Peter Thiel (Facebook Board of Directors) – Wriston Lecture – End Computer Age (Nov 2019)


Chapters

00:00:22 33rd Annual Walter B. Wriston Lecture
00:04:38 Scale, Quality, and Capitalism
00:14:10 Tech Scaling: Innovation, Democracy, and the Problem with Big
00:19:50 Challenges of Global Scale in the U.S.-China Rivalry
00:23:49 Scale, Immigration, and Trade in the U.S.-China Rivalry
00:29:14 AI, American Identity Politics, and the Hope for the Future
00:35:24 Tech Industry Innovation and the Illusion of Automation
00:38:32 Challenges of Innovation in Technology and Science

Abstract

The Significance of Scale: Peter Thiel’s Insightful Perspective

In an era of unprecedented technological and social change, Peter Thiel’s discourse at the 33rd Walter B. Wriston Lecture provides profound insights into the concept of scale, its impact on society, and the challenges it poses in various domains. Raihan Salam’s introduction and Paul Singer’s acknowledgment of the lecture’s tradition set the stage for a thought-provoking exploration of societal issues, technological innovation, and the critical interplay between scale and progress.

The Essence of the Lecture: A Synthesis of Ideas

The lecture, woven through various segments, underlines a central theme: the multifaceted implications of scale in modern life. James Q. Wilson’s 1995 lecture is recalled to contextualize America’s discontent amidst prosperity, highlighting issues like crime, educational failure, and cultural decline. Today, similar patterns of disorder resurface, exacerbated by policies that hinder successful initiatives, a crisis in education, and a cultural shift in higher institutions that often undermines Western civilization’s achievements.

The Manhattan Institute’s role in challenging established thinking frames the discussion, underscoring the importance of rule of law, free markets, and cultural significance. Thiel, celebrated for his entrepreneurial and intellectual prowess, critiques the modest ambitions of our technological era, advocating for transformative innovations over incremental advancements. He underscores the significance of free enterprise and open inquiry in fostering groundbreaking innovations.

The Complex Dynamics of Scaling

Thiel’s analysis extends into the tech industry, where the shift from libertarian ideals in cryptocurrency to centralized AI raises alarm about surveillance and individual autonomy. The lecture delves into the dichotomy of scaling, where it can yield both positive and negative outcomes, such as in the context of democracy and Silicon Valley’s network effects.

The critique intensifies when addressing the stagnation in big tech and science, where larger structures seem to impede rather than accelerate innovation. The lecture also spotlights the contradictions in educational narratives presented by figures like the Obamas, challenging the perceived merits of elite education.

Globalization, Scale, and the U.S.-China Rivalry:

Globalization involves four primary aspects: movement of goods, movement of people, movement of capital, and movement of ideas. The United States previously benefited from scale in all these areas, gaining outsized returns. Today, the United States retains a strong advantage primarily in finance and the Internet. However, there is a lack of full trust in banks and tech companies, leading to challenges in supporting them as national champions.

The rivalry with China necessitates a reevaluation of the United States’ global strategy. Thiel argues for a reevaluation of the pursuit of scale, particularly in sectors where the US holds clear advantages, such as finance and the Internet. Simple bigness may not be the optimal approach in the face of a similarly large rival.

China has significant advantages in scale compared to the U.S. China has 7 out of the 10 largest container shipping ports, while the largest U.S. port, Los Angeles, is only number 11. Shenzhen, China grew from 60,000 people in 1980 to 12 million in the last 40 years. The U.S. has difficulty scaling people and infrastructure. AOC argued that Amazon coming to New York would drive up rents and prices. This argument highlights the inelasticity of real estate in New York due to zoning restrictions. The U.S. needs to rethink its competition with China in terms of scale.

Tech, Economic Automation, and the Political Divide: Silicon Valley’s UBI Perspective and Thiel’s Disagreement

Silicon Valley believes that the rapid advancement of technology, particularly automation, is leading to job displacement and the potential need for universal basic income (UBI). Thiel challenges this notion, arguing that the data does not support the idea of widespread job loss due to automation. He highlights the long history of automation since the Industrial Revolution and suggests that the rate of automation has slowed in recent years. Thiel criticizes the tech companies in Silicon Valley for not innovating enough and suggests that the political pushback against them is partly due to this lack of innovation.

Innovation, Science, and National Exceptionalism: Thiel’s Insights

Thiel believes that the transition from horse to car was a more significant innovation than the development of self-driving cars, as the latter does not require a fundamental change in scale or technology. Thiel mentions an anecdote about Nobel Prize winner Bob Laughlin, who investigated other scientists at Stanford for alleged fraudulent research, leading to catastrophic consequences for Laughlin’s reputation and funding. He argues that forbidden speech and unasked questions often indicate underlying truths that should be acknowledged. Thiel critiques the notion of American exceptionalism, suggesting it is too abstract and prevents discussions about specific details and issues. He sees the rivalry with China as an opportunity to re-evaluate scale questions and push the country to consider its advantages and areas of focus.

Navigating Global Scale and Rivalries

A significant portion of Thiel’s lecture is devoted to the US’s strategic approach in a world marked by the rise of other major powers like China. He suggests a nuanced approach to scaling, focusing on areas of comparative advantage. This perspective is further elaborated in the context of real estate and the arguments presented by figures like AOC, emphasizing the need to reconsider migration policies and welfare programs.

Ideological Perspectives and Future Prospects

Thiel does not shy away from critiquing ideological biases on both the left and right, which often obscure critical issues like the China rivalry. He calls for a shift from quantity to quality, focusing on innovation, intensive growth, and a leaner but more effective educational system. Thiel’s call for academic freedom and the pursuit of forbidden questions reflects his commitment to unearthing suppressed truths.

His critique of American exceptionalism and the emphasis on detailed, specific advantages over abstract notions set the tone for a pragmatic approach to national and global challenges. The rivalry with China, seen as an opportunity for bipartisan discussion and progress, encapsulates the lecture’s overarching message: the need for a balanced, innovative, and responsible approach to scaling in the modern world.

Concluding Thoughts: A Call for Innovation and Accountability

In his concluding remarks, Thiel dismisses the urgency of UBI in the face of automation, urging Silicon Valley to focus on genuine innovation. He raises concerns about the challenges of scaling technologies and criticizes the specialization in modern science. Thiel’s call for academic freedom and the pursuit of forbidden questions reflects his commitment to unearthing suppressed truths. His critique of American exceptionalism and the emphasis on detailed, specific advantages over abstract notions set the tone for a pragmatic approach to national and global challenges. The rivalry with China, seen as an opportunity for bipartisan discussion and progress, encapsulates the lecture’s overarching message: the need for a balanced, innovative, and responsible approach to scaling in the modern world.


Notes by: WisdomWave