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Flashback: Thiel vs. Schmidt, 2012

Clearly I’m on a Thiel kick.

At first I was dubious, but now I’m just curious. Though some of Thiel’s motives and politics remain vague, it should be impossible for anyone to ignore his foresight and intelligence. The fact that many people still dismiss him offhand because he’s a nominal Trump supporter just blows my mind.

This debate, which took place in 2012, offers a clear picture of how much smarter Thiel is than other Silicon Valley tools, like Eric Schmidt. In this case, we watch Thiel eat Schmidt for breakfast, while Schmidt just oozes, as Thiel says, Google propaganda.

 

Summary

The opening question was to explain your view of what technology brings to the world.

Schmidt says that “the message of technology innovation is an overwhelmingly positive one,” then talks about how technology has transformed our world, bringing poor people into the middle class, and how everyone in the world will soon have access to the internet. Ultimately, he says that technology innovation will improve the world for everyone, giving people more information and longer lives.

This smacks of technological utopianism, something that Thiel (as well as others, such as Evgeny Morozov) warned about long ago.

The MC reads a quote of Thiel’s that offers a more cynical – and, in my opinion, realistic – perspective on the issue of technological innovation. “We wanted flying cars, instead we got 140 characters.”

Thiel goes on to compliment Schmidt, saying he does a great job as Google’s Minister of Propaganda, then outlines some very insightful points that Schmidt spends the rest of the debate avoiding (including a couple that we would later see crop up during the Trump election). Namely, the facts that:

  • Median wages have been stagnant for 40 years, compared to the previous 40 years, during which they increased 6-fold
  • The technological improvement we’ve seen in the past couple decades, which has been confined to the IT industry – or “the world of bits” – hasn’t translated into economic well-being
  • Since 1973, oil barrel prices have increased 50-fold, a demonstration of “a catastrophic failure of energy innovation,” which has been offset by computer innovation
  • Governmental regulation has effectively “outlawed technology” – for instance, new drug development costs $1.3 billion, you can’t fly supersonic jets because they’re too noisy, you can’t build nuclear power plants, and so on

The question Thiel asks is how IT innovation translates into economic progress for humans.

After a short slap fest, while disagreeing about technological progress, both agree that governments are at the root of many major problems. The Arab Spring becomes another bone of contention. Schmidt cites the cause as a widespread discontent with regimes, and Thiel blames 30-50% price hikes on food, which he says brought the threat of starvation for many people.

More disagreements prompt Thiel to respond with: “I thought we were going to talk about technology, but Eric seems to think it’s all about politics, which, in a way I think concedes my basic point, which is that technology is no longer that big a driver.”

He follows up with one of his main points: “Technology should be a large enough force that it could power [political] change.”

After Schmidt tries to make a point about education being the solution to automation and globalization, two forces that will govern the world in the future and create jobs problems, Thiel pushes Schmidt more, saying that Google doesn’t do enough to create more jobs, claiming that Google is not an innovative technology company, but merely a search engine that is sitting on $50 billion in cash with no ideas on how to use it.

Compare that to Amazon, he says, which continually reinvests all of its profits into new technologies.

For the closing phase of the discussion, Thiel reiterates his insults to Google, to which Schmidt responds that Chrome is the #1 browser in the world, Google is the top platform for enterprise innovation, and there are plenty of other examples of business innovation that Thiel was choosing to ignore.

Q&A followed.

Conclusion

This conversation reminds me of a WWE fight or a Jerry Springer spat, just in a different arena. Thiel’s nonstop aggression makes it really fun to watch and, as usual, his intelligent arguments make it fascinating food for thought. In particular, he seems like he has a very solid and respectable mission – to use technological innovation to change the world.

It would have been more interesting if Schmidt had anything to say, but as it is, his technological utopian preaching and soft sales patter comes across as weak, lame, and boring. He sounds exactly like an old-school politician, who can talk and talk for hours without saying anything.

I’m admittedly irritated by Schmidt’s smarmy smugness, but that doesn’t negate the fact that he got screwed by Thiel in this so-called debate. Since he had nothing to say and no way to respond to Thiel’s arguments, rather than addressing any point head on, he just dodged with catchphrases, incorrectly reframed arguments, and logical fallacies.

Though the discussion is clearly on a different level, this debate also reminds me of the two forces that came into play during the Trump elections: hot-air-breathing political types versus aggressive, straightforward businessmen.

Thiel vs. Trump Part 3 – The End of the Beginning or the Beginning of the End?

