Keynote with Peter Thiel @ CERAWeek [March 2017]

But if we want to get started this evening, we are very privileged tonight to have really one of the world's great venture capitalists as our guest this evening. It's Peter Thiel. His record is quite extraordinary in ways that those who don't know him would not know. He's touched your life in so many different ways. He was the founder and CEO of PayPal. He made the first outside investment in Facebook. He launched Palantir. His early fundings have been LinkedIn, Yelp, and dozens of other successful technology startups. He's the founder of the Founders Fund, which has funded companies like SpaceX and Airbnb. He started the Thiel Fellowship, which ignited a national debate by encouraging young people to put off going to university to instead start to do startups.

His Thiel Foundation tries to look at advanced technologies. And I should also mention that he is the author of a book called Zero to One: Notes on Startups or How to Build the Future, which became a New York Times bestseller. And as an author, I've learned to always hold up the book, so I'm doing that this evening. But he's here tonight because he's also very interested in energy and in all forms of energy, so I think he's also found being at CERAWeek quite interesting from his point of view. Have you enjoyed your discussions here?

It's been a phenomenal group you assembled here, Dan, so really impressive. Thank you.

So I thought we would start off maybe by talking about one of your great disappointments, which was having gone to Stanford Law School, having clerked for federal judges, but not quite getting the top thing, which was a Supreme Court clerkship. So maybe you can talk about that.

Well, I was always tracked in this hyper-competitive way. Already in eighth grade, one of my friends wrote in my junior high school yearbook, 'In four years, you're gonna go to Stanford.' Four years later, I got into Stanford, and then I went to Stanford Law School. And then the final credential at the end of this hyper-competitive process is, is to try to get a U.S. Supreme Court clerkship. I got interviews with two justices. They normally interview eight people and select four as clerks. And I missed it with both, and it felt like it was the absolute end of the world. And sort of my, yeah, the way I always describe it is I had sort of a rolling quarter-life crisis as I came to question the— So not midlife,

A quarter-life crisis as I came to question the value of all the things that I'd been competing on. I ended up at a big law firm in Manhattan, and it was one of these places where from the outside everybody wanted to get in, on the inside everybody wanted to get out. When I left after seven months and three days... How many hours? I don't quite calculate that, but one of the people down the hall from me said, 'You know, it's amazing to know that it's possible to escape from Alcatraz.' Actually, all you had to do was go out the front door, not come back. But psychologically, so much of people's identity gets wrapped up in the competitions and the way you win. And I think this is especially true for people who are relatively talented.

It ends up being these sort of very academic competitions. And the thing about competition that's good is it does make you better at that which you're competing on. So if you're high school swim team, you get to be a better swimmer. But then the downside with excessive competition is that it often makes you lose sight of the larger picture, of the whole, of other things that you might be good at doing. And so I've come, you know, the sort of the soundbite one-sentence thesis of the Zero to One book is that most business books tell you how to compete more effectively, and mine tells you that you should not compete at all. Right. Well, we'll come back and explain that.

So I'm not competing with other business books. Right, exactly. You're not competing with other... That's very... So after... So you then went back to Silicon Valley and started PayPal?

It was in the late '90s, in the tech boom, and it was the right time, right place, and this crazy four-year process from '98 when we started PayPal to 2002 when eBay bought the company. And we went through sort of the crazy end of the boom, bubble, sort of extraordinary bust. Survived. And survived. Some of us survived. But it was a lot of very interesting things that one learned from there. Maybe there were all the wrong lessons because it was such a strange time, but it was very formative.

Right. And so, uh, somewhere in there after, uh, PayPal, you, you made the transition from being an entrepreneur to being an investor, which is a, an adventure post-PayPal, yeah? And you didn't want to start other companies yourself so much, or what was that transition? Well, you didn't—don't want to—you don't want to compete.

So you don't want to compete. That includes, you don't want to compete with your past self. So if you've started an extraordinarily successful company, there's always a temptation to prove that you weren't lucky. Right. And so to do it again and to prove that you weren't just lucky. And I decided that that was a mistake and I was not going to compete with my past self. So it was like, I'd won a gold medal. Right. I needed to just do something else. And basically, since 2002, I've been an investor. And yeah, done.

So, I know you've been asked this question before, but I think everybody would like to know: what is it—and you're still on the board of Facebook—what was it that you saw on Facebook that made you become their first investor?

