Peter Thiel warns of upcoming (and current) stagnation

SIAI bene­fac­tor and VC Peter Thiel has an ex­cel­lent ar­ti­cle at Na­tional Re­view about the stag­nat­ing progress of sci­ence and tech­nol­ogy, which he at­tributes to poorly-grounded poli­ti­cal op­po­si­tion, wide­spread sci­en­tific illiter­acy, and over­spe­cial­ized, in­su­lar sci­en­tific fields. He warns that this stag­na­tion will un­der­mine the growth that past poli­cies have re­lied on.

Note­wor­thy ex­cerpts (bold added by me):

In re­la­tion to con­cerns ex­pressed here about eval­u­at­ing sci­en­tific field sound­ness:

When any given field takes half a life­time of study to mas­ter, who can com­pare and con­trast and prop­erly weight the rate of progress in nan­otech­nol­ogy and cryp­tog­ra­phy and su­per­string the­ory and 610 other dis­ci­plines? In­deed, how do we even know whether the so-called sci­en­tists are not just law­mak­ers and poli­ti­ci­ans in dis­guise, as some con­ser­va­tives sus­pect in fields as dis­parate as cli­mate change, evolu­tion­ary biol­ogy, and em­bry­onic-stem-cell re­search, and as I have come to sus­pect in al­most all fields? [!!! -- SB]

Grave in­dic­tors:

Look­ing for­ward, we see far fewer block­buster drugs in the pipeline — per­haps be­cause of the in­tran­si­gence of the FDA, per­haps be­cause of the feck­less­ness of to­day’s biolog­i­cal sci­en­tists, and per­haps be­cause of the in­cred­ible com­plex­ity of hu­man biol­ogy. In the next three years, the large phar­ma­ceu­ti­cal com­pa­nies will lose ap­prox­i­mately one-third of their cur­rent rev­enue stream as patents ex­pire, so, in a per­verse yet un­der­stand­able re­sponse, they have be­gun the whole­sale liqui­da­tion of the re­search de­part­ments that have borne so lit­tle fruit in the last decade and a half. [...]

The sin­gle most im­por­tant eco­nomic de­vel­op­ment in re­cent times has been the broad stag­na­tion of real wages and in­comes since 1973, the year when oil prices quadru­pled. To a first ap­prox­i­ma­tion, the progress in com­put­ers and the failure in en­ergy ap­pear to have roughly can­celed each other out. Like Alice in the Red Queen’s race, we (and our com­put­ers) have been forced to run faster and faster to stay in the same place.

Taken at face value, the eco­nomic num­bers sug­gest that the no­tion of breath­tak­ing and across-the-board progress is far from the mark. If one be­lieves the eco­nomic data, then one must re­ject the op­ti­mism of the sci­en­tific es­tab­lish­ment. In­deed, if one shares the widely held view that the U.S. gov­ern­ment may have un­der­stated the true rate of in­fla­tion — per­haps by ig­nor­ing the run­away in­fla­tion in gov­ern­ment it­self, no­tably in ed­u­ca­tion and health care (where much higher spend­ing has yielded no im­prove­ment in the former and only mod­est im­prove­ment in the lat­ter) — then one may be in­clined to take gold prices se­ri­ously and con­clude that real in­comes have fared even worse than the offi­cial data in­di­cate. [...]

Col­lege grad­u­ates did bet­ter, and high-school grad­u­ates did worse. But both be­came worse off in the years af­ter 2000, es­pe­cially when one in­cludes the rapidly es­ca­lat­ing costs of col­lege.[...]

The cur­rent crisis of hous­ing and fi­nan­cial lev­er­age con­tains many hid­den links to broader ques­tions con­cern­ing long-term progress in sci­ence and tech­nol­ogy. On one hand, the lack of easy progress makes lev­er­age more dan­ger­ous, be­cause when some­thing goes wrong, macroe­co­nomic growth can­not offer a salve; time will not cure liquidity or solvency prob­lems in a world where lit­tle grows or im­proves with time.

HT: MarginalRevolution