Wednesday, May 30, 2012


I just read an obscenely long New Yorker article about Peter Thiel, co-founder of PayPal, early investor in Facebook, etc. Here are some quotes which really resonate with me:

Peter Thiel pulled an iPhone out of his jeans pocket and held it up. “I don’t consider this to be a technological breakthrough,” he said. “Compare this with the Apollo space program.

The information age has made Thiel rich, but it has also been a disappointment to him. It hasn’t created enough jobs, and it hasn’t produced revolutionary improvements in manufacturing and productivity. The creation of virtual worlds turns out to be no substitute for advances in the physical world. “The Internet—I think it’s a net plus, but not a big one,” he said. “Apple is an innovative company, but I think it’s mostly a design innovator.” Twitter has a lot of users, but it doesn’t employ that many Americans: “Five hundred people will have job security for the next decade, but how much value does it create for the entire economy? It may not be enough to dramatically improve living standards in the U.S. over the next decade or two decades."

...America—the country that invented the modern assembly line, the skyscraper, the airplane, and the personal computer—has lost its belief in the future. Thiel thinks that Americans who are beguiled by mere gadgetry have forgotten how expansive technological change can be.

...without a new technology revolution, globalization’s discontents would lead to increased conflict and, perhaps, a worldwide conflagration.

The theory of an innovation gap as the main cause of economic decline has a lot of explanatory power, but it’s far from axiomatic. Trains and planes have scarcely improved since the seventies, and neither have median wages. What is the exact relation between the two? The middle class has eroded during the same years when the productivity of American workers has increased. (“I don’t believe the productivity numbers,” Thiel said flatly, defying reams of evidence. “We tend to just measure input, not output.”) Why, then, should breakthroughs in robotics and artificial intelligence reverse this trend? “Yes, a robotics revolution would basically have the effect of people losing their jobs, as you need fewer workers to do the same things,” Thiel said. “And it would have the benefit of freeing people up to do many other things. There would be social-dislocation problems, but I don’t think those are the ones we’ve been having. We’ve had a globalization problem.”