Peter Thiel spoke at the Economic Club of New York 2018. Super insightful, contrarian, clearly an original. If this is a name that is new to you, here is a refresher blog post from 2017. Co-founder of Paypal. Enjoyed this interview and put a few of his quotes in blue italics.
Technology used to mean more than the internet
Today, when people use the word technology, it just means Information Technology. . .much narrower meaning. For many decades, we have had a narrow cone of progress in the world of bits, not in atoms
This is something he harks on often. He laments that most of the advances over the last 20+ years has been in the consumer internet. So true. Are new gaming, social media, and grocery delivery apps making our life that much (marginally) better? Probably not. Our best minds are spending time finding ways to entertain us.
Donald Trump comes up a lot in this interview. Thiel was one of the few (only?) Silicon Valley leaders who supported Trump – spoke at the Republican National Convention etc. Thiel argues that the idea of political correctness has gone to far and does respect the fact that Trump is willing to question the status quo. Also, notes that voting for Trump turned out to not be contrarian . . .50% of the country voted that way.
Thiel’s view on renegotiation trade deals
There is something really odd going in trade relations, what you would expect in a healthily globalizing world is capital would go from slow-growing to the fast-growing world. . . that is the way globalization is supposed to look, today it’s quite the opposite, capital is flowing uphill.
One of the things that leads to surplus in their [China and Germany] countries, and deficits in the US, is they have a lot of value-added taxes, the economies are oriented towards investment, and away from consumption. Our economy is skewed toward consumption and away from savings and investment. That’s the kind of thing we need to rethink.
To my ears this sounds like a pro-VAT (consumption tax) stance. Unless the US tax policy starts to incentivize savings and investment, Americans will spend, spend, spend.
Thiel continues to be long bitcoin
Long bitcoin, and neutral / skeptical on just about everything else, with a few possible exceptions. . . the question is whether it can become a new store of value. The thing it would replace would be gold. . . It still strikes me as deeply contrarian. No wall street and investment banks are working on this. . . it has been missed in NYC and more shockingly in the Silicon Valley.
Thiel argues that bitcoin could be a store of value, taking some of that demand from gold. He says remarkably little about Ethreum, Litecoin or the other coins which have a better use case as a currency.
Charismatic technology
What aspects of technology are actually charismatic? Where there is a good story? Story about technology making the world a better place? It needs to be real, needs to be a viable business, but at least something that inspires people, motivates people in the company, has a transcendent mission. My relatively short list – cryptcurrency – people working on it have a very different vision of the world trying to build, still true with biotech – story for curing diseases and drastically improving the human health. And Elon Musk.
I found this to be the most interesting part of the talk. Yes, AI may be pervasive, here-to-stay, and be a huge mega trend, but he argues that it is boring, faceless, and not charismatic. He argues that people, resources, energy, and excitement will rally around “charismatic technologies.” Interesting, potentially true. People [now more than ever it seems] want to be a part of a purpose, not just profits. Pretty optimistic for a libertarian, right?
Amazon: The most ferocious company in the US
Okay, last point. It is Saturday night, right? Listen to the blurb on Amazon at minute 40:44. Crazy. Amazon is ferocious (yes, we know that), but listen to his reasons why other companies (Apple, Microsoft) are just not as hungry as Amazon. Completely makes sense – profitable companies are unwilling to adventure into lower-margin businesses; those opportunities look dilutive to earnings.
Amazon is the most ferocious company in the US. The company you don’t want to compete against. . . Amazon’s core business is a low-margin business, so everything else looks a better margin business. So it is ferociously expansionary.
Related posts: