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Lecture

2019 Wriston Lecture: Peter Thiel

Peter Thiel Investor and Entrepreneur
Wed, Nov 13, 2019 New York, N.Y.

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2019 Wriston Lecture: Peter Thiel

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Lecture

2019 Wriston Lecture: Peter Thiel

Peter Thiel Investor and Entrepreneur
New York, N.Y. 06:00pm—08:00pm
Wednesday November 13
Wednesday November 13 2019
PAST EVENT Wednesday November 13 2019

Investor and entrepreneur Peter Thiel delivers the 2019 Wriston Lecture.

Transcript of the event is available.

Event Transcript

Reihan Salam: Welcome. I'm Reihan Salam, president of the Manhattan Institute, and I'd like to welcome you all to the 33rd annual—[applause] And I'd like to welcome you all to the 33rd annual Walter B. Wriston Lecture. We are thrilled to have Peter Thiel with us tonight to discuss the end of the computer age. The program for the evening begins with dinner, which will be served shortly. Then our chairman, Paul Singer, will come up to give Peter a proper introduction. Before I let you enjoy the company of your table though, I would like to briefly acknowledge what is a deeply felt absence in the room tonight. Recently, Don Smith, a trustee of the institute and a dear friend to many in the room tonight, passed away. Don was a person who cared about ideas and their power to improve the lives of others, and for those who had the pleasure of knowing him personally, he was a constant source of warmth, wisdom, and good humor. I know I speak for the entire Manhattan Institute family when I say he will be missed. Ladies and gentlemen, please enjoy your meals. We will be back with this evening's program shortly. Thank you. [applause]

Paul Singer: Good evening, everyone, and welcome to the 33rd Wriston Lecture. This lecture has become an important night in America's intellectual life through the force and consequence of the ideas offered at this podium over the years. The formula for that success is simple. We invite extraordinarily bright speakers who offer bold perspectives, perspectives which rarely get a hearing in Manhattan ballrooms or progressive covens. Delivering the Wriston Lecture in 1995—that was a huge laugh line [laughter]. I mean, are we napping? Delivering the Wriston Lecture in 1995, James Q. Wilson asked why Americans were so unhappy with a country that was more prosperous and powerful than ever. Wilson drew attention to several insufficiently addressed signs of disorder: crime, failing schools, a coarsening culture, and deteriorating civic life. Wilson argued that these problems had begun with the dissolution of the family, then, as now, a controversial view.

Today, disorder is rising again. And I'm not just referring to Mayor de Blasio's much-lamented return from Iowa [laughter]. You're getting there. This disorder is the consequence of a nationwide effort to roll back many of the successful policies that MI scholars have spent their careers advancing. De Blasio's presidential campaign may have ground to a halt, surprisingly [laughter], but the preposterous policies he supports are moving full-steam ahead, carried on the platforms of less incompetent but equally radical candidates. Here in New York, but not just in New York, we face an opioid and single parenthood crisis overlooked for too long by the experts. America's labor market and civic well-being suffer from an education system that continues to prioritize bureaucrats and administrators as well as entrenched power over students. Not to mention the curricula, now ubiquitous throughout higher education that indoctrinates our students to be ashamed of Western civilization and to despise private enterprise and economic freedom.

As for today's campus culture, let's just say that it welcomes a broad diversity of ideological viewpoints from Noam Chomsky all the way to Robespierre [laughter]. Wilson's remarks in 1995, and their echo and resonance today, are typical of the work and approach of the Manhattan Institute. MI scholars have never been afraid to challenge lazy, conventional thinking and offer bold diagnoses and solutions. We're persistent, and when we have a view about something, we do not back down under pressure from elites and cloistered cabals of holier-than-thou academics. MI adapts with the times, and also more so with the Journal [laughter]. But we've also stood for certain principles: rule of law, public safety, free markets, and the belief that culture is a key determinant of the welfare of societies. In investing, where I spend much of my time, this combination, the ability to adapt without losing sight of core convictions, is a necessity. You must be able to think independently and form strong contrarian views, while at the same time maintaining a good deal of humility about how much you don't know. When I first started investing, my dad thought that if his son was brilliant enough to get into Harvard Law School, then he must be smart enough to make money in the stock market. Wrong [laughter]. I learned the hard way that listening to the so-called authorities and blindly following the trend was no substitute for starting from a few core principals and applying them in innovative ways to the unique investing challenge that each new era brings.

