The Failure of Modern Technology | Peter Thiel

The 1970s were an incredibly pivotal decade in U.S. history where stagnation and sclerosis began; both liberals and conservatives debate when decline started, but conservatives are right it was the 1970s, marked by moon landing in July 1969 followed by Woodstock 3 weeks later when hippies took over the country and the cultural war over progress was lost.

“the history about the stagnation sclerosis of of the United States the conservative versus liberal debate has always when did this start and um and I think the you know the Liberals always say it started in the 80s with Reagan the conservatives say it started in the 70s and I think the conservatives are really right about that and this is this is why I think the 1970s Were Somehow an incredibly uh pivotal decade in the history of this country and we should never um we we always have to insist on on going back to the history of the 70s as a as a key point of uh departure of thinking through what uh what has gone uh wrong or why why things have sort of flattened out not just in science and technology but in so many other fields um you know it's it's we we landed on the moon in July of 1969 uh Woodstock started 3 weeks later and I think with uh with the benefit of hindsight we can say that that's when the hippies took over the country and when um the true sort of cultural War over this question of progress was somehow was somehow lost and the stagnation of the 70s uh 70s really set in”

Technology is not a panacea, but science and technology started in the West due to something about Western Civilization that enabled them—likely freedom for individuals to think for themselves and lower social conformity pressure—distinguishing it from other civilizations.

“I'm not a techno utopian I don't think technology is the Panacea or the solution for all the world's problems um I do think that it is one of the uh great achievements of the West um I think science technology started in the west there was something about Western Civilization that enabled them to happen we can have debates as to exactly what parts of the western tradition uh uh really opened uh it up to to Scientific and technological and ination but I I I think it has something to do with the freedom of individuals to think for themselves and um and um and a way in which the so um the uh the social Conformity was not uh quite so overwhelming”

The U.S. dollar maintains value as reserve currency because of legal tender status (required for tax payment) and backing by American military supremacy; displacing the dollar requires replacing not just a payment mechanism but these institutional underpinnings.

“one one thought on why it's quite hard to Simply replace the dollar though is that uh you know it's um you know it says you know it's you know this note is legal tender for all debts public and private and so you have public debts like taxes and you need dollars to pay taxes you can't have Bitcoins to pay taxes and if you don't use dollars to pay taxes there will be people who will come with guns after you to make sure you pay your taxes in dollars and so on some level you know the US dollar as the reserve currency in the world as imperfect as it is with Fiat money and all all and all such is you know it is driven by the supremacy of American military power and uh and until until you um you know I know if we should change that but that's that is sort of what it's uh what it's linked on some deep level”

Two main reasons explain technological stagnation: libertarian (regulatory double standard: $100,000 to start software company vs. $1 billion to get new drug approved by FDA, so people start video game companies instead of life-saving drug companies) and conservative (loss of hope, increased risk aversion, loss of transcendent reference points).

“I always am nervous about answering questions that start with why but I'll give um Let me give both a Libertarian and a a a conservative answer you know I think the the libert Aran answer is that we've basically outlawed everything in the world of atams we've left the world of bits relatively unregulated it costs $100,000 to start a computer software company it costs you a billion dollars to get a new drug approved through the FDA and therefore um it's not surprising that we live in a world where people start more um video game companies and uh they don't actually work on drugs that would save people's lives um and so I think there is sort of this uh this there's sort of this um there's sort of this uh this extraordinary uh um regulatory double standard um and then I think um and then I think from a uh I think from a um from a more uh conservative perspective there is um there is sort of the sense that we've um we've you know we've become a more risk averse Society we we we don't um we we uh we've lost we've lost uh we've lost uh hope for the future”

Failure creates hysteresis where failure begets further failure—when Nixon declared war on cancer in 1970 with a 1976 deadline, the failure of that ambitious project created disincentives for declaring war on Alzheimer's or dementia, even though one in three people age 85 suffer from dementia.

