Episode description
Peter Thiel is an entrepreneur and investor. He co-founded PayPal, made the first outside investment in Facebook, and co-founded Palantir Technologies, where he serves as chairman. Thiel is a partner at Founders Fund and leads the Thiel Foundation, which funds technological progress and long-term thinking. He is also the author of the #1 New York Times bestseller Zero to One.https://foundersfund.comhttps://palantir.com Learn more about your ad choices. Visit podcastchoices.com/adchoices
Transcription
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Peter
Joe Rogan Podcast, check it out! The Joe Rogan Experience.
Listen in Spotify 0.0:0.0
Joe
Train by day, Joe Rogan Podcast by night, all day! What’s up, man? Good to see you. Glad to be on the show. My pleasure. Thanks for having me. My pleasure. What’s crackin’? How you doing? Doing alright.
Listen in Spotify 0.0:6.1
Peter
We were just talking about how you’re still trapped in L.A. I’m still trapped in L.A. I know. Are you friends with a lot of people out here. Have you thought about jettisoning? I talk about it all the time. But it’s always talk is often
Listen in Spotify 0.0:18.74
Joe
a substitute for action. It’s always, does it lead to action or does it end up substituting for action? That’s a good point. But I have endless conversations about leaving. I moved from San Francisco to L.A. back in 2018. That felt about as big a move away as possible. And I keep – the extreme thing I keep saying – and again, I have to keep my talks as a substitute for action. The extreme thing I keep saying is I can’t decide whether to leave the state or the country. Oh, boy.
Listen in Spotify 0.0:34.74
Peter
If you went out of the country, where would you go? Man, I’ve, it’s tough to find places because, you know, there are a lot of problems in the U.S. and most places are doing so much worse. Yeah.
Listen in Spotify 1.0:3.280000000000001
Joe
So. It’s not a good move to leave here. It’s as fucked up as this place is.
Listen in Spotify 1.0:14.620000000000005
Peter
But I keep, I keep, I keep thinking I shouldn’t move twice. So I should either, I can’t decide whether I should move to Florida or should move to New Zealand or Costa Rica or something like that.
Listen in Spotify 1.0:18.599999999999994
Joe
Yeah. Go full John McAfee.
Listen in Spotify 1.0:30.519999999999996
Peter
But can’t decide between those two. So I end up stuck in California.
Listen in Spotify 1.0:33.980000000000004
Joe
Well, Australia is OK. But they’re even worse when it comes to rule of law and what they decide to make you do and the way they’re cracking down on people now for online speech. And it’s very sketchy in other countries.
Listen in Spotify 1.0:38.14
Peter
But somehow the relative outperformance of the U.S. and the absolute stagnation, decline of the U.S.,
Listen in Spotify 1.0:54.3
Joe
they’re actually related things because the way the conversation’s grouped, every time I say, tell someone, you know, I’m thinking about leaving the country, they’ll do what you say and they’ll say, well, every place is worse. And then that somehow distracts us from all the problems in this country. And then we can’t talk about what’s gone wrong in the U.S. because everything is so much worse? Well, I think most people know what’s gone wrong, but they don’t know if they’re on the side of the government that’s currently in power. They don’t know how to criticize it. They don’t know exactly what to say, what should be done. Right. And they’re ideologically connected to this group being correct. Right. So they try to do mental gymnastics to try to support some of the things that are going on. I think that’s a part of the problem. I don’t think it’s necessarily that we don’t know what the problems are. We know what the problems are, but we don’t have clear solutions as to how to fix them, nor do we understand the real mechanisms of how they got there in the first
Listen in Spotify 2.0:1.9200000000000017
Peter
place. Yeah. I mean, there are a lot that are pretty obvious to articulate and they’re much easier described than solved. Like we have a crazy, crazy budget deficit. Yeah. And presumably you have to do one of three things. You have to raise taxes a lot. You have to cut spending a lot or you’re just going to keep borrowing money.
Listen in Spotify 2.0:58.599999999999994
Joe
Isn’t there like some enormous amount of our taxes that just go to the deficit?
Listen in Spotify 3.0:22.5
Peter
It’s not that high, but it’s gone up a lot.
Listen in Spotify 3.0:28.120000000000005
Joe
What is it? I thought it was like 34% or something crazy.
Listen in Spotify 3.0:33.620000000000005
Peter
It peaked at 3.1% of GDP, which is maybe 15%, 20% of the budget. It peaked at 3.1% of GDP in 1991. And then it went all the way down to something like 1.5% in the mid-2010s. And now it’s crept back up to 3.1%, 3.2%. And so we are at all-time highs as a percentage of GDP. And the way to understand the basic math is the debt went up a crazy amount, but the interest rates went down. And from 2008 to 2021, for 13 years, we basically had zero interest rates with one brief blip under Powell. But it was basically zero rates. And then you could borrow way more money, and it wouldn’t show up in servicing the debt because you just paid 0% interest on the T-bills. And the thing that’s very dangerous seeming to me about the current fiscal situation is the interest rates have gone back to positive like they were in the 90s and early 2000s, mid-2000s. And it’s just this incredibly large debt. And so we now have a real runaway deficit problem. But people have been talking about this for 40 years and crying wolf for 40 years. So it’s
Listen in Spotify 3.0:37.58000000000001
Joe
very hard for people to take it seriously. Most people don’t even understand what it means. Like when you say there’s a deficit, we owe money. Okay, to who? How’s that work?
