American Democracy March 14, 2019 Lecture

each tick makes a difference so today we are fortunate to have as our guest Peter teal Peter teal is a venture capitalist but also a student of American Life a proponent of American alternatives and the citizen actively involved in the public life of the United States our general plan for the class today is to move broadly from a discussion of the knowledge economy and its deepening and dissemination to a larger discussion of political economy and the political economic alternatives for the United States and I will then ask Peter to begin by introducing himself please professor West thank you so much for having me it's a tremendous honor to to be here I know the tremendous range of different topics that that we can we can cover and I want to I want to say a few things about maybe to start what I see is sort of the status of Science and Technology in the in the political economy and the you know the simplistic syllogism I have is that if we have enough growth in our society we can solve all problems if we don't have growth we can't solve any problems and then that the the real driver of growth for for the developed countries us Western Europe Japan is is at the scientific and technological frontier and so one of the one of the questions that we should always ask is what is the health of that frontier how you know how well are things actually working in these fields and about science and we have incredible maybe a little louder Peter like referring people hear me this better alright so we can talk about scientific precision to an incredible degree we have Avogadro's number in chemistry or the fine-structure constant physics these things get measured to you know five six seven eight significant digits and yet the question of progress in science you know how much the purpose is happening how fast is it happening this is just super vague and if you if you ask a university president you know what's going on of course everything's always great but you end up with short sentences with dishonest adverbs doing all the work something like obviously we're progressing faster than ever or some stuff like that and this this this question of measurement is is incredibly tricky oh I'll make it is very hard let's let's start by saying this is a very hard question to answer because one of the features of late modernity is that knowledge has become extremely specialized and divided and so we have ever narrower groups of experts of guardians guarding themselves and so the superstring Theory people and physics get to tell us about how much progress they're making super string theory the cancer researchers get to tell us that if they get just a few more million dollars in government grant money a cure for cancer is just around the corner Nixon declared war on cancer about 50 years ago was supposed to be cured by the Bicentennial by 1976 and maybe we're making progress but it's certainly been rather slow going and something like this goes goes in all these different fields it's so it's quite a tricky question to answer to answer directly my suspicion certainly is that things are not in that greatest shape and I'll give strengths or the linguistic observation that at this point technology the meaning of technology has narrowed it today technology is basically synonymous with information technology we were sitting in this classroom 50 years ago 1969 technology which was technology means the things that are changing the things that are progressing it would have met included rockets supersonic aviation it would have included the green revolution in agriculture it would have included you know progress in new medicine underwater cities you know it was sort of advancing on all fronts whereas the mental picture seems to be more one of of narrow progress around computers internet mobile internet software we've had progress in the world of bits but not in the world of atoms when I was an undergraduate at Stanford in the late 1980s this was not obvious yet these things have slowed down so much but with the benefit of hindsight any engineering field that you would have gone into would have been a bad career choice it was ready clear by the late 80s that he didn't want to go into aero-astro engineering nuclear engineering your parents would probably talk you out of doing that but every other engineering field was bad because we're in a society where not that much is happening the world of atoms Chemical Engineering Electrical Engineering sort of worked for about another decade the the only field that there was sort of science related that actually worked was computer science which in the late 80s was sort of a which was sort of the field the less talented people went into who couldn't hack it in electrical engineering and and so you know I think one of the one of the great lies that that we tell in our society is about stem science technology engineering math because there are in fact no jobs in most of these STEM fields you know the only two STEM fields I think work are computer science and maybe petroleum engineering at this point because so few people go into them because of reasons that we don't have to go into but but every other field does not work if you get a PhD in physics or in chemistry there's no well-paying job for you at the end same is true of you know biology things like this I've often I've often commented that I think the you're better off as an undergraduate majoring the humanities than in the sciences because in the humanities at least you know there will be no job for you at the end whereas in the sciences into thinking that you will be taken care of by the natural goodness of the universe and and so you will be less deluded if you if you if you major in the humanities so so there is sort of there's sort of this this uh this bottom-up perspective where things are not nearly as healthy in these fields as the Google propaganda which I will call what comes out of Silicon Valley might indicate which is that we have you know runaway progress it's just accelerating it's going faster it's breathtaking there's the Kurtz while McAfee type type story of course if we have runaway progress then we might have secondary problems it might be people are being left behind there might be you know people whose jobs are getting lost but the fundamental story of runaway progress makes the problem into simply a distributional problem whereas I think you know I think the core problem is one of general stagnation where we're not very much is happening let me make one tangential observation on why I think this question of progress is not when we can avoid so we you know it's there's always a sense when I ask you know how fast the signs how fast is technology progressing you know sort of the naive responses well this is just way beyond my paygrade it's beyond anybody's pay grade nobody knows and yet even if we don't want to answer the question there are a lot of implicit ways that it gets answered all the time and and one you know sort of narrow specific but very important version as a thought experiment and if you were if you were if you want to get growth back to 3% 4% a year in the US and you could always you know if you've got to 4% growth we could solve all our problems even 3% sustainably would be pretty good let me suggest there two ways to do it one way would be you enact a set of policies that if people ever got a sense you were going to do you would never get more than 10% of the vote so you get rid of all immigration laws you get rid of all environmental laws you look people build houses wherever they want to and so you could get growth maybe would be sort of cancerous but for at least a few decades you could get very very fast growth the other sort of thing you could do which would be much mmm which would be much easier would be to simply lie about the rate of technological progress and the way the the micro economics of this work is it's easy to measure nominal GDP which is a combination of inflation and real GDP and then you have sort of and then the lower the inflation is the more the real GDP grows so if we have you know 2 percent inflation and 2 percent real GDP growth we have a four percent nominal GDP growth but then if you go back and the inflation numbers you might conclude that there's a little bit less inflation and therefore things are actually better than then they would appear to be the way sort of one of the ways you go about rejiggering the inflation numbers the sort of arcane economics debate is by saying that the hedonic adjustment on technology is greater than expected and so this would be the way you would go about doing this with the you to point the Commission on accelerating technological change the Commission would conclude we've had way more progress than anybody thought it's been going much much faster you know the iPhone the new iPhone has a smooth surface and therefore it's so much better than the old iPhone and the qualitative adjustment you have to make is bigger and then the way this translates into public policies if the inflation rate is lower you need less of a cost-of-living adjustment and so you don't need to pay grandma's much first security and and so gave him the little cat food that she's been eating is getting more expensive every year that's offset by this by this hedonic improvement in technology I think that there's sort of a rough history of the US where this people try to trigger with the inflation numbers like this since about the 1950s the one point where people really succeeded was in the mid 90s this thing called the Boston Commission there I think actually three or four econ professors at Harvard were sort of major culprits in a scheme and they concluded that if you basically reduce the inflation rate by 1.1 percent you could save a trillion dollars over a decade and you could balance the budget and and they sort of that was going in and then after after a year the Commission included yeah actually the inflation number is 1.1 percent less than anyone thought because technology was going so much better than anyone thinks and then you could you could sort of rein in all the entitlement spending now you as a as a sort of free market libertarian there's a part of me that sort of is attracted to the sort of Machiavellian dishonesty about technology because it's a way it's a way to get our costs under control but as an intellectual I think you know we need to be asking these sorts questions so I think the story is one of general stagnation and the micro incentives whether it's the national borough of economic you know research whether it's your cancer researcher whether it's whether it's your tech entrepreneur or your venture capitalists all the people have an incentive to exaggerate and and that's why I think we should we should correct for that a little bit and we should assume that the things are actually slower than they are and then we have these very difficult questions what we should do about this one sort of constitutional law framing of the question I have is that I think one of the ways our Constitution works this works against a background of growth we have a representative government if the people sitting around a table and legislation is more for you and there's more for you and there's more for me and there's more for everybody and if someone's a difficult person well it won't be more for them and that kind of legislation works in a world where the pie is just growing relentlessly it's not clear that representative democracy Republican constitutional government whether this works at all in a world without growth we sort of had a trial run for this in the 1930s where the growth stopped the systems were put under stress and they went communist or fascist and I think I think we're sort of starting a sort of slow-motion repeat of this today I think that I think the technology has been decelerating since the 1970s but I would say 2008 was was a real real watershed and if we can't get back to growth I do not think you'll maintain the kind of government we have and it does not work when it's a purely zero-sum if I get more by taking from you then after a while you figure out that everyone who's made money everyone who succeeded is part of some kind of crazy racket and and the whole thing just just disintegrates so Peter before we go further could you tell us more about the thesis of secular stagnation and your position with regard to it in your view what is true and what is false in this thesis let's let's frame it in terms of three questions sort of try to have some clarity around so the first question you can always ask is is is secular stagnation happening or not and Google propaganda says there's no stagnation same thing is true of all the and there can be utopian versions like Google