Editing 1: Peter Thiel (section)

=== Official and Unofficial Narratives ===

'''Eric Weinstein:''' I used the word kayfabe for the system of nonsense that undergirds professional wrestling, and you've taken to using LARPing, live action role playing. It strikes me that we have two separate parallel systems. Now, this podcasting experiment that you and I are now part of provides for a very unscripted, out of control narrative. And then there's this parallel institutional narrative that seems to exist in a gated form where the institutions keep talking to each other and ignore this thing that's happening that has reached more and more people, so that you effectively have multiple narratives. (One of which, I think almost no one needs to believe. It's just that the institutions need to trade lies and deceptions back and forth amongst themselves.) How is it that these two things can be kept separate? It's like a real wrestling league and a professional wrestling league, side by side, where somehow they just don't come into contact with each other.

'''Peter Thiel:''' Well, I think if they came into contact, then they wouldn't both be able to exist. So I think that's not surprising that they can't come to contact.

'''Peter Thiel:''' I don't think it's ultimately stable. So I think ultimately our account is going to prevail. The institutional account is so incorrect that it will ultimately fail. I've probably been more hopeful about how quickly truth prevails than than it has.

'''Eric Weinstein:''' It's taken forever.

'''Peter Thiel:''' But I would still be very hopeful that our account is really going to break through in the next few years. I've been talking about this, the tech stagnation problem for the better part of a decade. And I think when I was talking about this in 2008, 2009, 2010 this was still a fringy view. It was very fringy within Silicon Valley. And I think even within Silicon Valley, there's sort of a lot of people who've come around to it, who've partially come around to it. There's a sense that tech has a bad conscience. It feels like it's not delivering the promises. Google had this propaganda about the future and it's now seen as .... The self-driving cars are further away than people expected. And so I think there is sort of a sense that things have shifted a lot over the last decade.

'''Eric Weinstein:''' But even five years ago. I moved out to work with you in 2013, and I had never seen a boom before. I mean, this was one of the things that was really important to me, is that being an academic ... The academy had been in a depression since this change around 1972, '73. And seeing a boom and seeing people with flowers and dollar signs in their eyes, talking about a world of abundance and how everything was going to be great, it seemed like everybody was the CEO or CTO of some tiny company.

'''Eric Weinstein:''' And then very, very quickly, it all started to change, and I felt like a lot of people moved back into the behemoths from their little startup having failed. A lot of the ideology felt poisonous, like, "Don't be evil," was not even something you could utter without somebody snickering behind your back. There's a self-hating component, where the engineers have been recruited ideologically and are not actually there to do business.

'''Peter Thiel:''' Sure.

'''Eric Weinstein:''' How did this happen so quickly?

'''Eric Weinstein:''' Am I wrong about that?

'''Peter Thiel:''' No, it's striking how fast it's happened. It's striking how much it's happened in the context of a bull market. So if you describe this in terms of psychology, you'd think that people to be as angry in Silicon Valley as they are today, the stock market must be down 40% or 50%. It's like people in New York city were angry. In 2009, they were angry at the banks. They hated themselves. But the stock market was down 50%, 60%, the banks had gotten obliterated. And that sort of makes sense psychologically. And the strange thing is that in terms of sort of the macro economic indicators, the stock markets, the valuations of the larger companies, it's way beyond the dot-com peaks of 2000, in all in all sorts of ways. But the mood is not like late '99, early 2000. It has this very different mood.

'''Peter Thiel:''' And the way I would explain this is that, for the people involved, it is sort of a look ahead function. Yes, this is where things are, but are they going to be worth a lot more in five years, 10 years? And that's gotten a lot harder to tell.

'''Peter Thiel:''' And so there's been growth, but people are unhappy and frustrated because they don't see that much growth going forward, even within tech. Even within this world of bits, which had been very, very decoupled for such a long time.