Listen in Spotify 4.0:55.01999999999998
Peter
Well, it’s to people who bought the bonds. And a lot of it’s to Americans. Some of them are held by the Federal Reserve. A decent amount are held by foreigners at this point because in some ways, it’s the opposite of the trade current account deficits. The U.S. has been running these big current account deficits and then the foreigners end up with way more dollars than they want to spend on American goods or services. And so they have to reinvest them in the U.S. Some put it into houses or stocks, but a lot of it just goes into government debt. So in some ways it’s a function of the chronic trade imbalances, chronic trade deficits.
Listen in Spotify 5.0:7.1200000000000045
Joe
Well, if you had supreme power, if Peter Thiel was the ruler of the world and you could fix this, what would you do?
Listen in Spotify 5.0:48.24000000000001
Peter
Man, I always find that hypothetical – it’s a ridiculous hypothetical.
Listen in Spotify 5.0:55.44
Joe
It is ridiculous. You ask ridiculous hypotheticals, you get ridiculous answers. I want a ridiculous answer. That’s what I like. But what could be done? It is ridiculous. It’s hypothetical. You get ridiculous answers. I want a ridiculous answer. That’s what I like. But what could be done? Like what could be – first of all, what could be done to mitigate it and what could be done to solve it?
Listen in Spotify 6.0:0.18000000000000682
Peter
I think my answers are probably all in the very libertarian direction. So it would be sort of figure out ways to have smaller governments, figure out ways, you know, to increase the age on Social Security, means test Social Security so not everyone gets it, just figure out ways to gradually dial back, you know, a lot of these government benefits. And then that’s, you know, that’s insanely unpopular. So it’s completely unrealistic
Listen in Spotify 6.0:11.620000000000005
Joe
on that level. That bothers people that need social security. I said means tested. Means tested. So people who don’t need it, don’t get it. Right. So social security, even if you’re very wealthy,
Listen in Spotify 6.0:48.25999999999999
Peter
I don’t even know how it works. Do you still get it? Yeah, basically anyone who – pretty much everyone gets it because it was originally rationalized as a sort of a pension system, not as a welfare system. And so the fiction was you pay Social Security taxes and then you’re entitled to get a pension out in the form of Social Security. Right. And because it was – we told this fiction that it was a form of – it was a pension system instead of an intergenerational Ponzi scheme or something like that.
Listen in Spotify 6.0:58.860000000000014
Peter
You know, the fiction means everybody gets paid Social Security because it’s a pension system. Whereas if we were more honest and said it’s just a welfare system, maybe you could
Listen in Spotify 7.0:36.75999999999999
Peter
start dialing – you could probably rationalize it in a lot of ways.
Listen in Spotify 7.0:46.19999999999999
Joe
And it’s not related to how much you put into it, right? Like how does Social Security work in terms of –
Listen in Spotify 7.0:51.22000000000003
Peter
It’s partially – I think it’s partially related. So I think there is – I’m not a total expert on this stuff, but I think there’s some guaranteed minimum you get. And then if you put more in, you get somewhat more, and then it’s capped at a certain amount.
Listen in Spotify 7.0:56.920000000000016
Joe
And that’s why Social Security taxes are capped at something like $150,000 a year. And then this is one of the really big tax increase proposals that’s out there is to uncap it, which would effectively be a 12.4% income tax hike on all your income. Adjust to Social Security? Sure. Because the argument is, the sort of progressive left Democrat argument is that it’s, you know, why should you have a regressive social security tax? Why should you pay 12.4% or whatever the social security tax is? Half gets paid by you, half gets paid by your employer. But then it’s capped at like 140, 150K, some level like that. And why should it be regressive where if you make 500k or a million k a year, you pay zero tax on your marginal income. And that makes no sense if it’s a welfare program. If it’s a retirement savings program and your payout’s capped, then you don’t need to put in more than you get out. Well, that’s logical. But there’s not a lot of logic going on with the way people are talking about taxes today. Like California just jacked their taxes up to 14 what? Was it 14.4?
Listen in Spotify 8.0:13.779999999999973
Peter
Something like that. Yeah, 14.3, I think. Which is hilarious.
Listen in Spotify 9.0:30.779999999999973
Joe
Yeah, 49 something. I mean, you want more money for doing a terrible job and having more people leave for the first time ever in the history of the state.
Listen in Spotify 9.0:33.60000000000002
Peter
Yeah, but look, it gets away with it. I know. And so –
Listen in Spotify 9.0:42.89999999999998
Joe
People are forced with no choice. What are you going to do?
