needs. peter has distilled his argument into a tweet size maxim worthy of our age. we wanted flying cars, and settled for 140 characters. at first, i did not understand the reference. perhaps because i am banned from twitter. [laughter]
>> not by twitter, but by my internal communications team. [laughter] >> true. peter understands, as we do at the manhattan institute, that robust innovation relies on a system of free enterprise. like so many philanthropists and scholars in the room, peter has committed himself to preserving the policy framework necessary for experimentation, growth and most quickly, america's reputation for unimpeded inquiry, which has historically driven our culture of innovation, and must do so again if we are to meet the unique challenges of this century. a society that challenges the sensors, challenging ideas, may well be headed on the path to suicide. for those of us with the means and courage to not just speak out against the intellectual mob, but to actually build something superior in its place,
there is great and urgent work to be done. tonight, that means providing a forum for the challenging ideas of our 33rd wriston lecture. ladies and gentlemen, join me in welcoming peter thiel. [applause] mr. thiel: paul, thank you for that incredibly flattering introduction. i am worried it is downhill from there. i thought i would start with a modest story. this was from about 20 years ago, i was starting paypal and i was speaking to a friend at the hoover institute. he thought, we are trying to do this innovative, finance tech company, talk to walter wriston. my response was, who is walter wriston? he complained about how young people do not know anything about the past and how america
has done a terrible job of not honoring its great business innovators and leaders. so i am honored to be here tonight to try to correct this in some small ways. and part of the wriston legacy that i think is still so present, he transformed citigroup into -- he scaled it up like crazy from the bank in the city to a bank that serves the world with atm's, interstate banking, credit cards, turning it into a money center bank. and then what the legacy draws our attention to in so many ways are the questions of scale and problems of scale. that is what i want to focus on tonight, that we have a question of scale. if something is good, more is better. and then of course, the quality element, where once you get to a certain scale, maybe you do different things.
this was the vision for citibank. and then perhaps there is also another dimension, where maybe you are changing the world into a better place. from a free-market perspective, perhaps by making or expanding capitalism, you can transform the world on a trans-political level. that was the hope that walter wriston had. in some ways, this resonated with me deeply when i was starting paypal, where we had this vision we will lead this financial revolution against all central banks, we would liberate money from government control, and we were going to go to this trans-political, technological level to transform things. of course, i think that there are a lot of qualifiers. >> please slow down. mr. thiel: ok, i will slow down a little bit. i have a lot to say, though. [laughter] [applause]
there are times when this transformation does not work in a libertarian direction. and the global scale can be quite different. and i sort of think of margaret thatcher's biggest mistake, she thought that embracing the european union would be a way to crush the unions in the u.k., so she went to a trans-political scale to bring about free markets in the u.k. a decade later she thought of this as her worst decision ever, where the free-trade of the eu came with a not so inexpensive brussels and that would regulate everything from the size of bananas all the way down. so there are kind of challenging questions about scale. if we were to tell the two technological stories about scale at this point, one of them
is a story about -- it is this crypto revolution, which is still going on with bitcoin and has this sort of libertarian potential. but i think that there is an alternate tech story, which is about artificial intelligence, centralized databases, and surveillance, which does not seem libertarian at all. so eyes watching you at all times, and all places. i think we live in a world where there is a surveillance. if we say that crypto is libertarian, why can't we say that artificial intelligence is communist? and have this sort of alternate account of scale. so there are things where you scale up, but the difference is not always a good one. you think hard about which ones play out and in which ways.
