Welcome to the Desert of the Real: A Conversation with Peter Thiel

Amid Silicon Valley hype, an entrepreneur's pessimism might be a sign of hope.
Appears in Summer 2016 Issue: Our Built World: Some Assembly Required
June 1 st 2016

Peter Thiel is not the Prometheus you might expect. In my conversation with him, the Silicon Valley entrepreneur and venture capitalist consistently points to human agency as the resource that could lift us out of an age of stagnation. Here we pick up on our conversation in San Francisco (you can read the first part of the interview at go.cardus.ca/thiel), exploring the role technology does and does not play as we imagine a healthy, growing, prosperous society.

Thiel is attentive to the grand sweep of history but can zoom in with almost pointillist detail on specific contemporary issues. At times he spins a story worthy of Edward Gibbon, one about the rise and fall of technology and prosperity. At other moments he dives into the psychology of interiority in cadences that sound more like David Foster Wallace.

I think it would be a sign of extreme decadence to say that we are at the absolute apex of what is possible.

Perhaps it is fitting that, near the end of the discussion, I couldn't help but recall Morpheus's prophet-like welcome to Neo as he introduced his new acolyte to the harsh realities the Matrix had hidden from him: "Welcome to the desert of the real."

—James K.A. Smith, editor in chief

JAMES K.A. SMITH: You've emphasized that you think we find ourselves in an era of stagnation because of cultural shifts that have happened. In other words, it's not that we got to the end of our rope; it's more because we've somehow tied ourselves in knots. But that also means we could change things. So if you could change these kinds of phenomena, it wouldn't be just this bland "disruption" agenda. If broken institutions, for example, are the problem, what would healed institutions look like? Or does it have to be new?

PETER THIEL: My own view is that a lot of things are in fact really broken, really hard to fix from the inside. There's a pessimistic read on the startup culture where you could say that people, it's not really a typical thing to start something new. That, the large institutions should have far more resources, longer time horizons and so you only need to start something new when none of the existing institutions work. Maybe the fact there's so much stress on starting new things is the positive tip of the iceberg but the much larger, negative part of the iceberg is that the large, existing institutions are incredibly broken.

JS: When you frame it as a stagnation problem, is the goal to turn it back up? Is the goal to re-accelerate?

PT: Well, I do think that there are a lot of problems that remain to be solved, and so I think it would be a sign of extreme decadence to say that we are at the absolute apex of what is possible. Even though I'm not technologically utopian, where I think this automatically works, I do think that there's maybe something very decadent about saying that we're at the end of history.

I suspect the stagnation is actually not itself stable. I think that if we don't get it to re-accelerate I'm sort of much more apocalyptic than [Ross] Douthat [who is writing a book on decadence] insofar as I think that you might just get a really crazy collapse.

For example, our political system is a cumbersome system—lots of checks and balances and basically, as long as there's a lot of growth or the pie is really growing, you can get people to compromise and pass legislation. If the pie's not growing there's no incentive to compromise and then it just doesn't work. I suspect that representative democracy of the sort you have in the United States and Western Europe does not actually work without the arrow of growth going up.

JS: Does that explain our moment right now?

PT: It's not just ours, it's also Western Europe's, it's also to some extent Japan's. Somehow the system's proved incredibly fragile to that.

JS: I think the reason why I resonate with your culture/nurture account of stagnation is because it also strikes me that obviously it would take nongovernmental resources to pull off the sort of re-acceleration you're describing. I also hear you pointing to nontechnological resources to pull this off because really what we're talking about here now are cultural systems, habits, institutions. We might even think about this in terms of the Catholic notion of "subsidiarity," right?

PT: Right.

JS: You have all of these sorts of layers of social communities that would foster a culture that could turn a corner.

My sort of one sweeping cultural idea about the United States in the last forty, forty-five years is that an awful lot of things are basically designed to hide stagnation or decline.

PT: Yes, although I would be very far down the subsidiarity thing on this. This is where I'm sort of more of in the libertarian, individual/small-companies zone. And probably the way I would frame it is that I think it's so messed up, it's too hard to get larger numbers of people to coordinate on this.