Listen in Spotify 9.0:47.5
Peter
It is – I mean there are people at the margins who leave, but the state government still collects more and more in revenue. So it’s – you get – I don’t know. You get 10 percent more revenues and 5% of the people leave. You still increase the amount of revenues you’re getting. It’s inelastic enough that you’re actually able to increase the revenues. I mean, this is sort of the crazy thing about California is, you know, there’s always sort of a right wing or libertarian critique of California that, you know that it’s such a ridiculous place. It should just collapse under its own ridiculousness. And it doesn’t quite happen. The macroeconomics on it are pretty good. Forty million people. The GDP is around four trillion. It’s about the same as Germany with 8080 million or Japan with $125 million. Japan has three times the population of California. Same GDP means one-third the per capita GDP. So there’s some level on which California as a whole is working even though it doesn’t work from a governance point of view. It doesn’t work for a lot of the people who live there. And the rough model I have for how to think of California is that it’s kind of like Saudi Arabia. And you have a crazy religion, wokeism in California, Wahhabism in Saudi Arabia. You know, not that many people believe it, but it distorts everything. And then you have like oil fields in Saudi Arabia and you have the big tech companies in California. And the oil pays for everything. And then you have a completely bloated, inefficient government sector. And you have sort of all sorts of distortions in the real estate market where people also make lots of money in sort of the government and real estate are ways you redistribute the oil wealth or the big tech money in California. And it’s not the way you might want to design a system from scratch, but it’s pretty stable. People have been saying Saudi Arabia is ridiculous. It’s going to collapse any year now. They’ve been saying that for 40 or 50 years. But if you have a giant oil field, you can pay for a lot of ridiculousness. I think that’s the
Listen in Spotify 9.0:50.440000000000055
Joe
way you have to think of California. Well, the other thing is you’re also- There are things about it that are ridiculous, but there’s something about it that it doesn’t naturally self-destruct overnight. Well, there’s a lot of kick-ass people there. And there’s a lot of people that are still generating enormous amounts of wealth there. And it’s too difficult to just
Listen in Spotify 12.0:9.799999999999955
Peter
pack up and leave. I think it’s something like four of the eight or nine companies with market capitalizations over a trillion dollars are based in California. That’s amazing. It’s Google, Apple, now NVIDIA, Meta. Yeah, I think Broadcom is close to that.
Listen in Spotify 12.0:28.32000000000005
Joe
And there’s no ideal place to live either. It’s not like California sucks, so there’s a place that’s got it totally dialed in with also that has an enormous GDP, also has an enormous population.
Listen in Spotify 12.0:53.5
Peter
There’s not like one big city that’s really dialed in. Well, there are things that work. So I looked at all the zero tax states in the US. And it’s always, you don’t, I think the way you asked the question gets at it, which is, you don’t live in a, you know, in theory, a lot of stuff happens on a state level, but you don’t live in a state. You live in a city. And so if you’re somewhat biased towards living in at least a moderately sized city, OK, I think there are four states where there are no cities, Alaska, Wyoming, South Dakota, New Hampshire. There’s zero tax, but no cities to speak of. And then you have Washington State with Seattle, where the weather is the worst in the country. You have Nevada with Las Vegas, which I’m not that big a fan of. And then that leaves three zero-tax states. You have Texas, which I like as a state, but I’m not that big a fan of Austin, Dallas, or Houston. And, you know, it’s a sort of – Houston is just sort of an oil town, which is good if you’re in that business, but otherwise not. Dallas has sort of an inferiority complex to L.A. and New York, which is not the healthiest attitude. And then, you know, I don’t know. Austin’s a government town and a college town and a wannabe hipster San Francisco town. So, you know, my books are three strikes and you’re kind of out too. And then that leaves Nashville, Tennessee, or Miami, South Florida. Those would
Listen in Spotify 13.0:5.6200000000000045
Joe
be my two top choices. Miami’s fun, but I wouldn’t want to live there. It’s a fun place to visit. It’s a little too crazy, a little too chaotic, a little too cocaine-fueled, a little too party,
Listen in Spotify 14.0:48.799999999999955
Peter
party, party. I think it’s pretty segmented from the tourist strip from everything else. It probably is something a little bit paradoxical about any place that gets lots of tourists.
Listen in Spotify 14.0:59.39999999999998
Peter
Where, you know, it’s in some sense of a case. There’s some things that are great about because so many tourists go. But then in some sense, it’s it creates a weird aesthetic because the you know, the day to day vibe is that you don’t you don’t work and you’re just having fun or something like that.
Listen in Spotify 15.0:17.74000000000001
Joe
Right. Because so many people are going there just to do that.
Listen in Spotify 15.0:34.860000000000014
Peter
And that’s that’s probably a little bit off with the South Florida, the South Florida thing. But, um, but I think it’s, um, and then I think, uh, and then I think Nashville is, is, is also sort of its own real place. Nashville’s great. Yeah. So those, those would be my, those are the top two. I, I could live in Nashville. No problem. Yeah.
