Peter Thiel (Facebook Board of Directors) – Seasteading 2009 Conference (Sep 2009)

Chapters

Abstract

The Evolution of Peter Thiel’s Vision: From Political Skepticism to Technological Necessity

“Reimagining Governance and Innovation: Peter Thiel’s Journey from Political Disenchantment to Championing Seasteading and Technological Frontiers”

Peter Thiel, a prominent figure in both the tech and political landscapes, presents a compelling narrative of transformation. His journey from a disillusioned political thinker to a fervent advocate for technological solutions like seasteading encapsulates a broader shift in perspective towards governance and innovation. Thiel’s thought-provoking insights range from the limitations of traditional politics, identified through his personal political evolution, to the powerful potential of technology and seasteading in addressing global challenges. Moreover, his views on the necessity of seasteading, shaped by the increasing number of countries and the implications of regulatory arbitrage, underscore a pressing need to rethink our approach to future crises and economic growth.

Personal Political Evolution

Peter Thiel’s transformation in political thought, evolving from a firm believer in the efficacy of political debate to a critic of its limitations, mirrors a broader skepticism about traditional political mechanisms. He likens these efforts to trench warfare, highlighting their inefficacy in producing significant change. This pessimism toward political processes sets the stage for his turn towards alternative solutions.

Thiel’s initial belief in political debate and persuasion led him to start an independent student newspaper. However, he later became disillusioned with the lack of progress made through political efforts, comparing it to trench warfare with minimal gains despite significant effort. Thiel observed that highly optimistic people often lacked intelligence. Smarter individuals were more likely to be pessimistic about the impact of individual actions in the face of universal indifference. Excessive alcohol consumption and substance abuse became coping mechanisms for many in response to this pessimism.

Technology as a Catalyst for Change

Thiel identifies technology, particularly the internet, as a dynamic force capable of bypassing political constraints and facilitating rapid, unforeseen changes. His belief in the transformative power of technology underpins his arguments for alternative governance models and solutions to global challenges.

Thiel shifted his focus from politics to technology as a means of change. He believed that small groups of individuals could build companies and use technology to transform the world in unexpected and rapid ways. Thiel saw the internet as a potential world-changing force, but questioned its ultimate impact.

Seasteading: A Convergence of Technology and Real-World Impact

Seasteading, a concept combining technological innovation with tangible real-world applications, emerges as a focal point in Thiel’s vision. Unlike abstract technological advancements, seasteading offers a physically grounded, yet technologically driven approach to exploring new forms of governance and living spaces.

Seasteading, the creation of floating cities, intrigued Thiel as a tangible technological solution with real-world consequences. Unlike the internet, seasteading would involve real human beings and occur in a physical location. Thiel considered seasteading to be more technologically feasible than space exploration, making it a relevant issue for contemporary exploration.

He argues that the financial system’s stability is tied to the assumption of technological progress. He interprets the 2008 crisis as a crisis of future expectations, emphasizing the importance of understanding the relationship between technological progress, financial stability, and financial models.

The Necessity of Seasteading

Thiel argues for seasteading’s necessity from both political and technological standpoints. Politically, it offers an alternative to traditional governance models, deemed inadequate. Technologically, it represents an opportunity for driving innovation and progress, essential in an era marked by technological stagnation.

Thiel presents a thought experiment about the number of countries in the world increasing from 45 in 1945 to 200 today. He asks whether there will be more, less, or exactly 200 countries in 2050. Different outcomes will lead to different futures for the world, including variations in marginal tax rates. The number of countries influences the ability of governments to raise taxes, as seen in California’s financial crisis. Thiel suggests that increasing the number of countries can promote freedom and lower tax rates.

Thiel poses a different question about the necessity of seasteading, rather than its feasibility. He argues that it may be necessary due to various factors. He creates a two-by-two matrix of possible and desirable outcomes. Most people in the room are in the “possible and desirable” quadrant. Many people outside the room may think it’s not possible or desirable for people to live on oceans.

The Role of Regulatory Arbitrage and Global Trends

The evolving global political landscape, characterized by an increase in the number of countries, fuels Thiel’s argument for regulatory arbitrage. He posits that a future with more countries could lead to competitive governance models and lower tax rates, as seen in California’s financial crisis. This concept ties into his broader vision of seasteading as a means to facilitate such competition and innovation.

Thiel also points to government incentives and regulations as potential impediments to progress. He argues that government policies may have contributed to health issues and obesity in the United States. However, he emphasizes the importance of setting aside the “why” question and focusing on the solution.

