Formula for success is simple. We invite extraordinarily bright speakers who offer bold perspectives, perspectives which rarely get a hearing in manhattan ballrooms or progressive cabins. Inivering the reston lecture 1995, that was a huge laugh line. [laughter] are we napping . Delivering the restaurant the reston lecture in 1995, the speaker asked why americans were unhappy with the country that was more powerful and prosperous than ever. He drew attention to signs of disorder, crime, failing schools a coarsening culture and deteriorating civic life. Wilson argued 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 talking about mayor de blasios much lamented return from iowa. [laughter] you are getting there. [laughter] this disorder is the consequence of a nationwide effort to roll back many successful policies that mi scholars have spent careers advancing. President ial campaign may have ground to a halt, surprisingly, but the preposterous policies he supports are moving full steam ahead, carried on platforms of less incompetent but equally s. Dical candidate we face an opioid and single parenthood crisis, overlooked for too long by the experts. Americas labor market and civic wellbeing 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 through higher education, that indoctrinate our students to be shamed of western civilization and to despise private enterprise and economic freedom. As for todays campus culture, lets just say it welcomes a broad diversity of ideological viewpoints, from noam chomsky on the way to robespierre. Willsons remarksbroad diversitl in 1995 and their residents today is typical of the approach of the manhattan institute. Mi scholars have never been afraid to challenge conventional thinking and offer bold solutions. We are persistent, and when we have a view about something, we do not back down under pressure cloistered and cabals of holier than thou academics. Times, andith the also more so with the journal. [laughter] dan . Is [laughter] but we have stood for certain principles, rule of law, public safety, free markets, and the belief culture is a key determinant of the welfare of societies. In investing, where i spent 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 dont know. When i first started investing, my dad thought that if his son was brilliant enough to get into harvard law school, he must be smart enough to make money in the stock market. Wrong. [laughter] learned the hard way that listening to 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 each new era rings. It is the same in policy and politics. And the manhattan institutes embodiment of this he thousand is what gives us our competitive advantage. It is embodied in the outlook of our new president. [applause] and his then ryan wasuthor ross douthat, challenging the gop to adapt Guiding Principles to new political realities. He is bringing the same spirit to his new leadership of mi, and we are looking forward to his leadership. Our lecturer tonight is another example of this spirit of independence, persistence and innovative thinking. Effectiveof the critics of groupthink, whether in business, politics or philanthropy. Peter thiel is an entrepreneur, Venture Capitalist, and in the words of economist tyler cowan, one of the most important public intellectuals of our time peter of our time. Peter spent his life in Silicon Valley and helped found paypal, invested in facebook and cofounded a Data Security giant as well as a Venture Capital firm, founders fund. While peter has been one of the most successful architects of the information age, he has also been one of the most incisive critics. Peter argues our technological imagination has been too modest, 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, latenight car rides, and being able to tell your friends that you liked what they had for lunch. [laughter] 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 philanthropists and scholars, peter has committed policy to preserving the framework necessary for experimentation, growth, and most critically, 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. Society that sensors 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 ideas maymob, but to actually d ,omething 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. Please welcome peter thiel. [applause] paul, thank you for that flattering introduction. I was worried it would go downhill from there. I thought it would start with a modest story, 20 years ago, i was starting with paypal, brainstorming on advisors, trying to do this innovative finance and tech company, and you should talk to Walter Wriston. My response was, who is Walter Wriston . He complainedand about how america doesnt know any thing about the past and tell young people in america have done a terrible job by not honoring great Business Leaders and innovators to it so i am honored to try to correct this in some small way. And the part of the Walter Wriston legacy that is still so present, he transformed citigroup, scaled it up like crazy from a bank that served the city to a bank that serves the world, atm sheehan, credit cards, interstate banking, turning into a money center bank. Of wristone legacy draws our attention to our questions of scale, problems of scale. That is what i would like to focus on tonight, that we have a question of scale. If something is good, more of it is better, so there is a quantity element. There is also a quality element of once you get to a certain scale, you qualitatively do different