Listen in Spotify 15.0:37.15999999999997
Peter
I’m probably always, I’m always, I’m always too, uh, you know, fifth grade onward since, you know, 77, I lived in California. And so I’m just a sucker for the weather. And I think there is no place besides coastal California where you have really good weather year-round in the U.S. Maybe Hawaii is pretty good. Coastal California is tough to beat. And you’re two hours from the mountains. Man, it’s like, you know, it’s mid-August here in Austin. It’s just brutal. Is it? I think so.
Listen in Spotify 15.0:57.75999999999999
Joe
Really? That was too hot for you? It was too hot for me. Today’s mild. What is it out there, like 80? All right. 85? 96. 96? You’re proving my point.
Listen in Spotify 16.0:32.67999999999995
Peter
I do so much sauna that I literally don’t even notice it. I’m outside for hours every day shooting arrows, and I don’t even notice it. Well, that’s – I don’t know if you’re a representative of the average Austin president.
Listen in Spotify 16.0:40.48000000000002
Joe
I don’t know, but I think you get accustomed to it. To me, it’s so much better than too cold. Too cold, you can die. And I know you can die from the heat, but you probably won’t, especially if you have water. You’ll be okay. But you could die from the heat, but you probably won’t, especially if you have water. You’ll be okay. But you could die from the cold. Cold’s real. So really cold places, there’s five months out of the year where your life’s in danger, where you could do something wrong. Like if you live in Wyoming and you break down somewhere and there’s no one on the road, you could die out there. That’s real. You could die from exposure. Sure.
Listen in Spotify 16.0:53.39999999999998
Peter
There’s probably some very deep reason there’s been a net migration of people to the west and the south in the U.S. over the last five decades.
Listen in Spotify 17.0:27.1400000000001
Joe
California, you can do no wrong. As long as the earth doesn’t move, you’re good. As long as there’s no tsunamis, you’re good. It is a perfect environment virtually year-round. It gets a little hot in the summer, but again, coastal, not at all. If you get an 80-degree day in Malibu, it’s unusual. It’s wonderful. You’ve got a beautiful breeze coming off the ocean. Sun’s out. Everybody’s pretty.
Listen in Spotify 17.0:28.90000000000009
Peter
And then it’s correlated with confiscatory taxation.
Listen in Spotify 17.0:50.98000000000002
Joe
It’s all sort of a package deal. Well, it’s a scam. They know you don’t want to leave. I didn’t want to leave California. It’s fucking great.
Listen in Spotify 17.0:55.33999999999992
Peter
I appreciate you left. I always have the fantasy that if enough people like you leave, it’ll put pressure on them, but it’s never quite enough. Never quite enough.
Listen in Spotify 18.0:1.9400000000000546
Joe
And it’s not going to be. It’s too difficult for most people. It was very difficult for me. And I had a bunch of people working for me that were willing to pack up and leave, like young Jamie over there. But it was tricky. You’re taking your whole business, and my business is talking to people. That’s part of my business. My other business is stand-up comedy. So you left during COVID? I left at the very beginning. As soon as they started locking things down, I’m like, oh, these motherfuckers are never letting us go.
Listen in Spotify 18.0:9.220000000000027
Peter
April, March, April, May 2020. In May, I started looking at houses. Cool. That’s when I came to Austin first. I got a place in Miami in September of 2020, um, and spent the last, you know, I’ve spent the last four winters there. So I’m sort of always on the cusp of, of, uh, moving to Florida, hard, hard to get out of California. Um, but the thing that’s gotten a lot harder about moving relative to four years ago, and, you know, I’d say, I think my real estate purchase have generally not been great over the years. I mean, they’ve done okay, but certainly not the way I’ve been able to make money at all. But with the one exception was Miami. Bought it in September 2020. and probably, you know, fast forward four years, it’s up like 100 percent. Wow.
Listen in Spotify 18.0:33.700000000000045
Joe
Something like that. And and and then but then paradoxically, this also means it’s gotten much harder to move there or Austin or any of these places. You know, if I relocated my office in L.A., the people who own houses, okay, you have to buy a place in Florida. It costs twice as much as it did four years ago. And then the interest rates have also doubled. And so you get a 30-year mortgage. You could have locked that in for 3% in 2020. Now it’s, you know, maybe 6.5%, 7%. So the prices have doubled, the mortgages have doubled. So it costs you four times as much to buy a house. And so, yeah, so there was a moment where people could move during COVID and it’s gotten dramatically harder relative to what it was four years ago. Well, the Austin real estate market went crazy and then it came back down a little bit. And it’s in that down a little bit spot right now where there’s a lot of like high-end properties that are still for sale. They can’t move. It’s different. There’s not a lot of people moving here now like there was in the boom because everything is open everywhere.
