Cardinal Conversations: Reid Hoffman and Peter Thiel on "Technology and Politics"

welcome good evening I'm purses drell

the Provost of Stanford University and I

am here on behalf of myself and

president Tessier Levine

to welcome you to Cardinal conversations

last fall mark and I asked several

University thought leaders in

conjunction with student leaders to

organize a series of discussions we ask

that these discussions advance to

commitments at the heart of Stanford's

research and education mission our

commitment to the free expression of

ideas and our commitment to fostering an

inclusive campus culture the students

and thought leaders were asked to decide

the format of the events the discussion

topics and the guest speakers and in

just a few moments you will see their

collaboration fair fruit

so tonight I'm pleased to welcome you to

the first event in this new discussion

series the initiative is very important

to both me and to mark so important that

we're actually doing a balancing act to

participate I normally teach a physics

class from 6:30 to 8:30 on Wednesday

night mark is currently teaching my

physics class for me

he's undergraduate physics degree so I

can inaugurate the series after my

remarks I will return to my classroom

and Mark will join you for the

conversation in a few minutes Mike

McFaul the head of Freeman spogli

Institute will describe how he and Neil

Ferguson of Hoover convened a group of

students and work together with them to

initiate this series and he'll describe

their plans moving forward then Neil

will moderate a discussion on the topic

of technology and politics between

well-known entrepreneurs and Stanford

alumni Reid Hoffman and Peter teal so I

have to start by thanking Mike Neil and

the student leaders from a broad range

of organizations across the political

spectrum for putting together the series

and I have to thank Reid and Peter of

course for agreeing to be our first

Cardinal conversations participants and

I know everyone here is eager to hear

their thoughts the goal of Cardinal

conversations is to

courage the free expression of diverse

viewpoints to stimulate critical

thinking by considering opinions beyond

our own and to engage in civil and

intellectually rigorous conversation so

why is this initiative such an important

priority for mark and myself

well first we believe that in both

research and education breakthroughs and

understanding come not from considering

familiar limited ranges of ideas but

from considering a broad range of ideas

including those we might find

objectionable and engaging in rigorous

testing of them through analysis

conversations and debate second our

strengths at Stanford derives from our

diversity diversity of backgrounds

religions nationalities races genders

sexual identities ages physical

abilities political views and ways of

thinking

we are only successful as an

intellectual community when our

discussion benefits from the entire

range of diverse perspectives present on

our campus and finally we feel it's the

responsibility of all of us not just

that we ensure that the expression of a

diversity of views is not just a

possibility but we also work to make it

a reality at Stanford both in the

classroom and outside of it and one way

to do that is to ensure that diverse

perspectives are actually discussed at

Stanford so it is in this spirit that

tonight's conversation we hope the

carnival's conversations to come will

help open all of our minds to diverse

opinions and that we will all commit to

intellectually rigorous and respectful

dialogue across differences whether in

the classroom in the dorm or in social

media whether as a student a scholar or

a citizen of the world as you are all

aware we cannot mandate respectful

disagreement but we can model it and we

can encourage it and I thank you all for

being here tonight as ambassadors of

that cause

thank you very much and I would now like

Mike McFaul to come up and make some

remarks thank you hey everybody thanks

for coming

I'm Mike McFaul I'm the director of the

Freeman spogli Institute professor

political science and senior fellow here

at the Hoover Institution it's fantastic

to see so many people here tonight I you

call it thought leaders as Provost draw

I don't know if I'm a thought leader but

I am a professor and I am an adviser to

Cardinal conversations and it's a real

thrill and privilege to do that I want

to say three points to add to what our

Provost just said first I want to

congratulate the students and the

faculty members for the idea for this

program and to thank president Tessier

Levine and provost drell from bracing

and supporting this novel idea we have

thousands of speakers at Stanford all

the time sometimes I feel like all I do

is provide entertainment for people over

at FSI and sometimes here at Hoover we

have secretaries of state we have

national security advisors in my field I

work on international security we have

ambassadors we have senators we've had

presidential candidates she came twice

actually to Stanford and we've had

presidents president george w bush has

been here twice just in the last couple

of years and president obama has been

here twice in the last couple of years

in fact I'm working on bringing him for

a third time

imagine Obama unhinged but he promised

me let's see if he holds true on that

but there's something significantly

different two things significantly

different about what we're trying to do

here tonight first in a somewhat

dangerous experiment we are pairing

speakers together not just giving them a

podium alone and not just giving a

podium with a safe into la Couture like

I have done with some of those other

people we have Neil Ferguson today to

moderate and second students are at the

forefront of what we're doing here at

least as far as I'm concerned

considering the topics the speakers

and also the participation it is

fantastic to see much so many students

in this room today probably more

students are in this room today than

ever before that's exactly what we want

second point Cardinal conversation is an

experiment in the vernacular of tonight

it's a start out as such it's an

imperfect product and we want to improve

it in the future I'm excited about some

of the speakers we've lined up already

and Appelbaum christina summers Cornel

West he just confirmed Wendy Sherman

fareed zakaria and many others but as we

move forward we want to increase the

diversity of speakers perspectives and

topics including in the fall from my

point of view more attention to foreign

policy and international issues and then

third and finally the best way to

increase that diversity is to have more

of you involved in that both faculty

members here tonight but also more

students so I encourage you to send us

your ideas I encourage you to join our

little committee I encourage you to be

engaged and help to form Cardinal

conversation as we move forward it's a

pretty good product right now but it's

gonna be better if you engage with us

but if you're gonna launch a product

I've been told sitting in the back with

some folks who have done that and in

ways that I have not you should start

with a big bang you should start with a

fantastic program and that's exactly

what we have tonight so let me now turn

it over to my colleague Neil Ferguson

and introduce our fantastic

conversationalist and get this program

started thank you all for coming

[Applause]

