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Peter Robinson: If you want proof that something has gone wrong in America, look at ticker-tape parades. No, really look at ticker-tape parades. The man who makes that argument, Peter Thiel, on "Uncommon Knowledge" now. Welcome to "Uncommon Knowledge." I'm Peter Robinson. Peter Thiel graduated from Stanford, then from Stanford Law School. After joining one of the most prestigious law firms in New York City, he decided not to practice law, returning to California where he co-founded PayPal, and made the first outside investment in Facebook. Since then, Peter has invested in companies such as LinkedIn, Palantir, and SpaceX. He has also become a public intellectual, speaking often about the United States and the world. This past autumn, he co-taught a course here at Stanford entitled "Between Stagnation and Progress." Peter, welcome back.

Peter Thiel: Thanks for having me.

Peter Robinson: From your remarks to the Atlas Society this past November. Quote, "We haven't had a single ticker-tape parade in New York City for an individual in the 21st century." Close quote. I thought that must be mistaken, so I looked it up, and you were exactly right. In the 21st century, New York has thrown parades for groups. The Yankees, the Giants. The most recent parade, which took place this past summer, and I'm quoting from the official website, was for "Healthcare professionals and essential workers." 20th-century honorees, Charles Lindbergh, Amelia Earhart, General of the Army Dwight Eisenhower, Neil Armstrong, Buzz Aldrin, Michael Collins. All right, from a ticker-tape parade for an individual, such as Charles Lindbergh, to ticker-tape parades for healthcare professionals. Why does that matter?

Peter Thiel: Well, I'm not sure there's something, I'm not sure I'm massively opposed to the ticker-tape parade for healthcare professionals, although it is kind of a-

Peter Thiel:  Not massively-

Peter Thiel: Quasi-unionized government racket, and one can be suspect of them being praised to the high heavens in quite the way they were in the last few years. But I think the thing that's missing is very striking, and it is, somehow, there's something about our society that has become more collectivist in all kinds of ways, and the part of it, and there's a part about anti-individualism, anti-individual achievement, and there's the intellectual part that I was probably the most concerned about in those comments is against heterodox thought. And so, if you put an individual on too much of a pedestal, and they have ideas that are different, maybe that's too dangerous. And I'm tempted to say, it's a risk we do not want to take. There was something, obviously, with Charles Lindbergh, where it went a little bit haywire. And-

Peter Robinson: In the late '30s, he was rooting for Germany, essentially.

Peter Thiel: Neutrality, yes. But there's something about, so, there was something about elevating individuals that-

Peter Robinson: There is a risk.

Peter Thiel: That is dangerous. But maybe there's an even greater danger in a society where heterodox thought is no longer allowed.

Peter Robinson: All right. You talked about our collectivist present. Once again, from your remarks this past November, quote. "There are two reasons I," this is you talking, I, Peter Thiel, "There are two reasons I always describe myself as a libertarian. One is good and one is bad." Let's hear them.

Peter Thiel: Well, the good reason is that I believe in a lot of libertarian classical liberal values. I think we should have less government, more individual rights, freedom. There's a lot of aspects of the program I'm very sympathetic to. And then the bad reason is that I think it's always a somewhat cowardly way of saying that you're a loser. You're never going to win, and you'll be left alone. And so there's a Silicon Valley context where it is much worse to be a Republican than a libertarian, because if you're a libertarian, you're-

Peter Robinson: You're permanently fringe.

Peter Thiel: You're permanently fringe, and never gonna threaten anybody.

Peter Robinson: I see. I see.

Peter Thiel: It was perfectly acceptable for me to support Ron Paul for president in 2008 and 2012, much more dangerous to support Donald Trump.

Peter Robinson: Right. Okay. Okay. You talk about in, again, in those remarks, you talk about the difference between a 50.1% vote in a democracy, and 99% agreement. And you say, I'm quoting you again, "There's a very important question that we always need to come back to. When do we go from the wisdom of crowds to the madness of crowds?"

Peter Thiel: Yes. Well, the conceit in a democracy, or even a constitutional republic like the United States, is somewhat majoritarian. The majority is more right than wrong. The 51% is more right than the 49%, and it's a way you make certain decisions. And maybe if you get to larger majorities it's more correct. Maybe a 70/30 vote is a really good democratic outcome. It's an overwhelming win. But then, yeah, if you're at 99.9% in an election, you're in North Korea, and you suspect something has, it's not that you've arrived at the absolute truth, but that you're in an absolutely insane totalitarian place. So, there is sort of this question about where one goes from one to the other. You know, I think there's probably a... If you think of the West as having two philosophical traditions, which are the Greco-Roman classical and the Judeo-Christian. The Greco-Roman rationalist enlightenment tradition is somehow that there's some sort of community of wise people, the Royal Society of Science in the 17th century, and that that is somehow conducive to truth. And I think the Judeo-Christian one is always extremely skeptical. You know, for a biblical scholar, I would sort of ask the question, is there a single incidence in which the unanimity of the crowd is right? I think it's always wrong. It's Joseph is right. His brothers are wrong. The Tower of Babel, it's the global crowd is completely wrong. You know, Christ is abandoned, you know, and-

Peter Robinson: Pilate begs the crowd to choose Christ to be freed, and Christ says-

Peter Thiel: The crowd always-

Peter Robinson: Please the crowd-

Peter Thiel: Gets it wrong. So, somehow, reason tells us to believe in the wisdom of crowds. Revelation tells us to be skeptical, and so it's a question of where does one end and the other begin?