things. So this was a position for citibank. And perhaps there is also a formative dimension where you are changing the world into a better place. And from a libertarian or freemarket perspective, perhaps toing, expanding capitalism transform the world on a trans political level. That was certainly the hope that wriston had. And in some ways this resonated me resonated with me deeply when i was starting paypal, and had a vision that we argan to lead that we are going to revolution, a libertarian revolution from Central Banks and go to control, to this trans political level to transform things. There are qualifiers on this. [indiscernible] all right, i will slow down a little bit. I have a lot to say, though. [laughter] there are times when this sort of transformation does not work in a libertarian direction, and the global scale can be different. Think of margarets biggest mistake. She thought in the late 1970s that embracing the eu would be a way to crush the unions in the u. K. So you went to a trans political scale to bring about more free markets in the u. K. , and a decade later she thought of this as her worst decision ever, where the free trade of the eu brussels that regulates everything from the size of bananas on down. So there are a lot of challenging questions about scale. If we were to tell two technological stories about scale at this point, one is the crypto revolution, which is going on with bitcoin and has this sort of libertarian potential. But there is an alternate tech story, ai, big data, centralized databases, surveillance, which does not seem libertarian at all. Watchingthe big eye you all the time at all places. Ideology has a certain valence. If we say crypto is libertarian, why cant we say ai is communist, and at least have an alternate account of scale . So there are things where you scale things up and you get a qualitative difference in the qualitative difference isnt good one. We need to think very hard about which ones play out in which ways. And i think for wriston in the 1970s, if you want to summarize it as a picture, if manhattan 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 that finance, technology, and the internet form has a natural, limitless scale, and that makes sense. There are a lot of other things were scaling is very different. I think in a democracy where you have a majority vote, that is good. If you have a super majority, that is better, 51 , you are probably right, 70 , you are even more right. If you get 99. 9 and percent of voters, you are sort of in north korea. So there was always this wisdom of crowds that works up to a certain point, and then that transitions into a madness of crowds. This is the Unhealthy Development in the Silicon Valley in recent years. We had very positive Network Effects that have tilted in this more negative scale, which seems completely deranged in recent years. I suspect this will be bad for least. Ion, at maybe business can still work at scale, but one thing that does not scale well at all our ideas and innovation. There are a lot of critiques of big tech can discuss. One critique i am sympathetic to is that innovation does not scale well. And as the Tech Industry has gotten bigger, or bigger governments, things like that, they are going to have innovation more slowly. So whether we go to the communist ai or the libertarian crypto world, or some complicated intermediate hybrid, i think it will happen slower than people think. That is a big concern i have. One other institution i think has scaled quite badly, i always think of science as the big brother, the older brother of tack who has fallen on hard hasr brother of tech who fallen on hard times. Big science has scaled badly. Think of universities, they give us this east they give us this ether osa about universal knowledge, and tickets scaled to an extraordinary degree, and the lies we tell about big science have been linked with university lies. A lot of our problems can be described in this way. My candidate for the everst lie the obamas told, a lie much bigger than any inaccuracy told by the current president , bigger than anybody. And im not concerned about lies or, the wmd thing in iraq if you like your doctor, you can keep it, there was partisan pushback, but this is all encompassing end it follows from getting the scale wrong. And they both did it. I will go Michelle Obama first. The one thing i have been telling my daughters is that i dont want them to choose a name, to go to top schools. We live in a country that houses amazing universities, so the question is, what is going to work for you . We know they were lying. The obamas daughter ended up going to harvard. [laughter] but it is reassuring. It would be very disturbing if they actually believed this stuff worked at scale way they claim it does. Her husband came up with a more six and one, telling to lies at once. Just because it is not some namebrand, famous, fancy school, doesnt mean you not going to get a great education there. First off, if it isnt a namebrand, fancy school, you are not going to get a great education, you are just going to get a diploma. If it is a namebrand school, you probably also want to get an education. [laughter] to right size the scaling for our intellectual life, you should describe harvard not as one of thousands of great universities, you should describe it as a studio 54 nightclub, it is a tournament, probably good for selfesteem and bad for the morals of the people who go there. Probably not a criminal thing, doesnt