Listen in Spotify 19.0:28.519999999999982
Peter
Well, I somehow think Austin was linked to California and Miami was linked a little bit more to New York. And it was a little bit, you know, all these differences. But Austin was kind of, you know, a big part of the move were people from tech from California that moved to Austin. You know, there’s a part of the Miami, South Florida thing, which was people from finance in New York, New York City that moved to Florida. And the finance industry is less networked on New York City. So I think it is possible for people, if you run a private equity fund or if you work at a bank, it’s possible for some of those functions to easily be moved to a different state. The tech industry is crazily networked on California. Like there’s probably some way to do it. It’s not that easy.
Listen in Spotify 20.0:37.700000000000045
Joe
Yeah, it makes sense. It makes sense, too. It’s just the sheer numbers. I mean, when you’re talking about all those corporations that are established and based in California, there’s so many, they’re so big, just the sheer numbers of human beings that live
Listen in Spotify 21.0:36.40000000000009
Peter
there and work there that are involved in tech. Sure. If it wasn’t as networked, you know, you could probably just move, you know, and maybe these things are networked till they’re not. You know, Detroit was very networked. The car industry was super networked on Detroit for decades and decades. And Michigan got more and more mismanaged. And people thought the network sort of protected them because, you know, the big three car companies were in Detroit. But then you had all the supply chains were also in Detroit. And then eventually it was just so ridiculous. People moved, started moving the factories outside of that area, and it sort of unraveled. So that’s, you know, it can also happen with California. It’ll just take a lot.
Listen in Spotify 21.0:50.11999999999989
Joe
That would be insane if they just abandoned all the tech companies in California. I mean, just look at what happened at Flint, Michigan, when all the auto factories pulled out.
Listen in Spotify 22.0:32.40000000000009
Peter
Well, it’s, look, I think you can, it’s always, there are all these paradoxical histories, you know, the, the internet, the point of the internet in some sense was to eliminate the tyranny of place. And that was sort of the idea. And then one of the paradoxes about the internet history of the internet was that the internet companies, you know, were, you know, we’re all, you know, we’re all, you know, we’re all centered in, in California, then the probably, there have been different, different waves of, of how networked how non networked they were, I think, I think probably 2021, sort of the COVID moving away from California, the big thing in tech was crypto. And crypto had this conceit of an alternate currency, decentralized, away from the central banks. But also the crypto companies, the crypto protocols, you could do those from anywhere. You could do them outside the U.S. You could do those from anywhere. You could do them outside the U.S. You could do them from Miami. And so crypto was something where the tech could naturally move out of California. And today, probably the, I don’t know, the core tech narrative is completely flipped to AI. And then there’s something about AI that’s very centralized. I had this one-liner years ago where it was, if we say that crypto is libertarian, can we also say that AI is communist or something like this, where the natural structure for an AI company looks like it’s a big company and then somehow the AI stuff feels like it’s going to be dominated by the big tech companies in the San Francisco Bay Area.
Listen in Spotify 22.0:40.98000000000002
Peter
And so if that’s the future of tech, the scale, the natural scale of the industry tells you that it’s going to be extremely hard to get out of the San Francisco Bay Area.
Listen in Spotify 24.0:34.48000000000002
Joe
When you look to the future and you try to just make just a guess as to how all this is going to turn out with AI, what do you think we’re looking at over the next five years?
Listen in Spotify 24.0:49.24000000000001
Peter
Man, I think I should start by being modest in answering that question and saying that
Listen in Spotify 25.0:1.4200000000000728
Joe
nobody has a clue. Right. Which is true, which pretty much all the experts say.
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Peter
You know, I would say, let me do sort of a history. The riff I always had on this was that
Listen in Spotify 25.0:10.5
Joe
I can’t stand any of the buzzwords. And I felt AI, you know, there’s all this big data, cloud computing.
