Peter Thiel on Stagnation, Innovation, and What Not to Call your Company (Live at Mason)

Good afternoon. Thank you for joining us today. My name is Carrie Conko, and I am Senior Vice President at the Mercatus Center here at George Mason University. It's my pleasure on behalf of the Mercatus Center to welcome you to the first of a series of conversations with Tyler. Today's special guest is Peter Thiel. The Mercatus Center is the leading university-based source of market-oriented ideas. Our mission is to bridge the gap between academic ideas and real-world problems, bringing scholarly research to bear on the most pressing issues facing our country today. This series of conversations will bring together world-class leaders who will talk about how ideas, cutting-edge research, and applied economics can be used to fix the problems we face in society. I'd like to take a moment to thank the members of the media relations team and the event strategies team who have made today's event possible. I'd also like to thank Tyler Cowen, whose vision guides not only the Mercatus Center but this series of events. It's my pleasure to get to introduce Tyler today. Tyler Cowen is the Holbert L. Harris Professor of Economics at George Mason University. With his colleague at George Mason, Alex Tabarrok, he is the co-founder of the popular economics blog Marginal Revolution. He is also co-founder of MarginalRevolutionUniversity.com, an innovative space for learning and teaching economics online. Bloomberg called Tyler Cowen America's hottest economist. Foreign Policy has named him to the global top 100 thinkers. The Economist named him as one of the most influential economists of the past decade. For those of us who've had an opportunity to have a conversation with Tyler, We know that his mind is an ever-changing kaleidoscope. We can discuss the NBA, arts, music, literature, even economics, and sometimes public policy. I'm really pleased to share him with you today. And with that, Tyler, I'd like to invite you to start the conversation.

Just a minute on the premise of this series. It's been my view for years now that Peter Thiel is one of the greatest and most important public intellectuals of our entire time. And throughout the course of history, he will be recognized as such. So I thought Peter would be absolutely the perfect person to inaugurate this series. Peter himself doesn't need an introduction. He has a best-selling book. His role in PayPal, Facebook, Palantir, many other companies is well known. Peter is a dynamo. There is no one like Peter. But the purpose today is to focus on Peter's views as a public intellectual. And the way we run these dialogues are a bit different than usual. It's not going to be chatty and drawn out. We'll try to replicate a kind of conversation Peter and I would have with each other. So get right to the point, a lot of quick back and forth.— and we'll see how well we can do that in public. But I've watched a lot of interviews with Peter online, and we're going to try to make this different from all those. So let's start with some questions about stagnation, Peter. And at any point, if you care to add other topics of your own, please do so. You're well known for arguing, "Well, they promised us flying cars, and all we got is 140 characters. Technological progress has slowed down." How is it you think that we're most likely to get out of the Great Stagnation when that happens?

Yes, I think there always are three separate things. This question of stagnation, which I think has been a story of stagnation in the world of atoms, not bits. I think we've had a lot of innovation in computers, information technology, internet, mobile internet, in the world of bits. Not so much in the world of atoms. Supersonic travel, space travel, new forms of energy, new forms of medicine, new medical devices, et cetera. So it's sort of been this two-track. Area of innovation. There are a lot of questions of what has caused it, and I think maybe that's a good part to start in terms of what gets you out of it. On a first cut, I would say that we've lived in a world in which bits were unregulated and atoms were regulated. And so if you are starting a computer software company, it costs you maybe $100,000. To get a new drug through the FDA maybe on the order of a billion dollars or so. And, you know, if the FDA were regulating video game technologies and you had to do a double-blind study to make sure that the video games weren't addictive, damaging to your brain, it's like— these things are very overdetermined. It's driven by many different factors. And my narrow attempt to get out of it is not necessarily to come to DC and beg the regulators to be more reasonable. It is to just try to find ways for people to succeed at the margin. I think the other thing that has driven the stagnation is the hysteresis. When you have a history of failure, that becomes discouraging, and so failure begets failure. No halfway sane parent would encourage their kids to study nuclear engineering today, whereas there are a lot of people going into software. So the history of success in software is encouraging more people to go into it and drive more innovation, and then a history of failure in these other areas has been very discouraging. And so what I think would start would be if you've got some signal successes in other areas, that can then set a precedent and you can somehow get what's been a vicious cycle into a virtuous cycle.

And then if you have to make a prediction, which breakthrough in particular will get us out of the stagnation? What's your pick?

Well, I still think There are probably the most natural ones are all these things that are at the boundary of information technology and atoms, of bits and atoms.

Artificial intelligence, biotech.

AI feels slightly overhyped. Biotech, a lot could happen. It feels heavily regulated. But sort of the self-driving car, if you've got self-driving cars, that would be a significant innovation which would change. A decent amount at the margins. There are some regulatory challenges with it, but it's sort of right at the intersection of the kinds of things that could happen.

So the—

I think the most natural hope is that information technology starts to broaden out and starts to impact this world of atoms, and then we're going to have this question about whether the technology outpaces the politics or vice versa.

And so what number should I keep my eye on? Let's say you're going to take a long nap and I need someone to tell me, Tyler, we're out of the Great Stagnation now. What's the impersonal indicator that I should look at?

Well, I disagree with the premise of that question. I don't think the future is this fixed thing that just exists. I don't think there's something automatic about the Great Stagnation ending or not ending. I always believe in human agency, and so I think it matters a great deal whether people end it or not. There was this hyper-optimistic book by Kurzweil, The Singularity is Near, where he had all these accelerating charts. I also disagree with that because it's— not just because I'm more pessimistic, but I disagree with the vision of the future where all you have to do is sit back, eat popcorn, and watch the movie of the future unfold. I think the future is open to us to decide what to do. If you take a nap, if you encourage everybody else to take a nap, then the Great Stagnation is never going to end.

Is there a chance that intellectually we've become so complacent that our worldviews have so changed. Some writers have suggested the decline of mainline Protestantism has intellectually changed America forever. The sense of what can be accomplished, our unwillingness to repeat, say, the Manhattan Project or Apollo. Is it possible we're simply in that forever? And it's a downward spiral, and the longer you're in it, the harder it is to get out, and it's not really about bits?

It's certainly possible that it's something like that. But I do think that there's certainly at the margins, there always are things that we can do. I am somewhat pessimistic about the possibility of government being a key, a place where the Great Stagnation gets reversed. There is a sense in which a letter from Einstein to the White House would get lost in the mailroom today, and you could not even do Apollo. Even something like the SDI program in the 1980s, the debate in the '80s was, you know, is a dangerous first-strike weapon versus a great defensive technology. Whereas today people would say that SDI was just this fictional thing that would have never worked. Again, this very odd way that our expectations have been dramatically reduced. But I do think there's sort of a question about where in the private sector can you coordinate things on a big enough scale. And so, you know, Silicon Valley startups have been a way to do it. And maybe there's some class of somewhat larger companies. My PayPal colleague Elon Musk started both SpaceX and Tesla, which are extremely charismatic businesses because it involved somewhat larger scale, complex coordination, getting a lot of different pieces together to work. Not as big as we could do, perhaps, if you had a well-functioning government, but I think that's not really that realistic.

