Peter Thiel

Peter Thiel: Leader of the Rebel Alliance | Uncommon Knowledge with Peter Robinson

Check out the Episode Page & Show Notes

Key Takeaways 

  • There was multidimensional progress in the first half of the 20th century, but there has been a general sense of stagnation in technological and scientific progress in the last few decades 
  • “We think we’ve been in an enchanted forest, but we’ve been wandering the desert for 40 or 50 years.” – Peter Thiel  
  • Technological and scientific advancements are double-edged swords, but that doesn’t mean they shouldn’t be pursued 
  • All exponential growth rates eventually slow down, including the Chinese economy; Xi and the CCP have elected to clamp down on its people once again as the Chinese economy has begun to slow
  • There is a question of communism in China; it’s actually socialism of a nationalistic sort that is both racist and xenophobic, which will limit its reach to the rest of the world
    • Maybe China can beat the US, but it probably cannot beat the whole world
  • The United States must not make the same mistakes with China that Western Europe made with Russia, specifically not becoming dependent on an adversary for critical resources 
  • There is something about California that has worked quite well from a macroeconomic point of view, and then it’s worked catastrophically from a governance point of view
  • The hyper-woke California model will beat everything within the Democratic Party, but it does not scale well to the rest of the country
  • “We have two parties in this country. There’s the evil party, the Democrats. And the stupid party, the Republicans.” – Peter Thiel
  • If the correct geopolitical strategy is for the U.S. to not be overextended and overcommitted to establishing a world empire, then this strategy cannot ever even be articulated or the retreat becomes a rout 
  • The prospect of armageddon is quite bad, but it must be weighed against the extreme alternative, which is the one-world totalitarian state in which nothing happens
  • It matters what we do; we must find the narrow window of technological progress in between the extremes of armageddon and stagnation 

Intro 

  • Peter Thiel (@PeterThiel) is a billionaire entrepreneur and venture capitalist known for co-founding PayPal, Palantir Technologies, and Founders Fund. He is the author of Zero to One, one of the most popular books ever written about entrepreneurship
  • In this conversation, Peter Thiel and Peter Robinson discuss The Great Stagnation, why technology and science are frightening, the China and U.S. conflict, the state of California, why the California model does not scale, the Rebel Alliance, classical liberalism, armageddon vs stagnation, why we need growth, and more 
  • Check out these Podcast Notes from Peter’s conversation with Alex Epstein
  • Host – Peter Robinson (@p_m_robinson)   

The Great Stagnation  

  • There was multidimensional progress in the first half of the 20th century
  • In the 1960s, people thought of technology as rockets, aerospace, agriculture, computers, and new medicines
  • Today, and for the last 25 years, technology is synonymous with information technology
  • There has been a general sense of technological and scientific stagnation over the last few decades 
  • The difficulty in quantifying the stagnation is why we have not talked about it enough
  • “We think we’ve been in an enchanted forest, but we’ve been wandering the desert for 40 or 50 years.”Peter Thiel  
  • Progressivism is used as a word in politics, but we don’t have it anywhere else in society
  • The computer-internet revolution was the one big exception, and it is striking how uncharismatic that revolution has become

Why The Slowdown in Progress?

  • There is such a wide range of components involved in the Great Stagnation that it is difficult to determine why progress has been stifled
    • Some contributing factors include overregulation by governments, institutional derangement in education, and limitations in particle physics
  • If Peter had to choose a single narrative most responsible for the stifling of progress, he’d choose the narrative that has vilified technological and scientific progress out of fear for what may come from more progress
  • For example, progress in nuclear energy technology was halted in the 1970s when society became nihilistic about it
    • The stifling of nuclear technology has happened to so many other technological fields
  • Today, there are fears about AI dystopia, the climate apocalypse, and bioweapons
  • There should be a ticker-tape parade for the mRNA scientists, but it would also be a reminder of the gain-of-function research being conducted at the Wuhan Lab
    • Progress and the anti-technology narrative are adjacent in many scenarios
  • Today, technological and scientific advancements are double-edged swords, but that doesn’t mean they shouldn’t be pursued 
  • “I’m still in the accelerationist camp. I’m still on the deregulation side. I still think it’s a catastrophe that these things have slowed down. But it’s not simply a failure, it’s also what people have done because the alternatives were quite dangerous and quite frightening.” – Peter Thiel 

