Lecture. Me to the 33rd this lecture has become an important night in americas intellectual life. The consequences and ideas offered at this podium the formula is a simple, we invite extraordinarily bright speakers perspectives which rarely get a hearing in manhattan ballrooms or progressive caverns. Tonivery in the wris lecture in 1995 that was a huge laugh line are we napping . [laughter] 1985,ring the lecture in james cu wilson asked why americans were so unhappy with the country that with was more prosperous and powerful than ever. He drew attention to several insufficiently addressed signs of disorder crime, failing schools, a coarsening culture, a deteriorating civic life. Wilson argued that these problems had begun with the dissolution of the family. Then, as now, a controversial view. Today, disorder is rising again. And i am not just referring to mayor bill de blasios much lamented return from iowa. [laughter] you were getting there. [laughter] [applause] this disorder is the consequence of a nationwide effort to roll back successful policies that scholars have spent in their careers advancing. Bill de blasios president ial campaign may have ground to a halt, surprisingly [laughter] policies heosterous supports are moving full steam ahead, carried on the platforms of lesson confident, but equally radical candidates. Here in new york, but not just in new york, we face an opioid and a single parenthood crisis overlooked for too long by the experts. Americas labor market and a civil wellbeing suffer from an Education System that continues to prioritize bureaucrats and administrators, as well as entrench power over students. Not to mention the curricula, now ubiquitous throughout higher education, that inductor needs our students to be ashamed of western civilization and to despise private enterprise and economic freedom. As for todays campus culture, lets say that it welcomes a broad diversity of ideological viewpoints from noah chomsky all the way to robespierre. [laughter] remarks in 1995 and their echo today are typical of the work and approach of the manhattan institute. Scholars have never been afraid to challenge elysee conventional thinking and offer a bolded diagnoses and solutions. We are persistent, and when we have a view about something we do not back down under pressure from elites and cloistered cabals of holier than thou academics. But adapts with the times, more so with the journal. [laughter] [applause] where is dan . [laughter] but we have also stood for certain principles, rule of law safety, free markets, and the belief that culture is a key determinant of the welfare of societies. In investing, where i spend much of my time, this combination, the ability to adapt without losing sight of core convictions, is a necessity. You must be able to think independently and form strong views while at the same time maintaining a good deal of humility about how much you do not know. When i first started investing, my dad thought if his ascent was brilliant enough to get into harvard law school, he must be smart enough to make money in the stock market. Wrong. [laughter] thatrned the hard way listening to the socalled authorities and blindly following the trend was no substitute for starting from a few core printables and applying them in innovative ways to the unique investing challenge that neat that each new era brings. It is the same in politics, and the manhattan institutes embodiment of this at those is what gives us our competitive advantage. It is embodied in the outlook a brandnew president. [applause] back in 2008, he and his werethor ross duvat, challenging the gop to adapt its Guiding Principles to the new political realities. He is overly bringing the same spirit to his leadership here, and were looking forward to the leadership he has in store. Anotherure tonight is example of this a spirit of independence, persistence and innovative thinking. He is also one of the most effective critics of groupthink, whether in business, politics or philanthropy. Peter thiel is an entrepreneur, a Venture Capitalist, and in the words of tyler callan, one of the most important intellectuals of our time. Peter has spent his professional life in Silicon Valley. Nd paypal and more recently cofounded davis security giant pelletier, as well as the Venture CapitalFirm Founders fund. While he has been one of the most successful architects of the information age, he has also been one of the most incisive critics. He argues that her technological imagination has been to modest, too content of food along the margins when what we need are transformational breakthroughs. The country that brought the world the automobile, the skyscraper, the airplane and the personal computer has become enamored with kitschy applications that facilitate things like take out delivery, latenight car rides, and being able to tell your friends that you liked what they had for lunch. [laughter] thee are no substitute for pathbreaking, world changing innovation that america needs. Peter has distilled his argument into a tweet size maxim worthy of our age. Cars, and iting settled for 140 characters. At first, i did not understand the reference. Fromps because i am banned twitter. [laughter] [applause] not by twitter, but by my internal communications team. [laughter] true. Peter understands, as