and i think that for wriston in the 1970's, to summarize it as a picture it was -- it is manhattan, if new york city was going to scale, the next scale was the world. that was the scale on which one had to move to. i think there is a sense in which finance, technology, and the internet had a natural limitless scale and that kind of makes sense. there are a lot of other things where scaling is different. i think in a democracy, if you have the majority vote, that is good. if you have a super majority, that is even better. 51%, you're probably right. 71%, you are more right. all the other hand, if you get 99.9% of voters, you are sort of in north korea. so there is always this wisdom of crowds that works up to a certain point, then it transitions into a madness of crowds. i think that is the unhealthy development that has taken place in recent years in silicon
valley, where we had positive effects, then it tilted into a negative thing, which seems i suspect that this will be bad for innovation, at least. maybe the business can work at scale, but i think one of the things that does not scale terribly well at all are ideas and innovation. there are a lot of different critiques of big tech that we can discuss, but one critique i am sympathetic to is innovation does not scale well. and that it has -- as the tech industry has gotten bigger, bigger governments, things like that, you are going to have innovation more slowly. so whether we go to the communist a.i., or the libertarian crypto world, or some complicated intermediate hybrid, i think we will actually happen lower than people think.
it is a big concern i have. one of the other institutions that i think has a scaled quite badly -- i always think of science as the big brother, the older brother of tech, who has fallen on hard times. big science has scaled extremely badly. the groupthink of the universities. they sort of have they see those that they give us universal knowledge. it is something that has scaled it to an extraordinary degree. and the lies we tell around big science have been linked in with university lies. and i think that a lot of our problems can be described in this way. i'm going to -- this is my candidate for the biggest lie the obamas ever told, much bigger than any sort of inaccuracies told by the current president, bigger than anybody,
and i'm not concerned about lies like the wmd thing in iraq, or if you like your doctor, keep him, because there was partisan pushback, but this one is all-encompassing and follows from getting scale wrong. and they both did -- ladies first, michelle obama. "the one thing i have been telling my daughters is i do not want them to choose a name. i do not wanted them to think i should go to these top schools. we live in a country where we have thousands of amazing universities, so the question is, what is going to work for you?" at scale you obscure the differences. we know that they were lying. they ended up going to harvard. [laughter] and it is reassuring. it would be disturbing if they believed this worked at scale in the way that they claim. her husband, he came up with a more sustained one, telling to
-- more sustained one, telling to lies at once. "just because it is not a fancy school, does not mean you will not get a great education there." if it is not a fancy school, you will not get a great education, you will just get a diploma. that is a dunce hat and -- in disguise if it is a namebrand . fancy school, you probably also will not get an education. [laughter] [applause] so, you know, if we were to right size the scaling for our intellectual life, usually describe harvard not as one of the thousands of great universities, you should describe as a 54 nightclub. it is good for the self-esteem, bad for the morals of the people who go there. maybe call it a wash. probably not a criminal thing, it does not need to be shut down, but probably does not deserve a tax deduction. [laughter] [applause]
if we come back to sort of the much healthier world of finance and capitalism, and back to the theme at hand, one of the questions is what are the kinds of scales we should be working on in 2019? how would one update the wriston perspective? i think that one sort of framework for this is -- there is a different question you can ask on the level of manhattan, new york city. it is sort of the capital city of the world and we cannot really go back from that because we cannot go back to the capital city of new york. albany has more standing under the u.s. constitution than new york city, but we do not want to turn into albany or something like that. so there are questions about how do we succeed at scale in these places.
so silicon valley's version of this question. i want to focus on the united states version and the question for the united states is, is the best strategy for the u.s. to go big, to go with this sort of global scale? this has probably been a thread throughout the u.s. history of at least of the last 100 years, everything from the progressivism of woodrow wilson, the new dealers setting up the global institutions from which they would run the planet from washington, d.c., and there was a sense the u.s. was at scale and should go always operate on a bigger scale and should be leading a world revolution. not always a libertarian one. i was reminded of the joke, why is the u.s. the only country in the world where revolution is impossible?
because it is the only country that does not have an american embassy. [laughter] but this was in some sense a good strategy for the u.s., to lean into the bigness of the country and go even bigger. i think that there are some ways we may need to update this in the world of 2019, where -- and in some ways it is shaped by the rivalry with china. and if we sort of think about a rival that is also incredibly big, simple bigness is not necessarily the right strategy. you think of the four vectors of globalization -- i think it is movement of goods, free-trade, movement of people, immigration laws, movement of capital, banking, finance, movement of ideas and the internet.