Listen in Spotify 25.0:20.480000000000018
Peter
There were all these crazy buzzwords people had, and they always were ways to sort of abstract things and get away from reality somehow and were not good ways of talking about things. And I thought AI was this incredible abstraction because it can mean the next generation of computers, it can mean the last generation of computers, it can mean anything in between. And if you think about the AI discussion in the 2010s, pre-open AI, chat GPT, and the revolution of the last two years, but the 2010s AI discussion, maybe it was… So I’ll start with the history before I get to the future. But the history of it was maybe anchored on two visions of what AI meant. And one was Nick Bostrom, Oxford prof,-duper intelligent thing, way, way godlike intelligence, way smarter than any human being. And then there was sort of the, I don’t know, the CCP Chinese communist rebuttal, the Kai-Fu Lee book from 2018, AI Superpowers. I think the subtitle was something like The Race for AI Between Silicon Valley and China or something like this. And it was sort of – it defined AI as – it was fairly low-tech. It was just surveillance, facial recognition technology. We would just have this sort of totalitarian Stalinist monitoring. It didn’t require very much innovation. It just required that you apply things. And basically, the subtext was China is going to win because we have no ethical qualms in China about applying this sort of basic machine learning to sort of measuring or controlling the population. And those were sort of like, say, two extreme competing visions of what AI would mean in the 2010s and that sort of maybe were sort of the anchors of the AI debate. And then what happened in some sense with ChatGPT in late 22 1950 to 2010, for the previous 60 years, before the 2010s. People have always said AI, the definition of AI is passing the Turing test. And the Turing test, it basically means that the computer can fool you into thinking that it’s a human being. And it’s a somewhat fuzzy test because, you know, obviously you have an expert on the computer, a non-expert, you know, does it fool you all the time or some of the time? How good is it? But to first approximation, the Turing test, you know, we weren’t even close to passing it in 2021. And then, you know, chat GPT basically passes the Turing test, at least for like, let’s say an IQ 100 average person. It can, it can, it’s passed the Turing test. And that was, that was the holy grail. That was the holy grail of AI research for the previous 60 years. And so there’s – I don’t know. There’s probably some psychological or sociological history where you can say that this weird debate between Bostrom about superintelligence and Kai-Fu Lee about surveillance tech was like this – almost like psychological suppression people had where they were not thinking – they lost track of the Turing test, of the Holy Grail, because it was about to happen. And it was such a significant, such an important thing that you didn’t even want to think about. So I’m tempted to give almost a psychological repression theory of the 2010 debates. But be that as it may, the Turing test gets passed, and that’s an extraordinary achievement. And then, you know, maybe, and then, you know, where does it go from here? There probably are ways you can refine these. It’s still going to be, you know, a long time to apply it. There is a question. There’s this AGI discussion. Will we get artificial general intelligence, which is a hopelessly vague concept, which general intelligence could be just a generally smart human being. So is that just a person with an IQ of 130? Or is it super intelligence? Is it godlike intelligence? So it’s sort of an ambiguous thing. But I keep thinking that maybe the AGI question is less important than passing the Turing test. If we got AGI, if we got, let’s say, superintelligence, if we got – that would be interesting to Mr. God because you’d have competition for being God. But surely the Turing test is more important for us humans, because it’s either a complement or a substitute to humans. And so it’s, yeah, it’s going to rearrange the economic, cultural, political structure of our society in extremely dramatic ways. And I think maybe what’s already happened is much more important than anything else that’s going to be done. And then it’s just going to be a long ways in applying it. One last thought. The analogy I’m always tempted to go to. And these things are never, historical analogies are never perfect. But it’s that maybe AI in 2023, 2024, it’s like the internet in 1999, where on one level, it’s clear the internet’s going to be big and get a lot bigger, and it’s going to dominate the economy, it’s going to rearrange the society in the 21st century. And then at the same time, it was a complete bubble and people had no idea how the business models worked. You know, almost everything blew up. It took, you know, it didn’t take that long in the scheme of things. It took, you know, 15, 20 years for it to become super dominant. But it didn’t happen sort of in 18 months as people fantasized in 1999. And maybe what we have in AI is something like this. It’s figuring out how to actually apply it, you know, in sort of all these different ways, it’s going to take something like two decades. But that doesn’t distract from it being a really big deal.
Listen in Spotify 25.0:28.6400000000001
Joe
It is a really big deal. And I think you’re right about the Turing test. Do you think that the lack of acknowledgement or the public celebration, or at least this like mainstream discussion, like which I think should be everywhere, that we’ve passed the Turing test. Do you think it’s connected to the fact that this stuff accelerates so rapidly that even though we’ve essentially breached this new territory, we still know that GPT-5 is going to be better, GPT-6 is going to be insane, and then they’re working on these right now. And the change is happening so quickly, we’re almost a little reluctant to acknowledge where we’re at. saying, and then they’re working on these right now. And the change is happening so quickly, we’re almost a little reluctant to acknowledge where we’re at.
Listen in Spotify 32.0:32.1400000000001
Peter
Yeah. You know, I’ve often, you know, probably for 15 years or so, often been on the side that there isn’t that much progress in science or tech or not as much as Silicon Valley likes to claim. And even on the AI level, I think it’s a massive technical achievement. It’s still an open question. You know, is it actually going to lead to much higher living standards for everybody? You know, the Internet was a massive achievement. How much did it raise people’s living standards? Much, much trickier question. So I – but in this world where not much has happened, one of the paradoxes of an era of relative tech stagnation is that when something does happen, we don’t even know how to process it. So I think Bitcoin was a big invention, whether it was good or bad, but it was a pretty big deal. And it was systematically underestimated for at least, you know, the first 10, 11 years. You know, you could trade it. It went up smoothly for 10, 11 years. It didn’t get repriced all at once because we’re in a world where nothing big ever happens. And so we have no way of processing it when something pretty big happens. The internet was pretty big in 99. Bitcoin was moderately big. The internet was really big. Bitcoin was moderately big. And I’d say passing the Turing test is really big. It’s on the same scale as the Internet. And because our lived experience is that so little has felt like it’s been changing for the last few decades, we’re probably underestimating it.