“as these areas have failed uh they sort of there's certain hysteresis that kicks in where failure begets failure and so when Nixon declared war on cancer in 1970 and promised we were defeated by the bicentennial by 1976 44 years later um maybe we're 44 years closer to the goal by definition but there's a sense we're more than six years away um um it would be inconceivable to declare war on Alzheimer's or dementia even if you know one out of three people at age 85 suffer from it uh and so there is sort of um much less of a of an impetus for uh for these kinds of things”

All happy companies are different because they differentiated themselves with something unique, while all unhappy companies are alike because they fail to escape the sameness of competition; great businesses are monopolies, not competitive firms.

“I think all happy companies are different because they uh they came up with something that was um different and unique from the rest of the world they differentiated elves from everybody else um and uh and the uh and the sort of Politically Incorrect word that I use to describe um really great businesses is that there are monopolies and this is what this is what you want to aim for you don't want to be doing something that's interchangeable where you could be replaced um by by lots of other people um and so as a Founders as an entrepreneur you're always aiming for Monopoly uh on the other hand on the other hand um all unhappy companies are alike because they fail to escape es ape the essential sameness that is competition”

The contrarian questions 'What great company is nobody building?' and 'Tell me something that's true that almost nobody agrees with you on' are shockingly hard for people to answer because the correct answer requires stating something uncomfortable that the interviewer would likely disagree with.

“the business one I like to always ask is what great compan is nobody building the the more intellectual one which I like to ask which I think is a fantastic interview question is um tell me something that's true that almost nobody agrees with you on and um and this is a shockingly hard question for people to answer um even when they can read on the internet that I always ask the question um and I I think it's and and it's it's it's shockingly hard in in um people think it's shockingly hard because uh you you sort of hear the question and you think well you know um you know it's it's just about uh you have to come with something really brilliant and incredibly smart and esoteric maybe you've had spend 10 years in some post-doctoral program before you can find out something um idiosyncratic that no one has ever thought of but um but if we were really honest about it most of us have some answers to this question and uh and and the actual reason that it's hard to answer is because um in an interview context the correct answer is one that the person asking the question is unlikely to agree with”

Progress and new thinking require something different in nature; as society loses transcendent reference points, people look more to one another and become more sheeplike and herd-like, losing the ability to think independently.

“if there are going to if there is going to be um progress if there is going to be new thinking in any direction uh it often uh requires uh uh something that's uh that's very different in nature and and there is and there is this worry of course that our society has lost um has lost sort of the Transcendent reference points as we as we've lost these reference points we've come to look more and more to one another uh and we've become somehow more um sheeplike more herd-like more leming like”

Business school creates a conformist filter: students who are socially well-adapted and low-conviction enter, and after two years in a 'hot house environment' they all pursue the same trending fields—historically targeting Michael Milken in 1989, then the dotcom bubble in 1999-2000—showing how peer pressure in elite institutions creates herd behavior.

“with apologies to people who went to Business School uh if you um you know I often think of the business school demographic is people who are sort of the anti- Asbergers demographic they're sort of socially very well adapted they're often sort of low conviction um in one way or another um and you sort of put these people in a hot house environment for two years and uh they've done studies on this at the end of the two years they always go into the wrong Fields they always sort of convince one another to sort of try to catch the last wave and so at Harvard Business School in '89 everyone tried to work for Michael milin you know uh sort of a year or two before he went to jail they were never really interested in technology or Silicon Valley except for 99 2000 when they all flocked to Silicon Valley at the at the very end of the dotc bubble”

Universities face a crisis comparable to the Catholic Church 500 years ago: a single uniform system with less diversity than the Church in 1514 (which had Dominican-Franciscan debates, while modern universities have only small Harvard-Princeton differences); society believes secular salvation requires university attendance ('go to Yale or go to jail') and payment of 'indulgences' to administrative classes.