'''Eric Weinstein:''' Now, one of the things that's interesting to me is, is that when we talk like this, a lot of people are gonna say, "Wow, that's a lot of gloom and doom. So much is changing so much is better." And yet, what I sense is that both you and I have an idea that we've lived our entire life in some sort of intellectual Truman Show, where everything is kind of fake, and something super exciting is about to happen. Do you share ... Is that a fair telling?

'''Peter Thiel:''' Well, I think there's been the potential to get back to the future for a long time. And there have been breaks in this Truman Show at various points. There was a big break with 9/11. There was a big break with the 2008 crash. You could say some sort of break with Brexit and Trump.

'''Peter Thiel:''' And the last few years, it's still a little bit undecided what that all means. But I think there were a lot of reasons to question this and reassess this for some time. The reassessments never quite happened, but I would say I think we're now at the point where this is really gonna happen in the next two years to five years to decade. I don't think the Truman Show can keep going that much longer.

'''Peter Thiel:''' And again, I've been wrong about this, so-

'''Eric Weinstein:''' Me, too.

'''Peter Thiel:''' I've been very wrong.

'''Eric Weinstein:''' I've been wrong. I've called it earlier.

'''Peter Thiel:''' We had an offsite when I was running PayPal in spring of 2001. The NASDAQ had gone from 2,000 to 5,000 back to 2,000, the dot-com bubble was over. And I was explaining, we were just battening down the hatches. At least one little company has survived, and we're going to survive. But the sort of insanity that we saw in the dot-com years will never come back in the lifetimes of the people here, because psychologically, you can't go that crazy again while you're still alive.

'''Eric Weinstein:''' Right.

'''Peter Thiel:''' The 1920s didn't come back until maybe the 1980s, or something.

'''Eric Weinstein:''' The lessons of the depression were long lived.

'''Peter Thiel:''' So it was generationally over. And yet, already in 2001, we had the incipient housing bubble, and somehow some other shows kept going for 20 years, 25 years.

'''Eric Weinstein:''' With a crazy narrative. The whole narrative behind the Great Moderation. I mean, I remember just clutching my head, "How can you tell a story that we've banished volatility?".

'''Peter Thiel:''' Yes. I always think of the 1990s narrative was the new economy, and you lied about growth. And then the 2000s narrative was the Great Moderation, and you lied about volatility. And maybe the 2010s one is secular stagnation, where you lie about the real interest rates, because the other two don't work anymore. In sort of a complicated way, these things connect.

'''Peter Thiel:''' But yes, new economy sounded very bullish in the '90s. Great Moderation was still a reasonably long stocks, but sounds less bullish. And then secular stagnation - in the Larry Summers forms, to be specific to what we're talking about - means again, that you should be long the stock market. The stock market's going to keep going up because things are so stagnant, the real rates will stay low forever.

'''Peter Thiel:''' So they are equally bullish narratives, although they sound less bullish over time.

'''Eric Weinstein:''' So that effectively we need ... What happened with the Roaring '20s followed by the depression was that there was a general skepticism, and here the skepticism seems to be specific to something different in each incarnation. You keep having bubbles with some lie you have yet to tell.

'''Peter Thiel:''' And of course, I think the crazy cut on the '20s and '30s was that we didn't need to have as big of a crash. You could've probably done all sorts of interventions. Because the 1930s was still a period that was very healthy in terms of background scientific, technological innovation. If we just rattle off what was discovered in the 1930s that had real world practical things, it was: the aviation industry got off the ground, the talkies, the movies got going. You had the plastics industry, you had secondary oil recovery, household appliances got developed. And as you know, by 1939 there were three times as many people who had cars in the US as in 1929. There was this crazy tailwind of scientific and technological progress that then somehow got badly mismanaged, financially, by whoever you blame the crash on.

'''Peter Thiel:''' And so, I think that's what actually happened in the '30s, and then we tried to manage all these financial indicators much more precisely in recent decades, even though the tailwind wasn't there at all.