Technology & Science Are Frightening 

  • “As a teenager, I used to love science fiction. I haven’t read much science fiction in decades because it’s all just dystopian and depressing.” – Peter Thiel 
  • The scientific dystopia, as it is commonly portrayed in books and movies, maybe a reflection of our current culture, but it might be telling us that so many of the paths to the future are extremely dangerous 

China

  • China learned from the fall of the Berlin wall in 1989 that they would have Perestroika without Glasnost, i.e. a certain liberalization of the economy without becoming a free and open society
  • There is a question of how much China’s resistance to democracy is a personal thing versus a structural thing
    • The personal version would say that there’s something unusually crazy about Xi Xinping and that he’s the second coming of Stalin or Genghis Khan
    • The structural versions would argue it’s not personal to Xi, but structural in the sense that China could be moderately free, and not completely totalitarian as long as the economy was growing 8% a year 
  • All exponential growth rates eventually slow down, including the Chinese economy; Xi and the CCP have elected to clamp down on its people once again as the Chinese economy has begun to slow 
  • As economic growth slows in China to 3-4% per year, it’s possible for it to become more totalitarian again

The Conflict with China

  • “They [CCP] say they’re communists. We should take that at least at face value.”  – Peter Thiel 
  • Today, China is more of a gerontocracy – a government based on rule by elders – while the forms of fascism and communism in the early 20th century were fundamentally youth movements 
  • China is sort of a half-fascist, half-communist gerontocracy 
  • China is strangely less idealistic and ideological than the Soviet Union

China vs The Rest of the World   

  • Framing it only as a conflict between the United States and China is self-defeating
  • The big question of the next few decades is how the strategic map of the world shapes up
  • Maybe China can beat the US, but it probably cannot beat the whole world 
  • There is a question of communism in China; it’s actually socialism of a nationalistic sort that is both racist and xenophobic, which will limit its reach to the rest of the world 

Learning from Western Europe’s Mistakes 

  • Western Europe made an incredible mistake to entangle itself so tightly with Russia
  • Western Europe made itself dependent on the Russian pipeline, and Germany denuclearized itself 
  • The question you must ask is whether or not the United States is making the same mistake with China
    • Is the United States too entangled with China? 
  • “I believe in free trade. I’m not in favor of tariffs, but I would make an exception for our one massive geopolitical and ideological rival.” – Peter Thiel       

California & The Resource Curse 

  • “The resource curse is the phenomenon of countries with an abundance of natural resources (such as fossil fuels) having less economic growth, less democracy, or worse economic outcomes than countries with fewer resources.” – Wikipedia  
  • If tech is the oil of the 21st century, there is a strange juxtaposition in California where some companies generate enormous wealth despite there being such a bad form of social-political governance
  • San Francisco is one of the wealthiest cities in the world on a per capita basis, and yet it’s completely misgoverned 
  • California is not poor; California has half the population of Germany and Japan but has roughly the same GDP
  • The average person in California makes twice as much as the average person in Germany, and three times as much as the average person in Japan
  • There is something about California that has worked quite well from a macroeconomic point of view, and then it’s worked catastrophically from a governance point of view
  • “If we compare [California] to oil countries, it’s not the worst, it’s not the best. It’s not as good as Norway. It’s not as bad as Equatorial Guinea. I think you should think of it as roughly on par with Saudi Arabia. Saudi Arabia has a crazy Wahhabi ideology; California has a woke ideology. Wahhabism to Saudi Arabia is roughly like wokism to California.”Peter Thiel      
  • In poorly governed systems, wealth is redistributed very inefficiently following periods of rapid economic growth
    • One inefficient vehicle is overpaying government workers
  • The average government worker gets paid twice as much as the average private sector worker in California; this is by far the highest ratio in the United States 
    • In Texas and Florida, the average government worker gets paid 10-15% more  
  • Crazy zoning laws are another example of inefficient wealth redistribution that creates a quasi-governmental real estate sector; this limits the number of new things that can be built

