Peter Thiel and Andy Kessler on the state of technology and innovation

resolved as a source of jobs and cultural renewal technology has proven and is likely to continue to prove a terrible disappointment speaking for the resolution more or less Peter teal speaking against Andy Kessler uncommon knowledge now welcome to uncommon knowledge I'm Peter Robinson a graduate of Cornell University and eCos ler worked as an analyst in New York before moving to Northern California to found velocity Capital Management which during the 1990s turned investments of 100 million dollars into more than 1 billion dollars since leaving velocity mr. Kessler has devoted himself to journalism he appears often in publications such as Forbes Wired and The Wall Street Journal and he's the author of more than half a dozen books including eight people and other unapologetic rules for game-changing entrepreneurs although the founder of the teal fellowships which each year award college students $100,000 apiece to pursue business by quitting college Peter Thiel holds both BA and JD degrees from Stanford University a co-founder of PayPal and Palantir mr. teal was the first outside investor in facebook among his other activities he now serves as a partner in the founders fund and the president of teal Capital Andy Kessler Peter teal welcome Peter teal in remarks to the international students for liberty I quote you how much technological progress is actually happening is it getting faster and faster or actually decelerating and in some ways slowing down a great deal the basic conclusion that I've reached is that outside a few areas we've had very little innovation in 40 years Peter 40 years has taken us from the Ford Pinto to the Google driverless vehicle explain yourself well if you if you look at if you look at the last 40 years we've had tremendous progress in computers and very little progress just about everywhere else and so if you look at the most most straightforward way to measure how fast we're moving is literally how fast are we moving and travel speeds had gotten faster century after century decade after decade we have pasture sailboats in the 19th century faster trains than faster cars faster airplanes it culminated with a Concorde was decommissioned in 2003 and today if you include low tech airport security systems we're back to travel speed circa 1960 in energy there's been a massive failure of innovation which is reflected by the fact that oil prices and energy costs still have not recovered from the oil shocks of the 1970s an inflation-adjusted dollars it costs as much as it did in the Carter at the end of the Carter years today despite fracking despite the drop out natural gas without without without fracking it would be even worse but but despite fracking we're basically in a Carter age energy crisis you look at biotechnology we probably have about a third as many drugs being approved by the FDA per year as we're being approved 20 years ago and so you can go through sector after sector and say the technology has not lived up to its hopes we certainly can hope that it's going to start to accelerate and that we're on the cusp of a new golden age which is what we're constantly being promised but Andy cancels about to make that promise i but i think i think that after 40 years of of hype and fail disappoints failed expectations the burden of proof has shifted very much towards those who claim that we're about to see a lot more happen and I think I think this slogan is of course reflected in the economic data we've had generally stagnant wages since 1973 mean wages have been stagnant median wages have been stagnant mean wages are up maybe 22% and so there's sort of it is reflected in the sense that things are not getting better for a lot of people 80% of the people united states think this country is on the wrong track and the next generation will be less well-off in the current generation which is radically at odds with this sort of cornucopia technology future that we're constantly being promised all right before I want to get to the PC wrote in The Wall Street Journal this past summer in which you mentioned specific segments of the economy that you built that you think technology is about to reinvigorate but first a kind of opening statement from Andy Kessler quote history shows this is you in The Wall Street Journal as well history shows that better higher-paying jobs are always created by technology history shows that you just heard what mr. teal here has to say has he shaken you just slightly you know I think Peter is on to something and in the physical world in the in the outside world in that you know technology both digital technology and in the physical world technology goes through these massive long run cycles so 1859 oil was first discovered in Titusville Pennsylvania in 1870 Rockefeller started drilling oil and it took till 1973 when the OPEC oil shock sort of spiked the prices that we've never really recovered from and so all of the physical world wants in terms of faster cars and planes and trains and the like are sort of stuck in this high energy world and it's sort of very difficult to break that barrier go 100 years after 1857 1900 at 1859 1959 Richard Fineman at down in Southern California famous physicist says there's plenty of room at the bottom meaning you know go smaller and smaller and find your innovation which which which remember the integrated circuit was invented in 1958 - the year before