Peter Robinson: All right, I'm gonna quote you one more time, on the present moment. "It may be hard to define where that line is," the line you've just been describing, "but I want to suggest that in all kinds of contexts, we're too far on one side, on the side that you can describe as collectivist, centralized, conformist, and just simply incorrect."

Peter Thiel: Yes.

Peter Robinson: In our politics? In what? Give us several of those contexts.

Peter Thiel: Well, In these comments I went through several different examples-

Peter Robinson: I wanna come to those.

Peter Thiel: But they are basically, probably the most dramatic one over the last year and a half has been the COVID politics, where we had all kinds of, all kinds of things that were asserted way too dogmatically, and of course, the dogmas then also took these sort of hairpin turns. I often say science, we'll say a little bit about science. Science has to fight a two-front war against excess dogmatism and excess skepticism. You can't be too dogmatic, so, in 17th- 18th-century science, you're fighting against some ossified Aristotelianism, or maybe the dogma of the Catholic Church, but you also can't be too skeptical. If you say, "I don't believe you're sitting in a chair," then we can't do science. So, Humean skepticism gets to be a little bit unscientific too, and you have to somehow fight against both. But of course, science always thinks of itself as more fighting against dogmatism, and the scientists still think that they're in 1750, and they're the sort of Deist, free-thinking rationalists who are fighting against the system and the power, and in the sort of paradoxical, mimetic inversion, they have become what they, where you have to always choose your enemies well, because you will soon be like them. And they've sort of become as dogmatic as the Catholic Church in the Middle Ages, or much worse, much, because at least the Catholic Church was somewhat stable in its dogmas. And here we had these hairpin turns. So, February of-

Peter Robinson: Just sticking up for the church, the Copernican versus the Aristotelian, that was never dogmas, just strictly speaking. I'm just sticking up for the church. We can arm wrestle about that later, but-

Peter Thiel: Well, I'm just describing the self-understanding of the scientists, so-

Peter Robinson: Yes, of course, of course. Okay.

Peter Thiel: But we had these hairpin turns. It was hyper dogmatic, and also sort of postmodern, in a very unstable way. So-

Peter Robinson: "Don't wear masks." "Oh, no, no, you must wear masks." That kind of thing?

Peter Thiel: Yeah, obviously, February, 2020, and they were probably lying about it, but it was a mask shortage, they told people not to wear masks, and then you had a hairpin turn. October 2020, Kamala Harris was telling people, "I will never take a Trump vaccine." And then of course, now everybody should take, or needs to get vaccinated. And then, I think perhaps most dramatically of all, the sort of, the shift from the food market to the Wuhan lab, which hasn't fully happened, but was again, this hairpin turn by Stewart or Colbert, can't get those two straight, but one of them sort of allowed it to happen, and then everybody could lockstep shift.

Peter Robinson: Right. Right. Now, you mention in these remarks that we've been talking about, a friend of yours, a friend of mine too, as far as that goes, Jay Bhattacharya. Could I ask you just to tell his story in brief, and why you consider that significant. Let me put it this way. Here's what I take you to be doing in telling that story. I take you to be saying, even in this collectivist moment, there are individuals.

Peter Thiel: Yes.

Peter Robinson: And there are hopeful examples.

Peter Thiel: Yes. But it's also just an example of the sheer insanity, where basically, he's a health policy tenured professor at Stanford. Has always been somewhat libertarian, somewhat heterodox on health policy. And then in the last year and a half really found his voice. And I think the thing that ended up triggering people was an article he wrote where he said, yeah, I get the quote exactly right, but something like, quote, "There's no high-quality evidence, there are no studies, there are no high-quality studies that prove that wearing masks is effective." And so he didn't say there was no evidence. He didn't say there were no studies. He was just, no high-quality studies. And then that was, of course, way too much, and then you had this crazed reaction on campus where there was a petition to get the university to-

Peter Robinson: Slap him down.

Peter Thiel: To not let him talk, and not create all these health risks by being able to expound these incorrect ideas. And I think sort of my-

Peter Robinson: You put, that really is insanity because in a sane, he said nothing that was not unreasonable, unscientific. His demeanor is always perfectly rational. Correct?