“the universities face a crisis today comparable to the crisis the Catholic Church faced 500 years ago uh and um it's a it's a single uh uniform system uh in a way the universities that we successor it's I think it's an atheist you can sort of think of the universities as the atheist Church um there's um there's less diversity than there was in the Catholic church in 1514 so you had debates between the Dominicans and the franciscans um at this point you have much smaller debates between you know the Harvard and the Princeton political science faculty um but um but um but we have sort of this idea just like people had in 1514 um that um the secular salvation requires you to be involved in these universities that you go to Yale or you go to jail that uh that um that you know um that you have to pay more and more in indulgences to this sort of uh Priestly or Prof professorial or really administrative class of people and that uh um and that you know if you get a diploma you'll be saved if you do not get a diploma uh you will sort of go to the secular equivalent of of hell”

Courage is in far shorter supply than genius in society, and many successful Silicon Valley companies were founded by people with Aspergers-like characteristics because socially well-adapted people are discouraged from pursuing heterodox ideas before they are even fully formed, sensing these ideas are too weird and will cost them friendships.

“we live in a world in which I think courage is in Far shorter Supply than than genius there there there is this uh you know there is this very strange phenomenon in Silicon Valley where uh so many of these successful companies were started by people who seem to be suffering from something like Aspergers or something something like this and and um and I think we need to always flip this around um and and and see this as somewhat of an indictment of our of our society where um if you are not suffering from Aspergers if you're actually socially relatively well adapted um you will somehow be talked out of or discouraged um of any of the heterodox ideas you might have before they're even uh even fully formed and so uh you will sense the ideas are too weird they don't fit in people will not like you they won't be your friends”

Competition forces focus on rival firms rather than on transcendent or truly meaningful goals; competition is a psychological and strategic trap that prevents people from imagining alternatives, as illustrated by law firm partners who cannot envision leaving despite hating their work.

“when uh when their identity was defined by by competing so intensely with uh with other people they uh they could not imagine leaving um and and this is I think the big problem with competition is that it focuses us on the people around us and um and while we get better at the things we're competing on we lose sight of anything that's important or Transcendent or truly meaningful in our world”

Competition forces companies into undifferentiated sameness; starting multiple companies in identical spaces (fourth online pet food company, tenth solar panel company, 10,000th Manhattan restaurant) is Darwinian competition that destroys value rather than creating it.

“you don't want to be starting the fourth online pet food company or the 10th uh thinf film solar panel company or the uh and I'm always nervous about even raising this one in this context but or the 10,000th restaurant in Manhattan um and uh and so if you want to if you want a darwinian competition if you want nature beared dread and tooth and Claw you should always open a restaurant if you want to make money you should do something something very different”

There is no formula in business or technology; all really important things in the universe are singular and happen only once, so turning history, technology, or business into a formula would be pseudo-science, not science, because science requires repeatability and experimental verification.

“one of one of the challenges in teaching about entrepreneurship or teaching about how to uh start new businesses is that there is there is actually no formula whatsoever uh you know science starts with the number two science starts with things that are repeatable that are experimentally verifiable in one way or another but uh but I think that um that all the really important things in our universe are singular and that uh um every moment in the history of business every moment in the history of Technology every moment in the history of our world happens only once and uh and so uh and so that if you try to uh turn history or uh technology or business into some sort of a formula um that will that will not be a science that will be a pseudo science”

There are ideological taboos in science: questioning Darwinism or climate change causes trouble, creating conformity in scientific fields and suppressing legitimate debate and investigation in certain domains.

“I do think there's sort of an ideological version where there's certain certain areas of science that are just taboo and so if you're questioning Darwinism or if you're questioning uh uh climate change uh you always get in trouble uh and so uh you know and so there are all these areas that where there's Conformity”

There is no formula anymore for career advancement; the millennial generation has been taught to be tracked and formulaic at precisely the moment when formulas are breaking down, creating a mismatch between preparation and reality.

“there is no formula uh that that that we have anymore and and this is very disturbing because um we've been brought up uh in a set of formulas and I think the millennial generation in the US U has been taught uh to be tracked and to be uh formul uh in a formulaic way at a precise point when these formulas are breaking down”

Political correctness, properly understood, is fundamentally an unwillingness to think for oneself and a fear of stepping outside bounds of conformity pressure; this is the core problem in universities and society at large.

