Cardinal Conversations - Reid Hoffman and Peter Thiel on Technology and Politics [NEW]

Welcome, good evening. I'm Persis Drell, the Provost of Stanford University, and I am here on behalf of myself and President Tessier-Lavigne to welcome you to Cardinal Conversations. Last fall, Marc and I asked several university thought leaders in conjunction with student leaders to organize a series of discussions. We asked that these discussions advance two commitments at the heart of Stanford's research and education mission: our commitment to the free expression of ideas, and our commitment to fostering an inclusive campus culture. The students and thought leaders were asked to decide the format of the events, the discussion topics, and the guest speakers. And in just a few moments, you will see their collaboration bear fruit.

So tonight, I'm pleased to welcome you to the first event in this new discussion series. The initiative is very important to both me and to Mark, so important that we're actually doing a balancing act to participate. I normally teach a physics class from 6.30 to 8.30 on Wednesday night. Mark is currently teaching my physics class for me. He's an undergraduate physics degree. So I can inaugurate the series. After my remarks, I will return to my classroom and Mark will join you for the conversation. In a few minutes, Mike McFall, the head of Freeman Spogli Institute, will describe how he and Neil Ferguson of Hoover convened a group of students and worked together with them to initiate this series.

And he'll describe their plans moving forward. Then Niall will moderate a discussion on the topic of technology and politics between well-known entrepreneurs and Stanford alumni, Reid Hoffman and Peter Thiel. So I have to start by thanking Mike, Niall, and the student leaders from a broad range of organizations across the political spectrum for putting together the series. And I have to thank Reid and Peter, of course, for agreeing to be our first Cardinal Conversations participants. And I know everyone here is eager to hear their thoughts. The goal of Cardinal Conversations is to encourage the free expression of diverse viewpoints, to stimulate critical thinking by considering opinions beyond our own, and to engage in civil and intellectually rigorous conversation.

So why is this initiative such an important priority for Marc and myself? Well, first, we believe that in both research and education, breakthroughs in understanding come not from considering familiar, limited ranges of ideas, but from considering a broad range of ideas, including those we might find objectionable, and engaging in rigorous testing of them through analysis, conversations, and debate. Second, our strength at Stanford derives from our diversity: diversity of backgrounds, religions, nationalities, races, genders, sexual identities, ages, physical abilities, political views, and ways of thinking. We are only successful as an intellectual community when our discussion benefits from the entire range of diverse perspectives present on our campus.

And finally, we feel it's the responsibility of all of us, not just to ensure that the expression of a diversity of views is not just a possibility, but we also work to make it a reality at Stanford, both in the classroom and outside of it. And one way to do that is to ensure that diverse perspectives are actually discussed at Stanford. So it is in this spirit that tonight's conversation, we hope, and conversations to come, will help open all of our minds to diverse opinions and that we will all commit to intellectually rigorous and respectful dialogue across differences, whether in the classroom, in the dorm, or on social media, whether as a student, a scholar, or a citizen of the world.

As you are all aware, we cannot mandate respectful disagreement, but we can model it and we can encourage it. And I thank you all for being here tonight as ambassadors of that cause. Thank you very much. And I would now like Mike McFaul to come up and make some remarks. Thank you.

Hey, everybody. Thanks for coming. I'm Mike McFaul. I'm the director of the Freeman Spogli Institute, professor of political science, and senior fellow here at the Hoover Institution. It's fantastic to see so many people here tonight. You call it thought leaders, Provost Drell. I don't know if I'm a thought leader, but I am a professor, and I am an advisor to Cardinal Conversations. And it's a real thrill and privilege to do that. I want to say three points to add to what our provost just said. First, I want to congratulate the students and the faculty members for the idea for this program and to thank President Tessier-Lavigne and Provost Drell for embracing and supporting this novel idea. We have thousands of speakers at Stanford all the time.

Sometimes I feel like all I do is provide entertainment for people over at FSI and sometimes here at Hoover. Secretaries of State. We have National Security Advisors in my field. I work on international security. We have ambassadors. We have senators. We've had presidential candidates. She came twice, actually, to Stanford. And we've had presidents. President George W. Bush has been here twice just in the last couple of years. And President Obama has been here twice in the last couple of years. In fact, I'm working on bringing him for a third time. Imagine Obama unhinged. But he promised me. Let's see if he holds true on that. But there's something significantly different, two things significantly different about what we're trying to do here tonight.

First, in a somewhat dangerous experiment, we are pairing speakers together, not just giving them a podium alone, and not just giving a podium with a safe interlocutor like I have done with some of those other people. We have Niall Ferguson today to moderate. And second, students are at the forefront of what we're doing here, at least as far as I'm concerned, considering the topics, the speakers, and also the participation. It is fantastic to see so many students in this room today. Probably more students are in this room today than ever before. That's exactly what we want. Second point, Cardinal Conversations is an experiment. In the vernacular of tonight, it's a startup. As such, it's an imperfect product, and we want to improve it in the future.

I'm excited about some of the speakers we've lined up already. Anne Applebaum, Christina Sommers, Cornel West, he just confirmed, Wendy Sherman, Fareed Zakaria, and many others. But as we move forward, we want to increase the diversity of speakers, perspectives, and topics, including in the fall, from my point of view, more attention to foreign policy and international issues. And then third and finally, the best way to increase that diversity is to have more of you involved in that, both faculty members here tonight, but also more students. So I encourage you to send us your ideas. I encourage you to join our little committee. I encourage you to be engaged and help to form Cardinal Conversations as we move forward.

It's a pretty good product right now, but it's going to be better if you engage with us. But if you're going to launch a product, I've been told, sitting in the back with some folks who have done that and in ways that I have not, you should start with a big bang. You should start with a fantastic program. And that's exactly what we have tonight. So let me now turn it over to my colleague Niall Ferguson and introduce our fantastic conversationalist and get this program started. Thank you all for coming.

"The wind of freedom blows" is Stanford's motto. It's on the tree or above the tree in the university seal. And I think Cardinal Conversations is all about letting that wind of freedom blow. In establishing this series of conversations to affirm this university's commitment to free speech, we—that's Mike McFaul and myself, along with the eight-member Student Steering Committee—we're all agreed that we wanted high-profile public intellectuals, not politicians and not professional provocateurs. Tonight, as we launch Cardinal Conversations, we're extraordinarily fortunate to have two of Stanford's most successful alumni ever. But both men are public intellectuals only as a hobby, which is rather annoying.

For those of us who do it for a living, because their day jobs, as you probably are aware, are being technology entrepreneurs and investors. I'm not sure they need an introduction to this audience, but I'll do it anyway. Reid Hoffman on my left and your right is the co-founder of LinkedIn, a professional network that you will be on if you're not already, and a partner at Greylock Partners. He's currently on the boards of Airbnb, Nauto, Convoy, Blockstream—I could go on—Mozilla Corporation. He's also the host of Masters of Scale, a podcast series which I highly recommend and which actually gave me the idea for this opening event. It's a really extraordinarily good introduction to the world of technology entrepreneurship.

And he's got a book coming out, not his first, because there's already the startup of you and the alliance. The new book focuses on what Reid calls blitz scaling, based on the Stanford course that went by that name. He has, in addition, a master's degree in philosophy from Oxford, my old university, where he was a Marshall Scholar. But here he was a major... He has a bachelor's degree with distinction in symbolic systems. On my right and your left, Peter Thiel. started PayPal along with Reid. They were once on the same team. Back in the 1990s, Peter led PayPal as chief executive officer, took it public in 2002. In 2004, as you doubtless know from the movie The Social Network, he made the first outside investment in a little Harvard company called Facebook.

