Peter Thiel at Libertopia 2010

You have this election coming up in two, three weeks where you have a choice that's presented to you. On the one hand, you can vote for taxing and spending and regulation and redistribution, or you can vote for the Democrats. And so I wanted to maybe get started with a little bit of interactivity and assume that I can be the libertarian dictator and we're only gonna allow two parties on the ballot. We're gonna allow the Objectivists and the Anarchists. And do sort of an alternate election right now on the spot and see who would vote for the Objectivist Party. And how about the Anarchist Party? And how about, even if we had that, how many of you would be skeptical of voting as the best way of deciding things?

I sort of got you on that one, but anyway. And so I want to reflect a little bit on, talk a little bit about my evolution, my thinking. I've been a libertarian, pro-free-market for, you know, as long as I can remember. But my thinking about how that intersects with the political system has changed a lot over the years. When I was a teenager studying political philosophy at Stanford in the '80s, it seemed like the right way to advance ideas was through the give-and-take of debate and through elections and sort of try to get a lot of people to be convinced of your views and of your side. Started one of these student newspapers. We had, you know, we had our minor victories; we managed to get the school's speech code overturned, but an awful lot of it had this feeling like it was trench warfare in World War I, where you had well-established battle lines, there was just tons of carnage, but the front lines never really moved.

And in retrospect, it maybe had the benefit that we were sort of preaching to the choir and had sort of the side benefit that the members of the choir kept singing for the rest of their lives. But it didn't really succeed in shifting people. And as people sort of grow older, they tend to sort of become disillusioned with things. The world's too big a place; it's too hard to change things. And sort of by the early '90s, you know, I sort of realized that the people who were sort of politically not part of the establishment system, you could basically measure people's IQ very simply by how optimistic they were about politics. And sort of the dumb people tended to think you should really all vote. The smarter people thought it was probably a bad thing, but you still had to maintain appearances.

And then the really smart people were just sort of despondent, and the ones who were conservative engaged in heroic amounts of alcohol consumption, and the people who were libertarian did not limit themselves to alcohol. And so, basically, I don't think despair is the only answer. It's because I don't think politics is the only way to go. My thinking on this started to take a turn towards a more optimistic perspective. In the mid-to-late '90s when I got involved in the tech boom in Silicon Valley, I ended up being the co-founder of a company called PayPal. The initial founding vision was that we were going to use technology to change the whole world and basically overturn the monetary system of the world.

We can debate on how much it succeeded or how little it succeeded. And there were parts of it that I think have worked and parts of it where the jury is still out. But the basic idea was that we could never win an election on getting certain things because we were in such a small minority. But maybe you could actually unilaterally change the world without having to constantly convince people and beg people and plead with people who are never going to agree with you, through technological means. And this is where I think technology is this incredible alternative to politics. And there are a number of different technologies we can outline, but the task in this world where politics has become so broken and so dysfunctional is to find a way to escape from it.

It's not a way to fix it; it is a way to escape. And there are, you know, a number of different options. I think the promising one of the 1990s and this last decade has been to escape onto the internet and to sort of create an alternate virtual reality. The question, of course, is still: how does it intersect with the real world? There is, I think—escaping to outer space is a promise, although I think the space technology is not quite there, so I think that's sort of for the second half of the 21st century. I think we can try to, you know, create autonomous countries on oceans, underwater, all sorts of other spaces. But I think technology is the vehicle for how we should be looking to escape and move beyond politics as we find it today.

I want to offer two basic thoughts and then open a little bit of discussion and debate on the limits of this. One thought on a caveat to this technology as an alternative, and then end with a caveat to the caveat. So the big caveat to technology as a standalone, autonomous force is that politics is going to try to stop it. And I think we should not underestimate the degree to which there is a race in our society between politics and technology. And it's a very open question whether technology is going to succeed on its own in escaping from the black hole of politics or whether somehow the system will collapse in on itself. And I think actually the correct, in a sense, attitude for people who are anarchist or libertarian or Objectivist is to not be insanely optimistic or insanely pessimistic, because insane optimism or pessimism means that history just has this force of its own and that there's no room

...individual choice. I think it really is actually, instead, a very close thing. And maybe politics wins, maybe technology wins, but it's not exactly clear which it is. One of the things that I've been spending a lot of time thinking about over the last year is this question of whether technology has simply been winning. And I think it's not as straightforward and as optimistic a case as I would have made a decade ago. So the caveat to my optimism is that we've had a lot of progress in computers and the internet. There are all sorts of other areas where there's been a lot less progress than we would like. Space travel is not where people thought it was going to be in 1968. The future history of Star Trek, the original series in 1967, was permanent lunar bases by 1980, Martian colonies by 1990, we would be at Alpha Centauri by now.

2001: A Space Odyssey was—2001 was when you had the manned expedition to Jupiter. And so there are a number of things on the space side that haven't quite lived up to expectations. I think biotechnology is not happening as quickly as it should. Energy is not happening as quickly as it should. And when we look at the areas of technology that have happened quickly versus the ones that have not, I think the basic thing is that the ones that are massively regulated are not happening. The ones that are unregulated are happening. The reason the computer revolution has happened in the last 40 years is the government forgot to regulate computers. People didn't think computers actually mattered. They thought this was just Bill Gates, who had Asperger's syndrome and was best allowed to just play in his room by himself with his computer.

And that's why that happened, whereas a lot of these other areas have been basically regulated to death. Even in something like medicine, the area where there's been the most progress in the last 20, 30 years has been in plastic surgery and things like that, because that was considered too unimportant to regulate. And so I think we need to really think very hard about—the one sort of caveat to the political is that it is perhaps stopping technology, which is our main escape route from politics ultimately. And this is sort of where I think you have this insane, very, very close contest. One sort of thought on, on the current situation is that I think we've had this sort of Keynesian approach to economics for close to 80 years in the US.

And we all suspect that there's something very wrong about Keynesianism. It hasn't worked. There's something that seems a little bit fraudulent about printing money and some people getting it and other people not. So there's some sort of a trick that's being played where somehow the money's being moved around very quickly and some people end up with more than others. But I think one of the sort of strange questions that is worth asking is why has it even sort of worked? Or why do we have a world where people can sort of think that it's worked for 70 or 80 years, which is quite a long time? People would never have believed in something like Keynesianism in the Middle Ages or in the 16th century.

And I would submit to you one of the reasons it has sort of been working for the last 80 years is because it happened against this backdrop of insane acceleration in technology. And if you have this technological motor where the society was growing two, three, four percent a year, you could actually do a lot of dumb things and it could still keep growing pretty quickly. And where I think today is very different from the 1930s is that the technological motor is starting to sputter. And the same things that led to Keynesian big government have led to the regulation of technology, and that is in effect actually slowing down and stopping the Keynesian project today. So when people talk about deficit spending in the United States, if you had massive technological progress, this would not be that big a problem.

You could double the debt, and you'd double the economy in 20 years, and it sort of roughly cancels out. It may not be the best thing to do, but you could actually get away with it. There's a sense we can't get away with it anymore, because there's a sense that the technological acceleration isn't working quite as fast as people thought. And that's where I think the Keynesian state has sort of reached this phase where it has self-destructed. It's sort of like the parasites have eaten up all the animals they were feasting on, and there's nothing left, and so they are close to starving themselves—which is, you know, we don't necessarily... We don't want the parasites; it's not good for them to be starving in the sense that it means the animals they've been feasting on are in trouble—but something like that, I think, is a description of what's happening today, and this is a place where it's very, very different from the 1930s.

And the 1930s formula, however badly it worked in the 1930s, would work even less well today because technological innovation was still happening in an enormous way in the 1930s. The government was not regulating Howard Hughes flying airplanes. You could not be Howard Hughes today. If you were flying airplanes over Beverly Hills without a license, experimental airplanes that might crash into buildings and stuff, this would not be allowed. You would not be allowed to go to the moon. There's a 20% chance of someone dying on the flight to the moon. No way. You could not go to the moon. You could not get an experimental cancer drug. You could not—you know, a whole series of these things have sort of gotten very limited.