Well, you know, I think a lot of these things, I get asked that question a lot. I don't know if I have sort of a really great answer to it. I was the sort of first angel investor in Facebook in summer of 2004. The business was already tracking quite well. They'd expanded to 20 colleges. They had 100,000 students. They only needed money to buy more computers. So I think that was always sort of a promising sign. One of my good friends, Reid Hoffman, who's a colleague of mine at PayPal, ended up starting LinkedIn. He'd had this theory for years that there was going to be this social networking or something like that on the internet. He'd even started a company in 1997, seven years before Facebook, called SocialNet.

He had the social networking idea in the name of his company seven years before the fact. In the sort of 2002 to 2004 time period, we just were looking at all these companies and ready to invest. And so when I met Zuckerberg, he was a sort of shy 19-year-old, and it was not like a Shark Tank pitch meeting where it was somehow this perfect pitch. It was just the perfect company. I think you have a perfect pitch when you have a bad company. Good lesson. And sometimes a perfect company doesn't need to have a terribly good pitch. So we were going to invest no matter what happened, and we did. Did it move faster than you thought it would? It had this sort of exponential growth characteristic, which I think there's sort of this quote that's apocryphally attributed to Einstein that anything that's sort of exponential

is—the compound interest is the most powerful force in the universe. And so anything that's exponential has this aspect to it that tends to get underestimated. We've seen that at PayPal, and certainly Facebook had that in the same way. I think it scaled—to scale much bigger than one would have thought at the beginning. So I thought it would sort of cover all college students in the U.S. and that would be a very successful business. And then it turned out that was just sort of the base you had from which you expanded to take over the whole world.

Well, in your book, Zero to One, as I understand, started off as a series of lectures. People made notes, it went viral, and decided to write a book, which was then a tremendous global bestseller. Can I ask you to give the very short summary of what it means, Zero to One, and the lessons in that?

Well, the sort of the contrast I draw out in the book is going from zero to one is going to be the first to do something new. And I always sort of contrast sort of an x-axis and a y-axis in this book where the y-axis is zero to one. Intensive growth, I sort of describe that as technology. And then the x-axis, I describe as sort of horizontal progress, copying things that work, going from one to n. And if you want a sort of buzzword for that, it would be globalization. And so I sort of draw this contrast between vertical intensive progress, doing more with less, technology, and horizontal extensive progress, copying things that work, globalization. And I think that we've lived in a society where for many decades it's been dominated by globalization, by copying things that work.

But I think we also need to be doing new things. And some combination of both of these is needed for the future. It's sort of an argument for how do you start these innovative technology companies that do new things? How do they actually become successful businesses? And there's sort of a lot of questions around them. But it's sort of anchored on this idea that technology and globalization are these two very different drivers of the future.

So we were just talking at the dinner table and you were kind of ruminating on the fact that you would think that large companies would be where all the great innovation occurs, but it instead occurs with 23-year-olds who are not part of large organizations. And you've thought about this for about two decades now. Why do you think that is?

Well, the PayPal version of the question that always was asked of us was, the initial product was you'd link money with email. And the question was, why was this not something that just a bank could do? And it would be a natural thing for a bank to do. They already had a lot of customers. They had an installed base. They had deeper financial resources, longer time horizons. And one of the questions I always got asked was, why couldn't this just be done by a bank? And 18, 19 years ago, I did not have a good answer to that question. I think you can have innovation in many different contexts. It can happen in small groups of people starting something new. It can happen in big companies. It can happen in nonprofits.

It can sometimes even happen in government or the public sector. But I think that one of the reasons big companies don't innovate as much as they should is that the politics inside big companies are always much worse than people realize. And so if you try to do something new, there will be a whole array of people shooting you down, telling you that's a dumb idea, telling you you should not do that in one way or another. And it's hard to quantify the sort of political drag coefficient, or whatever you want to call it, of a large company. But I've come to believe that that's the main reason. In theory, there are just always these economies of scale, and bigger is always better. And yet, it still makes sense for people to start new companies all the time.

And I think the main reason that you want to start a new company is because the politics inside large companies are such that they will not allow innovation or they will not properly reward the people who innovate or who do new things. And that's why some sort of dynamic startup ecosystem is something that I'm always a very big fan of.

