Summary Peter Thiel: The Stagnation of Science and the AI Revolution - YouTube (Youtube) youtu.be
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Speaker 0 We've you know, result in a society that was locked down, not just during Covid, but we've been in a soft lockdown down for for something like 50 years. We know the start of some sort of real Ai way. It's probably a breakthrough that's on par with the Internet itself of
Speaker 1 Hello, Fellow data nerds. My guest today is #peterthiel. Peter was the co-founder and Ceo of Paypal first in Facebook. Co-founder of Pal. He's also the founder managing partner of Co-founder Fund and the author of 0 to 1, which I think is 1 of the best business books ever written.
Speaker 1 Peter welcome to World Dash. Thanks for having, Warren. Now when starting company, how important is total addressable market?
Speaker 0 Well, it is it is... It is is always a necessary component. If there's no market at all, that's that's pretty pretty bad. But but there also are probably ways people can overs stress on on something like like Tam. And I always think that if you have a Tam that's too big, you know, it obviously ob skate.
Speaker 0 Other questions, which may be more important. If you have a very big total addressable market, you probably have a lot of competition. And and then that may create bigger challenges than having a a small market or something like that. So I don't know, the restaurant business has an enormous tam and it's a terrible business to go into you know, I think a lot of the energy business functions in a nearly comm modified way, which is why it tends to be business that's very hard for startups. To to find a really differentiated niche.
Speaker 0 So I I often think the, you know, the best Tam narratives are ones where you have a you have some sort of tight, fairly narrow Tam for the initial market and then there's some kind of expansion capability for and when Paypal launched our initial Tam were power sellers on ebay like 20000 or so. People in early 2000 then we got to 30 percent, 40 percent market share in about 3 months And then, you know, in a sense that was a tiny tam, but you could get you could get a foothold and you could sort of build a fortress. There and then from that base expand. And And do you know if you...
Speaker 1 If there's a way to expand from that basis is that just based on how talented the team is that based on, like, Okay. How important that that base or that center point is?
Speaker 0 Well, they're all there all sorts of intuition in in a payments context that there would be all these payments who will make on ebay off ebay, ebay itself was growing. We would gain share on. So there were sort of a lot of natural ways to to expand from it. And in the case of Paypal, you, it felt at the end of the day like, was hard radically expand beyond ebay and so in 2002, we sold the company to ebay. So it was a very powerful initial Tam it had a lot of expansion capability, but then crossing the Chasm to the off ebay market turned out to be quite hard to do.
Speaker 0 And so So then that... In in the context of paypal, it probably got us to an M and A exit.
Speaker 1 And when you think of, like, creating monopoly kind of very important. How do you think about that in relationship to, like, the venture capital context like outside of y comb, it doesn't... It seems like the rest of the Vc World is super competitive.
Speaker 0 Well, yeah, I always think that if you think about monopoly or moat or businesses with margins, you can always think a layer what. Which is the companies themselves. And then you second layer is the the financial investor layer. And And ideally, you as a Bc, you want invest in companies that are unique that don't have you know, too much competition, nature, barrier ridden tooth and cloth. But you also don't want to be competing too much with other B.
Speaker 0 And so I don't know. You can analyze it in much the same way as companies? You know, the sort of what are the kinds of mono anomalies? They're driven by brand. By network effect, sometimes by economies of scale, sometimes by by unique technology and the question is are there are there analogous things like that for venture capital firms where there some combination of of a brand, founder son had a brand where we are founder friendly.
Speaker 0 We started companies ourselves on the side, the co-founder. That was a very differentiating brand, and we started back in 2005, fast forward to 20 23 and lots of other people are saying it. And so maybe maybe it's a little bit more clutter. You have sort of try to assess that. Obviously are network effects where your network to some companies that gives you some sort of idiosyncratic deal flow, But then I think yeah, I think I think in practice it has to often be just reinvented on a on a deal by deal basis.
Speaker 0 And the poker analogy, Always like to use that when you're when you're investing in a company, It's always what do we understand about this, that other investors do not understand. And if you don't know the answer to the question,
Speaker 1 Been the sucker.
Speaker 0 You're the sucker. Yeah. It's like the poker 1 where, you know, you don't forgot who who's the who's the mark you're at the table and if you can't figure it out it's you.
Speaker 1 Now a decade ago, you were definitely 1 of the first people to call out that science wasn't progressing as fast as it had in the past. How is that paired in the last 10 years since since you've kind of been famous for making those statements?
Speaker 0 Yeah. I, I started talking about the text... Stag probably around 2 2008.
Speaker 1 Okay. Sorry you?
Speaker 0 And the and the claim is that it's been it's been it's been slow for at this point running on 5 decades really since the seventies that we've had limited innovation in the world of Atoms, you know I was undergraduate stanford for the late eighties, it was a mistake to major in anything having new adams but mechanical engineering chemical engineering. Nuclear engineering error were terrible decisions. And then the only thing that really worked were the world of bets computers, Internet, mobile Internet software. You know, to some extent, electrical engineering was so okay, but really computer science with was the 1 place where there continued to be this cone of progress. Yep.
Speaker 0 Around computers not debate. You know, how big that was It it certainly was very very unmet. Unbalanced. And it certainly I think it led some great companies. It's debatable how much it improved the Gdp relative to what what, you know, what we've seen say in the first half of the twentieth century, in the United States or the other developed.
