Peter Thiel on the Global Economy, the State of Our Technology, and Artificial Intelligence

welcome back to conversations on Bill Kristol and I'm very pleased to have with me again Peter teal innovator entrepreneur businessman thinker of all many topics in a vey imaginative and unconventional thinker on politics economics society so thank you Peter for Taoiseach half jungle good to have you we were just discussing before this that you're back pretty recently from China this is now May of 2016 and you had to do things to say about that so I thought would just begin such a huge issue in terms of the International economy and the future of the world politically and economically what struck you in China well it's it's a combination of incredible determination you know incredible hard work on the part of people I taught a mini course at Tsinghua University one of the elite universities in China those incredible interest and book was a huge seller it was either I sold a slightly we did very well throughout the world zero to one book but did probably sold more copies in China and the rest of the world combined is that right so it was an incredible and intense interest in on in technology how to do new things and then at the same time there's also this very palpable sense that the model that's worked so well for the last 30 35 40 years of globalization of growth through trade extensive growth copying things is reaching some kind of a natural limit and and and so I think there is a very challenging transition China's going through in terms of finding a new growth model it's not clear everybody can become an entrepreneur or anything like that even though you have various Oh Communist Party slogans of mass entrepreneurship and things that sounds slightly oxymoronic in that in that sort of Ain so they've well what did you find among especially the students confidence in the future worries about the future desire to change the system not well I think it's it's always those are things you can talk about and you cannot talk about in in that in that sort of a place but there's a incredible drive to succeed and then and then and there's always a question how does one interpret in kristan startups and entrepreneurship and on the surface it always seems to be a very optimistic very ambitious and then I think just beneath the surface it often also goes to a lot of anxieties around how tracks careers how I'm working in a large state-owned enterprise or in sort of a government functionary isn't quite what it used to be or may not work as well in the next 20 or 30 years as it has in the last 20 or 30 so so I think I think you know and I think I think we often have had this with these booms or bubbles where we're on on the surface it's extreme optimism the 90s with extreme optimism about the new economy in the US and then just beneath the surface it was this sense the old economy was no longer working and there was no future in the old economy and so I have sort of been wondering that something like that is going on in China today as well but this is again it's always hard to know it's a vast country and 1.3 billion or more people and so it's hard to really generalize about about something like that from just talking a few students in elite university I do the students think and I guess I what's your own judgment is - I mean is it surly fascinated by zero to long because I think we could do that in China - or is it gee they can do that in the US but we can't do it in China well I think it's I think it's interesting precisely because it's that's sort of the cusp of the debate and so the two kinds of critiques my 0 to 1 book God would be on the one hand that of course China can innovate and it's wrong for me to suggest otherwise which I didn't really do but there's sort of a sense that China gets linked with globalization and so one critique is um you know we can innovate just as much as the West and then the other critique of it is well zero to one businesses are good for America and other countries we don't need zero to one business we can just copy things that work and so you have these two diametrically opposed critiques we don't need to do this or we're already doing it and and that leads me to think the truth is somewhere right in between that there is a sense that they haven't needed to do it they haven't needed to innovate for a long time and this is of course is the good part of globalization you can copy things that work if you're a very poor very underdeveloped country there's a lot of room for for copying and then at some point huge increase in living standards living standards and at some point you run out of things to copy and and there's a sense that this is what happened this was the arc of Japan sort of the you know the the Asian exemplar in some ways we're starting with Meiji Restoration in the 1870s and then you know and then all the way through the 1970s 1980s was incredibly dynamic was in many ways it wasn't a strictly capitalist model but but it somehow just worked and then you sort of hit a wall in the 80s where they more or less caught up there was nothing left to copy and and then it somehow failed to to move beyond that and then there's you know then you get the question when does China hit a wall like Japan it's very similar model export oriented current account surpluses when did they hit a wall if you look at it on per capita GDP you would say it's roughly where Japan was 1960 so you know maybe 20 years let's go on the copying so if you look at per capita GDP you'd say you know China's still it's one seventh one eighth of the u.s. you know Japan got up to about two-thirds or three-quarters before they hit the wall so you know a long way to go and then if you look at it then if you look at it maybe from trade flows where in many Goods Chinese manufacturing half the stuff that's getting mate gets made in the world in that category and you sort of wonder how much growth is there really left doing this and you end up with this question whether maybe this model worked really well for Japan when it was the first country doing it and it works much less well for for China at a much bigger scale and so so maybe they're hitting this wall that Japan had in the late 80s today in 2016 one of those interesting things I think this is in the book and certainly other things you've written in our previous conversation I think we discussed this up is people tend to buddy together linked to globalization and innovation and I think you make the argument that they're quite different actually yes well I um I always try to stress the difference where I always draw a globalization on an x-axis it's copying things that work going from 1 to n it's horizontal extensive growth and then I always draw technology or innovation on a y-axis going from 0 to 1 intensive vertical progress doing new things what's doing new things versus copying things that work and there certainly is a sense that in a successful 21st century we want to have both more globalization and more more technology and but we can but then but then there are probably some trade-offs in terms of where the stress gets placed and if you look at the history of the last 200 years we've had areas of Technology and of globalization and of one or the other the 19th century was an era of both tremendous globalization and tremendous technological progress from 1815 ending with the start of World War 1 in 1914 when globalization goes very much in Reverse technology continues at a breakneck pace and then I would say Oh date 1971 when Kissinger goes to China as that as the year where globalization begins again in earnest and we have had 40 40 plus years now of breakneck globalization but what I've argued is a relatively more limited progress in technology mostly centered on this narrow cone of progress around computers software internet and not so much in many other areas of technology and so the 20th century had a period of technology with less globalization and then a period a more recent period of globalization with more limited technology it's reflected in some ways in the different ways we talk about our world so in 1965 when you had technology but no globalization you would have described the world geopolitically as the first world and the third world first world was that part that was technologically progressing the third world was that part that are permanently screwed up today the dichotomy would be between the developed and developing worlds which is a sort of convergence modernization globalization theory of history the developing world is converging with the developed world and becoming more and more alike and so this is a pro globalization dichotomy but at the same time it's also an anti technological dichotomy because when we say that we living in the United States or Western Europe or Japan are living in the so-called developed world we are saying I'm implicitly that we're living in that part of the world where nothing new is going to happen right where things are done finished and exhausted and I feel that that's always a little bit too pessimistic so so I think in theory we should have both globalization and technology in practice we certainly have choices that we make you know on individual level do we work in ways that are more globalization oriented more technology oriented it's possible that over the last 40 years there were so many gains from globalization that it was natural for talented people in our societies to work in those industries that were linked to globalization and perhaps those gains are you know are a little bit more hard to come by now and maybe it makes sense to rebalance towards towards technology if you think of it geographically within the US you could say that New York City is the city that was it's linked to finance finance is the industry that's linked to globalization simply because it's about the global movement of capital something that's very easy to move around the world and so somehow the way the economy and the future was centered on New York City from say 1982 to 2007 for that quarter century was was the period when people really believed in globalization and the sort of strange shift from New York City to Silicon Valley I see a shift where maybe we can get more of technology it's harder to make progress on on globalization and you know I still spend some time both in New York City MO in Silicon Valley and it's always