It's the same in policy and politics. And the Manhattan Institute embodiment of this ethos is, I believe, what gives us our competitive advantage. It's embodied in the outlook of our new president, Reihan Salam. [applause] Back in 2008, Reihan and his then coauthor, Ross Douthat, was challenging the GOP to adapt its guiding principles to the new political realities. He's already bringing the same spirit to his leadership of MI, and we're looking forward to the leadership that he has in store. Our lecturer tonight is another example of this spirit of independence, persistence and innovative thinking. He's also one of the most effective critics of groupthink, whether in business, politics or philanthropy. Peter Thiel is an entrepreneur, venture capitalist, and in the words of economist Tyler Cowen, "one of the most important public intellectuals of our time." Peter has spent his professional life in Silicon Valley. He helped found PayPal, was the first major outside investor in Facebook, and more recently, cofounded data security giant, Palantir, as well and the venture capital firm, Founders Fund.

While Peter has been one of the most successful architects of the Information Age, he's also been one of the most incisive critics. Peter argues that our technological imagination has been too modest, too content to fiddle on the margins when what we need are transformational breakthroughs. The country that brought the world the automobile, the skyscraper, the airplane, and the personal computer has become enamored with kitschy applications that facilitate things like take-out delivery, late-night car rides, and being able to tell your friends that you liked what they had for lunch [laughter]. These are no substitute for the pathbreaking, world-changing innovation that America needs. Peter has distilled his argument into a Tweet-sized maxim worthy of our age. "We wanted flying cars and settled for 140 characters." At first, I didn't understand that reference, perhaps because I'm banned from Twitter [laughter], not by Twitter but by my internal communications team [laughter]. True.

Peter understands, as we do at the Manhattan Institute, that robust innovation relies on a system of free enterprise. Like so many philanthropists and scholars in the room, Peter has committed himself to preserving the policy framework necessary for experimentation, growth, and most critically, America's reputation for unimpeded inquiry, which has historically driven our culture of innovation and must do so again if we're to meet the unique challenges of this century. A society that censors challenging ideas may well be headed on the path to suicide. For those of us with the means and courage to not just speak out against the intellectual mob but to actually build something superior in its place, there is great and urgent work to be done. Tonight, that means providing a forum for the challenging ideas of our 33rd Wriston lecturer. Ladies and gentlemen, please join me in welcoming Peter Thiel. [applause]

Peter Thiel: Well, Paul, thank you so much for that, an incredibly flattering introduction. I always worry it goes downhill from there. I thought I'd maybe start with a somewhat modest story. This was about 20 years ago, and I was starting PayPal. I was speaking to a friend of mine, Peter Robinson of the Hoover Institute. We were brainstorming on advisers to get to the companies. He thought, "We're trying to do this innovative finance tech company. You should talk to Walter Wriston." And my response was, "Who is Walter Wriston?" And then he sort of complained about how young people don't know anything about the past and how America does a terrible job of not honoring its great business innovators and leaders. And so I'm extremely honored to be here tonight and try to correct this in some small ways. And the part of the Walter Wriston legacy that I think is still so present is he transformed Citigroup into—he scaled it up like crazy from the bank that served the city to a bank that served the world. ATM machines, credit cards, interstate banking, turning it to money center bank. And then what the legacy of Wriston draws our attention to in so many ways are questions of scale, problems of scale. And that's what I'd like to focus my remarks on tonight, that we have a question of scale is if something's good, more of its better. So there's a quantity element. And then, of course, there's a quality element where once you get to a certain scale, maybe you can do qualitatively different things. This was the vision for Citibank. And then perhaps there's also a normative dimension where maybe you're changing the world into a better place. And from a libertarian or free-market perspective, perhaps by expanding capitalism, you can sort of transform the world on a transpolitical level. That was certainly the hope that Wriston had. And in some ways, this resonated with me very deeply when I was starting PayPal where we had this sort of vision that we're going to lead this financial revolution, a libertarian revolution against all central banks. We're going to liberate money from government control, and we're going to this transpolitical technological level to transform things.