Given that energy prices are now so low, are you more optimistic about peak oil than you used to be? Or do you think that's a temporary blip on the horizon?

You know, I'm surprised by how much they've collapsed. Now, I would say they are still higher than they were in 2002, 2003 on the oil side. And so, the jury is still very much out on how well it's going to work. I think the big question is what's the equilibrium price at which fracking is really going to work. We've had something like $450 billion has gone into the fracking industry in the last 4 or 5 years, and there's a question whether at $50 a barrel oil, can you actually get a positive return on that money? The striking thing, even as of summer 2014, when oil was still at $100-plus a barrel, was even though you had these two boom stories, you had the Silicon Valley IT story, and you had the fracking mid-US growth story, The striking thing was always how much smaller the fortunes were that were being made in the fracking industry, which led me to think that somehow it was not as great an innovation as was happening on the IT sector, or more marginal, harder to get to work. And so I think if it barely worked at $100, it'll be very interesting to see how well it works at $50. The intellectual question that I asked at the start of my book is, tell me something that's true that very few people agree with you on. This is a terrific interview question. Even when people can read on the internet, they can ask the question, everybody you interview, they still find it really hard to answer. And it's hard to answer not because people don't have any ideas. Everyone has ideas. Everyone has things they believe to be true that other people won't agree with you on, but they're not things you want to say.

And you're here, tell me something that's true that everyone agrees with you on.

Well, there are lots of things that are true that everyone agrees with me on. I think, for example, even this idea that the university system is somewhat screwed up and somewhat broken at this point, this is not even a heterodox or even very controversial idea anymore. There was an article in TechCrunch where the writer starts, "Oh, this is going to be super controversial and offend everybody." You then look through the comments, there were 350 comments, they were about 70% like they didn't So the idea that the education system is badly broken, not even controversial. You know, the ideas that are really controversial, the ones I don't want to tell you. I want to be more careful than that. I can give you sort of these halfway-in-between ideas that are a little bit edgier, that I'll sort of go out a little bit on a limb. So I think like the monopoly idea, that the goal of every successful business is to have a monopoly. That's where we're on the border of what I'd want to say, but really good ideas are way more dangerous than that.

But let me give you my take on how I've tried to fit different parts of your thought together. And again, for all you listeners, this doesn't have to be true. It's just my mental model of Peter Thiel, that you're one of the modern thinkers who takes the idea of original sin— doesn't have to be a theological commitment— seriously. So Tocqueville wrote in the 19th century that America eventually would evolve to be a land of complacent people because we would stop believing in original sin and sink into a kind of conformist mediocrity. So you've taken this to heart. So the world out there is deeply weird. Even though there appears to be free entry into ideas production, because of René Girard-like ideas, the people who deviate, someone comes down on them pretty hard. So there's excess conformity. The original sin in people's motives gets magnified at the social level. Basically, there are distortions out there in everything we can see. It's a kind of Gnostic theology, and a relatively small number of people who can see through those distortions can be great entrepreneurs or can tell the truth about politics. It's all ultimately some kind of bundled implicitly theological, but not necessarily involving belief in God, but theological perspective about the nature of people, and it ends up spreading to all the different parts of society. That to me has been what ties your thought together, but that's a hypothesis. Let's hear your reaction to that.

Well, let's see. I think sort of the way original sin normally works is that it resides in individuals in one way or another, and so theologically, I would place it much more in society. And so I think it's society is both something that's very real and very powerful, but on the whole, quite problematic. We always run the risk of losing sight of that. I think, I don't know if it's strictly the awareness of it that solves it. Certainly, I think there are many, there probably are some people who are just vaguely oblivious to it. So, in Silicon Valley, I've pointed out that many of the more successful entrepreneurs seem to be suffering from a mild form of Asperger's, where it's like you're missing the imitation socialization gene. And, um, and, uh, and, and that's a plus, right? It hap— it happens to be a plus for innovation and creating great companies, but I think we always should turn this around as an incredible critique of our society. And we need to ask, what is it about our society where those of us who do not suffer from Asperger's are at some massive disadvantage because we will be talked out of our interesting, original, creative ideas before they're even fully formed? We'll notice, oh, that's a little bit too weird, That's a little bit too strange. Maybe I'll just go ahead and open the restaurant that I've been talking about, that everyone else can understand and agree with, or do something extremely safe and conventional, and therefore hypercompetitive, and probably not that great as an idea. And so, I'd say a lot of these people may not understand this larger theory about society, but they're somewhat oblivious to it, and it pushes progress. Now certainly my own experience would have been a little bit more where, I think I was sort of, I grew up in Northern California, it was this hyper-tracked process where my 8th grade junior high school yearbook, one of my friends wrote in, I know you're gonna get into Stanford in 4 years. 4 years later I got into Stanford, then I got into Stanford Law School. You won all the conventionally tracked competitions, you end up, I ended up at a big law firm in Manhattan. From the outside, it was a place where everybody wanted to get in. On the inside, it was a place where everybody wanted to get out. And then, you know, you ask, you know, one of the people down the hall from me said that it was, you know, it was great to see me leave. I left after 7 months and 3 days. It was great to see me leave. It was like I had no idea it was possible to escape from Alcatraz. And—

What did you learn there?

Well, I learned that, I was incredibly prone to this problem of social convention. If you want to give it a religious terminology, it was like a— the psychological terminology would be that I had a rolling quarter-life crisis in my mid-20s. The religious terminology, I had a quasi-conversion experience where I realized that the value system was deeply corrupt and needed to be questioned. And so, I do think that I think one of the ways of challenging convention is to— one way, the Asperger way, you could say, is just to be sort of vaguely oblivious to it all and continue apace. And then I think there's another modality where you just become aware of how conventional our conventions really are, and then that becomes sort of an indirect route of trying to start thinking for yourself.

So in your view, perhaps the contemporary world, it's becoming— I don't know what the word would be— stranger or weirder or more shaped by individuals who are different precisely because conformity is being piled on other places. So if the movers and shakers would be people who are in some way neurodiverse, then overall the world is becoming more surprising in a way, right? Less what we expect at different margins and different corners. And this will accumulate. It may never feel like we're getting out of the Great Stagnation.— but each bit of change we get is, in a way, a more different bit of change than we would get, say, in 1957, when everything was done with guys with white shirts and starched white collars, and hoping they would be able to buy a little pocket calculator someday.

I'm not sure whether— I think the innovation that we are getting is driven in strange ways. I worry that actually the conformity problem is actually more acute than it was in the '50s or '60s, so that the category of the eccentric scientist, or even the eccentric professor, is sort of a— this is a species that is steadily going extinct, because there sort of is less space for that in our research universities than there used to be. And so, I worry that perhaps, if anything, it's a little bit the other way, but it's very hard to measure these things, or or calibrate them. But I think that in politics, the conventional approach is to simply look at pollsters. What are your positions gonna be? You just look at the polls, you figure this out, and it works fairly well. It probably, at the end of the day, that's probably not how the system really changes. It probably will get changed by some idiosyncratic people who have really strong convictions and are, over time, able to convince more people of them. But whether this means that we have more or less change is hard to evaluate. But I think it always comes from these somewhat non-conventional channels.

