Who offer perspectives which rarely get a hearing in manhattan ballrooms or progressive caverns. Delivery in the wriston lecture in 1995 that was a huge laugh line are we napping . [laughter] delivering the lecture in 1985, james q. Wilson asked why americans were so unhappy with a country that was more prosperous and powerful than ever. He drew attention to several insufficiently addressed signs of disorder crime, failing schools, a coarsening culture, a 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 am not just referring to mayor bill de blasios much lamented return from iowa. [laughter] you are getting there. [laughter] [applause] this disorder is the consequence of a nationwide effort to roll back successful policies that scholars have spent in their careers advancing. Bill de blasios president ial 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 lesson confident, but equally radical candidates. Here in new york, but not just in new york, we face an opioid and a single parenthood crisis overlooked for too long by the experts. Americas labor market and a civil wellbeing suffer from an Education System that continues to prioritize bureaucrats and administrators, as well as entrench power over students. Not to mention the curricula, now ubiquitous throughout higher education, that inductor needs our students to be ashamed of western civilization and to despise private enterprise and economic freedom. As for todays campus culture, lets say that it welcomes a broad diversity of ideological viewpoints from noah chomsky all the way to robespierre. [laughter] wilsons remarks in 1995, and their echo today, are typical of the work and approach of the manhattan institute. Scholars have never been afraid to challenge conventional thinking and offer bold diagnoses and solutions. We are 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. M. I. Adapts with the times, but more so with the journal. [laughter] [applause] where is dan . [laughter] but we have also stood for certain principles, rule of law 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 views while at the same time maintaining a good deal of humility about how much you do not know. When i first started investing, my dad thought if his ascent was brilliant enough to get into harvard law school, he must be smart enough to make money in the stock market. Wrong. [laughter] i learned the hard way that listening to the socalled authorities and blindly following the trend was no substitute for starting from a few Core Principles and applying them in innovative ways to the unique investing challenge that each new era brings. It is the same in politics, and the manhattan institutes embodiment of this at those is what gives us our competitive advantage. It is embodied in the outlook a brandnew president. [applause] back in 2008, he and his coauthor were challenging the gop to adapt its Guiding Principles to the new political realities. He is bringing the same spirit to his leadership here, and were looking forward to the leadership he has in store. Our lecture tonight is another example of this a spirit of independence, persistence and innovative thinking. He is also one of the most effective critics of groupthink, whether in business, politics or philanthropy. Peter thiel is an entrepreneur, a Venture Capitalist, and in the words of tyler callan, one of the most important intellectuals of our time. Peter has spent his professional life in Silicon Valley. He helped found paypal, and more recently cofounded Data Security giant pelletier, as well as the Venture Capital Firm Founders fund. While he has been one of the most successful architects of the information age, he has also been one of its most incisive critics. He argues that our technological imagination has been to modest, too content of food along 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, latenight 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 size maxim worthy of our age. We wanted flying cars, and settled for 140 characters. At first, i did not understand the reference. Perhaps because i am banned from twitter. [laughter] [applause] 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 framework necessary for experimentation, growth and most quickly, americas reputation for unimpeded inquiry, which has historically driven our culture of innovation, and must do so again if we are to meet the unique challenges of this century. A society that challenges the sensors, 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 lecture. Ladies and gentlemen, join me in welcoming peter thiel. [applause] thiel paul, thank you for that incredibly flattering introduction. I think it is downhill from there. I thought i would start with a modest story. This was from about 20 years ago, i was starting paypal and i was speaking to a friend at the hoover institute. He thought, we are trying to do this innovative, finance tech company, talk to Walter Wriston. My response was, who is Walter Wriston . He complained about how young people do not know anything about the past and how america has done a terrible job of not honoring its great Business Innovators and leaders. So i am honored to be here tonight to try to correct this in some small ways. And part of the legacy that i think is still so present here , he transformed citigroup into he scaled it like crazy from the bank in the city to a bank that serves the world with