Future Scenarios Necessitating Seasteading

Thiel highlights potential global crises, such as pandemics, nuclear wars, or climate change-induced disasters, that could necessitate seasteading. These scenarios underscore the importance of developing alternative living and governance solutions as a form of preparedness and resilience.

Perceptions and Attitudes Towards Seasteading

Thiel categorizes perceptions of seasteading into four quadrants, ranging from those who see it as both possible and desirable, to skeptics who deem it impossible and undesirable. This framework helps understand the diverse viewpoints and challenges in promoting seasteading.

Thiel identifies three groups of people: those who believe seasteading is impossible and undesirable, those who believe it’s possible but undesirable, and those who believe it’s possible and desirable. He argues that the group that assumes technological stasis is the most misguided.

Technological Stagnation: A Central Concern

Central to Thiel’s discourse is the notion of technological stagnation. Contrasting the optimistic predictions of the past with the current reality, he questions the narrative of an exponentially growing technological civilization, pointing to a lack of significant breakthroughs in key areas like space exploration and environmental sustainability.

Thiel questions the lack of technological breakthroughs despite the expectations of exponential growth in the past. He cites the example of Erban Schreiber’s book, “The American Challenge,” which predicted significant advancements by the year 2000. He points out the discrepancy between the envisioned future and the current reality, highlighting the need to examine why progress has not materialized as anticipated.

He views the current situation as a technological crisis, where rapid progress was assumed but didn’t materialize. He emphasizes the need to return to the mindset of rapid exponential progress, similar to the 1950s and 1960s. Thiel acknowledges he has speculative theories but focuses on the “what” rather than the “why” of the lack of progress in physical sciences.

Financial Implications of Stagnation

Thiel links the belief in steady financial growth with the assumption of ongoing technological progress. He warns of the risks to the financial system if this technological progress does not materialize, as seen in the 2008 economic crisis, which he interprets as a crisis of future expectations.

Thiel emphasizes the implicit assumption of technological progress in financial models and expectations. He illustrates this with the example of people assuming rising house prices and stock market growth while simultaneously dismissing technological advancement. He explains the connection between venture capital returns and overall technological progress, arguing that if technology stagnates, other investments become worthless. He criticizes the common narrative that describes the 2008 crisis as a credit crisis. He suggests viewing it as a crisis of assumptions about future progress and growth. He emphasizes the importance of understanding the role of technological progress in shaping financial models and expectations.

The Need for a New Narrative

Thiel calls for a reconnection between technological progress and financial stability, emphasizing the need for a narrative that clearly articulates this relationship. He advocates for a renewed focus on foundational material sciences and hard technologies as drivers of economic growth.

Government’s Role and Cultural Shifts

Thiel critiques the role of government policies and cultural shifts away from valuing physical sciences as contributors to the technological crisis. He stresses the need for a cultural reorientation towards scientific advancement and innovation.

Thiel’s Investment Strategy

Reflecting his vision, Thiel’s venture capital fund focuses on investments in areas often overlooked by mainstream investors, like space exploration, AI, and biotech. He sees these “science fiction-type” technologies as key to driving future progress.

Thiel does not have a clear stance on whether new countries will emerge from the breakup of current ones. He questions how the United States could promote such a process without resorting to nuclear revolution.

Thiel sees promise in the intersection of biotech with other technologies. He believes that the biotech industry has been dominated by PhDs and MBAs who have not generated substantial returns for investors. Thiel expresses hope for the emergence of successful biotech companies led by individuals without traditional credentials due to the availability of information on the internet.

The Promise of Biotech and Garage Innovation

Thiel sees great potential in biotech, especially in ventures that combine it with other technologies and are led by unconventional leaders. He underscores the importance of “garage biotech,” where individuals, empowered by internet-accessible information, can initiate impactful biotech companies.

Thiel’s investment focus is directed towards science fiction-type investments, primarily in space, robots, AI, biotech, and potentially seasteading. His preference for these areas stems from their unpopularity among other investors, creating opportunities for success. He suggests the possibility of starting biotech companies from a garage, given the increased accessibility of information and knowledge. He plans to discuss this concept, referred to as “garage biotech,” at an upcoming venture fund LP meeting.

The Imperative of Seasteading and Technological Renewal

In conclusion, Peter Thiel’s perspectives offer a nuanced and thought-provoking examination of the intersections between politics, technology, and innovation. His advocacy for seasteading, coupled with his critique of technological stagnation and the current financial models, presents a compelling case for reimagining our approaches to future crises, governance, and economic growth. Thiel’s journey from political skepticism to championing technological frontiers highlights the necessity of considering alternative paths to progress in an increasingly complex and interconnected world.

Notes by: datagram