He's still a director of that company. That same year, he launched Palantir Technologies. He's a partner at Founders Fund, which is the venture capital firm that funded such companies as SpaceX and Airbnb. Peter also started the Thiel Fellowship, which encourages young people like many of you to put, as he says, learning before schooling. He's another author, which is maddening to those of us who only write books. His book, Zero to One: Notes on Startups, was a New York Times bestseller. And it, too, started life as a Stanford course. So actually, the only person you'll see tonight on this stage who has not taught a course at Stanford. Here he studied philosophy and law. As an undergraduate, he founded the still-running Stanford Review.

Gentlemen, we're here to talk about technology and politics. And I want to ask a kind of simple opening question to you both. Let me start with you, Reid. What do you think the lessons are of 2016 for Silicon Valley?

So Silicon Valley generally looks at politics and the political sphere as a kind of a rugby scrum that moves very slowly, doesn't actually engage in a coherent view of the future, and usually figures out how do we build technologies and technology companies that have huge leverage effects. And so I think, broadly speaking, Silicon Valley's, you know, general, you know, kind of engagement with politics is say, 'Well, you know, just kind of keep a friendly relationship while we go out and build the future.' And I think that the shock and the—the fact that we were definitely, as an area, out of touch with the, um, with what was going on is—it was shock. It's like, 'Well, actually, in fact, if you get to, um, a movement that wants to enshrine the past against the future, that has actually, in fact, a set of areas where, um, there's a lot of pain being felt, uh, whether it's economic futures, opioid epidemics, and other kinds of things that says, "Look, we're not—"'

"—we're not convinced that this future is going to be good for us, for our children." And so one of the things I think broadly what Silicon Valley learned was, "Oh, shit, we need to focus on the now in addition to the future." I think part of that is also a shift from challenger to incumbent, which is part of how the competition amongst companies and technologies and startups—because there's thousands of startups—is so fierce that there's this focus on just like, "Okay, I'm young, I'm small, I'm building." And that includes all the way to what are current giants, whether it's Facebook, Google, et cetera. They still feel like, you know, if you look at Bezos' letters, you know, kind of Day One, you know, kind of things.

Uh, that, uh, shift from, "We're building something new and we're on that path," to, "Actually, in fact, we are part of the medium. We are actually, in fact, uh, part of what's fundamental to how information flows in society," and that changes a sense of responsibilities. And so, you know, one of the things I've been saying over the last year has been that we need to kind of get to Spider-Man ethics, which is, "With power comes responsibility." We're now in a position where we have the incumbency in power, and we need to step up to that responsibility, and we need to figure out what that right dialogue is for what is a society that we all want so that, in terms of inventing the future, there's a conversation about it. And I think that's broadly what I think the Valley has learned.

There's differential levels along that curve. There's differential levels of response. But I think it's that sense of, "Oh, we were out of touch with the now, and we need to do that as well while continuing to try to build the future."

So we'll get in the course of this conversation to what that great responsibility might look like now that you guys have realized you have great power. But let me turn to Peter. You played a prominent role, more prominent than Reid in 2016. Looking back on it, what do you think the significance of the political events of that year have been for Silicon Valley? Do you buy Reid's story that there's been a kind of shock awakening, that there are forces out there that don't want the future Silicon Valley's building?

Well, I agree part and part. But I suppose my impression is that if you define lessons learned as places where people have actually changed their minds, there were very few lessons learned. Because I think people in Silicon Valley didn't change their minds on very many substantive things at all. The way I'd slightly reframe the question Reid posed is, how should we think about the nature of technological and scientific progress and how it is happening? And there are a lot of different ways to describe this, but I would suggest you can have sort of a basic tripartite division: that part of it is accelerating, which is the sort of official Silicon Valley—that's the Google propaganda. Technology's accelerating, it's going faster, science is great, it's making—it's progressing at a, you know, incredible pace.

There's an inequality version, which, you know, where, you know, it's leading to sort of a more unequal world. But then there's also a stagnation version, which is that the future isn't happening at all. And I think there's some truth to all three—to acceleration, inequality, and stagnation. But I think the stagnation issue, question, is one that we don't think enough about in Silicon Valley, where we tend to have this debate that's a narrow debate between inequality and acceleration. And the way I would describe what's been happening is that we've had sort of a narrow cone of progress around computers, IT, the Internet, the world of bits. The world of atoms has seen much less progress. And so when we were undergraduates at Stanford in the late '80s,

you know, the one good field to study would have been computer science. Just about all the engineering fields that people studied at the time were bad fields. You didn't want to major in electrical engineering. You know, aerospace was catastrophic. I think already by then people had figured out not to do nuclear engineering. You go down the list, and that we were in a world where there was not that much progress in the world of atoms, only in the world of bits, and that this sort of stagnation, which runs very much counter to the official propaganda of acceleration that dominates Silicon Valley—it's reflected in stagnant wages. It's reflected in the ways in which the Millennial generation has lower expectations than their Baby Boomer parents.

And, and I think this is a very big part of the story we need to talk about. And even if you think about more local politics like the state of California, it's close to bankrupt as a state. And so it's amazing that we have this incredible tech thing going on in Silicon Valley. And if you go east, just to the East Bay across the Bay Bridge or the Dumbarton Bridge, you're in this, you know, in this basically failing, this failing state that, you know, in the next recession probably will go broke. And so there's sort of a question how to, how to scale this. I do think that, you know, the rough political mapping I would give on this tripartite division is the centrist establishment in this country is accelerationist.

That would be Clinton. That would be the Bush family. Obama was broadly in that camp. There's sort of a non-establishment left that would be inequality, which was the Sanders line. And then, you know, the non-establishment right, which Trump represented, was the thing that stagnation—so, 'Make America Great Again'—is very offensive to Silicon Valley, because you're telling people in Silicon Valley that the future's not progressing. And then the substantive question that I think it would be good for us to find a way to discuss more is: how fast is the future progressing? Is it progressing in a positive direction? How much of this is really happening? And it doesn't show up in the macroeconomic data.

It doesn't show up in the productivity numbers. And that's, I think, sort of one of the kinds of things that we need to engage more. By the way, I want to echo what all the speakers at the beginning said about the importance of having these debates and conversations. I think there's always a tendency for us to reduce the other side to a caricature of itself. A way this can get done a lot in U.S. politics at this time, where you sort of strawman the arguments. You pick out the weakest point, you make fun of that. And what I think we should always try to do is find ways to steelman the arguments, which is the opposite of strawman. We should take the arguments of our opponents and try to give them the strongest construction possible so that we understand them as well as we possibly can.

And I think the left will be able to win again at some point, but it has to start by steelmanning what something like Make America Great Again means, what it means in terms of this question about stagnation. And it has to have arguments that are more than just telling Trump's voters to hurry up and die.

What did you say about characterizing things? I missed that part. Here we go.

But in a sense, you're both saying that Silicon Valley had got detached from that part of the country that voted for Trump. And in your characterization, Peter, that's where the stagnation was happening, where the acceleration was simply not perceptible. And I think in the same way, your identification of a part of the country that wasn't interested in Silicon Valley's future is the same way of making a similar point. It's only a few years ago that people in Silicon Valley seemed very confident about what they were doing for politics. I'm going to quote from a book that Eric Schmidt wrote with Jared Cohen just a few years ago, The New Digital Age. Current network technology, they wrote, truly favors the citizens.

In an article in 2010, they predicted quite accurately with respect to North Africa and the Middle East that authoritarian governments would be caught off guard when large numbers of their citizens armed with virtually nothing but cell phones took to the streets. So glad, confident morning back then said the internet is good for democracy. Somehow that story seems less plausible in 2018. So how do we think about the politics of a networked world?