Let's say you're trying to select people for your Thiel Fellowships, or maybe to work for one of your companies, or to start a new company with. Just you, Peter Thiel, as a judge of talent, what trait do you look for in that person that is being undervalued by others? The rest of the world out there, it's way too conformist. So there must then be unexploited profit opportunities in finding people. And if you're less conformist, which I'm very willing to believe, indeed would insist on that being the case, what is it you look for?

Well, it's very difficult to reduce it to any single traits, because a lot of what you're looking for are like these almost Zen-like opposites. So you want people who are both really stubborn and really open-minded. 'Kay, that's like a little bit contradictory. You want people who are sort of idiosyncratic and really different, but then who can work well together in teams. And so this is again, sort of, maybe not 180 degrees opposite, but sort of like 175 degrees opposite.

And this is why you like Hegel.

Not, I don't like Hegel that much, but so I think it's, so if you sort of focus too much on one or the other, end of it, you would tend to get it completely wrong. But I like to get things where you get these combinations of unusual traits. If you have people with some really interesting, very different idea, that suggests, okay, we're in the idiosyncratic category. Then the important question becomes, okay, would they actually be able to function socially and execute? Then maybe the teamwork question you'd ask would be, What's the prehistory of this company? How did you meet? How long have you been working together? And if there's a long prehistory, that would be good on the other side. So I think it's always getting these combinations right.

So there's an interview with you when someone asks, "What's the Straussian reading of your book Zero to One?" And you say something like, "The Straussian reading is don't be an entrepreneur." Yet at the same time, society has this problem, which many of us would recognize, that too many people go down tracks of conservative career choices. You work for a consulting firm, or you go to finance if you come out of a top school. It's now become a new kind of conservative choice, maybe, to go to Silicon Valley in certain ways. Given the difficulties of becoming an entrepreneur and the pull of conformity, how is it actually socially? What kind of intellectual or ideological reconstruction do we need to get people out of so many of these conservative career choices?

It's hard to say. I think entrepreneur is sort of one of these very odd terms where people will say, you'll ask somebody, "Oh, what do you want to be doing in 5, 10 years?" "Oh, it's very clear, I want to be an entrepreneur." But it's just this sort of this vague, empty term. It's like, "I want to be rich, I want to be famous." And so, I am actually quite skeptical of that as a term. And so, yeah, so I think I did say the Straussian reading of Zero to One was that perhaps you should not— I had the perhaps, I had the adverb in, but perhaps you should not be an entrepreneur. It was because on one level, the book is advice about how you would go about building a business, but then on some level, you could also read every single chapter as discouraging people from going into business potentially as well. If you give the core advice that you should start a business that's going to be a monopoly, You say, "Well, that's really discouraging a lot of people who don't have an idea for a monopoly, and so maybe they shouldn't be starting businesses." My view is we should be starting more good businesses and fewer bad ones, not more businesses in the abstract, not more startups in the abstract. Yes, there is always this psychosocial bubble question. I don't think we're in a tech bubble today like we were in '99, 2000. I do not think the public as a whole is involved in quite the same way, and so I'm not worried about it like I would have been in '99, 2000.

I had someone email me a question. Let me read it off. Tell us what you think. This is a quotation. "What do you suggest a well-educated but zero marginal product worker in his mid-30s should do to remake himself for the next 30 years?" Well, I'm always super hesitant to answer questions that are so abstract.

If there was some general answer to the question, it would almost certainly be wrong.

Correct.

If I gave you some general answer and everybody could follow it, then if everybody followed that answer, it would be the wrong thing to do. Certainly, there are— there still seems to be, strangely, a shortage of people in IT broadly. If you're reasonably talented, you can get training in software, in coding, in a fairly short period of time, and get an employable job. And it's sort of an odd cultural thing in our society where we still think of computer programming as such a geeky, bad career choice for people, that even after a decade in which it's worked surprisingly well, there probably are still far too few people going into it. So that would be a—. I think that's a safe general one. Petroleum engineering is probably, you know, that's the other amazing one that, you know, has not yet attracted more people into it in spite of, you know, a decade-long boom.

If you think of the cultural achievement of mankind, or at least the United States, or maybe just your own California, and you ask the question, has that too seen a great stagnation, or is artistic creativity still reaching new and higher peaks? What's your view there? Just how general and pervasive is this phenomenon of stagnation? If it's intellectual in its roots, you might think that it's applying to everything.

I think it's very hard to measure in a number of these dimensions. I think artistic things, things that are of a very qualitative nature, are hard to measure. I certainly think Hollywood's producing fewer great movies relative to 20, 30, 40 years ago. On the other hand, there are a lot of good TV shows. What's your favorite TV show? It's all sort of this crazy schlocky stuff like Game of Thrones. I don't watch that much TV, but I think there are a lot of things like this that work, and it's hard to measure. I think the technology and science questions are ones that I find very interesting, because I think they are somewhat more measurable than a lot of the qualitative social ones. But yeah, I suspect we're not innovating as much in those dimensions either. I think that one you just end up projecting your own biases onto society.

In the back room, we were talking about Japan and a recent trip of yours to Japan. Maybe you'd like to relate some of what you were saying.

Well, they always want you to say things that are sort of contrarian and surprising, so they asked me this at this discussion I was giving in Japan. And the answer that I came up with, which was both flattering to the audience, but somewhat disturbing from our perspective, was I think we always think of Japan as this hyper-imitative, non-creative culture of extreme conformity. And my suggestion is that perhaps at this point, Japan is the least conformist, the least imitative country in the world., and that there's actually sort of a lot of interesting aesthetic cultural stuff going on. There still is a lot of very successful types of businesses. There's innovation in food production, all sorts of interesting areas. But then it's an indictment of the West, where I think Japan is no longer the Japan of the Meiji Restoration of the 1870s, or the Japan of the cheap plastic imitation toys of the 1950s. It's a country that no longer thinks it can get that much by copying from the West. There's probably still some narrow interest in IT and software. Outside of that, I think they're copying the US and Western Europe less and less. People aren't even learning English that much anymore. I think they're speaking less English than they were 15, 20 years ago. The golf courses are all getting shut down and converted to solar farms or something. People don't even wanna play golf anymore., and, uh, it's simply, um, and I think we need to take this as a, as a real critique of our society very seriously, that, um, they're finding less, uh, less that's desirable to imitate in the US or Western Europe.

I'll name a few items, and you tell me just if you think, is this overrated or underrated? Keynes. John Maynard Keynes.

Overrated or underrated? Uh, still, uh, still massively overrated, but perhaps not as much as he used to be.

New York City, overrated or underrated?