Of course, I think there are sort of a lot of qualifiers on this. There are times when—there are times when this sort of transformation does not work in a libertarian direction, and the global scale can be quite different. And I sort of think of Margaret Thatcher's biggest mistake was she thought that in the late '70s that embracing the EU would be a way to crush the unions in the UK. So you went to a transpolitical scale to bring about more free markets within the UK. And then a decade later, she thought of this as her worst decision ever where the free trade of the EU came with a not-so-inexpensive Brussels bureaucracy that regulate everything from the size of bananas on down. And so there are sort of a lot of challenging questions about scale. If we were to tell the two technological stories about scale at this point, one of them is still the sort of crypto revolution which is still going on with Bitcoin and has this sort of this libertarian potential. But I think there is sort of an alternate tech story which is about AI, big data, centralized databases, surveillance, which does not seem libertarian at all. You're sort of going to have the big eye of Sauron watching you at all times, in all places. And I often think that we live in a world where the ideology always has a certain veil on it. So if we say that crypto is libertarian, why can't we say that AI is communist, and at least have the sort of alternate account of scale? So there are things where you scale things up, and you get a qualitative difference, but the qualitative difference isn't always a good one. And we need to think very hard about which ones play out and in which ways.

And I think for Wriston in the 1970s, if you want to sort of summarize it as a picture, it was that if Manhattan, if New York City was going to scale, the next logical scale was the world. And that was the scale on which one had to move to. And I think there is a sense in which finance, technology, and the internet form has sort of a natural limitless scale, and that kind of makes sense. There are a lot of other things where scaling is very different. I think in a democracy if you have sort of majority vote, that's good. If you have a supermajority, that's even better. So if you got 51%, you're probably right. If you get 70%, you're even more right. On the other hand, if you get 99.99% of the voters, you're sort of in North Korea [laughter]. And you have sort of a sense that—and so there's always this wisdom of crowds that works up to a certain point, and then that transitions into sort of a madness of crowds. And I think this is sort of unhealthy development that's taken place in Silicon Valley in recent years, where we had very positive network effects that at least have tilted in this more negative thing at scale, where it seems completely deranged in recent years. And I suspect this will be bad for innovation at least. Maybe the business can still work at scale, but I think one of the things that does not scale terribly well at all are ideas and innovation. And there are a lot of different critiques of big tech we can discuss. But one critique that I am sympathetic to is that innovation does not scale well. And that as the tech industry's gotten bigger or bigger governments, things like that, you're going to have the innovation more slowly. And so whether we go to the communist AI or the Libertarian crypto world, or some complicated, intermediate hybrid, I think it will actually happen slower than people think. This is always a big concern I have.

