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Interview with Peter Thiel

Garry Kasparov agreeing with Peter Thiel here:

My latest book was conceived by three people – myself, Max Levchin and Peter Thiel [the latter are the creators of the Internet payment system PayPal, Thiel is one of the initial backers of Facebook]. There are some problems with the harmonization of our positions – but main thesis is that, contrary to the impression that we live in an age of unprecedented technological development, the last 30 years were probably the worst in several centuries, from the standpoint of advances in technology.

We feel that we literally have something new every month, but in fact it is progress that is proceeding from technological innovations and revolutionary inventions of the 1960s and 70s. For example, my iPod containst latest technology from 1981. In medicine there nothing similar to penicillin has been invented. If we talk about the Internet, then do not forget that the whole theoretical framework has been prepared in the 1960s in America, and the first communication session was 1969. A patent for mobile communications was registered in 1962, and the first call was made in 1973. The fact that the phones are smaller, thinner, more beautiful, does not change the fact that they are basically the same technology.

An example of real innovation was the emergence of personal computers, introduced by Apple in 1977. After that, it is hard to find innovation of this level. Everything that followed were modifications that made them smaller, but the principle remains the same. Steve Jobs created the entire line of Apple's Macintosh, and it was a breakthrough because it created the basis for everything else. It has reached a new technological level, which we now master, but it is based on the work of 1950s to 70s.

Why is this happening? The main reason is probably a common desire to reduce the element of risk. For example, in the last 60 years our planes have grown more comfortable, but they now fly more slowly since the decommissioning of the Concord. It's an unusual fact: over the past 40 years the first time in human history we have begun to move slowly. This is much due to the fact that we have started to pay attention to overall comfort, to social issues and the need to reduce risk.

People have a sense that we should receive benefits from our investment, but need to reduce the uncertainty. Risk should be less, but the income should be the same. This creates a gap, because in a free society, in a market economy, there is a direct relationship between risk and return. If you want to avoid risk, but receive ten percent of of your annual income from your investment, you open the way for the so-called financial engineering. In fact this is all fake, not real income, because it is not based on real changes in the economy, because you do not create new and tangible assets. In the 1960s young boys dreamed of becoming aerospace engineers, now they want to be financial engineers, working in investment companies, which are the most attractive spheres for talent. This naturally affects the quality of the total scientific potential, because financial engineering creates nothing.
Well, he is absolutely correct. If you're going to talk about the fact that we haven't invented something new yet, recall that many of these inventions were birthed not out of "hey I built this widget because I could" but because "Holy Crap, Russia's going to blow our shit up if we don't do something now! Quick!" Of course, it was far more fear than anything tangible, but NASA's birth was a direct result of Sputnik, not because we simply wanted to go into space. Similarly, so many of the theoretical frameworks and such were born in similar fashion.

Right now, we don't exactly have a rival to fight, hence you see so many of the metrics for the US dropping, which is unfortunate, because it seems that the US always needs to have itself be prodded by something or somebody. The Nazis and the Japanese empire created jobs on such a scale that it yanked the US right out of the Great Depression, and then Sputnik created NASA, and so forth.

But right now, the enemy isn't someone from "out there". The enemy, if anybody, is the enemy because they directly *impede* innovation because of their own vested interests (you know the joke about the economy being so bad that Exxon Mobil had to lay off 25 congressmen? Yep...the best humor is built on a kernel of truth).

So yeah, Kasparov's perfectly correct in everything he says.