I annotate a podcast with Peter Thiel and Eric Weinstein. Here is the original podcast (3 hours).
An excerpt from my annotation:
Weinstein says that if you walk into a room and subtract all of the screens, you will think that you are still in the 1970s. That is an indication of lack of progress.
I am inclined to push back. The first car I bought, in 1975, was a Ford Pinto. The quality of cars has gone up a lot since then. The food in my house is much better and much easier to prepare than the food in 1970. Outside my house, food choices at restaurants are dramatically better than they were in 1970. The ability to obtain goods made elsewhere, particularly overseas, has gotten much better. The ability to travel overseas has gotten much better, and once you get there it is much easier to pay for stuff, to find lodging, and so on.
Overall, I note that Thiel comes across as a conservative with the temperament of a revolutionary. Weinstein comes across as a progressive who holds onto some values that now seem archaic.
“Weinstein says that if you walk into a room and subtract all of the screens, you will think that you are still in the 1970s.”
Not if that room is a kitchen and you see all the impossibly luxurious (by 1970s standards) cabinets, counters, and appliances. Not if you sleep on 500-thread-count sheets. Or drive a car (the differences with 1970s cars are amazing). Not if you ride bicycles (no mountain bikes then, no suspension, no index shifting, no alloy rims or disc brakes, no saddles designed not to make your nether regions numb). Not if you engage in any number of different sports and hobbies: photography, mountain-climbing, scuba diving, tennis (Bjorn Borg was playing with a small-headed *wooden* racquet). My brothers and I started skiing with wooden skis with cable bindings and lace-up leather boots (getting my first pair of ‘metal’ skis was a big deal).
Don Boudreaux did a great series on CafeHayek using a 1975 Sears Catalog. And the catalogs are available online. Spending a few minutes perusing one is a eye-opener. It really was different world:
http://www.wishbookweb.com/FB/1975_Sears_Wishbook/files/assets/basic-html/page-284.html
Let’s split the difference. The 2019 car is much more enjoyable to spend time in (podcasts, adjustable seats, etc). However, it gets you to work at exactly the same speed as the 1970 car. In fact if traffic has gotten worse, it may get you to work slower. The core function of the car, getting people places, hasn’t changed. Which means the core function of all sorts of things related to that (real estate, etc) hasn’t changed.
I think we all know that lots of consumer items have improved on many quality metrics, but they haven’t changed in core function.
If we had gotten the oft remembered “flying cars” we would all get to work infinitely faster. No traffic. People able to live almost anywhere while still accessing the jobs and amenities of the city, which would transform real estate and a million other sectors.
“The core function of the car, getting people places, hasn’t changed.”
I would say that the core function is getting people places safely, reliably, and comfortably. Compared to 1970s cars, safety, reliability and comfort have increased dramatically. The current death rate per 100 million vehicle miles is only about 1/3 of what it was in 1975. And do airbags and other safety devices count as new inventions in their own right or just as quality improvements?
“I think we all know that lots of consumer items have improved on many quality metrics, but they haven’t changed in core function.”
Well, Weinstein doesn’t seem to know it. And changing ‘core function’ seems like an odd standard. The ‘core function’ of a physician hasn’t changed since Hippocrates, therefore can we conclude that nothing really significant has happened (just some quality improvements)?
Devil’s Advocate: you’re only partially correct. The cars of the ’70’s and before might have been less safe and less comfortable (maybe), but they were also more stylish and more fun to drive. My dad dropped 15 grand a few years ago on a ’72 Corvette, and plowed a bunch more money into maintaining it. I drove it a few times, it was fun, and it looked pretty cool, too. Not hard to see why he spent the money on it.
By contrast, look at an ’87 Corvette: the market for those is essentially nil. Boxy as hell, not considered any sort of classic or collectors item. Melt ’em down and make a Kia Sorrento out of ’em because they have no value.
My point is that cars of today might be safer, but all the crash test requirements and safety regulations that made them so have come at something of a cost in terms of style and design.
In your opinion.
Can you get a car today that is as “fun to drive” as the 1972 Corvette for $34,000? (Base price in 2019 dollars).
Collector (or nostalgia) value aside, there are many fun to drive cars in that price range. Virtually all of them “better” than the 72 Corvette.
Better how?
“Better how?”
Accelerate faster. Handle better. Would beat a ’72 Corvette on the drag-strip and the track while using much less gas and requiring much less service. Like these classics, I’d expect ’72 Corvette to come in behind a modern minivan, let alone a bog-standard Honda Accord.
So basically better in every way that matters save nostalgia and subjective styling.
So we come to the conclusion that we have indeed been comparing apples and oranges all along. The average modern passenger car, with the benefit of decades more R&D plus modern materials and manufacturing technology, is supremely competent, fast and safe. It can also be rather antiseptic.