“the greatest uh political problem that we have is this problem of political correctness uh properly understood and it is it is um an unwillingness uh to think for oneself uh a fear of um of stepping outside of the bounds of uh the sort of this incredible pressure to conform in in one way or another and this is I think the the the core problem in our universities and the uh the core problem in our um in our society at large”

Bob Laughlin, a Stanford physics professor who won the Nobel Prize in the late 1990s, mistakenly believed his Nobel Prize gave him perfect academic freedom; when he investigated how scientists were 'fraudulently ripping the government off,' he was promptly defunded by peer review and his graduate students could no longer get PhDs, demonstrating that even Nobel laureates lack true academic freedom.

“one of my um uh one of uh one of the people I know at Stanford uh was a um guy Bob Laughlin who uh is a professor in physics he got a Nobel uh Prize in physics uh in the late '90s and after he received his Nobel Prize he suffered from the Supreme delusion that he now had perfect academic freedom and he could look into any subject matter whatsoever and this uh this turned out to be a very very big mistake and uh he decided to look into something far more controversial than questioning climate change or questioning Darwinism or you know any of any sort of uh uh conventionally tabooed topics and he decided to look into the question of how many scientists or so-called scientists were fraudulently ripping the government off um and um and uh needless to say this was a movie that did not end well for for him um one of my one of my good F I sort of got the story from one of my good friends who was a PhD student of Laughlin at the time and he'd come into their office once a week and it would be and of course he was like a somewhat stubborn somewhat eccentric person tell his his uh grad students you know I'm so proud of you you're on the front lines of Science and we're battling all the frauds and imposters and we're like we're at war with the whole world to defend science from uh from all these fraudulent people are stealing money from the government um they sort of had a public hearing where they uh denounced some of the offending scientists um uh it sort of all went rather Haywire he was he was quite promptly defunded by the peer review process his his grad students could no longer get phds because you can only get a PhD if you get some committee to approve of it”

Both Washington DC and Hollywood reflect broader societal technological inertia more than they create it, though they do both reflect and create the problem—technological pessimism is endemic to contemporary society, not merely products of these institutions.

“I don't think it's I'm not even you know blaming Hollywood or DC altogether I think uh they they both in um in many ways more reflect our society than they created they do both they both reflect and created but I think it's often more a reflection of this uh of this um of this sort of technological inertia in one way or another”

We live in a world where a letter from an Einstein would get lost in the White House mail room; the historical precedent shows widespread acceptance of ambitious goals was possible, but is no longer conceivable.

“I think we are we are in a world where you know a letter from an Einstein would get lost in the White House mail room there all these things you could no longer you could no longer do”

To find a way back to the future, the first step is realizing we've been wandering in a desert for 40 years, not an enchanted forest—this psychological/epistemological reorientation is prerequisite for any substantive change.

“if we are going to find a way back to the future I think the first step um the first step um is to realize that we've been wandering in in a desert for the last 40 years uh and the first step to get out of the desert is to realize that we're in a desert and not in some sort of Enchanted Forest”

Like 16th century Reformation, the future will require individuals to save themselves because institutions no longer work, making self-directed learning and alternative paths necessary.

“the future is going to is going to look somehow very different and uh it you know and we all have to think you know this is the disturbing message I have a similar that of the 16th century reformers you have to actually figure out how to save yourself to some extent because the institutions no longer are working”

When contrarian thought is not pursued due to social pressure, the individual only partially blames social forces; they sense internally that their ideas are too weird, won't fit in, will make people dislike them, and so they self-censor before the thought fully forms.

“if you are not suffering from Aspergers if you're actually socially relatively well adapted um you will somehow be talked out of or discouraged um of any of the heterodox ideas you might have before they're even uh even fully formed and so uh you will sense the ideas are too weird they don't fit in people will not like you they won't be your friends and uh and so you should uh you should not pursue them”

Thiel left his position at a major Manhattan law firm after 7 months and 3 days; colleagues perceived this escape as impossible despite it requiring only leaving and not returning, suggesting competition-based identity makes people psychologically unable to recognize exit options.