That's massively overrated. Why? I think we basically have— well, we had a 25-year boom in finance from '82 to '07. I think that's sort of slowly ebbing, slowly abating. It's going to be increasingly regulated, and so you want to be— If you want a long-short blue state trade, you want to be long California, short New York. The long-short red state trade, by the way, is you want to be long Texas, short Virginia. If you ask, "What do Virginia and New York have in common, and what do Texas and California have in common?" is both Texas and California are actually very inward-focused places. California both Hollywood version and the Silicon Valley version are sort of very focused in on themselves. Texas is also a very inward-focused place. And what Virginia and New York, or let's say D.C. and New York City, have in common is that they're centers of globalization. Finance is sort of an industry that's fundamentally leveraged to globalization, and D.C. is fundamentally leveraged to international geopolitics. And I would bet on globalization sort of slowly being in abeyance. I think with the benefit of hindsight, we will realize that 2007 was not just the peak year of the finance boom, but also the peak year of globalization, like maybe 1913. Happily, it hasn't resulted in a world war, at least not yet, but I think we are sort of in this period where globalization is steadily pulling back, and so you want to be in places or industries that are levered to things other than globalization.

I tend to agree with that. As you may know, before 2007, trade is going up at a rate 3 times higher than world GDP. Post the crisis, trade and world GDP are going up at about the same rate. So I think in rate terms, that has peaked. So you see California and Texas in a way as being like Japan, and you're long Japan also. So that's underrated.

I would be— I'd be relatively long Japan, you know, probably I wouldn't be long France, but maybe that's even underrated because it's probably still somewhat anti-globalization. The marginal tax rates probably will go down in France at some point. But yes, I'd be long the things that are not as levered to globalization. I'd be skeptical of London, New York City, places like that.

How about China?

China, it's hard to evaluate on this globalization metric. Because on some level, the growth story is linked to exports and globalization. And then at the same time, it has this sort of, it has these capital controls and all these ways that it's somewhat separate. So, I find it always very hard to evaluate. I do think it's interesting that the questions about China are being asked less often in the US today than they were a decade ago. So, in 2005, it was a very widespread question. In what year will China overtake the US? A decade later, it's reasonable to think that it's a decade closer to when this will happen. It's a much less commonly asked question. At the end of the day, I suspect we're sort of underestimating China, but it may be very hard to invest. I've always thought that you can only participate in the Chinese boom if you are a well-connected, card-carrying member of the Chinese Communist Party. I'm not, and so it's not been a place that I've really focused that much.

Take a place like Brazil. I tend to think of Brazil as fairly inward-looking. So if you're on a bus in Brazil, you hear Brazilian music typically, not American pop music. Do you think Brazil is underrated or overrated economically, and do you agree with my characterization of it as relatively inward-looking? And if it's an exception, what would account for that?

It's relatively inward-looking. Actually, one other metric for inward versus outward looking is which countries were first taken over by Facebook, how Facebook spread all over the world. It started with the US, other English-speaking countries, then it went to all the small European countries where people spoke English—Switzerland, Holland, Scandinavian countries—and then the ones that were the hardest to break into were the ones with these very separate language groups. Brazil was much harder than the rest of Latin America, which sort of had this Spain to Latin America aspect, whereas Brazil is sort of a self-contained country where most of the people in the world who speak Portuguese live. Portugal barely counts. I think that— so I do think it qualifies on the inward-looking piece, but if you look at the history over the last 150 years, I think there have been 4 points where people were hyper-bullish on Brazil, and I'm not going to get them exactly right, but I think there was one, you know, pre-World War I, I think there was one in the '60s, in the '50s, in the '70s. That's right. There was one again in recent years, and they all turned out to be false dawns, and they were all linked to Brazil being tied into globalization. The optimism about Brazil was always from all the potential that would happen when it became linked to globalization, and then the disappointment happens when it turns out it doesn't work. There was this giant energy company called OGX, that the guy who started it was worth $30 billion in 2011. He's now worth minus $1 billion. You met with him in Rio de Janeiro. He had a McLaren parked in his living room in a villa on a pedestal. He had just divorced his wife, told me, "I can now park my car wherever I want." And they had all these offshore oil concessions they'd gotten from the government. In relatively shallow water. It seemed like a fantastic investment. They ended up— but then it turned out you could only get Brazilian oil service companies to develop it. There were no Brazilian oil service companies. Maybe the oil didn't exist at all. Maybe the whole thing was a giant fraud. Very hard to tell. But so these things sort of work when people are bullish about integration and globalization, and then the reality sets back in. So you can— it could be—. It could be the case that it's fairly decoupled, and the excess optimism came from people thinking it wasn't. Now, you mentioned Facebook a few minutes ago.

In the back, we were talking about good and bad names for companies. If you could tell us your view on this. How important is the name of a company? What are a few good names and why? And what are a few bad names? Well, I think the naming of—

this is sort of like a slight aesthetic thing I believe in very strongly. The names of companies are often very predictive of future failure or success. So I'd say PayPal was a very friendly name. It was the friend that helps you pay. Napster was a bad name. It was the music sharing site. You nap some music, you nap a kid. That sounds like sort of a bad thing to be doing. And it's no wonder the government then comes in and shuts the company down within a few years. So you want to be very careful how you name companies. In the sharing economy context, I like Airbnb way more than Uber. Airbnb sounds like this very innocent, virtual bed and breakfast, this very light, non-threatening sort of company. Uber, that sort of sounds like a bad name from Germany sometime in the 1930s. What are you exactly above? Maybe the law? This is probably something that, again, from a guy From a government regulatory perspective, I think Airbnb is a vastly better name than Uber. On the social networking side, I would say that I actually think Facebook was a very good name. I think MySpace was sort of a more problematic name. Facebook was— you can say that all these social networks involve both reading and writing. Unlike real life, you have to write before you read.. You first have to write some things about yourself, then you read more about other people. Over time, reading dominates writing. Facebook was about learning about people around you, about the real identities at Harvard. MySpace started among wannabe actors in Los Angeles, and it was about them coming up with fictional narratives around themselves, and then sort of a lot of other people in LA who are generally like that. And because reading dominates writing, Facebook would ultimately dominate MySpace. So I think you could sort of, there's a certain version where the whole arc of the company was, the whole product arc was implicit in the names.

How about United States? Overrated or underrated, and consider the name.

You know, it's hard for us to have good intuitions about this because because it's so, we're so used to it and so embedded in the history. But certainly I would be, this is all atavistic and way too old-fashioned, but I'd be sympathetic to the 19th century spelling where the U was lowercase.

In chess, first move, E4 or D4, which is better?

You know, it's probably the case, it's probably the case that d4 is marginally better at this point because it looks like there's certain defenses to e4 that are very hard to break, like the Berlin Defense. But I still always play e4. It's what I got used to.

Because it's the attacking move, right?

It's the attacking move, and if you're short of world champion level, I always enjoy increasing the risk and volatility in a game. Now, you were born in Germany.

You're fluent in German. That's part of your background. How do you think that's influenced your worldview, what I would call your implicit theology, how the different pieces of Peter Thiel's ideas fit together? What's the role there?