striking the sort of the extreme contrasts or burps you know optimism in Silicon Valley and in the sort of very deep pessimism that I feel always permeates New York where there's a model that's that's not quite working anymore and so that's that's what you see in New York City and then I think remarkably I think that's what people also believe in China this point which again was as a country geared to this uh degree greater than perhaps anywhere else in the world and how much of a go back to New York City that's so interesting but I guess there's a real trade-off in terms of regime and the political arrangements between the time a a an arrangement that might work for just massive increases of globalization and prosperity may not work to encourage innovation and if you're hitting the wall so to speak if if the gains are coming as easily anymore from globalization you could have political crises and other things well certainly um we have unlimited number of things say here so certainly I think growth can happen through some combination of globalization and technology and we always will have problems politically if there's not enough growth and so I think there's some level which the combination of globalization and technology hasn't been delivering as many goods is it as an inch eyes action I'm thinking I mean how much of a crisis do they face I mean before we compact us sorry try to tell I think I think with respect to China I think that globalization has been such an enormous driver it's it seems to me hard to to reorient it towards towards technology simply that there's so many you know you have the Foxconn factory where people are manufacturing the iPhones which I think more as globalization technology 1.3 million people employed there and you know maybe that keeps going maybe gets redirected in some other way but it's it's it's the transition I think is very far from trivial it was a very big problem even in Japan you know arguably right was globalization orientated tried to chef towards more something more innovative and never quite cracked crack that open so your so China has big challenges ahead of ahead of it it's you know i the the bullish case is always that that if you just look at per-capita incomes there's it would seem like there's still a tremendous room left for poor convergence but but my my own sense for it is that it's it's possible that we're were later in the globalization game than people people think there was the was part of the 2012 on people's congressman sort of a statement and the young I believe was leha who's sort of the chief economic adviser to president G included in the 2012 statement the globalization tailwind that had helped China for 30 plus years was abating and that you have to really think about how to reorient much of the economy may be towards internal consumption may be towards innovation but but away from a lot of the things that are working and that a lot of the power structures of course linked to things that are working there you know subsidies to the state-owned enterprises that export goods and that employ a lot of people and so there's a there's a question how easy it is to reorient that and I suppose that is where we presumably have some advantage as a free free country where a free society with you know what you can have a Silicon Valley in a way that I presumably it's harder in a place like China yes it's always you know I was worried that we're not as free a country as as would be desirable and that that there are certainly with respect to innovation there are many areas where it's effectively been outlawed not not in the area of computers which are still I think quite unregulated on the whole where there has been a lot of progress but yeah I think I think in the in the u.s. um there definitely are large elements of our economy that have been linked to this globalization story as well and if I and if I had to do sort of a long short version I would be I would try to be be skeptical of the parts that are linked to globalization I would you know I was talking to a young person graduating from college I would discourage them from working at a big money center bank in New York or for you know McKenzie or sort of the International global consulting firm which is again a classic globalization career you know Clinton Global Initiative that sounds uh sounds very dated at this point that's so 2005 yeah you know World Economic Forum all these things sound have sort of dated kind of a feel this is the way the future used to be it's not was I was that late the kind of the people look back and say that was the break point where we did have in a way it was literally a globalization of credit which then turned out to be yeah soundly based as people hoped right yeah that's certainly the interpretation I would give of it which was that it was a peak on globalization on the belief in the emerging market so you had the one of the acronyms in the 2000s with the BRICS countries Brazil Russia India China and and then it turned out that a lot of involved the investment of capital in these places that was was misdirected that there was a lot of corruption under the veneer of globalization and and maybe what wasn't going to work as simply as people people thought and I would argue that since 2008 it's not like it's the tide has really gone out it's still been held together you know the global trade flows were growing at two to three times the rate of GDP growth for 30 years before 2008 they've stayed roughly in line since then so the tide hasn't really come out but it stopped on stopped advancing but I think it's been held together much more by political will and much less by widespread belief one miniature version of this global project has been the European Union project where you could say in 2007-2008 people really believed it and so a German saver would naturally by Greek government bonds he got a higher interest rate in Greece and of course it would eventually converge to a German rate because everything was going to converge a post-2008 there's a lot more skepticism there would be no natural way that money would flow from northern to southern Europe today and so it's only to sort of keep the European system balanced as required massive state interventions to flow the flow the money to buy the bonds in southern Europe because on the people themselves no longer believe it and and so and I think the sort of all these versions of it where it's it's been held together by will and and I wonder whether the tide is really going to start going out in the years ahead yeah what does have a feeling just looking at Europe and to China a different way the political elites are like what can understand why they're doing this and they're not really wrong to do in the case of Europe I suppose something holding the thing together but now it's fighting against the you know it's holding something together that's already from which the benefits already been derived and now you're being to see the downside as opposed to let's all ride up you know as you say you know the 90s kind of we're all just riding on to a bright happy together you know well I think the elites are right in that the alternatives to globalization always seem really bad right so you know in Europe it was you know two world wars and so even if we have a sclerotic corrupt bureaucracy in Brussels that seems better than what happened at between 1914 and 1945 in Europe and and so I think there is always this this negative worry that the alternatives to globalization are all bad but but I think even even though I think that's correct that shouldn't blind us to the possibility that a lot of what goes under globalization may also have been bad and so if it is just a way for you know dictators in emerging market countries to abscond with money into Swiss bank accounts or if it's if it's a way for terrorists to sort of freely travel throughout the world and use our global communications and global transportation networks if the globalization of violence through terror things like that through all sorts of forms of it that can be bad so even though globalization ending is would be an unmitigated disaster we have to I think we should be much much more on we should try to draw a much tighter distinctions between what forms of globalization have been good which ones have been bad and not just have this or this Pangloss Ian World Economic Forum Clinton global foundation that if it has the word global it must simply be good that's that's interesting it also I guess one could think of us take the position that it might have been good mostly for X number of years or decades and that's nothing to be ashamed of it was a reasonable we the standard of living of hundreds of millions as was billions of people increased in China and India and parts of central Eastern Europe that had historically been hugely unstable became reasonably stable and better off but so that something was good for four or five decades doesn't mean it's good for that it doesn't mean that you can simply keep applying that formula for the next four or five decades that seems to be very much the view of the European Union in a weird way I suppose the Chinese you know the Chinese Communist Party two of you know we're just gonna keep doing what we were doing but that's the world doesn't quite work that way because over you know and it may be it may even be somewhat good so I tend to think if we had more trade agreements this would be generally a good thing right but the incremental value of the next trade agreement may not be as high with ones we already have and so so if we ask where we're going to really get the drivers to take our civilization to the next level in the decades ahead maybe it is not the same formula over and over again so let's go to that because you've been an articulate proponent and very much a contrarian proponent I think people are beginning to come around a bit to the argument of the innovation slowdown and that not that it necessarily that yeah that we've merged in our own mind let's say globalization innovation everything's better than it was and other computers became a stand-in for all kinds of innovation but in fact in many important areas innovation is has been less than it we would have expected it to event and is less than it could be is that is that right I mean you know certainly if we if we went back to say 1968 or you know the late 60s