Speaker 0 So I yeah. So I I broadly think that we've had this broad stag and technology and science for for something on the order 50 years.
Speaker 1 Is this Stagnation accelerating is the is it decelerating and now there's new waiver like, how where do you feel we are in that stag continuum?
Speaker 0 You know, I I think I think in some ways, we are roughly we are roughly in the same place. We've we've been for the last quarter century where it's it is there's there's a decent amount of progress in the world of bits. We had enormous internet wave in the, in the late nineties, maybe you know, the late nineties early, maybe we're now late in the Internet, but was that was a giant thing in computers and and we now have, you know the start of, you know, some sort of real Ai way even it's been talked about, you know, some ways for decades. But I think I think the L m's check Gp. You know, it's probably a breakthrough that's you know, I would Rank is on par with the Internet itself.
Speaker 0 It's it it is very big. And so I I think in this world of computers, we can say that, you know, the progress is continuing at. You know, and fits and starts, but you know, at at still a pretty a pretty decent pace. And then it's everything else that's been much slower, much harder to invest in you know, much harder for, yeah, much much, much less than advertising and much further from the science fiction, future of the jets.
Speaker 1 You you mean argument in your peace and the new criterion that kind of woken is that smokes screen for the lack of scientific progress. Can you unpack that a bit?
Speaker 0 Well, there's a there's a lot... It was it was sort of an ant high, woke and anti anti woke argument I was making where, you know I think there endless debates we can have about D, woke as political correctness, multi multicultural, all these topics. And on some level, I think they're important, know on some level, you know, I would advocate for certain certain certain views views on them, and I think the debates are important to have, And then on another level, I've come to worry that so many of these debates are distractions. It's like a magic show where... We're being h ties and we're paying attention to to it to a certain debate.
Speaker 0 We're not seeing the man in the orange monkey suit jumping on the back. I think something like this and and that diversity is a diversion from more important things. And the more important things can be questions of economics, questions of science, question of religion, you know maybe even other political issues, you know, the economics 1 just to rattle down the list real quick. The economics 1 is is just, you know, cultural marxism. The marxist is to critique cultural marxism is that it people took...
Speaker 0 They when they started focusing on race and gender, they forgot about class. They forgot about the real economics. And then this probably there's a Marxist sister libertarian critique where you can say that you, we've had just runaway housing prices, and that's that's the real problem we should be figuring out how to build more affordable housing. And that as long as we're talking about the other categories, we're not even going to be wrong not even gonna be in in the zone of dealing with that problem. And just there used to
Speaker 1 be the that the, like the Down were. For maybe better wages or better working conditions. Now it seems like some of these movements or think about things that are other than economic could be things you mentioned or the environment. Well, you know, is that is that also a smokes screen?
Speaker 0 I don't know if it's... You know, I don't know how cons you would get. Yeah There's a marxist conspiracy theory history where that was woken was a conspiracy the by the corporations to divide the workers and to race and gender, and pay them less. And I think there are I think there are various companies that know executed on something like that plan moderately well. There's Walmart in the 2 thousands was always in the dog house because it wasn't paying its workers up and they came up with the idea of rebranding themselves as a green corporation and that sort of split the left wing anti Walmart alliance and then in effect It was cheaper to do a little bit of green stuff than to pay the workers more and it was sort of a it was probably good for the Walmart shareholders.
Speaker 0 And and then was also in some ways, didn't really address some of these underlying economic challenges. I think I suspect there's something like that that's also going on with with the the question of science has been has been very obscured. And and And so that the, if you think of in the context of the universities or the schools, the woken tends to be focused on the der of the humanities, c and English or history or topics like that, whereas if the thing that's really wrong is that the scientists aren't making any progress, they're not inventing new things, you know, it's all sort of this corrupt peer reviewed research, incremental. It's sort of a it's a stagnant malthus soc institution and to the extent the sciences are the humanities are distracting us from sciences. You know, we're not even paying attention to...
Speaker 0 You know, I'd be fine with a little bit of woken if we were finding a cure for dementia, doing other things like that.
Speaker 1 And and is there is there is there some sort of structural reason why like, science is not progressing fast enough? Is there something like we can... Or is it just like all these 1 percent things that all add up?
Speaker 0 You know, the... I always think why questions are difficult? They're they're somewhat over determined There's there certainly is... There probably is some effect where certain feels. Have know, the easy things have been found, and it's hard to find new things.
Speaker 0 It's probably very hard to find a new element on the periodic table. So it's, it's hard to Don't you're not going find be like Christopher Columbus and find a new continent on this planet. So that, you certain certain fields get closed and get fully developed over time. But But I on the whole more inclined to sort of cultural explanations and it's not that nature has run out of things. For us, but that there's something that's changed in our culture we become 2 risk ave verse that things have gotten that you know, IIII think 1 1 dimension that III do think is fairly important 1 in the twentieth century is that there was a great deal of science and technology that was used in this sort of in this sort of military context.
Speaker 0 And you know at some point, you know the scientists and the engineers are just building, more powerful and more dangerous weapon systems. And know already, I think world war 1, it's all this carnage. It's sort of a ambiguous is all the science really more good than bad for humanity and then certainly 19 45 with los alamos and hiroshima. It's somehow I think tells us into a somewhat somewhat darker direction and there's there's something about the history of nuclear weapons where in my telling it It's a sort of delayed response It takes something like quarter century for it to fully sink in, but by by by by the early seventies it's like we can destroy the world 20 times over. What are we doing?