and and so that and Moore's law sort of sort of Moore's law is Moore's law says that the transistors and electronics gets Cheaper by half every 18 months orden Moore is a was the founder of Intel and so we are she's we're not even close we're 50 years into that cycle and and you know III think that the beauty of the digital technology cycle is that it drives productivity just like cheaper energy drove productivity of moving people around moving Goods around set up globalization and all the the great labor saving devices that that we all enjoy today whether it's our cars or dishwashers or whatever else where we waste energy to move things around you know we waste technology we waste transistors we waste bandwidth to get all the productivity out of out of our computer systems out of our iPhones and the like and therefore spit out free capital to go invest in whatever that next wave of technology may be let's get to a few of the specific segments of the economy you mentioned in your piece the Wall Street Journal and three-dimensional printing first of all what is 3d printing well think of a laser printer sitting on your desk that would you know scan a piece of paper and put little droplets of ink on it and you and you have a printed page a 3d printer just does it in three dimensions and instead of just ink it can solidify various materials and so you can use your Autodesk software on your PC and create a 3d object and hit print and and perhaps print out little pieces of plastic that broke off on the handle of your door and rather than spend a thousand dollars to replace the door of your car go to some shop and say you know I need this little thing here's the 3d model of it quote next year this is you next year we will see the appearance of Cheaper 3d printers and the growth of an industry why is it why is it that in others I was happened on one form of 3d printing I forget the name of it laser sintering something something along as I forget to put that once that patent is up then you're gonna see 20 entrants who use this much cheaper form of 3d printing and so by the way 3d printing just like laser printer the first one was $17,000 and now they're $200 or they give them away it's going to take a number of years for 3d printers to get cheaper but like laser printers assured in the era of anyone could be a publisher anyone could start a magazine anyone can publish a book more or less I think 3d printers will we'll drive increased jobs by small shops you know every little town wedding right like an auto shop there'll be a 3d printing shop hey I need this this broke off on my vacuum cleaner this broke off of let alone people who are creating new objects that can't even think updates it's things that can do new things are you feeling more cheerful well I think look the claim is not that there's no innovation happening or that innovation is altogether dead it's just that it's been it's been slowed down and so I think the the thing that's very tricky with all of these innovations that are happening or that may be just around the corner is to have a handle on how big they are really so how many jobs will it create how much will it add to the GDP and the amazing thing about Moore's Law which has been a phenomenal driver of the computer revolution for 40 years is that it has barely moved the dial in terms of median or mean incomes and so there is this so it's it's it's significant from a perspective of computer science there's been enormous progress and it has certainly transformed certain industries and it's transformed the culture in some ways but but it's not actually it's not shown up in the economic numbers and what I what I would what I would submit to you is that when we think of a world of stuff and a world of bits atoms and bits that atoms are somehow more important I've been involved in the computer industry the finance industry for 40 years we've had a lot of innovation computers and finance probably have less than financed by the way since that's getting outlawed right now yes but but in the world of stuff that has been outlawed by government regulation systematically for the last 40 years it's been environmental rules and and and so going into science or technology was generally a very bad idea for the last 40 years if you were went to nuclear engineering that was a bad idea aero-astro engineering bad idea because because there were no jobs because and dissipate they just said well let's pursue this point about regulations I've got a quotation for again this is your speak you Peter speaking last year we've had incredible progress in areas where there was no regulation and extremely limited progress where there was regulation it's not that we've run out of ideas it really is a story of two different economies that's a slightly different argument from the argument I understood you to be making maybe a failure of my understanding at the beginning of the conversation that is to say technology isn't failing us the government is getting in the way well I don't think there that the claim is just we're having less technological progress the question why that's happening could be because we've run out of ideas it could be because the government's out long it I tend to think a lot of it has to do with government regulation but the fact remains that we have less technological progress you we have no energy innovation you can't you can't you can't travel faster things like that because these things have been