and you asked where people thought the world would be by the year 2000 2015 2016 it's fallen you know way short if you if you look at the Back to the Future movie the Back to the Future one was 1985 they went back in time 30 years and things have changed quite a bit from 55 to 85 there's still been a decent amount of changes back to the future to went from 85 to 2015 30 years into the future like it was about a year ago a year ago and that was a world that was supposed to be radically different and and I think the the actual day-to-day changes outside of computers would have been quite modest in those thirty years or even I would argue since that since the 1970s and and and so you can sort of rattle off these different areas whether it's whether it's biotechnology where there's been some progress but it seems to have decelerated space travel transportation more generally you know all kinds of ideas people had in the 50s and 60s about you know reforesting the deserts or underwater cities or all kinds of things like this that this point forms of energies yeah fusion you know new forms of nuclear power that at this point all have the sort of retro future reveal it's like it's the future the way it used to be Star Trek feels very dated there's sort of these things feel feel very odd ated in their in their optimism about how much how much could be done and so so yeah I do think the the you know there's always those are different things that are going on there's you know there's acceleration in some places there's stagnation you know there's increasing inequality so you have sort of different themes but I I think that in a lot of these debates I would say it's 70 percent is probably stagnation and that if we focus too much on inequality or acceleration that we're going to get a lot of the public policy debates wrong so so if you focus too much on accelerations professor McAfee at MIT the second Machine Age is so runaway technological progress and then it's going to lead to more inequality and so you need to deal so it so has it's both this really good thing has some problems and then that sort of pushes you in a certain set of policy directions of what to do or on you know even more optimistic ones are things like things like things like reycarts while with the singularity is near whether this accelerating future and all you need to do is sort of sit back in your chair eat some popcorn and watch the movie of the future unfold and this all would end then and then the kinds of policy debates that we we end in this accelerating world tend to be I find sort of incredibly ethically charged where it always ends up being good versus evil technology and so the technology is so overpowering that the main risks are that it's going to destroy us all and so you have utopian forms and dystopian forms and nothing in between and so you have you know the worries in Silicon Valley about AI or you know do you really want to live forever or is that just a CLE ethically bad whereas in the stagnation side the Antonin too good is not evil the antonyms bad and the problem from my perspective is not so much that we have evil technologies that are going to destroy the world but that we have a lot of bad technologies and bad science that simply doesn't work so where evil has more this ethical right thing and bad has more the sense of not working there's there's an ethical moral perversion of it it's that people are lying about the science they're lying about the technology and they're saying that it's a that it's a it's really incredible when it's often not quite living up to what it is so so I find myself much more in this that the stagnation is the general dynamic and it's reflected in the economic data where you know median wages have been stagnant 48 plus years the younger generation has reduced expectations from their parents and sort of very broad sort of social cultural indicators that suggests that things feel they feel kind of stuck and then you have a very different set of questions what do you do about it you know what's gone wrong how do we get out of it how much of it is in our control are we just hitting natural limits I mean that would be a question I suppose right yes so I think um so I think the two leagues to the extent you see it as a technological problem or a scientific problem one approach has been that you're just hitting natural limits this is a Tyler Cohen second on the great stagnation a recent book by Robert Gordon another economist the rise and fall of American growth and so it was this idea that there were some fairly simple inventions the 19th early 20th century that maybe the rate of innovation peaked as far back as the late 19th century where you had you know incredible numbers of breakthroughs and and the it's just the nature of the world of the universe that it's much harder to find new things the low-hanging fruit has been picked and and therefore we have to sort of resign ourselves to far reduced expectations and sort of a more austere future I just read somewhere quote in an article versus not the whole it wasn't an argue it just statement you only get the only invent antibiotics once yeah I mean give massive gains in public health by a huge breakthrough like that where half your population isn't dying from infections basically and you know public health disasters and and in infancy yeah but you can't replicate that that's a those are the those are the arguments on the nature side I'm a little bit more partial to the the culture side of this that perhaps on that perhaps there never was any low-hanging fruit the fruit was always at least intermediate height and what always pretty high up yeah they didn't think at the time today these are easy breakthroughs right Breyers and certainly you know we have a we have a situation where you know one-third of the people at age 85 suffer from dementia or Alzheimer's and you would you would so if you could do something about that that would probably be close to as big a deal as antibiotics and and we're just weird but we're living in a world where people don't even expect that to happen anymore I think so what are the core problems I do you think every what is the education regulation I mean is it government is it just the culture as a whole I suspect this is you know all these questions why this is happening why questions I think are always hard to answer they're always a little bit over determined right my my sense is that to some extent it is all of the above but but I think there is I think there is a big hysteresis part to this where you know there's a way in which success begets success and then failure begets failure where you know where if you haven't had any major successes in a number of decades it does induce a certain amount of learned helplessness and then and then it shifts the the way science gets done or the way innovation gets done into the sort of more bureaucratic political structure where the the people who got the research grants are more the politicians and the scientists you're rewarded for very small incremental progress not for trying to take risk and so it's it's led over time to more incrementalist the Galit Arian risk-averse approach which I think has not worked all that well and so that has one change that for telling people that it's to take risks so it is it's it's it's it's not it's not clear it's not clear how you change it on a cultural political level I I'm always focused on the sort of very modest startup version which doesn't actually work for everything I think it's sort of like it's again it's a very imperfect solution so I think you can you can convince a small number of people to start a new business or to do something new convincing a much larger number of people to change things right I think is sort of a much more challenging problem and and that's and then you know this gets to all these questions about can you reform government research structures reform NASA can you reform the universities can you reform even large corporations in many ways are not much better than the universities with governments maybe a little bit but not as much as we often like to thank but I suppose one way to think about it and some of you thought a lot about is what we do seem to have one area where we have had pretty massive breakthroughs bigger than anticipated the one case maybe we're back to the future of 2015 to 85 really would his interest is the genuine quantum leap so this weekend and that is computers and related technologies information and so forth and could one then just say well let's go back and look at what happened there and what the structures were there and the incentives were there and the the culture was there and why couldn't we then you taught us rajadis you know try to make that more prevalent in other areas ah yeah that would be serviceable that's a bull ride did a reasonable approach that's early might naive intuitions it was relatively unregulated which again might be harder to do in energy or medicine or some of these other areas it was the reports that there were not that capital intensive so you could get started with relatively small amounts of capital and there's a question you know is that true of other areas of science where that's true or are there places where if you need to have you know 50 million dollars to test a new experimental design for a nuclear reactor does that necessarily become this deeply political process where you're at risk of the money going to precisely the wrong people every single time um so it was lower capital intensity there was um there was um there was um um it was less regulated and then I also think there's been this history of success where over time you've attracted very talented people who believe they can do things and and one shouldn't understate understate how much that sort of belief is is it as effectual um you know the company one of my one of my friends uh was on years ago was looking to join a big biotech company and it was what we kind of the the pitch to people coming out of with PhDs coming out of graduate school was that we have a better softball team than the other biotech companies because you know whether or not you discover something is so random so unpredictable that you know the only thing we can sort of control about your work environment is to tell you that you're going to have a better softball team that's why you should you should join our our firm