When some authoritarian regimes seem to know exactly how to use these tools? Reid, so I think that the, the optimism comes from people who say, 'Well, if you don't count bad actors, you don't count the attempt to interfere with other folks, and you say we have this empowerment of individuals that goes across the fact that you have a minicomputer, you have access to information, you can learn things, you can communicate with a wide variety of people.' Those are all the things that Eric and Jared were talking about. They're still definitely true. But part of moving from challenger to incumbent is when you begin to have the medium of communication, the medium of transaction, the medium of interaction, the medium of political decision,

then that becomes something where in the contest of human tribes, that then becomes manipulable, corruptible, gameable in various ways. And by the way, entrepreneurs do it too. Like they figure out how to game kind of virality and other kinds of things. This is not actually in fact completely new. What's new is that the scale is now at kind of the realpolitik and the politic of nations. And, you know, a microcosm of that could be the Peter Gabriel Witness thing, which used to distribute video cameras to, say, film human rights atrocities because bringing those films then sheds, you know, sunlight to them. And now, of course, what you have is you have authoritarian regimes looking at social media to say who was at the protest to try to track down them and their family, which is a, you know, kind of an alternative way and a way of doing that.

I think that the general problem with many people's reactions, and they say, 'Well, there is a fault of technology. We can't really discern truth amongst the fake news. We can have the Russians not doing cyber hacking, but by doing essentially social meme hacking.' And that that is a problem and that we should roll back. And actually, the usual answer is roll forward. The usual answer is we should figure out what to do about that and we should evolve the system in the right way. And so I remain, you know, kind of optimistic but not utopian in the technological possibilities. But what it means is you have to, like when you think about it, it's just as, like, for example, when we got PayPal to a certain size.

You have to start thinking that there's criminals using it and other things. And then you have to start building against that as part of what you're doing. And I think that's part of what's happening with information flows, trust, its influence within kind of a democratic political system.

Let me just follow up on that point, because you mentioned the fake news issue, which is very much in people's minds, also the Russian role. Your forthcoming book, Blitzscaling, on my reading says these are fixable problems, but we have to go forward. We can't hire an army of fact-checkers or superannuated newspaper editors. Talk a little bit about how you do that fixing, how you imagine that working.

Well, so part of what you can do—so people imagine that you can do an AI to do truth-checking. That's, I think, a ways off. I think that's fictional. However, what you can do is you can do, for example, because we already do this with credit systems, PayPal, et cetera, you can do identity checking. You can do things that have a way of saying, "Okay, is this information..." Like, you can have, for example, an information registry that says, "These are sources of information that have signed up for, call it, journalistic accountability." Like, "I can be questioned or attacked on not fact-checking, because I don't think there is such a thing as alternative facts." Those kinds of things can actually be baked into the platform.

It's not so much as "X is true" as much as, what is a better source of identity and provenance of the information, and where do you go to cross-check or to say, "Is someone standing up for this and saying, 'This is really true and I followed a journalistic process for it'?" I think you can see more of that kind of thing. By the way, you already see some of this in, for example, what happens in search quality results. Part of the whole emphasis on search quality is to say, "This is actually accurate information against this query," and you're essentially trying to bring that kind of thing to looking at information across these platforms.

Peter, let me put this question in a slightly different way to you. Has the internet, have the network platforms altered the nature of politics itself? In other words, are we still going to be having left-right debates like you were having as undergraduates, I was having as an undergraduate in the 1980s, or is there going to be a different kind of politics? Is it going to be authoritarian versus democratic? Is it going to be establishment versus populist? Growth believers versus stagnationists? How do you think about the new terminology, even, of politics?

Well, it's always hard to say because I think these technologies don't naturally always map in a very precise way. And so making predictions was a treacherous business for Eric Schmidt, and it's probably also somewhat treacherous business for us today in 2018. You know, one axis that I am struck by is sort of the centralization versus decentralization axis. And so I think, Reid, you just represented the centralization thing where it's all, everything happens in one place and then it has to sort of get curated in just the right way so that, you know, you have a—you have a good debate, but within the proper limits, within the right proper limits. And that's the sort of question that happens in a massively centralized context.

In a more decentralized context, that would perhaps not happen in quite the same way. Two of the areas of tech that people are very excited about in Silicon Valley today are crypto on the one hand and AI on the other. And even though I think these things are underdetermined, I do think these two map in a way politically very tightly on this centralization-decentralization thing. Crypto's decentralizing, AI is centralizing. Or if you want to frame it more ideologically, you could say that crypto is libertarian and AI is communist. And of course we always hear only the first half because we're biased to the left. But AI is communist in the sense that it's about big data, it's about big governments controlling all the data, knowing more about you than you know about yourself.

So a bureaucrat in Moscow could in fact set the prices of potatoes in Leningrad and hold the whole system together. And if you look at the Chinese Communist Party, it loves AI and hates crypto. So it actually fits pretty closely on that level. And I think that's a purely technological version of this debate. And I do think—so I think there probably are ways that AI could be libertarian and there are ways that crypto could be communist, but I think that's harder to do.

If all the cryptocurrencies are mined in China and Russia, that might... I think they're trying to stop even that at this point. Can I follow up on the implications of that? Because, I guess, in Reid's world of not necessarily AI, but some authority authenticating or validating what is good news as opposed to fake news—but there are authorities that will give the Seal of Good Housekeeping approval for some sources. Whereas, in your more libertarian model, presumably through some blockchain decentralized architecture, we'll be able to differentiate the fake from the true.

Well, in a centralized world, the question emerges, and a decentralized one, it doesn't emerge as well. So, yeah, of course, the larger platform companies have a challenge along the lines that Reid describes. I would describe it as a two-front war that they have to fight. They have to fight on the one hand against hate speech, fake news, that whole ensemble of things. And then they have to also fight against the people who want to limit speech, overly narrow speech, in the name of fighting fake news. And because it's a two-front war, it's much more complicated than just fighting on one front.

Can we talk a little bit... In the decentralized world, it's much harder to set up kind of... It's an interesting thing to say it's libertarian versus communist. You could say it's libertarian versus rule of law, right? It's much harder to set up a kind of a... Or anarchy... Yes, exactly. Yes, so it's actually much harder in the decentralized system to set up rules and norms. Like, for example, one of the things that's a massive problem in the crypto community right now is it makes Gamergate look, you know, relatively tame in its—in the way that it treats women in terms of public discourse and so forth. So, there's a whole bunch of problems that need to be fixed over there that are much harder to fix in that arena. Now, that being said, we're both

We both think that the invention of cryptocurrency is an important kind of innovation alongside the Internet for allowing a bunch of apps to be developed within kind of the Internet of money, the Internet of value as a way of doing it. So neither of us are negative on cryptocurrency, or at least not negative the same way. But that's one of the virtues of the kind of the rule-of-law systems.

Well, but this is always like, you could say, I would say AI is a much more transparent world. And then the centralized world is more transparent. And then the question you could always ask is, what's the opposite of transparency? Is it criminality or is it privacy? And from the point of view of a centralized state, the opposite—yeah, it's always, why do you want to have secrets? Why do we not know who you are and what you're doing? Why do you need privacy? If you're behaving yourself perfectly, you have nothing to hide. And you're a criminal—only a criminal doesn't want to have transparency. But I think it can really cut both ways.

I want to come back to this issue of the relationship between China in particular and big data companies, because I think it's a hugely important one. Before we get there, let's talk a bit about inequality, which popped up at the beginning of our discussion, but is, I think, pretty central to what Silicon Valley is doing, perhaps unintentionally. And, you know, even if one just looks at the case of crypto, it looks like another case of the smart people who thought of it first become spectacularly wealthy, and then the suckers like me who arrived late to the game, having ignored their teenage sons right the way through the bubble and buy at the top, get crushed. That's called the stock market. You may have seen that.

This has existed before. But what's striking to me about Silicon Valley's economics is the winner-take-all. And you make this point in Blitzscaling, as indeed, Peter, you do in your book, Zero to One. That's great for the winner. And you can see the winners in this neck of the woods in their Teslas. But is there not a sense in which... from the loser's vantage point, this is deeply alienating, and it just seems as if each new innovation is a fast track to wealth for a bunch of smart, young, well-educated insiders, and everybody else is just a user handing over their data for free?

