Thiel v. Schmidt
Peter Thiel, taking the pessimistic view, and Eric Schmidt, taking the optimistic view, both made good points in their debate over technology but Thiel had the knockout punch: PETER THIEL: …Google is a great company. It has 30,000 people, or 20,000, whatever the number is. They have pretty safe jobs. On the other hand, Google also has 30, 40, 50 billion in cash. It has no idea how to invest that money in technology effectively. So, it prefers get...
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- It may continue to grow every year, but it hasn't reached $50 billion yet. Thiel's argument is that they wouldn't need to hedge if we were in the middle of a period of breakneck innovation where progress was a sure thing.Jul 23, 2012
- Good point about the dividends. But ultimately you're arguing that Thiel is wrong, and that we do live in a highly uncertain world (which I agree with).
But I disagree with nearly all of the metrics you present for innovation, except for productivity growth. But of course, the stagnationists use total factor productivity as one of their key pieces of evidence for their argument: http://macromarketmusings.blogspot.com/2011/02/great-stagnation-and-total-factor.html
How much people are investing and how many products are launched doesn't mean much if they're investing in companies that create products which give us tiny incremental gains. A thousand iterations of an Android phone is not really comparable to the invention of the automobile or airplane in terms of scale of innovation.Jul 24, 2012
- You're making a Race Against the Machine type argument here, which I'm definitely partial to. And the transition to automated vehicles, when it happens, will be an enormous needle-mover; I don't think anyone's arguing with that.
The problem with looking at global TFP versus developed nation TFP has to do with the specific question being discussed--developing nation TFP is skyrocketing because they're copying the innovations that have already happened; basically there's a convergence story there. Thiel is arguing that for the countries that already have the latest innovations, progress has been much slower--not much slower than it is in developing nations (which we would expect since they have further to go to catch up) but much slower than it was relative to our own history.Jul 24, 2012
- I definitely wish that when people were talking about long term trends they would have charts showing their metrics for the past 150 or 200 years, not just the past 40 or 70 or 80.
I like this story you're telling. In this story, we may be in a time right now when we're investing in a lot of stuff that won't see its biggest payoff until sometime in the future. IE, when every vehicle is replaced with autonomous ones, when we actually start to see some dividends from DNA sequencing in a broader and more radical way than we currently are, when computers like Watson will replace doctors for basic diagnoses, etc.Jul 24, 2012
- Oh yeah, one more thing about Thiel's claim that bits are the only 'unregulated thing left': http://www.slate.com/blogs/moneybox/2012/07/24/the_myth_of_the_libertarian_internet.htmlJul 24, 2012
- My last semester in grad school I took two public policy classes, and one was transportation policy. It was taught by a lawyer who had worked at several transportation related agencies (including the FAA for instance). Suffice to say, the reality of airplane regulation is way, way more dismal that Yglesias makes it seem in that post. Which airline is allowed to fly from what airport, for instance, is a tightly regulated thing which has a direct impact on the profitability of any airline. It's true that there are other countries to look at, but the policies of most other developed nations aren't really any better than ours in this regard.
I take his general point though; Thiel definitely oversimplified. The debate with Schmidt was thought-provoking, but the Blake Masters essay-notes are much better and more nuanced http://blakemasters.tumblr.com/peter-thiels-cs183-startupJul 24, 2012
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