Why The California Model Does Not Scale   

  • “On the Democratic side, my read is that they have no alternative but to somehow pretend they can make the California model work for the country as a whole, but it won’t.” – Peter Thiel 
  • The hyper-woke ideology is not what makes California successful, just like it’s not the Wahhabi ideology that has brought wealth to Saudi Arabia 
  • “California is strong enough to crush everybody else in the Democratic Party, but it’s probably not strong enough to be a very compelling agenda for the country as a whole.”Peter Thiel  
  • Elizabeth Warren: the crazed university professor who is like a bad Puritan minister from the 17th century – that’s not going to work 
  • Tim Ryan: the fake blue-collar guy from Ohio where no one cares about blue-collar workers – that’s not going to work
  • Bernie Sanders or AOC: a crazed socialist thing – that’s dead on arrival, and not going to work 
  • The California model will beat everything within the Democratic Party, but it does not scale well to the rest of the country

The Rebel Alliance vs The Imperial Stormtroopers 

  • We should be trying to “get back to growth” that is not inflationary, cancerous, or apocalyptic
  • The right side of the political aisle is broadly a diverse ragtag rebel alliance, while the other side consists of the imperial stormtroopers in lockstep     
  • There are a lot of disadvantages to the rebel alliance, but it has the advantage of being able to admit that it does not have all of the answers right now
    • It will have rigorous debates over the next few years to figure it out
  • “We have two parties in this country. There’s the evil party, the Democrats. And the stupid party, the Republicans.”Peter Thiel     

Classical Liberalism  

  • A classical liberal in 2022 is like a Marxist professor in 1982 who were claiming that true Communism has never been tried; it is equally wrong when classical liberals in 2022 claim that true liberalism has never been tried 
  • Science and technology are such big drivers of modernity that we cannot turn our back on them 
  • We must figure out some way to keep going forward on our trajectory of scientific progress without self-destructing the society
  • Peter Thiel believes that those relying on a return to some political ideology are not as familiar as they should be with the state of technological and scientific progress

Don’t Wait For The Long Telegram 

  • In 1946, US diplomat stationed in Moscow George Kennan sent the State Department the “Long Telegram” – an 8,000 word expose on the state of the Soviet Union and recommendations for the US’s communist containment policy
    • Kennan’s telegram remains the United States’ containment policy to this day  
  • So, why hasn’t there been a containment policy for China?
  • Peter Thiel does not expect to see a long telegram for China because the U.S. has not established a viable long-term strategy on how it plans to accelerate growth and overtake China 
  • Setting China aside, a potential broad strategy for the U.S. is to gradually withdraw from the rest of the world, which is not something that can be broadcasted to the rest of the world because the retreat becomes a rout
  • If the correct strategy is for the U.S. to not be overextended and overcommitted to establishing a world empire, then this strategy cannot ever even be articulated
  • Maybe there is some way to contain China, but it’s probably best to figure it out without articulating it   
  • There is something about the “best policy”, where if it is articulated, the articulation itself will stop its proper execution             

Between Two Monsters: Armageddon and Stagnation  

  • “The stable deterrence structures of the Cold War look much shakier as more countries acquire nuclear weapons. It seems far easier now than at any time since World War II to sleepwalk into an all-out conflict.” – Peter Thiel on the prospect of armageddon 
  • “An endless stagnation. We have grown attached to our soft, comfortable ways, but we do not want to name what they are protecting against.”  – Peter Thiel on the Great Stagnation               
  • The prospect of armageddon is quite bad, but it must be weighed against the alternative 
  • The extreme alternative to armageddon is a form of soft totalitarianism where society is locked down and nothing happens 
  • The extreme alternative to armageddon is the one-world totalitarian state, the antichrist 
  • We should be at least as scared of the antichrist as we are of armageddon
  • “My contrarian intuition is that people are far more worried about armageddon than they are worried about the One World State.”Peter Thiel  
  • If you choose to stop pursuing advancements in science and technology, you cannot just stop it locally, you must also stop it globally
    • In this hypothetical, stopping American scientists only is not enough, you must stop scientists all around the world, which is impossible
    • This is a point made by Palmer Luckey, who makes the claim that people in the West have a very Western-centric approach to how technology develops   
  • We need to find “somewhere in between” armageddon and stagnation 

Why Do We Need Growth?

  • Non-inflationary, non-cancerous, non-apocalyptic growth would solve all of our problems
  • Growth is needed to lessen the Malthusian, zero-sum-stagnation ideology 
  • Without growth, we’re not going to solve the polarization, nihilism, or anger in society
  • It matters what we do; the world needs individuals to have agency
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