outlawed let me give a good gene therapy you're right the era of gene therapy is upon us back to what Peter said for that you know that energy which is a highly regulated industry and biotech you know there have been very few drugs that have been approved which I agree billion dollars for the FDA per per drug point three billion dollars to get through the FDA process and and but the the problem are I agree are both on there to over regulated industries but the problem specifically in the in the pharmaceutical and biotech business is that drugs that get developed tend to be one fits all and and you know there may be a disease that there's only a hundred thousand people have but there's a drug that comes out and has to have both safety and then efficacy and very few things do the beauty of there's a there's it's not so new but it seems like the time has now come for something called gene therapy where do you basically hack a gene and you take a ineffective virus injected with the correct DNA that you can then inject back into a human and then that DNA will do the repair on a disease so so you know it's early in dogs for example they've you know eliminated type one diabetes so let's hope that that can be used in humans as well but instead of a mass-market like statins for heart disease which I think are is a lot of baloney I don't link statins which is a ten billion US dollar business does a heck of a lot of good however with gene therapy its instead of a mass it's mass customization is you have the tool like 3d printers are tools for molding plastic you have tools in every hospital in the United States around the world and when someone comes in for the disease they go here's your specific DS now when a disease that now we can have as an individual gets treated well and with a specific gene therapy rather than here's Herceptin or here's a statin or here's you know an aspirin which is just as good as most other things and how is that's gonna change it's early but you know the the the piece that I wrote about job creation I think 3d printing is sooner this is over the next ten years I think gene therapy will become reality within the next decade and and I think will literally change how disease gets treated you know the jobs that created of it will begin towards the end of those ten years but I think it can be explosive Peter well it's you know as a venture capitalist I would say one of the enormous challenges is that there almost no patent nobody left investing in biotech companies and if you look at the life science in gene therapy well it's generally life science funds biotech lines have all gone out of business because they've made no money for the last 15 years and so so I do think you have this complicated combination of a scientific progress which may be there but a regulatory context which is which is really quite deadly and I do think I do think it no longer really captures the imagination of our of our broader public so when Nixon declared war on cancer in 1970 and said we defeated by the Bicentennial by 1976 43 years later we're you know 43 years closer to the goal by definition but perhaps as opposed to John Kennedy's saying that we would put a man on the moon by the end of the decade and we did within six or seven years exactly but you could not imagine Obama for example today declaring war on Alzheimer's even though one nobody with 85 are suffering from incipient dementia and so and so I think we are living in a world in which people's expectations for science and technology have been dramatically reduced and you can just contrast the way we think about Alzheimer's today versus the way Nixon could talk about cancer in 1970 except for one thing which is I want to go back to something you said before that that technology hasn't really affected the general population whether it be household incomes have been stagnant and I like I think technology you know increasingly behind the scenes we sort of take it for granted has increased living standards even in the physical world you take an automobile and compare a 2014 shiny new Camaro and compare it with a 1969 rs/ss Camaro I love them both is rip it out and there are a hundred different microprocessors in the 2014 version it's safer it gets better fuel economy it's more comfortable the music is better though right v Dolby portrayed Dolby just passed away you know there's there's all sorts of innovation that has increased living standards even if on a real basis those two machines cost the same and therefore it doesn't really show up as you know a increase they make all sorts of hedonic adjustments though and this is and if you look at measuring in measuring way measuring in places and I think the argument normally that I would make is the hedonic adjustment is actually too big it's sort of a plug the government likes to put in to suggest that it's not printing as much money as it is well and so and so I think you know and I think if you look at things like the gold price which you know I'm not necessarily a sort of a gold crazed about gold but if you look at that it suggests that there's been more inflation than people think and that somehow these hedonic adjustments have consistently been overstated yeah but but again so that's the automobile so something in the physical I I agree that that for the most part energy and pharmaceuticals have been left behind but looks like let's take the automobile if I agree it's changed significantly in 40 years