Well, what I would say is a couple of things. So one is, well, A, it's not handing over their data for free. So frequently that comment is like, 'Well, what has Google done for me?' Well, provided search, for example, right? You know, free information, free access to a whole bunch of videos, a bunch of other things. So, you know, maps. I mean, there's a ton of stuff. It's like, 'What have they done for me?' It's like, 'Well, that's what the data exchange looks like.' That Monty Python sketch, 'What have the...'

Yes. 'Romans ever do for us.' 'What did Google ever do for us?'

Other than roads, aqueducts, etc., etc.

And so—I'm glad we've got the Google-Roman Empire analogy going. Yes, exactly, they'll love us for that. So I think that the—but the inequality problem, that the unintended consequence of all this innovation seems to be to amplify an inequality that was already quite advanced in the 1990s, and it's only got worse. And a large part of what's driving it is these extraordinary, incredible returns to the blitzscalers, the winners.

Well, so I think that there's always, in most times in human history—you're the historian—there has been a fairly large divergence in wealth, whether it's financial systems, whether it's, you know, aristocracy and landowners and so forth. And there's no, you know, that is actually, I think, broadly a feature of human society, not a bug and not necessarily new. I think what's a feature of the current thing is, like, for example, you're mentioning cryptocurrency is something that Silicon Valley is getting wealthy off of. Actually, in fact, I think cryptocurrency, most of the people who are getting wealthy are outside of Silicon Valley. Cryptocurrency was most adopted and there's a couple of good companies here.

But the general range of mining cryptocurrency, of early trading in it, it took a couple of years for Silicon Valley to realize cryptocurrency was happening. It was one of those things that was more... The person I refer to as patient zero for Bitcoin in Silicon Valley is an Argentinian entrepreneur named Wences Casares, who is right now down in Patagonia, but he generally lives in Woodside, not too far from here. And so I actually think that the notion that the incentive is for the creation of the new thing, the thing that actually, in fact, could have a global impact, and that the benefit of that global impact going to some individuals is not necessarily a bad thing. I think that the important thing is to make sure that the bulk of people are having a sense of meaning and progress in their lives and inclusion.

And one of the things that an over-focus on incomes—this is a little bit of, like, for example, where Peter's making the stagnation point—is not paying sufficient attention to what happens when we get free encyclopedias for everyone and free learning materials for everyone and free entertainment for everyone and a bunch of other things that all come about with quality of life. And the only measure of human progress is not what is a relatively arcane GDP measure, but also various kinds of quality of life measures. And I think that those things are coming about for it. And what you would, I think, feel justly saying is if, well, this person created cryptocurrency or these set of people created cryptocurrency and made a bunch of money and everyone else is losing, if there aren't other paths forward to winning,

then that would be a problem. I actually think one of the good things is if I were to make a prediction, I'd say that five to 10 years from now, there will be at least 50% as many additional big tech companies and so forth. It won't be shrinking, it will be growing in terms of the number of different options and where they fit in the world and life. And what I would want to see from those is more ability because, like, for example, a centralized platform is a good thing if it's creating generativity, if it allows a lot of people. Like, for example, you take Airbnb or you take eBay and you say, actually, in fact, I can add to my income. I can be a micro-entrepreneur on this platform. I can make more things happen.

I think we want to see more of those to enable more people to say, "Well, I don't have to be a coder, I don't have to be a tech entrepreneur, and I can still make progress in my life." And I think that's the thing that we need to be more focused on as we figure out, okay, how to be inclusive.

Do you think conventional economics actually underestimates the benefits of the internet? Do you buy into that?

Let me just respond to this inequality thing first. I think we should maybe start by talking a little bit about where the inequality is actually experienced. Silicon Valley is, in some ways, a very unequal place. When people leave Silicon Valley, it's not because there are no economic opportunities. It's because the real estate costs too much. There's some studies I've seen where almost the entire increase in inequality in the last 20 or 30 years is simply increase in inequality of land ownership. If you were a Stanford graduate 50 years ago, you got a job at Hewlett-Packard, you could have gotten a three-bedroom starter home as a 22-year-old in Palo Alto. And so, in a way, this is how the stagnation manifests itself in land prices.

As a venture capitalist, I often think that almost all the venture capital money I'm investing is going to, you know, urban slumlords in the form of, you know, incredibly onerous commercial leases and, of course, the fairly high salaries you have to pay people in Silicon Valley, which they have to then pay to rent to all their landlords. And this is, you know, this is maybe—maybe this is loosely linked to tech because we're a networked economy and it's very hard to do things outside of Silicon Valley and network cities like New York City or London for finance. But I think that's sort of where the problem is. The remedy in my mind would be that you seriously think about changing zoning laws or things like that.

There's an economist I always like to refer to in the late 19th century, Henry George, who had this—there was this theorem that I think Stiglitz actually proved about 100 years later, the Henry George Theorem, which says that in a certain kind of urban area where not enough new things can be built, all the value gets captured by landlords. And so you're saying the value gets captured by a few tech entrepreneurs. Reid's saying it's this consumer surplus that gets captured by everybody. And I think the question we have to ask is, perhaps a great deal of it was actually just captured by landlords. They're not the people who get put on the front pages of magazines. But that's the way in which inequality is extremely profound.

And I think if you solve the zoning problem, I don't think people would have problems with some people making more money than others in crypto or at Google or anything like that. It's just the land-use problem.

I suppose I'm struggling a bit to believe that there are somewhere hidden in these neighborhoods landlords making more money from rents than you guys are making from your investments.

Collectively, but collectively. It's much more distributed. But yeah, it's been a phenomenal bull market in the land price. My parents got a home in Foster City, just north of here, for $120,000 in 1978. Today it's worth $2.5 million. And if you were in the older generation in the US and you got a house in a major urban center, you were able to retire. If you didn't, you weren't able to save for your retirement. And then if you're a young person, it's almost impossible to even get started.

It was a pupil of Henry George who came up, if memory serves, with the game Monopoly. And I can't resist asking you both about monopoly since there's a sense in which your books in their different ways are celebrations of monopoly. And conventional economics said that the monopoly wasn't a good thing and certainly would tend to lead to rent-seeking by the owners of the monopolies. Can you defend these winner-take-all-type companies which Blitzscaling produces? Is this just inherent in the nature of the business that there will be, if not monopolies, then things that are very like them?

Yeah, I mean, frequently we refer to them as winner-takes-most businesses versus all. But, you know, this is... and when people talk about network effects, that's the kind of thing that they're talking about.

This is a... a polite way of putting it.

Yes, it's a polite way of putting it. It's, you know, Peter thinks it's a classically deceptive way of putting it, which is the reason, hey, in Zero to One, he tried to call it out as, you know, "No, this is actually just a monopoly." I think the key question is what happens if there is a centralization of a platform. There's a lot of virtues in centralizations of platforms. They can create enormous generativity. They can create, like, a lot of—like, for example, you have a platform, iOS, Android. You can create a lot of apps on top of it. You have an open platform like the internet. You have a huge amount of productivity. Those kinds of things, I think, are very valuable to have, those platforms. And platforms are more valuable

the broader base they are in terms of your ability to build businesses on them, reach customers, have communications, do transactions, et cetera. It's part of the reason why there's only a few, you know, relatively few, like, credit cards and so forth. Because once they're processing, like, the thing is, "Well, should I accept this random new card or should I accept Visa or Mastercard?" Well, I'll take Visa or Mastercard, just easier, and it makes the whole system run more efficiently. The key thing you have to look at is: does it accelerate the right kind of opportunities and futures and innovation and build towards the future, or does it lock away the future? So the classic concern that people have around monopolies is that they try to enshrine the past versus the future.

And so they go, "Okay, I'm just going to collect rents. I'm not going to invent anything because I can sit on my monopoly in order to collect the rents." That's obviously a problem. That's obviously bad. That's the kind of thing you need to act against. Now, Peter and I have actually been on stage before talking about monopoly with Zero to One in his book. And, you know, part of actually, in fact, if they're actually in contention, even if they're very profitable and they're actually reinvesting their profits in order to compete with each other and try to bring products and services to the world, frequently in the modern cases, free products and services, you know, that's not clear that that isn't actually, in fact, a substantial social benefit in terms of how that's playing out.