Speaker 0 Does this make any sense? And then you maybe we shouldn't be funding the smartest physicists to build bigger bombs, maybe we shouldn't be funding any of the scientists. Maybe they all need to be regulated and and it's kind of sad for these people to be know, putter around lots of brand applications and filling out all sorts of D forms. But maybe that's the price you have to pay to stop it from blowing up the world.
Speaker 1 And it does seem like it... Some of this correlates with just like the moon landing, like, which is this like incredible feat. And then it just seems like things started to slow down, like, right around that time. Is there is there something that... Is there something in the psyche?
Speaker 1 Like, oh, like... It's kinda like mission accomplished. Like, we can we can just now slow down.
Speaker 0 Industries complicated. There were a lot of things that happened. But I think I think there was it was possible to accelerate science and tech through centralization and government funding. Even even the Manhattan project, you know, the New York Times editorial a week after hiroshima, something like, you know, hope you know, if he left this to P donna scientists who decentralized the sort of an anti libertarian argument. It would take half a century come up with device.
Speaker 0 Instead the army was just telling people what to do, it organized the scientists, they were able to bring this invention in 3 point half short years to the world. And then in a way you were able to repeat, this sort of centralized, coordinated, pouring in lots of money approach with the Apollo, program and, you know, Kennedy, early sixties gives us the speech and by the end of the decade, we have we have a man on the moon. But then I think the longer term cost was that you created these very large bureaucratic institutions. You no longer had the innovations that were coming in that you could then scale and and somehow, became politicized and it slowed down a lot. So there were some I don't know.
Speaker 0 I'm not sure Faust and Bargain, but some kind of it trade off between you can accelerate 1 time, but then then you get a scientific like an agriculture, you can increase food production by having some some mono culture, but then over time, it's probably not the healthiest. Not the healthiest ecosystem.
Speaker 1 Well when you're dealing with Adams, like, there's a lot of safety problems and if you think of the even do you think of early now? So there's a lot of people that die. There's a lot of even test pilots on the side doing stuff. And it is that, like, so safety ism? Has that come to kind of slow innovation?
Speaker 0 Sure. I mean, it was, you know, I think Yuri Gaga, the the first the first cosmo not who circled the Earth 6, 7 years, maybe a decade later died in some test fight. Test pilots. So Yeah. You know.
Speaker 0 So it's so there... Yeah. There was a there was a... There was sort of a crazy amount of of of risk taking and, you know, without maybe yet without many any judgments about it, III would say that Yeah, we... There was something that shifted away from that.
Speaker 0 It just felt too dangerous. And it was too much risk. Of nuclear War was too much risk of environmental degradation. There were just too many crazy things. People people felt could happen.
Speaker 0 And I don't I don't I don't wanna dismiss these existential risks. But I I do think that the trade off is that we've... We've resulted in a society that was locked down, not just drink Covid, but we've been in a soft lockdown for something like 50 years. And and my my bias is always we need to we need to find some way to get out of the lockdown.
Speaker 1 How do you know when to, like, where to draw that? Line like, if you think of, like, not long after some of this scientific progress started slowing. We, you know, we mandated seat belts and you know and then you mandate, you know, bicycle helmets and you mandate helmets when you're skiing and, you know, and and so... And, you know, many ways, like, these things are good. They protect people and stuff like that.
Speaker 1 So how do you know, like, where and, how far to go? There there's some sort of, like, laugh curve of how far you go on the safety is inside. Right?
Speaker 0 Yeah. It's it's always it's always hard. It's it's it's it's hard to articulate the... You know, the the the kinds of places where it feels like we we've gone too far or where it's gotten hide. It's so gotten hijacked by various racket are I think we've gone too far on the safety side with real estate.
Speaker 0 Where it's, you know, it's runaway N. Yep, extremely strict zoning laws. And I'm looking out of my window here in Los Angeles and it's all these office buildings that were built in the you know sixties seventies, maybe 19 eighties are the most recent buildings. I can't you know, I I cannot see a single I can't see a single crane anywhere on the horizon. It's just...
Speaker 0 And that's that tells me we've gone way too far in something. As relatively important as real estate. And then I do think on the biomedical side, which is in an narrative that I've thought about a lot, you know. And always think and it always strikes me we could be doing so much more. There's there's so many approaches that seem seem quite promising.
Speaker 0 And then it is, yeah, the barriers are just very, very high. And I think we're and we're scared of the things that can go wrong, but we're not scared enough of the things that will go wrong if we do nothing.
Speaker 1 The Steven Pi was recently on the podcast and 1 of his arguments that's probably most associated with him is the idea that we've been on broad... Positive trajectory since the enlightenment enlightenment? Like, where does your understanding of history diver from pink?
Speaker 0 Well, it's... And there's so much I think is not quite right about it. It's it's it's it's certainly 111 part of the argument. You what... I mean, obviously, there are there's there's the ways that things are better than 02:50 years ago.