Okay, just a quick recap and then I’ll wrap this series up for now, since, due to circumstances beyond my control, parts three and four, which I’d already written, were erased and are now gone forever.

Unless they are on archive.org or in Google’s cache. Or hiding somewhere in my computer.

But anyways, to recap:

  • Thiel supports Trump.
  • Thiel made a successful power grab in the face of an ocean of opposing views – i.e., he was right & everyone else was wrong. Yet I feel like I’m the only one who sees his foresight as extremely significant. Everyone else remains hung up on the “Oh no you di’nt support Trump!” mentality.
  • Thiel believes in monopoly, or the centralization of power, as opposed to decentralization of power.
  • He believes that capitalism is good, though his definition of capitalism seems to be somewhat different from other people’s and that definition isn’t being made abundantly clear.

Here is Thiel’s speech at the National Press Club:

To reiterate, I think that, rather than lambasting Trump and lumping Thiel in with him … which is very easy to do and requires no critical thinking or foresight whatsoever … people need to pay attention to Thiel for a number of reasons.

The most poignant fact is that he is very smart and he was right when everybody else was wrong.

When you take that important fact into consideration, it seems like a good idea to pay very close attention to what he has to say…

And he has some very interesting and scary things to say about the world’s state of affairs.

Trump vs. Thiel Part 2 – Thiel and the Monopoly Mindset

chicago-1049976_1920Recently I wrote a post about why Thiel supports Trump.

That was before Trump’s numbers took a nosedive…

In that piece, I suggested that Thiel might want to bang on America’s governmental engine with a Trump-shaped hammer until it started working again. Also, I dropped hints that Thiel might want to become president or use “the little guy” Trump as a tool.

Over at Medium, Samuel Hammond wrote a much more thorough and informed article on the same topic.

Here are some highlights:

  • Hammond wrote that “Peter Thiel see’s [sic] a Trump presidency as his pathway to be become the shadow CEO of the United States of America.”
  • He quoted from Thiel’s startup lectures: “A startup is basically structured as a monarchy…the truth is that startups and founders lean toward the dictatorial side because that structure works better for startups.”
  • And from Thiel’s article, The Education of a Libertarian: “I no longer believe that freedom and democracy are compatible. … A better metaphor is that we are in a deadly race between politics and technology…Unlike the world of politics, in the world of technology the choices of individuals may still be paramount. The fate of our world may depend on the effort of a single person who builds or propagates the machinery of freedom that makes the world safe for capitalism.”
  • Hammond interprets the above passage to mean that “monarchy is the other meaning of Zero to One.

Hammond’s insight is in-depth and informed. Very much so. And he’s probably right about Thiel.

the-white-house-103927_1920Although he had plenty more to say – much of which is beyond the scope of my interest and my lexicon – the third quote above is what bothers me about Thiel’s perspective.

There, Thiel contrasts “the world of politics” and “the world of technology.”

These vague concepts need some serious clarification…

The term “world,” as he’s using it, is hardly scientific or linguistically specific. However, as he said in his essay, he seems to think that humans can escape politics “in all its forms.”

It appears that Thiel thinks technology can free us from politics … as if technology can free us from humans’ physiologically determined psychology and behavior.

Is It Possible for Mortals to Understand Thiel’s Political Views?

In his article, the aforementioned The Education of a Libertarian, he says that in order to escape politics, we must use “some sort of new and hitherto untried process that leads us to some undiscovered country; and for this reason I have focused my efforts on new technologies that may create a new space for freedom.”

thiel-trump-politics

Escape out to sea or out to outer space won’t change human psychology…

Personally, I don’t understand how we can try something new and undiscovered when human psychology, human behavior, and human history repeat themselves endlessly. How does he even define “new”? And how can we escape politics without changing humans’ fundamental psychology?

Perhaps we can use technology or government to force people to behave the way we want…?

I digress.

He goes on to claim that technology, outer space, and seasteading are three such means of escape.

As I was reading those paragraphs, I was thinking to myself, Great…another technological utopian.

Then, Thiel went on to conclude:

The future of technology is not pre-determined, and we must resist the temptation of technological utopianism — the notion that technology has a momentum or will of its own, that it will guarantee a more free future, and therefore that we can ignore the terrible arc of the political in our world.

Ultimately, Monopoly Cannot Defeat the “Arc of the Political”

Whatever the specific strange views of Thiel may turn out to be, he appears to think that monopoly is a good thing … as if you could end politics altogether through some other form of government, like a technocracy, or by ending politics and government completely by letting a benevolent AI run everything.