“when I when I when I when I left after 7 months and 3 days um one of the um one of the uh one of the people um one of the people down the hall from me said uh you know I had no idea it was possible to escape from Alcatraz which which of course um which of course um was not literally true since all you had to do was go out the front door and not come back but uh but psychologically this was not um what uh what people were capable of”

Neither libertarian nor conservative bias should obscure objective decline: the government succeeded in the Manhattan Project (1940s), Apollo, and SDI (1980s—would have succeeded and produced laser ICBM defense if continued), showing government can accomplish hard technical goals when committed, but current inability to build government websites indicates broader failure.

“there's a Libertarian or conservative bias that the government can't do things but uh but I don't think this is absolutely true you know the government did succeed in um the Manhattan Project in the 1940s um it did succeed in Apollo there was the SDI effort in the 80s which I think would have actually succeeded had it been continued you know we would actually have lasers that could shoot down icbms today had we actually kept working on it and um and uh and uh we're now at a point where you can't even get a website for uh for for Obamacare and um and I I think that um and you know um whatever whatever you you know whatever you think of the morality of nuclear weapons I I want to suggest that uh that uh that building an atomic bomb is a far harder uh undertaking than building you know building a uh building an internet website”

Of 535 U.S. congressmen and senators, by a generous count perhaps 35 have backgrounds in science, engineering, or technology; the rest do not understand basic facts like windmills not working without wind or solar panels not working at night, indicating the country is 'stuck in the Middle Ages' on technical matters.

“in in the world of Washington DC there are 535 congressmen and Senators I I once did a study on this by a generous count maybe 35 of them had a background in science engineering or technology the rest of them do not know that windmills do not work when the wind is not blowing or that solar panels do not work at night um and you're basically Stuck in the Middle Ages in in in one in one way in in one way or or another”

Contrarian attitudes are formed through exposure to ideas that don't fit prevailing orthodoxy, growing up in Evangelical Christian family, and coming to believe that not everything taught in universities is sacred truth; professors are themselves subject to social pressures that reduce objectivity despite higher IQs.

“there was certainly uh you know there was certainly grew up in a Evangelical Christian um family there was there was certainly the uh there certainly sort of the S some of the political views I had didn't quite uh fit into the the prevailing uh liberal Orthodoxy and so um and so there was um there was an openness even as an undergraduate to thinking that not everything that I'd been told was uh was being told not all the conventional truths were simply the truth I think this is always a very important starting point to to um to to not sort of think that uh that everything that uh we're being taught is is absolutely sacred in this in this University context and to realize that there are um there sort of are um many ways in which even though we may have professors or people who are sort of much smarter or have higher IQs they have themselves um they're themselves subject to the sort of social Vortex where um where maybe um maybe they're not as objective about about things”

There are many problems with Fiat money; most alternative world currencies are worse than the U.S. dollar (Euro, yen, ruble seem worse), but the challenge is creating currencies the government cannot inflate; PayPal aimed to be a new world currency but succeeded only in creating a payment system, a much lesser goal.

“there's there's uh you know there is sort of a um there are lots of problems with Fiat money um uh the uh the challenge with creating alternatives to the US dollar is that U most of the other currencies in the world today are probably even worse so the Euro seems worse the end seems worse um the ruble seems somewhat worse um um and then the question is whether you can um you know whether you can create some some new currencies um where the government cannot simply inflate them away uh and we certainly had as an idea at PayPal we had these uh t-shirts back in 2000 where PayPal was going to be the new world currency uh we we didn't succeed at building a new currency um we U we did succeed a new payment system soort of a much lesser lesser goal”

In elite university systems like Yale, there is simultaneous external prestige (everyone wants to get in) and internal misery (everyone wants to leave), creating a trap where the institution's external appeal masks internal dysfunction.

“it was on the outside it was um it was a it was a place from the outside where everyone wanted to get in on the inside it was a place where everybody wanted to leave”