TEDxSiliconValley - Peter Thiel - 12/12/09

Thank you very much. I want to, uh, focus on a particular, unusual angle on it. I have one slide. I'll start with some audience participation here. When people talk about the singularity, they often talk about runaway technology, and they often think of it as a very bad thing. I want to go through several of the disaster scenarios that people talk about and just take a quick, informal poll of the audience to see how people are thinking about this. Seven different scenarios. Which one do you think is the most likely to happen, and which one are you the most worried about? So, first scenario is—just run through them real quick and then I'll take the poll—we have runaway robot technology, the robots kill everybody, Skynet.

Second one, you have runaway biotechnology, disease kills everybody. Third, you have runaway nanotechnology, the gray goo, and it wrecks the whole planet. Fourth, just existing technologies run away. You have a nuclear war, maybe in the Middle East, something like that. Fifth, governments use computers to control the world. You've got a one-world government, and it's a totalitarian dictatorship. That's the end of the world. Number six, something very conventional: global warming kills everybody. And number seven, nothing happens at all. And just take a quick poll to get a sense of where the audience is. How many people are most worried about, number one, the robots? All right, a few people just want to raise their hands and get acknowledged there.

Number two, how many people are worried about runaway biotech? A few more. Number three, runaway nanotech? Nobody's worried about that at all. Number four, nuclear war. It's actually a little bit more. That's the leader. Number five, the world government using computers to control everybody. A few people on that. Number six, runaway global warming. A few people there. And how about number seven? This stuff takes too long to happen. Well, that's actually the largest number of people are on number seven, which is the one I would like to talk about. And it is the one that I have become, of late, the most worried about of all of these: that this is not going to happen as quickly as people think.

I want to start by suggesting that one of the standard ways people think about technology is that if it happens, it's great; if it doesn't happen, not a big deal. I think this is—little could be further from the truth. Our entire civilization, our entire culture is predicated on accelerating technological change. And it's not just that this is the way our science fiction movies go, and that this is the sort of stuff people talk about at conferences like TEDx Talks, but it happens in even more basic and banal ways. So, for example, to use sort of a macroeconomic example, we have a financial system in which people plan for retirement, and they plan to earn 8.5% a year in retirement accounts. When you go to a retirement planner, that's what they tell you.

You'll earn 8.5% a year. If you save this much, then you retire at age 65, and if you live to age 90, you'll be fine. Where does that 8.5% number come from? Well, it comes from looking at studies over the last 100 years where that's roughly what you earned. But the problem is that the last 100 years were years in which you had incredible progress and incredible technological change. If you did the same study, say, from the period 1200 AD to 1300 AD, you would not be earning 8.5% a year. If you did it in 400 AD, the last 100 years of the Roman Empire, you probably would have been quite lucky to earn 0% and just keep your money for that 100-year period. And so these sort of assumptions about incredible compound growth that are embedded into things as basic as retirement planning and financial planning only work in a world where you have rapid, accelerating technological change.

I think the entire credit crisis that we've had in the last year can be thought of as not a credit crisis but possibly a technological crisis. Credit involves claims on the future. I will lend you money because you will pay me back more in the future. Things like the housing crisis were basically driven by computerized models, which said that there would be this much progress, there was going to be this much growth, everybody was going to be better off. Some people would be a little bit worse off, but most people would be better off all the time because of this implicit background assumption of rapid technological change, so that even if you had some ups and downs, you'd never have a systemic crash.

And in some sense, what I think has happened in the last few years is that the change has not been happening as quickly as people thought. That's why you ran into this crisis, and that's why it feels like it's a longer-term crisis. People are still, of course, not thinking about this. They talk about it as a financial crisis, as a regulatory problem, not as a problem in which innovation has not been happening perhaps as quickly as we need. If one had to sort of make the argument that there's something to be worried about, I would start by noting that things like median wages in the U.S. have not gone up since 1973. Average wages haven't gone up much. And this is in spite of enormous globalization.

So you'd expect, even with zero technology progress, you would expect significant progress in living standards just from global trade, if nothing else. And if we sort of go back to the world of, say, the late 1960s and the way people used to think the future was going to be, 1967, '68, the first Star Trek series, the future history was going to be permanent lunar bases by 1980, first manned mission to Mars by 1990, and by 2000 it was going to be on to the stars. If you look at the Jetsons, it was going to be robots, flying cars, on and on down the line. Servan-Schreiber, a French writer, in 1968 wrote this classic bestseller, The American Challenge, in which he argued that the United States was an accelerating technological civilization.