Well, it's interesting because obviously that's a question. I mean, innovation and technology probably is a bigger issue, a bigger subject of this week than ever before. So I think a lot of people around this table are thinking about that question. So your answer is a very interesting one to them. Let me, though, just talk a little more about technology. You graduated from Stanford. There was a Silicon Valley then, there's a Silicon Valley now. Has it changed a lot?

Yeah, I think if you define technology as that which is changing, because Silicon Valley's been at the core of a lot of innovation, it certainly has changed a lot. The underlying things people are working on are very different. In the 1980s when I was an undergraduate at Stanford, people still thought electrical engineering was the major to go into and that semiconductors were sort of the most futuristic kinds of things. And there was sort of a wave of innovative software was just getting started. And then the internet came along maybe a decade or so later in the mid-'90s. And then in the last decade we've had the mobile internet. And it's been both some different technology platforms and things happening at a different scale.

So I think it's been absolutely at the core of a lot of transformative changes.

So does it seem just different to you or is it still the same culture?

I always like to say that every moment in the history of technology happens only once. And so when we started PayPal, it was linking money with email. And this was an idea that worked in 1999. It would not have worked in 1985 when nobody had email. It would not work in 2017 because it's already been done. And so to the extent you're doing new things, it necessarily changes and it necessarily is different. And this is what always makes it very challenging to figure out how to invest because the temptation is always to try to find patterns, to find categories of things that you say you want to invest in and you want to look at. One of the questions I often get asked that I always really dislike answering is, "What are the big trends in technology?"

What are the big trends in technology? Oh! And so I always think... I was just going to ask you that. I don't know if you're serious about it, I can't even tell. I dislike the question because once you have a trend, it's something that already a lot of people have identified, a lot of people are doing it, and therefore it is unclear what is precisely innovative in it. And so almost all the things that are trends, I think, are buzzwords. And so it's like, again, focused on Silicon Valley today, it would be self-driving cars. It would be AI. A few years ago, it was big data. It was cloud computing. And if you hear these things, you should think fraud, and you should run away as fast as you possibly can.

And so if you sort of had a pitch where you had like a concatenation of buzzwords where it was like, "You know, we're building a SaaS enterprise software business on a mobile platform to bring big data to the cloud"—that is really impressive. And so you have a concatenation of buzzwords like that. It's a tell, like in poker, that you're bluffing and that there's nothing that you're doing that's actually unique. And then by contrast, I think a lot of the very successful companies are ones where they're in a category of one, and where maybe we don't even have quite the right language to describe, and we don't quite understand what they're doing. We're tempted to put them in categories, but maybe even the categories are misleading.

So again, to use Facebook as an example, it gets put in the social networking category. But maybe that's actually not what it's really about. It's not actually—people are not really interested in networking in the abstract with people. When my friend Reid started SocialNet in '97, it was all in this sort of, "You're gonna have these virtual avatars, and you might be a virtual cat, and I'd be a virtual dog, and we'd have these strange interactions in cyberspace." And it turns out that people don't really want to be virtual cats or virtual dogs. And what Facebook—maybe what Facebook really cracked—was real identity, and was the first company to figure out how to bring real identity onto the internet.

And so, but we often don't even have the correct language to describe what these companies are doing when they're unique. So I think the categories that one has for these things are often deeply misleading.

So I want to pledge to you that you're not going to get any business plans tonight as a result of being here. So that's why I'm going to ask you this question with that pledge before it. When you're evaluating a proposal, I mean, you've given us some sense of what you're looking for. But tell us a little more about how you process it. Is it intuitive? Are you looking at the people? Are you looking at what? How do you?

You know, I've focused on different components over time, so I tend to always think it's a three-part thing: people, the technology, and the business plan. I think my sort of contrarian bias at this point is that people in Silicon Valley like to talk about the people. So there is a celebrity cult of the people starting companies. They like to talk about the technology. And so maybe the business plan gets somewhat underweighted. And sort of the extreme formulation I have on the business side is that I like to think there are two kinds of businesses in this world: there are companies that are monopolies and there are companies that are not monopolies. I only want to invest in monopolies. And the reason this is one of those... Now, in the oil business, you have to be careful.