the wind of freedom blows Stanford's

motto des lucify outlaid it's on the

tree or above the tree in the

university's seal and I think Cardinal

conversations is all about letting that

wind of freedom blow in establishing

this series of conversations to affirm

this University's commitment to free

speech we that's Mike McFaul and myself

along with the eight member students

steering committee we're all agreed that

we wanted high-profile public

intellectuals not politicians and not

professional provocateurs tonight as we

launched Cardinal conversations we're

extraordinary fortunate to have two of

Stanford's most successful alumni ever

but both men are public intellectuals

only as a hobby which is rather annoying

for those of us who do it for a living

but because their day jobs as you

probably are aware our being technology

entrepreneurs and investors I'm not sure

they need an introduction to this

audience but I'll do it anyway Reid

Hoffman on my left and your right is the

co-founder of LinkedIn the professional

network that you will be on if you're

not already and a partner at Greylock

partners he's currently on the boards of

Airbnb modo convoy block stream I could

go on Mozilla Corporation

he's also the host of masters of scale a

podcast series which I highly recommend

and which actually gave me the idea for

this opening event it's it's a really

extraordinarily good introduction to the

world of technology entrepreneurship and

he's got a book coming out and not his

first because there's already the

startup of you and the Alliance the new

book focuses on what Reed calls blitz

scaling based on the Stanford course

that went by that name he has in

addition the master's degree in

philosophy from Oxford mild University

where he was a Marshall scholar but here

he was a major he has a bachelor's

degree with distinction in symbolic

systems on my right and your left Peter

Thiel started PayPal along with reap

they were once on the same team back in

the 1990s Peter led PayPal as chief

executive officer took it public in 2002

in 2004 as you doubtless know from the

movie The Social Network he made the

first outside investment and little

Harvard company called Facebook he's

still a director of that company that

same year he launched Palantir

technologies

he's a fount for a partner at founders

fund which is the venture capital firm

that funded such companies as SpaceX and

Airbnb Peter also started the teal

fellowship which encourages young people

like many of you to put as he says

learning before schooling

he's another author which is maddening

to those of us who only write books his

book zero to one notes on startups was a

New York Times bestseller and it too

started life as a Stanford course so

actually the only person you'll see

tonight on this stage who has not taught

a course at Stanford here he studied

philosophy and law as an undergraduate

he founded the still running Stanford

Review gentlemen we're here to talk

about technology and politics and I want

to ask it kind of simple opening

question to you both let me start with

you reading what do you think the

lessons are of 2016 for Silicon Valley

so Slocum Valley generally looks at

politics and the political sphere as a

kind of a rugby scrum that moves very

slowly doesn't actually engage

coherent view of the future and usually

figures out how do we build technologies

and technology companies that have huge

leverage effects and so I think broadly

speaking Silicon Valley's you know

general you the kind of engagement with

politics is say well you know just kind

of keep a friendly relationship while we

go out and build the future

and I think that the shock and the the

fact that we were definitely as a area

out of touch with the with what was

going on as was shocked is like cycle

action in fact if you get to a movement

that wants to enshrine the past against

the future that has actually in fact a

set of areas where there's a lot of pain

being felt whether its economic futures

opioid epidemics and other kinds of

things that says look there were not

we're not convinced that this future is

going to be good for us or our children

and so one of the things I think broadly

what Silicon Valley learned was oh

we need to focus on that now in addition

to the future

I think part of that is also a shift

from challenger to incumbent which is

you know part of how the competition

amongst companies and technologies and

startups because there's you know

thousands of startups it's so fierce

that there's this this focus on just

like okay I'm young I'm small I'm

building and that includes all the way

to what our current giants whether it's

Facebook Google etc they still feel like

you know if you look at businesses

letters you know kind of day one you

know kind of things that shift from what

we're building something new and we're

on that path to actually in fact we are

part of the medium we are actually in

fact part of what's fundamental to how

information flows in society and that

changes a sense of responsibilities and

so you know one of the things I've been

saying over the last year has been that

we need to kind of get to spider-man

ethics which is with power comes

responsibility we're now in a position

where we have the incumbency and power

and we need to step up to that

responsibility and we need to figure out

what that right dialogue is for what is

a society that we all want so that in

terms of inventing the future there's a

conversation about it I think that's

broadly you know what I think the valley

has learned there's you know different

differential levels along that curve

there's differential levels of response

but I think it's that sense of oh we

were out of touch and with the now and

we need to do that as well while

continuing to try to build the future so

get in the course of this conversation

to what that great responsibility might

look like now that you guys have

realized you have great power but let me

let me turn to Peter you were played a

prominent role more prominent than read

in 2016

looking back on it what what do you

think the significance of the political

events of that year have been for

Silicon Valley do you buy read story

that there's been a kind of shock

awakening that there are forces out

there that don't want the future Silicon

Valley's building well I agree part in

part but I said I suppose my impression

that if you define lessons learned as

places where people have actually

changed their minds there were very few

lessons learned because I think people

in Silicon Valley didn't change their

minds on very many substantive things at

all the the sort of the way I'd slightly

reframe the question Reid posed is is

how should we think about the nature of

technological and scientific progress

and how it is happening and there are a

lot of different ways to describe this

but I would suggest you can have sort of

a basic tripartite division that part of

it is accelerating which is the sort of

official Silicon Valley that's the

Google propaganda technology is

accelerating it's going faster science

is great it's making it's progressing at

a you know incredible pace

there's an inequality version which you

know we're you know it's it's leading to

sort of a more unequal world and but

then there's also a stagnation version

which is that the future isn't happening

at all and and I think there's some

truth to all three too you know

acceleration inequality and stagnation

but I think the the stagnation issue

question is one that we don't think

enough about in Silicon Valley where we

tend to have this debate that's a narrow

debate between inequality and

acceleration and and the way you know

the way I would describe what's been

happening is that we've had sort of a

narrow cone of of progress around

computers IT the internet the world of

bets the world of atoms has seen much

less progress and so when you know when

we were undergraduates at Stanford in

the in the late 80s you know the the one

good field to study would have been

computer science just about all the

engineering fields that people studied

at the time were bad fields who didn't

want to major in electrical engineering

you know aerospace was catastrophic I

mean nothing already by then people

figure out not to do nuclear engineering

and you go down down the list

and that we were in a world where there

was not that much progress in the world

of atoms only in the world of bits and

that this sort of stagnation which runs

very much counter to this you know

official propaganda of acceleration that

dominates Silicon Valley it's reflected

in stagnant wages it's reflected in the

ways in which the millennial generation

has lower expectation it's than their

baby boomer parents and and I think this

is a you know this is a very big big

part of the the story we need to talk

about and had you know even even if you

think about more local politics like the

state of California it's close to

bankrupt as a state and and so it's

amazing that we have this incredible

tech thing going on in Silicon Valley

and if you go east of it just to the

East Bay across the Bay Bridge or the

Dumbarton bridge you're in this you know

in this basically failing this failing

state that you know in the next

recession probably will go broke and so

that there's sort of a question how to

how to scale this I do think that you

know on the rough political mapping I

would give on this tripartite division

is you know the the centrist

establishment this country is

acceleration estoy be clinton that would

be you know the Bush family that you

know Obama was broadly in that camp

there's sort of a non establishment left

that would be

which was the Sanders line and then and

then you know the non-establishment

right which Trump represented was the

things that that's stagnation so make

America great again is very offensive to

Silicon Valley because you're telling

people in Silicon Valley that you're not

that the future is not progressing and

then and then the substantive question

that I think it would be good for us to

find a way to discuss more is is the

fast is the future progressing you know

is it progressing in a in a positive

direction how much this is really

happening and it doesn't show up in the

macroeconomic data it doesn't show up in

the productivity numbers and that's I

think that's I think sort of one of the

one of the kinds of things that that you

know we need to engage more you know I

but I by the way tyonna echo with the

wood you know all the speakers at the

beginning said about the importance of

having these debates and conversations I

think that I think there's always you

know a tendency for us to reduce the

other side to a caricature of itself and

there's of course a way this can get

done a lot in US politics at this time

we sort of strawman the arguments you

you pick out the weakest point you make

fun of that and what I what I think we

should always try to do is is find ways

to to steal man the arguments I was the

opposite of straw man we should take the

arguments of our opponents and try to

make them given the strongest

construction possible so we understand

them as well as we possibly can and I

think you know the left will be able to

win again at some point but it has to

start by by steel Manning what's