But I’m getting tired of trying to figure out Thiel’s way of thinking. I don’t even like politics. At first I thought he was just some eccentric tech visionary, like Musk, but now I’m not so sure.

chess-1145557_1920I get the feeling that, like Trump, he thinks that “he alone” can fix the world, and that he feels he’s above explaining the politics that he aggressively asserts onto the world – and if you tried to enter into a free and open discussion about politics or capitalism, he’d just try to checkmate you with logic that only he understands.

Anyways, here’s why he’s wrong:

Monopoly doesn’t encourage innovation, it discourages diversity and encourages overspecialization.

Overspecialization is a quintessential human trait that causes major, major problems.

Humans:

  • Cause the extinction of countless species
  • Reduce the variation of available foods on grocery store shelves
  • Replace “low-quality” search results with a tiny handful of corporate-owned sources
  • Build massive monopolistic businesses that suppress diversity and small business
  • Self-segregate into ethnic groups and nations

I’m sure you can figure out for yourself some of the consequences of these tendencies.

If not, I’ll leave you with this quote:

We are in an age that assumes the narrowing trends of specialization to be logical, natural, and desirable…all the known cases of biological extinction have been caused by overspecialization, whose concentration of only selected genes sacrifices general adaptability…In the meantime, humanity has been deprived of comprehensive understanding. Specialization has bred feelings of isolation, futility, and confusion in individuals. It has also resulted in the individual’s leaving responsibility for thinking and social action to others. Specialization breeds biases that ultimately aggregate as international and ideological discord, which in turn leads to war.

    -Buckminster Fuller, Synergetics

Why Does Peter Thiel Support Donald Trump? Because He Wants to Save the World…

election-613132_1920So why does Peter Thiel support Donald Trump?

When I read headlines saying that Silicon Valley is baffled by his actions, I am baffled by their reactions.

It should be clear that there’s more going on here than meets the eye – though sometimes I wonder if Trump knows that…

Peter Thiel, for those of you who don’t know, is a brilliant billionaire tech tycoon who helped found PayPal and Palantir and who has his investment fingers in many other businesses.

As a tech-savvy, forward-thinking gay man – who has some unconventional ideas about technology, capitalism, economics, and the world we live in – he’s one of the last people you’d expect to see speaking in favor of a Trump presidency.

Yet that’s exactly what he did at the RNC, claiming that the economy and the government are “broken” and that he supports “people who are building new things.”

Donald Trump, he says, is a “builder…and it’s time to rebuild America.”

But…come on.

Donald Trump?

Really?

Donald Trump? That Guy?

man-845847_1280Trump openly:

After watching a BBC special pointing out that the USA’s demographics are shifting – and that white people will be a minority in a few decades – I felt that Trump’s slogan, “Make America Great Again,” might actually be a subliminal message, “Make America White Again.”

The New York Times came up with a better one: “Make America Hate Again.”

But I’ll try to avoid ranting about Trump.

Critical Thinking About the System

Attacking Trump’s rhetoric is easy and everyone does it.

That is too simple.

It feeds his flames and avoids more important questions that would uncover the machinery underlying the current system, like:

  • Why has a simple-minded salesperson – who simply repeats his target audience’s desires right back to them, like any good salesperson – become so successful financially (despite 4 bankruptcies) and made it this far in the electoral process, and what is it in his rhetoric that resonates with such a large demographic of Americans?
  • Why are we being forced to choose between a salesperson and someone who’s being legally accosted by the FBI right now?
  • Why do people regard him as a “marketing genius,” when in fact he has simply mastered the basics of salesmanship that have been expounded, extrapolated, and explored by great salesmen for the past 100 years?
  • Why does a smart, forward-thinking tech billionaire like Peter Thiel support Trump?

Why Peter Thiel Supports Trump (Take Nothing at Face Value)

chess-433071_1920Peter Thiel is a businessman who thinks strategically about his aims, so there is certainly more to his endorsement than we heard in his RNC speech.

There are a few possible reasons why Thiel might support Trump:

  • Thiel plans to replace Trump with an artificially intelligent, Trump-shaped robot after the election
  • He actually does believe in and support Trump
  • He sees this as an opportunity to take the administrative office from the political families who have been running the office for decades
  • He sees a dire situation, thinks Trump will win, and wants to influence the little guy when he gets into office
  • He wants to run for president in a few years and sees Trump as his best bet for changing and getting into the political game

I could only wish that this last one were true – we would be much better off with a smart “builder” like Thiel than anyone else who has run in a very, very long time. If this were the tech tycoon’s plan, then he’s probably setting himself up now as the rescuer who will fix up the country after Hillary or Donald inevitably make things worse during the next term.