And so even though I believe technology is the way out, and even though I think politics is bad and voting is bad, the one caveat is that we have to be very sensitive to the degree to which politics has been constraining technology and in which the race is closer than we might like. We might like it just to be winning automatically, but I think it is actually a very, very close race. Now my caveat to the caveat, and I'll end with this thought and then open it to more of a give-and-take of a discussion, is that we should never forget, even if we have to in small measure engage in politics, we should never forget how evil and distasteful and bad it really is. I think it is only a small exaggeration to say that the government

is so fundamentally evil that to deny the evil nature of the government is equal to denying the existence of the devil. And I think that actually, I think that sort of double negative works both for people who believe in the devil and people who don't. And then on the flip side, if the individual is to become sovereign, you think of the most sovereign thing in the world as something like God. Basically, achieving individual sovereignty means that you get to be God or you get to be as close to God as is possible for anybody on this planet to be. And I think it is better to try to be God or to be like God than to be making a pact with the devil or with something like the devil. I think it is better for us to try to do something noble than to spend the rest of our lives trying to make compromises with the base.

Thank you very much. Yes, sir.

I'm fairly skeptical of what's actually happening. There certainly has been this widespread view among Silicon Valley venture capitalists that they should be investing in China and India. It's been an absolute disaster. The people have tried to do it over the last decade. And so the fact that people have not made money there makes me at least a little bit skeptical of the story of incredible progress. My own sense is the economic incentives are that you only really need to be pushing technology in the most advanced countries. The less advanced countries, for the most part, just need to be copying the advanced countries. So I think the business model for China for the next 20 years is to copy the U.S.

And if you're a talented person in China, you should be building bridges, building airports, just doing things that have already been done. And the task is to sort of build 19th-century plumbing and 20th-century railroads or something like that. And it's not necessarily to be really innovating at the edge of technology. I think the tech story with China is very overrated. And I think the place where people actually have the incentives are U.S., Japan, Western Europe, maybe some smaller places like Israel. And within the sort of confines of the developed world, the U.S. is actually still the most free or the least non-free place. And so that's why, unfortunately, the politics in the U.S. matter a great deal.

Yes, sir.

I do think that in our world, opposition to technology is intrinsically evil. So let me sort of frame it as a double negative. So if we think about where our planet is, we have 6.8 billion people today. We are geared for massive technological progress. These people would like to have the same standard of living like we have in the U.S. People in the U.S. will be very depressed if the living standards aren't a little bit higher in the next generation than the present one. One of the big issues is this malaise where people think things are actually not getting better. If you have 6.8 billion people and you try to get them up to the standard of living of the U.S., that is a formula for a Malthusian struggle for resources absent technological innovation.

I'm not going to say technology or technological progress is necessary in all times and all places. It is necessary in our world if you want to avoid a world war.

I got an exchange of pre-1964 silver coin as an exchange, and nobody can trace that versus paying by debit card or PayPal or whatever.

Great, similar question. It's again, a similar theme about the potential for abusing technology. I would say the generalized version of your question is, does increased transparency—is that a good thing or a bad thing? And, you know, I think it's an ambiguous thing. Increased transparency could be bad to the extent it means the government has more transparency into you and can monitor you at all times and all places. It is a good thing to the extent that we have more transparency going on into the government. My judgment would be that on net, transparency is a plus, although I can definitely understand the arguments both ways. For example, I do not think you could have World War I happen again today.

If you had people with cell phones and video cameras and it got posted on YouTube and people saw the carnage firsthand, it would not be possible for that to happen. We can still have wars of various sorts. We might have a catastrophic nuclear war. There are definitely things that can go wrong. But there are certain modalities of behavior that just don't happen anymore. If you take sort of the torture-type stuff that happened in the last decade—I suspect things like this happened in all previous wars the U.S. was involved in, and the difference was we became aware of it this time. And so I think that the transparency has been powerfully helpful. In my mind, the ability of transparency to undermine war is a plus that outweighs many other negatives, but I understand there can be some important differences about that.