And I would say this is perhaps not just in the oil business. And so one of the reasons this is probably systematically underestimated as a theme is that if you have a monopoly, you will tell people that you are in a super-competitive business. And if you are in a super-competitive business, you will tell people that you have a monopoly of sorts. So, for example, if you have a search company in Silicon Valley that I will not name, if you were to go around as CEO saying—no name—'We have a bigger share of the market and higher profit margins than Microsoft ever had in the 1990s,' you wouldn't do that. You would say, 'We're not a search company. We don't even talk about search.' You would say, 'We're a technology company with this enormous space called technology, and we're competing with Apple on smartphones, and we're competing on self-driving cars, and there's sort of just competition everywhere you look in everything we're doing, except this one thing called search.'

We never talk about that. And then, by contrast, in a place like San Francisco, if you were to open a restaurant, and you try to pitch people on that, that's the worst business idea ever. All restaurants—90% go out of business after two years, especially in a hyper-competitive market like San Francisco. And then you would fictionally narrow the scale of the market, and you would say, 'Well, this is the only Nepalese-British fusion cuisine in this one part of the city.' And so then you would tell a fictional story as to how there really is no competition in that one specific space, even though it's really just a restaurant. So I think this question is always very, very understated, and it's perhaps the single one that I've focused on massively over the last number of years.

So you've described yourself a couple times as a contrarian. Have you always been a contrarian, or when did you realize you were a contrarian?

If I were to be contrarian, I would try to dispute that characterization or something. You know, I've always, you know, I always think there is something about the mania of crowds, large groups of people where people, you know, it often goes very bad. There's something about human nature where we learn from other people by copying people around you. You know, already in the time of Shakespeare, the word 'ape' meant both primate and to imitate. I think it was Aristotle who said that man differs from the other animals in a greater aptitude for imitation. So imitation is this very deep aspect of human nature. It's how you learn language as a kid—you copy your parents. It's how culture gets transmitted.

But then it also is this thing that can go very badly wrong, where you sort of get runaway manias, bubbles, lemming-like, sheep-like, insane herd-like behavior. And I think—I think it's something—it's hard to resist, I mean, unless you're a contrarian. It's an important dynamic to try and be aware of, I think. And I think it's, of course, super hard to resist. The sort of anti-business school version of this that I often give is that in a—in the Silicon Valley context, you could say that it's striking how many of the successful entrepreneurs seem to be suffering from a mild form of Asperger's, which seems like a very deleterious trait. You'd seem like you're at a massive disadvantage if you have this, even though

And then if you sort of think of the anti-Asperger's cohort, I always think of it as students who go to business school. And so they're basically people who are extremely extroverted, don't really have any convictions. And then they put themselves in a sort of—wait, there are a few MBAs. I'm sorry, I'm not trying to—I'm really not trying to offend anybody here. But they sort of put themselves in this hothouse environment for two years where they talk to a lot of other people who don't know what they're doing and they're trying to learn from all the other people what they're supposed to do. And they've done these studies at Harvard Business School where it's sort of systematically the largest part of the cohort always does the wrong thing.

So you go to Harvard Business School and, after two years, you're convinced to try to catch the last wave. And so, in 1989, everybody wanted to work for Michael Milken, one or two years before he went to jail. In 2000, they all descended on Silicon Valley and timed the end of the dot-com bubble perfectly. And so there is this version that's been an incredibly important dynamic of our society in recent decades. It's something one needs to think about very hard. I know you've thought about it in terms of

the public policy discussions around climate change. And do you see that kind of groupthink at work there?

Sure, there's a lot of groupthink. There's always a sense that you need groupthink, that people don't have time to even think for themselves. But yes, it's—I always—I'm not sure I'm an extreme skeptic of climate change, but I have my doubts about the extreme ways that people try to push it through. And I always say that I would be much more convinced of climate change, of the need to do something, if I thought there was a more open debate in which both sides were given a full hearing. And it's possible that, even if climate change is quite as bad as people say it is, that when we have groupthink, maybe we misdiagnose the problem. Maybe it's all methane emissions and the real problem is eating steak.

And I suspect that's not something that's being investigated properly. And then, of course, or even more prosaically, it's probably much more of a coal problem than anything else. Even on that level, it doesn't seem to get adequately processed. So yes, I think we have a lot of shortcuts. It's one of the things you have to have if you're an advanced technological civilization. We can't live in a world where everybody masters everything. You can't think for yourself. You can't think everything through from first principles. We don't have time to do it. We all have this experience of being absolutely overwhelmed with information. But then, one of the big perils of an advanced technological civilization is that this groupthink dynamic can actually become more insidious, and the problem of political correctness can become greater because it's so much harder for us to actually spend the time and think through these things for ourselves.