One of the other institutions that I think has scaled quite badly—I always think of science as tech's older brother who's fallen on hard times. And big science has scaled extremely badly. And this is sort of the groupthink of the universities, that they sort of have this ethos that they give us a universal knowledge about the universe that everybody gets. It's something that scales to an extraordinary degree. And the lies that we tell around big science have been linked in with the university lies. And I think sort of a lot of our problems can be described in this way. This is my sort candidate for the biggest lie that the Obamas ever told, a lie much bigger than any sort of inaccuracies told by the current president, bigger than anybody. And we are not concerned about lies like the WMD thing in Iraq, or if you like your doctor, you can keep them because those were sort of partisan. There was some partisan pushback. This is one that's sort of all encompassing, that sort of follows from getting the scale wrong. And they both did it, sort of. I'll let ladies go first; Michelle Obama first. So quote, "The one thing I've been telling my daughters is that I don't want them to choose a name. I don't want them to think, 'Oh, I should go to these top schools.' We live in a country where there are thousands of amazing universities. So the question is, what's going to work for you?" And so at scale, you obscure all the differences. Of course, we know they were lying. The Obamas' daughter ended up going to Harvard [laughter]. And it's reassuring. I mean, it would be very disturbing if they actually believed that this stuff worked at scale in the way they claim it does. Her husband came up with an even more succinct one, telling two lies at once. Just because it's not—quote, "Just because it's not some name-brand, famous, fancy school, doesn't mean that you're not going to get a great education there." So let's parse that two lies. First off, if it isn't a name-brand, famous, fancy school, you're not going to get a great education. You're just going to get a diploma that's a dunce hat in disguise. If it is a name-brand, famous, fancy school, you probably also won't get an education [laughter]. [applause]

And so, if we were to rightsize the scaling for our intellectual life, you should describe Harvard, not as one of the thousands of great universities, you should describe it as a Studio 54 nightclub. It's this tournament. It's probably good for the self-esteem and bad for the morals of the people who go there, and maybe call it a wash. Probably not a criminal thing, doesn't need to be shut down but probably does not deserve a—probably does not deserve a tax deduction [laughter]. [applause] If we come back to—if we come back to the sort of—the much healthier world of finance and capitalism and back to the theme at hand, one of the questions is, what are the kinds of scales we should be working on in 2019? And how would one update the Wriston perspective? And I think one sort of framework for this is that there's—and there's sort of a different question you can ask on the level of Manhattan, New York City. It's sort of the capital city of the world. We can't really go back from that because you can't go back to the capital city of New York. Albany has more standing under the US constitution than New York City, but we don't really want to turn it into Albany, or something like that. And so there are sort of questions about how do we succeed at scale in these places? And there's a Silicon Valley version of this question. But I want to maybe focus it on the United States version, and the question for the United States is, is the best strategy for the US to go big, to go with the sort of global scale?

And this has probably been a thread throughout the US history of at least the last 100 years. Everything from the progressivism of Woodrow Wilson, the New Dealers after World War II setting up the global institutions from which they'd run the planet from Washington DC. And there was sort of a sense that the US was at scale and should always operate on an even bigger scale and should be leading this sort of world revolution, not always a libertarian one. I was reminded of the joke, why is the United States the only country in the world where revolution is impossible? Answer, because it's the only country that doesn't have an American Embassy [laughter]. But this was in some sense a very good strategy for the US. It was to lean into the bigness of the country and to go even bigger. But I think there are sort of some ways we may need to update this in the world of 2019, and in some ways, it's shaped by the rivalry with China. And if we sort of think about a rival that's also incredibly big, simple bigness is not necessarily the right strategy. And so we think of the four vectors of globalization that I often think it's movement of goods, free trade; movement of people, migration, immigration laws; movement of capital, banking, finance; movement of ideas, the internet. And it made sense for the US to lean into all these things because being the biggest, we've sort of got outsized returns from scale. Whereas, I think if we do sort of ledger on these today, maybe only two of them are still ones that the US really has a powerful advantage in. I think it's finance and the internet, even though we, of course, have misgivings about those two.