it made sense for the u.s. to lean into these things because being the biggest sort of got those outsized returns from scale. where as i think if we ledger on these things today, only two of them are still ones that the u.s. really has a powerful advantage in, and i think it is finance and the internet. even though we have misgivings about those two. and there is a sense in which we do not fully trust the banks. we do not fully trust the tech companies. they don't fully trust the u.s. the feeling is mutual. so it is difficult for us to really support these companies as national champions. in the 1950's, the ceo of general motors could still say, what is good for gm is good for america. it is a little bit of a distortion but not that inaccurate. it would be inconceivable today for the ceo of goldman sachs or google to say, what is good for goldman sachs or google is good for america. it would be inconceivable. so even though this is for the model that we probably should still be working on, it is quite
a tough lift. i think when you think of trade or immigration policy, it is a scale question -- it is much more sobering for the u.s. we are simply not able to compete with china at scale, when you have seven of the 10 of the largest container shipping ports in china at the largest in the u.s., los angeles, is number 11. making the world safe for container shipping -- it is making the world safe for the chinese communist one world state at the end of the day, that is what you are tilting toward. on the immigration issue, it's striking how difficult at how much better china is at moving goods and people than we are. china has probably had the greatest internal migration of any country in the world in the last 20 or 30 years. you look at southern china, it
had 60,000 people in 1980. it has expanded to something like 12 million with a growth factor of 200 in the last 40 years. and again, i will use the contrast of new york city, where we had 7.1 million people in 1980. it has grown to 8.4 million people in the last 40 years, and it is not scale on people. we can scale finance, tech, but people we are really bad at scaling. $3.8ost -- it costs billion to build one mile of subway in new york city, it is only $400 million per mile in paris. that suggests any attempt to scale on people is not the place we should be competing. there is some urgent need to rethink all these different scale questions, where we will be good, where will it be much more challenging. i'm not a fan of aoc to say the the least, if if you were to
steelman of those arguments, that amazon should not come to new york, the argument was basically that it would drive up rent and prices for everybody there. we have to asked seriously if that is not entirely wrong, what is the inelasticity of real estate in a place where the zoning is it so controlled it is not possible or very hard to build new things, like new transportation, things like that. there is a famous economics theorem from henry george in the late 19th century who said come in a city that is too heavily regulated, the inelasticity of , any gain flows to the landlords. the mistake they made was this is also a libertarian argument, because you could say that you need to get rid of all the welfare in new york city because it goes the landlords, because it is 100% of a transfer. it is also an argument that we would have to rethink migration
very hard on. -- very hard. so to the extent that china focused our competition, focused our competition, it suggests we need to dig about scale -- think about the scale issue very differently. it is a very open question where the u.s. should go from here. i do not think that we can simply go subscale, not like israel or switzerland or something like that. i would like the u.s. to be a tax haven. i do not know if that works at our scale. but it is a very urgent question to think about what are the kinds of places we can scale and in a good way where we can win and to do that better in the years and decades ahead. if i had one general thought on it, i would say that perhaps we have to shift a little bit from quantity, from simply scaling in size, to quality. that is sort of the question. and that this is backed innovation, back to intensive
growth, not just doing more of the same but a shift toward i.p. protection, fewer scientists -- but actually doing real science. fewer good universities, but we understand them to be elite universities. and somehow a shift to quality over quantity is probably an advantage of that we have to think through really hard vis-a-vis china. a place i think that this -- one thing i always find so befuddling is why these questions of scale have not been asked for such a long time, why they china revelry in some ways has remained obscure for as long as it has. and i sort of think in closing i will give my thesis on the left and right, sort of some ideological blindness we have