Well, in terms of energy, which I know one reason you're here is because you're very interested in energy, and I guess it would be called contrarian, and you've talked about the need, I think, for alternatives to alternatives.

Well, I think there is always a question about how one can go about innovating in the energy space. There was obviously this clean tech bubble that went very catastrophically wrong in Silicon Valley from about 2005 to 2008. And then at the same time, there's this very interesting question how one goes about innovating in all these different fields. If I had to give a simplistic contrast of Silicon Valley and the fracking boom in Texas and elsewhere in the United States, what's very striking is that, on some level, I think fracking represents a bigger economic form of progress for our society as a whole than the innovation Silicon Valley has done. That is the pro-fracking side of the argument.

And then on the other side, what's striking, and again, this is a very parochial Silicon Valley perspective, is how little money people have made, relatively speaking, in the fracking context versus Silicon Valley. And so there's something about the innovation in software in this world of bits where the innovators have been able to capture a tremendous fraction of the gains. And this has been much harder to do in a lot of these other contexts. And so this is always this very striking contrast. If you generalized from this, there is no necessary link between great innovation and great economic reward. And I often think this is sort of often this delusional thing scientists or inventors tell themselves that they will be rewarded by the natural goodness of the universe.

And there's a lot that went wrong with the cleantech bubble in Silicon Valley, but if I had to give sort of the monopoly cut on this, if I invest in monopolies, I want to invest in companies that get to a large market share. You can get to a large market share if you start with a small market. In energy, this is actually quite hard to do. And so almost every clean tech pitch deck started with, you know, "We're in energy," as you saw in 2005, 2008, "We're in energy. This is a market that's measured in hundreds of billions or trillions of dollars. And if we have a fraction of a fraction of that market, we're still going to be a big company." But you're going to be a super competitive company, and you often will be like this minnow in this vast ocean. And then you have a thin-film solar panel technology, but then there are 10 other thin-film solar panel technologies you have to compete with, and there are 90 other solar panel technologies,

and then there's wind, and then there's, you know, the frackers came out of right field, Chinese cheap manufacturing came out of left field, and, you know, you're this minnow in this vast ocean. And so there's something about the structure of these things that's impressive. So I'm impressed by how lucrative fracking has been, given how structurally difficult I think it is to actually capture the value of the innovations people create.

So you've thought about energy in terms of the role it plays. You've mentioned the economic impact in the kind of world you'd like to see, and maybe you might elaborate on that.

Well, I do think one of the basic definitions of technological progress I always give is doing more with less. And so in an energy context, it is this critically important question of how we get to cheaper energy sources in the future. I think I would define innovation in energy as getting to cheaper, hopefully cleaner energy sources in the years and decades ahead. That's how one would go about trying to measure it. I think it is such a large part of our overall economy that if we're able to do this, then our society will progress and we'll be better off. And if not, we'll have a lot of challenges.

Right. So many of the companies you've invested in have really played roles in globalization in one way or the other. One of them, SpaceX, perhaps beyond globalization. And I know that you've thought a lot about globalization itself. Do you think there's even a consistent definition of what globalization is?

Well, it's a buzzword, so you have to be a little bit skeptical of it, although there's a certain aspect of it where you know it when you see it. And I do think it's hard to give all the reasons why, but I think the tide on globalization is just going out. Really? It's going out on all these different dimensions. And so if you have movement of people, I think immigration is getting more restrictive, not just in the US, but throughout the Western world. I think movement of trade, I think that's... I think there's big headwinds there: movement of people, movement of goods, movement of capital, which is mainly through banks. Banks are going to get more regulated. And then even movement of information, where I think there may be some headwinds for...

The internet was designed to survive a nuclear war, but even so, I think there are a lot of regulatory challenges that Silicon Valley is going to be facing from Western Europe and elsewhere in the years ahead. I think the tide on globalization is just going out in a pretty big way.

I should tell you, tomorrow we have a session in the plenary we're doing called "Whatever Happened to Globalization?"