there can be dystopian versions like every science fiction movie that says the robots are about to kill everybody so these different utopian and dystopian forms of acceleration ISM and I'm on the side that yeah not much not much is actually happening then you get into question why and so one sort of division is is always that there's not enough money and it's a it's a demand-side problem this would be the Larry Summers of you my views it's much more supply-side province we're not some reason we're not getting enough new stuff out there then on the question of why is there a supply-side problem you can sort of maybe one division would be you can say and so the the nature version of the argument would be we're not producing anything more because all the low-hanging fruit has been picked the easy inventions have been made it's hard to come up with new ones the the cultural argument is that it's actually there is more potential for us to do things it's it's actually the problem with our culture were too risk-averse too much is regulated things like this Tyler Cowen the George Mason economist who also wrote a book on the great stagnation he believed - more on the side of culture so I that those are my answers to those three questions one way of reframing the question are as a and I think mine my answer is the minority on all three so I think most people believe in acceleration not stagnation most people think it's a demand problem not a supply problem most people think it's nature not culture you know one of the reasons I believe my contrarian minority answers those three questions are correct is because because certainly if you imagine a conversation with let's say a baby boomer scientist and you say and you start the conversation would sort of start with scientists what doing all these great things oh no you're not you haven't cured cancer second thing second line of Defense's scientist well we haven't had enough money no no that's not true you've got tons of money we're spending more money than ever on science that's not true third line of defense is is yeah but it's gotten much harder all the easy stuff spin been fixed no that's not true you're just a lazy person and and so if you think of these the three conventional answers as the natural psychological defense of answers people have that's why we should be skeptical though and that's why you know and so my first two answers are pessimistic my third one is more optimistic I think you know I think we can do better I think you know I don't I don't think the stagnation is you know that we're in some sort of entropic Twilight we can never get out of and so could you fill not in the the third hopeful element in your view what is the content what is the content with respect to policies what is the content with respect institutions and what is the content with respect to culture yeah there's there's a lot of you know a lot of different things I would I would I would I would try to I would try to tinker with I would say that you know one of the areas that I was very interested in undergraduate did not pursue was was biotech I think whenever I look at it by all rights there's you know tremendous amount of progress we could make there it is you know it's incredibly it's incredibly regulated and you know getting the complicated debates about about the micro regulation how severe it is but in my judgment the FTA is way too onerous it's virtually impossible to come up with with new breakthroughs you know the polio vaccine when it was first developed in 1950s about you know a few dozen people got killed they they sort of miss dosed it if that happened today you put it on Deep Freeze for 20 years and and so I think there are all these different kinds of innovations that are are very very difficult to make for you know on a regulatory basis I think there's a you know I think one of the one of the sort of technological slash political areas where loudness intersects and you alluded to in the opening is the question of the the big cities versus everything else we have you know we have this strange society where everybody wants to live in these big cities and you know if you're going to Harvard you know the only are four places you can go from here it's Harvard it's a sort to New York DCL a Silicon Valley maybe a few people stay in Boston but that's about that's about it and we sort of debate you know why has everything gotten so centered on these big cities what what does it reflect and the cities have Network effects they have better more Economic Opportunity but they also don't work very well and the technologies or the iPhones the newfangled iPhones also distract you from the fact that your environments a hundred years old and you're grinding through a subway in New York that's probably working less well that was a hundred years ago you know it used to be that Brooklyn to Manhattan took 25 minutes and with a sort of a slow-motion strike or whatever's going on there now takes 90 minutes to get from Brooklyn to Manhattan and when this sort of stuff happens all the games have to go into real estate basically so this is one of the one of the great sources of inequality one of the great drivers of inequality in our society over the last 20-30 years has been runaway housing cost so if you owned a house the owner own property you you weren't really exposed this increase in inequality if you're a young person if you're an immigrant if you're just getting started in one of these big cities you're up against this this bigger this bigger and bigger hurdle there's a there's a late nineteenth century economist Henry George I always think is very interesting to to look at he was considered sort of a socialist in the late 19th century in the early 21st centuries considered sort of a libertarian I think that tells you something about how much our society shifted but but but the basic what are the basic gorgeous theories was that he needed attacks monopolies the main monopolies were in land needed tax land very highly there's a theorem called the Henry George theorem that was proven by Stiglitz about a hundred years later which basically says that if you have a city we're nothing much change not not too much changes which is owned heavily it's hard to build new things it's hard to change things then 100 percent of the value of the public good in that city yet captured by the landlords so if you have if you if you give people in New York City welfare all the welfare goes into increased rent payments if you have a park if you have police all the value gets captured in increased rent and this is and the way I see you know the question is what does one do about this it's it's not a law of nature but it is is it is heavily it's heavily circumscribed by available technology so if you have if you build highways and subways the sort of highways and suburbs you could have some escape valve from this and this is sort of why we didn't have the Progressive Era did not lead to a communist revolution in the early 20th century because there was a way to reopen the frontier with highways and suburbs that highway that suburban frontier is now semi closed it's too far away the highways are clogged the technology doesn't work and and so I think yeah I think there's a question can we come up with new transportation systems as a way to and that's generally but well for thought change it's a blessing to have you years to have this kind of a critical exchange Socratic exchange as always a healthy thing but it's no accident Henry George was the favorite social critic of John Dewey that he would write elevated prose anytime you invoked Henry George but it had something to do with the centrality of public life the bonds that hold us together that which constitutes very content of what it means to be a citizen you talk about the subways in New York and what happened those are all public things that are demeaned and devalued in a moment in which given the global financial eyes former capitalism that now range makes it difficult for them to be recipients of the kind of attention resources investment and so forth how do how does public life figure into your fascinating thinking which is against the grain and I appreciate that yes against them you're thinking outside of the box in it but what role does public life but public infrastructure public education public health care public things that hold a democracy together unbelievable power of not just technology but technology under capitalist Aegis profit-driven technology well it's it's uh I do think you know I always have a schizophrenic view on politics I think it is it is on some level toxic and therefore something one should avoid on the other hand it is like the air we breathe that permeates everything and so I I tend to have this sort of schizophrenic thing where I try to avoid it most of the time and then episodically try to engage in it very we can all agree on the toxic carry but I think I think I think I think I think there are a lot of things that work best if you have functioning public institutions and then there are questions why they're not functioning so why does the New York City subway system not work is it because people are disconnected from their city government and not participating in voting is it because it's run by a corrupt set of unions is it more of a scientific technological thing where somehow we can't build you know on superfast railroads even though they've been built in Japan and elsewhere other places you know you know so I think it's a I think that's that's sort of the ensemble of questions I would always come back to but do you see a certain level of if not incompatibility intense conflict between the commitment to various ways in which liberties personal liberties economic liberties proliferate and democratic forms of life is there a built-in tension do you think I don't you wrestle with that tension so Cornell just before Peter answers were difficult to to follow up on your on your provocation on on the institutional side one approach which would be the classic libertarian or classical liberal approach would be simply lighten the regulatory burden untie the hands of the entrepreneurs within the established framework of the market economy but the alternative the alternative of the radical democrat or experimentalist would be that that's not enough and that it is necessary to in of eight in the devices of economic decentralization so that more people can have more access to more markets in more ways and to that end simply lightening the regulatory burden does not go far enough that's on the institutional side now on the cultural side simultaneously there'd be the question of what can and should you do is it enough to promote a cultural a culture of entrepreneurialism within the educational institutions as they are now organized or do you need a radical reshaping of the school system a different method of teaching and learning a concerted attack on the division that exists in the United States between two tiers of the school system a dissociation of the funding of the schools from local finance and so forth so you're your own diagnosis of the problem could be read in these two ways as pointing either to the narrower prescriptions of the classical libertarianism or as serving as an invitation to this broader task of institutional and cultural reconstruction well I would be you know III the narak my narrow focus is 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 and if we can I think there were lots of institutional arrangements that were but but we shouldn't give that too short shrift so we're talking earlier about the New Deal the 1930s 1940s there were all these institutional changes and as a libertarian I don't like them I'd like to say they were bad but things still worked the US was much better often you know 1945 then in 1933 and the my telling of what actually worked in the 30s was that you had a whole series of tremendous breakthroughs you got the commercial aviation industry you got the the the talkies in the movies you got the you got the household appliances washer washing machines dryers you got you got three times as many people on cars in 1940s in 1930 at the beginning of the plastics industry at the secondary oil recovery industry so there's a whole series of waves of innovation and this was an incredible tailwind and then if you have that sort of tailwind we can run socialist New Deal experiments and it can still work but I don't have a tailwind you know I can run my libertarian experiments and it won't work but he but even has a libertarian or by the public mobilization in the face of war those moments all of a sudden even libertarians become highly friendly with the government power yes the state driven policies government policies because Hitler's a thug