Peter Thiel @TheFreedomFest 2015

Thank you very much. There's a lot to say on this topic, but the basic starting point that's very critical is to try to define competition properly. And I want to suggest the way to think of competition is that that's what happens when people try to get the same thing. So you have competition in politics when you have different people trying to get to be president. You have competition in sports when people are trying to get the same Olympic medal. You have competition in education when people are trying to take the same tests that the educational system makes them take. And that's when you get very, very intense competition. We have a little bit of a competition here today with me and John.

And it's always overrated because it's always oversold. So to me, I desperately want to win this debate. Even though—and there's something about competition that's always prestigious, there's status, it's exciting—but it is oversold, it is overrated because it is, for starters, not that significant economically. And if you want to make money, competition is not the way to go. So in business, I've often said capitalism and competition are antonyms. A world of perfect competition is a world where all the profits are competed away. If you want to start a business where you have to compete like crazy, you should open a restaurant. You will never make any money doing so. It is a terrible, terrible idea for a business.

If you want to succeed in business as a founder, early investor, early employee, as an entrepreneur, you always aim for monopoly. And we can have a debate about when that's good or bad for society as a whole, but on the inside, you always want to have monopoly. You want to be doing something that's so different, that's so good, that's so terrific, that nobody else in the world is able to do it. We're talking here not about government-backed monopolies, which are bad, like the Post Office or things like this. We're talking about innovative monopolies where you do something new. When Steve Jobs created the iPhone, he was the only person in the world that had a smartphone that worked. And this was not creating scarcity.

It was creating a new form of plenty. And that's what good monopolies do. And he was rewarded for that by building, within about a decade, the single company with by far the largest market capitalization in the world. And so I think this is always a really critical idea in business. Now, there are many different contexts where this competition around monopoly comes up and gets to be—this idea of competition creeps in. And I want to suggest that we often have this idea that our free market system is the place that's the most competitive, but that actually, the places that are the most competitive are the places that are not free. If you live in a communist society, you have intense competition because you're not allowed to do all sorts of things, and therefore, you have to compete incredibly intensely for the small number of things.

There's competition where you have to get in a long breadline, and you have to compete with the other people to get bread. You have intense competition for the jobs in the Communist Party. If you're in a place like North Korea, you have to compete like crazy to clap with the people around you. And if you don't clap vigorously enough, you may get shot. All of you here today do not have to compete quite as much, which is fortunate. You're living in a free society where you do not have to do that. And I think that, in a similar way, we find it in sort of athletic competitions, academic ones. When Henry Kissinger said that the battles in academia are so ferocious because the stakes are so small—why would you compete like crazy when the stakes are small?

Maybe it's just the people at Harvard, the fellow professors at Harvard are systematically crazy people. But they are doing it because whenever the stakes get small, the differences get small and the competition becomes more and more ferocious. What we need to find is a way to do very, very different kinds of things in all sorts of contexts. And freedom, I think, consists of the ability not to compete and the freedom to do things that other people are not doing in different contexts. And you're certainly, in the U.S., free to compete, but you're also free not to compete. And it's worth contrasting the benefits of those two. I will acknowledge that of competing. When I was in high school, I was a competitive chess player.

I became very good at chess. But it always comes at this price of not doing other things and narrowly improving the things you're competing on. It was very hard to get to be a world-class chess player because there were people in the Soviet Union who were much, much better because the government had not allowed them to do anything else. So they had to compete even more intensely at chess than anyone in the U.S. really did. And so in business, there are all sorts of contexts where this happens. It happens in academia, in society. I was in junior high school. One of my friends said, 'I know you're getting into Stanford.' Eighth grade, and four years later, I got into Stanford.

I got into Stanford Law School. You sort of win one competition after another. You end up at a big law firm in Manhattan. From the outside, it's a place where everybody wants to get in. On the inside, it's a place where everybody wants to get out. When I left after seven months and three days, one of the people down the hall from me said, 'Wow, this is really reassuring to see that it's possible to escape from Alcatraz through the front door and not come back.' But, but, but psychologically, it was hard because so much of our identity gets wrapped up in the competitions that we win, and our identity gets wrapped up in beating the people around us. And, and that's why I want to suggest that the, the antithesis, the antonym of competition is not capitalism or something like that, because, you know, a capitalist is

someone who's in the business of accumulating capital. In a world of competition, the capital gets competed away. The opposite of competition, I want to suggest, is individualism. It's being able to do things where you're not always the same, where you're not always pushed to be the same as the people around you, and where you're able to actually think for yourself, do things that are a little bit different. There's a strange phenomenon in Silicon Valley where many of the most successful companies seem to be led by people who are suffering from mild forms of Asperger's. And this is a somewhat disturbing fact because it reminds us of the extraordinary social pressures we have in our society to compete, to become the same, and where those of us who are not suffering from Asperger's are often talked out of our interesting, original, creative, different ideas before they're even fully formed because we pick up on all these subtle social cues from the people around us.

Oh, that's a little bit too different. That's too weird. Shouldn't go with that, one way or the other. And we need to always realize that there are these intense political, social, cultural pressures to compete, and it's when we overcome them that we do new things. So competition does make you better at chess or at sports, or the politicians who compete for public office get better at lying and making promises, so you do get better at the thing you're competing on, but it always comes at this terribly high price of losing sight of this much broader perspective. And I think fundamentally, competition would make sense, by the way. It would make sense in a world in which there was nothing new to be ever invented or created, where all the goods were static.

Because in that world, every monopoly would be back. Every monopolist would be like a troll at a bridge collecting a toll, like the post office, like our government monopolies. But in a dynamic world where you create new things, monopolies are good because they are the reward you get for innovating, for doing something dynamic, for creating something new. And I believe we live in a world in which there are enormous numbers of new things to do. And so if we channel ourselves into narrow competition like I did in my 20s when I was brainwashed into working in a large law firm, or all these other relatively sterile forms of competition, we end up losing out not just for ourselves in having lives that are relatively undifferentiated and relatively less productive, but also our society ends up losing out because it progresses less, it becomes more homogeneous, more the same,

it becomes ferociously competitive, but in ways that move the ball less forward. And I think there's a microcosm we see of this in all the debates around education, where it has become strangely more and more and more tracked over time. And it's become less and less productive. People are paying more for the same. It's a super intense competition to get into the same colleges. They're all undifferentiated. Everyone learns more or less the same thing. The top schools, people end up going into the same sorts of careers. And it is, at some point, not a good way to do things. We all sense that this sort of educational bubble, which is a competition bubble that's driven by people being pushed to compete in narrow, unnatural channels,

is about to break, and hopefully the future will be one in which people will be doing many different kinds of things. So I think that even though there's an economic critique of competition and a business critique, at the end of the day I want to sort of stress the cultural one that we should put individualism over sameness and that: don't compete. Competition is for losers. Thank you very much.

Thank you very much. And you notice I did not take a vote of the audience from the beginning because I thought the argument needed explication before you could intelligently vote. What a concept, huh? So we're going to have the two people put their positions forth and then vote at the end who you thought won. Now, both of these books, as I