had, and it is critical on both sides. i think on the left, asking -- the distraction machine from asking questions about what to do on the scale of the united states, the distraction machine has been driven by identity politics of one sort of another. sort of like a subscale. we do not think of the country as a whole, we think of just subgroups within the country. insane there is some self-contradictory with identity politics. i think that you start with what makes you unique, it means what makes you the same. you start with a and not a, you can prove anything. i think that the politics monster gets crazier and crazier. maybe it is flopping around its tail in a final death throes. but it does seem to have a lot of energy left. and until the left can move on from identity politics, it will not be able to focus on the scale we need to be focusing on for this country. i think from the right, the
doctrine i would encourage us to rethink is the doctrine of american exceptionalism, put the u.s. on a scale where it could not be compared to any other country or place. you can think of exceptionalism, i often use the theological analog, it is like the radical monotheism of the god of the old testament or the koran where you can't compare anything to god. you can't say anything about his attributes. exceptionalism is like saying the u.s. can't be measured or compared or evaluated in any way possible. what happens when -- say you are exceptional in all these ways, you are exceptionally off in different ways. you end up with some ways that cost $3.8 billion a mile, people who are exceptionally overweight people, people who unawareptionally self
and the corrective is in the 20 20's the united states needs to , settle for greatness. thank you very much. [applause] >> mr. thiel has agreed to take a few questions. what anyone care to volunteer? -- would anyone care to volunteer? >> should we shout it out? ah. ai. you tech people are so annoying. how much of us old people know what ai is? it is artificial intelligence. why is it communist? mr. thiel: there are a lot of qualifiers to this. ai is the buzzword of the day. it can mean the next
generation of computers or anything between. it can be the terminator movie where it is a robot that kills you. it can be all of these creepy social credit scoring things in china. but in practice, the main ai applications people talk about are using large data to monitor people and know more about people than they know about themselves. in the limit case, maybe it can solve a lot of the economics type problems where you can know enough about people than they know about themselves. you can enable communism to work. maybe not as an economic theory, but at least as a political theory. it is definitely a leninist thing. it is literally communist because china loves ai. it hates crypto. i think that tells you something. then there is a common sense
level on which it is. people are creeped out and this is why. we should label it accurately. >> [inaudible] >> what does a hopeful, great america look like? what can we look forward to? what are your hopes the next 24 months? mr. thiel: i certainly hope the country has more of a future than just 24 months. [laughter] i think my hopes are we find a way back to more intensive growth. the focus on globalization -- we sort of divided the world into developing and developed countries.
developing countries are the converging with the ones developed world. developed countries say the future is just not going to look different than the present. it is just this eternal groundhog day. somehow breaking that logjam would be good. there will be a future again. there will be differences from the present. we've had progress around tech , around i.t. a narrow cone of progress around the world of bits. the iphones that distract us distract us from how old and unchanging our environment is. you are writing on a subway -- riding on a subway that is 100 years old. i think a healthier form of progress would happen on many different fronts. we can debate why that has not happened and what the challenges are. i would like to see innovation, not just some narrow iphone app
but across the board. >> you talked about in the past silicon valley, universal basic income, robots are replacing humans. the average american is not going to have a job. that is a common view in silicon valley and new york. it is not as sympathetic. trump has tapped into this as people have been left behind. those people have rally behind him. you also agree we should be more nationalist. how do you see tech and the san francisco-new york centric world making room for people to enjoy the american dream? whatever that looks like for the next 50 years. mr. thiel: i disagree with all of the premises behind your question.