atms, interstate banking, credit cards, turning it into a money center bank. And then what the legacy draws our attention to in so many ways are the questions of scale and problems of scale. That is what i want to focus on tonight, that we have a question of scale. If something is good, more is better. And then of course, the quality element, where once you get to a certain scale, maybe you do different things. This was the vision for citibank. And then perhaps there is also another dimension, where maybe you are changing the world into a better place. From a freemarket perspective, perhaps by making or expanding capitalism, you can transform the world on a trans political level. That was the hope that walter had. In some ways, this resonated with me deeply when i was starting paypal, where we had this vision we will lead this financial revolution against all central banks, we would liberate money from government control, and we were going to go to this trans political technological level to transform things. Of course, i think that there are a lot of qualifiers. Please slow down. Thiel ok, i will slow down a little bit. I have a lot to say, though. There are times when this transformation does not work in a libertarian direction. And the global scale can be quite different. And i sort of think of margaret thatchers biggest mistake, she thought that embracing the European Union would be a way to crush the unions in the u. K. , so she went to a trans political scale to bring about free markets in the u. K. A decade later she thought of this as her worst decision never, where the freetrade of the eu came with a not so inexpensive brussels and that would regulate everything from the size of bananas all the way down. So there are kind of challenging questions about scale. If we were to tell the two technological stories about scale at this point, one of them is a story about it is this crypto revolution, which is still going on with bitcoin and has this sort of libertarian potential. But i think that there is an alternate tech story, which is about Artificial Intelligence, centralized databases and a surveillance, which does not seem libertarian at all. So eyes watching you at all times, and all places. I think we live in a world where there is a certain valence. If we say that crypto is libertarian, why cant we say that Artificial Intelligence is communist . And have this sort of alternate account of scale. So there are things where you scale up, but the difference is not always a good one. You think hard about which ones play out and in which ways. And i think that for walter in the 1970s, to summarize it as a picture it was it is manhattan, if new york city was going to scale, the next scale was the world. That was the scale on which one had to move to. I think there is a sense in which finance, technology and the internet had a natural limitless scale and that kind of makes sense. There are a lot of other things where scaling is different. I think in a democracy, if you have the majority vote, that is good. If you have a super majority, that is even better. 51 , youre probably right. 71 , you are more right. If you get 99. 9 of voters, you are sort of in north korea. [laughter] so there is always this wisdom of crowds that works up to a certain point, then it transitions into a madness of crowds. I think that is the Unhealthy Development that has taken place in recent years in Silicon Valley, where we had positive effects, then it tilted into a negative thing, which seems completely deranged in recent years. I suspect that this will be bad for innovation, at least. Maybe the business can work at scale, but i think one of the things that does not scale terribly well at all are ideas and innovation. There are a lot of different critiques of big tech that we can discuss, but one critique i am sympathetic to his innovation does not scale well. And that it has as the Tech Industry has gotten bigger, bigger governments, things like that, you are going to have innovation more slowly. So whether we go to the communist a. I. , or the libertarian crypto world, or some complicated intermediate hybrid, i think we will actually see that happens lower than people think. It is a big concern i have. So one of the other institutions that i think has a scaled quite badly, i always think of science as the big brother, the older brother of tech, who has fallen on hard times. And big science has scaled extremely badly. You think of the universities, they sort of have they see those that they give us universal knowledge. It is something that has scaled it to an extraordinary degree. And the lies we tell around big science have been linked in with university lies. And i think that a lot of our problems can be described in this way. Im going to this is my candid my candidate for the biggest lie the obamas ever told, much bigger than any sort of inaccuracies told by the current president , bigger than anybody, and im not concerned about lies like the thing in iraq, or if you like your doctor, keep him, because there was partisan pushback, but this one is allencompassing and follows from getting scale wrong. And they both did ladies first, michelle obama. The one thing i have been telling my daughters is i do not want them to choose a name. I do not wanted them to think i should go to these top schools. We live in a country where we have thousands of amazing universities, so the