Who offer perspectives which rarely get a hearing in manhattan ballrooms or progressive caverns. Delivery in the wriston lecture in 1995 that was a huge laugh line are we napping . [laughter] delivering the lecture in 1985, james q. Wilson asked why americans were so unhappy with a country that 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 are 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] but the preposterous policies he 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] wilsons 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 conventional thinking and offer bold 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. M. I. Adapts with the times, but 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] i learned the hard way that listening to the socalled authorities and blindly following the trend was no substitute for starting from a few Core Principles and applying them in innovative ways to the unique investing challenge 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 coauthor were challenging the gop to adapt its Guiding Principles to the new political realities. He is bringing the same spirit to his leadership here, and were looking forward to the leadership he has in store. Our lecture tonight is another 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. He helped found paypal, and more recently cofounded Data 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 its most incisive critics. He argues that our 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] these are no substitute for the pathbreaking, world changing innovation that america needs. Peter has distilled his argument into a tweet size maxim worthy of our age. We wanted flying cars, and settled for 140 characters. At first, i did not understand the reference. Perhaps because i am banned from 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 has historically driven our culture of innovation, and must do so again if we are to meet the unique challenges of this century. A 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, 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] thiel paul, thank you for that incredibly flattering introduction. I think it is downhill from there. I thought i 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 Wriston. 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 , 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. And then what the legacy draws 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. And then 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. Please slow down. Thiel 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 the size of 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 certain valence. 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. So there are things where you 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 which finance, 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. I think in a 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. If you get 99. 9 of voters, you are sort of in north korea. [laughter] so there is always this wisdom of crowds that works up to a certain point, 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. And that it has as the Tech 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. You think of the universities, 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 science 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 candid 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 want 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 obscure 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. Just because it 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 thing, it does not need to be shut down, but probably does not deserve a tax deduction. [laughter] [applause] if we come back to sort of the, 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 . How would one update the wriston 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. Albany has more standing under the constitution they new york city, but we do not want to turn into albany or Something Like that. So there are questions about how 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 d 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 leading a world 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 embassy. [laughter] but this was in some sense a 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 laws, movement of capital, 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. And there is a 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, its striking how difficult at 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. Billion 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. Im not a fan of aoc to say the the least, if if you were to steelman of those arguments, that amazon should not come to new york, the argument was basically that 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 19