but look at the 40 years before then and if you compared a Camaro from 1968 60s to Model T in the 1920s that's that was a bigger change 40 years before from what we've seen in the last 40 years if you get self-driving cars I can see that would be a big change but that's again something that's in the future there was a people well okay maybe in the future but there was a piece in the journal earlier this week Mercedes says within five years they're going to have these we'll see if there we will see if they're alive okay so the regulatory problem okay all the regulatory one it's obviously go back to health care you know just think of laparoscopic surgery and how much different you had a gallbladder issue you were in the hospital for two weeks now you're your you know little chopsticks in a couple little holes it's fixed and you're out the next day same thing with stents for for a heart effect be less and less people die of heart attacks there's one big fear is you know you have a hard job you have a lot of stress you're gonna die have a heart attack it doesn't have you know ulcers are long gone and so I would argue and and you can't point to any government statistic I don't believe that could show this but standard of living 'z have increased from 10 years ago from 20 years ago debate is whether the rate of increase has the rate of increase is it accelerating or is it decelerating if you look at life expectancy it's going up but it's going up at a slower rate than it was in the early part of century life one more one more big segment of the economy robots Andy Custer quote robots might bring back some mass manufacturing from offshore but the real upside is that they can do things that haven't been done before there's a very amused to the imagination I'm hoping of mr. Teel here can you fill that out and well think of the 3d printer comment it's the same thing as is you know we have robots have been been used in the automobile industry for welding and things that are unsafe but now you have devices that are twenty thousand dollars that in effect if they're run a couple shifts are $4 an hour devices so everyone's scared wow this is gonna get rid of workers and you go know it you know everyone thinks of robots as the the mass market you know pick in place and move as opposed to something that's programmable and so instead of mass market I think the world is moving towards mass customizations we have the tools so that we can create products and services that are customized for individuals and and robots not in China and not in Japan and not in Korea but sitting in our own country that can be programmed to come up with devices and services for people I think is a huge change and will lower the cost of these customizable huge change it's again it's certainly been over-promised for a long time so the history of robotics we have the Jetsons we had you know Rosie the robot and the Jetsons it's still I think we still probably I was talking to people to Columbia robotics lab a few years ago when did they expect robots to be able to fold people's laundry and um not in our lifetimes now it's possible they're too pessimistic but certainly after 40 years of overhyped predictions one has reasons to be skeptical I'll give you know one example you know children who have that problem as well not in their lifetimes will they ever fold their laundry but go ahead one example well you know one does think of Japan as a country that's very advanced in robotics and the Fukushima nuclear disaster this would have been something where having a robot go into the nuclear plant and and fix it would have seemed like the most straightforward application of robotic technology nothing like that exists we always we have this fantasy this the sort of technology exists it's just not there yet our wars are fought with robots now right I mean they're flying robots and there are crawling robots and which which changes the lives of soldiers etc if I switch to shift to one industry with which you are both dissatisfied higher education the teal fellowships not only are you a Stanford VA and a Stanford Law School graduate you teach at Stanford and yet the teal fellowships take kids and give them money to get out of college how come well I think well first off my claim has never been that nobody should go to college the claim is that we need to thoroughly rethink education and it has changed quite a bit in in recent decades where when Peter you or I went to college it already cost a lot the cost have escalated dramatically in the last 20 years and so the question of what the cost benefit is is is quite different when kids are ending up with a hundred two hundred thousand dollars in student debt and it's sort of a rocks them into into sort of careers that are perhaps they can't take much risk in their jobs or anything like that because they have to just basically pay off these debts and returning the next generation into a class of indentured servants who are basically and be paying off these these college loans but so but the the point of the teal fellowship surely you believe more than you're trying to set an example I think I think people need to rethink what they're doing very hard so there are cases where it's worth going to college if you're getting an engineering major if you're studying some of these areas where there actually are applications for it it's it's perhaps still worth it in most other areas it needs to be rethought very very hard