And then you get into all these very difficult questions, you know, why that's happening, you know, what's causing it, you know, why that can get reversed. The energy version of this that I've been wondering about, and I haven't, you know, fully formulated this, but is whether the sort of... And we had this great era of globalization, if you sort of say that we had... The 19th century was both globalization and technology both progressed. After 1914, globalization went into reverse. Technology kept going. And then since the early '70s, we've had this second tremendous age of globalization. I always date it to 1971 when Kissinger went to China. And then we've had sort of somewhat more limited technological progress, a lot in computers, some in energy, but a lot more constrained in many other areas.

And this second age of globalization on the energy side was very deeply linked with the global oil market, which was—oil is this fuel source you can naturally move around the world. Then you get capital flows that are sort of the other side of it: petrodollars, the money center banks that recycle the petrodollars, the global cities like London and New York where the only thing you had to do was really buy real estate for the last 40 years. That was actually the way to be long globalization—was to just buy real estate in those places. And I wonder whether a lot of it just represented this global oil market, and so that when globalization is ending or the tide is going out today, it is that energy is becoming somehow more regional.

If fracking succeeds in the US, the US may have to import much less oil. And then to the extent that natural gas becomes the energy of the future, because it's sort of so much more expensive to transport, does that then lead to a necessarily much more regional kind of a makeup with sort of much less of these countervailing flows? And so globalization often gets described as this abstraction, as this ideology where it's just something that comes from McKinsey, and if you don't understand it, you didn't get the memo from McKinsey or something like that.

I think some people have gotten the memo.

But I wonder if it's—I wonder if it's just—maybe it's just physics and atoms and things like that.

So it's interesting, I'd always kind of used the beginning of the modern second age of globalization, 1964, when the Beatles made their first round-the-world trip. But I think actually Kissinger's trip to China in a more substantive way probably really was. That kind of opening up is a very good way to think of the beginning of the era. You were one of the people who nominated Donald Trump at the Republican Convention this past year. Do you think his election represents partly a rebellion or the tide going out on globalization?

Sure, I'm naturally inclined to think of it in those terms. I think—I don't think, but I think again it's just there's something around globalization that's not been working that well. And I sort of have wondered whether, you know, just again, sort of like the cultural icon version of this is, I don't know if you would start any organization that has the word global in it today. That feels so incredibly dated. And so, just to pick on Davos, the World Economic Forum, and, you know, sort of a decade ago, it was a group of people who were running the world, and now it's just the group of people who messed up the world. Right?

Notice we do not call this Global SIRA, we just call it SIRA.

Again, if we don't get dirty with definitions and asking what this means, would anybody in their right mind start an organization with the word global in it today? That's so 2005. It's like the picture of, if you want a music reference, it's like the picture of Bono with O'Neill, Treasury Secretary O'Neill in the Bush 41 administration traveling through Africa.

It's a good thing, but it feels so dated. Do you think, though, if you do have a breakdown in globalization, that partly globalization has also been a kind of structure for dealing with conflict among nations, do you see a risk of greater conflict?

Well, that's the really big fear, because that's how the first great age of globalization ended in 1914. And so I think the tremendous fear is that if globalization ends, this leads to a world war, some sort of incredible conflict between—between countries, and it certainly is that fear that's driven much of the project, especially on the EU level or things like that. But I think that if you go back to—but the question is really whether—there's a book, I once taught a class at Stanford where I taught about all these historical books about the future, and sort of these predictions people made, and they were all sort of spectacularly wrong, but they were wrong in very interesting ways. And there's one book from 1911 by Norman Angell called The Great Illusion.

It was this bestseller in 1911. The Great Illusion was that there could be a world war. And the core argument that Norman Angell made was that there could be no great war anymore because the world was so interconnected through trade and finance and capital flows, and this was sort of keeping the peace. And what's quite scary about the Norman Angell book is if you read it today, it's completely undated. It sounds like something people could write in some McKinsey report today. But I think the question that we need to ask a lot harder is, has globalization happened in a good way or a bad way? And maybe there was something unbalanced about the globalization of the late 19th, early 20th century,

and maybe there's been something very unbalanced about the globalization.

And if you looked at the unbalance today, I mean, would it be in terms of the effects on working people, or would you...?