and so there is there's something around a lot of these areas where it felt that people were too much of a small cog in a giant machine very hard to actually impact things and there was sort of less of a sense of human agency so I think that's that's we always have to come back to how do we how do we come back to a real real sense of agency it does stay like the safety and environmental regulations just as so mass at others I'm sure too are so massive in the medical areas the energy areas transportation and then just the political you know obstacles the red securing in the current talk you know the people who currently occupy things making it hard to make progress I mean which I guess didn't happen or of course after the fact went over is you say everything's over determined right probably what could have thought in 1985 that it's not like there was no one in the computer or information technology field and they were presumably interested in blocking new entrance but somehow they it didn't work that way yeah it's a complicated history we had with the thalidomide disaster or FDA so there's specific things you can you can point to that went very wrong but yeah I think today you would not get the polio vaccine approved you know when it was first when we were first used they dosed it wrong and I think they gave 10 or 15 people got polio accidentally and and so day that would probably put slow down for another 20 years or something like that so so I do wonder whether whether we become whether we become too risk-averse and in various ways but you know even even this concept of risk is a very strange concept if you if you do a Google one of the things you can do on Google is search for words and the frequency with which they occur in books over time if you look at the word risk over the last 200 years from 1800 to 2000 it's sort of a very infrequent word very rare until about 1970 is that right and then it goes up at an incredibly steep curve and it becomes sort of much more common in titles how to manage risk how to take risk and and and so the the sort of the thought I've been wondering about is whether a lot of talk about risk is actually even counterproductive to risk that you know if you have a risk that if your kids are left unsupervised the playground that they'll be kidnapped or if you have a risk that this can go wrong or that can go wrong or a risk that somebody's going to die from from some new medical treatment that risk is actually this word that's used to discourage people from from doing anything and and it's more and more frequent occurrence is a symptom of society in which less and less good risk taking is actually taking place a friend of mine is on the board of a financial institution says they spend more time at there and I'm not sure this is bad it's not leaving I'm just reporting this they spend more time at their board meetings discussing the management of risk than actually making money yeah it's minimizing the downside yes and it's not a stupid thing to be worried about obviously after especially after 2007 and eight but at some point you sort of this a bit of a you're spending more time on the insurance to ensure that there's no disaster from the products that you're making then the products you making right yes I think diversification you've written about this some write the kind of degree to adventure capital was people think of it as a diversifying instead of yeah there's all these all these ways where I I wonder whether the focus on the sort of processes of risk minimis Asian distracts you from the substance of ideas of figuring things out of doing new things and and so yes I think definitely I'm definitely something something like that seems to seems have been very much at work and I think that one of the things that's true about risk is that it's sort of this very probabilistic way of thinking about the future where the future is dominated by chance by fortune and that's sort of this all-powerful force that dominates everything and and I think it's one of the questions that I think is very unclear is whether this is is this in fact a deep truth about the universe or is it more about the abdication of our responsibilities and so as a venture capitalist I'm always tempted to the temptations always you look at a company say don't really know it's going to work or not I'm just gonna invest a small amount see what happens and the temptation is to treat all these companies as lottery tickets right but once you treat them as lottery tickets I found you somehow psyched yourself into losing because you've already psyched yourself into writing too many checks a little bit too quickly and and you're not actually making a statement about the inherent chance enos of the universe you're actually making much more statement about your own laziness or own unwillingness to try to really think things through and so I do wonder whether there's something like that that's uh that gets obfuscated by by this talk about risk where it always sounds like it's a statement about the the larger world but it may really be more statement about the failure of our ability to think things through you know and maybe it is hard to precisely model these things out or or something like that in the case of in the case of startups and and very innovative businesses it's always quite unclear to me how you even talk about risk score probability and and so you can you can talk about it if you can do an experiment many times and see what happens over and over again so you did high-frequency trading on Wall Street that has a probabilistic character where you can probably model the risks very very precisely but if you're investing in a one of a kind company I don't even know how you go about and measuring what the risks are how you would quantify it and and and if you have a sample size of one standard deviations infinite and so in theory you can't say anything about the risk if Mark Zuckerberg started Facebook over again a thousand times how often would it work we don't get to run that experiment right you know and so on and so somehow risk orientated processes they make sense in a context of large n so they insure insec Salar jan millions of people driving cars so many have accidents who can sort of model it out or life insurance policies actuarial science these are also large end sciences but i think there are a lot of very important things that are small n or even n equals one or it's a very small number and and if we're to beholdin to these risk models um I think we just don't do those kinds of things and they may be very important yeah the large end things the insurance schemes are important for the maintaining the stability of society and you know taking care of people from reflected by bad luck and bad circumstances but it doesn't get you doesn't you could have a perfectly insured right a perfectly running Insurance Scheme some speak right and never have any progress I guess it's a simple matter we I worried or the more extremely I would put it is perfectly running Insurance Scheme it would probably collapse under its own weight eventually and and so if we have if you think of our education system as largely an insurance policy the universities are largely this insurance policy for upper-middle class parents who are scared that their kids are going to fall through the ever bigger cracks in our society it can sort of work but are we really going to have a future in which everybody's insured and isn't that a recipe for disaster over time or nothing to it so the welfare state is a reasonable supplement to a growth to a growth economy but it can work as the be-all and end-all for everybody yeah that's interesting and it is and I think in the same way a super low risk thing there parts of it work can work but it it probably can't work universally and I don't think it can work from motely as extensively as it as it has been done you know I was in other ways I was guilty this I went to I went to law school sort of the low-risk seemingly low-risk thing to do from undergraduate in the late 80s early 90s when I went to law school and it was a fairly low risk way to get sort of a upper middle class career in a in a big law firm and and in retrospect I think it's turned out to be quite high risk for a lot of the people who did it because they were part too many people who did it you know it worked well for a few years and then then a lot of things just tend to go wrong even for the people come out of these very successful attract kind of places so you know if you wanted to date this maybe in 1965 or 1970 if you were graduating from college there was actually a way that you could do a low-risk very successful career so few people were doing it that if you and there was a way you could sort of arbitrage this risk successfully don't think that's been working terribly well I think that's been working less and less well for the last 30 40 years even has been understood better and better so yeah that's interesting and I mean people forget and you know much worthless and I do but the Oh 708 crashed the instruments that are generally thought to have contributed to the crash at least the two have got out of control or says that people didn't know what they were holding and one thing led to another the kind of knock-on effects were precisely supposed to be lessening risk yes it wasn't quite right that many people Wall Street thought hey let's make big let's gamble yes I'm did and they were but really it was it was the opposite it was if we can spread you know holding one mortgage as a big gamble holding 1/100 of hundredth mortgages is safer because you know three of them will go under but of course you are the other 97 yes an editor doubt that guess what the whole thing is rickety is more rickety in a way than the very old-fashioned community bank holding you know the local mortgages right I mean it it well it's it was yes oh yeah I would say I would say it turned out to be more rickety because people thought it was too safe yeah so in theory diversified portfolios would be somewhat safer but if everyone thinks they're incredibly safe then you might leverage those diversified portfolios up a great deal more than you otherwise would and you would risks that community bank would never have taken us thing to be somehow better for more broadly for our politics and society I would say you know the o7 crashing hey you don't have anything