Does the Free Market Encourage Long-Term Innovation?
Peter Thiel is an American entrepreneur, hedge fund manager and venture capitalist. He is Clarium’s President and the Chairman of the firm’s investment committee, which oversees the firm’s research, investment, and trading strategies. Before starting Clarium, Peter served as Chairman and CEO of PayPal, an Internet company he co-founded in December 1998 and was acquired by eBay for $1.5 billion in October 2002.
Prior to founding PayPal, Peter ran Thiel Capital Management , the predecessor to Clarium, which started with $1 million under management in 1996. Peter began his financial career as a derivatives trader at CS Financial Products, after practicing securities law at Sullivan & Cromwell.
In addition to managing Clarium, Peter is active in a variety of philanthropic and educational pursuits; he sits on the Board of Directors of the Pacific Research Institute, the Board of Visitors of Stanford Law School, and is an adviser to the Singularity Institute for Artificial Intelligence. Peter received a BA in Philosophy from Stanford University and a JD from Stanford Law School. He is self-described libertarian and a minority investor in Big Think.
Question: Bill Gates believes that the free market fails to encourage innovation in areas where there’s a long timeframe. Do you agree?
Peter Thiel: Well, I think that markets classically fail in cases where there are public goods that provide benefits that people cannot capture. The big debate is how big these public goods are, where they exist, things of that sort. I do tend to think that things that have incredibly long time horizons often do involve market failures. So if you think about basic science or coming up with new theories of mathematics, these are not the kinds of things which are necessarily a well-defined market to pay people.
At the same time, I think one of the places where I would disagree with Gates is that it is not at all clear that we have a government that is doing this much better. And so even though I think markets are often not thinking on a long-time horizon, I think that our government structurally is doing even less so. When we have a government where we have people who are up for election at most once every six years for a U.S. senator, that’s a time horizon that is much shorter than in a market that, you know, a company is looking at 10, 15, 20 years which is a time horizon over which a stock price is typically valued.
Question: Is there a better way to encourage long-term innovation?
Peter Thiel: There is a lot that could be done with the market. I think, we want people to have long term time horizons and so I think to some extent it is... there’s a cultural question, there’s people should be thinking of their life, you know... life is long. It doesn’t end in six months or three years or whatever the next line on your resume is, it’s something that for most of us we can expect to go on for quite a number of decades ahead. And so I think somehow people should be encouraged to think about a very long time horizon and I think this is true for businesses, it’s true for governments and it’s true for people doing things in the non-profit sectors.
Recorded November 15, 2010
Interviewed by Victoria Brown
Directed / Produced by Jonathan Fowler
The venture capitalist agrees with Bill Gates that the free market often fails to encourage long-term innovation. But governments are not the solution.
Swiss researchers identify new dangers of modern cocaine.
- Cocaine cut with anti-worming adulterant levamisole may cause brain damage.
- Levamisole can thin out the prefrontal cortex and affect cognitive skills.
- Government health programs should encourage testing of cocaine for purity.
Civil discourse has fallen to an all time low.
The question that the American populace needs to ask itself now is: how do we fix it?
Discursive fundamentals need to be taught to preserve free expression
In their findings the authors state:
upholding First Amendment ideals.
Talking politics at Thanksgiving dinner
- Progressive Activists: younger, highly engaged, secular, cosmopolitan, angry.
- Traditional Liberals: older, retired, open to compromise, rational, cautious.
- Passive Liberals: unhappy, insecure, distrustful, disillusioned.
- Politically Disengaged: young, low income, distrustful, detached, patriotic, conspiratorial
- Moderates: engaged, civic-minded, middle-of-the-road, pessimistic, Protestant.
- Traditional Conservatives: religious, middle class, patriotic, moralistic.
- Devoted Conservatives: white, retired, highly engaged, uncompromising,
It's interesting to note the authors found that:
"Tribe membership shows strong reliability in predicting views across different political topics."
Here are some statistics on differing viewpoints according to political party:
- 51% of staunch liberals say it's "morally acceptable" to punch Nazis.
- 53% of Republicans favor stripping U.S. citizenship from people who burn the American flag.
- 65% of Republicans say NFL players should be fired if they refuse to stand for the anthem.
- 58% of Democrats say employers should punish employees for offensive Facebook posts.
- 47% of Republicans favor bans on building new mosques.
Here are some guidelines for civic discourse that might come in handy:
- Practice inclusion and listen to who you're speaking to.
Civic discourse in the divisive age
dangerously tribal, fueled by a culture of outrage and taking offense. For the combatants,
the other side can no longer be tolerated, and no price is too high to defeat them.
These tensions are poisoning personal relationships, consuming our politics and
putting our democracy in peril.
Once a country has become tribalized, debates about contested issues from
immigration and trade to economic management, climate change and national security,
become shaped by larger tribal identities. Policy debate gives way to tribal conflicts.
Polarization and tribalism are self-reinforcing and will likely continue to accelerate.
The work of rebuilding our fragmented society needs to start now. It extends from
re-connecting people across the lines of division in local communities all the way to
building a renewed sense of national identity: a bigger story of us."
SMARTER FASTER trademarks owned by The Big Think, Inc. All rights reserved.