we do at the manhattan institute, that robust innovation relies on a system of free enterprise. Like so many philanthropists and scholars in the room, peter has committed himself to preserving the framework necessary for experimentation, growth and most quickly, americas reputation for unimpeded inquiry, which is historically has historically driven our culture of innovation, and must do so again if we are to meet the unique challenges of this century. He society that challenges the sensors challenging ideas may well be headed on the path to suicide. For those of us with the means and courage to not just speak out against the intellectual mob, but to actually build something superior in its place, is a great there is great and urgent work to be done. Tonight, that means providing a forum for the challenging ideas of our 33rd wriston lecture. Ladies and gentlemen, join me in welcoming peter thiel. [applause] paul, thank you for that incredibly flattering introduction. I think it is downhill from there. I thought it would start with a modest story. This was from about 20 years ago, i was starting paypal and i was speaking to a friend at the hoover institute. He thought, we are trying to do this innovative, finance tech company, talk to walter. My response was, who is Walter Wriston . He complained about how young people do not know anything about the past and how america has done a terrible job of not honoring its great Business Innovators and leaders. So i am honored to be here tonight to try to correct this in some small ways. And part of the legacy that i think is still so present here is he transformed citigroup into he scaled it like crazy from the bank in the city to a bank that serves the world with atms, interstate banking, credit cards, turning it into a money center bank. Legacy draws the our attention to in so many ways are the questions of scale and problems of scale. That is what i want to focus on tonight, that we have a question of scale. If something is good, more is better. And then of course, the quality element, where once you get to a certain scale, maybe you do different things. This was the vision for citibank. Perhaps there is also another dimension, where maybe you are changing the world into a better place. From a freemarket perspective, perhaps by making or expanding capitalism, you can transform the world on a trans political level. That was the hope that walter had. In some ways, this resonated with me deeply when i was starting paypal, where we had this vision we will lead this financial revolution against all central banks, we would liberate money from government control, and we were going to go to this trans political technological level to transform things. Of course, i think that there are a lot of qualifiers. [inaudible] ok, i will slow down a little bit. I have a lot to say, though. There are times when this transformation does not work in a libertarian direction. And the global scale can be quite different. And i sort of think of margaret thatchers biggest mistake, she thought that embracing the European Union would be a way to crush the unions in the u. K. , so she went to a trans political scale to bring about free markets in the u. K. A decade later she thought of this as her worst decision never, where the freetrade of the eu came with a not so inexpensive brussels and that would regulate everything from sliced bananas all the way down. So there are kind of challenging questions about scale. If we were to tell the two technological stories about scale at this point, one of them is a story about it is this crypto revolution, which is still going on with bitcoin and has this sort of libertarian potential. But i think that there is an alternate tech story, which is about Artificial Intelligence, centralized databases and a surveillance, which does not seem libertarian at all. So eyes watching you at all times, and all places. I think we live in a world where there is a surveillance. If we say that crypto is libertarian, why cant we say that Artificial Intelligence is communist . And have this sort of alternate account of scale. Re youre are things whe scale up, but the difference is not always a good one. You think hard about which ones play out and in which ways. And i think that for walter in the 1970s, to summarize it as a picture it was it is manhattan, if new york city was going to scale, the next scale was the world. That was the scale on which one had to move to. I think there is a sense in , technology and the internet had a natural limitless scale and that kind of makes sense. There are a lot of other things where scaling is different. Democracy, if you have the majority vote, that is good. If you have a super majority, that is even better. 51 , youre probably right. 71 , you are more right. Youou get 99. 