Those who live in a bubble had best admit it, and apparently I do.
Peter Thiel gave an interesting speech endorsing Donald Trump. Many people are very unhappy about the endorsement. I am ambivalent about this aspect, because it is beyond my poor powers of calculation to determine which of the worst pair of major party presidential candidates in American history would do the most long-term damage to the republic. But I disagree strongly with the theme of his speech—that what American needs is to become a “normal country.”
What Thiel seems to mean is that America should resemble most other nations, which are less interventionist in foreign affairs and whose citizens see themselves as acting out of interests rather than some set of unique principles. Becoming a normal nation in this respect would not only represent a change from America’s historic role in the world but be against our long-term interests.
The United States is a very unusual, indeed extraordinary nation, because it is founded on principles rather than ethnicity or conquest. And its principles were mostly fine classical liberal ones. That has made it look and behave very differently from other nations. For instance, it has not had as large a welfare state as other industrial nations or even a socialist party. One of my greatest fears is that this election is making it more “normal” in this respect.
The Republican standard-bearer is not trying to trim our burgeoning entitlements; the Democratic candidate, now influenced by the socialist Left of her party, wants substantially to increase them. Insofar as citizens see themselves as part of a “normal nation” rather than one dedicated to principles of liberty, the United States will decline, as the ever-larger entitlement state creates economic stagnation and a war of all against all.
The media has suddenly become very concerned about outside financing for litigation. The reason is that such financing is for the first time supporting a well publicized lawsuit against the press. The Silicon Valley mogul Peter Thiel has contracted to provide financial support for a lawsuit against the gossip site Gawker on invasion of privacy grounds.
Litigation financing should be celebrated rather than deplored, because it equalizes access to justice. Some kinds of suits pursue novel or risky claims. Even lawyers on contingency fees may be unwilling to take them for those who cannot pay or they may take an exorbitant cut for their doing so. But litigation finance can draw on institutional or wealthy investors that can underwrite the risk. Institutional investors finance a portfolio of lawsuits and this diversification permits them to suffer losses in many lawsuits, while still coming out ahead overall.
Thiel, however, is not a diversified investor in lawsuits, but appears to be financing only defamation and invasion of privacy suits against Gawker and similar gossip sites.
A group of billionaires, including Peter Thiel and Elon Musk, have established a new initiative called OpenAI. It will attempt to accelerate research into artificial intelligence (AI) but in way that assures that the resulting AI will be “friendly.” In my view, this is the most important philanthropic initiative of the year, perhaps of the decade, because it addresses a crucial issue of our time—dangers from the accelerating pace of technological change.
The development of AI can help navigate the rapids ahead, because progress in artificial intelligence can aid in assessing the consequences of social policy for other forms of accelerating technology, such as nanotechnology and biotechnology, more accurately and quickly. More substantial machine intelligence can process data, simulate the world to test the effects of future policy, and offer hypotheses about the effects of past policy.
But as Musk and Stephen Hawking have argued, strong AI– defined as a general purpose intelligence that approximates that of humans—also could threaten humanity, because it might be unable to be controlled. Man will be in the unhappy position of the sorcerer’s apprentice—too weak to master the master machines.
A new biography, Elon Musk: Tesla, Space X, and the Quest for a Fantastic Future, provides more evidence that America does not face secular stagnation—a state of slow growth and little innovation. I have always been skeptical of this claim, because many of the statistical measures on which it relies are those of our centralized government that miss out on improvements in health and enormous benefits of new technology, particularly the internet.
But some intelligent observers, notably Peter Thiel, have argued that recent gains are narrowly focused on information technology. As Thiel provocatively puts it: “We were promised flying cars, and instead what we got was 140 characters.” Musk, however, has become a billionaire by building actual products that do gesture to a fantastic future where such items as flying cars are imaginable.
One is an electric car, Tesla, that has attracted attention not only for its battery engine, but for its aesthetics. It combines Silicon Valley know-how with Hollywood dazzle.
It was supposed to make consumers happy. Last month, Target launched a line of clothes designed by Lilly Pulitzer. Within hours, however, things turned ugly. Customers flooded the stores and cleared the shelves. The story online was the same, a torrent of early sales caused Target’s website to crash and supplies to vanish. Shoppers who came up empty-handed fumed when Target announced that it would not restock the clothing line. The anger only increased when items from the limited-edition collection began popping up on eBay for several times the prices they were offered at Target.
Who would have guessed, the media wondered that the designer of preppy resort wear could cause so much trouble?
René Girard, for one.
At this year’s Federalist Society student symposium Richard Epstein and I spoke on a panel on Innovation and Inequality. We agreed that the innovation created by capitalism has hugely benefited the poorest in society. We disagreed over the extent to which the very nature of modern innovation itself has a tempering effect on inequality.
In my view, modern innovation helps reduce real inequality both around the globe and in the United States. And it does so for fundamental reasons. Information technology creates value by better arranging material resources. And because of the nature of our accelerating technology the know-how for such information technology rapidly becomes common property benefiting everyone.
Another way of putting this point is that modern information technology dematerializes the world and thus democratizes it, because it is material things that are scarce. The move from its to bits is also a move to equality, because bits can be enjoyed by the many simultaneously. Income inequality gives a misleading picture because we all enjoy the benefits of a growing pool of expressions of ideas.
Let me give some concrete examples. Watson, the machine that beat the best players at Jeopardy, is going into medical diagnostics.
Peter Thiel’s new book, Zero to One, is ostensibly a self-help book for those who want to succeed at start-ups. But any powerful self-help book flows from a philosophy of the world, and Thiel reflects his libertarian and transhumanist impulses. Zero to One is thus far more interesting and more original than most business books. But the book is also at times disappointing because, amid arresting insights, it contains overstatements and simplifications. And at the heart of the book is a paradox: Thiel believes that innovation is less than it could be, but he does not offer a convincing explanation of why the market for startups should be failing.
The specific advice to startups is the book’s greatest strength.
It seems like everyone–but especially conservatives–is talking about Peter Thiel these days. One sees his name all over. The traditionalist conservative Intercollegiate Studies Institute has made the venture capitalist and PayPal cofounder this year’s speaker defending Western civilization (link no longer available). I met Peter (and sat cozily beside him for two days) at a theology conference sponsored by First Things, where he shared his quite singular interpretation of Genesis. Last December, I went to a Straussian conference on Burke and Strauss, funded, of course, by Peter Thiel.
I (and 60,00 or so others) recently got an email from Jonathan Last of the Weekly Standard, who began by saying that he often disagrees with Thiel; he thinks his praise of the innovative benefits of monopolies, for instance, applies “only in the narrowest cases.” Still, “right or wrong, or somewhere in between,” Peter’s writing is always “interesting,” and he is “one of our more important public intellectuals.” Thiel’s big claim, that “the collapse of technological progress over the last 40 years is the root of our cultural, political, and economic malaise,” is worth arguing about.
You know, it really is.
Here’s a summary of Peter Thiel’s take, as expressed recently in the Wall Street Journal, on the contrast between competition and monopoly:
Competition is not as marvelous, and monopoly is not as monstrous, as pop culture and economic theory proclaim. Entrepreneurial creativity brings incessant change, so competitive firms are lame nonentities while firms that win a monopoly position through innovation are magnificent benefactors to their owners and the general public alike.
Thiel is on the right track.