Speaker 0 And when George Washington had wooden teeth or something like that that seems that seems like at least 1 dimension of progress that we wouldn't want to go back to. And I think you know, 1 wouldn't want to go back, 02:50 years or even 100 years just in terms of a lot of quality of life issues. I think it's somewhat trickier question about the last 50 years. So I think something has has kind of hit the wall in the last 50 years. And that's know that's more it's more ambiguous.
Speaker 0 I the I think the specific pink argument that I find, very incorrect is just that the world's gotten more and more peaceful and that that violence has gone down. And I I always have this roof where you know, he's he's a psychology professor and he probably flu chemistry why he went into a field like psychology. And if you... So to chemistry physics, there's this very basic thing that the total energy of a system is the kinetic energy plus the potential energy. And when you measure violence, you're just measuring the kinetic energy, you know, how many bombs are being dropped.
Speaker 0 Yep. That's going down. But the potential energy, the number of nuclear bombs, the ability, you know the potential energy, potential destruction is way higher than it was 50 years ago. And so If we look at that, it tells us, I'm not sure that we should should be completely. Complacent.
Speaker 0 It's true that we're in this world where nuclear weapons have not been used since 19 45. I don't know why that's automatic, you know, if the North Korean dictator does a video of a nuclear bomb, a New King, the Golden Gate Bridge in San Francisco, and we treat this as a cartoon villain. And I'm not sure. We're supposed to deal with it. But I think I think I think we should be taking this up a little bit more seriously and and that things are, you know, that these existential risks are very real.
Speaker 0 And this is also where... And this also where I'm, you know, I'm not I'm not a lu night. I don't think we can go back. I don't think you can turn the clock back. But I think there are sort of all these other dimensions of existential risk.
Speaker 0 I think there's an Ai of existential existential risk that's where you know, I think el Az you'd gone kinda of crazy, but, you know, his arguments are not that bad. And the people in silicon valley do not have you great rebuttal to the existential risk of Ai. And there are know and there are environmental issues, not just climate change. There's sort a lot of different environmental dimensions where there, know there are serious existential risks. And we need to find some way to to talk about them, not just to minimize them like pink does.
Speaker 0 Find a way to talk about them, but but then not just shut everything down.
Speaker 1 And I think is it... The argument is partly what you're saying is that, you know, we could be a turkey the first week of... November or something and not know what's coming or as this society?
Speaker 0 Sure. Well, that's that that that's what that is that is what the existential risks. Argue... That's what all those arguments tell you. Yeah.
Speaker 0 And again, I I think even something like even something like the the very strange nuclear deter thing. It's like maybe these nuclear weapons never get used. That's not the way nuclear deter was supposed to work, was supposed to work we're supposed to think about them all the time and you're supposed to be scared. And then you didn't use them and it sort of worked during cold war from 19 49 to 89 and so And then the last, you know, 33, 34 years, it's it's sort of like we've just gotten psychologically exhausted from it. We don't think about it anymore.
Speaker 0 But that's... That's not really the theory of how the stuff is supposed to work. And yeah, maybe maybe the Us President can't actually launch a nuclear weapon. I think I think, know, I think Jfk will be Jay Nixon. I suspect that if a President Trump has said, you wanna push a nuclear button.
Speaker 0 I'm annoyed at the election results. I I don't think he could have actually done that. But I'm not sure the nuclear weapons are completely unusable.
Speaker 1 I Now you you've also pointed out that we've seen both a decline in religion and science in the Us over the last 50 years. And on the face of it, you know, 1 would think maybe just... That that these things were opposed, but you you you have some sort of belief that they're linked.
Speaker 0 Yeah. I don't I don't know if I bought I have a I have a great theory on how they're linked. But certainly, let me maybe say something about where... What what I think has gone wrong with science with on the philosophy of science. I always think the thing that's tricky about science is you're supposed supposed to fight the 2 front war against excessive dogma and against excessive skepticism.
Speaker 0 If If you're too dogma, you can't be scientific, and this is certainly early modern signs. Seventeenth eighteenth century you're fighting the excessive of dogma of the Catholic church. And or, you, certain views of you, pto astronomy or they were sort of like, and you need it and know scientist with someone who thought for themselves and question excess dogma. And then on the other hand, you also cannot be overly skeptical as a scientist. You know, if I don't if I don't trust my senses and if I think you might be you know, you you might not be who you appear to be or I can't.
Speaker 0 I can't you might be a demon or image or something like that. So it's carte human skepticism and there's some point where that's that's very bad for science. So you have to fight too much skepticism and you have to fight too much dogma and then somehow getting that balance right is is pretty hard. I would that I would say the history of science when it worked, it was certainly more on the anti dogma side and the anti skeptic side, was it was you it was some of both. My sort of rough qualitative sense if we fast forward to 20 23 is that it is 100 percent anti skepticism.
Speaker 0 And so we are always fighting the people who are too skeptical, the conspiracy theorists, the people. The people who do not believe the vaccine works. The people who are climate change skeptics, the vaccine skeptics, these stem cell, the Darwin skeptics, So it's all it's all fighting skepticism. And then whereas if you if you ask scientists, where are where is science too dogma today. Give us some fields where science is too dogma and less dogma, would be would be good.