something like make America great again

means what it means in terms of this

question about stagnation and it has to

have arguments that are more than just

telling Trump's voters to you know hurry

up and die what did you say about

characterizing things in essential both

saying that Silicon Valley had got

detached from that part of the country

the voted for Trump and in your

characterization Peter that's that's

where the stagnation was happening where

the acceleration was simply not

perceptible and I think in

the same way your your identification of

a part of the country that wasn't

interested in Silicon Valley's futures

the same the same way of making a

similar point it's only a few years ago

that people in Silicon Valley seemed

very confident about what they were

doing for politics I'm gonna quote from

a book that Eric Schmidt wrote with

Jared Cohen just a few years ago the new

digital age current network technology

they wrote truly favors the citizens in

an article in 2010 they predicted quite

accurately with respect to North Africa

in the Middle East that authoritarian

governments would be caught off guard

when large numbers of their citizens

armed with virtually nothing but cell

phones took to the streets so glad

confident morning back then said the

Internet is good for democracy somehow

that story seems less plausible in 2018

so how do we think about the politics of

a networked world when some

authoritarian regimes seem to know

exactly how to use these tools Reid so I

think that the the optimism comes from

people who say well if you don't count

bad actors you don't count the attempt

to interfere with other folks and you

say we have this empowerment of

individuals that goes across the fact

that you have a mini-computer you have

access to information you can learn

things you can communicate with a wide

variety of people those are all the

things that Eric and Jared we're talking

about they're still definitely true but

you have to part of moving from

challenger to incumbent is when you

begin to have a the medium of

communication the medium of transaction

the medium of interaction the medium of

political decision then that becomes

something where in the contest of of

human tribes that then becomes

manipulable corruptible you know game a

bull in various ways and by the way

entrepreneurs do it too like they figure

out how to game you know you know kind

of virality and other kinds of things

this is the

is not actually in fact completely new

what's new is that the scale is now at

kind of the realpolitik and the politic

of Nations and you know a microcosm of

that could be the Peter Gabriel witness

thing which used to distribute video

cameras to say film Human Rights

atrocities because bringing those films

then sheds you know some light to them

and now of course what you have is you

have authoritarian regimes looking at

social media as to say who was at the

protest to try to track down them and

their family which is a you know kind of

an alternative way and a way of doing

that I think that the general problem

with many people's reactions and they

say well there was a fault of technology

like we can't really discern truth

amongst the fake news we can have the

Russians not doing cyber hacking but by

doing essentially social meme hacking

and that that is a problem and that you

should roll back and actually the usual

answer is roll forward the usual answer

is we should figure out what to do about

that and we should evolve the system in

the right way and so I remain you know

kind of optimistic but not utopian and

in the technological possibilities but

what it means is you have to look when

you think about it is just as like

example when we got PayPal to a certain

size you have to start thinking that

there's criminals using it and other

things and then you have to start

building against that as part of what

you're doing and I think that's part of

what's happening with information flows

trust it's it's it's influence within

kind of a democratic political system

let me just follow up on on that point

because you mentioned the fake news

issue which is very much in people's

minds also the Russian role your

forthcoming book a blitz-scaling on my

reading says these are fixable problems

but we have to go forward we can't hire

an army of fact-checkers yes or

superannuated newspaper editors talk a

little bit about how you do that fixing

how you imagine that that working well

so part of I mean that part of what you

can do so people imagine that you can do

an AI to do truth tale checking that's I

think a way is off I think that's

fictional

however what you can do is you can do

for example because we already do this

with credit systems PayPal cetera you

can do identity checking you can do

things that have a way of saying okay is

this information like you can have

example a in information registry say

these are sources of information that

have signed up for journalistic

accountability like I can be questioned

or or attacked on not fact-checking

because I don't think there is such a

thing as alternative facts and those

those kind of things can actually be

baked into the platform it's not so much

as X is true as much as like what is the

a better source of identity and

provenance of the information and what

where do you go to cross-check or to say

is someone standing up for this and

saying this is really true and I

followed a journalistic process for and

I think you can see more of that kind of

thing and by the way you already see

some of this in like for example what

happens in search quality results like

part of the whole emphasis on search

quality is to say this is actually

accurate information against this query

and you're essentially trying to bring

that kind of thing to looking at

information across these platforms Peter

let me put this question in a slightly

different way to you has has the

internet have the network platforms

altered the nature of politics itself in

other words are we still going to be

having left-right debates like you were

having as undergraduates I was having as

an undergraduate in the 1980s or is

there going to be a different kind of

politics it is going to be a forit aryan

versus democratic is it going to be

establishment versus populist growth

believers versus stagnation ists how do

you think about the the new terminology

even of politics it's always hard to say

because the I think these technologies

don't naturally always map in a very

precise way and so making predictions

was a treacherous business for Eric

Schmidt and it's probably also somewhat

treacherous business for us today and in

2018 you know one that one access that I

am struck by sort of the central

versus decentralization axis and so I

think read you just represented the

centralization thing where it's all

everything happens in one place and then

it has to sort of get curated in just

the right way so that you know you you

have a you know you have a good debate

but within the proper limits within the

right proper limits and and that's

that's the sort of question that happens

in a massively centralized context in a

more decentralized context that that

would perhaps not not happen in quite

the same way so for example you know one

of the two of the areas of tech that the

people are very excited about Silicon

Valley today are crypto on the one hand

and AI on the other and even though I

think these things are under determined

I do think these two map you know in a

way politically very tightly on this

centralization decentralization thing

Kryptos decentralizing AI is

centralizing or if you want to frame it

you know more ideologically you could

say that crypto is libertarian and AI is

communist and of course we always hear

only the first half because we're biased

to the left but but you know AI is

communist in the sense that's about big

data it's about big government's

controlling all the data knowing more

about you than you know about yourself

so baroque rat and Moscow could in fact

set the prices of potatoes in a

Leningrad and hold you know the whole

system together and you know if you look

at the you know Chinese Communist Party

it loves AI and hates crypto so it

actually gonna actually fits pretty

closely on that level and I think that's

that's sort of a that's a purely

technological version of this debate and

and I do think so you know I think I

think there probably are ways that AI

could be libertarian and there are ways

that crypto could be communist but I I

think that's harder to do if all the

cryptocurrencies are mined in China and

Russia that might think there's trying

to stop even that at this point can I

follow up on the implications of that

because I guess in Reed's world of not

necessarily AI but some some authority

authenticating or validating what is

good news

but there are authorities that will give

the good seal of the seed of Good

Housekeeping approval for some sources

whereas a new more libertarian model

presumably through some blockchain

decentralized architecture we'll be able

to differentiate the fake from the true

what's always well in an in a

centralized world the question emerges

and a decentralized one it doesn't

emerge as well so so yeah of course the

the larger platform companies have you

have a challenge along the lines that

Reid describes and is you know it's uh

it's I would describe it as a two-front

war that they have to fight they have to

fight on the one hand you know against

hate speech fake news you know that

whole ensemble of things and then they

have to also fight against the people

who want to limit speech in a overly

narrow speech in the name of fighting

fake news and because it's a two-front

war it's much more complicated than than

just fighting on one front can we talk a

little bit in the decentralized world

it's much harder to set up kind of like

you know it's an interesting thing to

say it's libertarian versus communist

you could say it's libertarian versus

rule of law right it's much harder to

set up kind of a yes exactly yes so it's

it's actually much harder in the

decentralized system to set up rules and

norms like for example one of the things

that's massive problem in the crypt of

community right now is it makes

gamergate look you know relatively tame

in its in the way that it treats women

in terms of public discourse and so

forth so there's a whole bunch of

problems that need to be fixed over

there that are much harder to fix in

that arena now that being said we're

both we both think that the invention of

cryptocurrency is a important kind of

innovation alongside the internet for

allowing a bunch of apps to be developed

within the kind of the Internet of money

the internet value as a way of doing it

so it's neither of us are are negative

on cryptocurrency or at least not

negative the same way but but that's one

of the virtues of the kind of the rule

law systems well but but this is always

like you could say I would say AI is a

much more transparent world and then the

quest but the centralized world is more

transparent and then the question you

could always ask is what's the opposite

of transparency is it criminality or is

it privacy and you know from the point

of view of a centralized state the