So it's sort of—and there's sort of sense in which we don't fully trust the banks. We don't fully trust the tech companies. They don't fully trust the US. The feelings are sort of mutual. And so it is difficult for us to really support these companies as national champions. In the 1950s, the CEO of General Motors could still say, "What's good for GM is good for America." It's a little bit of a distortion, but it was not that inaccurate. It would be inconceivable today for the CEO of Goldman Sachs or Google to say, "What's good for Goldman Sachs or Google is good for America." It would be just inconceivable to say that, and so even though this is sort of the model that we probably should still be working on, it's quite a tough lift. I think when you think of trade or immigration policy, the scale question is much more sobering for the US. We're simply not able to compete with China at scale when you have 7 out of 10 of the largest container shipping ports are in China. The largest in the US, Los Angeles, is only number 11. It's just sort of make the world safe for container shipping. It's making the world safe for the Chinese Communist One World State at the end of the day. That's sort of what you're tilting towards. Or on the immigration issue, it's striking how much better China is at moving goods and people than we are. China has probably had the greatest internal migration of any country in the last 20, 30 years. If you look at Shenzhen in Southern China, it had 60,000 people in 1980. It's expanded to something like 12 million, a growth factor of 200, in the last 40 years. And again I'll sort of use the contrast of New York City, where we had 7.1 million people in 1980. It's grown to 8.4 million in the last 40 years. And it simply does not scale on people.

We can scale finance. We can scale tech. People, we're really bad at scaling. It costs $3.8 billion to build one mile of subway in New York City, and it's only $400 million per mile in Paris. And that sort of suggests that any attempt to scale on people is not the place we should be competing. And so there is, I think, some urgent need to rethink all these different scale questions. Where are we going to be good? Where's going to be, sort of, much more challenging? I'm not a fan of AOC, to say the least, but if you were to steel man one of her arguments that Amazon should not come to New York. The argument was basically that it would just sort of drive up rents and prices for everybody there. And we have to ask seriously whether that's not entirely wrong. What is actually the inelasticity of real estate in a place where the zoning is so controlled that it's very hard to build new things, it's hard to build new transportation, things like that. There's a famous economics theorem from Henry George in the late 19th century, that in a certain city that's too restricted and too heavily regulated, the inelasticity of real estate ends up being complete so that any gain in the economy of the city simply flows to the landlords. And of course, the mistake AOC made was this is also a libertarian argument because you could say that you need to get rid of all welfare in New York City because all the welfare simply goes to the landlords because it's 100% of a transfer. And of course, it's also an argument that we would have to rethink migration very hard. So to the extent China has focused our competition, it suggests that we need to think about the scale issue very differently. It's a very open question where the US should go from here. I don't think we simply can go subscale, so it's not like Israel or Switzerland or something like that. I sort of would like the US to be a tax haven. I don't know if that quite works at our scale [laughter], but it's a very urgent question to think about.

What are the kinds of places we can scale in a good way where we can win and do that better in the years and decades ahead? And if I had to sort of give one general gloss on it, I would say that perhaps we have to shift a little bit from quantity, from simply scaling in size, to quality. And that's sort of the question. And this is back to innovation, back to intensive growth, not just doing more of the same but shift towards IP protection, shift towards fewer scientists but actually doing real science, fewer good universities, but we understand them to be elite universities. And somehow, a shift to quality over quantity is probably the place of comparative advantage that we have to think through really hard vis-à-vis China. Now the place where I think—one of the things I always find so befuddling is why these questions of scale have not been asked for such a long time, why the China rivalry, in some ways, has remained obscure for as long as it has. And I sort of think in closing, I'll give sort of my thesis on both the left and the right. There are sort of are some ideological blinders we've had, and I'm going to sort of be critical on both sides here. I think that on the left the distraction machine from asking a question about what to do on the scale of the United States, the distraction machine has been driven by identity politics of one sort or another. And it's sort of like a subscale. We don't think of the country as a whole, we think of just subgroups within the country, and I think there's something insane, self-contradictory about identity politics. I always think you can sort of start with identity means what makes you unique. It means what makes you the same. If you start with A and not A, you can prove anything. And I keep thinking the identity politics monster gets crazier and crazier. Maybe it's just flopping around its tail in sort of final death throes, but it does seem to have a lot of energy left. And until the left is able to move beyond identity politics, it's not going to be able to focus on the scale that we need to be focusing on for this country.