JS: Then you don't have a culture. Even if I'm totally with you in the diagnosis of statism as an overreaching behemoth, if this is really a "cultural" account, you need some role for communal collaboration. It seems to me that even the individual who has the imagination to help us turn this corner is indebted in some sense to resources, to communities, to social imaginaries that they've inherited somehow.

PT: Yes, it's possible that it's not enough to do it on that little level. So you may be right about that. I always had this very schizophrenic relation to the larger political governmental zone because I do think it's important, and then I think that if I spent all my time on it I would go completely crazy because it's so hard to actually be effective.

JS: I live in a university so I know exactly what you're talking about.

PT: And a university is not even the biggest structure.

JS: No, and even it is already an immovable ship.

PT: There are a lot of institutions that even at that scale are in shockingly bad shape. I don't know if it's enough just to do things at a smaller scale. I find myself attracted to trying things on a smaller scale because that's where I can actually get it to work. Then maybe there's a version where you get enough things done on a small scale that somehow adds up or it sets a different role model, something like that.

JS: Sure. And if you think of those spaces as not just corporations or companies or startups that are creating something, they are also in some sense incubating their own cultures that are forming people to then inhabit the wider culture differently, right?

PT: Right.

JS: A classic example would be a family: the family is an institution that is supposed to do this. But talk about an institution that is also very broken.

PT: Right, and there's always the argument that it just gets totally overwhelmed by the bigger culture.

JS: Well why wouldn't the individual then? Even more so.

PT: That's fair. It's a very hard problem.

To get out of the desert that we've been in for the last forty years you have to start by saying that you are in a desert, not in some sort of enchanted forest.

JS: In some sense it comes down to the sort of imagination it takes to do the creative, innovative work that you've done. What fueled that imagination? What are your debts?

PT: I'm always uncomfortable with the autobiographical questions. They're so hard to answer in some ways. But I think . . . well the negative part that I tend to stress is that it was important to somehow have the ability to think without it being squelched right away. I do think our greatest intellectual problem is some form of political correctness broadly understood, so that you'll bring up an idea and hear: "Don't go there, that's bad"; "Don't explore that, that's just wrong"; "No point investigating that idea, that was discredited three hundred years ago." There's something around that that I think is quite problematic. Things like the Dewey educational system, where everything is just homogenized and standardized.

JS: I think what's intriguing though is how many people, just because they're not paying attention, would have associated you with a kind of, "We're going to invent our way out of this problem." That's not what I really hear you saying. I mean, you want to create cultures that nurture imaginative thinking and innovation, but you actually don't think it's "tech" that's going to get us there. It's more like the software of a society that has to change.

PT: Well, yeah. I'm always focused on the tech as an expression of this. But I don't think it's getting us there; I certainly don't think it's getting us there automatically. It's if you sort of say, "the singularity is near," as if it will just happen and all you have to do is eat popcorn and watch the movie of the future unfold.

JS: As if it's just fated . . .

PT: Even though I think technology is important I will always want to put the stress on human agency as a much more important question rather than this passive assumption that there are just these extremely large forces that will drive it one way or the other.

JS: That's why you're interested in the cultural conditions that got us to where we are. How did we get here?

PT: Yeah. There's a question of why did we get here? What were things that went wrong? Maybe it was the baby boomers in the United States in the last forty to fifty years. Why did we get here? Maybe that's related to, How do we get out of this? So those are two cultural questions.

A third question that I always find to be interesting—though I'm not sure how general it is since it comes out of my minority view—is, Why is this not more obvious? My sort of one sweeping cultural idea about the United States in the last forty, forty-five years is that an awful lot of things are basically designed to hide stagnation or decline.

We have reasons for the decline and the things we can do about it. But then we also have a whole set of cultural institutions that hide the decline from us. I'm reminded of the John Milton line that "the mind is its own place and of itself can make a hell of heaven and a heaven of hell." One of the big cultural mechanisms that I think has taken place over the last forty-five years is the shift to interiority, where we don't think about the outside world but instead focus on internal states. So it's yoga, it's recreational drugs, it's sort of . . . it's various extremely nonmaterial things that are supposedly goods that make it . . .

JS: Where you go hide.

PT: Where you can hide.

JS: It's a very Pascalian dynamic actually: Distract yourself from facing up to the reality.

Understanding that things are bad is a form of progress.