Do you still sometimes dream in German? We spoke German at home. We moved to the States when I was a year old., and we spoke German at home for the first 12 years. My parents didn't have a TV set. We got a TV set at age 12, and then sort of every, that, the English language overtook everything. I, it's hard to sort of generalize. I think California and Germany are sort of extremely opposite kinds of places in certain ways, and I think of, you know, I think of California as both very optimistic and somewhat desperate. So, you know, you have 20,000 people a year move to Los Angeles to become movie stars. Maybe 20 of them make it. So it has sort of all of California's super optimistic, but somewhat desperate— It's like Beach Boys music, right?

Sounds optimistic on the surface, but it's deeply sad and melancholy.

Maybe something like that, yeah. And then I think of Germany as always incredibly pessimistic, but very comfortable. And so it is this very big contrast. I think I think it is probably, I'm not sure pessimism is generally that helpful an attitude to have, but the German pessimism is probably a helpful corrective in the midst of the hyperoptimism that permeates Silicon Valley. I think that if you're a mildly pessimistic person, you might do well in a place where people are insanely optimistic, and if you're a mildly optimistic person, you would do well in a place where people are insanely pessimistic. Like, say, Germany.

So maybe you're this mix of German pessimism and California optimism. Just like you said, for Thiel Fellowships, you look for people who embody these Zen contradictions. Maybe that's one of yours, that the extreme pessimism has to do with the weirdness of the world and the difficulty of breaking through the conformity. But at some level, you think it can be done, right?

And you've done it. I always think extreme pessimism or extreme optimism on their own terms are not terribly healthy attitudes to have, because extreme pessimism tells you there's no point in doing anything. Extreme optimism tells you there was no need to do anything, and so they sort of converge on doing nothing. I think a healthy attitude is always either something that's milder, mild optimism, mild pessimism, and I think I average out to sort of a mild version, even though maybe the components are extreme. On average, it comes out somewhere in the middle.

I was emailed this question: What is your maximum likelihood estimate of when you will die? At what age?

You know, I think this is a— I think it depends a lot on what we do about this stuff. So again, it's not as though the future exists on its own. But you're forecasting you. Well, it depends on what I do. What I get other people to do in the next few decades. I think these things could go in very different directions. I think there are— whenever I look at the science on these areas, I think there are many innovations that could happen, and then I think it's incredibly slow. If I had to make a straightforward forecast, I would do a straight-line extrapolation where life expectancy has gone up something like 2.5 years 2.5 years per decade since 1840. And so, that would probably get me into my early to mid-90s. And then, you add maybe 10 years, so somewhere 100 to 110. That would be sort of a good— a pretty good uppercase. But I think there's a lot of variability. If things end up stagnant, it'll be not much more than what people would expect today. If things accelerate, it could be a lot longer.

A lot of those gains in life expectancy have come from people younger than 80. People who reached 80 in, say, 1870 did only marginally worse than people who reach 80 today. In that sense, I tend to be more pessimistic about many people reaching 100, though I would give you, in relative terms, perhaps the best chance of anyone in this room.

So I think that was true in the first half of the of the 20th century. I think in recent decades, more of the gains have come from somewhat older people, not necessarily from people who are 80 and up, but say people who are 60, 65, 70, being able to live significantly longer than they were in the past. And we're certainly not gonna— but you're right, we're not gonna get that many more gains from reductions in infant mortality or things of that sort. And so it will come from people who are somewhat older, hopefully living both longer and hopefully healthier lives.

What's your favorite novel?

You know, the classic one I always give is Lord of the Rings, but if you want something like a little bit more intellectual, it's probably the Bulgakov novel, The Master and Margarita, where the devil shows up in Stalinist Russia and succeeds and gives everybody what they want, and everything goes haywire. It starts because no one believes he's real.

New Testament or Old Testament, which has influenced you more and why?

Well, I'd have to go with something like the New Testament, but I think it's always, these things are always subject to so much interpretation, and so I think it's, I don't think something like any of these holy books, they stand on their own. If they did, that's always an anti-religious argument at the end of the day.

The Hebrew Bible to me has more of this dialectic that we found in a lot of the other topics. Mix of optimism and pessimism, much more irony, multiple voices, varying perspectives. So my answer would be Hebrew Bible has influenced me much more than the New Testament, which has hardly influenced me at all. Now, you're different in that way, but what it is in your character, intellect, or background do you think accounts for that difference, given some of the other things you've said?

Let's see. You know, it's— I'm trying to think of It's probably, well, I actually, I would disagree with that sort of characterization of it. I think that Christ is a very complex, very ambiguous figure in many ways. It's always, which makes, I think, the interpretation quite difficult. I think almost everything that Christ said could be described as an answer to something that's true that most people did not agree on. And I think for the most part, it was necessary for Christ to be very careful how he expressed himself. It was mostly in these sort of extremely parabolic, indirect modalities, because if it had been too direct, it would have been very dangerous. I think it was John Locke in The Reasonableness of Christianity said that Christ obviously had to mislead people since if he had not done so, the authorities might have tried to kill him.

So there's a kind of Straussian Christ here.

That's the Straussian interpretation of Christ, which I think is at least true for— it didn't end in a particularly Straussian way, but I think it was at least true for most of his ministry.

What do you hope to spend the next year thinking about, ideas or questions you haven't thought through already that will be your focus in the next year or two to come? Things we haven't talked about already?

I don't know if it's ever really this top-down agenda that I try to set. A lot of what I end up doing is somewhat serendipitous. You talk with a lot of interesting people. You try to figure out what are some great technologies, great entrepreneurs to work with in different ways. That's how you end up getting very interesting perspectives and how you change your mind on things. So it's no set agenda. I mean, the overarching agenda is always to try to figure out some way to get out of the stagnation by literally helping people to start companies that will change the world.

Before we get to audience Q&A, final question from me. You've done many startups, funded many others. You've written Zero to One on startups. If you think of the Institute for Humane Studies and Mercatus Center, as a kind of startup. We're together in one location. We have a critical mass of people here studying notions of liberty and individual responsibility. We have more or less a common intellectual background in some ways. I wouldn't say we have a monopoly, but the space of doing liberty-oriented ideas in a university setting is by no means what everyone is jumping at doing, to say the least. If you think of us as a startup embodying at least some characteristics which have something to do with what you've praised, what advice would you give us at the margin for being successful in the future?

Yeah, no, I think all those elements are quite good. And I actually think— I have to be careful this doesn't— I actually think that, I think that it's always a mistake to be too focused on prestige and status. And this is always the great temptation in many areas. I think academia is one that's extremely prone to this. And so, I would always be long substance, short status. And so, I think the temptation is to try to get more respectability within an academic setting,, or within some sort of a broader audience. And if you try to get respectability, it will always come at the price of sort of softening the edges, modulating what you say. And so you want to always put substance over status. And if that was sort of a single overarching theme, that would be a very, very healthy one to maintain.

Okay, thank you, Peter, very much for those stimulating answers. For Q&A, we do that through lines at the mic. Is that correct, Julie? And if you would take your line at the mic, we'll go to the first question. Please, no lengthy statements. Please ask direct questions. Yes.