9 of voters, are sort of in north korea. [laughter] so there is always this wisdom of crowds that works up to a certain point, then the transitions then it transitions into a madness of crowds. I think that is the Unhealthy Development that has taken place in recent years in Silicon Valley, where we had positive effects, then it tilted into a negative thing, which seems completely deranged in recent years. I suspect that this will be bad for innovation, at least. Maybe the business can work at scale, but i think one of the things that does not scale terribly well at all are ideas and innovation. There are a lot of different critiques of big tech that we can discuss, but one critique i am sympathetic to his innovation does not scale well. Techhat it has as the industry has gotten bigger, bigger governments, things like that, you are going to have innovation more slowly. So whether we go to the communist a. I. , or the libertarian crypto world, or some complicated intermediate hybrid, i think we will actually see that happens lower than people think. It is a big concern i have. So one of the other institutions that i think has a scaled quite badly, i always think of science as the big brother, the older brother of tech, who has fallen on hard times. And big science has scaled extremely badly. Universities,he they sort of have they see those that they give us universal knowledge. It is something that has scaled it to an extraordinary degree. And the lies we tell around big signs have been linked in with university lies. And i think that a lot of our problems can be described in this way. Im going to this is my candidate for the biggest lie the obamas ever told, much bigger than any sort of inaccuracies told by the current president , bigger than anybody, and im not concerned about lies like the thing in iraq, or if you like your doctor, keep him, because there was partisan pushback, but this one is allencompassing and follows from getting scale wrong. And they both did ladies first, michelle obama. The one thing i have been telling my daughters is i do not them to choose a name. I do not wanted them to think i should go to these top schools. We live in a country where we have thousands of amazing universities, so the question is, what is going to work for you . At scale you up scare the differences. We know that they were lying. They ended up going to harvard. [laughter] and just it is reassuring. It would be disturbing if they believed this worked at scale in the way that they claim. Her husband, he came up with a more sustained one, telling to lies at once. Because ite just is not a fancy school, does not mean you will not get a great education there. If it is not a fancy school, you will not get a great education, you will just get a diploma. If it is a namebrand fancy school, you probably also will not get an education. [laughter] [applause] so, you know, if we were to right size the scaling for our intellectual life, usually describe harvard not as one of the thousands of universities, you should describe as a 54 nightclub. It is good for the selfesteem, bad for the morals of the people who go there. Maybe call it a wash. Probably not a criminal think of it does not need to be shut down, but probably does not serve deserve a tax deduction. [laughter] [applause] sort of the,ck to this sort of less the much healthier world of finance and capitalism, and back to the theme at hand, one of the questions is what are the kinds of scales we should be working on in 2019 . Stonwould one update the writ perspective . I think that one sort of framework for this is there is a different question you can ask on the level of manhattan, new york city, it is sort of the capital city of the world and we cannot really go back from that because we cannot go back to the capital city of new york. It has more standing under the constitution they new york city, but we do not want to turn into albany or Something Like that. Howhere are questions about we succeed at scale in these places. So Silicon Valleys version of this question. I want to focus on the United States version and the question for the United States is, is the best strategy for the u. S. To go big, to go with this sort of global scale . This has probably been a threat throughout the u. S. History of at least of the last 100 years, everything from woodrow wilson, the new dealers setting up the global institutions from which they would run the planet from washington, d. C. , and there was a sense the u. S. Was at scale and should go or always operate on a bigger scale and should be worldg a road a revolution. Not always a libertarian one. I was reminded of the joke, why is the u. S. The only country in the world where revolution is impossible . Because it is the only country that does not have an american a busy. Embassy. [laughter] at this was in some sense good strategy for the u. S. , to go even bigger. I think that there are some ways we may need to update this in the world of 2019, where and in some ways it is shaped by the rivalry with china. And if we sort of think about arrival that is also incredibly big, simple bigness is not necessarily the right strategy. You think of the four vectors of globalization i think it is movement of goods, freetrade, movement of people, immigration capital,ement of banking, finance, movement of ideas and the internet. And it made sense for the u. S. To lean into these things because being the biggest sort of got those outsized returns from scale, where as i think if we ledger on these things today, only two of them are still ones that the u. S. Really has a powerful advantage in, and i think it is finance and the internet. Even though we have misgivings about those two. Sense in which we do not fully trust the banks. The feeling is mutual. So it is difficult for us to really support these companies as national