And sports cars, we find, are about more than generating numbers—hell, any minivan can do that. They are about the fact that when certain parts are put together in certain ways by certain people, they become something greater than their own sum.
Isn’t that pretty much what I said? Sounds like you posted a link that agreed with me just as much you.
We have flying cars, they are called airplanes and helicopters. There are major tradeoffs in these two categories of “flying cars”. The problem, as I see it, is C.P. Snow’s Two Cultures in which the language/humanities side see’s innovation like the Wright Brother’s heavier-than-air flight through the lens of imagination and inspiration. The Wright Brother’s innovation should be seen and understood through a technical lens. Their multiple innovations and approach are a showcase for innovation in engineering.
Many engineering fields get to the point where the techniques/technologies are mature. These near perfect end-states should be celebrated not lamented.
Lawyers like Thiel fail to appreciate technical innovation/stagnation, in my opinion.
“These near perfect end-states should be celebrated not lamented.”
That’s fine, but its kind of like saying that the Roman Empire reached a near perfect end state for agricultural Malthusian civilization. Perhaps true, but still stagnant.
The bottom line is that exponential growth is built into a lot of societal organization. For one, exponential growth removes a lot of zero sum conflicts. If I had a flying car that could get me to work from 200 miles away in half an hour while still being economical, then I wouldn’t be so worried about zoning or overcrowding because I could just exit as opposed to bidding against the same scarce resources as everyone else.
In reality a ride in Ubercopter from JFK to Manhattan, hardly a far distance, costs $500 roundtrip or $125,000 a year if you actually used it to commute each day. And that’s a short distance between two crowded points.
There are all sorts of good reasons for this, but the bottom line is we are all still sitting in traffic.
Gaussian growth looks exponential in the first 3rd of the curve. Chasing past growth based on bad assumptions is a sure-fire way to destroy value.
Or worse, it leads to people like Thomas Malthus jumping to horrible conclusions about the innate uselessness of the poor… oh wait, you probably like that.
Painting supernatural stories with technical metaphors doesn’t make them any less magical. If only we had magic carpets, imagine, imagine.
Flying cars are ruled by physics. Rome was not. Know thy problem space.
…but the bottom line is we are all still sitting in traffic.
Not me. My commute for many years has been from the bedroom to the home office. WAY cheaper and faster than a flying car. It’s an arrangement that has been enabled by inventions and improvements all made after the 1970s.
OMG on 1970s cars, especially American cars. When go through the worst made American cars, half the list is dominated by 1970s like Pintos, Gremlins and Novas….They are all ugly Brown or Olive Green! Living through the late 1970s, Americans were driving boats that got 12 MPG. (Watch any 1970s Roger Corman produced movie and not think the cars are complete eyesoars!)
There is a reason why the Japanese car companies started dominating the car market in the late 1970s:
1) The gas crisis of 1970s and high oil prices hit the economy BIG in 1979 and forced families to avoid big cars. Professor made the argument that capitalism pricing mechanism is the best solution for rationing resources across the economy. Did you know the US consumed less gas every year after 1978 until 1993? Why? Main reason: The Japanese built a quality small car, the Corolla or Civc, that could get 25 – 35 MPG instead the shit Pinto or boats like the Crown Victoria.
(To further get on soapbox the domestic going all in with light trucks that dominate their profits but if oil goes over $120/barrel, people will return to more cars.)
On the Rogan podcast Weinstein says he is repelled by Republicans because “they would exclude me from their country club”. That statement also struck me as archaic. His reluctance to go to Germany struck me the same way. For a smart guy he seems to hold on to priors from his youth rather strongly.
Most of my wife’s family vote Democrat despite being very out of step with the modern Democratic Party. When asked a lot of it seems to go all the way back to opposition to the Vietnam Draft. What’s relevant in your youth stays with you.
Most of my wife’s family vote Democrat despite being very out of step with the modern Democratic Party.
So are they voting Joe Biden in Primary? The one reality with the D Primary polls, Joe Biden has been the leader the entire time (currently ~29% on RCP) and yet everybody assumed he can not win and is out of step with Democratic voters. So far it has been the anti-Guiri Primary but it is still early. (Do you who called the Trump Primary win the earliest? Republican Primary Polls!)
The other most important reality of Biden lead is he is strongest with Southern African-American voters! (Matt Yglesias point on Biden is he is the favorite because older Democratic like him best and older voters dominate the Primary voting.)
I have no clue who they support in the primary, it seems reasonable though. They aren’t very engaged in politics. It’s mostly just habit.
Also, none of them started families so the thing that usually shifts people to the right never happened to them.
I think name recognition is huge in these things, and that played to both Trump and Biden’s advantage. Trump probably proved that name recognition is good even when lots of people recognize you for something bad.
That is so absurd on two levels.