And that's the reason why, like, part of what I look at and I say, "Well, what way should we be trying as technologists and inventors of the future?" is say, "Well, make paths by which people can not just find information or communicate or find entertainment or find education, but also make things by which people can create work for themselves, create economic opportunity." That's part of the reason I, you know, Airbnb and eBay as kind of simple examples of these kinds of things. And you say, "Well, there's a marketplace." Marketplaces have natural network effects. They tend to be dominant, and that's where trading happens. Well, that's okay if you're actually enabling a lot of business and creation on top of it.

It may even be good.

Before we get to you, Peter, I want to just point out to the audience that we'll be taking questions from you. But this being close to Silicon Valley, we won't be doing it in some kind of old-school way with microphones or bits of paper, God forbid. No, we'll be using Slido. And you'll be, with the aid of your electronic devices—and too bad if you didn't bring one—able to put in your questions via Slido. They will then be moderated by our undergraduate committee, and I'll get the winners. And that's how we're going to do Q&A tonight. I'm telling you this now so that you have time to follow the instructions, which I hope have now appeared above us, and figure out how to get online to Slido and pose a question.

I hope this works. Because if it doesn't, then we will have to use scraps of paper and it will be a great embarrassment, certainly for me. Peter, while everybody's figuring out Slido and preparing devastating questions, the conventional response to any mention of monopoly was always antitrust. And I guess, as somebody who was at the law school here, you're the right person to ask: is this coming eventually? Let's assume, fast forward, there's some swing to the left in American politics. Maybe the next populist is Bernie Sanders. Does antitrust finally show up in Silicon Valley and say, 'You naughty monopolies have to be broken up'? Will it be like Standard Oil?

Well, antitrust is always an extremely big, crazy weapon. And it's very unclear when that gets used in different contexts. By the way, I'm not simply pro-monopoly. I want to be very clear on that. The distinction I always make is between dynamic monopolies, where people invent things, and that's where we also protect those in our society. We protect those with patent, copyright laws. And so if you have a dynamic monopoly, that's good. A static monopoly that's more like a rentier, like a landlord, or maybe a troll collecting a tax at the bridge or something like that, those are more problematic. And the question is, what kinds of monopolies do we want to actually encourage that are sort of analogous to IP, and which ones are more static and problematic, and that are the subject of antitrust?

And that's sort of the—that's why it's a complicated question, because there are, in fact, good monopolies and bad monopolies, the way we think about it. I don't think antitrust laws, I understand, allow that. I'd say that the more general question is just how much regulation is coming towards the tech companies in Silicon Valley. This is, again, somewhat hard to predict. The thing that I'm struck by is, and that I worry about is, how poorly the big tech companies are playing the sort of political game that they're supposed to play. In 2008, we had an enormous financial crisis where, I think, the banks are still worse actors than the tech companies. And the banks got relatively light regulation after 2008 because they were sort of bipartisan.

They backed both parties. And the sort of thing that maybe is idealistic or maybe stupid or maybe just wrong is that Silicon Valley is a one-party state. It's—it's all in on one party, and that's when you get in trouble politically in our society. When you're all on one side, the other side doesn't care for you, and your side doesn't care for you either, at the end of the day, because they don't need to. And—and so the thing, you know, you said that the regulation will come from the left. It may well come from the Republicans at this point. It may start with the Republicans, and that you're really in trouble when the Republicans want to regulate you. How might they do that? Because I can't imagine Republicans doing a big antitrust action.

Well, it's, you know, there are sort of a lot of—I'm not going to try to give them ideas, but there are. Go on. But it could, you know, it can—you're really in trouble when you get conservative Republicans and liberal Democrats to agree. And the worry I have is that the response to the one-party culture of Silicon Valley is, you know, 'We'll never get you' versus 'We don't really—we have you anyway, so we don't need to,' and both parties end up coming after you.

I'd like to expand on this a little bit because actually one of the mistakes I think is made a lot in thinking about this is we are moving from a US unipolar world to a multipolar world. And so everything that is discussed here presumes that the US is the world and everything else is a shadow. And so I actually think we are already in a place where really what you're seeing with monopoly, antitrust, and so forth is actually a return to competition from nation-states. So it's part of the reason why the Europeans kind of blend some legitimate social concerns together with the 'we're not happy with the fact that we don't have as strong a tech industry as we'd like, impose some regulation,' and they really focus on Silicon Valley, not realizing that China's coming along, you know, kind of full steam.

And I don't think China is going to dismantle its monopolies because I think it understands that actually, in fact, creation of industries of the future is really important. And so I think that the interesting question that as people say, 'Well, we should slow down, we should enshrine the past.' I'm quite certain—here I'll engage since Peter already took a shot at the left—I'm quite certain that we'll want coal mining jobs back in great profusion and quantity because it's the right work in the industry of the future for us. Basically, I think that the question is you have to say, 'Look, what are the industries of the future? We want to be there and part of it.' Because it's political fighting and infighting, that's precisely where you begin to see the decay of Rome.

It's like nothing else matters. It's only fighting within. So it's like, 'Okay, we're Republicans. We think the tech industry is progressive and not for us, so we're going to go regulate them.' And that's going to be not an America First policy. That's going to be an America Last policy.

So I'm starting to get questions through Slido. I'm relieved to say that it's working. And I can't help going to one of them now because it fits in with the conversation we've had so far. Randy asks, 'You've agreed more than disagreed. What is something you strongly disagree about?' And I'm guessing from what's being said at the moment that this administration might be the answer to that question.

Well, I did actually, in fact, create a card game—I was hoping you'd bring that up—called Trumped Up Cards, which is modeled on Cards Against Humanity. And just for entertainment value, one of the cards in that deck—I gave Peter one of the very first decks—is Peter Thiel as actually, in fact, one of the cards in the deck. So that would be one of the more humorous areas.

Peter, so America First could end up being America Last if Republicans just go after Silicon Valley out of sheer political spite. Is that a plausible scenario in your view?

Well, there are a lot of ways the Trump administration could get things wrong. There's a lot that's, of course, very broken in Washington, D.C., generally, and so I think it's a mistake just to blame any sort of one person for it. I would say that I do always think that there are some very real problems that Trump has pointed to that we should take more seriously. The one that, from an elite point of view, is the craziest is that you should be more restrictionist on trade. That always seems like a really crazy view that Trump has, and it's not clear being restrictionist is a good idea. On the other hand, there's obviously something deeply screwed up in the trade relations. In a globalizing, healthily globalizing world, capital should flow from the developed to the developing world because you have higher growth rates in the developing countries than the developed world.

That's sort of the convergence theory of globalization. This was the U.K. in 1900, had a current account surplus, 4% of GDP, and the money flowed out. If you look at our planet from outer space, the money is flowing the wrong way. It is flowing from a fast-growing China to a slow-growing U.S. Or you could say, poor peasants in China are saving money to invest in the U.S. And it's because that's just the other side of these incredible trade deficits. And so if you believe in globalization, we should have trade surpluses. And that tells you there's something wrong with the trade arrangements. Now, you know, it doesn't necessarily mean that you want to be protectionist or that you want to create national champion companies or anything like that.

But it is at least a question that one should raise very hard about, you know, is there something wrong with the U.S.-China relationship when the only thing they seem to want from us are McDonald's hamburgers? And you can blame that on us because we're not building anything, and you can blame it on China. It's at least a question we should be asking.

Let me follow up on China, because Ravi's asked, what does the rise of China mean for the future of Silicon Valley and technology more generally? You alluded to it earlier, Peter. Talk a bit more about this. To me, this is the fascinating thing. Europeans blew this. They're nowhere. They don't really have any major technology companies. But the Chinese... Perhaps as much by accident as by design kept the U.S. technology companies at bay and allowed their own so-called BAT companies, Baidu, Alibaba, Tencent to flourish. And now these are the real rivals for the Silicon Valley companies. And yet their relationship with government is completely different from the relationship that we've been talking about in the United States.