You know, I think there is a lot of content things one could do. My hope would be that a lot of good ideas come out in the process of having this greater freedom. What I personally decided to focus on is the technology itself. I tried the content route. In the '80s, '90s, I felt that a lot of it led to just hopeless kinds of debates that never led anywhere. And so my own view is that the biggest leverage is to actually change the technology and thereby try to change the society. And I'm confident there will be enough other people to drive the content. And I hope that it will be pushed in a direction where transparency undermines the existing injustices of the existing sociopolitical order.

Well, my vision at the time I started PayPal in '99 was that we would get rid of all central banks, you know, overnight. It's taken a little bit longer than I expected. I was optimistic about that, but I do think, I do think that to the extent it becomes easier for people to shift out of one currency into another, that is a very powerful—um, that's probably something that will make it much harder for governments to inflate and debase currencies. And so, if you look at the information revolution over the last 30, 40 years and inflation trends, inflation trends have been relentlessly going down. It is no longer possible for people to easily inflate because the money is no longer fully trapped. People can shift the money very, very quickly.

And even the U.S., which is probably structurally the most inflationary country of the major countries left, cannot unilaterally inflate its money anymore. August 1971, John Connally, the Treasury Secretary, could go on TV and say to the whole world, 'It's our money and it's your problem,' when they devalued the dollar by 40%. That doesn't work anymore. Can't do that. And so I think there are ways in which these sorts of abilities to shift things around have pushed it into a much less inflationary world than it used to be, which means that governments have correspondingly less power to weaken the currencies, which is one of the main ways governments have historically confiscated and taxed money.

Empirically, there's a lot less of it than happened 20, 30 years ago. Let's see. A lot of questions. Go ahead.

Patent and IP laws are a big negative. I don't know if there can't be some version of them that works, but certainly in a technological context, it's basically you have an incredibly bogus patent office where you can file all sorts of crazy patents that don't make sense, and it really gloms up the system tremendously. I do think you want to have something where the inventors of things are rewarded for it and where it can't be stolen. But the way I think about it as an investor and venture capitalist and entrepreneur is that we have to invest in companies where people, in a sense, figure out some quasi-self-enforcing things, where there's something about the intellectual property that makes it hard to be stolen, because I don't think we can actually count on the government to protect us.

So I think the reality is we do not have a functioning intellectual property regime. We might be able to have one, and maybe it's just a function of a non-functioning government. And maybe that's a function of the fact government never works. But I think we should be aware of that and just figure out what you can do, where inventors get rewarded, and where it's, in effect, self-enforcing. Let's see. Yes, go ahead.

Well, there's so many I would like to change. I think the one that I am most tempted to change, if I could just change one, it would be to remove all restrictions on people leaving. And so basically allow emigration with no restriction, no hindrance. This is, you know, if people could just leave, it's actually quite hard at this point to leave the US without paying massive penalties. We're not at the East Germany phase, but you basically want to have people be able to have the freedom to leave. And if they have the freedom to leave, I think that puts a lot of pressure on. I think on a state-by-state level, for example, in the US, I'm actually quite optimistic that taxes will not go up in California or New York or any of these places because too many people can leave and move to other states.

The US as a whole, I don't want to leave. I don't want to leave the US. I don't want to leave California. But if there are some other people who do leave, I think that will actually help apply pressure on making the system even better for those of us who choose to stay. And I want them to have the freedom to leave.

Well, the really successful Internet businesses have typically been things where it's grown so quickly that no one can catch it. You have the idea, it grows so quickly, then you have a scalable business and it sort of becomes protected through having economies of scale. There may be secret processes you don't tell people about. There may be software that you store on a server and you don't actually share the code. So I think that's one of the ways in which the Internet effectively helps people protect their intellectual property. I just think you can't actually count on the government to do it. So I think that's just the negative fact. We may lament it, but we're living in a world where intellectual property is mainly used for mischief.

Let's see. Yes. What do I think about the concept of the Singularity? I think, I think it would be a good thing if it happened, but I think it's an open question whether it is going to happen. So I think that the way people normally talk about accelerating technology is we need to be scared of it. There are all these things that can go wrong. It's like, "What happens if?" and sort of all these scare stories about technology, I think the thing that's really scary is if it doesn't happen. And it's because if it does not happen, we will have incredible resource scarcity, you will have incredible issues of a retirement system that's broken and underfunded, on and on down the line. So I certainly hope that it's going to happen.

