Transcript excerpt of Peter Thiel discussing when monopolies are beneficial versus harmful. Thiel argues that dynamic, innovation-driven monopolies (e.g., Apple, Microsoft historically) create new supply and attract capital and talent, whereas static monopolies that merely extract rents are harmful; he also notes policy tools (antitrust, IP) and laments insufficient capital in clean energy versus abundant capital in software.
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There's a public policy question. At what point are monopolies good or bad? I think they become bad in a static world where a monopoly is just a toll collector at a bridge, the tax collector, toll collector. It's like a Parker Brothers board game where you just reshuffle the existing properties. Nothing changes. I think in a dynamic world, you're not creating artificial scarcity. So when Apple invents a smartphone that works, that's not restricting supply, it's creating a supply where none existed. And, and this is reflected, we have antitrust laws to stop bad monopolies and we have copyright, intellectual property laws and things like that to encourage good monopolies. And I think the good monopoly, even if it's not in a software context dominated by ip, the idea behind IP is what makes a lot of these software monopolies more good than bad. If you told me you had one that was going to stop all innovation and sit down on everybody and squash everybody for the next hundred years, that's probably a pretty bad, pretty unhealthy dynamic. I think in practice, that's not been the case. So people were worried about that with IBM in the 70s, Microsoft in the 90s. With the benefit of hindsight, these were probably the points at which the monopolies were eroding as a result of changing markets in any event. So IBM, it was the shift from hardware to software, Microsoft from desktop to Internet. And so I would be disturbed if you have a permanent monopoly. I think most of the time they're like a decade, two decades, they're not permanent. And I do think the existence of these monopolies is what, you know, it does encourage so much innovation. Why is so much capital being put into the software industry? And I think it is a policy problem that we don't have enough capital going into other industries. You know, I think clean come back to clean energy. I think it would be good if we had more innovation in clean tech. It's just the business models don't work. And as a result we're going to have very slow innovation in that area, even though it would be very good for our society. And we're going to have enormous amounts of innovation in software, which I think is not as important as clean tech, but it's still pretty good for our society. But it's because the business models actually work. And so I think the fact that these monopolies can be created and are so valuable, that's what attracts capital, talent, and that's a part of the dynamic that drives the whole system. Forward. Thank you.