It's far from the hostile relationship that we see between Silicon Valley and Washington today. They're hand in glove. So talk a little bit about what you think China's success in technology means for Silicon Valley. Is the future perhaps there rather than here?

Well, it's badly underestimated in Silicon Valley. And I do think Alibaba and Tencent, in particular, at some point are going to be trying to expand outside of China. I expect that they will try to do so in a fairly aggressive way. And I think people in Silicon Valley are probably fairly myopic about that—maybe in the U.S., in the U.S. generally. And certainly, the question of what year does China overtake the U.S.? This was a very big question people asked, say, in 2005, 2006, 2007. We're 13 years closer to that than we were in 2005. And we seem to be asking the question much less today than we were 13 years ago, even though we were presumably 13 years closer to when that happens. And it's almost as though we've stopped thinking

about it as the data's gotten closer. My calculation would be if you look at it on a PPP basis, China's already overtaken us, GDP, it's like 20, 30. If you do an average of purchasing power parity and GDP, which I think is a better measure than either of the two alone, you get to about 20, 20. It's gonna happen in three years, three, four years. And that's barely registering as a conversation, as a conversation here.

Since there was a request for Peter and I to disagree, the specific thing that I would disagree with Peter on is I actually don't think Silicon Valley is blind to China. I think Silicon Valley is quite aware that in the entire world, the shape of the technological future, the most significant contender is China. They worry about the protected Chinese market. There's a whole variety of Silicon Valley companies that can't play within China. They worry about more support from the government and anything from data to kind of generally labor laws. They worry about the fact that there is a city in China that's graduating a million engineers every year, let alone the whole thing. And so that's part of the reason why Silicon Valley tends to be such a large advocate of

especially high-end immigration, although all to some degree of fairness, but that's the—how do we play against that? And part of when I meet with various European government officials, I say, "Look, you're really focused on Silicon Valley, but what we're worried about is what the future looks like vis-à-vis China, and there's all these issues." And I think if you went around and talked to every single medium to large company within Silicon Valley, they're all thinking about what does the China market look like, what does competition with China look like. Tencent, Alibaba, Baidu are highly innovative companies. There's a lot of interesting things that they're doing. There's things that we now have kind of ideas and copies of startups here that are of ideas that are made in China.

There's a ton of these things going on. And so the specific disagreement is actually, in fact, Silicon Valley treats this as a very serious threat indeed. And it's either healthy competition, which I think Peter thinks is an oxymoron, or a contest for the future.

So you're the perfect people to ask a follow-up question on this. I was just a couple of weeks ago in Hangzhou, which is the headquarters of Alibaba. But you don't just need to go there. You can go anywhere, and you'll see that in financial technology, China is a long way ahead. Why is it that we don't pay for everything with PayPal, but the Chinese pay for everything with Alipay or WeChat Pay? I mean, to the extent that you do not see a credit card, and when Chinese people come to the United States, they chortle at our antiquated behavior. You guys were way ahead of China in thinking about an online payment system. And yet, from where I'm sitting, they've completely overtaken. Now, I would love to know why you think that is, because all I see when I go to China is ubiquitous online payment systems that have become...

But this is not just payments. I mean, there are all sorts of places where... If you're an undeveloped country, you can go straight to the technological frontier. Whereas if you're reasonably developed, maybe the delta is not that big. And so it's slower to adopt things. And so you would find the same thing to be true of mobile payments in the developing world generally versus the developed world. E-commerce is much bigger in China as a percent of commerce because people never built big retail stores. I think Japan has the most elaborate retail industry, and that's probably the country where you have the smallest percent of e-commerce. And it's not because Japan's unusually backward, but because the old economy of Japan actually functioned reasonably well.

And the payment system in the U.S. is not seamlessly efficient, but it works reasonably well. It's not a trivial thing to start a new payments company. You have to always find something where there's a big delta that can really drive an intense need for adoption. And having something that's just a little bit better for a lot of people is often a very difficult technology to drive out.

Jack Ma said something at Davos last week which really struck home for me, namely that the Chinese model would work better in emerging markets, pretty much for the reason you've just given. And that left me wondering if, essentially, companies like Alibaba will be able to roll out their platforms really easily in emerging markets, and the Silicon Valley companies may be left with just the developed world. Is that a scenario that you think is plausible?

One of the things I've been saying for a few years is there's three Internets. There's the English Internet, the Chinese Internet, and everything else. And where the actual combat will be is in the everything else.

And who do you think will win in that contest? Is it conceivable that, in fact, the Chinese companies, that BAT could beat FANG? Very conceivable. What do you think?

Yes, but I still disagree with Reid that this is generally understood in Silicon Valley because the big Chinese companies so dominate China that people in Silicon Valley don't even think they can break into China that much. When they don't think they can break in, they don't think about it that much. And so one of the benefits for China of the sort of state champions, the Chinese firewall, is that there's no incentive for us to think about what's going on in China that much because it's gotten so hard to do anything. And so I think whenever China starts to do things aggressively outside of it, we will not be paying as much attention as we should.

Questions are pouring in, a number of them about American politics, and I want to come to those in a minute. But there's a big question that Ben has asked. Is American democracy in crisis, and do Big Tech companies have any moral responsibility to preserve or defend American democracy? Reid, does it feel like a crisis of democracy to you?

I think it's unquestionably a crisis of democracy. I think that the notion of political polarization where legitimate news organizations are called fake news and you have attacks on institutions, where the question about foreign government interference within our democratic process is weakly responded to. I think all of those things lead to an unquestionable turmoil and challenge. I think that the—I think that tech companies have a responsibility, as do, I think, citizens and other companies and the government to try to do stuff about this. I think that the, you know, like, for example, people say, well, Facebook, should they have known that the Russians were going to try to socially hack it?

And that's legitimate for a company to say, "Look, we didn't think that was our thing. We're a company. We're doing business stuff. We're not trying to be, you know, in the game between nation-states." But now that you know about it, there's a question of how do you provide services well. Fortunately, I think the people there actually care and are trying to figure out how to learn the right lessons and how to be good citizens in this. But I think it's unquestionable that our democracy is in turmoil.

You can agree that things are more polarized than they were in the past. The polarization trend, I would say, did not start with the Internet. Maybe there are things about Internet communication technologies that create a crazed intensity where you have your daily minute of hate on Twitter, or these sort of virtual mobs on the Internet where you just sort of attack random people. So there are aspects of it that may be contributing to polarization, but that doesn't mean that that's the main thing that's causing it. I would say polarization in the US has been increasing since the late '60s. And I would date it to roughly the time period when the growth slowed. And we've been in an era of relative economic stagnation since the 1970s, and that's why I think the primary cause for polarization is economic stagnation, because in a world without growth, it's not clear, and we're not strictly a democracy, we're sort of a representative...

We're a constitutional republic. We're an indirect democracy. The democracy's modified by the republic, the republic's modified by the Constitution. But even that system doesn't work that well without growth because the way our system of government works is you have a bunch of people sitting around the table in a state legislature or legislature, and they craft legislation where there's more for you and more for you, and if Reid's the difficult person, there's no more for Reid. And when the pie is growing, it's relatively easy to craft win-win legislation. When the pie is not growing, everything becomes zero-sum, it becomes much more hostile, there's a loser for every winner. And I think that's the dynamic that I would say is 80% of the problem with polarization.

And maybe tech, maybe the way the message forms is 20%—don't want to minimize that 20%—but we shouldn't turn it into the scapegoat for all of the problems in our society.

Would you buy that the polarization would have happened anyway, even if none of this stuff had been invented, and we still did politics with TV and newspapers?

