Accelerating or Decelerating? The Prospects for Technology and Economic Growth ?
Peter Thiel, Co-founder of PayPal, Technology Entrepreneur, Investor, and Philanthropist
George Gilder, Chairman, George Gilder Fund Management, and Senior Fellow, Discovery Institute
Peter Thiel’s thesis that technological progress is decelerating has been featured prominently as of late in a number of opinion journals and popular magazines, while George Gilder holds to the supremely optimistic premise of his famous ‘Microcosm: The Quantum Revolution in Economics and Technology’.
Moderator: William Davidow, High-technology Executive, Venture Investor, and Author of ‘Overconnected: The Promise and Threat of the Internet’
The debate was formatted as a point-counterpoint, with Thiel and Gilder speaking for about fifteen minutes each on the primary topic—whether the growth of technology is on the rise or in stagnation—before providing short followups to each others’ speeches and finally taking questions from the audience.
Thiel started out the talk on a rather solemn note, arguing that “there’s been less technological progress than people often advertise in recent decades, and unless something is done to fix this situation, we will be likely to have even less in the decades ahead.”
An avowed libertarian, Thiel offered his opinion that outside of the computing industry, in areas such as transportation, green technology and medicine, technological growth has been on the decline since the 1970s. “Almost everywhere else, there’s been deceleration…if you look at transportation, people moved faster every decade from 1500 on, [but now] transportation speeds are back to 1960s levels. It’s been literally flat.”
One of the primary reasons for the stagnation in non-digital technologies, Thiel argued, is intense government regulation of various science and technology industries, specifically pointing out “the failure” of green technology in the past decade under heavy government subsidy, as well as the decline in nuclear innovation. He cited public fears of nuclear meltdown, especially in the wake of Japan’s catastrophic earthquake last year and the subsequent scare at the Fukushima nuclear facility, as reminders that the nuclear industry is not in a position to regain public confidence. With regards to this Thiel noted, “The world has become increasingly hostile to any sort of innovation.”
Perhaps his most striking anecdote was regarding Warren Buffett and his massive investments in the railroad industry, which Thiel argued was “basically a bet against technology,” citing the fact that the dominant use of railroads in the modern day and age is for the transportation of coal—a bet against green technology.
“As a venture capitalist, I am interested in trying to reverse and undo this trend…I would like to see the next few decades have a lot more progress than we’ve had in the last forty years,” Thiel remarked.
George Gilder’s part of the talk offered a positive counterpoint to Thiel’s. Gilder, now age 72, described in significant detail the technological progress made since his younger years.
He began his part of the talk with a story from the early 80s, when he held conversations with electrical engineers who argued that emerging digital communication technologies of the time, such as CDMA—the digital wireless communication standard Qualcomm began rolling out at the time—were inferior in quality to equivalent analog communication technologies, noting how much digital technology has advanced since then.
Gilder, who Thiel called a “friendly rival”, offered a different look at the technological progress of energy: “Peter’s worried about energy. I’m not worried about energy at all. I never imagined that clean tech was a reasonable project for America when we have oil and gas in huge quantities…enough natural gas has been [discovered] to support the U.S. economy for the next 200 years.”
Gilder used this anecdote as a jumping point for a discussion into the positive role modern technology has played in expanding economic growth in the United States through scalability of platforms. Like Thiel, Gilder argued that government often served as an impeding role in the growth of technology, at times suggesting that issues like global warming were distracting from modern scientific progress.
With regards to transportation, Gilder commented that “air travel is one of the most stupendous successes technologically that I’ve experienced in my life, and it’s still improving rapidly.” He then segued into a discussion of nanotechnology, calling it “a delusion” in the mechanical sense, but suggesting that nanotechnology has opportunities outside the realm of nanobots and micromachines: he acknowledged investing in a company that has begun experimenting with carbon nanotubes to filter water.
One of Gilder’s strangest moments during the conversation was a moment where he claimed that “we’ve started worshiping trees again, and we became druids creating this sun engines around the country, and we really had a mania. I think this mania is coming to an end now.” This drew some chuckles from the audience.
While Thiel and Gilder discussed point and counterpoint back and forth, disagreeing on the central issue of whether or not the growth of technology was expanding or contracting, Gilder remarked at the end of his retort that on many of the issues, “I agree with Peter. I don’t want to seem to be too much of a push over, but I agree that culturally we’ve had this massive revulsion towards technology.”