Speaker 0 I don't think they could say anything specific at all. And that fact tells us that it has become you know, it has become as dogma as the medieval church was. And and and then the the only the only sort of anti dogma characters are and maybe it's like. Maybe it's in a children's science book where it's a little girl who's exploring the world and she is she's not dogma, but that's it's in Children's books that we have the non dogma scientist school in Grad school labs or something like that, where they're all regiment grow bots and we make sure that anyone who's even a little bit header docs gets thrown off the over overcrowded bus or something like that. So that's that's sort of that's sort of a model of what has gone wrong with science.
Speaker 0 And then maybe you know, talk about religion, say, say the Judeo Christian, part in particular. You know, there's there's probably... I I don't know, sort of 1 of the... Maybe the biggest maybe the biggest thing you can talk about is God. Maybe God is the biggest thing there is.
Speaker 0 And it's kind of a big difference whether or not god exists. And And if we're in the society where where we want people to be you know, where we have we sort of have peaceful coexistence by ob securing these big questions, downplay playing big differences, somehow the question of God's existence is almost too big for us to debate, and it's the kind of thing that that we don't really want to have 2 vigorous debates about because it's just we can't have differences that big to have a peaceful society. And so there's there's sort of our... Yeah. There's there's something there's probably something like...
Speaker 0 It's not quite dogma, but there's something about the dogma of things we've agreed not to talk about or to think about, that probably are you know, maybe it gets us peace, but it's sort of I think it's at the at the price of not thinking about some of the most important things or or maybe at the price of something like a frontal lob bottom for both the scientists the and the religious people
Speaker 1 I mean, 10 years ago, most of the people I knew in the Ai community were militant atheist. But today, it seems most of them are creation is they they think we're in a simulation. Like, why has that shifted?
Speaker 0 Well, I have IAI have a lot of different theories on this. Let me give 2 slightly different ones. III always... Well, I think I think the new Atheist, which is like slightly different group of people, but the Christopher hitch, Dented Dock ins, that whole crowd in the the early 2 thousands. There's a...
Speaker 0 As Sam Harris and so on. Christopher I I think they have somehow gone very out of fashion. And the read I have on that is that what they were doing in 2005, new atheism was a politically correct way to be anti Muslim. And so you were you God was a bad violent being and they're sort of ways you made it all purpose you attacked all the different religions, but the real target was you know, Isis, osama bin Laden, you know, you know, all all the A qaeda, all all these sort of craziest islamic terrorist groups. And...
Speaker 0 But it done sort of a politically correct way where it wasn't it was somewhat narrow, but that felt that felt like argument that was badly needed in 2005. When you pass forward to 2023, you know, the big geopolitical challenge for the west is not you is not seventh century fundamentalist, Islam, it's something like xi jinping thought and the Cc. And then and then this is sort of well, it's sort like a bo. It's kind of this... Consensus thing what everybody believes what everybody else believes.
Speaker 0 And it's disturbing the structure of it, Not saying the content, but this structure of it is disturbing close to the East Bay rational to to the sort of consensus scientific thinking. And so the new atheists had some very powerful things to say against bin laden, they don't have anything to say about why president G and the Cc are wrong. And and so they are no longer relevant because they can't... They can't even engage with, you know, our biggest geopolitical or intellectual, social challenge that the West faces. So that's that's sort of 1 1 bigger picture question.
Speaker 0 You know, I think within I think within the Ai context, they're sort of all, you know, the question about how this shift to the simulation, theory the universe happened is is a little bit... It's it's sort of a a little bit strange. You can you can can always say that a simulation where the universe is not made of atoms, but a bits was just a it just a social... Status game where the computer scientist were beating up on the physicists. And the physics people like to deal with matter and energy and particles and then the computer science people like to deal with zeros and ones and bits.
Speaker 0 And so if we shift from a multiverse to a simulation theory of the universe. That's is somehow the computer science people, you know, beating up on the physics people and you can think of it as inter department rival array of sorts. The the another... And I think these things can all I'll be over overturned. Another explanation I have for why the simulation thing became so powerful.
Speaker 0 Was I think it was somehow deeply linked to the Ai safety question. And I think the rough you know, some the the rough logic and it's not it's not air tight, but the the rough argument was that if you were in a multiverse and you you have you build this Ai, And it's very... And then there's a question as you build Ai, Ag, super intelligence, you know, will it be safe? How can you trust it will it be you know, will it be friendly humans? And and people are pretty optimistic about solving it, but it was already obvious in the early 2000, there were some pretty big theoretical problems.
Speaker 0 You know, if it's if it's smart, you than you, it might pretend to be friendly, it might fool you. It might not actually be friendly. If it's sort of a machiavelli belly or Darwin or operator. It's never going to be perfectly aligned with you. Its incentives may be diver from from those of human beings.
Speaker 0 So if you sort of model it as a Darwin or Machiavelli belly act, it's very hard to get the perfect alignment it. So the sort of you know, was there was a decent amount of optimism about the Ai problem generally because we were progressing in computers. So, it seems like we'll eventually get to Ai, Ag is there's a certain logic to that. But then the the friendly version of that's seemed a lot harder for these theoretical reasons even in say 2005. And so if your picture of the universe a multiverse, then it's it's, you know, the Ai or the Ag is in the future, and there is you know, it it seems unlikely it'll be friendly and it's, you know, when the singularity arrives, chances are we're all just going to die.
Speaker 0 If you're in the simulation theory of the universe where the simulation was designed, created by some, super Ag being, and in some sense, the Ag is in the past and the compatibility of the Ag with humans, seemingly was already solved.
