Editing 1: Peter Thiel (section)

=== Sanity of Institutions ===

'''Eric Weinstein:''' And mine as well. And I think perhaps sort of the craziest idea to come out of all of this - and again you met your version of this in a law firm, which is predicated upon the idea that a partner would hire associates and the associates would hope to become partners who could then hire associates. And so that has that pyramidal structure. And in the university system, every professor is trying to train graduate students to become research professors to train graduate students. And I think that the universities were probably the most aggressive of these things I've called embedded growth obligations. But the implication of this idea that we structured almost everything on an expectation of growth, and then this growth that was expected ran out - it wasn't as high and stable and as technologically-led as before - has a pretty surprising implication. Which is, I mean ... Well let's not dance around it. It feels like almost universally, all of our institutions are now pathological.

'''Peter Thiel:''' Or sociopathic, or whatever you want to call them. Yes. Yes, I suppose there's sort of two ways one could imagine going, if you had these expectations of great growth - Great Expectations was the Charles Dickens novel from the 19th century.

'''Eric Weinstein:''' Right.

'''Peter Thiel:''' We had Great Expectations. And then you can try to be honest and say the expectations are dialed down, or you can continue to say everything's great and it just happens not to be working out for you, but it's working out for people in general. And somehow it's been very hard to have the sort of honest reset. And the incentives have been for the institutions to derange and to lie. There's probably a way the universities could function if they did not grow. You’d be honest, most people in PhD programs don't become professors. Maybe you'd make the PhD programs much shorter. Maybe you'd be much more selective; you'd let fewer people in. There would be some way you could sort of adjust it, and the institutions could still be much healthier than they are today.

'''Peter Thiel:''' But that's not the path that seemingly was taken. And something like this could have been done in a law firm context. Maybe you still let the same percentage of people become partner, but the partners don't make quite as much money as before, or something like that. So that there would have been ways when one could've gone, but those are generally not the choices that were made.

'''Eric Weinstein:''' Yeah. I wonder if that's even possible. Because if you had a law firm that was honest or university that was fairly honest and you had one that was dishonest, it seems to me that the dishonest one could attempt to use its prestige to outcompete the honest one. And so that would become a self-extinguishing strategy, unless you somehow have a truth-in-advertising program.

'''Peter Thiel:''' Yeah, I don't know. I do think the truth, when it breaks through, you're better off having told it than not not having. And so it's always ... As long as everybody was dishonest, it could work.

'''Peter Thiel:''' Look, it's mysterious to me how long it worked. We had these crazy bubble economies in the ... You know, we had the tech bubble in the 90s, the housing bubble in the 2000s, what I think is a government debt bubble this last decade. And so if you've had this sort of up-down bubble, that's sort of harder to see than if things were just flat. So if the growth in 1970, things had just flat-lined, and you had 40 years of no growth, that would have been problematic. And you might have noticed that very quickly.

'''Eric Weinstein:''' Right.

'''Peter Thiel:''' But in a sense, simplifying a lot, you could say the 70s were down, the 80s were up, the 90s were up, the 2000s were down. So two down, two up, net flat, but it didn't feel that way internally.

'''Eric Weinstein:''' With lots of excitement.

'''Peter Thiel:''' There was a lot of excitement, a lot of stuff happened. And California was like a even more extreme version of this. You know, the last three recessions in California were much more severe than in the country as a whole. The recoveries were steeper, and so California has felt incredibly volatile. The volatility gets interpreted as dynamism. And then before you know it, 30 or 40 years have passed.