and and one of the symptoms of the education bubble that we have is that we assume it's an absolute good you don't need to worry about the specifics it doesn't matter whether you're studying computer science or underwater basket-weaving they're all the same because they all lead to a diploma a college degree and that's the ticket to a better life and and I think when these bubbles unwind you cut away at the abstractions and you start focusing on what's actually going on and when we were going to focus on what's going on the years ahead I think we will find that most of it has not delivered the goods it promised Andy Kessler in the Weekly Standard quote over half of college graduates with bachelor degrees who are the age of 25 or under don't have jobs or are unemployed what's the problem you continue the huge disconnect between what colleges are turning out and what employees want in new hires we have over 4,500 colleges and universities in this country how did an entire sector of the economy get so wide why haven't there been adjustment what's going on why is this so out of whack well with economic usefulness part of wasn't the market working it's part of Peters disconnect which is you know we're stuck in an age-old education system where a degree is a degree when you graduate and and the problem is there's still a lot of art majors and even math majors you know you come out with a math major where there's not a math job now maybe that applies to engineering skill and programming skill well fine but but you know there's a big debate whether liberal education should liberal arts should stay liberal arts or whether something like engineering is considered vocational every time I say you know we should have more specific job training job training career training in schools and oh you're talking about vocational schools I get you engineering is an occasional school you go well when you're paying 250 grand over four years for for school and it's now more than that you you better come out with something that at least launches you towards some sort of career so I think that's one big problem with education the other one is that you know technology always is about taking the Best of Breed if you by Oracle software you get the best of breed of the service and then it's multiplied everyone gets the same you know Best of Breed software we're in education it's the most unproductive business every college has a history professor and an economics professor some are good some are bad and so I'm a big fan of online education where you can take the Best of Breed and digitally deliver it to students and I think have almost a better learning experience you know yes there's small group discussions and things that need to be replicated which how University a place but so much of universities are big lecture halls where people you know fall asleep in the back at least I did and and take notes or it's one guy takes notes and everyone else copies I think that can be eaten into with okay you manage okay no you love Stanford I happen to know that you love Cornell you have your you have a boy there now yeah all right two kids they're not one kid one kid at Cornell what should Stanford do well Stanford is positioned reasonably well because it has a heavy engineering focus it's sort of well well plugged into the new economy in Silicon Valley and so they're probably under less pressure than any other university in the United States the the top universities function in many ways as a sort of tournament credential and then it's it's unstable well so if you went to a place like Stanford or Harvard a question would be how well would you do if you were smart enough to go there but didn't go and you actually would still do pretty well and then if you go there people know you went there you do really well and that you separate out how much people learn the learnings maybe 10 percents if you're a high school graduate let's say you make 40,000 years a high school graduate eighty thousand years a Stanford graduate if you got into Stanford you'd make sixty thousand if you got the Stanford degree you get seventy six thousand and if you actually the learnings only four thousand so I agree that the sorting mechanism agree that the online curriculum is an interesting part but it's only the four thousand dollars it's only ten percent most of it's not about learning most of it's about a zero-sum tournament and the way you can see it's a zero-sum tournament is that these colleges never want to expand the number of people they let in what sort of a business is it which is a fantastic business for sixteen hundred students a year but the sixteen hundred first student that's a terrible the only business I can think of like that is maybe if you're operating a night club in which you limit the number of people you let in to make it exclusive so they are in the business of exclusivity you're in the business top school and and in that sense education is actually not a positive sum game about learning and information but a zero-sum game where it's basic and it's basically pitched to the various parents to try and knock out the other kids from other parents and some of that is a regulatory issue as well because you know go to go to any HR department of a fortune 500 company and and say okay how do you hire people do you give aptitude tests to incoming thing and the answer is no we're not allowed to give aptitude tests well why not well it's complicated goes