—North Virginia. Thank you very much, Peter, for being here. Thank you, Tyler, for organizing this. My question is, so you talk about vertical progress versus horizontal progress, and I'm wondering, how does one create vertical progress? Like, do you have any tips for doing that? Yeah, no, it's always— look, I think there's no formula. I think there's no straightforward formula for innovation. And I think it's much easier to do horizontal progress, which I describe as globalization, copying things that work, going from 1 to N, versus vertical progress, technology, doing new things, going from 0 to 1. Globalization, I think there is actually a formula. You can copy what's working, you can sort of try to mechanically apply apply it, whereas I think there's something very— there's something scientific about globalization. There's something deeply unscientific about the history of technology itself. Science starts with the number 2, whereas every moment in the history of science, technology, business, I believe, happens only once. The next Mark Zuckerberg won't start a search— won't start a social network. The next Larry Page won't start a search engine. And so I think it's always something, you know, It's always some idiosyncratic thing. I think it's good to be passionate about something that you're good at that other people are not doing. And so if you get those three things lined up, that's a very good start. Thank you. This side, yes.

My question is very similar to the last question that Dr. Cowen asked, but from a different angle. I think that what Mercatus does is not necessarily completely unique in the sense that you're competing with other people who are trying to influence minds about economic and truths related to government. So in order to go from zero to one in a nonprofit organization or a political advocacy group, what would one have to do? What would be a key differentiator or angle to approach with it?

Well, the contrarian nonprofit question that I always ask is— it's not the contrarian business question, what great businesses no one started. The contrarian investor question is, What great investments does nobody like? The contrarian nonprofit question is, what great causes are deeply unpopular? This is how I always deflect requests for money, is I ask people, why is your cause popular? Why is your cause unpopular? Because I only want to fund unpopular causes. I assume popular causes are funded relatively well, relative to good unpopular causes. And so I think that's the— that's sort of, in some sense,. So if you're able to push unpopular causes, that's very good. And then the Zen-like problem, the paradox, is that you will have a lot of impact if you're able to push a good, worthwhile, but unpopular cause. The Zen paradox is that it's very hard to market it and get money to do it. And so that's the tension that I think it's worth thinking through really hard. I think most nonprofits fail at this, where they end up supporting things that are super conventional. They can get funding for them, but if they didn't do it, there'd be 100 other people doing it. So I think always having a counterfactual sense of mission is important. If we weren't doing this, nobody else in the world would be doing this. And to the extent that's not true, you want to make that more true. And maybe it's a spectrum, but you want to— always tilt more in that direction. I always, on the business side, on the nonprofit side, I always differentiate mission-oriented businesses, which have this counterfactual sense of importance, from social entrepreneurship. Because I think anything that has a social element to it, I think the word social is very ambiguous. It can mean, number one, good for society. It can mean, number two, good as seen by society. And in practice, the the second meaning always ends up dominating the first. And then you end up with sort of the me too, lemming-like, sheep-like clones that, where you lose every raison d'être.

This side. This is a question that a commenter named Daniel Burfoot posted on Professor Cowen's blog. If he's in the room, I apologize for taking your question. But his question is, in an age increasingly dominated by intellectual ability, What should a person of modest cognitive ability do with his life to find meaning or make a contribution? And related to that, what person of average or modest intelligence do you admire most?

Well, I'm not going to answer the second question because I'm always nervous that I'd be insulting people if I did. But I think that— I think that, I don't know, I think there are actually a lot of things that people can do that are strikingly, that are underexplored. There are certainly all these vocational careers where people can do quite well, and they're somehow considered not cool, not prestigious, This is sort of the average plumber makes about as much as the average medical doctor. And so I do think this idea of what's unfashionable is very important as an initial anchor. And there's no reason that people of average ability are going to be more pushed towards what's fashionable than people who are very smart. I think often the smarter people are more prone to trendy, fashionable thinking, because they're more easily— they can pick up on things, they can pick up on cues more easily, and so they're even more trapped by it than people of average ability.

On this side. Hi, Peter. I'm inspired by you. I am also nervous to be here asking you a question, so please bear with me. I'm going to take you on in your challenge about sharing something we know to be true that everyone disagrees with. And then ask you a question about it. And the truth that I know to be the case is that the future of human evolution and how we think about, how we structure society lies in privately funded, managed for profit cities built in partnership with but independent from governments today in the world. My question to you and then also I have a follow-up for Dr. Cowen. Is what do we need to do to enlist your powerful support in that view, in addition to getting introduced by someone in your inner circle? And Dr. Cohen, my question to you is what do we need to do to be on that stage having a similar conversation with you and the crowd that you have managed to get out here? Thank you.

Well, look, I think there are many things that would be would be incredibly terrific to do. So it's always like the business version is always, you know, would be, is this important? So yeah, if we could reopen the frontier in geopolitical terms and find a way to really innovate on society, I think this would be a terrific thing to do. And then the question is, how does one actually do this? Is very tricky. All the surface area on this planet is occupied. It seems very hard to get this to work. I know Romer had this experiment with the city-states in Africa. I think it was prohibitively expensive. It could never really quite get started. And so you need to have some version of where this would work and you could get started with a budget of, let's say, less than $50 billion. So if you could give me a convincing way it would work for 50 million instead of 50 billion, I'd be interested. I got it.

Your question addressed to me, I have a graduate student and also a colleague who are working on the economics of private cities, not private cities being completely separate from larger political units, but largely private cities with mostly private infrastructure nonetheless. If you're talking about private cities truly independent of government, I would call those cruise ships. We do have many of them. I think they work fine, but I don't view them as a significant blow for liberty. And in fact, when I go on a cruise ship, I actually worry about some of the liberties I'm signing away. I know I do that voluntarily. It's fine. I don't object to that. But I tend to favor larger political units and to think that human freedom will be found by the wealth and diversity within larger political units, giving people pockets. I'm not sure we'll ever have a bottom-down creation of a lot of micro units which compete very intensely and through exit give people true liberty. I'm more optimistic about the larger political units vision, but maybe that's a matter of taste. But in terms of these events, you know, you or anyone else, feel free to write me. Thank you very much.

My name is Alice Hugelblad. And my name is Eric Bremen and the project's name is Enterprise Cities. You will hear from me later. This side.

Feels like a little bit of a follow-up, but in a 2009 Cato Unbound article, you discussed your disillusionment with democracy as a source of innovation and change in government and politics and expressed your interest in cyberspace. Outer Space and Seasteading. Is there a 2015 update on how you're feeling about government and politics and innovation?

