Peter Thiel: belief

Transcript context

…If you accept for the moment the premise that in general, the sort of free-market system we have has done a pretty fair job on the production side, but that there may be a secular threat to its success on the distributional side — in other words, increased concentration of wealth, perhaps due to technology changes — is there a way to substitute something on the distribution side without harming the effective progress performance on the production side? I’m not sure I agree with all those premises. That would be point number one. I always think on this inequality debate, you have to always separate into three separate questions. One, is it even going up? It’s probably going up in the US, not going up globally, so the Gini coefficient of the world, not even clear that’s going up. Let’s grant number one. Then you have a second question, why is this happening, and then a third question, what to do about it? I think these things are very different. Why it is happening: I tend to blame it more on globalization than technology. I think it’s very overdetermined by many different things that are very hard to solve, and then I think what to do about it: many of the remedies are actually worse than the disease. If you come up with higher marginal tax rates, for example, you probably will just incent people to come up with more loopholes; maybe it hurts the middle class more than the wealthy. If you actually look at societies with officially very redistributionist policies, they seem to get more and more static the more redistributionist the rhetoric is. You have to go very far left before you actually get to effective redistribution. Venezuela is not left-wing enough to get the redistribution. You have to go probably all the way to Cuba, Soviet Union, things like that. France, not nearly far enough. I’d rather go in a very different direction. My sense is always that it’s basically that the issue is not inequality, the issue is much more stagnation. There’s a sense of people’s living standards are generally not improving that much, and then, what can you do about that? What are the microsolutions for that? In Silicon Valley, San Francisco, where I live, I would say the single biggest variable that makes people feel the stagnation is the sense in which housing costs, rental costs, are through the roof. The political fix I would be tempted to pursue would be trying to find a way to break the unholy alliance between urban slumlords and pseudo-environmentalists that sort of prevent any new urban development. But I think it’s always much more a problem of stagnation than inequality. Let’s try to squeeze three more questions into the last five minutes. Next.…

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