Peter Thiel: No, it's in some sense, a very technical, abstruse point. It's not-

Peter Robinson: Right. This is not a clash of ideologies. This is just-

Peter Thiel: It's not a crazy, anti-mask thing, it's just no high-quality study. But of course, it was the very nuanced nature of it that made it so dangerous, because we're supposed to think in very clean, ideological, bright-line terms. And subtlety's not allowed-

Peter Thiel: I have this short-cut suspicion that things, we always need more surface area for debate, but if you're not allowed to say something, I have a suspicion, not only that you should be allowed to say it, but that it's simply true. And so I suspect that if I-

Peter Robinson: Are you still heuristic?

Peter Thiel: I haven't examined are there high-quality studies or not, but the fact that you have to silence somebody, rather than you just point to a high-quality study, suggests to me that it's simply true. That's my shortcut heuristic-

Peter Robinson: Quotation. Direct quotation. Dr. Anthony Fauci, in an interview just last month, we're recording this in December. This is from an interview in November. Quote. "When people criticize me," Anthony Fauci. "When people criticize me, they are really criticizing science, because I represent science." Close quote. What would you say to Dr. Fauci?

Peter Thiel: Well, it's obviously, if we say that what you're saying is on some level, it's literally true, but then science means something very different from, again, what we thought of as this anti-dogmatic, free, open-

Peter Robinson: Process of exploration, debate.

Peter Thiel: Process of exploration.

Peter Robinson: Evidence.

Peter Thiel: And it has become the opposite. It is probably that he's actually, the case that he's kind of true about a lot of what goes under the name of science, and that when people invoke science, they are trying to shut off debate. And if something is real science, you don't need to call it science. It's physics and chemistry. It's not physical science or chemical science. And then on the other hand, we have things like, let's say, climate science, or political science, where-

Peter Robinson: You stick the word science in precisely because it isn't scientific.

Peter Thiel: It's like a tell in poker that you're exaggerating, because it's not quite there. So, that's certainly the minimum suspicion. Yeah. It's like those banners where, "In this household, we believe in science," or all these things where, that doesn't seem like... Science with a capital S seems to be like the antonym of science with a lowercase S.

Peter Robinson: Right. Right. All right. Another instance of collective madness, if I'm interpreting your remarks correctly, this is quoting you once again. "On most things, President Biden doesn't get blamed enough, but maybe on Afghanistan, he gets blamed too much." Close quote.

Peter Thiel: Well, we had this super chaotic end to the Afghanistan adventure, where the retreat turned into an unmitigated rout. And I think there's two different ways you can think of it. One is that there were these tactics they got wrong. They should have secured the air force base. They should have done it more gradual. There was all these sort of tactical mistakes. And in that case, it was tactics, then that's probably on the Biden administration and the National Security Council, and that whole set of people. But the view I have is that it was probably the thing that really made a good ending in Afghanistan impossible was the 20 years of epistemic closure of the lies we were telling ourselves about it, and they were these lies about nation-building, that everything was going wonderfully in this place. And it was just, you were somewhere in cloud cuckoo land. It was just a completely crazed form of epistemic closure. I went through, you know, I tried to come up with, what were some of the more absurd instances of this? So, there was obviously, I think a lot of them were like episodes from "The Onion," where the last president of Afghanistan had gotten a PhD on having more transparency and honesty, and on emerging market governance, and then he was just a kleptocrat, who was not stealing 100%, not 98%, but it was 100% of the money. So that, something absurd about that. There was one YouTube video I found, it was a BBC episode on, it was some nonprofit NGO, probably all, again, subsidized by the West, which was giving art lessons to Afghan people, and sort of this postmodern lesson on Duchamp's "The Toilet," which was this absurdist, nihilist thing from 100 years ago, where this artist put a toilet in an art gallery and said, "Art is whatever I say it is." And you have this Pashto translator, and these Afghan people had no clue, but that's sort of what the nation-building looked like-

Peter Robinson: And it was funded by our state department, presumably?

Peter Thiel: Yeah, probably.

Peter Robinson: Probably.

Peter Thiel: Yeah, but it was, the whole thing was one version of this after another. And there were various dissenting voices. The one I gave, which was, maybe it was too late, and not articulated the right way, was President Trump-

Peter Robinson: I wanna quote you on this, because you-

Peter Thiel: You use the language. I don't wanna use it.

Peter Robinson: I'm not gonna use the language. Well, we'll see how we handle this. This is you talking about Donald Trump, and you're citing him for his individualism. "Maybe it was already too late, but two years ago, President Trump had a description of what was going on in Afghanistan that was, I believe, fundamentally, correct. I will quote him." And then you do quote him. "'Afghanistan is an expletive country.'" Close quote. And you write that, or you say, "That was perhaps not a rigorous scientific description, and it was certainly not a very nice thing to say." And then you make a point that I consider, I consider, arresting. Arresting in about as important a point as anybody could possibly make, at least about the present moment. Quoting you again. "But when you limit yourself to saying things that are very nice, you can't actually talk about anything at all."