Speaker 1 Yep.
Speaker 0 And so if it's been... If it was solved once, it can be solved again. And and and so there's a way that Yeah, there's a way that the simulation theory worked a as a partial solution to the very vaccine friendliness alignment problem. I don't need to expect. But I think that's sort of roughly why as people as sort of quasi psychological Stagnation I would give is as people were grasp with the the difficulty of building a friendly Ai, they grabbed onto to the simulation theory as the, you, everything's been solved already answer.
Speaker 1 Going back to the science, I've heard you say before that, like, when people name something science, it's generally less scientific, whether it's political science or social science, etcetera. Like, how does that is that is that naming convention by itself also means science help signs progress less quickly?
Speaker 0 Yeah. Well, it's it's it's sort of... Well, it's always a quite... It's it's sort of if you're insecure enough that you have to call something science. Then, yeah, sort of like the gentleman of protest too much or it's or like, it's it's this thing that needs the opposite.
Speaker 0 III think I think you know I think a lot of adverbs always mean the ops which is why should be very careful to use them. So it's like, frankly honestly. All out, you know, very means a little bit, you know. And so I think you should the general good editing technique is to try to get rid of all adverbs in your writing because they the default interpretation has that they they often mean the exact opposite, what they say. And anyway, and there's something like this with with science.
Speaker 0 And and you think that it's it's and certainly political science, social science, climate science, The strange 1 is in a ways computer science, which was when I was undergraduate at Stanford, it was Yeah. It was it was the people who were not very good at e or math went into computer science. And then it was it was this It's
Speaker 1 much easier. To get into, then do so many other engineers leaders.
Speaker 0 K you know, and and then it had this same superiority complex, and that's why the field grabbed onto the science label.
Speaker 1 Yeah. There's no... It's not called math science or or something like that or...
Speaker 0 Yes. So math is just hard.
Speaker 1 Yeah. Now the the the Us federal government is now has 32000000000000 or so in debt. Like, how do you think that impacts... The investments the country needs to make. Or how concern are you about it?
Speaker 0 Ben, it it it seems it seems like a very big problem. It's... You know, it's it's odd how it sort of has crept up on us. I I think for decades, people were saying that, you know, at some point all the government debt would squeeze out money from the private sector that you'd end up with more and more of the government budget, we would just interest on the debt or interest on the interest, there'd be some sort of runaway compounding. People already making this argument, the 19 eighties in a sort of an anti reagan way.
Speaker 0 And then somehow the people who cried Wolf, the it felt like they were wrong for for close to 40 years. And I think 1 of the reasons if if you sort of look at the history of why why was the debt able to grow and it seemingly didn't matter is that we had a we also had a bull market and in bonds and the interest rates steadily went down from something like 20 percent in the early eighties to basically 0 percent after thousand 8 from 2008 to, 02:21. We had sort of this 13 year period or so of with maybe small hiccup, but most mostly just 0 rates. And in a 0 rate world you can add add to the debt and the interest payments aren't that high. And so the annual cost of servicing the debt, in 20 21, you was something like 1.6 percent of Gdp, whereas in 19 91, it was 3.2 percent of Gdp.
Speaker 0 Yep. So so I think that's sort of my explanation for how this thing...
Speaker 1 And the interest rates were essentially significantly lower than Gdp growth. So you had that kinda going for us as well.
Speaker 0 Sure. But but but but at this point, it it feels like finally... Some something broke. We're, you know, no longer in a deflation context, you know, the interest rates have have spiked, the inflation has spiked. And I think we're headed for we're headed for a very, very challenging decade.
Speaker 0 And I worry that sort of a lot of these arguments people made for for 30 or 40 years have a lot of truths to them. And And that once, you know, once the rates are above 0, you know, it's the crisis is here and we have to we have to figure it out. Probably 1 other 1 other thing that both helped and hurt the United States was that was that we were the reserve currency for the world. And so you could run bigger deficits than a normal country could, you could get away with it for longer. And then there's always a question whether at some point that that means you're in a bigger hole in a crazier place vis to vis things.
Speaker 0 I'm I'm, you know so You know, when When I look at the Us versus other countries, the the conundrum, I'm very stuck by stock plays. There are all these challenges in the U. Us. And you know, all these problems we face And then it's very oddly still the case that almost everything else seems worse. And I I don't know if that makes it stable and this can continue, but that's...
Speaker 1 Right. Is it is it just, like, relative matters? It's like the fastest person wins and even if we're much slower, like, it doesn't matter or or or is it the absolute matters.
Speaker 0 We're still the most dynamic society. We're the place where the innovations are still happening. I'd like there to be more, but it's it's it's it's it's it's it's striking how how how Asymmetric it is. I11 metric I was looking at was companies started since 19 90 that have market capitalization over 100000000000. So brand new companies that have grown to be worth 100000000000 dollars or more.
Speaker 0 There are 17 in the world 11 are in the Us. 6 are in China, 0 everywhere else.
Speaker 1 Amazing.
Speaker 0 And and so it's... And then this is just the the extraordinary failure of Europe, all these other places. And 556 years ago, there was some complicated debate of the Us versus China. And, you know, if if you were the Ceo of 1 of these 17 companies. I mean, you'd be so much so much rather be in the Us than in China.
