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Peter Thiel: Big Tech, As It Operates Today, Is Communist

Visions of the computer age have swung from big centralization in 1969 through big decentralization in 1999. Neither got it quite right, Thiel says

Philosopher of technology George Gilder revisits world class tech venture capitalist Peter Thiel’s live streamed talk at COSM 2019 in “ The failures and self-hatred of Big Tech.” Thiel, the author of Zero to One (2014) will attend COSM 2021 (November 10–12) in person this time, along with Gilder. Note: You can get the best rate if you register before October 31.

The focus of the 2021 meet will be the paradoxes of the new world of technology. As we will see, Thiel is an expert at defining that world. This is the first of a four-part series on his view of the future, starting with his First Contrarian Idea, that the way Big Tech operates today is communist and that decentralization is coming, whether Big Tech likes it or not:

This portion begins at 00:50 min. A partial transcript and notes, along with Show Notes and Additional Resources, follow.

George Gilder: The ultimate cosmic man here. Peter Thiel.

Peter Thiel: I’m going to offer three contrarian ideas for the future, where things are going with technology and computers.

Peter Thiel

I’m going to give you three contrarian ideas, but I’m going to weave in a little bit of a book review of Life after Google as well. One of the things that’s always difficult about, talking about the future is that, we don’t really know what’s going to happen, for sure. It’s not that deterministic. I think it’s even hard to know what happened in the past.

Note: Life after Google: The Fall of Big Data and the Rise of the Blockchain Economy (2018) is George Gilder’s book on the peril as well as the promise of the Big Tech industry. From Thiels’ Wall Street Journal review: “Google’s algorithms assume the world’s future is nothing more than the next moment in a random process. George Gilder shows how deep this assumption goes, what motivates people to make it, and why it’s wrong: the future depends on human action.”

Part of the fallout from the book is renewed interest in sharing the wealth: Ralph Bunko asks, “If our attention is worth billions, shouldn’t we market it?” Here are some other thoughts from reviewers.

Peter Thiel: So, let’s start by talking about the history of the computer age and the history of the future — the way people talked about the future in the past and the way they thought: Where was the computer age going to go?

If we’d been asked in 1969, the future of computers was going to be, massive centralization. Giant databases, giant AI-like computer intelligences would run everything. IBM was HAL, transposed to the Space Odyssey movie, one letter off from IBM.

It was one of the early Star Trek episodes. They come to the planet Beta. Thousands of years earlier, somebody had unified the planet, and left a computer program that ran the whole planet. All the people were peaceful but very docile and nothing ever happened. And as usual, they follow the prime directive, and convince the computer to self-destruct. They don’t follow the prime directive and then leave everything in disarray.

Note: Here’s more on Beta II and its authoritarian computer:

Peter Thiel: The future of the computer age, circa 1969 was centralization. A few large companies, a few large governments, a few large computers that controlled everything.

Fast forward to 1999. The future of the computer age was going to be massive decentralization. Libertarian. Anarchist. The corollary to the end of the Soviet Union was that information had this decentralizing tendency. The internet was going to fragment things, and it was going to be this anarchic, libertarian place.

Then if we fast forward to 2019, the consensus view of the future today, I would submit is that, the pendulum has somehow swung back — all the way to 1969. The consensus view is again, that it is about large centralization, Google, Google-like governments, that control all the world’s information, in this super centralized way.

I think that the Life After Google thesis — that I agree with and endorse — is that if we look at this past (and people got it terribly wrong in 69) things were going to go to decentralization. In 99, it actually started going back the other way.

From the point of view of 2019, … perhaps the contrarian thing is to say, maybe the pendulum can swing back towards more decentralization, more privacy and things like that. This is what seems to be, at least contrarian, and something that we should always take more seriously.

If you want to frame it in terms of the buzzwords of the day, in terms of crypto[currencies] and AI, it’s always understood, that crypto is somehow vaguely libertarian. But we never are willing to say the opposite, which is that, if crypto is libertarian, then AI is communist because it’s centralized. The computer knows more about you, than you know about yourself. It is totalitarian.

Communist China loves AI, and dislikes crypto. We should at least, consider the possibility that Silicon valley is probably way too enamored of AI, not just for technological reasons, but also because it expresses this left-wing centralized zeitgeist.

Note: China recently banned all forms of private cryptocurrency and is moving toward a digital currency controlled by the People’s Bank. All transactions can then be monitored by the government and thus contribute to every citizen’s social credit score, which helps determine school admissions, jobs, and loans. See also: Valley insider Peter Thiel’s comments past year proved prophetic: “His fundamental question, “How can Google use the rhetoric of ‘borderless’ benefits to justify working with the country whose ‘Great Firewall’ has imposed a border on the internet itself?”, is especially timely because China’s government uses high tech for, among other things, sophisticated racial profiling. ”

Peter Thiel: So, I think the first contrarian idea I have, is that perhaps it’s time for the pendulum to swing back. Life After Google, at its core means that, we are going to go back from this very centralized world today towards a more decentralized one.

That seems to me, to be the correct thing to bet on.

Here’s the live stream:

Here are the Three Contrarian Ideas, with transcript and notes:

  1. Peter Thiel: Big Tech, as it operates today, is communist. Visions of the computer age have swung from big centralization in 1969 through big decentralization in 1999. Neither got it quite right, Thiel says. The coming decentralization is the First of three Contrarian Ideas that the famed venture capitalist offers tech philosopher George Gilder.
  2. Peter Thiel says, forget the hype: Big Tech is slowing down. Second Contrarian Idea: We can see the slowdown clearly if we look past the hype. Thiel: A self-driving car is a step up from a car but not as big as a car was from a horse. And Google doesn’t even talk about the self-driving car much now.
  3. Top venture capitalist on tackling the big, corrupt universities. Peter Thiel: Online education is great for learning, but unfortunately, learning has almost nothing to do with the so-called educational system. Thiel’s Third Contrarian Idea: Never bet against the human spirit as a source of new ideas. That includes education reform.

And in the fourth and final episode: Is Bitcoin just a flash in the pan? Peter Thiel responds. He reveals that PayPal started out as a libertarian project to free money from central control but that proved harder than anticipated. Thiel thinks of BitCoin as the real thing: “It’s sort of the centralized currency that we fantasized about at PayPal, but didn’t quite build.”

You may also wish to read: Peter Thiel speaking in person at COSM, Seattle, November 10. As a world class venture capitalist, he is known for bluntness about what works and what doesn’t. COSM 2021 focuses on the converging technologies, remaking our world. Thiel asks, is new tech soaring or slumping?


What does super-investor Peter Thiel think you should read?
Some books to consider include history as well as business strategy. The two cannot be separated. A book maven tells us what Thiel has recommended, if you are thinking of starting a business — or thinking about life in general.

Show Notes

  • 00:50 | Introducing Peter Thiel
  • 01:12 | Three Contrarian Ideas
  • 01:50 | The History of the Future
  • 04:53 | The First Contrarian Idea: AI is Communist
  • 06:10 | The Second Contrarian Idea: The Speed of Technology
  • 13:20 | The Third Contrarian Idea: Technology is about People
  • 14:55 | Bet on the Human Spirit
  • 15:22 | The Big Tech Monopoly
  • 19:18 | Improved Education
  • 27:21 | The Monopoly of Money
  • 32:24 | China’s Capabilities
  • 35:15 | Technology and the Human Condition

Additional Resources

  • COSM 2021: November 10-12 in Bellevue, WA 
  • Watch Peter Thiel’s talk on YouTube.

Podcast Transcript Download

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Peter Thiel: Big Tech, As It Operates Today, Is Communist