Writing is always such a dangerous thing. I remember a professor once told me back in the '80s that writing a book was more dangerous than having a child because you could always disown a child if it turned out badly. You could never disown anything that you've written. The Cato Unbound article it was, you know, my— it was a 1,000-word essay. It was late at night. I quickly typed it off. I sent it to someone else to review. Said, "Oh, there's nothing controversial in here at all." And my retrospective was that if you actually ask someone to double-check things for whether or not it's controversial, you already deep down know that you should double-check it yourself. But I think sort of my updated version on it would be that, you know, I sort of made the case I thought democracy and capitalism democracy and capitalism weren't quite compatible. The updated version I would give is, you know, it's not at all clear that we're living in anything resembling a democracy. You know, we're living in a sort of a representative republic, but then that's modified through a judicial system, and then of course that's been largely superseded by these very unelected agencies of one sort or another, which really drive most of the decision-making.. So I think calling our society a democracy, whatever may be good or bad about democracy, is very, very deeply misleading. We're not a republic. We're not a constitutional republic. We are actually sort of a state that's elected by these— that's dominated by these very unelected technocratic agencies. And the very difficult political question is, how can you get an advanced technological allows society to function in any way that's more Republican or more Democratic at all. And not at all sure how that is, but I think the challenge is that a lot of these agencies have become deeply sclerotic, deeply non-functioning, even though the alternatives to them politically often seem to be even worse. So, the Federal Reserve, lots of things they do I don't like, but then, you know, sort of once you get people in Congress involved, in dictating Fed policy, that always seems even worse.

A follow-up on that, Peter. New Zealand arguably is the most democratic country in the world, I would say, or very close to the most democratic. Given that, New Zealand, overrated or underrated?

You know, again, I think it's more like a representative democracy or republic. But there's no constitution.

Close to only one branch of government, very little federalism.

Well, I think a lot of these smaller countries are somewhat underrated generally because you have sort of an adaptability, an ability to change things that can move sort of a lot faster. But I think it's— again, I don't think it's the form of government that matters so much. I think it's often the culture. The size. How well things work, to some extent the size. So I think those are Those are elements that are very positive. But yeah, in a world where globalization is going in reverse, one sort of rough approximation is you want to go on a place on the planet that's as far away from the Middle East as you can get. And if you do that on a physical globe, it's somewhere in the southern hemisphere, and it's basically halfway between New Zealand and Tahiti. And so if you had to pick them, I'd go with New Zealand over French Polynesia, which is sort of where the people in France go who find the work hours in France too onerous. Tonga.

On this side. Thank you. How would you evaluate the government of the United States as an investor in innovation and technology?

And perhaps you would consider referring to— rockets to the moon, the transcontinental railroad, drug development, and solar energy, or any other innovations you care to stress? Well, it's— these are all obviously quite different, and I would say it's been on a— so there's a libertarian perspective which I have, which is that it's extremely bad. But that's present tense, and I think the sort of non-libertarian perspective that I think we always should think about a little bit harder is that there's also been a tremendous decline, where I think in the 1930s and 1940s, you had a degree of technocratic competence that was quite significant. You know, today a letter from Einstein would get lost in the White House mailroom. The Manhattan Project would be unthinkable. Apollo would be unthinkable. It probably— I think the first signal one that really went wrong was Nixon's war on cancer. And so I always do think the 1970s were this decade where many of our institutions, especially our governmental institutions, started to work much less well. And that was perhaps the signal one where things went badly wrong. In terms of investing in science and technology, it seems to me that the minimum criterion for doing it is to have some understanding of these things and some ability to evaluate them properly. And in a government in which 2/3 of the representatives are lawyers, and in which— again, just using the House and Senate as a proxy for our government— By generous count, no more than 35 have degrees in engineering or science or anything like that, even very— any technical field, very generously defined, both the House and Senate. Perhaps these are not the right people to be driving these investments. And I think we, again, should have much more focus on substance, much less on process. I always use the Solyndra bankruptcy as an example, and so this question, what went wrong? There's sort of a Republican process critique. The process was screwed up, there were kickbacks, somehow there was this corruption. They could never quite prove it, but that was sort of the intuition. The Democratic defense was, we had a process, we had a portfolio, a financial process where we gave money to lots of different things, you sort of let 100 flowers bloom or something like that. And yet sort of a mathematical objection to it was that a select few a cylinder is— has 2πr, the surface area of a flat panel, which would be 2r, and therefore is by definition 1/π as efficient as a flat panel. And so it was— you could just use 9th grade high school geometry to show that this was a demonstrably inferior technology, was never going to be commercially viable. And you have a Nobel laureate, Steve Chu, running the Energy Department, who is not allowed to use 9th grade high school geometry. In evaluating what to do. And that's obviously— that sort of a society, that sort of a government is one that should not be allowed to make any investments in these areas whatsoever.

This side. Hi, Peter. Joe Colangelo, Executive Director, Consumers Research. In your— in the libertarian utopia that you will build, what will you use for money? Will it look more like Bitcoin or more like PayPal?

Well, I'm not exactly sure that I'm going to succeed in building a libertarian utopia anytime soon.

This question presupposes that you do.

I think that— I actually do think that there's a little bit too much of a fixation on this monetarist level and not enough on the underlying real economy. I think that we sort of have, for example, we have a lot of these debates about Fed policy. Are they printing too much money? Are they not printing enough? What should the Fed be doing? Somehow do you decentralize that? I think money and the nature of money is somehow much less important than all the micro-regulations that make up the economy. So I would be, if you gave me a choice, of getting rid of the vast bulk of government regulations and keeping the Fed. I'd much rather do that than keeping all the other zoning laws and crazy rules we have and going with PayPal, Bitcoin, any gold, any sort of alternate currency one could come up with. And so I think that I'd much prefer to focus on the level of atoms, the real economy, than on the virtual level of bits, which I think have money as being linked to. My intuition, for what it's worth, is that you'd want money— you'd want it to somehow be linked back to the real in a fundamental way. This was the merit of the gold standard, that it was sort of— it at least maintained this discipline that money was not something that simply grew on trees and could be printed ad infinitum. And so, I'd want it to be linked to something real, maybe maybe you link it to the equity market or something that's somewhat more real than just fiat money. But again, I think the much more critical thing are all the microregulations. Thank you. Hi, Peter.

My name is Ara. I work for the Indonesian government as their advisor. My question too for you, first one is, do you think Indonesia is underrated or overrated? And number two, What would you recommend for my government to fight off terrorism? Because you talk a lot about monopoly in your book. Is it possible for my government to monopolize information security, yet at the same time respecting the individual privacy of our citizens?

Thank you. Wow. And again, I'm not totally sure if I have a great answer on that off the top. I think that, you know, I think that I don't know if the right question for many of these countries is what to do on the level of the country itself. You know, Indonesia has 200+ different islands. It's extremely heterogeneous as a place. I think that if things were somewhat more decentralized, that probably would be the direction that one would be tempted to go. Tyler Cowen, you know, I don't know all about the details of the terrorism issue in Indonesia. My sense is that a lot of these national security debates have involved these fake trade-offs in many different places, and it's always, you do more with more or less with less. So you have more security with more privacy invasions in a more centralized, powerful state versus you have less security with more privacy, sort of. So it's always like the NSA versus the ACLU. And I think this is a very fake dichotomy. The technological solution I would like is where you do more with less, where we have more security with fewer invasions of privacy, and we try to find ways to actually do things that are much smarter. And that's what I would define as actual innovation in this space. But we can always We can always do more with more versus less with less. And I think that's just sort of the boring ideological debate we're always stuck with. This side.