opposite you know yes it's always you

know why do you want to have secrets why

do we not know who you are and what

you're doing why do you need privacy if

you're doing everything if you're

behaving yourself perfectly you have

nothing to hide and so but and you're a

criminal

not only a criminal doesn't want to have

transparency but I think it can really

cut both ways I want to come back to

this issue of the relationship between

China and particular and big data

company because I think it's a hugely

important one before we get there let's

talk a bit about inequality which popped

up at the beginning of our discussion

but is is I think pretty central to what

Silicon Valley's doing perhaps

unintentionally and you know even if one

just looks at the case of crypto it

looks like another case of the smart

people who thought of it first become

spectacularly wealthy and then the

suckers like me who arrived late to the

game having ignored their teenage sons

right the way through the bubble and by

at the top get crushed the stock market

yeah well we this is existent before but

it's what's striking to me about about

Silicon Valley's economics is the winner

takes all

and you put make this point in

blitzscaling as indeed Peter you do in

your book zero to one that's great for

the winner and you can see the winners

in this neck of the woods and their

Tesla's but is there not a sense in

which from the losers vantage point this

is deeply alienating and it just seems

as if each new innovation is a

fast-track to wealth for a bunch of

smart young well-educated insiders and

everybody else is just a user handing

over their data for free well what I

would say is a couple things so one is

well it's not handing over their data

for free so frequently that comment it's

like well does Google done for me well

provided search for example right you

know free information free access to a

whole bunch of videos a bunch of other

things so you know

apps I mean as a ton of service like

what are they done for me is like well

that's what the data exchange that Monty

Python the sketch what did yes

Romans other than roads are education

and so glad we've got the Google Roman

Empire analogy lovers for there so I

think that the but the inequality

problem yeah but the unintended

consequence of all this innovation seems

to be to amplify an inequality that was

already quite advanced in the 1990s and

it's only got worse and a large part of

what's driving it is these extraordinary

roots credible returns to to the

blitzscale as the winners well so I

think that there's always in most times

in human history you're the historian

there has been a fairly large divergence

and wealth whether it's financial

systems whether it's you know

aristocracy and landowners and so forth

and there's no you know that is actually

in tech broadly a feature of human

society not a not a bug and not know so

he knew I think what's a feature of the

current thing is like for example you're

mentioning cryptocurrency is something

that Silicon Valley is getting wealthy

off of actually in fact I think

cryptocurrency most the people were

getting wealthy auto outside of Silicon

Valley cryptocurrency was most adopted

and there's a couple of good companies

here but like the general range of

mining cryptocurrency of early trading

in it like it took a couple years for

Silicon Valley to realize cryptocurrency

was happening it was one of those things

that was more like the person I refer to

as patient zero for Bitcoin in Silicon

Valley is an Argentinian entre named

wences Casares who is right now down in

Patagonia but you know he generally

lives in Woodside not you know too far

from here and and so I actually think

that the the notion that that the

incentive is for the creation of the new

thing the thing that actually in fact

could have a global impact and that the

benefit of that global impact going to

some individuals is not necessarily a

bad thing I think that the important

thing is to make sure that the bulk of

people are having a sense of meaning and

progress in their lives and include

and one of the things that an over focus

on in comes this is a little bit of like

for example what were Peters making the

stagnation point is is not paying

sufficient attention to well what

happens when we get like free

encyclopedias for everyone and and free

learning materials for everyone and and

and free entertainment for everyone and

a bunch of other things that all come

about with kind of quality of life and

the only measure of human progress is

not what is relatively arcane GDP

measure but also various kind of quality

of life measures and I think that those

things are coming about for it and what

you would I think feel justly saying is

if well this person created

cryptocurrency or these set of people

create a cryptocurrency and made a bunch

of money and everyone else is losing if

there aren't other paths forward to

winning then that would be a problem I

actually think one of the good things is

is if if I were to make a prediction I

think I'd say that five to ten years

from now there will be at least 50% as

many additional big tech companies and

so forth they won't be shrinking it will

be growing in terms of the number of

different options and where they fit in

the world in life and what I would want

to see from those is more ability

because like for example a centralized

platform is a good thing if it's

creating generativity if it allows a lot

of people like for example you take

Airbnb or you take eBay you say actually

in fact I can add to my income I can be

a micro entrepreneur on this platform I

can make more things happen I think we

want to see more of those to enable more

of more people to say well I don't have

to be a coder I don't have to be a tech

entrepreneur and I can still make

progress in my life and I think that's

the thing that we need to be more

focused on as we figure out okay how to

be inclusive do you think convention

economics actually underestimation the

benefits of the internet you find that

let me just respond to this inequality

thing first right I I don't I don't

think I think we should maybe start by

talking a little bit about where the

inequality is actually experienced and

let you know Silicon Valley's in some

ways a very unequal place when people

leave Silicon Valley it's not because

there are no economic opportunities it's

because the real estate costs too much

and you know there's some studies I've

seen where almost the entire increase in

inequality in the last 20 or 30 years is

simply increase in inequality of land

ownership you know if you were a

Stanford graduate 50 years ago

you worked got a job at hewlett-packard

you could have gotten you know three

bedrooms starter home as a 22 year old

in Palo Alto and so you know in a way

this is this is sort of this is how the

stagnation manifests itself in you know

in land prices as a venture capitalist I

often think that almost all the venture

capital money I'm investing is going to

you know urban slum Lords in the form of

you know incredibly onerous commercial

leases and of course the perrolli high

salaries you have to pay people in

Silicon Valley which they have to then

pay to rent to all their their landlords

and this is you know this is maybe maybe

this is loosely linked to tech because

we're a networked economy and it's it's

very hard to do things outside of

Silicon Valley and network cities like

New York City or London for finance but

but I think that's sort of where the

problem is and then the you and then the

the remedy in my mind would be would be

that you know seriously think about

changing zoning laws or things like that

there's a there's an economist I always

like to refer to in the late 19th

century Henry George who had this there

was a theorem that I think Stiglitz

actually proved about a hundred years

later the Henry George theorem which

says that in a in a certain kind of

urban area where not enough new things

can be built all the value gets captured

by landlords and so you know Reid saying

you know you're saying the value gets

captured by a few tech entrepreneurs

risa it's this consumer surplus that

gets captured by everybody and I think

the question we have to ask is perhaps

perhaps a great deal of it was actually

just captured by by landlords they're

not the people who get you know I put on

the front pages of magazines but but

that's sort of that's that's the way in

which inequality is extremely profound

and I think I think if you solve the

zoning problem I don't think people

would have problems with some people

making more money than others in crypto

or at Google or anything like that you

know it's just it's just the line use

problem I suppose I'm struggling a bit

to believe that there are somewhere

hidden in these neighborhoods landlords

making more money from rents than you

guys are collecting collected less but

collectively it's much more distributed

but yeah it's it's it's it's been a

phenominal bull market in in in in in in

in the land price you know Mike my

parents uh you know got a home in Foster

City when just north of here for

$120,000 in nineteen seventy eight today

it's worth two and a half million and

and you know if you if you were in the

older generation in the US and you got a

house in a major urban center you're

able to retire if you didn't you weren't

able to save for your retirement so it

and then if you're a young person it's

almost impossible to even get started it

was a pupil of Henry George who came up

if memory serves with the game Monopoly

and I can't resist asking you both about

monopoly since there's a sense in which

your books in their different ways of

celebrations of Monopoly and

conventional economics said that the

monopoly wasn't a good thing and

certainly would tend to be to

rent-seeking by the owners of the

monopolies can you defend these

winner-take-all type companies which

blitz-scaling

produces is this just inherent in the

nature of the business that there will

be if not monopolies then things that

are very like them yeah I mean

frequently we refer to them as winner

takes most businesses versus all but you

know this is and when people talk about

network effects that's that's the kind

of thing that they're talking about this

is a yes as a point way of putting it

it's a you know Peter thinks it's a

classically deceptive way of putting it

which is the reason I hate in zero to

one and try to call it out as you know

no this is actually just a monopoly i

think the key question is what happens

if there is a centralization of a

platform is about a lot of virtues and

centralization zuv platforms they can

create enormous generativity they can

create like a lot of like for example

you have a platform iOS android can

create a lot of apps on top of it you

have an open platform like the internet

you have any huge amount of productivity

those kinds of things I think are very

valuable to have those platforms and

platforms are more about

we'll the broader base they are in terms

of your ability to build businesses on

them which customers have communications

do transactions etc it's part of the

reason why there's only a few you know

relatively few like credit cards and so

forth because once they're processing

like the the thing as well should I