we all agree let's make sure he doesn't have world domination is that a fair that's fair oh boy I find these I find both of your argument implicitly super depressing if they're true that's a hopeless thing to reform why for technologies military and scientific you know this is what sort of mobilized society one way of telling the history of what went wrong is that you know we had we had World War two we got the nuclear bomb it was the New York Times editorial a few days after Hiroshima it was something like you know in the paraphrases but this is the rough tone of it was um you know this is an incredibly impressive achievement you know there are all these people who say that society can't work if you have the army telling everyone what to do libertarians they were critical of and you know if you if you'd let the pre-madonna scientists their own devices maybe would take them half a century but when they were told by the army what to do they could do it in three and a half years and get this invention to the world and now my only observation is New York Times doesn't write editorials like that anymore but let's but sort of the military telling of the history was we had the Manhattan Project the sequel to the Manhattan Project was the Apollo space program because it wasn't good enough to have nuclear weapons you need to send them around the world really fast you need to do it many times over to kill everybody and and this basically culminated and reach some kind of insane culmination in the early 1970s and that's roughly when the tech stagnation started and so war it's not a motivating thing we have enough of nuclear bombs still yeah I hear you what you're saying but me as someone trained in philosophy as you were at Stanford you know it was a brother named William James taught here at Harvard I wrote an essay called the moral equivalent a war see war is not a metaphor to be deployed only and it has a religion military you can declare a war on poverty you can declare a war on white supremacy when they need it that we had apartheid in the south at that time right so we want a double victory we want to win the war internationally let's win the war against American apartheid let's win the war against poverty let's win the war against ignorance there's other ways in which we can marshal the warlike spirit that's still tied to I I don't I think the metaphor only works when the underlying thing like war is something that can still be won in in the in the in the core military context so William James was writing pre-world War one I don't know if they would have used that metaphor after 1914 I think that you know I think we had you know we had certainly the war on poverty we had you know the war on segregation but war on cancer under Nixon I am not aware of a war metaphor being used since the early 1970s but it's not so I've been trying to use it the last forty years it's not kicking in it's just we don't actually want war you know we had open it up to Bates look it's not just a metaphor about about motivation because it has a content so one element in the content is massive mobilization of national resources at the sacrifice of current consumption with very high marginal tax rates for example the second element is radical institutional innovation not formalized for the most part but radical nevertheless experiment including innovation in the forms of collaboration of government with private enterprise and and with the result of a duplication of GDP in four years so proven success if one believe that then you know I'd be fine paying more in taxes if I thought we could go back to a government that actually actually did things I think there's a way to think of libertarianism as a philosophy of political decline it's as our government institutions work less well it's natural for them to do less the libertarian party got started in the u.s. in the 1970s which was the decade where our government institutions stopped working it has been gaining ground for 40 to 50 years libertarianism it's not a timeless and eternal truth it's a historical tree it's an adaptation because institutions work less well than ever if we if we take and I think like one one difference between governments and companies companies have a natural half-life after a while they die they get replaced by by younger more vital healthier things it's very hard to do that in government NASA was was very innovating you start an ass in the 1950s 96 you have great scientists sixty years later yes but then but then as you imply the problem is the circularity that this minimalism about collective action risks becoming a self-fulfilling prophecy sure but it's also but but on the on the Left it's it's if you have to defend every last existing institution how sclerotic it is that's that's actually ultimately going to help us on the libertarian side of course that's sort of what you're that's what you're increasingly locked into doing and this is where you know the New Deal history is impressive but I don't know what it means because you started with basically no federal got virtually no federal government completely blank slate you know in the 1930s 1940s the people working in the federal government DC were far more talented than the average people managing companies throughout the United States and today it's you know it's like a minimal did like at least was able to do even in Brazil a minimal thing would be could you actually move the capital city of the US elsewhere if you just move it to some other part of the country though that would force people to do something new and that's that sounds beyond insane to even suggest we should probably open it up question yes jump in well look i think that i think that the uh the the Innovation Challenge that I've described is fairly independent of of that you know I don't think that women or minorities have less access today than they had 50 years ago or 60 years ago and I think we had more innovation in our society in the 1950s and 1960s than we do today and so it's you know it's always a it's always a fairly someone you know the the um the you know I'm often asked this question in the you know in context of Silicon Valley and how do we get more women engineers how do we get more women executives and and my answer is that's not even you're not even asking the right question you know the question is how do you get more women to found companies because what matters is that you start a company and that's what sets the culture in Silicon Valley of the you know and again it's it's extremely unbalanced alistun you know it's very unbalanced of the you know the 150 tech unicorn companies private tech companies worth a billion dollars from or only three have women co-founders the projected that looked at this about two years ago so it may have been updated a little bit and those three they were all husband-and-wife teams which is not what the feminists want to hear so that's but I have a solution you should you should be you should you should just start a company but what are the conditions under which you start those companies well you need some ideas you need to be able to inspire people to have access to capital access to credit you know some foot I always I always think I always think the capital part gets exaggerated we have we've had a world of zero interest rates government printing money for a decade there's way more capital than anybody knows what to do with we have too much capital I don't know what to do with it on my venture fund the same problem is is true across the board in Silicon Valley we need more good ideas well it's okay it's it's hard for me to sort of go into like a detailed critique of why your company you should have succeeded or why it didn't succeed you're doing very good I know these big of them have some other people [Laughter] I don't believe that so I think your answer is the kind of answer I believe but it's sort of but but the question I think is misplaced so I don't think there's a process we can come up with that works there's no sort of formulaic process people are always looking for a formula it's not like shark tank where you have to figure out the right pitch you have to figure out the right way to tell people exactly what you're doing in 30 seconds in an elevator or something like that it's people but people are desperately looking for follow this formula and you'll be rich that's uh that that might be great or it might be just that I'm you know I'm telling you a bunch of BS and then I think what what happens in practice it it is always you know somewhat serendipitous it's you know there there's something there's something about you know it's sort of self-fulfilling you people think it's gonna work and then then it somehow it takes off but it's yeah yeah the access problem is always tricky you know when I when I started you know when I started PayPal 98 99 I you know I probably had a pitch 100 separate people over the course of the first year and you know it was it was you know you knew people he sort of got got in front of them some of them but it was it was it was still really hard it's always a really hard looked we've got a question here then one in the back these two and then then what shift is that right brother [Music] um well look I think I think the the entrepreneurial venture capital forum is a very tricky one to solve because it's it's very risky it's it's naturally decentralized if you had the government simply issuing up venture capital checks it would go catastrophic ly wrong because you know most companies are actually bad ideas and aren't even close aren't even close to working and so those are those are the that's sort of where I'm not quite sure who knows about the venture capital ecosystem now most business isn't equity financed most business is is debt or credit financed and and the policy thing that I would suggest as a concrete policy would be that we should try to figure out ways to ship credit to small business and away from consumers so as a small business when you're starting small businesses very hard to get credit you can go me you haven't put on a credit card which has extremely high interest rates and and and whereas where's consumers you know they they borrowed a lot because it's easy to borrow and they never think about how hard it is to pay off businesses aren't response you know they're not personally liable but but there are it would be much better if we had credit directed towards business and away from consumers so this is the East Asian economic model it's very strange you know why things work at all on a place like you know Japan or you know the East Asian countries but I think I think sort of the key macroeconomic insight they had was to make it hard for consumers to get credit and easy for for businesses to get credit and that somehow is a much is a much better is a much better approach now you know this is this is this is not popular because we don't want you know you have to buy sales taxes you have to say it you can't for money you can't you know it should be harder to buy a house you have to have a bigger down payment to house so those are the things you do when you restrict consumer credit but but if I had a choice I would I would definitely do that and shift gives it a depth driven businesses mainly small businesses different from equity yeah the vast majority of them are debt driven yeah so like an equity a venture capital equity business it's like I have to make I have to have a chance to make ten times my money to justify the risk of investing it and that's there are a lot of business that just don't have those attributes you know if you have a restaurant or a local business you can make money but it's you know work your family to death your friends well the question in the back before we ship yes well I'm saying that's that's that's how you change things in Silicon Valley because because the it is it is centered on the founders of companies and I'm sorry that's if you know that's if you're not dealing with that you're not gonna change things I understand you don't want to do it personally I'm not saying you have to do it personally but that's the problem it has to be solved um let's see the well the context is I was I was involved in this litigation against Gawker Media where I helped underwrite Hulk Hogan the the wrestler and a successful lawsuit I mean complicated fact pattern but basically they had published they had secretly filmed mr. Hogan having sex with his best friend's wife it was filmed in the privacy of the bedroom and then it was shown on the Internet to millions of people and and you know it was it was and was basically and then you know once once we finally got it to trial you had sort of a pretty big runaway jury verdict where you know it was basically our our lawyers asked for