champions. In the 1950s, the ceo of General Motors could still say, what is good for gm is good for america. It would be inconceivable today for the ceo of Goldman Sachs or google to say what is good for Goldman Sachs or google is good for america. It would be inconceivable. So even though this is for the model that we probably should still be working on, it is quite a tough lift. I think when you think of trade or immigration policy, it is a scale question it is much more sobering for the u. S. We are simply not able to compete with china at scale, when you have seven of the 10 larger shipping ports are in china and los angeles is number 11. Making the world safe for container shipping it is making the world safe for the Chinese Communist one world state at the end of the day, that is what you are tilting toward. On the immigration issue, um, ats striking how difficult how much better china is at moving goods and people than we are. China has probably had the greatest internal migration of any country in the world in the last 20 or 30 years. You look at southern china, it had 60,000 people in 1980. It has expanded to Something Like 12 million with a growth factor of 200 in the last 40 years. And again, i will use the contrast of new york city, where we had 7. 1 Million People in 1980. It has grown to 8. 4 Million People in the last 40 years, and it is not scale on people. We can scale finance, tech, but people we are really bad at scaling. Toss millions to build one mile of subway in new york city, it is only 400 million per mile in paris. That suggests any attempt to scale on people is not the place we should be competing. There is some urgent need to rethink all these different scale questions, where we will be good, where will it be much more challenging. C to say then of aos least, if if he were to scale one of those arguments, that amazon should not come to new york, the argument was basically that all the it would drive up rent prices for everybody there. We have to asked seriously if that is not entirely wrong, what is the elasticity in a place where the zoning is it so controlled it is not possible or very hard to build new things, like transportation, things like that. There is a famous economics professor, henry george, in the late 19th century who said come in a city that is too heavily regulated, the elasticity of real estate ends up being so that any gain close to the landlords. The mistake they made was this is also a libertarian argument, because you could say that you need to get rid of all the welfare because it goes the landlords, because it is 100 of a transfer. And it is an argument that we would have to rethink migration very hard on. So to the extent that china focused our competition, focused our competition, it suggests we need to dig about scale differently. Question whereen the u. S. Should go from here. I do not think that we can simply go subscale, not like israel or switzerland or Something Like that. I would like the u. S. To be a tax haven. I do not know if that works at our scale. But it is a very urgent question to think about what are the kinds of places we can scale and in a good way where we can win and to do that better in the years and decades ahead. If i had one general thoughts on it, i would say that perhaps we have to shift a little bit from quantity, from simply scaling in size, to quality. That is sort of the question. And that this is backed innovation, back to intensive growth, not just doing more of i. P. Ame but a shift toward protection, fewer scientists but actually doing real science. Universities, but we understand them to be elite universities. And somehow a shift to quality over quantity is probably an advantage of that we have to think through really hard visavis china. A place i think that this one thing i always find so befuddling is why these cushions of scale have not been asked for such a long time, why they china revelry in some ways has remained ups good for as long as it has. And i sort of think enclosing i will give my thesis on the left and right, sort of some ideological blindness we have had, and it is cortical on both sides. I think on the left critical. On both sides i think on the left, asking questions about what to do on the scale of the United States, the distraction machine has been driven by identity politics of one sort of another. Sort of like a subscale. We do not think of the country as a whole, we think of subgroups. And i think that is something selfcontradictory with identity politics. I think that you start with it means what makes you the same. I keep thinking the identity politics monster gets crazier and crazier. Maybe its flopping around in its final death throes but it does seem to have a lot of energy left. Until the left is able to move beyond identity politics, its not going to be able to focus on the scale that we need to be focusing on for this country. I think from the right, the sort of doctrine that i would encourage us to rethink is the doctrine of american exceptionalism, which was again sort of a superbig scale, but sort of put the u. S. On a scale where it simply could not be compared to any other country, any other place. You can think of exceptionalism as i often use the theological analogy that its ike the radical god of the old test where you cant compare anything