Talking about two of the technologies that Silicon Valley is most excited about right now -- cryptocurrency and artificial intelligence -- the controversial billionaire and PayPal cofounder used this technique on Wednesday night. "Crypto is libertarian, AI is communist," Thiel declared, during a public debate with LinkedIn founder Reid Hoffman at Stanford University's Hoover Institute.
Like many of Thiel's pronouncements, it was equal parts catchy and gnomic. In case you're wondering, he was talking about decentralization and centralization.
Cryptocurrencies are typically open-source, meaning that anyone with technical ability can contribute. On top of that, anyone disgruntled with a given cryptocurrency's trajectory can "fork" it, creating a new coin, as has happened to both bitcoin and ethereum. When tokens are purchased or earned, they can't be confiscated unless the owner's private keys (a sort of cryptographic password) are compromised.
Cryptocurrencies are also famously designed to be extralegal -- beyond the reach of the government -- although of course the SEC and the IRS hope to quash that notion.
Meanwhile, artificial intelligence relies on the trend that came before it, big data, and big data is gathered by big entities. For example, Google is able to do extraordinary things with machine learning because of the staggering amount of search data, image data, and general user behavior data that it's amassed over the years.
Historically, communist regimes like the Soviet Union and Maoist China sought to create highly centralized command economies, noted Thiel. A sufficiently powerful AI could realize the bureaucrat's dream of accurately predicting peasant farmers' potato yields months in advance from thousands of miles away. No wonder, then, as he said, "the Chinese Communist Party hates crypto and loves AI."
Hoffman heard Thiel out, then offered an alternative metaphor: Cryptocurrencies are "anarchy" and artificial intelligence is "the rule of law." Throughout the night, Hoffman was more optimistic than Thiel about the ability of Silicon Valley to deploy its products for good. He pointed to marketplaces like Airbnb that turn regular people into "micro-entrepreneurs" as an example of the tech industry spreading opportunity.
However, Hoffman also expressed worries about tech's impact on politics. "We need to commit to 'Spiderman ethics,'" he said. "With power comes responsibility." He described the Valley's burgeoning doubts: "We're not convinced that this future is going to be good for us, for our future."
According to Thiel, America's economy is practically only vibrant when it comes to technology. "We've had sort of narrow cone of progress around computers," he explained. "There is not that much progress in the world of atoms, only in the world of bits," he added, pointing out that non-software engineering would have been the absolute wrong thing to study in the 1980's from a careerist standpoint.
The talk between Thiel and Hoffman, moderated by Niall Ferguson, was broadly themed to address technology and politics. Both men have strong views on these topics. Thiel notoriously supported President Trump during 2016, a move that earned him few friends in the mostly liberal tech industry.
Thiel suggested that he knew prior to Trump's ascendancy that a candidate who was "both extremely pessimistic and motivational" would be a powerful combination. Hoffman, on the other hand, was an advisor to Hillary Clinton, according to Recode, and uses his fortune to bolster liberal candidates and causes.
During the talk, the audience was allowed to submit questions through a web interface. The questions were then displayed to the rest of the audience in a Reddit-like format. Ferguson said that the most popular questions would be posed to Thiel and Hoffman. Some were, but the most highly upvoted question was never addressed by the end of the night: "On the topic of post-partisan politics: Peter, how do you square libertarian political beliefs with support for mass government surveillance?" Presumably this query was a reference to Thiel's leadership at Palantir, a secretive private company that specializes in data analysis and works closely with the government.
A recurring theme of the night was the need to reach across the aisle in intellectual discourse in order to have a fuller view of reality. Thiel in some sense has no choice about this, since his peers largely disagree with him, as he pointed out. He said that a conservative student at a school like Stanford would get a better education than a liberal one: "If you're liberal, you'll really just get your views reinforced." Hoffman also said that being friends with a contrarian Thiel helped test and strengthen his own views.
Another audience member asked, "How much of your friendship is attributed to the fact that you met in the benign environment of the university? Would you still become friends if you met today?" Hoffman responded that it wasn't the camaraderie of university, but the fact that it was a period of life dedicating to growing and understanding.
Earlier in the conversation, Thiel advocated for "steelmanning," which is the practice of trying to understand the strongest version of your opponents' views. (It's the opposite of "strawmanning.") "There's always a tendency for us to reduce the other side to a caricature of itself," he said.
"The left will be able to win again, but it has to start by steelmanning." It's not enough to "tell Trump voters to hurry up and die." Hoffman pointed out that this was a caricature of liberal views, and both men shared a chuckle.