The idea that Weinstein paints himself as some socially scorned outsider, while he is this darling personality of the political right is absurd. Next, “country clubs” are not part of normal mainstream life, but are primarily known as this absurd caricature from old pop culture movies that feature “prep” antagonists who wore sweaters tied around their neck in the most ridiculous fashion.
Yeah I agree, it was a jarring statement. He then went on a little rant about how Republicans like to destroy Yosemite and gleefully club baby seals. To me, these cartoonish views greatly reduce the credibility of the “big picture” predictions and statements he often makes.
The key focus in Thiel’s thesis is that stagnation = existential risk to Western institutions. My rephrasing:
Because of the embedded rent-seeking the institutions introduce friction costs (perhaps on the order of 2-10% of GDP, depending on how you view the defense largesse) . Solving for equilibrium doesn’t look good when growth collapses, and temporary bubbles (driven by monetary illusion) are masking the unpalatable optics (of political rentier class gobbling up the former middle class’ share).
The end result is disruptive (revolution/collapse) as opposed to gradual adaptation to the lower growth.
To be clear, this is my view of Thiel’s thesis, and from the engineering perspective a rational reallocation of resources in the face of stagnation is preferable to the present food fight in a zero-sum economy.
My view is that humans are adaptable and playing videogames and smoking pot in parents’ basements will be acceptable to the populace (i.e. no revolution)
+1
It may be that the gulfs will wash us down:
It may be we shall touch the Happy Isles
-Tennyson
Frankly Peter Thiel and Elon Musk come across to me like Ayn Rand heroes. That they complete smart geniuses that the problem of society is not following their every word even though half their ideas are terrible and come off like complete jerks. In the modern global economy, most geniuses have 2 – 3 really good billion dollar ideas but tend to overstate the record.
At least Bill Gates comes across more humble and how many GREAT ideas did he have. Or Steve Jobs, for how smart he was on the impact of home computer and phone devises, almost ran Apple out of business in the 1980s and was not a successful Pepsi CEO.
Elon Musk is no Ayn Rand hero. His greatest ability is to hoover in government subsidies.
After listening to the podcast, the two men seem to share an infatuation common today and often found on this blog, discussing reasons why smart people make irrational decisions and why innovation is disappointing.
The big dilemma with innovation and with capitalism in general is with marginal incentives biased towards growth. We have a great deal of innovation in our lives, but it feels like it has gobbled up any remaining bandwidth we have left as human beings.
There are some amazing efficiencies to owning an iPhone, but on net, it leaves me with a greater set of personal burdens and vulnerabilities than before. Innovation in the last 30 years makes life more comfortable and I have more resources, but it isn’t easier on net, and maybe these improvements don’t make my life overall that much better.
I have a lot more to pay for. I have a lot more to learn to get the good stuff, and I have to be much more careful in my decisions than my parents did. We can’t keep adding more going forward. We are going to have to edit. We are going to have to balance efficiencies and new features.
What you’re describing (and I agree) is that we are past “peak human”. Complexity has overtaken the comfort zone of human cognition. The interview refers to it by saying that specialization required to compete leaves no space in any individual for aggregating and generalizing the specialist knowledge. Our solution so far has been via organizations (allowing us to outcompete the bigger-brained neanderthals). But the interview is arguing that complexity is probably outside the organizations’ comfort zone as well (in reference to academic politics, PC, etc). Perhaps the next solution is artificial superintelligence (which will follow 7 minutes after the birth of artificial general intelligence). This would marginalize humans more.
This isn’t a dilemma with capitalism; it’s a dilemma with life. Even if nothing else is scarce, time is; and realize it or not, these innovations that burden you also free up enormous amount of previously scarce time. And of course, once freed, you immediately fill up that free time with other distractions and burdens, but what else would you do with it? Many people have fantasies about just reading a nice novel by the garden, but it turns out other things – like making fun of politicians on twitter or seeming fashionable or clever to others – matter more to them than such simple pleasures, even if they pretend otherwise. And of course as old material worries recede, new ‘spiritual ones’ take their place. But that’s not because of capitalism or technology or what have you; that’s biology, and it has no social or cultural or political solution. We’re not hard-wired to be content when our basic needs are met. That pathological discontentedness is part of our success as a species.
My point is that modern markets aren’t working like that. Modern innovations are not balancing efficiency and added value. Life is getting faster, more complex and more difficult.
I agree completely that “We’re not hard-wired to be content when our basic needs are met.” But for the first time in history, we are widely able to obtain more than we are capable of managing. We don’t naturally edit well enough, and we are going to have to figure that out in order to proceed.
I agree with your observation that attention is the new scarcity but I think that I’m somewhat more optimistic that this too can be solved.
Paul Graham, in an essay about how to generate good startup ideas noted:
The edge of this spreading fractal stain has a new interesting problem that you have outlined. This is an opportunity for one or more new innovations.