Yeah, well, it's... I mean, you could say that there's... If you split into three categories, we could say there's good globalization, bad globalization, and no globalization. There's always a sort of World War I argument that the alternative to globalization is catastrophic, so therefore we have to assume that all globalization is good and we don't ask any questions about it. But if you can have both good and bad forms of globalization, and if you don't ask questions, chances are that a lot of it ends up being more bad than good. The kinds of things that might be bad are, does it lead to increased inequality? Does it lead to speculative bubbles of one sort or another? I wonder whether a lot of the bubbles have involved fictional stories of globalization, like the internet bubble in the '90s, the Japan bubble, where Japan was going to take over the whole world in the 1980s.

Sort of, there's an argument every single bubble has involved a bad story of globalization. So does it lead to a more bubble-prone world? Does it lead to an unequal world? And then, you know, you can say North Korea is an autarkic country, but you could also say that it's a badly globalized country where it sort of, you know, it exports, you know, counterfeit $100 bills and heroin and nuclear weapons materials, and it imports British scotch and German BMWs and Swedish prostitutes. And that's like a bad form of globalization. And we want to be able to say that that's not the way globalization is supposed to happen. And when we don't say that, we don't ask enough critical questions.

And then the question becomes, how much is like North Korea? Right. But of course, what you've been so involved with, Silicon Valley, you don't roll back the technology, the communications technology and information technology.

Yeah, but I think people in Silicon Valley are too complacent about that. So certainly, Silicon Valley has not been able to sell its businesses in China. And so there's a Great Firewall around China. And then there's a technological determinism story you can tell where this is just the future and China will eventually buckle under and cave and adopt all of these things. But then you might wonder, maybe this doesn't happen at all, and, and maybe it's possible for the internet to actually, to actually fragment and not to have this sort of historical necessity to it. So, so there's always, you know, there are many things that I'm uncomfortable with about this, you know, de-globalization that's happening. But, but I think there are a lot of different pieces.

There's a there's this up Jim Cramer a line from The CNBC guy, sort of the crazy Tourette's person on CNBC. And it's that there's always a bull market somewhere, you just need to find it. And one of the thoughts one of my colleagues has had for a while, and I'm starting to think maybe right, is that one of the places we're having a bull market is we're now in a bull market in politics. I'm not sure this is a good thing, but it is a fact that maybe politics is becoming more important, it's becoming more intense, the range of outcomes is becoming greater, and that we're in a world in which there is a bull market in politics that's getting started.

Let me ask you one last question. Reading *Zero to One*, I wondered if there are certain really broadly held beliefs that kind of resonate with you and guide your actions as you look at the world.

That's like a tough question for me to answer. I'm better at answering the opposite question. No, but... No, you always... I mean, look, most of the time, most common sense beliefs are right. And you want to be contrarian and right. You don't want to be contrarian for its own sake. And most of the time, you know, the common sense beliefs are right. There often are, you know, you always ask, you know, what are things that everybody believes? And there may be all sorts of things that people believe but aren't quite articulated. And sort of a macroeconomic one that I would say is just a widespread truth is that we live in this strange world of zero percent interest rates. And you could say that that's the consensus, that we don't get a lot of inflation even with 0% interest rates.

And what this reflects, I think, is this widespread failure of the imagination for the future. You have 0% interest rates. People always like to argue that 0% rates are wrong and they're a sign that something's completely crazy with the central bankers and they lost their minds. But what if the 0% rates are right? It's sort of a consensus view. And if the 0% rates are right, what it implies is that outside of these small pockets in Texas or California, people have no idea what to do with money. And if you get to places that are as screwed up as Western Europe, they'd be happy to get negative interest rates. They are that clueless as to what to do with their money. And so I think people in this room largely excepted—people... We live in a world in which people don't have specific ideas about the future.

In a world where you have no ideas about the future, money becomes more valuable than anything you could do with it. You don't know what to do with it, so you just hold on to the cash and wait, and then the rates go to zero. Right. And so I think the zero percent rates are this very big truth about the lack of an idea we have about the future in our society. And it's a challenge for all of us to do better than zero. Right. Well, and I guess go from Zero to One. At least as a start, go from Zero to One.

So, Peter, this has been an extraordinary discussion. I think, given us all so much to think about, and we really appreciate your coming to share with us your perspectives and your outlooks and what you've learned and how you look at the future. So please, everybody, join me in thanking Peter Thiel. See you all tomorrow morning. Thank you.