you know thought the most they could ask for with a straight face was a hundred million dollars and then after seven hours the jury came back and awarded mr. Hogan 115 million so a lot of these things always very fact-specific you have to go through a lot of the facts but the you know look like the way I would the way I would frame it is our Constitution doesn't just have a First Amendment it also has a Fourth Amendment which is against unreasonable search and seizure that's where the right to privacy comes from and and there are certain cases where First Amendment should dominate and there are other cases where some of the other ones should dominate and I would I would submit that a sex tape illegally stolen filmed in the privacy of someone's home is much closer to a core Fourth Amendment you know right against invasion of privacy both by government actors as well as private corporate actors and and this is not a first amount of thing this was the way this was the way the whole whole trial proceeded to be they started by you know they they just argued First Amendment First Amendment the whole time and it was you know it was we're journalists we got to do whatever we want because we have the First Amendment they argued the law we argued the facts no it's it's not about the First Amendment it's just a sex tape so Peter let's let's now begin to broaden this conversation to the two political economic agenda that we've been considering here in the course and to that end I simply want to restate for you three of the themes of that agenda that we have been discussing here and and here you speak to them in any order that seems to you most useful so first theme has been the relation of the backward parts of the production system to the most advanced parts and especially the fate of what is now the vanguard of production the knowledge economy or the learning economy it is present in every part of the production system not just in high-tech manufacturing but everywhere in this present only as a fringe that excludes the vast majority of firms and workers and Sorley this insular character of the new productive Vanguard ISM must be part of the explanation for both economic stagnation and the aggravation of inequality and here the basis of discussion has been that we shouldn't take this insularity of the advanced economy as something that is natural or necessary although it may be always the most probable outcome and we should explore the means by which this productive Vanguard could be both deepened and disseminated the second theme is has been the theme of the relation of labor to capital in the context of this change in the advanced forms of production there is a demand for flexibility in labor markets and in a large part in the world including the United States flexibility seems to have become a pretext for the condemnation of an increasing part of the labor force to radical economic insecurity and insecurity specifically in the form of precarious employment insecurity and a downward tilt to the returns to labor seems to be incompatible with a dynamic of productive enhancement and the third theme that we've been we've discussed in this context as part of the core of a progressive political economy is the theme of the relation of finance to production finance to the real economy under the under the view that finance should serve the productive agenda of society rather than being allowed to serve itself that it is not enough to regulate it what we want is to adopt innovations that tighten the link between finance and the real economy and increase the likelihood that finance will be a good servant rather than being allowed to be a bad master those are the three themes that we have discussed and we'd like to hear you on them because they seem to be notably absent from the conventional progressive discourse in the United States today a lot talking on all three of these so let's let's say let's summarize them you know expanding beyond insularity the knowledge economy secondly what do we do about the precariat people who feel like super insecure in our system and then third you know the correct degree of financialization of the system and how to think about that um meet in that order slightly disjoined way let me just throw out a few a few thoughts on you know and again there all these place where I can question some of the premises and I don't think that's that Constructors I'm gonna sort of assume this framing is is essentially correct it strikes me that the place to look on the knowledge economy is very much on the on the university side so if we have this idea of knowledge that's something that's fundamentally positive some if I know something it doesn't mean that you can't know it too that that knowledge has the sort of extreme positive zero sum that's to it the question is always you know why there are lines around you know as you this is often sort of this expression you go to Gale or you go to jail and and you know we'd like that there to be sort of more of a spectrum on this what I what I would submit to you one of the challenges with the universities and the elite universities is that's not how they think of the knowledge economy at all and here's I'll give you the thought experiment if you were the president of Harvard University or Stanford and you had some fantasy of getting lynched by a mob of angry alumni angry students and angry faculty then you should give a speech something like the following the knowledge economy is very important it's something that we're doing a great job educating people for and obviously because it's such a positive something we're gonna triple our enrollment over the next twenty years will take us a while to build the buildings but over the next 20 years we're gonna triple the enrollment of Harvard after all you know in in 1970 you know there were about 200 million people in the u.s. it was mostly at Harvard it's mostly a us-centric institution now there are seven and a half billion people in the world it's a global institution so we're serving 37 and a half times as many people as we were serving 50 years ago and we're only gonna triple the enrollment or not we're not talking about increasing it by factor of 37 and you I mean I don't know how fast would be till you got fired and it's because the self understanding of this institution is yeah the propaganda is that it's a it's a knowledge economy it's a knowledge factory it's it's an educational institution the self understanding the real self understanding is this is a studio 54 nightclub and we have a you know we have a massive velvet rope with lots a long line of people on the outside trying to get in and the longer the line the more reassuring it is to the small number of people who are poor in and so so we have to we have to think really hard about the propaganda versus you know what the realities are you know and yeah in theory education is positive some inclusive it's something for everybody to learn in practice it's it's this crazy zero-sum tournament I think all of you are right you can go to Harvard you should I should go to Harvard you have to be very careful to go to a school ranked number xx or number one hundredth because maybe the Diploma gets to be a done set in disguise or something like that but but the system you know the system you know every time people use the word it's it's almost Orwellian you know every time people in these university context use the word inclusive they mean exclusive or it's you know it's things mean their own opposites all the time so so anyway I think the so I would I would redirect the knowledge economy question to to the nature of the universities they're very central in our system so I'm just giving some soundbite response as the you know the the pre carry at sort of the insecurities that people feel a slightly different way I would frame it is I don't think there's a problem with people getting jobs in our society you know the unemployment rates three and a half percent it's quite low it's just most the jobs don't pay very well for the land wage and and and then and then I think again the more nuanced version of this is that we have about half the country where it's um it's actually very it's very easy to afford to live but there are no jobs and then the other half of the country it's very expensive to live and there are jobs that pay moderately well but not too well and on average you're fine you know the median wage for the median house in the u.s. is actually perfectly adequate median house price in the US is $250,000 you know fifty sixty thousand dollar a year income you can easily afford a two hundred fifty thousand dollar house the problem is you know people aren't they don't exist in cyberspace they're not some sort of average median person living in an average median house you either live in a this high-cost megacity where you make some money but can barely stay ahead because that's sort of Henry George different problem or your or you somewhere else i i again i i i don't want to read a record all toward zoning laws and real estate but I think that's the that that is the that is the that is the real challenge if you look at other Western countries the ones that that I feel are the healthiest are the ones where it's it's not as centralized on the mega cities you know France Britain are even more screwed up in the u.s. because all just in one city London or Paris you know I think I think Germany is is relatively healthy Japan weirdly works you know centralized on Tokyo that the public transportation works so that it's it's like one big one big relatively affordable city but but the economies that are centered on these very big cities with extremely antiquated systems you know it's I think you're not gonna solve it until you rethink transportation or the structure of the economy and so that's it's not the only part of the answer but that's that's the one I would I would always I would always redirect things towards you know I think the let me see what say on the financial side i I think I broadly agree with you that there's you know there's a healthy role for finance and then there's a a degree to which an economy can become over financialized I think the peak of over financialization in the u.s. was probably 2007 when maybe half the profits in the u.s. were effectively made by banks or other financial firms and so if you so say like what what percent of the profits in the capitalist system should be made by financial entities and if my intuition would be ten to fifteen percent is healthy fifty percent is way too much I think the number today it's come down post oh eight but still maybe twenty-five to thirty percent so it's still too much but it's um it's it's it's partially receded and then what do you do about that but but it's not but it's not just a question of the distribution of profit right it's it's a question of the relation between activity in the capital markets and real economic activity increase of output or enhancer in the productivity so the problem is not the the the spec of the development in finance the problem is its dissociation from the productive agenda society yes but let's let's drill down that word dissociation just a little bit more and you know the most associated you can be the most disconnected you can get is in a purely globalized world and so I I often think the way to think of Manhattan in the United States is the financial center the way you should think of it pictorially is it's like an island it's off the coast but it's really a thousand miles off the coast of the US and the business model of Manhattan consists of people producing little pieces of paper that say you owe me money and we need that we don't it shouldn't be as big a part of the economy as it is the historical question is why did it get to be so big why did it get to be so extreme in 2007 and and again the you know sort of the simple simplified one-word answer I would have is globalization because globalization is what makes things the most disconnected it's not the local banks it's not even the national banks it's these crazy global capital flows than directly so you can think of um you can think of the banking system in the US as the mirror image of the current account deficit and so if you sort of plot on a you know x-axis is time y-axis you start with a current account deficit it was zero in 1980 when down to minus three and a half percent of GDP and 87 back to zero and 91 and then it went by oh six oh seven down to six seven percent of GDP and then in the oh eight thing it's now around minus three percent so I can go out just just picture the chart and then the mirror image of that is is a chart that reflects the dollars that flow into the u.s. so we're sending money out in the current account deficit the other countries