Most people are talking about reforms to boost growth. Which is fine. However, as a contingency plan, we should also consider institutional reform to deal with an extended period of very low growth.
The shift from defined benefit to defined contribution plans is one example of a strategy that is more resilient to a lower-than-hoped growth rates scenario. But much more would need to be done to defuse all the time-bombs we’ve built.
I think 1970 is a bad point in time. To me, a much stronger point would be 1995. It’s been about 25 years, but sometimes it feels like everything has stagnated since that point, just before the mass introduction of the internet. Music feels very similar, fashion seems very similar. I don’t see much difference in restaurants and food other than perhaps quantity.
+1
I would agree with 1995 but I do think we forget that there is a load of investment in former third world nations. So there is a sense and some reality that things have not improved that much since 1995/2000 or so.
However, ask the average Chinese or India citizen about how much their lives have change from 1995 to today? I bet their answer are dramatically different. (That said I don’t know what happens when all the globe economy turn in Japan in next generation.)
While that’s true, shouldn’t third-world development be independent from first-world? Like, if quality of life in the first-world had increased dramatically, would the third-world still be stuck at their 1995 level?
A model where we can either have development in the third-world or development in the first-world, but not both at the same time seems very odd to me.
Overall I would agree with you but one of the mother of necessities is both rising labor expense and increasing real wages. So it is a bit of mystery to me why ordering kiosk have not grown more the last 10 years. Literally there is nothing new about them and I have wondered why they are used more. (I see them only high traffic and high cost labor such as airports and convention centers in the middle of the city.)
1) In certain ways, China high investment has crowded out investment and productivity in other economies.
2) There is a demand component of productivity and slow or declining population itself slows productivity.
3) US working class wages have not only stagnated but also not even kept with productivity gains since 1970s. So this limits more productivity advances.
4) Healthcare productivity save lives but comes at higher cost.
5) There is simply a much higher cost of testing new innovations. Driverless cars are great productivity gain but it is going to take decades to test these things.
FWIW, McDonald’s is putting ordering kiosks in all their restaurants.
Much appreciate the annotation.
But begging pardon for the impertinence, Thiel does not seem particularly revolutionary or conservative here. He seems to be a run of the mill social critic who imagines a better world and catalogs all the ways the current world falls short. Yawn.
It is no great pearl of wisdom to note that we don’t know what the future holds. Prophesying stagnation is always a safe strategy. We see it over and over again in all kinds of fields. Back in 1990 the World Health Organization estimated that there were 38 million blind people in the world and that this figure would grow to 76 million by 2020. Today they estimate that the figure has declined to 36 million. Treatments for river blindness and incremental advances in the treatment of retinopathy and cataracts have benefitted tens of millions. Yet forecasters see increased rates and numbers of blind people in the future due to age, diabetes, etc. No real way to know if this forecasting is rent seeking or a helpful spur that will avert future suffering.
The future belongs to the doers, not the critics.
Thiel is a doer deserves great credit for all his various initiatives like the fellowships where he is putting his money where his mouth is.
But progress occurs in many unheralded realms as well. I’m reminded of a small town, fly-over country cousin who graduated high school, went to work in a factory, saved money, bought out the owner, improved designs, and now travels the world selling his new and improved products. Incremental progress.
Horatio Alger stories do happen but how often do we celebrate and raise the status of such doers?
Inspiration might flow from paying greater attention to the doers than the prognosticators. Personally, national holidays in honor of some great US doers may encourage some young people along the right path.
Some personal priorities. February 21 could be celebrated as the birthdate of George A. Stephen, Sr., inventor of the Weber grill, a noble and beloved invention too often taken for granted. February 7 could be set aside to honor Orin F. Stafford, inventor of the charcoal briquette and the rotary kiln that used wood scraps and sawdust to produce them (brought to full production fruition by Henry Ford and Charles Kingford). And the numbers of these doers is legion but so many go sadly uncelebrated.
Telling these stories and honoring these doers may inspire forward progress by youngsters who all too often lack exposure to the ordinary run of the mill doers who accomplish so much of what we take for granted.
My house was built in 1955.
Here is something that has been nagging at me with all the zoning, building restriction, and YIMBY talk. Look at this chart of new home sales. From about 1991 to 2005, the rate about triples in only 13 years.
Yes, this is a national rate and doesn’t capture what might be flatter curves in certain important locations, but still, I still on average even in those places you’d see a slightly less dramatic but still steep rise in new home sales.
Now, my impression (correct me if I’m wrong) is that the zoning and building rules in most places have been more or less the same for the last 30 years or so.
So, does it make sense to put so much blame on those rules now, when, during that recent 14 year period, they apparently didn’t stand very much in the way of a tremendous amount – and high rate of growth – of new home building?