question is, what is going to work for you . At scale you obscure the differences. We know that they were lying. They ended up going to harvard. [laughter] and just it is reassuring. It would be disturbing if they believed this worked at scale in the way that they claim. Her husband, he came up with a more sustained one, telling to lies at once. Just because it is not a fancy school, does not mean you will not get a great education there. If it is not a fancy school, you will not get a great education, you will just get a diploma. If it is a namebrand fancy school, you probably also will not get an education. [laughter] [applause] so, you know, if we were to right size the scaling for our intellectual life, usually describe harvard not as one of the thousands of universities, you should describe as a 54 nightclub. It is good for the selfesteem, bad for the morals of the people who go there. Maybe call it a wash. Probably not a criminal thing, it does not need to be shut down, but probably does not deserve a tax deduction. [laughter] [applause] if we come back to sort of the, 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 . How would one update the wriston perspective . I think that one sort of framework for this is there is a different question you can ask on the level of manhattan, new york city, it is sort of the capital city of the world and we cannot really go back from that because we cannot go back to the capital city of new york. Albany has more standing under the constitution they new york city, but we do not want to turn into albany or Something Like that. So there are questions about how we succeed at scale in these places. So Silicon Valleys version of this question. I want to focus on the United States version and the question for the United States is, is the best strategy for the u. S. To go big, to go with this sort of global scale . This has probably been a threat d throughout the u. S. History of at least of the last 100 years, everything from woodrow wilson, the new dealers setting up the global institutions from which they would run the planet from washington, d. C. , and there was a sense the u. S. Was at scale and should go or always operate on a bigger scale and should be leading a world revolution. Not always a libertarian one. I was reminded of the joke, why is the u. S. The only country in the world where revolution is impossible . Because it is the only country that does not have an american embassy. [laughter] but this was in some sense a good strategy for the u. S. , to go even bigger. I think that there are some ways we may need to update this in the world of 2019, where and in some ways it is shaped by the rivalry with china. And if we sort of think about arrival that is also incredibly big, simple bigness is not necessarily the right strategy. You think of the four vectors of globalization i think it is movement of goods, freetrade, movement of people, immigration laws, movement of capital, banking, finance, movement of ideas and the internet. And it made sense for the u. S. To lean into these things because being the biggest sort of got those outsized returns from scale, where as i think if we ledger on these things today, only two of them are still ones that the u. S. Really has a powerful advantage in, and i think it is finance and the internet. Even though we have misgivings about those two. And there is a sense in which we do not fully trust the banks. The feeling is mutual. 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 is good for gm is good for america. It would be inconceivable today for the ceo of Goldman Sachs or google to say, what is good for Goldman Sachs or google is good for america. It would be inconceivable. So even though this is for the model that we probably should still be working on, it is quite a tough lift. I think when you think of trade or immigration policy, it is a scale question it is much more sobering for the u. S. We are simply not able to compete with china at scale, when you have seven of the 10 larger shipping ports are in china and los angeles is number 11. Making the world safe for container shipping it is making the world safe for the Chinese Communist one world state at the end of the day, that is what you are tilting toward. On the immigration issue, um, its striking how difficult at 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 world in the last 20 or 30 years. You look at southern china, it had 60,000 people in 1980. It has expanded to Something Like 12 million with a growth factor of 200 in the last 40 years. And again, i will use the contrast of new york city, where we had 7. 1 Million People in 1980. It has grown to 8. 