you have bought the google propaganda, hook, line and sinker. let's articulate this. we have runaway technological progress. a lot of people will be left behind. we need to take care of them. this does not show up in the data. we have 3.5% unemployment. the productivity numbers are pretty anemic. it does not show up in the economic data. that is sort of the starting point. if you think about automation and the rate of automation, it has happened over 200 years, since the industrial revolution. my suspicion is the rate has slowed because the things we can automate easily, like farming, manufacturing have been automated. even if we are still automating manufacturing at 5% per year, it is a smaller part of the economy. the total productivity gains are
slower. the sectors that are left are the sectors that look the same as they did 100 years ago, kindergarten teachers, nurses, yoga instructors. all of these nontradable jobs are immune to automation. they are a large part of the economy. that is perhaps why things have slowed. we always have this story this is about to change. if you look back over 40 years, the simple reason it slowed is because the sectors immune to automation have become bigger parts of the economy. i don't know. i tend to think the silicon valley ubi discussion is this magic trick where we draw your attention away to something else. it is like the technology is going to take your jobs. we should have ubi to take care of you. we should pay attention to people in silicon valley have not been doing enough. there are a lot of critiques of the big tech companies and things they have done wrong over the last few years.
my cut on why this is a political push back against the tech companies in silicon valley is they have not innovated enough. if you have done bad things, you can say we've done these good things. the list of good things is sort of lacking. probably the biggest one of -- on the google list is self driving cars. that would be an innovation. they've been promising it for 10 years. they talk about it less. the expected time seems to be expanding. it is not that big of an innovation. i think going from horse to car is bigger than going from car to self-driving car. we have to quantify this and really think through how much is going on. these problems are even more serious on the science side. one form this problem of scale, if you are too big a scale it , becomes impossible to actually know the particulars of what is going on.
maybe it is a feature of latent modernity. things are so specialized. he have cancer researchers talking about how great they are. we have the quantum computer people saying they are about to build a quantum computer and you have these narrow groups of self policing experts telling us how great they are. i can't resist mentioning the anecdote from one of my friends. his advisor at stanford, he got a nobel prize in physics. he suffered from the delusion that once he had a nobel prize in physics he would have academic freedom and he could do what he wanted to. what he decided to do was investigate all the other scientists at stanford who he was convinced were stealing money from the government. engaged in mostly fraudulent research. a lot of input, but not much output. the two grad students, he would
come into their office, i'm very proud of you. we are on the front lines. we are doing battle against the whole universe in this office. you can imagine how this movie ended. it was quite catastrophic. the grad students could not get phd's. he got defunded. my suspicion is when there speech that is completely forbidden and questions are not allowed to be asked, you should assume those things are true. >> i believe we have time for one more question. [applause] please. >> thank you. i too have a premise which i shutter to offer, but i will. thank you. i welcome your critique of the notion of american exceptionalism, which i interpret to be a call for greater humility on a national and cultural level. that is my premise. if the premise is accurate and accurately reflects your view,
how might we achieve that on the political level? is there a way? mr. thiel: this is probably above my pay grade. i think the starting point is to frame the issues at the right scale. exceptionalism can be inspiring. there's something about it that is so abstract we are not able to talk about the details of what is going on. anything where what we focus on these questions of detail will be helpful. that is the place i would start. and i think the rivalry with china is going to push us to ask these scale questions a new.
we are not in a great place in a lot of ways but we still have a lot of advantages. we should think hard, where do we push and things like that. it is one of the few issues that are essentially bipartisan. i think it is a place where we could have a reasonable discussion. >> please join me in thanking peter thiel. [applause] [captions copyright national cable satellite corp. 2019] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] [crowd talking] , live every day with news and policy issues that impact you. coming up friday morning, as carolf authors week, anderson discusses her book "one person, no vote." and hugo gurdon will talk about
conservatives in the trump presidency. watch c-span's washington journal, live seven clock a.m. eastern friday morning. be sure to watch authors week all this week starting at 8:00 a.m. eastern. c-span, theon senate judiciary committee hearing on the opioid epidemic. then justice neil gorsuch on his book "a republic, if you can keep it." later, the joint economic committee looking at the cost of raising a family. >>good morning, everyone. i would like to welcome you to today's judiciary hearing on encryption -- excuse me. that is not the right one. tackling the opioid crisis. a local government approach. we will start with opening statements from