Listen in Spotify 33.0:19.1400000000001
Joe
It’s interesting that you say that so little – we feel like so little has changed because if you’re a person – how old are you? Same age as you were. Born in 1967. So in our age, we’ve seen all the change, right? We feel like so little has changed because if you’re a person, how old are you? Same age as you were. Born in 1967. So in our age, we’ve seen all the change, right? We saw the end of the Cold War. We saw answering machines. We saw VHS tapes. Then we saw the internet and then where we’re at right now, which is like this bizarre moment in time where people carry the internet around with them in their pocket every day. And these super sophisticated computers that are ubiquitous, everybody has one. There’s incredible technology that’s being ramped up every year. They’re getting better all the time. And now there’s AI. There’s AI on your phone. You could access chat GPT and a bunch of different programs on your phone. And I think that’s an insane change. I think that’s one of the most, especially with the use of social media, it’s one of the most bizarre changes I think our culture’s ever,
Listen in Spotify 34.0:57.13999999999987
Peter
the most bizarre. It can be a big change culturally or politically. But yeah, the kinds of questions I’d ask is, how do you measure it economically? How much does it change GDP? How much does it change productivity? And certainly, the story I would generally tell for the last 50 years, since the 1970s, early 70s, is that we’ve been not absolute stagnation, we’re in an era of relative stagnation, where there has been very limited progress in the world of atoms, the world of physical things. And there has been a lot of progress in the world of bits, information, computers, Internet, mobile Internet, now AI.
Listen in Spotify 35.0:51.2199999999998
Joe
What are you referring to when you say the world of physical things?
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Peter
You know, it’s any, it’s, well, if we had defined technology, if we were sitting here in 1967, the year we were born, and we had a discussion about technology, what technology would have meant? It would have meant computers. It would have also meant rockets. It would have meant supersonic airplanes. It would have meant new medicines. It would have meant the green revolution in agriculture, maybe underwater cities. Because technology simply gets defined as that which is changing, that which is progressing. And so there was progress on all these fronts. Today, last 20 years, when you talk about technology, you’re normally just talking about information technology. Technology has been reduced to meaning computers. And that tells you that the structure of progress has been weird. There’s been this narrow cone of very intense progress around the world of bits, around the world of computers, and then all the other areas have been relatively stagnant. We’re not moving any faster. You know, the Concorde got decommissioned in 2003 or whenever. And then with all the low-tech airport security measures, it takes even longer to fly, to get through all of them from one city to the next. You know, the highways have gone backwards because there are more traffic jams. We haven’t figured out ways around those. So we’re literally moving slower than we were 40 or 50 years ago. And then, yeah, and that’s sort of the, and then, you know, and then, of course, that’s sort of the, and then, you know, the, and then, of course, there’s also a sense in which these, the screens and the devices, you know, have this effect distracting us from this. So, you know, when you’re, you know, riding a hundred-year-old subway in New York City, and you’re looking at your iPhone, you can, you can look at, wow, this is this cool new gadget, but you’re also being distracted from the fact that your lived environment hasn’t changed, you know, in a hundred years. And, and so there’s, yeah, there’s a question, how important is this world of bits versus, versus the world of atoms? You know, I would say as human beings, we’re physically embodied in a material world. And so I would always say this world of atoms is pretty important. And when that’s pretty stagnant, you know, there’s a lot of stuff that doesn’t make sense. I was an undergraduate at Stanford, late 80s. And at the time, in retrospect, every engineering area would have been a bad thing to go into, you know, mechanical engineering, chemical engineering, all these engineering fields where you’re tinkering and trying to do new things because these things turned out to be stuck. They were regulated. You couldn’t come up with new things to do. Nuclear engineering, aero-astroengineering, people already knew those were really bad ones to go into. They were, you know, outlawed. You weren’t going to make any progress in nuclear reactor designs or stuff like that. Electrical engineering, which was the one that’s sort of adjacent to making semiconductors, that one was still okay. And then the only field that was actually going to progress a lot was computer science. And again, it’s been very powerful, but that was not the felt sense in the 1980s. In the 1980s, computer science was this ridiculous, inferior subject. You know, I always, the linguistic cut is always when people use the word science, I’m in favor of science, I’m not in favor of science in quotes. And it’s always a tell that it’s not real science. And so when we call it climate science or political science or social science, you know, you’re just sort of making it up and
Listen in Spotify 36.0:47.61999999999989
Joe
you have an inferiority complex to real science or something like physics or chemistry. And computer
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Peter
science was in the same category as social science or political science. It was a fake field for people who found electrical engineering or math way too hard and sort of dropped out of the real science and real engineering fields.
Listen in Spotify 40.0:36.960000000000036
Joe
You don’t feel that climate science is a real science? is, it’s, well, let me, it’s, there’s several different things one could say.