Peter Thiel: Yes. And certainly-

Peter Robinson: Explain that. Explain that, and explain why Trump, in this case, somehow got it right. Crude, loutish, all-

Peter Thiel: If it's a completely failed country, and we can't say that, then our description is very, very far off. There probably are times when the nice things are close to reality, but if you're forced to say nice things, it's probably the case that somehow the truth is very far from nice, and you're very far from it. And that's what, you can think of a lot of political correctness as a misdirected form of politeness that ended up in catastrophe in Afghanistan.

Peter Robinson: This is a point you didn't touch on in your remarks, but something tells me you'll have plenty to say about it, even so. Journalism. American journalism. If you think back to Soviet Russia in the '30s, and one journalist after another was coming back from visits to Russia, and lying to the public saying, "We have seen the future and it works."

Peter Thiel: Yep, Lincoln Steffens, or whoever said that-

Peter Robinson: Yes. Yes. But there were a couple of journalists who came back and told the truth. Malcolm Muggeridge went across, and then came back and wrote for "The Guardian," which was a left-wing newspaper in those days. And he told the truth that it was horrible, that people were being killed, that there was starvation. He told the truth. I can't, and Afghanistan was easy to reach. You just put in an application to the Pentagon, and they send journalists over, and we didn't have anybody. I mean, one mode in which it could have been done would have been to do a kind of P.J. O'Rourke, or a Hunter Thompson approach, where you just send somebody over there and do gonzo journalism on the corruption, and the chief source of domestic cash is poppy growing. And it didn't happen. Nobody told the truth. Why?

Peter Thiel: Well, you didn't even tell the lies. You just said nothing. Whereas if you look at how much... probably if you, yeah, to the extent you talked about it, it was this inside DC, politically correct, overly polite conversation. The outside DC thing wasn't even that, it was, you didn't talk about it at all. I think there were a few things, there was the, I think Russia is a bad country, but there was the, I think incorrect, theory that Russia was paying bounties on American soldiers, to gin up our resolve. There were these-

Peter Robinson: But that became reported only because they used it against Trump.

Peter Thiel: Yes, but again, it was-

Peter Robinson: It was still something-

Peter Thiel: It was more about Russia. It was barely even about Afghanistan. But the larger reality was that for quite some time, and it even predated Trump, people weren't even talking about it. And so, the safest way, and if you have to lie too directly, that itself is pretty dangerous. And if you have to give reports on how wonderful Afghanistan is, that might not quite work, so, it's probably best not even to talk about it.

Peter Robinson: All right. So, 'cause the notion that if you can only speak about something in nice terms, you really can't talk about it at all. I just wanna come back. I want to press you on that point, just briefly. So, here's what we hear all the time on universities, among other places. And as I said in the introduction, you've just co-taught a course here at Stanford this past autumn, "Avoid triggers. Don't offend anybody. Say anything you want to, but remain civil. Again, say anything you want to, but just bear in mind that this is a community, and there are people whose feelings are at stake here." And would you say that that kind of guidance, that line of argument, actually represents an attack on freedom of speech?

Peter Thiel: Oh, absolutely. And of course, it's not just a university context. It's also large woke corporations. It's probably, yeah, there are all sorts of other contexts where you have that. I think it's often, I don't even judge the people too much. It's individually quite rational not to stick your neck out in these contexts, but it gets us collectively to a really bad place.

Peter Robinson: All right. New topic here. I'm going to quote you again to set this up. "One more example of the sort of totalitarian conformity that's preventing us from asking critical questions, from course-correcting, from fixing problems. I'm thinking of our most sacred deep state institution of all, the Federal Reserve." Close quote. Explain.

Peter Thiel: Well-

Peter Robinson: Their job is just to maintain the currency.

Peter Thiel: Well, COVID is this weird disease, where maybe we should listen to healthcare experts. Afghanistan's this faraway country we don't know much about. But inflation is something-

Peter Robinson: Shows up at the grocery store-

Peter Thiel: That's common sense, that everybody can see in the gas bill, the grocery bill. And so this is, and maybe it's started to shift the last few weeks, but sort of the, it was, again, this sort of extraordinary case of epistemic closure, where it seems like the Fed was the last institution that was able to register the worst inflation since the 1970s, that's starting to really accelerate in this country.