accept this random new card or should I

accept a Visa or MasterCard well I'll

take Visa MasterCard just easier and it

makes the whole system run more

efficiently the key thing you have to

look at is does it accelerate the right

kind of opportunities and futures and

innovation and build towards the future

or does it lock away the future so the

classic concern that people have around

monopolies is that they try to enshrine

the past versus the future and so they

go okay I just couldn't collect run so

I'm not going to invent anything because

I can I can sit on my monopoly in order

to collect the rents that's obviously a

problem that's obviously bad that's the

kind of thing you need to act against

now Peter and I've actually been on

stage before talking about monopoly with

zero to one in his book and you know

part of actually in fact if they're

actually in contention even if they're

very profitable and they're actually

reinvesting their profits in order to

compete with each other and try to bring

products and services to the world

frequently in the in the modern cases

free products and services you know

that's not clear that that isn't

actually in fact a substantial social

benefit in terms of how that's playing

out and that's the reason why I like

part of what I look at and I say well

what way should we be trying as

technologists and inventors of the

future is say well make paths by which

people can not just find information or

communicate or find entertainment or

find education but also make things by

which people can create work for

themselves create economic opportunity

that's part of the reason I you know

airy and be and eBay it's kind of simple

examples of these kinds of things and he

said well there's a marketplace

marketplace have natural network effects

they tend to be dominant that's where

trading happens well that's okay if

you're actually enabling a lot of

business in creation on top of it may

even be good before we get to you Peter

I want to just point out to the audience

that we'll be taking questions from you

but this being close to Silicon Valley

we won't be doing it in some kind of

old-school

way with microphones or bits of paper

god forbid no we'll be using a slide oh

and you'll be with the aid of your

electronic device isn't too bad if you

didn't bring one able to put on your

questions via slide Oh

they will then be moderated by our

undergraduate committee and I'll I'll

get the winners and that's how we're

going to do Q&A tonight and telling you

this now so that you have time to follow

the instructions which I hope have now

appeared above us and and and figure out

how to get online to slide oh and pose a

question I hope this works because if it

doesn't then we will have to use scraps

of paper and it will be a great

embarrassment certainly for me Peter

well while everybody's figuring out

slide oh and preparing devastating

questions

the conventional response to any mention

of monopoly was always antitrust and I

guess to somebody who was at the law

school here you're the right person to

ask is this is this coming eventually

let's assume fast forward there's some

swing to the left and American politics

maybe the next populist is is Bernie

Sanders does antitrust finally show up

in Silicon Valley and say you naughty

monopolies have to be broken up will it

be like Standard Oil

well antitrust is always a an extremely

you know big crazy weapon and it's sort

of very unclear you know when that gets

when that gets used in different

contexts you know that by the way I'm

not simply Pro monopoly gonna be very

clear on that the distinction I always

make is between dynamic monopolies where

people invent things and that's where we

also protect those in our society we

protect those with patent copyright laws

and so if you have a dynamic monopoly

that's good static monopoly that's more

like a rent EA like a landlord or a you

know maybe a troll collecting attacks

the bridge or something like that those

are those are more problematic and the

the question is what kinds monopolies do

we want to actually encourage as that

our serve analogous type II and which

ones are more static and problematic and

that are the subdue bankers and that's

sort of a that's why it's a complicated

question because there are in fact good

monopolies and bad monopolies the way

that allows I say that the more you know

the more general question is just you

know how much of a you know how much

regulation is coming towards towards the

tech companies in Silicon Valley this is

again sort of somewhat hard hard to

predict my um the thing that I'm struck

by is how and that I worry about is how

how poorly the big tech companies are

playing the sort of political game that

they're they're supposed to supposed to

play and you know we had in 2008 we had

a you know we had an enormous financial

crisis that you know where I think the

banks are still worse actors than the

the tech companies and the banks got

relatively light regulation after 2008

because they they were sort of

bipartisan they backed both parties and

the sort of thing that maybe he's

idealistic or maybe stupid or maybe just

wrong is that Silicon Valley is a

one-party state it's it's all in on one

party and that's when you get in trouble

politically in our society when you're

all on one side the other side doesn't

care for you and your side doesn't care

if you either at the end of the day

because they don't need to and and so

the thing you know you said that the

regulation will come from the left it

may well come from the Republicans at

this point they may start with the

Republicans not you're really in trouble

when the Republicans want to regulate

you how might they do that because I

can't imagine Republicans doing a began

to trust action well it's you know there

are sort of a lot of I'm not gonna try

to give them ideas but but there we go

but it could you know it can you're

really in trouble when you get

conservative Republicans and Liberal

Democrats to agree and the the the worry

I have is that the response the

one-party culture of Silicon Valley is

you know we'll never get you versus we

don't really we have you anyway so we

don't need it and both parties end up

end up coming after you

I drink they expand on this a little bit

because actually one of the mistakes I

think is made a lot and thinking about

this is we are moving from a u.s. hyper

polar and and so everything that is this

discussed here is presumes that the US

is the world and everything else is a

shadow and so I actually think we are

already in a place where really what

you're seeing with monopoly antitrust

and so forth is actually a return to

competition from nation-states so it's

part of the reason why you know the

Europeans kind of blend some legitimate

social concerns together with the we're

not happy with the fact that we don't

have as strong a tech industry as we'd

like so we'd like to impose some

regulation and they really focus on

Silicon Valley not realizing that China

is coming along you know kind of full

steam and I don't think China is going

to dismantle its monopolies because I

think it understands that actually in

fact creation of industries of the

future is really important and so I

think that the interesting question that

is people say well we should slow down

we should enshrine in the past you know

I'm quite certain here I'll engage since

Peter already took a shot at the left

you know and quite certain that we'll

want coal mining jobs back in in in

great profusion and quantity because

it's the right work in history in the

future for us and so you know basically

I think that the the question is you

have to say look what is the industries

of the future we want to be there and

part of it and and the the because it's

political fighting and infighting that's

precisely where you begin to see you

know the decay of wrong it's like

nothing else matters it's only fighting

within so it's like okay we're we're

Republicans we think the tech industry

is is progressive and not for us so

we're gonna go regulate them and that's

gonna be you know not an America first

policy that's gonna be an America last

policy so I'm starting to get questions

through slider I'm truly to say that

it's working and I can't help going to

one of them now because it sort of it

fits in with the conv

we've had so far Randi asks you've

agreed more than disagreed what is

something you strongly disagree about

and I'm guessing from what's being said

at the moment that this administration

might be the answer to that question

well I did actually in fact create a

card game I was hoping you have a card

called trumped-up cards which is a model

on cards against humanity' and just for

entertainment value one of the cards in

that deck I give Peter one of the very

first decks is Peter teal is as actually

in fact one of the cards on the deck so

there there would be one more of the

more humorous areas pizza so America

first could end up being America last if

Republicans just go after Silicon Valley

out of sheer political spite it's not a

plausible scenario in your view well

there are there are a lot of ways the

Trump administration could get things

wrong and you know the you know there's

a lot that's of course very broken in

Washington DC

generally and so I think it's a mistake

just to blame on any any sort of one one

person on I I would say that that I do

do you always think that there are some

very real problems the Trump has pointed

to that we should take more seriously

you know the one that that you know sort

of from an elite point of views is the

craziest is that you should be more

restriction astonied that always seems

like a no really crazy view that Trump

hasn't and it's not clear the

restriction this is a good idea on the

other hand there's obviously something

you know deeply screwed up in the trade

relations you know in a in a in a

globalizing healthfully globalizing

world the capital should flow from the

developed to the developing world

because you have higher growth rates in

the developing countries in the

developed world that's sort of the

convergence theory of globalization this

was the UK in nineteen hundred had a

current account surplus four percent of

GDP and the money flowed out if you look

at our world planet from outer space

the money is flowing the wrong way is

flowing from a fast-growing China to a

slow growing us or you say poor peasants

in China are saving money to invest in

the US and it's because in that it's

because that's that's just the other

side of these incredible trade deficits

and and so you know if you believe in

globalization we should have trade

surpluses and and that tells you there's

something wrong with the trade

arrangements now you know it doesn't

necessarily mean that that you want to

be protectionist or that you want to

create national champion companies or

anything like that but it is at least a

question that that one should should

raise very hard about you know is there

something wrong with the us-china

relationship when the only thing they

seem to want from us are McDonald's

hamburgers well then you can blame that

on us because we're not building

anything and you can blame it on China

it's at least a question we should be