And what that looked like and what that meant was that because it was going to accelerate, the U.S. would run away from the rest of the world, and as time would pass, it would actually have to compete less and less with other countries because of accelerating technological change. And so that by the year 2000, Servan-Schreiber predicted, the average person in the United States would be working four days a week, seven hours a day, and would have 13 weeks a year of paid vacation time, all within a single generation. Now, this is very easy to dismiss as, well, he's French, and so we can sort of ignore it. But I think we should not dismiss it quite so quickly, and we should ask, why have things instead gone in a way where people seem to be working harder,

they're running really hard just to stay in place? And I think one of the things that we need to question is whether the story of technological progress has been quite as rapid as people have thought. Now, I think it's, in general, an extremely difficult question to answer, how fast things are happening. There are obviously all sorts of problems. On a meta-level, one of the problems is that it's hard to know that much about science and technology. It's extremely difficult to get a handle on all of it. There are many different areas, many different people doing cool things in particular disciplines. But the thing that I would suggest might lead to a little bit of skepticism and a little bit of worry is that the politics of it is that everybody who knows is biased.

In an accelerating technology side. So if you're a university scientist working on, let's say, superstring theory in physics, you will say, 'You know, if we just get that billion dollars for the next particle accelerator, we're going to discover so much about the world.' If you're the scientist that says you shouldn't fund any of this because it's all a waste of money, you won't get heard. If you're an entrepreneur starting a company, every company is the greatest company. Venture capitalists are even worse than entrepreneurs in this respect. And the basic thing is that I don't think there's anything wrong with people being optimistic. In many ways, optimistic people are more likely to get things done.

We have to realize that all the people who know are skewed very heavily in one direction, and nobody is on the other side thinking about what happens if this does not happen. It's obviously possible to organize a society in which there's no progress. It would basically mean that people would have to save 40% of their income, they would have to work till they're 75 years old, and they'd have to dial back consumption radically. If you have no progress, there is a way to make that work. It's just not the way we are geared. And I think one of the real dangers that we face as a society in the next 20 years is if there is not enormous growth. And one way to think about this on a global basis is you have the emerging markets and the developed world.

And cognitively, when people talk about the future in the emerging markets, it's always a 20-year story. It's a story about China will be, in 20 years, a lot better off. It'll look sort of like America. There are 1.3 billion people, and they will need 2.6 billion socks and 2.6 billion shoes, and there are going to be sock factories and shoe factories, and there's going to be progress in which basically all that has to happen is China, India, all these countries, they just have to copy. There needs to be zero innovation. It's really easy for these countries. All they have to do is copy. No innovation. But when you come to the developed world, the way we typically talk about the future is, what happens in the next six months?

Is the financial crisis over? Does the stock market go up, does it go down? It's a six-month time horizon. The question of where will things be in 20 years, and are we going to be dramatically better off in 20 years or not, I think does not get asked nearly enough. And the answer to this question, I think, has very little to do with finance or the banking system or various regulatory and legal issues. It has everything to do with how much of a focus there is on science and technology. My concern as a citizen is that this is not an area that we're spending enough time on. Of the 538 people in the House and Senate in the U.S., 11 have degrees in engineering or background in science. And so the assumption on a policy level, and again I don't think the government is unusually unique in this, is that science and technology are problems that are solved by other people.

And it's the kind of thing that, if it's a problem that's solved by—and we'll have somebody else that's going to solve cancer, and somebody else is going to solve, somebody else is going to figure out how to deal with environmental problems, and someone's going to solve this problem, and that problem, and the other problem, and the question of how do we get 8.5% returns a year, we don't know, but somebody else will do it. And I think in general that works, but it doesn't work if everybody thinks it. It's like the joke about the two economists at the University of Chicago who are walking along the street and one of them sees a $100 bill and the other one says it's not possible for there to be a $100 bill on the street because there's an efficient market and people walking along the street picking up $100 bills.

And normally that's true, but if everybody thinks that things work perfectly, that's actually the scenario where they're less likely to happen. And so when we talk about the critical vectors, I think, of technological progress in the next few decades, one obvious one is alternate energy. I mean, there are many others. But if you focus on alternate energy, it will happen if people work really, really hard on it, and if people think this is the most important thing in the world. It will not happen if people think, 'Well, this is a problem that automatically gets solved because problems always get solved.' And I think we're still way more in the second mindset than the first. I think that's sort of the kind of a challenge that we're going to have.

If I had to sort of describe what I think we need to do to get things restarted in the next few decades, my basic model is we should go back to the late 1960s and the '50s and look at all the science fiction books that were written at the time and look at all the things that did not happen and make a concerted effort to make those happen. And when people were writing in the '50s and '60s, they predicted the computer revolution and the internet in part, but all the other stuff they predicted has not happened. We don't really have space travel, we don't have the robots, we don't have—we don't have the underwater cities. We don't have the reforestation of the deserts. We don't have a whole series of other things that people were thinking were going to happen in the next few decades at the time.

And in some sense, while there's been a lot of progress in many fields in the last four decades, it's not that we've been standing still. I think we need to go back to a society where this is sort of emphasis number one, focus number one, and we basically move as quickly as we possibly can and figure out a way to get back to the future. Thank you very much.