I think from the right, the sort of doctrine I would encourage us to rethink is the doctrine of American exceptionalism, which was, again, sort of a super big scale, but sort of put the US on a scale which simply could not be compared to any other country, any other place. And you can think of exceptionalism as—I often use the sort of theological analog that it's like the radical monotheism of the God of the Old Testament or of the Quran, where you can't compare anything to God. You can't say anything about his attributes. And exceptionalism is sort of like saying the US is this country that can't be measured, or compared, or evaluated in any way possible. And what happens - say you're exceptional in all these ways - is you probably end up being exceptionally off in different ways. You end up with subways that cost $3.8 billion a mile. You end up with people who are exceptionally overweight. You end up with people who are exceptionally unselfaware. And I think something like the corrective to exceptionalism is that perhaps in the 2020s the United States needs to settle for greatness. Thank you very much. [applause]

Reihan Salam: Mr. Thiel has kindly agreed to take a few questions. Would anyone care to volunteer?

Question 1: AI. You tech people are so annoying. How many of us old people know what AI is? But it's artificial intelligence. Why is it communist?

Peter Thiel: Well, again, there are a lot of qualifiers to this. AI is sort of the buzz word of the day. It could mean the next generations of computers, the last generation of computers, anything in between. It can mean the Terminator movie where it's a robot that kills you, it can mean sort of all these sort of creepy social credit scoring things in China. But in practice, the main AI applications that people seem to talk about are using large data to sort of monitor people, know more about people than they know about themselves. And in the limit case, maybe it can solve a lot of the sort of Austrian Economics type problems where you can know enough about people that you know more about them than they know about themselves, and you can sort of enable communism to work, maybe not so much as an economic theory, but at least as a political theory. So it is definitely a Leninist thing. And then, it is literally communist because China loves AI; it hates crypto. And so that, I think, tells you something. And then I think there's a commonsense level on which people are creeped out about it and this is why. And we should label it accurately.

Question 2: So what does a hopeful great America look like? What can we look forward to? What are your hopes for the next 24 months, let's say?

Peter Thiel: Well, I certainly hope that the country has more of a future than just 24 months [laughter]. But I think that my hopes are that we find a way back to more intensive growth. The focus on globalization, we sort of divided the world into developing and developed countries. And the developing countries are the ones that are converging with the developed world. The developed countries are those where we're sort of saying, "The future is just not going to look different from the present. It's just the sort of this eternal groundhog day." And I think somehow breaking that logjam would be good so that there would be a future again. Things would be different from the present. We've had progress around tech, around IT, this narrow cone of progress around the world of bits. But the iPhones that distract us from our environment also distract us from how strangely old and unchanging our environment is, how you're riding a subway that's 100 years old. And I think sort of a healthier sort of progress would happen on many different fronts. And then we can sort of debate why that hasn't happened, what some of the challenges are, but I would like to see innovation, not just in some kind of narrow iPhone app but across the board.

Question 3: So you've talked about the past. Silicon Valley talks about UBI, universal basic income, robots are replacing humans. The average American in Iowa is not going to have a job. That's a common view in Silicon Valley. In New York, it's not as sympathetic, but Trump has tapped into this as people have been left behind. Those people have rallied behind him. You also agree with this, that we should be more nationalist. How do you see tech and kind of this San Francisco, New York-centric world making room for people to enjoy the America dream, whatever that looks like different from the past 50 years, so what it looks like for the next 50 years?