Peter Robinson: Anybody who bought a gallon of milk, knew more about inflation than Jerome Powell, the chairman of the Fed-

Peter Thiel: And in some ways, it's a more extreme one, because this is one where it's just common sense. Do you trust what you see on the bill, or do you trust what the experts are telling us? This one is a really crazy one. And then of course, the Fed is, in some sense, our most sacred institution, so, if there's something going wrong there, there are a lot of questions you have to ask-

Peter Robinson: There's rot everywhere. So, let me ask you about a piece of recent intellectual history. When you were an undergraduate here, and then a law school student, Milton Friedman was still up and writing, and doing research as a fellow at the Hoover Institution. And I was fortunate enough to be able to get to know, his office and mine were on the same floor. Actually, this is when you and I got to know each other. And as far as I could tell, in those days, Milton Friedman did something that very rarely happens in intellectual life. He won. He won. Inflation is always and everywhere a monetary phenomenon was his great statement, and the free market approach, the importance of a stable currency, his entire intellectual critique of the '60s and '70s was embraced, as best I could tell, in academia, all across the country. And now he's only been dead, I think 15, 16 years, in that range, it's less than two decades. It is almost as if Milton Friedman had never been born. I'm going to quote you again. "We have a modern monetary theory to which everyone has gravitated at precisely the moment when it needs to be questioned and challenged." Close quote. How is it that an entire, and supremely rational, I guess, my respect for economics as a discipline is, A, it's rational, but B, it's also tremendously empirical when it's practiced correctly. Milton's book, "Monetary History of the United States," was a history of something real. Okay. How is it that such a discipline can toss out the progress that that entire school of thought made, and replace it with, as you say, this new monetary theory? Everybody went leaping to this new monetary theory-

Peter Thiel: Well, there's something about economics that's also, always risks, it risks of being very politicized, because if you can twist the economic answers a little bit, then you can push things in a very strange direction. And, I suppose, look, I think the inflation question is always a little bit more complicated than the Milton Friedman version you described. And certainly there wasn't-

Peter Robinson: He wrote academic work, and he wrote his columns for "Newsweek." He was popularized in the same type of way-

Peter Thiel: There was a conservative version of the Milton Friedman arguments a decade ago in the form of the Tea Party, where Obama's, and the Obama Fed, are printing money, and they're running 800 billion trillion dollar deficits, and that's too much, and that's gonna generate inflation, and it never actually showed up. And so, so the thing about economics is that it's not that precise a science, there's some slippage, and it turned out the credit system was so busted, the banks were so busted, and one of the ways you create money is not just through growing the money supply, but it's through the credit system working, and the impairment of the credit system was about offset by the extra money printing, and that's why the Bernanke Fed, it roughly worked, even though the Tea Party was more wrong than right, in retrospect. But then when you fast forward a decade, it would be a very mistaken lesson to say that therefore, you could do anything you wanted to. Monetary policy doesn't matter. You can print as much money as you want. You can have deficits as big as you want. You can make the money high-velocity. The money that Bernanke printed went to banks, and didn't get lent out, so it was low-velocity money. If you send checks to people, that's high-velocity money, which is more inflationary. And so, when you violate everything, economics isn't an exact science, but it's exactly enough that-

Peter Robinson: It knows something.

Peter Thiel: That's gonna go very wrong.

Peter Robinson: All right.

Peter Thiel: And then, of course, the political layer is, they probably have a look-at function where, if at the Fed you say, "We have to stop the money printing to stop the inflation, but then we're gonna go back into a recession because of all the COVID restrictions," or whatnot, you know you're not supposed to do that. And then you have to grab onto something like MMT to justify the whole thing. And then there is, again, the striking thing is, there seems to be no room for violent dissent. So, it's again, on the Fed side, maybe they could have gotten to the exact same decisions we got to over the last year or two if there was like a really vigorous dissent. "This is crazy. This is inflationary." That itself would reassure me.

Peter Robinson: Right, right. But there certainly was no one on the Fed making that argument.

Peter Thiel: No, nobody. Maybe there was some super subtle ways, but effectively, no one was making that argument.

Peter Robinson: Quoting you again. "The single thing that is telling us the hour is late for fiat money," paper money backed by nothing but the good will of the federal government. Good faith and credit, as the saying goes, of the federal government. "That the hour is late for fiat money and central banks, is cryptocurrency, and Bitcoin in particular. A third individual hero against the collective is Satoshi Nakamoto." First of all, I'm a little, as you know, this is not my field. I thought Satoshi Nakamoto was sort of mythical, legendary. Nobody actually knows whether this person really exists. Is that wrong?

Peter Thiel: Well, somebody created Bitcoin.

Peter Robinson: Oh, and we might as well call him Satoshi-

Peter Thiel: And he wrote all these papers. And I believe the first Bitcoin payment was from Satoshi to one other person-

Peter Robinson: Okay. So, we do know there was an individual.

Peter Thiel: There was an individual. There's a genesis block of one million bitcoin that are presumably held by that individual, which, at $50,000 a bitcoin would be worth $50 billion. So, there is a somewhat strange mystery at the heart of the Bitcoin phenomenon, which is still the largest cryptocurrency-

Peter Robinson: So, we still don't know if this person is still alive?

Peter Thiel: We don't know who the founder, we don't know who the creator was. And it's sort of, it's this hidden, anonymous individual. And, I think, anyway, there's a lot of different things one can say about it, but if you think of Bitcoin, you can think of it as a revolutionary, anti-fiat money thing. You can say it's, again, a late warning, like President Trump's warning on Afghanistan. It's not very nice. It's not very polite. But it's like, this is a canary in the coal mine, and it's telling you, the hour is very late and you better do something. But I think we ignore it at our peril.