4 Million People in the last 40 years, and it is not scale on people. We can scale finance, tech, but people we are really bad at scaling. Billion to build one mile of subway in new york city, it is only 400 million per mile in paris. That suggests any attempt to scale on people is not the place we should be competing. There is some urgent need to rethink all these different scale questions, where we will be good, where will it be much more challenging. Im not a fan of aoc to say the the least, if if you were to steelman of those arguments, that amazon should not come to new york, the argument was basically that it would drive up rent prices for everybody there. We have to asked seriously if that is not entirely wrong, what is the elasticity in a place where the zoning is it so controlled it is not possible or very hard to build new things, like transportation, things like that. There is a famous economics professor, henry george, in the late 19th century who said come in a city that is too heavily regulated, the elasticity of real estate ends up being so that any gain close to the landlords. The mistake they made was this is also a libertarian argument, because you could say that you need to get rid of all the welfare because it goes the landlords, because it is 100 of a transfer. And it is an argument that we would have to rethink migration very hard on. So to the extent that china focused our competition, focused our competition, it suggests we need to dig about scale differently. It is a very open question where the u. S. Should go from here. I do not think that we can simply go subscale, not like israel or switzerland or Something Like that. I would like the u. S. To be a tax haven. I do not know if that works at our scale. But it is a very urgent question to think about what are the kinds of places we can scale and in a good way where we can win and to do that better in the years and decades ahead. If i had one general thought on it, i would say that perhaps we have to shift a little bit from quantity, from simply scaling in size, to quality. That is sort of the question. And that this is backed innovation, back to intensive growth, not just doing more of the same but a shift toward i. P. Protection, 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 an advantage of that we have to think through really hard visavis china. A place i think that this one thing i always find so befuddling is why these questions of scale have not been asked for such a long time, why they china revelry in some ways has remained obscure for as long as it has. And i sort of think in closing i will give my thesis on the left and right, sort of some ideological blindness we have had, and it is critical on both sides. I think on the left, asking questions about what to do on the scale of the United States, the distraction machine has been driven by identity politics of one sort of another. Sort of like a subscale. We do not think of the country as a whole, we think of subgroups. And i think that is something selfcontradictory with identity politics. I think that you start with what makes you unique, it means what makes you the same. You start with a, you can prove anything. I think that the politics monster gets crazier and crazier. But it does seem to have a lot of energy left. And until the left can move on from identity politics, it will not be able to focus on the scale we need to be focusing on for this country. Docknk from the right, the us totrine i would urge rethink is the doctrine of american exceptionalism, put the u. S. On a scale where it could not be compared to any other country or place. You can think of exceptionalism, i use the theological analog, it is like the radical monotheism of the god of the Old Testament or the koran where you cant say anything about god. Exceptionalism is like saying or u. S. Cant be measured compared or evaluated in any way. , say you arewhen exceptional in all these ways, you are off in different ways. You end up with some ways that cost 3. 8 billion a mile, overweight people, people who aware andf unself the 20rective is in 20s, the United States needs to settle for greatness. Thank you very much. [applause] has agreed to take questions. What anyone care to volunteer . Should we shout it out . Ah. A. I. , you tech people are so annoying. How much of us old people know what ai is . Why is it communism . There are a lot of qualifiers to this. Ai is the buzzword of the day. It can be the terminator movie where it is a robot that kills you, it can be all of these creepy social credit scoring things in china. Practice, the main ai applications people talk about are using large data to monitor people and know more about people than they know about themselves. In the limit case, maybe it can solve a lot of the economics problems where you can know enough about people than they know about themselves. You can enable communism to work, maybe not as an economic theory, but as a political theory. Leninist. Nitely china loves ai. It hates crypto. Something. You and then there is a common sense level. People are creeped out and this is why. We should label it accurately. [inaudible] what does a hopeful, Great America look like . What can we look forward to . What are your hopes the next 24 months . Mr. Thiel i certainly hope the country has more of a future than 24 months. [laughter] my hopes are we find a way back to a more intensive growth. Sort of the focus on dividedation, we have the world into developing and developed countries. Developing countries are converging with the developed world. Developed worlds are saying, the future is just not going to look different than the present. Its an internal groundhog day. Logjam breaking that would be good. There will be differences from the present. Weve had progress around tech and i. T. Around the world of bits. Us,iphone, that distract distract us from how old and unchanging our environment is. You are on a subway that is 100 years old. I think a healthier form of progress would happen on many fronts. We can debate why that has not happened and the challenges. Innovation, to see not just narrow iphone app. But across the board. You talked about in the past Silicon Valley, universal basic replaced byybody is robots. The average american is not going to have a job. That is a common view in Silicon Valley and new york. This, as tapped into people have been left behind. You also agree we should be more nationalist. Tech and the San Francisco centric world making room for people to enjoy the American Dream . Whatever that looks like for the next 50 years. I disagree with all of the premises behind your question. You have bought the google propaganda. Lets articulate this. We have runaway technological progress. A lot of people will be left behind. This does not show up in the data. We have 3. 