sure I mean it's it's the it's the sort of like that sort of probabilistic but I think of this as probabilistic kind of thinking has infected so many things in the you know the populist the very strange version in politics is the way that poll taking has become so so unbelievably dominant where and you know it's it's it's like you can so any model these are statistical aggregates of people probabilistic leads you get to 51% you only need fifty three percent which is where you know Romney's 47% comment came from is you know I need fifty three the other side needs fifty three don't need any more and and then there's sort of just this probabilistic science of of getting at that it has had a certain amount of power we shouldn't deny that it's had had a great deal of power and then at the end of the day it has some very severe limits where you know everyone's you know everyone if all the politicians are looking at the same polls right you know we're just we're just really electing nate silver's president or something like that which is a sort of strange change in constitutional priorities everyone's micro-targeting and and then as happened this year 2016 on the republican side at least a guy blew through did no micro-targeting right i mean everyone else was picking their lane to run in I've always you know so struck by this and you know what the word someone mentioned lanes to be recently and I hadn't heard the term about Obama the visit but early in the primary process in late 2015 or least ready see that was all the talk about political pundits it wasn't stupid I mean you know there's the conservative land evangelical and utterly into this line governor Elaine it turned out the one guy who ignored seems to ignored all that Trump and just decided I've got a message and I'm not right now leading but I can be leading and I can go up from 25 percent to 35 percent to 45 percent division represent sort of did that and it's it's sort of society similar to yes what are some searches and limitations but I mean to someone who just didn't accept the kind of I'm going to diversify my political effort you know right um or narrowly target my political I think we're still too close 2016 to really coherent liao totally that's a pathetic bad idea on the other hand you know for you know all the ways that Trump gets described as this sort of you know incredibly independent a kind of a non-politician it's still very striking out all the speeches just get started with recitations of polls right and and so it's again um that's more of a snowball thing that you think kind of a how do you say that with doctor makes is getting people to it's legitimizing himself by hey I'm winning and that other people want it so again maybe it's another commentary on how beholden we are to polls and so if you're the politician or the aspiring president who talks more about polls than anybody else helps you that's strangely advantageous crazy it seems again like very odd but somewhat true statement but in a democracy people want to be on the winning side and so I think he had a real instinct on that too that there's a sort of way which you you know you keep doubling down so to speak and people want to be with it win it with the winner you know yes well it it who knows what will happen but look if you get these things can work in certain contexts um for a while you know be winning it as long as you're winning yeah right okay but but there are there are I suspect all these other contexts where this the sort of probabilistic approach has not been has not been terribly helpful it's uh you know politics at least you can still just do surveys it's right it's sort of somehow related if you're if you're talking about if you're talking about starting a business and saying you know we're going to just do this random walk we're going to a/b testing of different types of products and see what people want we're going to have no opinions of our own and just do all this sort of testing of customers the problem is the search space is just way too big there are way too many things you can do you don't have enough time to go through the sort of the sort of statistical surveying and feedback mechanism and and you know a lot of the things that have worked the best have been sort of paradoxically not so a probabilistic liebe hold on if you look at Steve Jobs Apple where it was it was um you know that you have something like the Isaacson book on Steve Jobs where it sort of portrays him as this tyrannical boss just yells at people all the time and even if all of that's true it doesn't it doesn't seem to me to get it you know why did it work at all why what why did it inspire people and I think it was because there was you know there was a plan you're going to you know execute against it and and you could sort of pull off some really incredible things that you could never do if you just did everything through the sort of instantaneous feedback from from from different kinds of things so I think complex planning complex coordination these are the kinds of things that it's gotten very hard to do in in the sort of probabilistic society people I describes you a complicated plan in a technological context you think of it like a Rube Goldberg contraption it's just not going to work something's in a break because we think of every step is probabilistic we think of the steps is more deterministic is just just have to get the different steps to work and and you can you can actually you can have a Manhattan Project there's no reason that you can't do this there's no reason even the government can't do this it actually did in the 1940s and you could you could you could send a man to the moon with Apollo and you certainly should be able to do a website for a war for the affordable care act since that's demonstrably a lesser demonstrable inferior technology to Apollo or Manhattan I suppose on the business side if you survey polled ahead of time I mean this has been famously so sad about Starbucks I think it's right would you want to pay two or three times as much for a cup of coffee that may not even taste better really to the coffee you get your diner kind of a bitter European taste or whatever I think people would have said no presumably or in any case it wasn't clear that was like huge incipient demand or whatever term economists would use you know an unmet demand for that I'm not sure even if one polled and ten years ago you like to have a little phone in your pocket that you could do this this and this people that maybe maybe not I'm not scared of you and there is a way which all that way of thinking about economics does you limit self-limiting and misleading in some ways it's it's I'm always it's always this question whether it's that good to just always be looking at the people around you getting feedback from them in different ways there's you know this very strange aspect in Silicon Valley where so many of the of the very successful entrepreneurs and innovators seem to be suffering from a mild form of Asperger's or something like this and I I always wonder where this needs to be turned around into a critique of our society or if you don't suffer from asperger's you get too distracted by the people around you they tell you things you listen to them and somehow the wisdom of crowds is generally wrong you know if you the Malcolm Gladwell wisdom of crowds book yeah it's always there's a very specific thesis that it has which I believe is true and there's a way the term always gets misused the specific thesis is that the wisdom of crowds works if everybody in the crowd is thinking independently for themselves so if we have a jar of marbles and everybody guesses how many there are then somehow the collective judgment ends up being better than most individuals judgments but but if you have a if you have a but if you have some the most more common way the wisdom of crowd works is through this sort of hyper mob like behavior where I think you get a lot of your rationalities you get the wisdom of crowds becomes the madness of crowds it becomes you know a bubble in finance or you know something worse than politics when it goes when it goes very wrong they've done these studies of them at Harvard Business School which I often think of as consisting of the opposite of Asperger like people so there are people with or extremely socialized extremely extroverted have relatively few convictions of their own and you put the good work habits good work habits and you put them in a two-year hothouse environment in which they spend two years talking to one another trying to figure out what to do which leads to this very dysfunctional wisdom of crowds dynamic where you will simply on because know the other people actually have thought about it for themselves and have any independent ideas and they've done Studies on this where matically the largest cohort at Harvard Business School goes into always the wrong thing so you know 1990 they all wanted to work for Michael Milken sort of one or two years before he went to jail yeah they were never that interested in tech except for in 99 2000 they descended on Silicon Valley on mass and time the end of the dot-com bubble perfectly and and on and on so there is something about this that's uh that's uh that's very tricky where you know probably a lot of innovative ation a creative thinking doing things that matter generally depends on not being so beholden to the people you're immediately around even though you get feedback and the feedback is helpful there these cases work and go very wrong and I suppose it's most helpful into thinking I would think in a static situation if you're dealing with a static universe X number of people X number of things you can do then you know in a way getting the most feedback suit you best to deal with this situation I suppose but it doesn't tell you what kind of what happens when there's a breakthrough an innovation or some disruptive event right it yeah I mean it depends something sudden what-what your priors are so if we if like my prior is that there's a lot more innovation that could happen right and so if the feedback mostly is a form of anti theories can't do that that's too bold that doesn't quite make sense in a world where a lot of innovation still possible alright this sort of horizontal feedback probably has a very bad dampening effect um if we're in a world where in fact everything's been discovered everything