aren't buying goods or services but they're sending us money back the money that gets sent back gets sent back to the banks and so the bigger the current account deficit the more money flows into the banks and so in 1987 banks are doing really well 91 when he was down 2-0 2000s now let's go broke Mike Milken goes to jail that's what happens when the current account deficit comes down the money runs out for banks the biggest current account deficits we had were an Oh 607 at the peak of the housing bubble eight hundred billion dollar a year current account deficit and the way that gets sterilized is that you have banks telling foreign investors eight hundred billion dollars worth of lies on why they should put the money into subprime mortgages and all this sort of stuff and you have this sort of globalized financial system and you know that partially broke in in oh seven oh eight it's it still has a long ways to go and so I would say again this is you know I'd say one way we get to a healthy financial system would be that we have no current account deficits then the banks will have less money they'll have less power over the economy it will be more localized but to get our current account deficit back to zero probably you know requires a set of policies that would be labeled as very anti-globalist I'm in favor of them but that's because you talked about you talked about one of the premises so that if Roberto Roberto was putting forward a basic one is forms of democratizing the markets such that every day people have access to resources so they can live lives of decency what is the strongest argument that you have or your strongest suspicions of various forms of democratizing markets well it's it's all even maybe you agree in your own libertarian way different ways of accessing private sector public sector and so well I think there are all sorts of forms of access that have to you one you want you you have to always be careful that the access isn't counterproductive so so for example at the peak of the housing bubble in Oh 506 you know more people underprivileged minorities etc had access but they ended up buying the house at the top of the bubble and so you have to always you know there's always a substantive question of how do how to best do this I would tend to focus less on the consumption side more on the on a small business side but then I think the but I think the anti-globalist version of this is if if the banks are these you know money center banks lending money on a global basis they don't care about the local community so if you're you know if you're if you're on Citibank Citigroup in New York City you don't care about you don't have to lend money to to people living great the five boroughs or anything like that you can go anywhere in the world so as you as you D globalize you know maybe maybe you're getting rid of certain types of efficiencies but it does push push it back towards this this much more local question mm-hmm questions in this corner and on the Left we go here here what about some sisters love's right here right here here in here already why I would say my leverage point we need to get rid of the current account deficit and then then the banks will be weaker well IIIi would never I would never claim that you you get rid of the government altogether there's that some of these things aren't you know profoundly political so on so on the you know you weak in the banks when you get to know trade deficits no current account deficits I believe that if you had free trade fair trade you would have very very very low trade deficits we don't have fair trade we have extremely unfair trade that's very asymmetric where you know we have few restrictions in our side other countries have lots of restrictions and and and the way the way this works is when you have this sort of unbalanced trade where we export a hundred billion a year to China and they export five hundred billion a year to the US it's um it's a subsidy to the financial system because the extra four hundred billion goes to the banks so that's number one number two it's a subsidy to US consumers because we got cheaper stuff from China but number three it's a sub it's a it's a subsidy to Chinese workers / US workers and so people have jobs in China you know you you don't get a manufacturing job in the US but you know you get cheap stuff at Walmart and and the you know if you if you had if you actually had fair trade and I think this does require a lot more political intervention than people have been willing to to enact I think all these things would rebalance it would be bad for banks would be bad for US consumers but it would be great for US workers yes I um there's I think I think if I had dropped out then I would get attacked for for not knowing what I missed so I think I get attacked either way either a hypocrite or an ignoramus so I prefer being a hypocrite to being an ignoramus you know I think I'm really neither and I think I'm neither because I think it's it's not the case that one size fits all and I I'm not I've never advocated that everybody drop out after the term we uses stop out because you can always go back the college is one of the ways to get evaluate is by what percent of people graduate so you can stop out of Harvard for five years they will always take you back because they're worried about managing those numbers but but so you drop out or stop out of college start a company I've never claimed that everybody should become an entrepreneur that everybody should do that I think it's important for our society and it's good for our society but I don't think everybody should do that I also don't think that it's it's that healthy for us to say that everybody should go to an elite college it doesn't work for the reasons we already articulated because they're running the studio 54 nightclub system and but I think I think I think fundamentally we need to have you know a you know a healthier society would be one in which there are many different good opportunities for people and and for average people for people at an elite level you know it's one of the one of the weird dynamics is that on an elite level you're told you know that you can only go to one of these four or five colleges then you come a lawyer a doctor imagine consultant or a banker and maybe maybe a sophomore person let's maybe that one's been added in the last decade and so the smarter you are the narrower the range of things are that that you can do you know the the analogy that I've often used for for universities is is that it's they are as corrupt today as the Catholic Church was 500 years ago on the eve of the Protestant Reformation and it's the same sort of stuff that we're being told you know the you have sort of the priestly professorial class that it's sort of very cynic iord you have you have runaway tuitions that are like the indulgences there's a Salvation story where if you get a degree from from Harvard you will end up in a good place if you don't get a college degree you will end up in a very bad place so it's it's it is like this is the Atheist church and and what I'm arguing for is a second Reformation and it's not to replace it with some unitary alternative system I think it will be you know I think it will be a whole range of different things I'm not you know trying to create you know a unitary alternative to the atheist church Peter could I could I just press you on that James in your in your in your answer to the to the first theme the theme of the insularity of the knowledge economy and the overcoming of the insularity but you focused exclusively on the educational element and especially the role of the universities now consider a historical comparison that we've taken up here in the course which is the comparison to the organization of entrepreneurial family scale agriculture in the United States in the first half of the 19th century the Americans created a highly efficient agriculture a family scale but with entre characteristics in other words it wasn't a subsistence agriculture and to do that they had to create a kind of agricultural market that had not existed before it was not simply the regulation of the market and it was not the abolition of existing regulation they actually distributed the lands that is they created stakes and assets that didn't exist before they did establish the land-grant colleges the equivalent to the universities that you mentioned but they then organized a system of Agricultural Extension that would bring the insights of agricultural science to the producer on the ground and they combine this with the invention of a whole set of legal and financial devices like agricultural income insurance crop insurance food stockpiles safeguarding family agriculture against the unique combination of economic risk and climate risk so in other words it was a large operation involving a combined set of technological organizational and institutional innovations associating the government with a small-scale producer and fomenting in the relations among the small-scale producers what today we would describe this cooperative competition that if they competed against one another but they also pooled resources achieving economies of scale now it's if we take this as as an analogy in thinking about the dissemination of the knowledge economy it seems that what we would need to do would be more ambitious and more complicated than this 19th century example not less ambitious and less complicated and that would then point us away from this regulatory minimalism to an institutional maximalism is does it doesn't the example suggest that we redirect our reasoning in that in that way well I think you can point to a number like even granting all your premises I think in point in in a variety of different directions the the the part that I that resonates very powerfully for me is I am I'm struck by how we live in a world in which people no longer believe in complex coordination of any sort and and that if you have something where you have a lot of different pieces that are coordinated in a very complicated way people instinctive reaction even if they're center-left you know trained at institutions like this will be that's a Rube Goldberg contraption it's never gonna work it's so complicated it will it will it will break down there's a there are the the 19th century you had governmental you had private public versions this you also had purely private versions you know the Second Industrial Revolution you know the Ford factory things like these they were innovations and complex coordination where you put pulled together you know a lot of different parts of the supply chain in a very complicated way to do something you know radically new at a at a very different efficiency and price point but I think I think we've we've given up on complex coordination in governmental forms we've also given up on it in private sector cash you know the private sector version is it's striking how few companies have anything like a complex coordination I think Apple was impressive because they had to build the whole supply chain in China to get get the iPhone and that's why nobody understood it nobody saw it coming because nobody thinks in those terms my my friend Elon Musk's Tesla electric car come you ever get a lot of different pieces together like maybe it'll work maybe it won't work but it's it's way more complicated than than launching an app on a on a computer from from your from your home sorry I'm very struck how we move away from in all forms of complex coordination I think part of it has to do with the failure of central planning in communism but but you know um I think that even socialism is better with a five-year plan and without a five-year I like socialism to five year plan more than socialism without a five-year plan and III believe that in general there's something we said some kind of planning and equation matter we had a question here already well I I it's a fair point I'm it's not something I'm I should maybe be more focused on it than I am I'm sort of focused on you know the the thin tip of the sphere where I think you know progress and the future are happening it obviously doesn't work in a context where the rest of the society falls apart where you know if the power grid goes down or thinking things just don't work that's that sort of the they're both they are both necessary now I the reason I would still always come back to the need for growth for innovation is I I tend to think you know I tend to think the two fundamental modalities we have is we can be expanding we can be growing or we can be stagnating and declining and and the maintenance part just keeping the lights on that that that part of our that part of our society will work you know less well much less well in the stagnant one just