Peter Robinson: Okay. So, now let me ask you a couple of questions that arise from genuine perplexity on my part, because, again, as you know, I live here, but I am not of this world, in some way. I know, you know more of them, I know a lot of young entrepreneurs who made a packet of money when Palentir went public, and many of them bought Bitcoin, and I've had conversations with a couple, and they say, "Well, inflation is just going to eat away at the value of the dollar. Bitcoin is probably, it's extremely volatile. But if you think in terms of a decade, it's a much safer bet," say they. Okay. And then I just go check, and it's true that over the last, Bitcoin has gone up, and up, and up in value, but over the last six months, say, 10-year treasuries, the yield on 10-year treasuries has fallen, from 1.5 to 1.35%. In other words, if people are genuinely, this is economics 101, which is about as far as my formal economics ever went, and we were always taught that the market for the treasury bills, for 10-year treasuries, is the deepest, richest, most sophisticated market on Planet Earth. And that market doesn't seem to be flashing even an amber light, let alone a red light, about inflation. So, what am I missing here? Or, what are the markets missing?

Peter Thiel: Well, look, it's possible that the markets in this case are still right, and there's no inflation coming, but the other suggestion I would have, would be that maybe it's a broken market, where the deficit is about as big as the amount of QE the Fed is doing. And so, in some sense, the Fed is buying up all these bonds, and so, if you have inflation, the inflation can show up, you expect it to show up in real assets, house prices are up 20% year-on-year in the U.S. It can show up in collectibles, art, cars, baseball cards. Certainly one place it can show up initially is in the stock market. Cryptocurrency is another place where it's the new gold, but it can also show up, it can even show up in bonds. There's all this extra money, and some of the extra money goes into the bond market. And so, if it's a slightly broken market because the Fed is doing as much QE as you need, we'll see what happens to the bond prices when they stop printing the money, and you have these big deficits, then you'll get a real sense of the clearing.

Peter Robinson: Okay. You just gave me an education and terrified me. That makes only too much sense. SEC chairman Gary Gensler earlier this month. Quote. "The American public is buying, selling, and lending crypto on platforms where there are significant gaps in investor protection. If we don't address these issues," we, the Feds don't address these issues, "a lot of people will be hurt." Close quote. In other words, move the very regulatory regime that Bitcoin holders are attempting to escape, many of them. Just move that, put that same mattress on top of Bitcoin, the regulatory mattress on top of that market. How do you reply to Gary Gensler?

Peter Thiel: Well, even if all of that's true, it's maybe still better than the alternative, which is to have your wealth in fiat money. If you have a world of, let's say 0% interest rates, and 2% inflation, which we had under Obama, that's still, over a course of five years, that's a 10% confiscation of your money, which is like the Cypress-type confiscation in Europe was scandalous and shocking. All of a sudden, people's bank accounts got cut by 10%. We just do it. We don't do it nominally-

Peter Robinson: Do it slowly.

Peter Thiel: We do it slowly with real things, and then of course, this last year where the inflation's 6%, and the rates are still zero, it's actually a 6% confiscation of people's cash. And so, yes, I dunno. I'm tempted to say something like, physician heal thyself.

Peter Robinson: All right. What is to be done? Again, the collective versus the individual. You speak about the last time you attended the World Economic Forum in Davos, which I think was 2015, you got sick of it a long time ago.

Peter Thiel: 2013 was the last time-

Peter Robinson: 2013. 2013, even longer ago. All right. I'm quoting you. "People were there only in their capacity as representatives of corporations, or governments, or NGOs. It really hit me. There were simply no individuals in the room." Close quotes.

Peter Thiel: Yeah. Yes. If you think of, again, there probably are some individuals, but the overall sense that Davos, the self-understanding is this is the government of the future, and it will be a global government, and you can be in it to the extent you're a proxy for a larger structure, which is like a big corporation, a big government, a big nonprofit, but an individual, and then these people somehow all get to this wisdom of crowds consensus that seems on some level sort of the center-left, politically correct thing. That's the Davos is dumb version. The Davos is clever version is that people say the exact opposite of what they believe, and it's all a reputation-laundering operation for people trying to escape from failed third-world countries. But it is somehow, it is not a truth-seeking place. It's not a place where we have maximum surface area of debate. And if that's the future, if Davos represents the future, it might be efficient, it might work as having a global market, might be good to have certain types of global governance. But what I don't like about it is that it's a world with no dissenting views. And I don't believe we're at the end of history where we simply know the truth. And until we're at the end of history, you need to have dissent, you need to have heterodox views to try to figure things out.

