I think that Thiel’s perspective on economy is fundamentally Marxist. Like, the rich getting richer by the power of compound interest, whether that means investing their money in business, buying political power to get unfair advantage over their competitors, etc. Simply said, if at the beginning of the year I am richer than you, then if everything else is equal, at the end of the year our difference in wealth should only be greater, because whatever you do, I can do too, and I do have a few extra options you don’t have. But the same is true for the difference between the slightly rich and the extremely rich. And if we are competing for a share of the same cake, someone is going to starve, and later even more people are going to starve.
Except where Marx sees the light at the end of the tunnel in worldwide revolution which would make everything magically okay (and the history of communist countries so far proves him wrong), Thiel sees it in technological progress. Simply said, with enough progress we can outrun the otherwise inevitable corruption. Even if the wealth of rich people grows exponentially, if the world as a whole grows faster, everyone can get better, and no one needs to starve. But this remains true only as long as the world progresses fast enough, which is why Thiel is so worried about the idea that the progress may be slowing down. This is still mostly within Marxist mainstream: Marxists accept technological progress unforeseen by Marx as an explanation why the prophesied doom and the worldwide revolution haven’t happened yet. But they still hope that it soon will happen. Thiel hopes that it won’t.
Then there is the observation that although computer science made an extreme progress, other things are way slower. “We have the computers from Star Trek… but nothing else from Star Trek.” No idea who noticed this first, but probably many people already did. Many also noticed how our ancestors could fly to the Moon, but we can’t.
Criticism of academia as a pyramid scheme and gatekeeping institution, also nothing new. Brian Caplan wrote a book about it.
Complainst about regulation are also quite old.
From my perspective, although most of the ideas are already out there, it is still valuable that someone made a coherent picture out of it. Which in itself is another Thiel’s topic, how increasing specialization makes it difficult to understand the big picture about technological growth (and specifically how even impressive progress in some parts of science often doesn’t translate into useful technology: for example the knowledge of atoms gave us atomic bombs and nuclear power, but the knowledge of quarks gave us… nothing). Without this coherent picture, people could still admit the individual complaints, and yet deny the conclusion.
I think that Thiel’s perspective on economy is fundamentally Marxist. Like, the rich getting richer by the power of compound interest, whether that means investing their money in business, buying political power to get unfair advantage over their competitors, etc.
I think Thiel’s answer would be that in a world of 0 interests rates the rich don’t really get richer by the power of compound interests. All the profits get competed away.
Criticism of academia as a pyramid scheme and gatekeeping institution, also nothing new. Brian Caplan wrote a book about it.
The book was written after most of the talk, so it’s not a basis for Thiels thoughts.
Thiel does speak about all asset classes not really providing the returns that the LP’s desire.
The interview with Thiel and Eric Schmitt is good in this regard. Google holding 50 billion on it’s balance sheet because they don’t see any way to invest that in a profitable way is a good illustration of those dynamics.
I think that Thiel’s perspective on economy is fundamentally Marxist. Like, the rich getting richer by the power of compound interest, whether that means investing their money in business, buying political power to get unfair advantage over their competitors, etc. Simply said, if at the beginning of the year I am richer than you, then if everything else is equal, at the end of the year our difference in wealth should only be greater, because whatever you do, I can do too, and I do have a few extra options you don’t have. But the same is true for the difference between the slightly rich and the extremely rich. And if we are competing for a share of the same cake, someone is going to starve, and later even more people are going to starve.
Except where Marx sees the light at the end of the tunnel in worldwide revolution which would make everything magically okay (and the history of communist countries so far proves him wrong), Thiel sees it in technological progress. Simply said, with enough progress we can outrun the otherwise inevitable corruption. Even if the wealth of rich people grows exponentially, if the world as a whole grows faster, everyone can get better, and no one needs to starve. But this remains true only as long as the world progresses fast enough, which is why Thiel is so worried about the idea that the progress may be slowing down. This is still mostly within Marxist mainstream: Marxists accept technological progress unforeseen by Marx as an explanation why the prophesied doom and the worldwide revolution haven’t happened yet. But they still hope that it soon will happen. Thiel hopes that it won’t.
Then there is the observation that although computer science made an extreme progress, other things are way slower. “We have the computers from Star Trek… but nothing else from Star Trek.” No idea who noticed this first, but probably many people already did. Many also noticed how our ancestors could fly to the Moon, but we can’t.
Criticism of academia as a pyramid scheme and gatekeeping institution, also nothing new. Brian Caplan wrote a book about it.
Complainst about regulation are also quite old.
From my perspective, although most of the ideas are already out there, it is still valuable that someone made a coherent picture out of it. Which in itself is another Thiel’s topic, how increasing specialization makes it difficult to understand the big picture about technological growth (and specifically how even impressive progress in some parts of science often doesn’t translate into useful technology: for example the knowledge of atoms gave us atomic bombs and nuclear power, but the knowledge of quarks gave us… nothing). Without this coherent picture, people could still admit the individual complaints, and yet deny the conclusion.
I think Thiel’s answer would be that in a world of 0 interests rates the rich don’t really get richer by the power of compound interests. All the profits get competed away.
The book was written after most of the talk, so it’s not a basis for Thiels thoughts.
Yes, but part of risk is that it comes with people losing their fortune. Elon Musk is richer then any Rotschield.
Thiel does speak about all asset classes not really providing the returns that the LP’s desire.
The interview with Thiel and Eric Schmitt is good in this regard. Google holding 50 billion on it’s balance sheet because they don’t see any way to invest that in a profitable way is a good illustration of those dynamics.