But I doubt Thiel wants to be president (wink, wink, nudge, nudge).

Although, come to think of it, Mark Cuban, another famous billionaire who made big bucks in the tech industry, had said he’d been open to running for president…

Either Thiel plans to run for president in a few years (wink, wink, nudge, nudge) or…

Thiel Supports Trump Because He Thinks Trump Will Implode the Government, Which Will Make Room for Innovation … And a New Monopoly

gears-1236578_1920That’s pretty similar to what this guy at Business Insider said, but I can’t seem to find that article any more…

To find hints of Thiel’s real thinking, look past his RNC speech:

  • Thiel believes that innovation is driven by monopolistic companies, not by competition. According to Thiel, the ideas we use to discuss capitalism are based on models that are outdated and obsolete. Competitive businesses involve towards static equilibrium, and spend their money trying to outdo one another. They have no cash left over to innovate and create. A monopoly, however, is free to charge what it wants, then use those profits to drive innovation. Google is a perfect example of a monopoly in today’s economy. AT&T used to be one, as did IBM and Microsoft.
  • Innovation is at odds with competition and globalization…or they are at least perpendicular to one another. In one talk, Thiel used Japan as an example to demonstrate the difference between the two: since the time of the Meiji Restoration, the country has globalized but not innovated…that is, Japan copied the rest of the world. As a result, this island nation, which is smaller than California, has become a major world superpower. In the 80s, though, they ran out of stuff to copy and their previously explosive economic growth stagnated.
  • Technology and innovation are, for all intents and purposes, the same. Technology, he says, isn’t just limited to computers and software. This has been the most recent, most explosive area of innovation, in part due to the lack of regulation in this sector, which is a brand new industry. Other types of technology could also innovate and grow, but there are a variety of financial, regulatory, and other hurdles to overcome in those sectors – for instance, Elon Musk went to extreme lengths to overcome institutional, technical, regulatory, financial, and other obstacles in the preexisting aerospace industry in order to innovate with SpaceX. Not to mention Tesla.
  • Thiel runs Palantir, a secretive software company that tells the future. Well, fortune-telling may be a bit of a misnomer, but it does offer big data solutions that are used by big organizations, from governments to spy agencies to big name brands. Palantir is financially backed by the CIA and Thiel’s own venture capital company, among others. Supposedly, Palantir is valued at $20 billion and earned $1.7 billion in revenues in 2015. Some have suggested that Thiel’s support of Trump is a move to secure more government revenue for his company.

So how do all these bullet points apply to the topic at hand?

Many people look at a Trump presidency and see chaos…or worse.

Here are some quotes from a piece in the New Yorker, as quoted by a piece on Slate, written about the ghostwriter of Trump’s book, The Art of the Deal:

The prospect of President Trump terrified him. It wasn’t because of Trump’s ideology—Schwartz doubted that he had one. The problem was Trump’s personality, which he considered pathologically impulsive and self-centered…[Schwartz said,] “I genuinely believe that if Trump wins and gets the nuclear codes there is an excellent possibility it will lead to the end of civilization”…asked what he would call [a new book about Trump], he answered, “The Sociopath.”

Is it really possible that Thiel supports someone like Trump?

Or is the tech tycoon playing a different game?

All Good Monopolies … And Competitions … Come to an End

chess-603624_1920As Thiel has pointed out, competition results in stasis and old monopolies are out-innovated by newer monopolies. Trump, a a simple-minded salesperson, has somehow co-opted the Republican party and the election process.

Perhaps his very presence on the electoral stage signals the obsolescence of an old monopoly?

For instance, AT&T was replaced by a diversity of wireless providers. Microsoft replaced the IBM monopoly, and Microsoft is in turn being replaced by newer, more innovative monopolies.

A businessperson, like Trump or Thiel, might feel that businesses and governments are analogous processes.

Eventually, any monopolistic governmental structure, electoral competition, or economic machinery will become outdated and obsolete.

Then it will become replaced by a newer, more evolved monopoly.

If Trump gets elected, it will result in – at the very least – more division, conflict, and controversy than we are seeing right now.

In other words, Trump could cause so much havoc that we would have to wake up and restructure the system.

This would make room for innovation and growth.

Heck, maybe there is only one way to make the broken governmental engine work again…

Start banging on it with a Trump-shaped hammer and hope the world doesn’t end in nuclear war.