Peter Thiel: So I disagree with all the premises behind your question [laughter]. [applause] I think you have bought the Google propaganda hook, line, and sinker - okay, let's articulate this - which is that we have runaway technological progress, a lot of people will be left behind, and we need to take care of them. This doesn't show up in any of the data. We have 3.5% unemployment, the productivity numbers are still pretty anemic, and it doesn't show up in any of the economic data. So that's sort of like the—that's sort of the—that's sort of the starting point. If you think about automation and the rate of automation, it's basically happened over—it's been going over for 200, 250 years since the industrial revolution, and my suspicion is the rate has slowed because the things that we were able to automate easily like farming or manufacturing have been automated. And even if we're still automating manufacturing at the rate of 5% a year, it's a much smaller part of the economy, and so the total productivity gains are actually slower. The sectors that are left are sectors that look very much the same as they did 100 years ago, and so it's like kindergarten teachers, nurses, yoga instructors, all these sort of nontradeable service sector jobs are fairly immune to automation. They're a large part of the economy, and that's perhaps why things have slowed. And then we always have this sort of fantastical story that this is about to change, but if you look back over the last 40 years, the simple reason it's slowed is because the sectors that were immune to automation have just become bigger and bigger parts of this economy. And so I think the—I don't know. I tend to think the Silicon Valley/UBI discussion, it's like identity politics. It's like this sort of magic trick. We're drawing your attention away to something else. It's like all the technology is going to take all your jobs, and should we have UBI to take care of you? And what we should be paying attention to is that people in Silicon Valley have not been doing enough. There are a lot of critiques of the big tech companies, of things they've done wrong and different things over the last few years.

My cut on why there's such a political pushback against the tech companies in Silicon Valley is they've not innovated enough. It's like if you've done bad things, one of the things you can always say is, "Well, we've done these good things too," and the list of good things is sort of lacking. Probably the biggest one on the Google list is self-driving cars. And I think that would be a significant innovation, on the other hand, they've been promising it for 10 years. They're talking about it less than they were four or five years ago. They expected the time to be expanding. But it's not that big an innovation. And I think going from a horse to a car is bigger than going from a car to a self-driving car. And so we have to sort of quantify this and really think through how much is going on. And these problems are, if anything, even more serious on the science side. And one form of this problem of scale that I talked about is if you're too big a scale, it becomes impossible to actually know the particulars of what is going on. And I think it's maybe a feature of late modernity that things are so specialized. And we have the cancer researchers talking about how great they are, and the quantum computer people say they're about to build a quantum computer. And you've all these narrower and narrower groups of self-policing experts telling us how great they are.

I can't resist mentioning sort of the anecdote from one of my friends. His advisor at Stanford, Bob Laughlin, got a Nobel Prize in physics in late '90s. And he suffered from the supreme delusion that once he had a Nobel prize in physics, he would have academic freedom [laughter], and he could do whatever he wanted to. And so what he decided to do is he was going to sort of investigate all of the other scientists at Stanford who, he was convinced were sort of stealing money from the government and sort of engaged in mostly fraudulent research, just a lot of input of money, but not much output. The two grad students, he'd sort of come into their office once a week and it would be, "I'm very proud of you. We're on the front lines. We're doing battle for science against the whole universe in this office." And you can sort of imagine how this movie ended. It sort of was quite catastrophic. The grad students couldn't get PHDs. He got defunded. And my hermeneutic suspicion is always when there's speech that is completely forbidden and questions that are not allowed to be asked, normally, you should assume that those things are simply true.

Question 4: Thank you. I, too, have a premise which I now shudder to offer, but I will [laughter]. Thank you. I welcomed your critique of the very notion of American exceptionalism, which I interpret to be a call for greater humility on a national and cultural level. That's my premise. If the premise is accurate and accurately reflects your view, how might we achieve that on the political level? Is there a way?

Peter Thiel: Well, this is probably above my pay grade too, but I think that the starting point surely is to frame the issues at the right scale. And exceptionalism can be inspiring. There's something about it that's so abstract that we're not able to talk about the details of what's actually going on. And so I think anything where we're able to focus on these questions of detail will be helpful. And that's sort of the place that I would start. And I think the rivalry with China is what's going to push us to ask these scale questions anew. We're not in a great place in a lot of ways, but the country still has a lot of advantages. And we should think really hard what are our advantages, where do we push them, things like that. And I think it is one of the few issues that are essentially bipartisan. I think it is actually a place where we could have a reasonable discussion.

Reihan Salam: Please join me in thanking Peter Thiel. [applause]

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