Yeah. One of my favorites, Fox News, or various forms of talk radio. I'm sure you were watching it last night, glued to the State of the Union. Yes, exactly. Such visionaries as Sean Hannity, whose every word I hang upon. And so, look, I think the polarization, broadly speaking, where Peter and I agree is actually, in fact, growth is super important, non-zero-sum psychology, where you kind of say, 'Hey, look, we can keep playing, because even if Peter gets more of this hand and Neil gets less, we play again and see where we end up.' That's an extremely important part, and I think that is a contributory portion of this, and I didn't mean to say that I think that technology was a unique contributor to the polarization as much as I think part of, you know, what has happened is that there's now kind of these new media, these new ways of kind of sharing information, and we have to kind of get to a, 'How do we get to collective truth?' And actually, I think we should be focusing on, 'How do we get to real news versus...'

Labeling things fake news.

It's always a two-front war. So there is a war against fake news and real news. I don't know how you can get to real news without labeling things as fake news, by the way, since the way you make it sound like they're two categories. But the other front is that there are all these people who also want to fight for certain types of news in the name of excluding things. And so it's always a two-front war. That's what makes it complicated. If it was simply, well, you know, anyone who complains about a certain type of speech, we'll listen to them and we'll get rid of that speech because it's not true or it's offensive or something, that gets weaponized very problematically and you don't end up in a good equilibrium.

That prompts a question which has been in my mind for a while and was brought to the surface by what happened after the Charlottesville events. And that is the possibility that, without our even being aware of it, Internet companies begin to censor the public sphere. And the process of exclusion that you just alluded to gets much less attention, but might actually be a more insidious problem. Is that other front that you talk about one that we should worry more about?

Well, I'm not—I'm not going to try to defend hate speech at all. And that's not—I don't think that's what we're—that's what we're talking about.

I think it's where the line gets drawn that seems to be problematic. Who, who decides what is hate speech on the Internet?

Well, I think it's always this two-front problem. I mean, there's certainly certain categories of speech that are hate speech that I think we could all agree to. I don't think that's where... The really problematic aspect of this debate is it's not about hate speech. It's about things that are not true or not important or distracting, sort of all these varieties of fake news. But the hateful versions of it are just a small, small subset.

Press you both a bit on this issue because it seems to me to be very important and a number of questions have alluded to it. And this really has to do with the fact that Silicon Valley itself has not polarized. I mean, if only there was some polarization here. One could say the same, incidentally, about universities, but there's an almost total lack of it. In fact, you have, as a number of questioners have pointed out, a very liberal culture. And one question comes from Isaac. Are very liberal cultures in tech companies a cause for concern? Reid?

I thought that would be a question for Peter. Yeah, that's why I asked you. Well, I think Peter and I figured out we met each other in '87, in Philosophy 80: Mind, Matter, and Meaning as undergraduates. And a kind of a classic argument that we had had was, is the university biased left and ideologically narrow-minded? And part of the argument that I use, and I think there's truth on both sides of this one, which is the argument I'd use is actually, in fact, if you have a bunch of people who are truth seekers who all end up in kind of a cluster of points of view, that may be an argument for it versus an argument for bias in terms of truth seeking. And then I think one of the points that Peter made, and this is one of the things I like about having these kinds of discussions, was that generally speaking, more people on the right can argue the intelligent points from the point on the left than vice versa.

And I think it's an important thing for liberals and progressives to be able to do that. So, Peter's opening remarks.

If you're a village atheist in a small town in Alabama, you can probably argue the other side better too. But the sort of context we're in at places like Stanford, places like Silicon Valley, it skews very much one way. So I think if you're a conservative or libertarian student at Stanford, you will get a much better political education than if you're a liberal student. If you're a liberal, you will just get your views reinforced, and you can be in this sort of epistemic closure for four years, or the rest of your life. And so I think it's not even good for your side when it's always strawmanning, never steelmanning.

So that was the point that I was essentially building to, is what the challenge, I think, within Silicon Valley is that... I think that we need to have a better discourse and theory about what is a good society, what are theories of human nature and so forth, and not have a fallback of a certain ideological stance. And I think that active discussion is very important. So that's one of the things I think is a problem with it. The thing I think is... not a problem with it, is a sense of, well, actually, in fact, we have a sense of kind of broad social good, you know, parodied somewhat by the "Silicon Valley" television show in kind of good ways, that says, you know, like, okay, what is that future that we're building towards?

And that we are actually, in fact, trying to build things, that we have an optimism that there are technologies that we can build, and this is... like, back to the, I don't think that people in Silicon Valley think that we're actually in stagnation and think America Great Again is a problem because we're in stagnation. I think they think it's the inequality issue. And I'd say I think the thing that they learned to really focus on as kind of what's going on. And I think that they say, well, sure, there's slower progress in atoms, but bits is now infecting all of the world of atoms, everything from robots and manufacturing and everything else. And so we are seeing progress in that, as I think they countered the

to the kind of opening argument. And I think that kind of optimism about the future that may have a broad kind of liberal ideology behind it is a good thing. So that's the both/and answer. Peter?

Well, you know, I think it's at least ambiguous. So, you know, if you have network effects, if you quickly get to, you know, they're more efficient. So you can say Silicon Valley is an efficient place where you very quickly get to the truth. You quickly figure out what the right companies are, what the future is going to be. And then the downside of an overly networked context is that you get bubbles, you get epistemic closure, you get the madness of crowds. And that is also a very big danger in our universities, in these sort of networked centers of the economy. And I do think it's always hard to know exactly where you'd draw that line. My own sense is that it's wildly on the wrong side. So the question about networked versus madness of crowds, one way of asking this question is, are we sort of at the end of history, which is sort of the liberal conceit, where we know all the basic answers?

We know what's right. There are few people who are retrograde. They're bad. They're going to die soon.

Well, you're making my point. It's like a network economy is sort of like saying, 'Hurry up and die.' But, but then versus are there still a lot of things that we just don't know? And therefore, are there a lot of topics on which these debates are still open? And I think the mistake, in my judgment, would be that we're constantly getting to... There's a right answer, and you get to the right answer very quickly and very efficiently. You don't waste your time on things. That's the Silicon Valley conceit. And my view would be that on many topics, the answers aren't clearly right. They're not clearly right on globalization. They're not clearly right on any of these issues. And so I think, to get to the truth, we need a broader debate because I think we are more wrong than we think.

Here's a question from, yeah, Reid.

So, I mean, I think... Just to be precise, I think there is precisely that lack in that there is the kind of cult of efficiency, and the efficiency and techno-determinism is the answer that should be there. And I think that is too simple and should include discussion of what is a good society, human nature, and so forth. And that does need more, you know, contrasting points of view. And it's not just contrasting left-right. It's actually, in fact, more historical knowledge, more philosophical knowledge. I think those kinds of things. I mean, it is entertaining to be part of conversations that are things like, 'Okay, we're just going to upload ourselves in a robot.' And you're like,

"How do you know what that means? What is that, exactly?"

And that kind of thing is, I think, important. So it's kind of a cognitive diversity for thinking about the good society in the future. Now, that being said, I think that the notion that actually, in fact, being very optimistic, being, 'Look, we can go do things that are very big,' is, I think, actually an important thing, and I don't think it's ambiguous.

I want to ask just one point on this. So, heterodoxy... Reid, couldn't we? I think... That's unusual, isn't it? I think there's a sense in which I would say science, philosophy, religion, these are much more important than politics. And so, heterodoxy in those fields, having genuine debates in those fields, is much more important than the diversity in politics. But politics is simple. If you can't even have diversity of views in politics, that's telling you you're in an incredibly unhealthy society. That's sort of where the average person is able to engage in political debates. We don't expect them to engage in these other debates. It would be good if people could engage in these debates more.

If you can't even engage in a political debate, if you can't even have different views on that, that means you have no diversity of views on all these other topics, which I think are much more important.

And clearly, it's been heterodox thinkers in those other fields that have been the pioneers. The pioneers, certainly in fields of science and philosophy in the 18th century, were not surrounded by like-minded people. They were very often marginalized.