PT: Yes, so I wonder whether there are all these cultural institutions that have played a powerful role in distracting us. The educational one is something like the horizontal Dewey system: you don't compare yourself with your parents, you just compare yourself with your peers, and there are always some people doing relatively better. It's a crosssection of time, and you don't do it across time. Then you can avoid facing the decline.

There's this very interesting set of questions that I've gotten interested around history that are related to this. If we assume everything is fine, you don't study history because you might realize that things were better. I suspect maybe this is even true in some of the sciences, that maybe even the sciences have regressed. And I wonder whether this is true of the lot of the social sciences, where this unholy conservative/liberal alliance hides the decline—where the conservatives say the social sciences were bunk, are always bunk, and we don't need to look at them, and the liberals say they are relentlessly progressing and therefore we don't need to study the history of these sciences. Maybe [James] Frazier [author of The Golden Bough] was more interesting as an anthropologist than the people who went native and became cannibals in the 1970s. Or Freud or Jung or all these people were much more interesting in psychology than the general fields you now have, where almost nobody who is in it believes there's such a thing as a mind.

JS: That's the second time you've made me think about C.S. Lewis's comments about the "chronological snobbery" of late modern culture. In some ways you're saying we should be more open to some historic ideas that we thought we've progressed beyond because actually they might hold more wisdom for us.

PT: I think it's hard to even fully engage when you're thinking it's just getting better.

But if we're talking about cultural dynamics that blind us to the decline, I've said there's an educational version of this, a history version, and I think maybe all the culture wars in our society can also be filed under this rubric of hiding scientific and technological stagnation from ourselves.

We landed on the moon in July of 1969 and Woodstock began three weeks later. With the benefit of hindsight, that's when the cultural war around progress was lost and the hippies sort of took over the country.

But if you're so very intensely focused on various cultural fights then you can ignore how everything else is strangely unchanging. The cultural question that I think is very interesting is whether there's a lot in our culture that's hiding this from ourselves. Extreme specialization is another cultural mechanism where we tell ourselves that we need to be specialized, that we can't think about these bigger questions about the whole—"interdisciplinary" is always a bad word—so maybe specialization is again a way to really hide the decline.

JS: So if you were actually going to turn this stagnation arrow upward again, it would probably get worse before it got better because one of the things you'd have to do is stop the denial. You'd have to remove all these blinders and blinds that are hiding us from the reality.

PT: I don't think that would necessarily make it worse. Probably to get out of the desert that we've been in for the last forty years you have to start by saying that you are in a desert not in some sort of enchanted forest.

JS: Then that becomes an impetus for change and opens up the possibilities for grappling with it.

PT: Yeah. Rhetorically, it's always hard to know exactly how to calibrate it. You don't want to be so pessimistic as to say we're in a bottomless pit or something like that.

JS: I understand the pessimistic end of the continuum. And yet it doesn't seem to me like pessimism has the final word here for you. Are there any resources for hoping it could be otherwise? Is agency important to this?

PT: I think there is a sort of indomitability of the human spirit.

There's a certain way in which I think understanding that things are bad is a form of progress. I think it's gotten clearer in the years after 2008 that something's really stuck. I think there's a possibility for having these discussions today in a way that you could not have nine or ten years ago. There are a lot of zombie theories that are on autopilot and they're utopian, dystopian, various governmental political ones. I think they've gotten a lot weaker, and so I think there's a little bit more of an opening for this. Then I do think it could be very different.

One out of three people suffer from dementia by age eighty-five, and I imagine we could find a cure for that. I don't think that that's inconceivable, and it seems strange that we're in a culture where there are no alarms around that—that we're so passive about it. But I think all these things . . . there's always a possibility for these things to change.

I could imagine it being very different.


James K.A. Smith is editor-in-chief of Comment and teaches philosophy at Calvin College where he holds the Gary & Henrietta Byker Chair in Applied Reformed Theology and Worldview. His latest book is Awaiting the King: Reforming Public Theology (Baker Academic, 2017).


Peter Thiel is an entrepreneur and investor. He co-founded PayPal and was the first outside investor in Facebook; he also co-founded Palantir Technologies, the data analytics firm. He is the author of New York Times bestseller Zero to One: Notes on Startups, or How to Build the Future.