Speaker 0 Now it
Speaker 1 we used to kinda sort society maybe by things like race or religion and today, it seems much more like we're sorting by political ideology. How does that affect society over time?
Speaker 0 Man I it's I don't... I it's always so hard to to know exactly how these things, how these things play out it. I don't... I'm what I'm always struck by, you know, in some ways, I think things are extremely polarized in the Us politically in some ways, it always feels me like the differences aren't very big. If we sort of think about all the topics we've talked about, where are the Republicans and Democrats really different on getting back to faster tech innovation trajectory and do they have a meaningfully different plan for doing this?
Speaker 0 Or even something as pros as, let's say, reducing the deficit. Maybe the democrats are a little bit more taxes, the republicans are a little bit more spending cuts, but is either party, is there a meaningful difference in how much they will reduce the deficit or some...
Speaker 1 Are more housing or you just go down the list. Like they... They are pretty close together on all these.
Speaker 0 All the issues that we talked about today day that I would argue the truly important ones. I I wonder whether the, the extreme polarization hides the pack that there's, you know, so so little differences. It's always the the the shakespeare versus Karl Marx. Karl Marx, people fight each other because they're truly different in Shakespeare, they fight each other because there are no differences at all. And so it's like the opening line of Romeo and Juliet, you know, 2 houses of alike digging to the mon used the calculus and they hate each other, and there these 2 families that, you know, families, but they have no there's no difference at all.
Speaker 0 And that's that's sort of what... You know, Don't I don't think it's hundred percent Shakespeare, but we're probably in a world that's, you know, 90 percent Shakespeare and maybe maybe 10 percent marks.
Speaker 1 There's been a law written about social mobility in decline in the Us, maybe since the the the time we're talking about since the seventies, like, Is that happening? Is is it a problem?
Speaker 0 You know, it's it's... It's a problem. I I think, you know, I think in inequality is a problem, I think the lack of social mobility is a problem. I always anchor a little bit more on the stag generally. And so I think if you know, I don't know if if if if the Gdp grew at 3 percent a year.
Speaker 0 And even if, the inequality was big, and it was hard for people to move from blue collar to white collar jobs. I think everybody would be better off. And so I'm always more on more on this question of broad broad stag is the 1 as the 1 to focus and I I understand people always think that's just a cop out. For a rich person to talk about, but I do think that if we got 3 percent Gdp growth, these problems wouldn't be as important for And if we have 0 or, you 1 percent Gdp growth, you know, It's these things will be very, very hard to solve and it'll be very 0 sum very contentious and probably won't be solved.
Speaker 1 And the differences between let's say, the fiftieth percentile and the, you know, the the the 1 percentile in the Us is hasn't grown that much, But the difference between the 1 percentile and the 0.1 or the 0.01 percentile has grown quite a bit. Like, is there some sort of recipe for problems because of that, like the keeping up of the Jones is at the top?
Speaker 0 You know, there are... Let me think what you say about it. I don't I don't quite know. But if you if you... Yeah.
Speaker 0 If you say that I know. You see the fiftieth to the 1 percent the 1 percent to the point 001 percent. Is the middle class versus the millionaires and then the millionaires versus the billionaires.
Speaker 1 Yep.
Speaker 0 And maybe I don't know. Then and then you can you can you can get this... Into this very complicated tax policy debate on whether you know, our policies, too nice to billionaires, too nice to millionaires, about right, something like this. And I think I think 1 way 1 way to describe the rough debate is that... And the the reason we're I think it's sort of stuck, I'll try to make this...
Speaker 0 Fairly neutral. I think the billionaires pay a lower tax rate than the millionaires. The millionaires pay, ordinary income tax, you know, 50 percent more of their income gets paid in tax in a place like California. The billionaires, it's, let's say, it's mostly capital gains taxes, those can also be deferred. You don't have to sell the stock right away, maybe the effective tax rate for the billionaires is something like 15 percent to 1 5.
Speaker 0 And so the millionaires can always say it's unfair that the billionaires are paying you know, a lower tax rate. But then if we if you were to look at this from a government point of view where let's let's say the government policy is to maximize revenues. You can if you if you massively raise capital gains taxes, people just won't sell the stock at all. And the lot for curve effect means that, yeah, maybe the billionaire wealth goes down. The government collects less revenue.
Speaker 0 So I think we're much closer to the maximum tax on billionaires, whereas if you raise income taxes from 50 percent to 60 percent or 65 percent probably the partners and law firms, all those people will just work harder. And so that's kind of the weird the weird policy conundrum, the weird policy conundrum that we have. You my My libertarian answer is probably way outside the Overt window is that we should not have this reg aggressive attack structure. But you just need to cut taxes massively on the middle class and the millionaires. And and that's how you get to a non aggressive tax structure.
Speaker 0 But if want if you want the government to collect more in revenues, you just need to make the structure more reg aggressive because the people who can pay are the middle upper middle class and millionaire people. And so if you want a bigger government, that collects more revenues, it should look like Western Europe, where the marginal rates are about the same and 50 percent on income California, the 50 percent rate kicks in at a million dollars a year in Austria 50 percent kicks in at 70000 dollars a year. And that's that's how you get to, you know, a more a larger government. You can do more redistribution, but it has the effect of yeah. Reducing mobility.
