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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

In this third episode — on Peter Thiel’s Third Contrarian Idea — 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.”

In the first episode, Thiel noted that the way Big Tech operates today has more in common with a communist state than with a democracy. So his First Contrarian Idea, set out there, is that decentralization is coming.

In the second episode, he talked about his Second Contrarian Idea: If you look at the big picture over the past few years, Big Tech’s progress is slowing. That’s not the hype we hear but then Thiel didn’t make nearly $4 billion listening to hype.

Peter Thiel

Now, in the third episode, he advances his Third Contrarian Idea, that technology is about people and never bet against the human spirit as a source of new ideas.

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 and, as we will see, Thiel is an expert at delineating them. In this third part of a four-part series, Thiel offers his Third Contrarian Idea, tacking the current corruption at universities in the process:

This portion begins at 13:20 min. A partial transcript and notes, along with Show Notes and Additional Resources, follow.

Peter Thiel:This Third Contrarian Idea is a qualification on my first two ideas: First, the pendulum’s going to swing back to decentralization. Second, it’s swinging back but it’s just going to be slow. Everything has slowed and we’re in this world of stagnation.

But, a qualifier to both is that, at the end of the day, technology is about people. It’s not about inanimate forces. It’s not some kind of Marxist historicism about the way things are inevitably going to happen. The stress is always on individuals, small teams that start companies, that start new projects, that do new things.

Note: Thiel got a chance to put his beliefs into practice: “He has been a prime mover in PayPal, Facebook, Palantir, Airbnb, Lyft, and Elon Musk’s SpaceX. And he had intended to found a university. But, after seeing what happened to so many founders’ intentions, he ended up giving gifted entrepreneurs grants to drop out of university and just go do it.” – Mind Matters News He has spoken and written against political intolerance and the Atheist Church of the universities.

Peter Thiel: It’s a question of human agency, it’s not deterministic. We have every possibility to do these things, but at the end of the day, it is up to us to make it happen.

Life goes on and, in particular, human life, humanity goes on — even though the dominant narrative is that tech is about inanimate forces or Marxist historicism. It really is, at its core, about human beings, and we should always bet on the indomitability of the human spirit.

George Gilder: Today, the US government has a full court press, against all these giant technology companies. They’re claimed to be monopolies. Peter, you’re the world’s leading expert on monopolies; how they form, what they contribute, what their life cycle is. What do you think of this, all these huge fines for relatively trivial offenses, and array of litigation against Facebook and Google, and all these giant companies, these colossi that rule our world.

Peter Thiel: I’m on the board of Facebook, so I have to be pretty careful how I answer your question here, but, let me give a somewhat indirect answer … I think, some of these criticisms are justified, and Silicon Valley needs to do a better job, in many ways. But, I believe, that the core defense Silicon Valley should give, against the accusations of being too big, and too centralized in all these problematic ways, is that the alternative to Silicon valley… is even more centralization, in the form of Chinese communist tech companies, where it’s basically just one giant org-like thing, controlled by the Chinese communist party.

So, if there’s a problem with big tech, if it’s too homogenized, too centralized and so on, we have to be careful, that we don’t set up an alternative, where it’s even bigger, even more centralized, and literally communist.

So how would Peter Thiel change the education system? He discusses that with his host George Gilder

Peter Thiel: The way to think of the universities today, is that they are as corrupt, as the Roman Catholic church was 500 years ago.

You have this system of indulgences, that takes the form of runaway tuition. You have this priestly, or professorial class, that is pretty lazy, and doesn’t do very much work. You have this theory of salvation, where salvation consists of getting a diploma. If you do not get a college diploma, you are going to end up in a very bad place, and so there’s a soteriological [savior] story as well.

It’s a, universalized, centralized, big story. It’s a successor to the universal Catholic church, is this universal, university system. Maybe this is an oxymoronic way to describe it, but I think you have to think of it, as the atheist church, with a capital A and a capital C.

I have no problems with the Church, and I have some problems with atheism, but I think the Atheist Church is really, simply too much. We should be fighting the atheist church, in all of its forms. I can’t quite predict the future, but reform does not come from within. There were all these attempts to do, to reform these universities from within. It just feels like a fool’s errand of sorts.

I remember in 2007, over a decade ago. I had this idea that my big nonprofit philanthropy project, was going to be to start a new university. I had, someone at my foundation spent a year and a half, looking at all the universities that had been started in the US in the preceding 100 years, with 1907 to 2007.

It was a sorry tale of donor intent betrayed, money wasted, and things just not working at all. There were a few tiny things, that you could say worked, but on the whole, it was just a sorry tale of failure. The lesson I took from it, was one of, a little bit of humility because, if one reacts, “well, people have failed at this for a hundred years, and I’m going to do it better”…

The lesson I took instead was, maybe the system is actually, unbelievably hard to reform on the inside, and like in 1517 [the Reformation], the reformation starts from the outside. The alternative, is not to create some new university system, some new template. It’s for people to do different things.

The way we started, was with this Thiel Fellows program. We try to convince 20 students a year, to stop out of college and start companies. It was not a plan, but it was going off the ever narrower tracks, that are working ever less well… the internal label we had for the Thiel fellowship was, it was about programming and deprogramming. We need to deprogram people from the cult of the Atheist Church.

Note: Just recently, Dorian Abbot, a world-class expert on climate on exoplanets (which determines whether they could host life forms), had his lecture Canceled at MIT because he was on the wrong side of a political squabble over the value of merit-based evaluations of students at his own university. Princeton University stepped in to enable his lecture, October 21, 2021, 4:30 EST. The situation has been widely seen as a test for the purpose of a university.

George Gilder: What about online education? What is the promise of that? There are a lot of really significant initiatives, which are actually having an impact. What do you think of, are the prospects really, in using information technology?

Peter Thiel: Well, there’s obviously a lot that one can do online. When I take my “venture-capital list hat,” I always think it’s very important to break down the abstractions a little bit — and to remember that education itself is always an abstraction.

Let me suggest, there are four different things that education means in practice: It’s an investment in your future. So, you go to college, it’s an investment into a better future.

Second, it’s a consumption decision, so it’s like a four-year party. I used to think that it was this bad superposition, bad quantum superposition of investment and consumption. It was like people in the housing bubble who bought a large house with a swimming pool, and it showed how frugal they were and how much they were saving for retirement. We were conflating investment and consumption, which is always a mistake.

But I now think, it’s the third and fourth one that are the more important. The third one, is that it’s an insurance product, and that it’s something you buy to avoid falling through the ever bigger cracks in our society. They can charge more and more because people are getting more scared, about some of the things that have gone wrong in this country.

The fourth one is, it’s a zero-sum tournament, where you have to think of Harvard, Stanford, and Caltech, and the other elite universities as a Studio 54 nightclub, in which the value is not that you have this information — the value comes from exclusion, from excluding people.

There’s a Harvard or Stanford version: Putting Harvard or Stanford classes online, and letting people take them. But they don’t get credit at Harvard or Stanford, and taking those classes does not lead to a Harvard or Stanford degree. That tells you that a lot of the value of this very strange good, that is called education comes not from the actual learning, but more from things like status, selection, exclusion, things of that sort.

When we look at these different approaches, we have to try to disentangle what they’re doing. So, online education is great for learning, but unfortunately, learning has almost nothing to do with the so-called educational system.

Next: What does Peter Thiel think about the future of cryptocurrencies as a form of decentralization?

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.

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Top Venture Capitalist on Tackling the Big, Corrupt Universities