big has been discovered then this sort of feedback would would stop people from wasting their lives on some sort of quixotic quest of one sort or another so so it does depend someone with what your what your priors are but but if I if I had to make a judgment on it I think I think we are in a world where these feedback mechanisms have gotten far too powerful where people are too easily swept up by these these mob dynamics I you know I'm certainly not going to go on your TV show and blame this on on the Internet in any way but but you know you have to you have to ask whether there are ways some of these technologies have-have you know maybe even exacerbated some tendencies that were already there in our society the phenomenon of political correctness so many different ways to describe it but but certainly one is just that you have these you know incredibly powerful negative feedback effects that get brought to bear and and have this you know very inhibiting character and doesn't I don't think it actually results in things being far more generative than the otherwise would be like it cuts off a lot of lines of inquiry but I don't think that means that it opens up that many more and final questions on this topic which is very interesting I think it seems to be the conservatives and libertarians on it we're both pretty sympathetic I think to those points of view you know Hayek one of the great libertarian heroes never justly saw what a great economist the fatal conceit you know you can't have central planning which I think it's been a very useful critique of big government nanny-state liberal welfare state liberalism probably don't you think it's had the effect just listen to you of thinking about this of on the other end it's sort of conservatives have bought into a very probabilistic or maybe that's quite the right word but you know such a hostility or planning such a hostility to to cumin conceit that they've almost that's almost spills over to a kind of fatalism about human innovation or you know agency how most yeah yes I think I think that is I think there is sort of a very strange way that some of these these ideas developed and certainly in the area of economics in 19th century sort of pre Austrian classical economics the thought was that you could still measure things objectively so you know how many pounds of steel is this factory producing how many tonnes of steel is factory producing how many you know cars per hour are the workers producing this assembly line and and there was that sort of a intuition about objective objective value and there's been the shift towards um towards making things more subjective when it all becomes sort of unmeasurable or they're too many variables to measure and i think that was you know in some ways was started by austrian economics and i think now at this point it really permeates all of it it's not just the right it's also the Obama administration wouldn't say that that they can have strong substantive ideas of what to do they can improve processes but but they would not never actually think that you could actually build a very specific thing in a in a pre-planned way they don't even believe in that anymore all right they have been nudging which is not the term that's yes the cast is the very painting any think of it such a limited aspiration for it's again it's it's again feedback from things that are already working and we improve them a little bit so it's all it's all you know it's all you know we're all just going to climb up go up the up gradient and we may get stuck on a low-lying hill you know you have to sometimes you have to step back and wondering where in the world do we find ourselves and we just simply go up hill do we do we end up on a low hill or do we really end up on Mount Everest you know and and we have all these hill climbing theories we have no sort of valley crossing mountain climbing theories and we need we need some more of those kinds of those kinds of things but um but yeah I think that I think this shift towards towards a subjective you know subjective ways of measuring economics it then ultimately leads to that this this way in which we can't even coherently talk about progress so are we are we actually progressing as society and then the answer becomes is just impossible to know you can't tell it's just different to all these things are somewhat different and maybe maybe you're living in a much smaller apartment in New York City than your parents or grandparents lived but you have an iPhone with a really smooth flat surface and so the hedonic benefit from that how do you trade that off versus the apartment that's a quarter the size of that of your grandparents and and so I think it's a I think they're I think it's hard to know how to think about these things but I I do worry that the the stress on these sort of subjective hedonic economic measures are excuses we're telling ourselves to hide the stagnation or even decline from ourselves speak to progress one of the ways people hope for progress obviously is computers and we're broadly artificial broadly but artificial intelligence I guess a particular has been a focus reason leave it you've given this a lot of thought and I'm pretty closely involved in a lot of these efforts or watch them closely and invest in so I'm sure what what do you think I mean okay listen we had some tipping point at we gonna is the world 20 year so I'm going to looked at different in terms of what machines can and can't do well it's um it's very hard to say and I'm you know I'm a sort of many somewhat conflicting thoughts on this I don't know so they come down very strongly in one side or the other of these debates I say that certainly computers generally have an area where there's been a lot of progress so it's it's maybe not unreasonable to at least ask the question how much more progress could there be how many ways could AI happen but you know one of the on the other hand one of the things I don't particularly like about artificial intelligence is that it has become such a buzzword I think of these buzzwords often always on obscure more than they illuminate and you know one of the ways to see that it's a buzzword is to see how ambiguous it is artificial intelligence can mean both the next computing the last computing that humans will ever build and everything in between and so it has a sort of rather elastic meaning when artificial intelligence means the next set of computers it sort of pushes the conversation and you know somewhat more automation replacing certain low skill or medium skill kinds of activities people are doing when you talk about it as the last computing device where it's you're building a mind that sort of can out think and outwit any human being you end up with you know these very scary somewhat political questions is going to be friendly is it dangerous and if something like that could be developed maybe will be on par with extraterrestrials landing on this planet where well I think the first question would not be about you know what would this do to the unemployment rate the first question is are they friendly or not or it's the first questions would be political if one um so I think that's sort of a general a general framework I would say that that certainly on the the sort of bullish AI consensus that exists is that we're making progress very quickly there are no deep reasons why computers couldn't do everything better than then what what humans do and this may indeed happen you know the next in the next few decades and that this would of course be an extraordinarily important and transformative set of changes and you know I'm certainly open to all these perspectives but I also wonder whether there's certainly parts of this that one could could question and if you if you had to be a little bit more critical of it of the two points of criticism would be to first start with the history where people have been in some ways too optimistic about AI for quite some time so in 1970 there were people who said you'd get computers to understand language everything humans could do within a decade same thing would have been said in 1980 and so you know we've been here before and so there's been a history with this turned out to be be more difficult than people would have thought there was um and then of course there always is this there's always a sense of whether whether it's maybe just a particular moment in time we're at the peak of a technology cycle the only thing we can worry about is technology that's so good that it's too fast and it changes things too too radically there was a spring of 2000 there was this essay they got a huge readership in Silicon Valley by bill joy the one founders of Sun Microsystems and was the future does not need us so how run away technology would get rid of people and and so I remember that well that's already 15 years and years ago but in retro but and as a socio-cultural observations a psychosocial observation in a spring of 2000 we should have worried about was not whether the technology was going to work so well that it would be this runaway progress but the real question was was it working at all where the business models working and it turned out that a lot of things didn't work that well and and we had sort of a you know period when people went back to banking and back to consulting from from Silicon Valley the b2c b2b didn't mean business to consumer and business to business meant back to consulting back to banking and so so anyway so I do wonder whether the the sort of mini a ibubble that we've seen in the last few years is maybe symptomatic that we're at some again some local peak in optimism about how much Silicon Valley is doing can do on all these sorts of things I think um I think one way um one aspect of it that I that I think is somewhat disturbing is certainly that that there's this sort of probabilistic thinking that again creeps into the AI issue as well so if you meet someone in Silicon Valley who who is believes that AI is possible it's happening soon and it's potentially dangerous let's say those these are three very widely held beliefs on the the fourth thing that you can always push back on them you don't want to question those three beliefs but the fourth one that's a very powerful one to question back is well you have no idea of how to build one that's safe and you couldn't build one that's safe and the way you've defined the