need to be shut down, but probably does not deserve a tax deduction. [laughter] back to this sort of, the last, 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 . Frame, framework for this, and there is a different question you can ask on level, manhattan, new york city, it is sort of the capital city of the world, we cant, cant really go back from that, because you cant be the, go back to the capital city of new york. Albini has more standing in the u. S. Constitution the new york city, but dont but we dont really want to turn into albany or Something Like that. There are certain questions about how, how do we succeed at scale in these places . , firsts Silicon Valley with this question, but i want to focus it on the Silicon Valley version of this question, but i want to focus on the United States version. And the uniteds quake the United States question is, is it the best strategy for the United States to go big with a global scale . In u. S. History for at least the last 100 years, everything from woodrow wilson, the new deal after world war ii setting up a Global Institution from which they would run the planet from washington dc, and there was sort of a sense of the u. S. Was at scale and should go to always operate on an even bigger scale, and you should be leading the 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 is the only country that doesnt have an american embassy. [laughter] thishis was in some sense, was in some sense a very good strategy for the u. S. It was to lean into the bigness of the country and to go even bigger. But i think there are sort of someways where we may need to update this in the world of 2019, and in some ways it is shaped by the rivalry with china. Rival we think about a that is also incredibly big, simple bigness is not necessarily the right strategy. Vectors of the four globalization, movement of goods, freetrade, movement of people, migrationintegration migrationimmigration laws, movement of capital, banking, finance, movement of ideas, the internet. It made sense for the u. S. To these things, the biggest we should have gotten outsized returns from scale. Maybe only two of them are still ones that the u. S. Really has a the biggestpowerful advantage,k it is finance and the internet, even though of course we have misgivings about those two, and there is sort of a sense in which we dont fully trust the banks, we dont fully trust the tech companies, they dont fully trust the u. S. , so the feeling is mutual, so it is difficult for the u. S. To 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. There was a little bit of distortion but not that inaccurate. It would be inconceivable today to hear the ceo of Goldman Sachs or google to say, what is good for Goldman Sachs is good for america. It would be inconceivable. So even though this is the model that probably should still be worked on, it is a tough left tough lift. When you think of trade or immigration policy, the scale question is more sobering for the u. S. We are not able to compete with china at scale. When you have seven of 10 of the largest container shipping ports in china, and the largest in the u. S. , los angeles, is only number 11. It is making the world safe for the Chinese Communist oneworld state at the end of the day, that is what you are tilting towards. Iton the immigration issue, is striking how difficult, how much better china is that moving goods and people then we are. Has had the greatest internal migration of any country in the world in the last 20, 30 years. If you look at shen jen in southern china, it had 60,000 people in 1980. It has expanded to Something Like 12 million, a growth factor of 200 in the last 40 years. To use the contrast of new york city, we had 7. 1 Million People in 1980 and it has grown to 8. 4 million in the last 40 years, and it is simply not scale on people. We can scale on finance, but people are real bad at scaling. It cost 850 million to build one mile of subway in new york city, and it is less in paris. So any attempt to scale on people is not the place we should be competing. So there is i think some urgent need to rethink all these different scale questions, where is it going to be much more challenging . Ofm not a fan [indiscernible] were i am not a fan of aoc, but her argument was that amazon should not come to new york, it would drive up prices for everybody there. We have to ask seriously if that is not entirely wrong . In a place where zoning is so controlled it is not possible, it is hard to build new things, new transportation, things like that, and there is a famous economics theory from henry george in the late 19th century that in a certain city that is too restricted in heavily regulated, the inelasticity of thatestate conflates so any gain in the economy of the city flows to landlord. This was also a libertarian argument because you could say need to get rid of all welfare in new york city because all the welfare goes to landlords, because it is 100 of a transfer. And it is also an argument we would have to rethink migration very hard. To the extent china is focused our competition china has focused our competition, it suggests we need to think about scale differently. It is an open question where the u. S. Should go. I dont think we can go subscale rate it is not like israel or switzerland or Something Like that. We are taking you live now to a church in miami, florida, where President Trump will kick off his evangelicals for trump coalition. This is live coverage on cspan. And