as much you know the places where we have you know the Flint Michigan where you don't have clean drinking water well it's also you you know it's also been a declining you know auto industry there for for decades and and and so I think these things are you know are super tightly super tightly linked in practice but what well I think well I think I think I think I think I think we're not measuring it properly so i think that i think the stagnation problem is much more serious than the economic statistics indicate because we are today most people's work is in the economy whereas in the 50s and 60s the work that women did wasn't measured and therefore things have progressed less since the 50s and the data would indicate so for example if you have a you know one income household with the wife raising the kids that only that one income gets counted as part of the GDP today you have a two-income household with a third person hired to do childcare and that looks like it's a much bigger GDP and and it actually is not so I think there are you know I think there are a lot of things that are very good about feminism but we should also not downplay the ways in which it's it's led us to an exaggerated view of GDP growth and doing even less well than it looks because the work of women was not counted properly in the fifties and sixties but there's a class issue I think this is very important here which is to say if we had maintenance workers who were organized who could threaten to strike then all of a sudden their plight and predicament would be much more the center of attention look at the Mait in the maintenance workers at Harvard it's so easy to overlook now let them all decide not to come in for two weeks Harvard comes to a stop where as Roberto and I go on vacation a few people notice but that's about it but these maintenance workers shut off place down but we've got such a weak labor movement that it's easy to have you you see the point I'm making do you agree with that well I can't speak to the heart I think the Harvard car we tell my workers in general workers into organized workers India in general I don't what cut you off but I mean I want to make sure to hear your voices heard these issues especially about workers organized yeah I look I think I think we have I think I think I think we have you know I think the private sector unions are relatively weak I think other sections are way too powerful way too powerful way too powerful oh they know it's it's a it's a giant scam right you got the privatize educational institutions running amok I I think that I think that you underestimate how it's a form of just massive intergenerational theft that's going on in all the blue states where it's the retired government workers that are being subsidized by that by the whole system in ways that everybody else would would not be so profiteers who were running to the bank in private schools because they've got access to unbelievable resources now some of them coming out of the state legislature she's got the public school start to work better than they are well that's another issue that's another issue there but we're talking about the clash of public private and the issue partly and this is very important because we really haven't talked about the culture of greed which is crucial no you know that's also a issue of who we are as human beings so we need some accountability of that but we have cultures that reinforce greed be it on Wall Street be it privateers and also bid in public sphere well you know if we want to go down the litany of mortal sins from medieval Catholicism you know I would I would I would not start with greed I would start with envy because that is the one of the seven mortal sins that is still completely Tabou and i believe that is the that is the cardinal one that Santa said it was the most odious of all the vices but great these days needs there is much more attention and envy but we okay question about wait a min Cornel just a minute I want to intervene in this social in this conversation and stand up for Vanguard ISM which just now it seemed to me you you didn't give the you didn't respond fully so so this this question of advanced technologies and advanced practices so we don't need 19th century technologies to deal with fundamental maintenance problems we need 21st century technologies and the the potential of these advanced technologies is to liberate humanity all of humanity as much as possible from routine work including cooking doing the laundry and so forth so that our time can be resolved reserved for the not yet repeatable and for taking care of one another for taking care of one another so the the advanced practices that we're speaking about are not for a narrow elite they're for everyone and what what we're discussing is how we get there how we get to the situation in which the advanced practices are widely disseminated and liberate an increasing part of humanity from the kind of work that can be done by machines no human beings should be condemned to do the work that can be done by a machine and that's that's the larger emancipatory promise of this vanguard ism yes yes or disagreement here is you're always focused on inequality I'm more focused on stagnation I don't think you know I don't think we have self-driving cars even in Silicon Valley they're not coming there people are too slow they're not working on it you always have a narrative we have this Google propaganda narrative I'm not narrowly focused on high quality and I think and I think a fundamental defect of the position of the progressives is that they cast themselves in this role this pietistic role of humanizing the project of their adversaries the force the commands the agenda is the force that most credible embodies the cause of constructive energy of creation of dynamism so so I'm on your side one other equivalent that I think the I I strongly agree that if you can automate something you should just automate it and shouldn't force someone to the drudgery of doing a job that can be done by a machine now at the same time let us acknowledge that let's say a job the way most people think of it is something you learn once and then can do repeatedly for the rest of your life and so there's a very negative way to rephrase what you said which is you're saying jobs are going away that's great you're just going to have to reinvent yourself every day for the rest of your life and come up with new stuff to do and that's what's scary to people that's that's what the prokaryotic feels like you know when I when I you know I was attacked here for just suggesting people become entrepreneurs that's way too scary for people that you shouldn't you should get off your you should get off your track job you should start a company that's people experience that that already is it's far too scary and I'm not I'm not I'm not even I'm not even judging that but but you know if you if you give the advice everybody should be an entrepreneur that would be so unpopular right because that's people want security they don't they don't want they don't want that degree of risk there was a question in the back in the middle yes and then back here why it's it's it's always it's always hard to have a systematic answer that I I I think I have a lot of people work with me who are do do give me very frank feedback on when they think I'm doing something that's crazy or wrong or or misguided I think you know it's it's a it's a sort of smaller office smaller office type dynamic which has you know a lot of crazy things that go with it but it's it's what we try to avoid and I think generally do is is the the large corporate political thing where there's never any feedback and so these in a large corporate setting you generally have you know you have you have sort of this new speak politically correct language people use to never actually engage in in the real issues I think the you know III do think this I I'm always hesitant to sort of sharply separate out doing you know the the non sort of a non profit from a for-profit thing I mean I think I think they're very different but but you should always be asking you know why is it what you're doing why is what you're doing good and I'm I'm somewhat uncomfortable with the the sort of shift where you make money and then you do things in a in a non profit context and it's sort of this the somewhat schizophrenic thing doesn't doesn't make that much sense but but again look the caveat to this and you know embedded in the system it's hard to be self-aware about these things and then there's a way in which the language always gets hijacked over time in ways that are very tricky so I think one thing that was very good in Silicon Valley a decade or two decades ago was that companies talked about being mission oriented they had some mission that was beyond making money there's about about about changing the world for the better today that just sounds hackneyed because it's sort of become this somewhat fake formula and so that's that's sort of will always be on the lookout for that that even the things that that are you know good and authentic and and to easily turn into formulas that are in practice are the only personal note just like the assistant even like myself - you have deep Christian identity and sensitivity and Sensibility how does that feed into your own witness in public sphere in the private sphere when we love to Rene Girard towering figure that he how does that fit in just briefly well I identify myself as Christian it sort of means you know I think the the the Gerard was his philosopher that I studied under at Stanford influenced me tremendously one of his key ideas was that a lot of what we do is involved imitation and we have role models and we copy role models and if you have you know if you have if it's the wrong role model you copy what other people want and then that leads to envy or greed not everybody wants what everybody wants is often you know this formula for for violence and and that what you you you want desire not to be horizontally mediated you don't want to just try to keep up with the Joneses try to keep up with the people around you that's sort of a violent escalatory nomadic dynamic you want it to be somehow transcendent you want to you know you want to look up to people or beings with whom you're not actually in competition but to follow Jesus that's that follow Jesus is to head toward the cross all right well the service that you give we get into well we get yes yes that's true and then there also are ways in which that that can get hijacked you know so it's hijacked by churches and so for communists oh oh we don't worry about it communists I do though I worry about them a lot we got more Christians running around damage creating damage and communist right now but even if even if we focus on both no I mean even if we focus on both you would agree that this this service that you render for the least of these yes yes and I also and I also worry about the people who use that rhetoric different way that solutely quested in the back with your brother that birthday that's right okay there you go well I I guess my my intuition is that that sort of more advanced technological civilization probably becomes becomes more complex and then to the extent we're not able to deal with it and I think you know the 737 thing seems quite disturbing it's sort of like the question you have is can the u.s. still build airplanes are we still capable of doing this have we we're happy and so I'm I'm you know the optimistic way to frame it is things are getting so much more complicated should we slow it down a little bit and my more pessimistic worry is wow things have gone so much that our country can't even build airplanes like it used to and and that we have a we had this shipped you know away from complexity and there's always these questions you know why this stuff why this stuff has happened the you know one explanation I would have for the shift away from complex coordination again I'll focus on the Silicon Valley near of Silicon Valley context that I feel I understand best is the only game in town for the last quarter century has been consumer internet which are then you know websites they're easy to code easy to do it's nothing super complicated about any of these companies they get more involved as you scale them but very easy story does before it's not like building an airplane or or you know a rocket or or anything anything like that and and the question the the sort of the competitive question I I do wonder about is is whether this shift towards less complex consumer internet forms of technology was because all the more complex stuff we're gonna get beaten by China you're gonna get beaten it's not allowed on a regulatory basis for some reason people have figured