Peter Thiel and George Gilder debate on “The Prospects for Technology and Economic Growth”

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This is an excellent dialogue between George Gilder and Peter Thiel, from 2012, regarding two different versions of what the future will look like.

It is a little over an hour, and I highly recommend you listen to it.

Gilder is a thorough-going optimist. He sees a world where everything is good and getting better, and critiques of technological change are generally wrong-headed. That is a brutal over-simplification, of course. Gilder is a seasoned speaker, debater and writer. He makes a decent case, better than I am suggesting here.

Theil makes a more subtle case. He says that technology, other than the technology has stalled for decades. He says that the fields of engineering that deal with “stuff” have been — and this is a strong word — “outlawed.” As a result, the only areas where technological change is happening are in finance and computing. Nuclear engineering, for example, would have been a suicidal career choice if you made it a generation ago.

So, Theil is one hand a pessimist. He sees a decay in the rate of technological development, a decay in standards of living and real wages, a decline in optimism and expectations for a better future.

However, he does not conclude, “so, we are doomed.”

What he says instead is that we cannot pretend that technological progress grows on trees. He says that we need to address the obstacles to technological change which are thwarting the potential for a better future.

All of that seems correct.

The vision Jim Bennett and I depict in America 3.0 is one in which the excessive regulatory obstacles to technological progress, capital formation, and new business formation have been greatly reduced. Under that scenario, much of the halted progress in the world of “stuff” should resume. This is particularly the case because, as Gilder correctly notes, the extraordinary advances in computing power will enhance the potential of all of these areas. The potential for rapid development, leading to rapid economic growth and rising living standards, is within our reach. It is being held back by political and regulatory obstacles, not technical or scientific ones.

That has to change. But, it might not. Nothing is inevitable.

It is up to us to make it happen.

I have not yet read Thiel’s new book Zero to One: Notes on Startups, or How to Build the Future. It is en route from Amazon as I type this, however. Here is the web page for the book.

8 thoughts on “Peter Thiel and George Gilder debate on “The Prospects for Technology and Economic Growth””

  1. One field dealing with “stuff” in which there have been very important recent major improvements: fracking.

    In general, though, Thiel is correct. And it’s not just a matter of regulation, but of culture…”stuff” ain’t cool. Note how common of the use of the term “technology” these days means “computer technology”…indeed, it usually means “consumer-facing computer technology” or a component thereof. Start a company selling underwear on the net and you will be considered a Technology company; start a company doiong something innovative in materials technology, you probably won’t be (unless it can be tagged to a currently-hypeable topic such as 3-D printing.)

  3. David, I disagree that it is a matter of culture as opposed to regulation.

    If the other fields were lucrative and permitted to achieve their potential, they would be “cool” too.

    The other fields besides “tech” — which is absurdly truncated to mean, as you say “consumer-facing computer technology” — have the potential to do amazing things and generate huge fortunes and many well paying jobs and many happy investors.

    The chief obstacles are regulatory. These are serious, but they are fixable.

  5. Why are they debating instead of measuring? For every six digit NAICS code, evaluate the prospects for technology and economic growth and give it a numerical rating. With that database of ratings, the overall level of progress, where are there great prospects and where are we stagnating will become clear. There are, at present, 19253 NAICS 6 digit codes. On the scale of two people debating a subject, that’s a lot of conversations. On an Internet scale, that’s not all that impressive. It would not really be that expensive to go through the exercise.

    So why don’t they?

  6. Apologies, while the validity of my point isn’t affected, I got the number of NAICS codes grossly wrong. There are only 1,063 NAICS codes in use, not 19,253 codes. There are 19,253 separate industries grouped into the 1,063 codes. I misread a spreadsheet.

  7. I wish Vaclav Smil had been a part of that discussion.

    I have read a few of Smil’s books. They are brilliant and data heavy. Two of the books I wish I have read are his Creating the Twentieth Century: Technical Innovations of 1867-1914 and Their Lasting Impact (Technical Revolutions and Their Lasting Impact) and Transforming the Twentieth Century: Technical Innovations and Their Consequences (v. 2).

    I raved about how great Smil is over at my place before. I won’t expound it on great detail here; it suffices me to say that Smil is one of the few people with knowledge base and scientific expertise to assess whether or not if technological progress and/or scientific discovery have actually been decreasing, and if so why and how. He understands the science behind the inventions in question. All of it.

    Here is a a review of these two volumes by Joel Mokyr; here is another by David Nye for the American Scientist.

    The gist of Smil’s argument seems to be that in the years between 1867 and 1914 the world experienced a scientific revolution of the kind it had never seen before and will not see again. A quote from the second review:

    Smil argues that the two generations before 1914 laid the foundations for an expansive civilization based on the synergy of fossil fuels, science and technical innovation. He rejects claims that the computer and the Internet have caused unprecedented economic acceleration and argues that the remarkable growth and social change of the 20th century were based primarily on refinement and development of machines and processes created before World War I. After a first chapter on the technical level of Western societies in about 1865, Smil argues for the transformative nature of electrification (chapter 2), the internal combustion engine (chapter 3), new materials and chemical syntheses, particularly nitrogen fixation (chapter 4), and new information technologies (chapter 5). He suggests that a well-informed scientist from the end of the 18th century, such as Antoine-Laurent Lavoisier, if brought forward to witness the society of 1910, would have confronted a “world of inexplicable wonders.” In contrast, “were one of the accomplished innovators of the early 20th century””Edison or Fessenden, Haber or Parsons””to be transported from its first decade to 2005, he would have deep understanding of most” of the machines and processes set before him.

    Smil suggests that most of the inventions and advancements of the 20th century were simply applications–mostly changes in scale–0f the changes that went before.

    Computing and genetics seem to be the major exceptions to this rule.

    It seems to me entirely plausible that the low hanging fruit of existing scientific fields–the kind Edison could tinker with in a personal laboratory–have all been picked. Technology tracks scientific advance. Perhaps we do not need to get into discussions of culture or regulation to explain what we see.

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