back to the Civil Rights Act 1964 and some Griggs versus Duke Energy it's a it's a it's a long story but they can't but who does give aptitude tests universities and so universities I agree with Peter hunter percent are a sorting mechanism I like the tournament of Education some tournament yes it's a sorting mechanism the soon to appear in a column by antique and by the way a needed sorting mechanism but if if corporations were to give universities we have wither yeah 15 minute I Q test would not cost you a quarter million dollar semester and four years of your life so I'm not long ago talking to an executive about how he did his searches and why don't you and you know the story it was Stanford plus the Ivy's and Cal and a few others why aren't you recruiting at Ohio State or little liberal arts institutions which we all know are very fine institutions in the middle of the country upper Northland look I'm sure there are very bright people out there but they're going to have to find me at Stanford and and Cornell and so forth I can find them this is the sorting argument you're making so so what happens we go from 4600 universities as online education begins to unfold to Stanford and Cornell and nobody else what happens I think the the top elite universities are in the best shape because they are they they have an advantage from the sorting mechanism that exists I think all the others are going to be under pressure it's it's unclear what replace how the universities are in the best shape because they're to the top universities not because they actually do a better job of education because that's what people want to they want it they want to have a credential from a top university because it is an IQ test in disguise yes and you subscribe to them well yeah but but forget about colleges and universities let's go back let's go to K through 12 you know this is more online education is about eight great it's about getting the best of breed - you know seventh graders eighth graders 12th graders or lem's graders anyway before they go off to college and and and restructuring how that is done because that is the most inefficient unproductive and and you know tenured so you you get people who nail it in for decades as teachers in the K through 12 system and you're optimistic that online education will we have the same transform K through 12 the same problem Peter's energy and pharmaceutical it's a regulatory issue anything that touches it well this is this is of course this of course the challenge is large sectors of our economy our government-run quasi government run and so you know if you define technology's doing more with less Moore's law more computing power with less at less cost education it's the opposite we're doing less with more we're spending more and more money the quality of the public school teachers has steadily gone down so you're getting less for more so it's actually moved in the opposite of a technological direction you had a quiet if you had sort of a diagram said the most technological things are the things that where there's the most improvement more for less education is at the far opposite end you'll be pretty close to the bottom yeah so I'm not even sure how to formulate the quest for me late it I'll stumble along a little bit and then you can tighten up the question for me but you would expect online technology to overwhelm online education to overwhelm the regulatory obstacles the teachers must I'm less convinced to that in five years in ten years ever I think at some point the system just collapses on the on the higher education side it's not clear what will replace it but so this is this is you're waiting for Eastern Europe in 1989 you're waiting for the Soviet Union in 1991 just wow I think the institutions are not open to reform internally oh really okay so it is like were the music companies open to working with Napster in 99 2000 was the New York Times interested in really going on the internet in 2002 or were they just breathing a big sigh of relief that the 90s were over and the internet was fake and nothing was going to happen I think the universities as well as the public junior high schools high schools are are going to basically you know fidelity as long as they can but we need a crisis so so a year ago right now the Chicago Public School teachers went on strike and Rahm Emanuel the mayor of Chicago just after the Obama rather new mayor of Chicago Lee III formulated some that I then published later saying this is great what he should do is pull a Ronald Reagan and fire all of this Chicago public school teachers and issue every child a iPad and with the software honor with all the curriculum that they need and have them come to school and work on it and an education would cost of what it was to pay for the teachers you look at the salaries of the Chicago Public School teachers and they all right now or as 80 $90,000 let alone that the the pension cost of course it didn't happen but but we're gonna need something along those lines where there's a trigger to say you know what here's here's a group that did use online education and actually their outcomes are better than those in the public school system maybe it will happen in inner cities where where education is so bad and and and iPads and whatever else gets so cheap that that is how education does I think it's going to happen outside the US and be successful and then come and invade the US are are we in an internationally