out that the more complex stuff doesn't doesn't quite work you know you off you often want complex things to be protected with intellectual property I think electoral property doesn't protect you your best bet is ok I'm gonna do something really simple it'll take off exponentially it's gonna take over the world it doesn't matter if I have no copyright protection because um because because it'll be the brand or the scale that protects me and so you know I'm not against consumer Internet companies and not against what what what Silicon Valley's been doing but I I find it much more disturbing how how how they're all these other things that have not been done in Silicon Valley or elsewhere we had this a pro tech manifesto about almost a decade ago where the the tagline was you know they promised us flying cars and all we got was 140 characters and that was not meant to be a narrow critique of Twitter I think Twitter's are perfectly you know successful good company the two or three thousand people who worked there have you know well-paying jobs that are pretty safe but but we want to be doing more than that I would still like flying cars even though you know maybe maybe maybe not made by Boeing yes well again I might my um my framework is not an egalitarian framework so that's not that's that's not the question I was answering I think the my framework is charismatic it's about role models it's about you change things by by changing the culture by setting examples and and so I think there are all sorts of ways to reduce inequality in hiring or executives or things like that but that will not change the culture from my perspective and what I was trying to address was how do you how do you ship the culture in Silicon Valley on this and I think there are things you can do that can make it seem more egalitarian or make it more gal tear in certain ways but the way you change the culture is that you know that you have that not all the founders of these companies are white men but but you would admit though just in terms of defending Liberty for all that there are sexist and and racist and even homophobic impediments as part of the nepotistic system at various sites that make it difficult for people who have been marginalized even a gang assets to those networks let alone capital and credit and so forth this empirical question I'm not gonna know I know obviously we still have all sorts of forms of you know it's all embedded in history history domination if we get past we don't have we can have lots of debates about what one should do about it but but I'm there's no part of me to questions the history so you agree with my greeter history well I was trying again - were just practically you know what does one given that history what does the one then attempt to I still think you have to somehow start yeah in Silicon Valley you have to start a company what's it in the back oh we got a brother hunger in the house so good to see this is one of the brilliant brilliant bringing children up a bird oh my god I gave it up give it up sorry to out you like that you look t did they look just like each other you all right [Laughter] well I'm again this is where I'm I'm I'm very skeptical about the limits of what what one can do institutional I mean there certainly are all the sort of regulatory stuff there the housing costs there all those kinds of factors they're normally fine in the in the smaller smaller cities I would let me let me try sort of an intermediate rephrase the question try to answer a slightly different more intermediate level questions so I think it's maybe not a question of you know you know how do we how do we bring innovation from Silicon Valley to st. st. Helena or whatever in Mont Helena Mosman how do we get it to Bozeman to small town of forty fifty thousand people it's it's how do we get it to these intermediate scale places like you know Atlanta or Denver or st. Louis or or Houston or Dallas which is I think I because I do think there's there's you know there's a network effect there sort of there are there are certain dynamics of scale where you know you need you need things to be happening for things to happen you need a critical mass of talented people to to be able to do things and so I don't I think the innovation can be spread well beyond these three or four places whether it can be spread evenly throughout the whole country that seem that seems like a much much harder task and I wouldn't let that much harder task it shouldn't distract us from trying to equalize it beyond these these three or four places you know for what it's worth I I think we are we are just about at the breakpoint on on on Silicon Valley and even though this is very boring it is just the housing costs you know when it's $2,000 for one-bedroom apartment in 2011 in San Francisco that's what you have in a gold rush town comes with the territory when it's four thousand dollars for a one-bedroom apartment that starts to become you know a ridiculous tax that that that is going to push people elsewhere there's a there was a there was a discussion I had at Stanford University early 2005 the question came up where will we find the next Google and sort of a search problem very interesting students investors where do you find this next the next big a Google company and you can't type it into the Google search engine anyway my my my um like somewhat obnoxious but I thought still accurate answer was I thought there was a 50% chance he would find it within five miles of the auditory and we were speaking at Stanford you know you could argue that the next Google was Facebook Facebook was located one point eight miles from that auditorium 1.7 miles by bike now if I give if I had to give the same talk today in Silicon Valley I would say it's way less than 50% chance that it's anywhere in Silicon Valley and so I do think I do think things are going to be somewhat more distributed in the next decade in the decade ahead I think there's certain you know there's certain monopolies Silicon Valley had on knowledge of how to start companies or the capital was all concentrated and I think I think those are those are much less robust and and as a result some of the more negative effects of because they're not actually gonna build more housing the zoning won't get fixed the negative effects will dominate the positive and and I would bet on on parts outside of Silicon Valley even though I wouldn't necessarily bet on Bozeman Montana not criticizing it either it's look I think I think all it's probably anchored well like I don't know I still don't know if there's a political intervention on a mayoral level Atlantic City is sort of a again sort of unusually messed up place you're just asking me really hard questions here you know it's like yeah you're addicted to to this corrupt casino based tourism and that's that's obviously better than most of the other things you could be doing even though it's it's sort of less good than it used to be because other people figured out to do that as well so that's that's sort of why you're stuck in Atlantic City and then and then to to get something else I tend to think it ends up being anchored on you know on a on a small number of very successful businesses I don't know if it's it's not a you know it's not a gala terian it's um you know people might be created equal corporations are not you know some corporations are much better much more valuable than others and and so in practice it's not you you know we need to let a hundred flowers bloom have a hundred different companies it's we need to get you know just a few that really breakthrough that really succeed and and that's the that's that's the kind of answer that that politicians don't want to hear because they want to talk about you know small business in the sense of letting one hundred flowers bloom they don't want to talk about in the sense of having you know a few local champions that that really drive you you would admit that certain conditions under which certain monopolies and oligopolies of very dangerous like like Harvard there's a lot of example but I'm thinking in the private sector as well it's not just the private sector we shouldn't always just what you've got we got this hand going man I I think I think that there's a lot I can say I've known Ilan for close to 20 years at this point I think that you know he's working around the clock on he's CEO of two separate companies he has five children I mean it is it's like a 100 hour a week workweek and I mean he does so much more than I do that I I would I would never you know I would I wouldn't want to kurtis criticize Ilan for not doing enough you know it's maybe maybe he's doing the wrong things but but the the intensity is is is really extraordinary of what what he's done maybe it's too much but it's definitely not too low I think um well I I I'm hesitant to sort of go through all you know other people's you know other people's motives and and whatnot I think I didn't say can't I just said I was pessimistic about it it's hard it's very hard and I guess I guess I guess the I don't know I think I think the the naive version would be is um are the universities are they like a corporation or are they like a government and so corporations if they're too screwed up they go bankrupt and and then you have new corporations for government to go broke it's really bad and so you can often have a dysfunctional government that persists for for a very long time and I would submit that that the universities are more like the government than like a private corporation and the the proof of it is that our top universities are still the same as they were 200 300 years ago and that that suggests that it's incredibly hard to change things it's incredibly hard to shift the pecking order if you have something that's that robust it's probably somewhat insensitive to how well it's run how good a job it does or all these things you know it's just gonna keep going that the brand is so strong III had this I had this idea of starting a new university nonprofit that I want to do 2017 via the one you know one really big idea but one of my colleagues spent a year and a half and she looked at all the universities that had been started in the US and the preceding 100 years 1907 to 2007 and it was basically a saw retail of money wasted donor intent betrayed just failure and there were some there were some small smallish things were sort of idiosyncratic but sort of general all-purpose University there's not been a successful one started in a hundred years and that tells you something about how incredible power powerful the network effects brands what have you done things to sansar and then my my suspicion is if you have you know if you have an immortal being and the universities are fundamentally immortal it can be very corrupt it doesn't die even if it becomes very corrupt that's query and there's a use culture in this very broad sense so there's you know there's education there's all the regulatory stuff that I would I would I would tend to drill on there's you know there's a somewhat new agey version that I also inclined to think is part of it even though it's hard to know how important it is but that that you know there is a lot of learned helplessness people don't think they can do things and therefore they don't do things if you think you can you will if you think you can't you won't you know it's the power of positive thinking is not necessarily you know enough to it's not necessarily enough to solve problems power of negative thinking that is really power well it's always dispositive if you think you can't do something you will definitely not not do that and and I think that is you know that's sort of again there are reasons for it but but sort of this this the the the widespread sense of learned helplessness is if I could made wave a wand and change that I think that would be super-powerful and you know I want one of these sort of New Age things I've started to just ask people there's starting companies is uh it's sort of a stupid question but it's just tell me what's gonna happen with your company and and you know and from the answer you can tell whether it's going to succeed or not it's a I mean it has a surprise a crazy amount of content so we we have to end now but the enhancement of agency this theme this is the ground on which the right and the left can meet and make common cause against the center yes is that this is like I think the BAI narrative culturally what I don't like about AI is that it's a it's it's that machines are going to thank because humans aren't because we don't want humans to have agency we don't want humans to think we want the machines to do our thinking for us it's the opposite the machine should do the repetitious that we can do the rest yes but that's