asking let me follow up on China does

Ravi's asks what does the rise of China

mean for the future of Silicon Valley

and technology more generally you

alluded to it talk a bit more about this

to me this is the fascinating thing

Europeans blew this they're nowhere they

don't really have any any major

technology companies the Chinese perhaps

as much by accident as but by design

kept the US technology companies at Bain

allowed their own so-called bat

companies Baidu Alibaba 10 Center to

flourish and now these are the real

rivals for the Silicon Valley companies

and yet their relationship with

governments completely different from

the relationship that we've been talking

about in the United States it's far from

the hostile relationship that we see

between Silicon Valley and Washington

today their hand in glove so talk a

little bit about what you think China's

success in technology means for silicon

valley's is the future perhaps there

rather than here well it's it's badly

underestimated in Silicon Valley and I

do think I do think Alibaba intense and

in particular in particular at some

point are going to be trying to expand

outside of China I expect that it will

try to do so in a fairly aggressive way

and it's and I think people in Silicon

Valley are are probably fairly myopic

about that maybe maybe in the US

in the US generally and certainly

certainly the question of you know what

year does China overtake the US this was

a very big question people asked say in

2005 2006 2007 you know it's it's worth

13 years closer to that than we were in

2005 and we seem to be asking the

question much less today than we were 13

years ago even though you're presumably

13 years closer to when that happens and

it's almost as though we've stopped

thinking it about it as the date has

gotten closer my calculation would be if

you if you look at it on a you know PPP

basis China's ready overtaking US GDP

it's like 2030 if you an average of

purchasing power parity and GDP which I

think is a better measure than either of

the two alone you get to about 2020 it's

gonna happen in three years three four

years and and that's barely that's

barely registering as a as a

conversation conversation here Reid so

since it was a request for Peter and I

to disagree the specific thing that I

would disagree with Peter on is I

actually don't think Silicon Valley's

blind to China I think Silicon Valley is

quite aware that in the entire world the

shape of the technological future the

the most significant contender is China

they worry about the protected Chinese

market there's a whole variety of

Silicon Valley companies that can't play

with in China they worry about more

support from the government anything

from data to kind of generally labor

laws they worry about the fact that

there is a city in China that's

graduating a million engineers every

year you know let alone the whole thing

and so that's part of the reason why

Silicon Valley tends to be such a large

advocate of you know especially high end

emigration although all to some degree

of fairness but that's the you know how

do we how do we play against that and

you know part of when I you know meet

with various European government

officials I say well you're really

focused on Silicon Valley but what we're

worried about is is what the future

looks like

Pisa V China and there's all these

issues and I think if you you went

around and talked to every single law

you know medium to large company

in Silicon Valley they're all thinking

about what is the China market look like

what is competition with China look like

10 cent Alibaba Baidu are highly

innovative companies there's a lot of

interesting things they're doing there's

things that we now have you know kind of

ideas and copies of startups here that

are of ideas that are made in China

right and then there's a there's a ton

of these things going on and so the

specific disagreement is actually in

fact Silicon Valley treats this as a

very serious threat indeed and you know

it's kind of you know it's either

healthy competition which I think Peter

thinks is an oxymoron or a contest for

the future so you're the perfect people

to ask a follow-up question on this I

was just a couple of weeks ago in

Hangzhou which is the headquarters of

Alibaba but you don't just need to go

there you can go anywhere and you'll see

that in financial technology China is a

long way ahead why is it that we don't

pay for everything with PayPal but the

Chinese pay for everything with Ali pay

or WeChat pay I mean to the extent that

you do not see a credit card and when

Chinese people come to the United States

they chortle that's our antiquated

behavior you guys were way ahead of

China in thinking about an online

payment system and yeah from where I'm

sitting they've completely overtaken now

I would love to know why you think that

is because all I see when I go to China

is ubiquitous online payment systems

that have becomes all this is not just

payments there are all sorts of places

where if you're a undeveloped country

you can go straight to the technological

frontier whereas if you're reasonably

developed maybe the Delta is not that

big and so it's it's a it's it's slower

to adopt things and so you would find

the same thing to be true of mobile

payments in the developing world

generally versus the developed wouldn't

pay so you know ecommerce is much bigger

in China as a percent of commerce

because people never built big retail

stores I think Japan has you know the

most elaborate you know retail industry

and that's probably the country where

you have the smallest percent of

e-commerce and it's not because you know

Japan is unusually backward but

because the old economy of Japan

actually functioned reasonably well and

the payment system in the u.s. is not

seamlessly efficient but it is it works

reasonably well it's not a trivial thing

to start a new payments company you have

to always you know find something where

there's a big Delta that you know can

really drive an intense need for

adoption and and having something that's

just a little bit better for a lot of

people is often a very difficult

technology to drive Jacmel said

something at Davos last week which

really struck home for me namely that

the the Chinese model would work better

in emerging markets pretty much for the

reason you've just given and that left

me wondering if essentially companies

like Ali Baba will be able to roll out

their platforms really easily in

emerging markets and the Silicon Valley

companies may be left with just the

developed world is that a scenario that

you think's plausible one of the things

they've been saying for a few years is

three internets is the English internet

the Chinese internet and everything else

and where the actual combat will be is

in the everything outside and who do you

think will win in that in that contest

is it conceivable that in fact the

Chinese companies but be a teef that rat

could beat Fang very conceivable what do

you think yes but I still disagree with

Reed that this is generally understood

in Silicon Valley because the big

Chinese companies so dominate China that

you know people in Silicon Valley don't

even think they can break into China

that much when they don't think they can

break in they don't think about it that

much and so one of the one of the

benefits for China of the sort of state

champions of the Chinese firewall is

that there's no incentive for us to

think about what's going on in China

that much because it's gotten so hard to

do anything and and so I think whenever

whenever China starts do things

aggressively outside of it we will not

be paying as much attention as we should

questions that are pouring in a number

of them about American politics and I

want to come to those in a minute but

there was a big question that Ben has

asked is American democracy in Christ

and do big tech companies have any moral

responsibility to preserve or defend

American democracy 3 does it feel like a

crisis of democracy to you

I think it's unquestionably a crisis of

democracy I think that the notion of

political polarization where legitimate

news organizations are called fake news

and you have attack on institutions

where the question about foreign

government interference within our

democratic policy process is weakly

responded to I think all of those things

lead to an unquestionable turmoil and

challenge I think that the I think that

tech companies have a responsibility as

do I think citizens and other companies

and the government to try to do stuff

about this I think that the you know

like example people say well a Facebook

should they have known that their

Russians are gonna try to social mean

hack it and that's legitimate for a

company to say look we didn't think that

was our thing we were a company we're

doing business stuff we're not trying to

be you know in the game between nation

states but now that you know about it

there's a question of how do you how do

you provide services well fortunately I

think the people there are you know have

you know actually care and are trying to

figure out how how to learn the right

lessons and how to be good citizens in

this but I think it's it's it's

unquestionable that our democracy is in

turmoil I would eat I you know you can

agree that things are more polarized

than they were in the past the

polarization trend I would say did not

start with the internet you know even

though that may be there are things

about internet communication

technologies that are on you know sort

of create an unfair a crazed intensity

where you have sort of the your daily

minute of hate on Twitter yes or those

or you know sort of these sort of

virtual mobs on the internet where you

just sort of

random people and and that's you know

there so there are aspects of it that

you know may be contributing to

polarization but that doesn't mean that

that's the the main thing that's causing

you know I would say polarization in the

u.s. has been increasing since the late

60s and I would date it to roughly the

time period when the growth slowed and

we've been in a era of relative economic

stagnation since the 1970s and that's

why I think the the primary cause for

polarization is his economic stagnation

because in a world without growth it's

not clear and we're not in a strictly a

democracy where a sort of a

representative or a constitutional

republic we're an indirect democracy and

that's you know the democracies modified

with Republic the relics modified by the

Constitution

but even that system doesn't work that

well without growth because the way our

system of government works is you have a

bunch of people sitting around the table

and a state legislature or legislature

and they craft legislation where there's

more for you and more for you and it

reads the difficult person is not no

more for read and and in a when a pie is

growing it's relatively easy to craft

win/win legislation when the pie is not

growing you know everything becomes

zero-sum it becomes much more hostile

there's a loser for every winner and I

think that's the that's the dynamic that

that you know I would say is 80% of the

problem with polarization and you know

maybe tech maybe the way the message

forms is 20%

don't want to minimize that 20% but we