nation-to-nation competitive environment that is to say what happens in who knows about China but let's say Singapore which has a squared-away tax base and low taxes and good education system does this at some point what is the positive mechanism here although you believe we have to have some sort of terrible collapse I don't know you know it's it's possible that global competition will push the u.s. to become less sclerotic but if you sort to buy the world in emerge in sort of developing and developed nations the developing nations are still really far behind the US and so for a country like China or Vietnam you basically just have to copy stuff in the US there's so much low-hanging fruit and then in the developed world you have sclerosis in most other countries too so it's a problem in Western Europe it's a problem in Japan and maybe Israel's a little different maybe seeing a Singapore is a little bit different but but the u.s. is after all the place where people normally did new things this was this is the business model of this countries the United States is the country where people do new things so you know people in Italy do you know fashion people and you know France become good chefs the u.s. of the country were people making cars and TVs we'd be Japan right now but instead you have venture capitalist like Peter Thiel and entrepreneurs that flock here from around the world to implement their ideas everyone has ideas oh you know they come here and the reason they come here is there's property rights the markets are freer there's access to capital and and also there's an experience base within you know 10 miles in every direction of the room we're sitting in that you can have a higher probability that your idea is going to come to fruition okay so for that for that reason it's really critical for us to get rid of the regulatory roadblocks in the United States because if we don't fix them here the rest of world is still pretty far behind and it won't get fixed elsewhere couple of closing questions then the politics I sense I'm actually the wrong generation because I but I sense among the young well say you're the people you're entitle you are funding let's say the teal fellows the kids in their 20s that you're dealing with these people that the interest in politics is close to zero the system is what it is it doesn't work very well there are large sectors just as the two of you have described such as education which are essentially hopeless I am just going to look for openings and drive myself into it and politics that is to say commercial openings technological openings I'll go where there's or profit to be made which tends to mean some unregulated industry and politics just be damned do you sense that as well on a bigger picture politics yes III think there's an interest but I think this generation has been brainwashed and and you know just thinks life is what it is and and we should all recycle three times a day and and and move on but what what the best entrepreneurs do is they find something that annoys them and maybe it's the banking system and which is highly regularly they go we're gonna take that down maybe it was the phone companies like the guys at Skype of course it was in Estonia but there's plenty of things that happen in this country you know it's way too expensive to call from Eastern Europe to the United States let's take that sucker down and you know you put servers all around and you just bypass it until it collapses I think the cable industry it's gonna happen you know people are unhooking and and delivering video over the internet rather than subscribing to the cable companies those the greatest entrepreneurs those are the ones that that it's not politics think that's wrong I'm gonna run for office and change the law about how cable operates is no no we're gonna go around them until we squeeze them and strangle them and then move on some industries not in ones where say the FDA will will charge you infinite amounts of money to get your drug approved or so it does depend a lot on the regulatory context would what I would say is I don't think it's an the job of an entrepreneur to try to change our entire political legal system that's like an impossibly high burden and so and so you do have this dual type thing that goes on where as an entrepreneur or as someone who joins one of these businesses you'll try to find something where you can do something and it may be one of the relatively small spaces that are left that are relatively unregulated but it is up to the rest of us up to our entire society to really try to fix this background regulatory context that's become I think so toxic and we underestimate how expensive it is because you know even though Andy's done a very good job painting a bright future of 3d printing and next-generation genomics most people cannot fully visualize that and so they don't think okay it's really important for us to get rid of all the roadblocks that are in the way and so this great potential future never is quite strong enough to overcome all the inertia in our system or mostly it's not quite strong enough last question for the two of you I sometimes have the feeling that the young entrepreneurs around here to the extent I say around here I'm talking about Northern California but of course much of the same you'd encounter in Silicon Alley in New York and route 128 around Boston and so forth I sometimes have the feeling that things to the extent