Channel: Roberto Mangabeira Unger

Views: 76,867

Rating: 4.9001513 out of 5

Keywords:

Id: h2TrRWAkbr8

Length: 112min 0sec (6720 seconds)

Published: Mon Mar 18 2019

Reddit Comments

[u/torontoLDtutor]

The instructors are Roberto Unger, a critical legal theorist, and Cornell West, a critical race theorist. The course is titled "Political Economy After The Crisis."

The first 15 minutes is Thiel's expositing his views on the American economy and then about 15 minutes of exchange between Thiel, Unger, and West, focusing on them criticizing his libertarian views, and then it goes to Q&A which is just maddening to listen to. These students should be embarrassed...

A few highlights:

Thiel compares universities to the corruption of the Catholic Church in the 1600s

He says public unions are bankrupting blue statues and someone boos him

A triggered feminist accuses him of being anti-free speech for bankrolling Hulk Hogans lawsuit against gawker at around 44minutes

the whole thing is worth watching imo

[u/Brozac11]

This was a really good listen. Thanks for sharing. I thought Thiel held himself well against a pretty unsympathetic audience. Thought the conversation was productive and respectful for the most part,

[u/warmind99]

Financier here, absolutely love Peter Thiel. He wrote both The Diversity Myth and From Zero to One, which are both imo some of the best works in their classes (philosophy, entrepreneurship). Also, afaik he was the deadass first person to call bullshit on the universities, all the way back in the 90’s, predating Sargon (no. 2) by like 12 years or more.

[u/[deleted]]

What a shame, really :/