shouldn't turn it into the scapegoat for

all of our all of the problems in our

society did you buy that the

polarization would have happened anyway

even if none of this stuff had been

invented oh it all it takes with TV and

newspapers I don't yeah you know one of

my favorites Fox News you know or

various forms of Tosh show you what you

get glued to the state exactly such

visionaries as Sean Hannity who you know

you know whose every word I hang upon

the and so look I think the polarization

okay

oddly speaking where Peter and I agree

is actually in fact growth is

super-important nonzero-sum psychology

where you kind of say hey look we can

keep playing because even if you know

Peter gets more of this hand and and

Anil gets less we play again and see

where we end up that's extremely

important part and I think that is a

contributory portion of this and I

didn't mean to say that I think that

technology was a unique contributor to

the polarization as much as I think part

of you know what has happened is that

there's now kind of these new media

these new ways of kind of sharing

information and we have to kind of get

to a how do we get to collective truth

and actually I think we should be

focusing on how do we get to real news

versus labeling things fake news okay

that's true P it's always a two-front

war so there is a there is a war against

fake news and real news I don't know how

you can get to real news without

labeling things as fake news by the way

since the way you sound make it sound

like there are two categories but but

but the other front is is that there are

all these people who also want to fight

you know for certain types of news in

the name of excluding things and so it's

always a two-front war that's what makes

it complicated if it was simply well you

know anyone who complains about certain

types of speech will listen to them and

will get rid of that speech because it's

not true or it's offensive or something

that gets weaponized very

problematically and you don't end up in

a good equi Librium that prompts a

question which um which has been in my

mind for a while and was brought to the

surface by what happened after the

Charlottesville events and and that is

the possibility that without our even

being aware of it internet companies

begin to censor the public sphere and

the process of exclusion that you just

alluded to gets much less attention but

might actually be a more insidious

problem it is that of the front that you

talk about one that we should worry more

about well I I'm not I'm not going to

try to offend hate speech at all and

that's not I don't think that's what

we're that's what we're talking about I

think it's where the line gets drawn

that seems to be problematic

who

who decides what is hate speech on the

Internet well it's it I think it's

always this two-front problem so I mean

there's certainly certain categories of

speech that are hate speech that you

know if you that I think we could all

we'd all agree to I don't think that's

what I don't think that's where you know

the really problematic aspect of this

debate is it's not about it's not about

hate speech it's about you know all it's

about things that are not true or not

important you know or distracting sort

of all these varieties of fake news but

not the hateful versions of it are just

a small small subset press you both a

bit on this issue because it seems to me

to be very important and a number of

questions have have alluded to it and

this really has to do with the fact that

Silicon Valley itself has not polarized

I mean if only there was some

polarization here one could say the same

incidentally about universities but

there's an almost total lack of it in

fact you have a as a number of

questioners are pointed out a very

liberal culture and one question comes

from eyes are very liberal cultures in

tech companies a cause for concern

reading I thought that would be a

question for Peter well Peter and I

figured out we met each other in 87 and

philosophy a tea mine manner and meeting

as undergraduates and a kind of a

classic argument that we had had was is

the university's biased left and

ideologically narrow-minded and part of

the argument that I use and I think

there's truth on both sides of this one

which is the argument I'd use is

actually in fact if you have a bunch of

people who are truth seekers who all end

up in a in kind of a cluster of points

of view that may be an argument for it

versus an argument for bias in terms of

truth seeking and then you know I think

one of the points that Peter made and

this is one of things I like about

having these kinds of discussions was

that generally speaking more people on

the right can

you the intelligent points from the

point on the left and vice versa and I

think it's an important thing for people

and progressives to be able to do that

so Peters opening remarks sir if you're

if you're a village atheist in a small

town in Alabama you can probably argue

the other side better too so yeah but

but the sort of context we're in at

places like Stanford places like Silicon

Valley it excuse very much one way so I

think I think yeah I think if you're a

conservative or libertarian student at

Stanford you will get a much better

political education than if you're a

liberal student if you're liberal you

will just get your views reinforced and

you can be in this sort of epistemic

closure for for four years for the rest

of your life and and

and so I think it is I think it's not

even good for for your side when it's

it's it's always straw Manning never

steel Manning so that was the point that

I was essentially building to as to what

the challenge would think within Silicon

Valley is that I think that we need to

have a better discuss discourse in

theory about what is a good society you

know kind of what is theories of human

nature and so forth and not have a

fallback of a certain ideological stance

and I think that active discussion is

very important so that's one of the

things I think is a problem with it the

thing I think is not a problem with it

is a is a sense of well actually in fact

we have a sense of kind of broad social

good you know parodied someone for the

Silicon Valley television show and kind

of good ways that says you know like

okay what is that feature that we're

building towards and that we are

actually in fact trying to build things

that will that we have an optimism that

there are technologies that we can build

and this is like back to the I don't

think that people in Silicon Valley

think that we're actually in stagnation

and think Merrick America great again is

a problem because we're in stagnation I

think they think it's the inequality

issue and I'd say I think the thing that

they learned to really focus on as kind

of what's going on and I think that they

say well sure there's slower progress

and Adams with bits is now infecting all

of the world of atoms everything from

robots and manufacture

everything else and so we are seeing

progress amount as I think they

countered the to the kind of opening

argument I think that kind of optimism

about the future that may have a broad

kind of liberal ideology behind it as a

good thing so that's that's the both in

speech well you know there's I think

it's at least ambiguous so you know if

you have network effects if you quickly

get to you know if they're more

efficient so you say Silicon Valley is

an efficient place we very quickly get

to the truth you quickly figure out what

the right companies are what the future

is going to be and and then the downside

of an overly networked context is that

you get bubbles you get epistemic

closure you get the madness of crowds

and and that is that is also a very you

know big danger in our universities and

and you know in these sort of networked

centers of the economy and I think and I

do think it's always hard to know you

know exactly where you where you draw

that line my own sense is that it's uh

it's wildly on on the wrong side so the

the question about networked versus

madness of crowds you know one way of

asking this question is are we sort of

at the end of history which is sort of

the liberal conceit where we know all

the basic answers we know what's right

there are few people who are retrograde

they're bad they're gonna die soon and

the earlier characters they say well

you're making my point it's like the

networked economies are like saying

hurry up you can die but but then versus

are there so a lot of things that we

just don't know and and therefore are

there a lot of topics on which these

these debates are still open and I think

the I think the the mistake in my

judgment would be that we were

constantly you know getting to you know

there's there's a right answer that and

you get to the right answer very quickly

and very efficiently you don't waste

your time on things that's the that's

the Silicon Valley concede and and my

view would be that on on many topics the

answers aren't aren't clearly right

they're not clearly right on

globalization they're not clearly right

on on any of these

of these issues and so I think to get to

the truth we need to need a broader

debate because I think we are more wrong

than we think here's a question for ya

Reid so I mean I think just to be

precise I think there is precisely that

lack in that there is the kind of cult

of efficiency and the efficiency and

techno determinism is the the answer

that should should be there and I think

that is too simple and should include

discussion of what is good society human

nature and so forth and that does need

more you know contrasting points of view

and it's not just contrasting left-right

it's actually in fact more historical

knowledge more philosophical knowledge I

think those kinds of things I mean it's

it is entertaining to be part of

conversations that are things like okay

we're just gonna upload ourselves in or

robot and you're like well do you know

what how do you know what that means

like what is that exactly and that that

kind of thing is I think important so

it's kind of a cognitive diversity for

thinking about the good society in the

future now that being said I think that

the notion that actually in fact being

very optimistic being a look we can go

do things that are very big is I think

action an important thing and I don't

think is ambiguous I want to ask doc

just one point on this so heterodoxy I

could leave on I we think that's unusual

I think I think there's a sense in which

I would say science philosophy religion

these are much more important than

politics and so heterodoxy in those

fields having genuine debates in those

fields is much more important than

diversity in politics but politics is

simple if you can't even have diversity

of views in politics that's telling you

you're in an incredibly unhealthy

society if that's that's sort of where

you know the average person is able to

engage in political debates we don't

expect them you know to engage in these

other debates but it would be good if

they if people could engage in these

debates more if you can't even engage in

a political debate if you can't even

have different views on that that means

you have you have no diversity of views

on all these other topics which I think

are much more