I think that if there was no politics in our world, it would be happening at a fast enough rate that we could sort of solve a lot of the problems we have. And we basically have this race between politics and technology, and I think the debates about the Singularity are symptomatic of it. I think one of the things that's culturally very odd in our society is that everybody is against technology almost. And it's basically, and if you think about science fiction as a genre, you know, Star Trek was optimistic. When was the last really optimistic sci-fi movie since Star Trek? Maybe the Star Trek repeats, but most of them are about technology that doesn't work or technology that's bad. And so, you know, I think science fiction as a genre has sort of collapsed in the last, you know, 50, 60 years.

We don't really believe it anymore. And I think that's really unfortunate because that is sort of an important part of the way out.

Yeah, the point I'd like to make following on to that is the fact that right now, governments are sucking up all the resources that could be used to develop this technology that's going to make the world, you know, it's a complete misallocation of resources.

Yes, I don't—yes. Yes, okay. Go ahead.

Do you think that a free market worldwide currency would be necessarily based on precious metals, or is there a future for digital anonymous cash?

You know, I think currency is always a very, you know, very mysterious sort of a thing. You know, my standard prop when I was running PayPal was to sort of always just, you know, hold up a hundred-dollar bill and you ask people. It's always a great way to get people's attention. If you ever need to give a talk and get people's attention, start by waving money. It's hypnotic. And, you know, and this is not gold. It's not really based on gold. It's not clear it has any use value. I mean, you wouldn't even want to use this as toilet paper, right? Or as wallpaper or anything like that. So it has no intrinsic value, and then it's just this weird social phenomenon. And so, you know, would you like to have a hundred-dollar bill?

And you ask, how does money work, why does it work? It's a very, very weird thing. I think the argument in favor of gold and precious metals are that the government can't inflate them. The argument against it is it also has no obvious intrinsic value, and there's something very weird about what's the intrinsic value of gold. In theory, I think you'd want the money to correspond to things that are actual productive resources. So it would be something like, you know, maybe like a worldwide equity market or a worldwide equity index or something like that would seem to me to be the most theoretically sound. But money is a very strange thing and we could—yeah, it's the same reason. And actually figuring out how it works exactly would probably take us at least a few years or so of discussion.

Go ahead.

Well, let's see. Basically, we look at anything that we think makes a difference in the long term and that's underfunded. Those are the general criteria. So basically, the things that are underfunded—short-term things, I think, tend to be taken care of by the free market system or by various other existing charities. I think it's the long-term stuff that people aren't thinking about nearly enough, and so we're very interested in what we can do to help encourage technology. One of the initiatives that we just started a few weeks ago—I will just, self-promotion, advertisement, intermission here—is we decided that we need to do something to encourage more people to go into technology. And there is actually, I think, a very deep problem where our education system has actually become inimical to technological progress.

And the basic, there's sort of a lot of reasons I can go through with this, but basically public education, university education, basically is education to get people tracked, to think the same way, to do the same things. Really great companies are getting started by people who actually often drop out of college or stop out of college. And we basically have started this initiative for 20 people under 20 years old. We'll pay them $100,000 over two years. They have to have some idea. If they don't have an idea, we will help get them something to do. But basically, we want them to stop out of college for two years and actually do something productive. The sort of more, the slightly neutral version of this I give in a less libertarian context would be that if you think of debt and leverage as a bad thing and that over-excessive indebtedness is a problem, there's a way in which college education has become an exercise in massive debt.

And the college administrators, if you complain about subprime mortgage brokers who sort of were telling people that they should borrow tons of money to invest in a house which may not have been a good investment, and you think that should be regulated by the government, the government should start by shutting down all the universities where the administrators are telling students that they should be borrowing insane amounts of money to invest in their future. It's not an investment decision. It's actually just a bad consumption decision. Most colleges are four-year parties. It's not an investment. And it's basically, it's worse than spending the money on a subprime mortgage because at least the house price, there's a spot price in houses so you can actually figure out how bad it is pretty quickly.