Peter Robinson: China. I'm quoting you again. "China has gone from bad to worse, from a communist regime to a worse communist regime, in that there are simply no individuals allowed. Anybody who deviates from the party line gets crushed." Close quote. Well, yes. But at the same time, so goes the argument, the Chinese have lifted six or 700 million people out of poverty, but the system of freedom and individual liberties that you and I cherish, it's the past. The Chinese have invented a new model of tight central control combined with free markets, and that's the future. Ray Dalio of Bridgewater. One of the richest men in America. He's invested heavily in China. When asked about Chinese human rights violations, I'm paraphrasing him, I don't wanna be unfair to him, but he said, in effect, it's like a family in China, and they're strict parents. We're too permissive. They're strict parents. So, he spoke with real admiration, not just of investment opportunities, but of the system that's making them possible. To which you reply how?

Peter Thiel: Well, Peter, it seems to me you're making the historicist argument on China, that it's just these inevitable forces of history that drive everything, and something like this might have been true of the China from '89 to 2013, where they looked at the Soviet Union, and I think the Chinese ideology was, "We're not going to be the Soviet Union. We're going to have perestroika without glasnost." And it was-

Peter Robinson: We, the party, will retain control.

Peter Thiel: We, the party, with some elements of a free market, some elements of an efficient, more efficient economy, but we'll continue to have Leninist political control, even if we don't have Marxist economics. But I think the way I would frame China since 2013 is that it's very different. Putin is a positive role model for Xi, rather than the Soviet Union being a negative role model for China. And I'm not sure Putin's been great for Russia, but he gets to be president till 2036. It's working for him individually. And so I think China works for exactly one individual, Mr. Xi. And then it doesn't work for anybody else anymore. And certainly there's a large class of successful individuals who've gotten clobbered this last year. The Jack Ma story is the most remarkable one. And-

Peter Robinson: Jack Ma, the founder of Alibaba, who criticized the Chinese regulatory regime, as I understand the story, and then simply disappeared. Now, he's appeared, I mean, he's still alive. He's appeared on a trip recently, last couple of weeks, but let's put it this way, he's fallen silent.

Peter Thiel: Yep. And there's been a way that the tech companies have generally gotten clobbered, and it is just there are no individuals allowed. Maybe no wealthy people allowed. It is back to a far more totalitarian playbook. And so, whatever worked about the Chinese development path in the '70s, '80s, '90s, I feel is very different. There's probably some development where you can copy the advanced countries, and maybe copying is something you can do in a not very free society. But then once you get to the frontier, and you have to do new things, that's a very, very tricky question.

Peter Robinson: Peter, when-

Peter Thiel: It seems to me that China is like a much worse version of Japan. Like Japan wasn't the freest country. It was a culturally weird place. It was not a totalitarian communist country, but for many decades it had a great model of copying and catching up. And then by the '80s it had caught up, and then it hit the wall, and China just seems like a much more deranged, dysfunctional version of Japan.

Peter Robinson: Remind me of the year you published "Zero to One," your book "Zero to One."

Peter Thiel: 2014.

Peter Robinson: All right. 2014. So, in 2014, in "Zero to One," on the first or second page, as I recall, you argue that when it comes to it, really China does not know, in 2014, as of 2014, China did not know how to do zero to one. It did not know how to do what we do in Silicon Valley, which is really innovative. Start with nothing and come up with something that didn't exist before. Is that still the case? Are you worried about, I mean, again, this is not my world, but I hear people concerned about the Chinese catching up and overtaking us in AI, for example. Have they achieved the capacity to go from zero to one now, under this regime?

Peter Thiel: You have to look at a whole series of different technological verticals. So, it's a question about 5G with Huawei. You have to look at the hypersonic missiles. There's a whole bunch of crazy stuff in space. So, there's sort of a, there are a series of different verticals, and then there's, of course, the AI one. My sense is that for the most part, they have not overtaken us. There is a geopolitical problem for the US if they just catch up to us. China-

Peter Robinson: That's bad enough.

Peter Thiel: If you get to the same per capita GDP, the same technological level of the US, so they copy everything, they don't invent anything, but you have a country with four times the people, four times the GDP, four times the military, it will become the dominant superpower. So, I think there's a certain sense in which it was not clear that China really needed to innovate, and maybe it just needed to copy in order to get to some kind of world domination, but all that being said, those were my views circa 2014, but fast forward to 2021, it feels like it's really gone haywire, where you always had the Leninist structures, they've tightened those up. And we're actually going back to some kind of Marxist economy. And it is very strange how it's become... The extreme version a historian told me the other day was that he thought Xi was the best thing happening to the West, because he was sabotaging China in every way possible-

Peter Robinson: They're getting in their own way again-

Peter Thiel: And he was just turning it into North Korea, which again is too extreme. But there is sort of a question. What is the internal logic of totalitarianism that breaks it? What stops it from killing more people and going ever crazier? In other words, there were ways it deescalated after the Cultural Revolution, after Stalin, but there also can be a totalitarian logic of intensification escalation, and it seems to be in that right now, and it's not obvious where that stops. You know, Xi's been in power for eight years, since 2013, and every year people have said it's about to... There's anti-corruption campaign that was just cleaning things up-

Peter Robinson: He made his. He's reasserted control-

Peter Thiel: And now it's gonna go back to normal. And then every year it has actually intensified.