and clearly it's been heterodox thinkers

in those other fields that have been the

pioneers the pioneers certainly in

fields of science and philosophy in the

18th century we're not surrounded by

like-minded will as there was a very big

difference between good science and

great science and I think the good the

good version that you sort of get taught

in a programmatic way is is somehow you

know connecting the dots and just you

know copying things that other people

have done and and I think the the great

science always has has it's much more

heterodox feel to it so Hagen has asked

a really nice question which goes to

your friendship I don't think we need to

ask a question about what you think of

Trump's first year to establish that you

have different political views a number

of people wanted me to ask that but I

you know what I think it's kind of

obvious you're not gonna give the same

answer that question but hardly these

questions this how much of your

friendship is attributed to the fact

that you met in the benign environment

of the University and would you still

become friends if you met today that's a

very good question the I think if we had

the context to discover the thing that

we did discover at Stanford which is

it's the truth is very important

discourse is very important broadening

your thinking by talking to super

intelligent people who disagree with you

is valuable and that the the question is

really a discourse about what is the

what is the aspirations of humanity what

are the what are the way to try to get

to the better version of ourselves which

is the essentially a lot of the

different forms or arguments that Peter

and I had if we if we could have those

discussions and discover that attribute

about each other then I think the answer

would be yes now obviously part of the

challenge is in the the fact that I kind

of worry about the current state of the

Republic is kind of the decline of Rome

as a way of doing it would we be able to

see

- those virtues unless that would be

that would be the challenge but I think

that if we could see that it's not so

much the benevolent as much as

discovering that importance of truth

that importance of what is the best most

the way that we can evolve our humanity

the best then I think the answered be s

be you you will views when you were an

undergraduate certainly weren't his in a

whole range of issues and yet you were

friends in fact you were describing to

me in the green room campaigning for the

Students Union together talk a bit about

that relationship which somehow could

transcend fundamental differences of

political ideology well I look I think I

think we you know alluded to this

already in many different ways tonight

it it is that that there is there sort

of a lot of open questions a lot of

things to try to figure out it is it is

that you learn by by understanding the

other side's arguments that they're

strongest not not at their at their

weakest I do I do think you know I can't

I can't answer your question

counterfactually would we still become

friends that's that's like an almost

insane counterfactual question I think I

like but that we you know I I think that

I think there is probably something

about the time when you're at Stanford

where it is it is a little bit easier to

do this then then then then then then

later and so it is it's definitely an

opportunity people should not miss out

on these sort of the you know sort of

the your reads networking point but the

networks I think are always the wrong

words the better words are things like

friendships things like that and this is

a good time to make to build real

friendships coming the more succinct way

of putting it is the time to understand

each other that was the thing it wasn't

a benevolent environment it was the time

to understand each other and that was

very valuable we're getting towards the

clothes I've got a question here from

Natalie which i think is is a good one

to point us towards a conclusion as

discussed tonight

she says Silicon Valley is out of touch

with large swathes of the United States

what do you both think

the path forward to reconnect with

people Rena you gonna go in one of those

tours of 50 states meet people in

Wisconsin look I think that while and

that's very funny to put it that way

look I think that it was I think those

tours were very well intended because if

you say look how do I understand people

let me go at least talk to some of them

let me meet people and I think that go

have the conversation is extremely

important I think that the I think

that's somewhat challenging I think the

thing is is the problem has been brought

to the mind like there's a sense in

which all of the geekiness and nerdiness

of Silicon Valley also means that

something I was a little less kind of

socially adept a little less like okay

how do we have this conversation as a as

a tribe or something and so I think the

I think that probably the bridge is

understanding what those challenges are

and then approaching it somewhat like

engineering about how do we build

solutions and I think that can be

helpful that was a little bit of the

reason why the kinds of things I gesture

to or there are products that come out

of Silicon Valley that say actually in

fact this can help people build meaning

and businesses and work and generate

economics into their lives those kinds

of things and in can we create kind of a

growth psychology not just for our

industry but for other industries as

well those kinds of things I think can

create a lot of value and can bridge

that bridge the current gap Peter you

were an outlier in 2016 in Silicon

Valley how did you manage to establish

that connection with the rest of the

country with the flyover States middle

America whatever you want to call it it

doesn't look like you're obviously

connected to people in rural Wisconsin

and yet somehow you picked up that

signal of deep frustration with the

status quo

tell us a bit about how you did that

well I'd been making the stagnation

argument

that I tried to outline here for you

know for the better part of a decade and

and I you know it's it's it's it you

sort of get enormous pushback in in

Silicon Valley part of it is for good

reasons part are sort of more reasons

that people you know want to think

they're everything they're doing is

great and so if this was this was an

axis that that was that was that was

that was very important it was one that

was whether it was going to be a very

big blind spot you know the the advice

that I'd given all the more on the

Republican side with the advice I'd

given all the candidates was they needed

to have someone who was more pessimist

they were not pessimistic enough and you

needed to be pessimistic because if you

were optimistic that just showed you

were out of touch and optimism may be a

good trait if you're a tech entrepreneur

it's and it's you know somewhat good

trait as a politician but too optimistic

is toxic you know and and this was this

was the core mistake you know people

like Romney made people like Jeb Bush

made they think it's fundamentally a

progressive narrative where things are

fundamentally working you know I always

thought it was very difficult to run a

candidate who was sufficiently

pessimistic because you're too

pessimistic you'll demotivate your own

voters you know everything's going to

hell in a handbasket that's not a that

encouraging political frame but if there

was if there was some way to be both

extremely pessimistic and motivational

that was a that was a super powerful

combination that I think people were

were very much under under estimating

you know I think the question I would

I'd want to leave for people here is to

come back to this question of the nature

of scientific and technological progress

it's a question that's a I think an

all-important cultural social political

question what is the truth about it are

we are we in fact in a society that's

with a few Eric a few signal signal

exceptions broadly stagnating you know

are the economists right there's no

productivity gains or or is the sort of

Google propaganda

the more correct view of the world and

that's that's a that's a question that I

think we should try to engage with it's

very hard to engage with by the way

because it's the nature of late

modernity that science and technology

are specialized they're the domain of

specialized experts and so we are told

that you can't think about this it's not

like the 18th century where a

well-educated person understood

something about everything and so is

physics progressing is string theory

representing a lot of progress in

physics and sir don't know it's quantum

or quantum computers around the corner

don't know about that either and and

when the answer to every single one of

these questions is we don't know this

all-important question about the nature

of the progress of our society we have a

sort of learned helplessness with

respect we have to figure out some way

to be able to to think about these

things more effectively the I'm not

gonna try to go into you know every

single one of those topics right now

that's the leaf because we only have one

minute but but the political the

political layer on it is that I suspect

that the extreme specialization leads to

an incentive in which the experts in

each of their designated fields are self

congratulatory and so the string

theorists will talk about how wonderful

they are you know the cancer researchers

will say you know we're about to cure

cancer it's just around the corner yeah

that's what we've been saying to the

last 50 years but this time we're

telling you the truth and on and on down

the line and you know there's a tech

version there's a venture capital

version of this where people are really

guilty and so I think the extreme

specialization I suspect leads to a

massive systemic skew to the answer so

this is I I broadly agree on the

importance of being future-oriented of

saying look how do we have as much

science progress as possible I would say

in the sense we have extremely short

time the fact that we are we today have

apps on our cell phone that can

recognize skin cancer that can be

present for seven billion people is

actually in fact a sign of progress

prefer having a cure for cancer it seems

like the moment has come to draw this

wonderful conversation are too close our

next Cardinal conversation segwaying

rather nicely from what Peter was just

talking about will take place in the

same place at the same time on February

the 22nd and will feature Francis

Fukuyama and charles murray discussing

populism and inequality it only remains

for me to do some very quick thank-yous

I want to thank Hoover's amazing event

staff Alexander Bradley Chris Dodd Deniz

Elson Shanna Farley Linda Hernandez Jeff

Jones Justin Petty Janet Smith and Aaron

Tillman as well as Magdalena Fittipaldi

at FSI big thank you to the students who

made this happen

Stephanie Chen Kartini Christos McRib

Asst Anna Mitchell just as tension

Palmer

Ravi Jake's Antigone's Annapolis and

Rory Arrieta Kenna however the biggest

thank you and you're going to give it

should be for our extraordinary guests

in this first Cardinal conversation

please join me in thanking Reed Hoffman

a Peter teal

[Applause]