to god and exceptionalism is sort of like saying the u. S. Is this country that cant be measured or compared in any way possible. What happens when you are say you are exceptional in all these ways is you probably end up being exceptionally off in different ways. You end up with subways that cost 8 billion a mile. You end up with people who are exceptionally overweight and exceptionally unselfaware and i think Something Like the corrective to exception alingism is that prapping in the 2020s, United States needs to settle for greatness. Thank you very much. [applause] there thiel has agreed to take a few questions. Would anyone care to volunteer . Shout it out . A. I. You tech people are so annoying. How many of us old people know what a. I. Is, but its Artificial Intelligence. Why is it communist . Peter well, again, there are a lot of qualifiers to this. A. I. Is sort of the buzzword of the day. It can mean the last generation of computers. It can mean a robot that kills you. It can mean sort of all these sort of creepy social credit scoring things in china. But in practice, the main a. I. Applications that people seem to talk about are using large data to sort of monitor people, know more about people than they know about themselves. In the limit case, it maybe can solve a lot of the economics problems where you can know enough about people but you know more about them than they know about themselves and you can sort of enable communism to work, maybe not so much in economic theory but at least as a political theory. It is definitely a litmus thing. It is literally communist because china loves a. I. It hates crypto. That tells you i think tells you something. And then i think i think there is a common sense level on which it is. This is what people are creeped out about and this is why. We should label it accurately. What does a hopeful, Great America look like . What can we look forward to . What are your hopes for the next 24 months . Peter well, i certainly hope that the country has more of a future than just 24 months. [laughter] but i think that my hopes are that we find a way back to more intensive growth. Sort of the focus on globalization has been we sort of divided the world into developing and developed countries, and developing countries are the ones converging with the developed world. Developed countries are ones where we are saying the future is just not going to look different from the present. Its sort of an eternal groundhog day. I think somehow breaking that logjam would be good. There will be a future again. Things will be different from the present. We have had progress around ech, around i. T. But the iphone distracts us from our environment, distracts us from how strangely unchanging our environment is. You are riding in a subway thats 100 years old. I think sort of a healthier form of progress would happen on many different fronts. We can sort of debate why that hasnt happened, but i would like to see innovation, not just in some kind of narrow iphone pp but across the board. You talked about in the past you talked about in the past Silicon Valley talks about universal basic income. Robots are replacing humans. The average american in iowa will not have a job. Thats a common view in Silicon Valley and new york. Its not sympathetic, but trump has tapped into this. People have been left behind. You also agree with this, that we should be more nationalist. How do you see tech in kind of this like san francisco, new york centric world making room for people to enjoy the american dream, whatever that looks like, different from the past 50 years, what it looks like for the next 50 years . Peter i disagree with all the premises behind your question. I think you have bought the google propaganda hook, line and sinker. Lets articulate this, that we have runaway technological progress. A lot of people will be left behind. This doesnt show up in any of the data. We have 5. 3 unemployment. The productivity numbers are still pretty anemic. It doesnt show up in any of the economic data. Thats sort of the starting point. If you think about automation and the rate of automation, its basically happened over its happened over this has been going on for 200 years, since the industrial revolution, and might suspicion is the rate has slowed because the things we were able to automate easily, like farming or manufacturing, have been automated and even if we are still automating manufacturing at the rate of 5 a year, its a much smaller part of the economy. So the total productivity gains are actually slower. The sectors that are left are sectors that look invest the same as they did 100 years ago. So its like kindergarten teachers, nurses, yoga instructors, all these non trainable sector jobs are immune and a large part of the economy and thats perhaps why things have slowed. We have the fantastical story that its about to change. If you look back, the simple reason it slowed is because the sectors that were immune to automation have become bigger parts of this economy. So i think that i dont know, i tend to think the Silicon Valley u. B. I. Discussion is like some like identity politics, like this magic trick, drawing your attention away to something else. The technology will take your jobs. We have u. B. I. To take care of you. What we should Pay Attention to is