problem that you're going to build a superior mind that will be able to out thank you you won't be able to to build it in a way that's a that's safe one of my colleagues was sort of talking to one of the top AI researchers and sort of pushed him on this and it was basically Professor you know you obviously don't believe any of your theories about about AI because if you did you wouldn't be publishing any of it on the internet because when the AI emerges it will read about it on the internet it will know to hide and to not make you aware of how powerful it really has become so so there's something akin to that that's implicit in all of this where if it's if it's if the sort of the optimistic case about technological possibility is true there's a sense of helplessness in terms of what people can actually do about it so it's very much linked to this this rather dystopian view and this is reflected in the Hollywood movies right I cannot think of a single movie from Hollywood about AI that doesn't have a dark and rather disturbing under undercurrent to it and so it's again I think it's the sort of probabilistic reasoning that things are sort of technologies are out of our control there's no human agency we can't actually know what we're doing that gives it this very strange quality and of course um and of course there is there is a sense in which you know the term AI simply means something that human intelligence isn't up to the task and so so one way of it one other way of interpreting the the AI boom is that you know that the surface it is about extreme optimism about the potentialities and computer technology and then beneath the surface it simultaneously is perhaps a great deal of pessimism around around the possibilities and other technologies that will be developed by humans and deep pessimism about the possibilities for what humans can do so it's sort of a man with a hammer sees a nail everywhere so one interpretation I have a bit of the AI bubble is it again you know in a strange way is symptomatic of the technology stagnation thesis now that's there's a fit with the notion that we've developed societies and is that which what we can do on our own yes is yes ASX market of a kind of literally it's gonna come in and I do what I don't know but you know so we're waiting for it's like you're waiting or waiting for this AI to save us from all these things and then don't know whether it'll be friendly or not so it has this very again has this very strangely passive aspect where where it's it's some others not enough room for a human agency to my to my liking now certainly one one sort of somewhat more basic point I always try to make is that um it's not at all obvious why the question about let's say near-term a is not the way futuristic stuff but the you know the next generation or the generation after that why it should be seen as such an adversarial dynamic you know what we're always talking about computers as substitutes for humans and yet the reality is they are they are very different um they are you know computers are able to do things in this incredible brute force way humans are sometimes able to do things far more effectively and yet there's sort of ways in which our minds are probably much simpler than we think you know it's probably wrong to think of a human minds having hundreds of billions of neurons because and that's about codes for hundreds of billions of things in our mind you're you're a really smart person if you have 20,000 vocabulary words and and so I think there is something about computers and humans where they're deeply different and I wonder whether the the focus on AI somehow obscured obscure these differences and so the the mystery in some ways is why why have we actually not built AI and and you know the conventional explanation Silicon Valley is we have not built it because human minds are so complicated you have hundreds of billions of neurons you need to have to have a computer with hardware the type we haven't quite developed yet and and sort of just a matter of time and what will get there but you can make the same argument you'd say this cup here has you know close to Avogadro's number of molecules or atoms in it and could never be modeled by a computer but you don't actually need to model every atom you can just model the basic structure in a similar way if there is such a reductionist theory of the mind were possible it could perhaps have been already designed on 1970s or 1980s type type hardware so so I think there are some very mysterious questions like this that have have not been fully thought through my guess is that it's possible that there are just these these really big differences and that there are and there's a separate question with you can brute force a simulation of a human mind and to probably are ways you can do it and then there's some limits to that but but but they're naturally complimentary because they're so different that we normally need to be afraid of people who are just like us because those are the people were competing against you know you know it's it's if you're you know you need to be globalization is scary because it means that you have sort of very underpaid people who aren't that different from us in other countries competing with people in the US and Western Europe you know the computers are not they're complementary they're not they're not really competing they would be scary if we had a super futuristic version where we had a robot that looked just like you Bill Kristol and we didn't have to pay it any money in any context and you'd be you'd be rightly alarmed by that feel and this is and this is many other people do and this is this this is the common sense intuition why people are scared of cloning you know it's a throat bioethics cut on cloning but the common sense reason is that you had sort of hundred clones of yourself they undercut your they'd be competing with you and you're competing you're always competing with people who are like you and and so so to the extent computers are really different that's I think much more of a positive and a negative when you say the human mind is simple you're making you're saying not that it's easy to replicate with the opposite there's something mysteriously simple about it so that food force doesn't replicate at least some of the things that it can do yes it um it might might my views it it's mysteriously simple right ah and it seems to be able to do very powerful things with relatively few components so maybe maybe there is some relatively simple algorithm that that that could replicate it but it's strange that we haven't found that and but it's probe it's perhaps not a problem of hardware which is the naive standard view that we just need more hardware and you'll you'll get it to work yeah when when the computer beat Garry Kasparov and Jasper was at 97 maybe just like that Charles Krauthammer who knows a lot about chess and there's a lot about fair might about science too wrote a cover story for us which we had lot a title be scared be be very scared and you know it's interesting reflection I think got back and looked at in a while but I would say twenty years later it doesn't feel that scare I mean clearly when at a game like jazz with a set number of pieces and a board and rules you know the brute force so to speak and just at some point surpass even the greatest player but most of life isn't like that I think and one doesn't have the sense that computers are defeating humans in the way that one might have thought 20 years ago would now move from chess to other parts of life or maybe I'm wrong about that but it does that so it's I think it's an open question so I think it's it's happened certainly less quickly than people would have predicted by various points you know certainly have day trading you these sort of great great trading algorithms where the computers are maybe doing two-thirds of the stock trading on the stock market or you have you have certain certain places where these things happen on the other hand things like language translation still feel extremely far away from that and if anything the way Google has improved its it's a language translator is to find phrases in books and then see how the humans translated those books and so it's sort of has found efficient ways to leverage off of human translators and it's not actually any kind of semantic understanding on the level of the computer of what's actually the meaning of the words and so that kind of thing still seems seems very far away and day trading is in a way I don't know that much better but it seems like a good example because it's not stock picking it's not let alone venture capital investing rights to my knowledge computers haven't I'm of course yes I'm hoping the hopeful that venture capital is a is extremely uh far from being replaced by computers yeah the use of computers in those areas is to help people you know process data very quickly and do a lot of comparisons and stuff at the end of the day it's not yes so the more hopeful view that I still have is that it is it is likely to be just a continuation of the of what's been happening since the Industrial Revolution where mechanization automation free people up from certain kinds of repetitive tasks and free people up to do other things and then it can be scary for living in a society where there not enough other opportunities where there's not enough growth were there problems like that but in and of itself freeing people up from the drudgery of repetitive tasks is probably a good thing yeah the transition can be very unpleasant and of course one reads about it in history books there's having this conversation with someone recently you know well people went from agriculture from rural areas to the cities and you know what they did they got through it and London was a mess and everyone writes you read early accounts of early and you know Blake and the coal mines and early industrial London it and another less London with the other industrial towns in England and it's terrible but you know they get through the problem and everyone ends up well off of course the getting through takes 20 or 40 years as it includes all kinds of bad things happening and stability and maybe we're in such a moment here you could argue with all the anxieties about people losing jobs but there's also so much nostalgia that you're the I mean it's like I mean I'm sorry it is if you