Yes, so hi, Peter. My name is Yaya Osfor. And my question revolves around, I have also the same appetite to live longer, over 100, for reasons that are correlated with my life mission. So I'll give you an example. My life mission is to produce more entrepreneurs, innovators, locate ideas, and leverage my full potential as a citizen in this world, health, and many reasons. So for you, my question is, why do you have an appetite to live longer, and what's your life mission? And is that correlated with— have you fulfilled your life mission yet?

Well, I think it's somewhat independent of a life mission. So I actually just think life is something that's worthwhile in and of itself. I think death is kind of a bad thing in and of itself. So even if I was adrift and had no sense of what I was doing at all, I would still, all else being equal, hopefully prefer to live a lot longer. I always think it's very odd how weirdly strange the anti-aging life extension idea is. And I always think, why would people— think that you need a life mission or some extraordinary reason to want to live longer. And I think part of it goes to these very strange psychological ways we deal with mortality through a combination of acceptance and denial. We accept that we're all going to die, and so we don't do anything. And we deny, we sort of think we're not going to die anytime soon, so we don't really need to worry about it.. And so we have this sort of schizophrenic combination of acceptance and denial, like extreme pessimism and extreme optimism. It sort of converges to doing nothing. And I'd like us to just fight it a little bit more for its own sake.

Thank you. Over here. Thanks for the good discussion, both of you. If you accept for the moment the premise that in general the sort of free market system we have has done a pretty fair job on the production side, but that there may be a secular threat to its success on the distributional side. In other words, increased concentration of wealth, perhaps due to technology changes. Is there a way to substitute something on the distributional side without harming the effective progress— performance on the production side?

Well, I'm not sure I agree with all those premises, so that would be sort of point number one. I always think on this inequality debate, you have to always separate into three separate questions. One, is it even going up? It's probably going up in the US, not going up globally, so the Gini coefficient of the world, not even clear that's going up, but let's grant number one. Then you have a second question, Why is this happening? And then a third question, what to do about it? And I think these things are very different. The why it is happening, I tend to blame it more on globalization than technology, but I think it's very overdetermined by many different things that are quite hard to solve. And then I think what to do about it, I often, I think that many of the remedies are are actually worse than the disease, where if you come up with— if you come up with higher marginal tax rates, for example, you probably will just incent people to come up with more loopholes. Maybe it hurts the middle class more than the wealthy. And if you actually look at societies with officially very redistributionist policies, they seem to get more and more static. The more redistributionist the rhetoric is. And you have to go very far left before you actually get to effective redistribution. Venezuela is not left-wing enough to get the redistribution. You have to go probably all the way to Cuba, Soviet Union, things like that. France, not nearly far enough. And so I'd rather go in a very different direction. And my sense is always that it's— that it's basically— that the issue is not inequality, the issue is much more stagnation. There's a sense that people's living standards are generally not improving that much. And then, the sort of our, "What can you do about that? What are the micro solutions for that?" In Silicon Valley, San Francisco, where I live, I would say the single biggest variable that makes people feel the stagnation is the sense in which housing costs, rental costs are through the roof, and so the political fix I would be tempted to pursue would be trying to find a way to break the unholy alliance between urban slumlords and pseudo-environmentalists that sort of prevent any new urban development. But so I think it's always much more this problem of stagnation than inequality.

Let's try to squeeze 3 more questions into the last 5 minutes. Next.

Hi, Peter and Tyler. My name's Dianqiao Han. I'm a patent lawyer. I also consider myself a person with ordinary cognitive intelligence. But a few years ago, I come up with a proposal to build a human physiological simulator after the Human Genome Project to further push the IT and the life science revolution forward. I managed to talk to Dr. Collins from NIH, who was the director then, and his answer is, "Great idea, but it's too hard to do." So I want to get your response for that. Thank you.

Yeah, I probably agree with that. That seems a little bit hard to do. I generally find myself a bit skeptical of all the AI-themed discussions that we have at this point. I think it's still quite a bit further away than people think. It feels like a bit of an extreme consensus that AI is just around the corner, it's about to happen. It would take a lot longer to explain all my misgivings about it, but I think it fits a little bit too much into this conventional inequality narrative that we have rapid technological progress and the only problem is that the, you know, is that people won't have jobs and will be replaced by computers. And I suspect that's not quite correct. I think the whole AI story is, if anything, happening more slowly. The data point people always give is self-driving cars. The fact they always come up with the same example suggests that maybe there's not that much to it. Even if you got— and I think self-driving cars would be significant— it might replace at most 1% of the workforce, might increase productivity by a few percent. In the economy. So if you phase them in over a decade, it would not be that transformative. Next question. Hi, Peter.

My name is Mark Noturno. I'm wondering what you see as the biggest changes in the practice of science, say, over the last 50 years, for better or for worse, from the perspective of innovation, and whether you think that the public consciousness or concept of science has matched those changes.

It's gone dramatically for the worse. Basically, you've— I think the basic narrative I would give is that we had this preexisting ecosystem of idiosyncratic scientists who were driving research in all sorts of independent ways. You could dramatically accelerate it by by giving them a lot of money, which is what we did in the 1930s to 1960s, but it came at this price of subtly politicizing the system. And the problem is that a good scientist is very much the opposite. Now, this may be like more like 180 degrees, not 175 degrees. It's 179.5 degrees, the opposite of a good politician. It's like a scientist is someone who's interested in the truth. A politician is someone who has a very troubled relationship with the truth. And I think we've had this sort of Gresham's Law where the bad scientists have driven out the good, or people who are nimble in the art of writing government grant applications have replaced the eccentric scientists who've really pushed the research. And I think that's sort of this deep corruption of the process. It's very hard for the public to be to fully appreciate it because it's— because science is so specialized. And so, you know, who am I to evaluate superstring research or quantum computing research or nanotech or, you know, immunotherapy as applied to cancer? And because of this extreme specialization of science, you have these sort of self-reinforcing expert communities that have made this process of politicization extremely opaque to the broader public. But I always— yeah, I'm very much in favor of science, but I'm skeptical of people who excessively invoke science as an incantation of sorts. You know, you use science— when you use the word science, it's often a tell, like in poker, that you're bluffing and that no science at all is going on. And so we have political science, we have social science, we don't have physical science or chemical science. They're just physics and chemistry. There's no debate. Library science. And so if you think about other areas where people use the word science excessively, I think those are areas that we should perhaps be a lot more skeptical of.

Last question, Brian Kaplan. Yeah, thank you very much, Tyler. So here's my question. How happy are the super rich?

First-hand experience, or all the super-rich people you know, or both? I'm not sure this is a terribly easy thing to measure. I think this is extremely deeply subjective. It's that people probably have fewer worries about money. They have a lot of worries about how excess of money screws up relationships in different ways. I think there probably are are pluses and minuses. But I, I'd always question the premise of the question. I'm, I'm not sure whether subjective happiness should be the most important metric at which we evaluate things. There's many other metrics we can use.

Peter, thank you very much.

Thank you very much. Thanks.