Listen in Spotify 40.0:54.92000000000007
Peter
It’s possible climate change is happening. It’s possible we don’t have great accounts of why that’s going on. So I’m not questioning any of those things. But how scientific it is, I don’t think it’s a place where we have really vigorous debates. Maybe the climate is increasing because of carbon dioxide emissions. Temperatures are going up. Maybe it’s methane. Maybe it’s people are eating too much steak. It’s the cows flatulating, and you have to measure how much is methane a greenhouse gas versus carbon dioxide. I don’t think they’re rigorously doing that stuff scientifically. And I think the fact that it’s called climate science tells you that it’s more dogmatic than anything that’s truly science should be.
Listen in Spotify 41.0:13.739999999999782
Joe
Dogma doesn’t mean it’s wrong. But why does the fact that it’s called climate science mean that it’s more dogmatic? Because if you said nuclear science, you wouldn’t question it, right?
Listen in Spotify 42.0:2.5
Peter
Yeah, but no one calls it nuclear science. They call it nuclear engineering. Interesting. I see what you’re saying.
Listen in Spotify 42.0:10.800000000000182
Joe
The only thing is I’m just making a narrow linguistic point. Is there anything called science that is legitimately science?
Listen in Spotify 42.0:15.61999999999989
Peter
Well, at this point, people say computer science has worked.
Listen in Spotify 42.0:20.820000000000164
Joe
But in the 1980s, all I’m saying is it was in the same category as, let’s say, social science, political science. It was a tell that the people in this prospect of green energy and the concept of green energy, and they’re profiting off of it and pushing these different things, whether it be electric car mandates or whatever it is, like California. I think it’s 2035 they have a mandate that all new vehicles have to be electric,
Listen in Spotify 42.0:23.61999999999989
Peter
which is hilarious when you’re connected to a grid that can’t support the electric cars it currently has. After they said that, within a month or two, Gavin Newsom asked people to not charge their Teslas because it was summer and the grid was fucked.
Listen in Spotify 43.0:1.4600000000000364
Peter
Yeah.
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Peter
Look, it was all linked into all these ideological projects in all these ways. And there’s an environmental project,
Listen in Spotify 43.0:16.76000000000022
Peter
which is, you know, and maybe it shouldn’t be scientific. You know, the hardcore environmentalist argument is we only have one planet and we don’t have time to do science. If we have to do rigorous science and you can prove that we’re overheating, it’ll be too late. And so if you’re a hardcore environmentalist, you know, you don’t want to have as high a standard of science. Yeah, my intuition is certainly when you go away from that, you end up with things that are too dogmatic, too ideological. Maybe it doesn’t even work, even if the planet’s getting warmer. Maybe climate science is not… My question is, maybe methane is a worse, is it more dangerous greenhouse gas than carbon dioxide? We’re not even capable of measuring that.
Listen in Spotify 43.0:27.11999999999989
Joe
Well, we’re also ignoring certain things like regenerative farms that sequester carbon. And then you have people like Bill Gates saying that planting trees to deal with carbon is ridiculous. That’s a ridiculous way to do it. How is that ridiculous? They literally turn carbon dioxide into oxygen. It is their food. That’s what the food of plants is. That’s what powers the whole plant life and the way we have the symbiotic relationship with them. And the more carbon dioxide it is, the greener it is, which is why it’s greener today on Earth than it has been in 100 years. These are all facts that are inconvenient to people that have a very specific, narrow window of how to approach this. Sure.
Listen in Spotify 44.0:13.559999999999945
Peter
Although, you know, there probably are ways to steel man the other side, too, where maybe the original 1970s, I think the manifesto that’s always very interesting from the other side was this book by the Club of Rome, 1972, The Limits of Growth. And it’s you can’t have – we need to head towards a society in which there’s 0%. There’s very limited growth. Because if you have unlimited growth, you’re going to run out of resources. If you don’t run out of resources, you’ll hit a pollution constraint. But in the 1970s, it was you’re going to have overpopulation, you’re going to run out of oil. We had the oil shocks. And then by the 90s, it sort of morphed into more of the pollution problem with carbon dioxide, climate change, other environmental things. But there is sort of, you know, there’s been some improvement in oil, carbon fuels with fracking, things like this in Texas, it’s not at the scale that’s been enough to give an American standard of living to the whole planet. We consume 100 million barrels of oil a day globally. Maybe fracking can add 10%, 10 million to that. If everybody on this planet has an American standard of living, it’s something like 300, 400 million barrels of oil. And I don’t think that’s there. So that’s kind of, I always wonder whether that was the real environmental argument is we can’t have an American standard of living for the whole planet, we somehow can’t justify this degree of inequality. And, and therefore, you know, we have to figure out ways to dial back and, you know, tax the carbon, restrict it. And, and maybe, you know, maybe that’s, there’s some sort of a Malthusian calculus that’s more about resources than about pollution.
Listen in Spotify 44.0:57.340000000000146
Joe
How much of that could the demand for oil could be mitigated by nuclear?
Listen in Spotify 47.0:5.0
Peter
You probably could mitigate it a lot. There’s a question why the nuclear thing has gone so wrong, especially if you have electric vehicles, right?
Listen in Spotify 47.0:12.88000000000011