are a coal miner and you're out of work at age 52 it's very tough and it's hard to adjust and you have to move or you're you'll never maybe have quite a swapping a job and it's easy for me to sit here and say you know that's just part of social progress that's not the right that's not a very palatable thing to say on the other hand what should be too nostalgic that it was a great thing that we had tens of you had millions of people in coal mines that was not a healthy one or the assembly line all this tile Janelle Trump's getting the votes of quote the white working-class the people who were once working in steel mills and that was great great or on assembly lines and it was it seems to me an awful lot of literature was written in the 50s and 60s 70s matter of assembly lines with dehumanizing and I get a machine and you know not a great you know not what would wanted to get beyond that Haitian perhaps if we didn't want Chinese manufacturing was powerful we needed to automate the assembly lines even faster than we did in the US or if anything we didn't mechanize quickly enough in some of these industries I think the sense of nostalgia that we have is a sense of that there is a lot that we're losing and and the dilemma is that the things that we're losing are very obvious and then on the other and the other end of the tunnel there are many things that we will gain and we have every reason to think the things we will gain are much greater than things that we were losing but it's sort of obvious what we're losing it's not at all obvious what we're going to gain on on the other end I think that would have been certainly true of you know the early 19th century leaving your throes of the first Industrial Revolution and there's certainly are aspects of it that are there like that today but you know might again my my worry with all these things is is if anything it's there's not enough happening you know it's it's if you sort if you take the biggest innovation that people are talking about now its self-driving cars yes I was just glad so let's talk about really so big a deal and you know in a way happy right it's it's you know I think our one or two million people who are employed as as drivers just like maybe one and a half two percent of the workforce maybe something that in that ballpark um maybe it would increase efficiencies because you could get some work done in the car while you're driving to the office so there'd be it maybe maybe could lead to five percent increase in GDP in the whole economy maybe I'm under estimating it some how about it I think I think it would be a significant change but it wouldn't be you know wouldn't it wouldn't necessarily take double our GDP or anything remotely like that and and so the fact that that's sort of the the most transformational change we can imagine is um is again perhaps you know is to my liking to my way of thinking strangely unambitious well you you famous attic said you they told us with that but was there was your favorite joke but it promises flying cars no we got 140 character so this is a nowadays I'm Drive order than 140 characters and it's it's a self drive but really to think about it I hadn't thought about it this way the self-driving cars the still car is coming on the same roads and the same traffic I maybe it's a little less traffic because you know there maybe you maybe they can park themselves you don't need a driver key one and not it won't have to have a car you'll just tell the self to your call like over the self-driving car will come get you so there's less congestion a little bit because there are but I think the theory but it's not flying cars and that is in a way the which would have been up yeah quantum leaps in theory could help congestion a lot theory it could take a lot of pressure off of parking spaces right and things like that and then at the at the same time the fact this is this is the technology that's iconically right the most radical that we can sort of concretely describe um you know it's it's more than Twitter but it it's not it's not quite teacher comes not just criticize Twitter you know but I hate well it's a good it's a very good company it's yeah I just like Twitter tweeting but I also agree there it's in fact that this is what it's come to in a way the there were huge breakthroughs obviously real breakthroughs email I find all that stuff is pretty amazing I mean would mean it was a software car would be I'd say almost as big as the car itself but I would still say that original invention of the car was bigger than the self-driving sir had to give the rough qualitative yeah from or some druggie to car is a bigger that seems people being able to its close you know in lessening distance I think that a card or a self-driving car certainly doesn't lessen distance at all it of course makes it easier you know it is sort like uber replacing I don't know yeah not as far as thinking the exact same thing myself without quite in this context and it is the iconic next breakthrough it's not that big a breakthrough you know yeah but it so there are um and then the other are the are uh you know there are of course quite an even company like uber where you have on this this this this major innovation I I often wonder whether it's it's more symptomatic of of the failure of certain political structures so right the the vision in the 50s and 60s with said you'd build very high speed transport systems which in the San Francisco Bay Area where I live we're basically vetoed by local zoning ordinances and and so it's sort of like this very second best solution because you couldn't build the much faster kinds of things that that people thought were natural in the fifties or sixties to develop and so so it again it's a it's sort of a it's a it's a compensating device for for sort of the dysfunction of our cities where there's not enough parking so you don't want to drive your own car I can never find a parking space it's it's it sort of ends up being and the public transportation systems don't work castles or limited medallion all these social market system for all these things that are dysfunctional and then we have this innovation to sort of ameliorate the dysfunction but but if the political systems worked better in our cities this would be this would be sort of a we might be doing some very very different kinds of things so you're more worried still about the lack of real technological breakthroughs if I can put it that way then this notion that we're on the cusp of all kinds of technologies which will be dangerous to us and out of our control far more worried about the lack of good technologies than the danger of evil so it's it's I feel as a venture capitalist I see all these you know bad forms of bad technology bad science where it's things that just don't work the cool sounding things the general problem is not that they're ethically problematic is that they just don't work and then and then and then or the things that do work are often on a scale that's uh that's incredibly modest you know if you there's often way in which humor is used to sort of hide disturbing truths from ourselves and and you know people made fun of technology in the early 20th century the humor was to disguise how scary it was how much it changed how drastic it was and today it's like you know people throwing virtual cats at one another on the internet or something like that the humor we make fun of technology it's to hide from ourselves the disturbing fact of how trivial it is and how small how small it is so you know people are still worried about what's going on but I think it has a has a very different feel from what it did a hundred years ago yeah that's really fascinating any last word of relative optimism however I mean it is striking just we're here actually having this conversation we're about to the code room where I could have a conference on the mastery of nature sort of modern philosophy and it's its attempt to conquer nature and in a way the amazing success but in a way but so much attention has been given to the downside of that and the you know was it was it a bad idea the first place or is it you know if we know it created as much harm as good as out of control as we were saying earlier but in a way you're taking a very interesting and sort of contrarian view that maybe the problem is that we need to recapture a little that early Verve of the attempter movement yes I don't how to incarnate you for the relief of man's estate or whatever I don't think we've lost it all together right and so it's it's always there's always there is you know that there is and there's always a way in which the you know the post-2008 malaise in the silver lining to this is that there is a sense that we need to do new things we can't just keep going the way things were and there was a complacency that you could have had years ago that I think you no longer quite can have today people are far more open to this idea that perhaps there's been not as much technologic you find that since you when did you first introduce the ideas about I started yet excited about a person 2011 I'm starting to talk about it three four years earlier right and and certainly even in 2011 people thought this was very crazy and at this point even an even in Silicon Valley there are people who sort of said you know I've thought about it some more and I think I think is actually you know there's a lot a lot to this so so it's there's definitely there's more of an openness to it to this notion and maybe that's the first step in in and getting out of it you know you have to realize that we've been wandering in a desert for 40 or more years now and not an enchanted forest and that's that's how we find the first step to get out of it forty years is a good time for the end the wandering it that's about it so yeah I think over forty but today right it's time to leave Peter thanks so much for taking the time to have this conversation and thank you for joining us for conversations

Channel: Conversations with Bill Kristol

Views: 98,052

Keywords: Peter Thiel, William Kristol, Start Ups, Technology, Venture Capital, Artifical Intelligence, China, Bill Kristol, Investing

Id: Q_3r49XXRw4

Length: 83min 24sec (5004 seconds)

Published: Sun May 22 2016

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[u/orientpear]

Thiel's book, "Zero to One" sold more copies in China than all other markets combined.