5 unemployment. Productivity numbers are unique. It does not show up in the economic data. That is the starting point. If you think about automation and the rate of automation, it over two hundred years, since the industrial revolution. My suspicion is the rate has slowed because the things we can automate easily, like farming, have been automated. Even if we are still automating manufacturing at 5 per year, it is a smaller part of the economy. The gains are slower. The sectors that are left are the same as they were 100 years ago, kindergarten teachers, nurses, all of these nontradable jobs are immune to automation. Why things have slowed. We also have this story this is about to change. If you look back over 40 years, the simple reason is slowed is because the sectors immune to automation have become bigger parts of the economy. I dont know. I tend to think the Silicon Valley ubi discussion is this magic trick where we draw your attention away to something else. Technology is going to take your jobs. We should Pay Attention to people in Silicon Valley have not been doing enough. There are a lot of critiques of the Big Tech Companies and things they have done wrong over the last few years. My cut on why this is a political pushback is they have not innovated enough. Youou have done bad things, can say weve done these good things. The list of good things is lacking. Of google isne self driving cars. That would be an innovation. Theyve been promising it for 10 years. They talk about it less. The expected time seems to be expanding. It is not that big of an innovation. This ando quantify really think through how much is going on. These problems are even more serious on the science side. Scale,m this problem of if you are too big, it becomes impossible to actually know the particulars of what is going on. A feature of late modernity. Things are so specialized. We have the quantum Computer People saying they are about to build a quantum computer and you have these narrow groups of experts telling us how great they are. I cant resist mentioning the friends,from one of my his advisor at stanford, he got a nobel prize in physics. Delusioned from the that once he had a nobel prize he would have Academic Freedom and he could do what he wanted to. What he decided to do was investigate all the other scientists at stanford who he was convinced were stealing money from the government. A lot of input, but not much output. The grad students, he would come into their office, im very proud of you. We are on the front lines. We are battling against the universe. You can imagine how this movie ended. It was catastrophic. The grad students could not get phds. He got defunded. My suspicion is when there speech that is forbidden and questions are not allowed to be asked, you should assume those things are true. Believe we have time for one more question. [applause] please. Thank you. Shutter premise which i to offer, but i will. Critique of the notion of american exceptionalism, which i interpret to be a call for greater humility on a national level. That is my premise. If the premise is accurate and reflects your view, how might we achieve that on the political level . Is there a way . This is probably above my pay grade. I think the starting point is to frame the issues at the right scale. Inspiring. Ism can be theres something about it that is so abstract we are not able to talk about the details of what is going on. Onthing where what we focus these questions of detail will be helpful. That is the place i would start. Think the rivalry with push us to askto lees scale questions these scale questions. We still have a lot of advantages. We should think hard, where do we push and things like that. It is one of the few issues that are bipartisan. Coulda place where we have a reasonable discussion. Please join me in thanking peter thiel. [applause] [captions Copyright National cable satellite corp. 2019] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] journal,s washington every day with news and policy issues that impact you. Coming up thursday, as part of authors we, a former senator will join us to talk about challenges facing native americans today from his new book. Correspondent will be on to talk about impeachment and campaign 2020. Watch washington journal at 7 00 eastern thursday morning. Join the discussion. Watch authors week all this week starting at 8 00 a. M. Queen elizabeth the second delivered her annual christmas message from Windsor Castle located about 25 miles outside of london. The tradition of the message dates back to 1932 with a radio address by king george the fifth. Queen elizabeth made the first televised adjust
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