Peter Robinson: Back to this country for closing questions. Again, I'm going to quote your remarks to the Atlas Society. "The United States has this very fundamental choice. Are we going to become like China? Are we going to have some sort of fake totalitarian efficiency in which we crush individuals, or will we find a way back to really celebrating individuals?" So, how do we find our way back? Will we find? I wanna get to that. But there's a kind of prior question. How do we go from ticker-tape parades for astronauts, and General of the Army Eisenhower, and Fleet Admiral Halsey, to ticker-tape parades for collectives, for groups? How did it happen that in this country, founded on notions of liberty, with this elaborate structure of countervailing power structures in the government itself to prevent individual liberty, how did it happen that we reached such a collectivist moment?

Peter Thiel: Oh, that's always hard. That's so hard to say. I'm just saying we should acknowledge that something like that happened-

Peter Robinson: Something went wrong and we're here.

Peter Thiel:  And I can look at the ticker-tape parades. I don't know who sets them up. I don't know who selects the people, but something went wrong, and I wanna say that it was not just an idiosyncratic thing. It's something that's symptomatic of a bigger problem. I think, if you could solve the ticker-tape problem, I suspect you will have done a big step towards solving the bigger one. So, my sort of joking version was we should have a ticker tape for Satoshi, even if he doesn't show up. And if you could do that, wow, we're living in a country that's so much healthier-

Peter Robinson: On the way back.

Peter Thiel: It's on the way back. And maybe it's just, there's some committee in New York City, maybe the Mayor's office, but it's just like a whole bunch of people that have to sign off on it, and if you got all of them to sign off, we'd be in a different world. And that's why I think that's, it's just symbolic, but symbols are important.

Peter Robinson: We'll send a copy of this interview to the new, to the incoming mayor, Eric Adams, in New York who takes office on January 1st, I think. So, couple more questions. Seventies in this country decline. And then in the '80s, things turn around astonishingly quickly. Economic expansion, rebuilding the military, the courage to bring new kinds of pressures to bear on the Soviet Union, such that in just 10 years from '79 to '89, you go from the national humiliation of the Iranian hostage crisis, to the fall of the Berlin Wall, to victory in the Cold War. Do we have the mechanisms in place, including the human capital, including, I suppose, what would you say, even intellectual and political courage? Do we have it within ourselves to make such a kind of comeback? Is renewal possible, or is this just decline? This happened to Rome. It happened to Britain. It happens to all great countries. It's happening to us.

Peter Thiel: Well, I'm anti-historicist, because historicism says that it's all these tectonic plates that shift, and it's these impersonal historic forces, and I believe it's always individuals that matter-

Peter Robinson: You believe in free will.

Peter Thiel: And free will. And it's up to us. There's certainly a way that you can... There's a talking point where people like to say the Biden administration is like the second coming of FDR. And it feels in some ways like the extreme opposite of FDR. It feels very low agency, which-

Peter Robinson: Five months of Jimmy Carter-

Peter Thiel: As a conservative libertarian, I actually don't mind too much, but somehow it is probably, it would be healthier if Biden were the second coming of FDR.

Peter Robinson: Last question. You're a Stanford alum. Again, for that matter, you taught a course here at Stanford to undergraduates just this past fall. Imagine a Stanford undergraduate who agrees with every word you've said during this conversation. And by the way, I know such undergraduates, there are a lot of 'em around, who sees the pressures for conformism, the corruption of science, the soft, but invidious, suppression of speech. What can that undergraduate do? What's your advice to that undergraduate? What can that undergraduate do to help this country find its way back to celebrating individuals? Or would your advice be, no, no, no, no. Even the way you're framing that question is a temptation. Don't think about public life. Go found a company in Silicon Valley. That's where individualism still matters, and can still succeed, at the level of the entrepreneur, in this particular economic ecosystem.

Peter Thiel: Well, I think we have a wide range of things people can do. You can start companies. I think there is such a shortage of talented people in politics or government that probably there's room for more people to do that. So, I think there's a wide range, and we're in a society where it feels like everything is on autopilot, that you're becoming an ever smaller cog in the ever bigger machine. And I would-

Peter Robinson: As an investor, you look at this as the opportunity-

Peter Thiel: I would take the opposite bet on that. Specific advice, I can't give, since that would, if I give some sort of categorical advice, "Everybody should do X," that's the most anti-individualistic thing imaginable.

Peter Robinson: All right. Peter Thiel, investor, author, libertarian, and we may as well use the old-fashioned word, patriot. Thank you.

Peter Thiel: Thank you.

Peter Robinson: Oh, and Merry Christmas.

Peter Thiel: Merry Christmas.

Peter Robinson: For "Uncommon Knowledge," the Hoover Institution, and Fox Nation, I'm Peter Robinson.

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