Peter Thiel on Stagnation and Education - Eric Weinstein

I moved out to work with you in 2013. I'd never seen a boom before. This was one of the things that was really important to me. Being in academics, the academy had been in a depression since around 1970 to 73. Seeing a boom and seeing people with flowers and dollar signs in their eyes, talking about a world of abundance and how everything was gonna be great. It seemed like everybody was the CEO or CTO of some tiny company, and then very quickly it all started to change. I felt like a lot of people moved back into the behemoths from their little startup having failed. A lot of the ideology felt poisonous. 'Don't be evil' was not even something you could utter without somebody snickering behind your back. There's a self-hating component where the engineers have been recruited ideologically and are not actually there to do business. How did this happen so quickly?

Now, one of the things that's interesting to me is that when we talk like this, a lot of people are gonna say, 'Wow, that's a lot of gloom and doom. So much is changing, so much is better.' And yet what I sense is that both you and I have an idea that we've lived our entire life in some sort of intellectual Truman Show where everything is kind of fake and something super exciting is about to happen. Do you share it? Is that a fair telling?

Yes, it's always... I always think of the 1990s narrative was the New Economy, and you lied about growth. And then the 2000s narrative was the Great Moderation, and you lied about volatility. And maybe the 2010s one is secular stagnation, where you lie about the real interest rates because the other two don't work anymore. It's a complicated way these things connect. But yes, New Economy sounded very bullish in the 90s. Great Moderation was still a reason to be long stocks but sounds less bullish. And then secular stagnation, in the Larry Summers form to be specific, means again that you should be long the stock market. The stock market's going to keep going up because things are so stagnant, the real rates will stay low forever. So they are equally bullish narratives, although they sound less bullish over time.

So let me focus you on two subjects that are important for trying to figure out the economy going forward. I'm very fond of, perhaps over-claiming but making a strong claim for physics, that physics gave us atomic devices and nuclear power and ended World War II definitively. It gave us the semiconductor, the World Wide Web. Theoretical physicists invented molecular biology, the communications revolution. All of these things came out of physics, and you could make the argument that physics has been really underrated as powering the world economy. On the other hand, it's very strange to me that we had the three-dimensional structure of DNA in '53, we had the genetic code ten years later, and we had very little in the way of, let's say, gene therapy to show for all of our newfound knowledge. I have no doubt that we are learning all sorts of new things, to your point about specialization in biology, but the translation hasn't been anything like what I would have imagined for physics. So it feels like somehow we're in a new orchard and we're spending a lot of time exploring it, but we haven't found the low-hanging fruit in biology, and we've kind of exhausted the physics orchard because what we found is so exotic that whether it's two black holes colliding or a third generation of matter or quark substructure, we haven't been able to use these things. Are we somehow between revolutions?

Why is it that in an era where physics is stagnating, we don't see these kind of minds? I'm a little skeptical of that theory.

Well, so I totally want to riff on this point because I think you've hit the nail on the head. To my way of thinking, the key problem is if you go back to our original contention, which is that there is something universally pathological about the stories that every institution predicated on growth has to tell about itself when things are not growing. The biggest danger is that somebody smart inside of the institution will start questioning things and speaking openly. And it seems like the polymaths would be the people who could connect the dots and say, 'You know, there's not that much going on in my department, there's not much going on in this department over here, not that much going on in this department over there.' And those people are very, very dangerous. You know, one of my friends studied physics at Stanford in the late nineties. His advisor was this professor at Stanford, Bob Laughlin, who in the late 90s, brilliant physics guy, late nineties he gets a Nobel Prize in Physics. And he suffers from the supreme delusion that now that he has a Nobel Prize, he has total academic freedom and he can do anything he wants to. And he decided to direct it at... I mean, there are all these areas I shouldn't go into, question climate science, there are all these things one should be careful about, but he went into an area far more dangerous than all of those. He was convinced that there were all these people in the university who were doing fake science, wasting government money on fake research that was not really going anywhere. And he started investigating other departments, started with the biology department at Stanford University. And you can imagine this ended catastrophically for Professor Laughlin. His graduate students couldn't get PhDs, he no longer got funding. Nobel Peace Prize, sorry, Nobel Prize in Physics, no protection whatsoever. Julian Schwinger fell out of favor with the physics community despite being held in its highest regard and having a Nobel Prize. And he used the epigram in a book where he wanted to redo quantum field theory around something he called source theory: 'If you can't join them, beat them.' And I think it comes as a shock to all of these people that there is no level you can rise to in the field that allows you to question the assumptions of that field.

Well, I remember discussing with a president of a very highly regarded university. He came to me and said, 'Can you explain how your friend Peter Thiel thinks? Because I just had a conversation with him and I could not convince him that the universities were doing fantastically, this university in particular. How does he come to this conclusion?' And I said, 'Well, look, Peter doesn't come with a PhD, but let me speak to you in your own language.' I started going department by department talking about the problems of stagnation. It was very clear that there was no previous experience with any kind of informed person making such an argument. I mean, this was a zero-day exploit.

Well, he was possessed of an idea that the intellectual elite, in which he undoubtedly saw himself a part of, had the right to transgress boundaries. And I think what's stunning about this is the extent to which this breed of outspoken, disruptive intellectual has no place left inside of this system from which to speak.