that they think political thoughts they come to the conclusions that both of you under have articulated today but they have the feeling that it's something new and so look at this clip and then I'll ask a question I just like the both of you to respond to this if we look to the answer as to why for so many years we achieved so much prospered as no other people on earth it was because here in this land we unleashed the energy and individual genius of man to a greater extent than has ever been done before freedom and the dignity the individual have been more available and assured here than in any other place on earth so the question is is that that's Ronald Reagan's first inaugural address is that somehow so old-fashioned and uncool that it's not accessible in some way culturally accessible to young entrepreneurs or do they feel some or do they feel at ease with the history of the country do they recognize that the notion of taking that sucker down goes all the way back to Sam Adams and the original tea party this I guess another way of I'm going on and on about the question but the final formulation would be we know that Cameron David Cameron the Prime Minister Britain engaged in it along and I think in some ways still continuing campaign to rebrand the Conservative Party because mrs. Thatcher was just permanently uncool kids just couldn't accept the younger generations just couldn't somehow relate to it so what do you think well why do you think I do think there's always this strange generational history where things that happen before you were born feel or three historic right yes and you can't quite and so you know kids are graduating from college today we're born after the Berlin Wall came down right and so you know you're in my back yeah I say that but it's true enough and so you have you have to always and so I think there is a context people don't really know anything other than the context that we have and most the system seems pretty stable not much has changed in the u.s. in 2025 years internally it's been an extremely stable system and so people don't really ask too many questions about it I think it could obviously be much better it could potentially be much worse there's sort of a lot of important political choices and questions that are always at least implicit but they they're generally not surfaced Andy so you know couple thoughts first of all I think this generation is much more individual driven sometimes to the point of you know self ego and and our sysm and whatever else but there's there's a there's an individualism about it you know something a lot of it is the tools that they have whether it's Facebook and Twitter allow them to express themselves and be individual and make decisions in smaller groups you know when I grew up you turned on in New York area channel 2 and there was Walter Cronkite you know whatever he said during the broadcast I remember what he said at the end of every broadcast he said that's the way it is and I took it as and you can't do anything about it that's just the way it is now who even watches Network News except people who are 75 and and laying in bed it's it's you know the news is gathered on social media and through many other means and no one is telling this generation or any of us anymore that's the way it is that there's I think there's a feeling that people can change maybe the bigger picture things in in terms of you know what's going on in Syria and the real politic of how the chess pieces move around the world it's I don't know you know there's someone that does that for me but for almost everything else how people live their lives I think there's a feeling perhaps false because they don't understand all the regulatory pulls and they can't use the dishwasher detergent that they'd like to get their dishes clean it's something that's you know phosphate free now and everything else that goes along with it but and so back to Peter's point I wish there was more transparency in the regulatory joking that is going on because I think that more than our generation this current generation really is more individualistic and will drive change absolutely the last question and Peter just gave me a way to set aside questions of statistics standards of living median income and so put that aside Peter said a moment ago the system could get better or it could get much worse five years from now better or worse Andy in in what way in terms of standards of living and you've got and you've got would you is America a better place to live and let's say more technologically I'm gonna say better I'm gonna say roughly the same it's gonna be remarkably stagnant really with crosscurrents some things will be much better some things will be much worse I think we'll see continued progress and computers continued stagnation and going backwards on energy five years from this day let's reconvene Andy Kessler the author most recently of eat people and other unapologetic rules for game-changing entrepreneurs and Peter Thiel who is working on a book called already titled called zero to one which will be published next spring Andy and Peter thank you for the Hoover Institution and the Wall Street Journal I'm Peter Robinson thanks for joining us

Channel: Hoover Institution

Views: 60,826

Keywords: innovation, engineering, science, creativity, risks, technology, medicine, education, biology, biotech

Id: jX07zPupNdc

Length: 45min 20sec (2720 seconds)

Published: Fri Sep 20 2013