There's no spot price in a college education. You don't really know what your college is worth until 20, 30 years later. And so there are all sorts of ways in which there's no accountability or anything, anything like that. So I think if we're worried about bubbles, you want to be worried about education. Second version of this, last thought on this is if you define technology as doing more with less—very basic definition of technology—the things that are most anti-technological are the ones where we're doing less with more or doing the same with a lot more. And one way to measure what are the most anti-technological sectors of our society, they're the ones where we've had the most inflation.

And it turns out they're all the ones that are basically government-run. And that's healthcare, the military, and education. And education is actually, on an inflation basis, probably the worst. It's the most anti-technological sector of our society if you define technology as doing more with less.

Yes? If technology is going to outpace government, what do you see as some of the most important developments for the future of technological developments to enable people to share information as well as perhaps goods and services without being able to be stopped by a government?

You know, it's somewhat hard. I don't think it's necessarily something where you can just be sort of super dogmatic and these are the kinds of things that should be done. I do think it's—I think there's somewhat of a decentralized, organic thing where it is—a big part of our job is to encourage people who have really inspired ideas to do it. I tend to think you'd like to have ideas that are actually big, not just small incremental ones. So we are very interested in ideas that are really going to change the world. I certainly think the information revolution has played an incredibly important role. I think on the whole it's been a positive, even though there are certainly some worrying dimensions to it one can point to.

Personally, I think biomedical advances, if you could really roll back aging, would be incredibly powerful. In a world where everybody dies, it only becomes a question of how you die. Do you die heroically in a war, or do you just die of old age and senility? But if death itself is not just a fact, but becomes a problem, and it's a problem that's being solved, I think there are sort of all these ideologies around rationalizing death, justifying death, enabling death, that become much less tenable. So I think transformative biomedical progress is the area that should by all rights be happening, given the sort of progress in scientific knowledge that's happening in biology. It seems to be happening more slowly.

And I think there is a real regulatory problem with that.

We've looked at this. We've looked at all these possibilities. I think, I think the basic challenges are that, number one, you have to actually get—it's not that easy to get the country. You might not want to be stuck with the people you already have. And then actually the basic infrastructure may actually cost quite a bit more. And so I tend to think instead of trying to spend billions or tens of billions of dollars building, you know, trying to build a new country, you want to do something that works much more incrementally and organically, where it works on a modest scale and then you can sort of scale it from there. And so, you know, on the seasteading side, we're very interested in any business plans of what can you do that would be profitable

like right now on a seastead. And we want to get things that are incrementally feasible rather than, you know, generally something costs, you know, on the venture capital side, I like to say, you know, we invest in things that cost more than a million dollars because, like, less than a million, it's just too many people that can do it, but less than a billion, more than a million, less than a billion. That's what we'd like ideas in. That's the other caveat on our idea range.

Well, I do think, you know, look, my caveat on the political thing is it may be utopian to get rid of government or politics altogether. You know, to the extent people have to be entangled with it, you should be entangled as little as possible, though. And so you should never forget that it is, that there is something deeply, deeply wrong about it. You know, never lose sight of that fact. Yes, go ahead.

You mentioned Star Trek as being the last optimistic show of science fiction genre. Do you think that that's symptomatic of our attitude towards technology, or do you think that the movies we see and the shows we see can actually change the way we think about technology?

I think I'm sort of—sorry, I'm a bit low on time here, but I'll just answer that question. I think it's more just a symptom of how we're in a society that's taking less and less of its bearings from scientific and technological progress. And it's not the most important symptom, but certainly whenever there's a government push for regulating technology more, it's not something that's on the top 10 list of things people worry about. And that's, I'd say... If the number one thing people were telling the political leaders is, 'We want you to get rid of government regulation of technology. Allow us to build nuclear power. Allow us to go into space, have supersonic planes again. Allow us to get rid of the FDA.'

Allow us to have any drugs we would like. You know, maybe we could actually move forward on some of those issues, maybe not, but it's not even, it's not even like in the top 10 list. And I think that's, that's unfortunate because I think, I think it is actually one of the most important, not the most important, uh, dimension on which, uh, which a lot of these questions will be decided. Cool. I can do one more question or—all right, go ahead. One more.