Speaker 1 Now. I love your quote that courage is in shorter supply than genius. Is that new you think to our society or has that always been the case?
Speaker 0 It's it's always it's always hard to to calibrate, but I I... There probably is... My my felt sense certainly is that there's... Some degree to which you know, I don't like the word contra, but He docs thinking, thinking for oneself, you know, not deferring to the wisdom of crowds, things like that, is somehow somehow gotten you know, gotten harder to do and, you know, it's and than it was in our society 50, 60, 70 years ago. There obviously are you know, all these good and bad things about the Internet, but but certainly 1, you know, 1 thing that's, you know, that's at least somewhat problematic, somewhat troubling is that know, anything that you put on the Internet, we'll stay there you we'll stay there forever.
Speaker 0 So you have to think really hard, what kinds of ideas you're gonna you're going to put out? You know, I I started 1 of these conservative student newspapers is Stanford Stamp review back in 19 87, And it was it was a wildly he docs and maybe obnoxious, you know, maybe maybe... Mean cruel any point of view, but you know, it was people wrote crazy things in that paper. And then you can date the exact point when it moderated and became much less that way was 2002, it's when they started posting the articles on the Internet. And people you know, that they they knew.
Speaker 0 It's everything you write. It it'll be with you for the rest of your life and you have to you have to dial it back accordingly.
Speaker 1 Now, you're you're kinda of well known for, you know, conspiracy theories in some ways. Like, what what is the conspiracy that you believe that maybe people would be surprised that you believe.
Speaker 0 Okay, I I believe so many of them we don't apply. Well, I think I think there are there are a lot of things that, you know, I I don't know if they're you know, you you you can have... You can have sort of sort of these emergent property as if conspiracies where, you know, it's it's not clear whether people fully know what they're doing, but they're acting, as it's as if it's a conspiracy. And I don't know. I think 1 category where very strange things happen are when you have when you have highly in elastic goods where you you change the price by the quantity by 1 percent the price goes up 20 percent or something like this.
Speaker 0 So the... When the Us government's settled with the tobacco companies in the late nineties. It effect card the industry. And then the government and the tobacco companies were on the side of massively raising prices and then it went from and being these terrible things to this major source of tax revenue and these mono anomalies that just trend money like crazy because nobody was not part of the settlement to sell tobacco, so sort of pet. Strange card effect.
Speaker 0 And I've been wondering whether there's sort of an Es explanation of the major oil companies where if take if we take the the oil majors. Let's say, an oil again has this feature where if you increase if you decrease supply of oil by 1 percent price goes up 10 percent So it has this highly elastic future 100000000 barrels a day, take a million barrels offline, Prices go up 10 dollars a barrel. From 80 to 90 or something like the 10 percent something like that. And so... And then this is this is sort of the intuition time the opec cartel.
Speaker 0 But now if you take the major Western oil company, a Shell Exxon mobile Chevron, Bp. And if all the Ceos got together in a room, and said, you, we are all going to cut our oil production by 30 percent and then the prices will go up by more than that and our profits are gonna go way up. And we're in effect going to conclude with Opec and extend the Opec cartel to all these companies. We're And that would be a I don't know, that would be a p phase of violation of section 2 the Sherman act and all these people go to jail. For antitrust violations.
Speaker 0 But if instead of doing that, each of them hires an Es consultant who tells them that they should take half their profits and invest them in solar panels and wind mills. Don't you get the same results, especially if the solar panels of wind don't really work? Like. And so And so now I I don't IIIII don't know if I believe the full conspiracy theory this where Es g is was... Have to think of it as a conspiracy by the oil and gas companies to raise prices.
Speaker 0 But the effective truth of it is is that as you as the companies leaned into Vs policies. Even though the specifics have had a very mixed track record their share prices have gone up, their profits have gone up and the market feedback has been to encourage them to do it more of it, whether they understand. It's working with a precise reason or not?
Speaker 1 This has been really interesting sharing. Last question we ask all for deaths, what conventional wisdom or advice do you think is generally bad advice?
Speaker 0 And I think almost all of it is. Because I don't know Don't know where. I don't know where it start because it's it's it's it's just... It's just the real advice is. It's it's it's it's I I just don't believe you're sort of in this 1 size fits all cookie cutter thing where everybody needs to do the same thing or you know if there's some conventional advice that works for everybody, the fact that everyone's given it is not differentiating and And I'm not interested in things that are timeless eternal truths.
Speaker 0 I'm interested in figuring out things that are 1 time, world historical, what what what what is it that makes sense for me or you to do in 20 23 right here right now and and and that's and that's where, whatever conventional bro mics you you get are never targeted for that. So it's it's all
Speaker 1 just to push back, like on the... These timeless internal truths, like, there are some that are probably extremely important and recognizing those so as a society or what you you would think would be important or you don't agree?
Speaker 0 Yeah. But I think I think I think the the things that that that matter that we should be thinking about are... You know, it's it's it's it's... What's different about our time?
Speaker 1 Mh.
Speaker 0 Or what are the thing? Yeah. I I mean, I don't know. You know, it's probably not gonna to go around killing people. But but but I don't think that gets you very far in terms of coming up with a good plan for your life.
Speaker 1 Yeah. Yeah. This has been amazing. Thank you, Peter T for joining us at world of Das. I'm I'm a huge fan, so thank you again for for joining us.
Speaker 0