the people in Silicon Valley have not been doing enough. There are critiques of the big Tech Companies, things they have done wrong over the last few years. My cut on why there is such a political pushback against the Tech Companies in is Silicon Valley is theyve not innovated enough. You can say we have done the good things and the list of good things is sort of lacking. Probably the biggest one of the google list is selfdriving cars. I think that would be a significant innovation. On the other hand, theyve been promising it for 10 years, talking about it less. The time seems to be expanding. I think going from a horse to a car is bigger than going from a car to selfdriving car. We have to really think through how much is going on. And these problems are, if anything, even more serious on the science side. One of the one form of this problem is scale i talked about is if you are too big a scale, it becomes impossible to actually know the particulars of what is going on. I think maybe its a feature of late modernity that things are so specialized. The cancer researchers are talking about how great they are. The Computer People say theyre about to build a quantum computer. You have experts telling us how great they are. I cant resist mentioning sort the anecdote from one of my friends, his advisor at stanford , got a nobel prize in physics in the late 1990s. He suffered from the supreme delusion that once he had a nobel prize, he would have academic freedom. What he decided to do was he was going to investigate all the other scientists at stanford who he was convinced were stealing money from the government and sort of engaged in fraudulent research, a lot of input of money but not much output. The two grad students come into their office once a week and it would be i am very proud of you, we are on the frontlines, doing battle for science against the whole universe in this office. You can sort of imagine how this movie ended. It was quite catastrophic. The grad students couldnt get ph. D. s. He got defunded. My suspicion is always when there is speech that is completely forbidden and questions not allowed to be asked, normally you should assume that those things are simply true. I believe we have time for one more question. Thank you. I too have a premise which i now shudder to author, but i will. Thank you. I welcomed your critique of the very notion of american exceptionalism, which i interpret to be a call for greater humility on a national and cultural level. Thats my premise. If the premise is accurate and accurately reflects your view, how might we achieve that on the political level . Is there a way . Peter well, this is probably above my pay grade, too, but i think that the starting point surely is to frame the issues at the right scale, and exceptionalism can be inspiring. It is but there is something about it thats so abstract that we are not able to talk about the details of what is actually going on. And so i think anything where we focus able to focus on these questions of detail will be helpful. Thats sort of the place that i would start. Its like i think i think the rivalry with china is whats going to, you no he, is going to push us to ask the scale questions anew and we are not in a great place in a lot of ways but the country still has a lot of advantages. We should think really hard what our advantages are, and things like that. I think it is one of the few issues that are essentially bipartisan. So i think it is actually a place where we could have a reasonable discussion. Please join me in thanking peter thiel. [applause] [captions Copyright National cable satellite corp. 2019] cspans washington journal live every day with news and policy issues that impact you. Coming up thursday morning, as part of authors week, former north dakota senator byron dorgan will join us to talk about challenges facing native americans today. And White House Correspondent john gizzy will be on to talk about impeachment and campaign 2020. Be sure to watch cspans washington journal live at 7 00 eastern thursday morning. Join the discussion. Be sure to watch authors week all this week starting at 8 00 a. M. Here is a look at some of our feature programming this holiday week on cspan. Tonight at 8 00 p. M. Eastern, the symposium on religious freedom. At 9 30 watch the festivities surrounding the White House Christmas tree. On christmas day, at 10 00 a. M. Eastern view this years white house decorations with the first lady. Plus a look back at previous years decorations by former first ladies hillary clinton, barbara bush and michelle obama. A discussion about Technology Issues with peter thiel and journalism director john miller on the history of jurnism and fake news at the liberty forum. On thursday, at 5 45 p. M. Eastern, a joint Economic Committee hearing on the high cost of raising a family. Then at 9 10 p. M. , constitutional litigator Justin Pearson talks about occupational licensing requirements at the federalist society. Watch this holiday week on span. Queen elizabeth ii delivers her annual christmas message from Windsor Castle located about 25 miles outside of london. The tradition of the royal christmas message dates back to 1932 with a radio address by king george v. Queen elizabeth made the first televised address in 1957. This is just under 10 minutes. [music]