There's a very big difference between good science and great science. And I think the good version that you sort of get taught in a programmatic way is somehow connecting the dots and just copying things that other people have done. And I think the great science always has this much more heterodox feel to it.

So Jorge has asked a really nice question, which goes to your friendship. I don't think we need to ask a question about what you think of Trump's first year to establish that you have different political views. A number of people wanted me to ask that. But you know what? I think it's kind of obvious you're not going to give the same answer to that question. But Jorge's question is this: how much of your friendship is attributed to the fact that you met in the benign environment of the university, and would you still become friends if you met today?

That's a very good question. I think if we had the context to discover the thing that we did discover at Stanford, which is the truth is very important, discourse is very important, broadening your thinking by talking to super-intelligent people who disagree with you is valuable, and that the question is really a discourse about what are the aspirations of humanity, what is the way to try to get to the better version of ourselves, which is essentially a lot of the different forms of arguments that Peter and I had. If we could have those discussions and discover that attribute about each other, then I think the answer would be yes now. Obviously, part of the challenge is in the fact that I kind of

worry about the current state of the republic—it's kind of the decline of Rome as a way of doing it. Would we be able to see those virtues in this? That would be—that would be the challenge. But I think that if we could see that, it's not so much the benign environment as much as discovering that importance of truth, that importance of what is the best, most... the way that we can evolve our humanity the best, then I think the answer would be yes.

Peter, your views when you were an undergraduate certainly weren't his on a whole range of issues, and yet you were friends. In fact, you were describing to me in the green room campaigning for the Students' Union together. Talk a bit about that relationship, which somehow could transcend fundamental differences of political ideology.

Well, look, I think we've alluded to this already in many different ways tonight. It is that there's sort of a lot of open questions, a lot of things to try to figure out. It is that you learn by understanding the other side's arguments at their strongest, not at their weakest. I do think, you know, I can't answer your question counterfactually: would we still become friends? That's like an almost insane counterfactual question. I think—I like this. But, you know, I think that—I think there is probably something about the time when you're at Stanford where it is a little bit easier to do this than later. And so it's definitely an opportunity people should not miss out on, sort of your networking point.

But networks, I think, are always the wrong words. A better word are things like friendships, things like that, and this is a good time to build real friendships. I think the more succinct way of putting it is the time to understand each other.

That was the thing. It wasn't a benevolent environment. It was the time to understand each other, and that was very valuable.

We're getting towards the close. I've got a question here from Natalie, which I think is a good one to point us towards a conclusion. As discussed tonight, she says Silicon Valley is out of touch with large swaths of the United States. What do you both think is the path forward to reconnect with people? Reid, are you gonna go on one of those tours of 50 states?

Meet people in Wisconsin? Look, I think that while—and it's very funny to put it that way—look, I think that it was... I think those tours were very well intended because if you say, 'Look, how do I understand people? Let me go at least talk to some of them. Let me meet people,' I think that 'go have the conversation' is extremely important. I think that the—I think it's somewhat challenging. I think the thing is, the problem has been brought to mind. There's a sense in which all of the geekiness and nerdiness of Silicon Valley also means that Silicon Valley is a little less socially adept, a little less like, 'Okay, how do we have this conversation as a tribe or something?' I think that probably the bridge is understanding what those challenges are and then approaching it somewhat like engineering about how do we build solutions.

And I think that can be helpful. That was a little bit of the reason why the kinds of things I gesture to are: there are products that come out of Silicon Valley that say, 'Actually, in fact, this can help people build meaning and businesses and work and generate economics into their lives'—those kinds of things. And can we create kind of a growth psychology, not just for our industry, but for other industries as well? Those kinds of things, I think, can create a lot of value and can bridge the current gap.

Peter, you were an outlier in 2016 in Silicon Valley. How did you manage to establish that connection with the rest of the country, with the flyover states, Middle America, whatever you want to call it? It doesn't look like you're obviously connected to people in rural Wisconsin, and yet somehow you picked up that signal of deep frustration with the status quo. Tell us a bit about how you did that.

Well, I had been making the stagnation argument that I tried to outline here for the better part of a decade. And you sort of get enormous pushback in Silicon Valley. Part of it is for good reasons, part are sort of more reasons that people want to think everything they're doing is great. And so if this was an axis that was very important, it was one that was going to be a very big blind spot. The advice that I'd given all the—and we're on the Republican side, but the advice I'd given all the candidates—was they needed to have someone who was more pessimistic. They were not pessimistic enough. And you needed to be pessimistic, because if you were optimistic, that just showed you were out of touch.

And optimism may be a good trait if you're a tech entrepreneur. And it's a somewhat good trait as a politician, but too optimistic is toxic. And this was the core mistake people like Romney made, people like Jeb Bush made. They think it's fundamentally a progressive narrative where things are fundamentally working. I always thought it was very difficult to run a candidate who was sufficiently pessimistic because if you're too pessimistic, you'll demotivate your own voters. 'Everything's going to hell in a handbasket'—that's not that encouraging a political frame. But if there was some way to be both extremely pessimistic and motivational, that was a super powerful combination that I think people were very much underestimating.

I think the question I'd want to leave for people here is to come back to this question of the nature of scientific and technological progress. It's a question that's, I think, an all-important cultural, social, political question. What is the truth about it? Are we, in fact, in a society that's, with a few rare, a few signal exceptions, broadly stagnating? Are the economists right? There's no productivity gains? Or is the sort of Google propaganda the more correct view of the world? And that's a question that I think we should try to engage with. It's very hard to engage with, by the way, because it's the nature of late modernity that science and technology are specialized. They're the domain of specialized experts.

And so we are told that you can't think about this. It's not like the 18th century where a well-educated person understood something about everything. And so, is physics progressing? Is string theory representing a lot of progress in physics? Answer: don't know. Are quantum computers around the corner? Don't know about that either. And when the answer to every single one of these questions is "we don't know"—this all-important question about the nature of the progress of our society—we have a sort of learned helplessness with respect to it. We have to figure out some way to be able to think about these things more effectively. And I'm not going to try to go into every single one of those topics right now.

That's a relief because we only have one minute left.

But the political layer on it is that I suspect that the extreme specialization leads to an incentive in which the experts in each of their designated fields are self-congratulatory. And so the string theorists will talk about how wonderful they are. The cancer researchers will say, "We're about to cure cancer; it's just around the corner. That's what we've been saying for the last 50 years, but this time we're telling you the truth," and on and on down the line. There's a tech version, there's a venture capital version of this where people are really guilty. And so I think the extreme specialization, I suspect, leads to a massive systematic skew.

I broadly agree on the importance of being future-oriented, of saying, "Look, how do we have as much science progress as possible?" I would say, since we have an extremely short time, the fact that we today have apps on our cell phone that can recognize skin cancer, that can be present for 7 billion people, is actually, in fact, a sign of progress.

I'd prefer having a cure for cancer. We'll work on it.

It seems like the moment has come to draw this wonderful conversation to a close. Our next Cardinal Conversation, segueing rather nicely from what Peter was just talking about, will take place in the same place, at the same time, on February the 22nd, and will feature Francis Fukuyama and Charles Murray discussing populism and inequality. It only remains for me to do some very quick thank yous. I want to thank Hoover's amazing event staff, Alexandra Bradley, Christa, Denise Elston, Shana Farley, Linda Hernandez, Jeff Jones, Justin Petty, Janet Smith, and Erin Tillman, as well as Magdalena Fittipaldi at FSI. Big thank you to the students who made this happen, Stephanie Chen, Karl Kinney, Christos Makridis, Anna Mitchell, Justice Tention-Palmer, Ravi Jacques, Antigone Zinopoulos, and Rory Arrieta-Kenner.

However, the biggest thank you, and you're going to give it, should be for our extraordinary guests in this first Cardinal Conversation. Please join me in thanking Reid Hoffman and Peter Thiel.

Thank you.