Peter Thiel and Me: Technology, China, and Immigration
One of my favorite things in the world (besides Evil, potato salad, and the new Kindle, of course) is when people agree with me. In a recent appearance on Bloomberg, Peter Thiel does some quality agreeing with me. If you don't know Petey boy, you should: he co-founded PayPal (was the company's first CEO and helped sell it to eBay for $1.5 billion), he invested $500K in Facebook in 2004 (and now sits on FB's board), founded Clarium Capital, the $3 billion HF, is a managing partner at Founders Fund, was a trader, and has his JD from Stanford Law. I also just added to his accomplishments by giving him an honorary doctorate from Evil University, where he majored in What a Dick.
Peter tells Bloomberg's badly-in-need-of-friendly-spanking she-reporter Margaret Brennan that, instead of worrying about what shape, size, or color panties our recovery will take in the near-term, what we NEED to be doing is thinking about our long term prospects and how we might be able to ensure some global supremacy. Ironically, this "technology video" cannot be embedded, so see it
"It's not a question of whether we can patch things up in another year with another stimulus, bail out the banks or anything like that, it's actually how do you get things in better shape over the next 20 years? The only answer for our developing world is technology and innovation," Thiel says. "We can't compete with China on labor cost, this is not an option. Globalization without technology means just an increasingly Malthusian struggle for resources."
We Americans, as a people, seem to have a bit of an obsessive complex whet it comes to China. It's as if, in our hypothetical global corporation, China is that young upstart that sits at the cubicle around the corner from us that we KNOW is going to eventually oust us and run the company. We just don't know when or how yet, and we don't totally understand his motives.
So we bite our nails, asking ourselves, should we join forces with him to ensure we at least get a senior VP position in his regime? Should we sabotage his ascendancy, get him drunk and coax him to say some mean shit about Iran? Does China think I look pretty today, or does he think I look like a slut? Maybe we should invite him over and devalue his currency together?
What Thiel says is obvious and, I'd argue, correct: yes, our relationship with China has become increasingly tenuous and has become more of a zero sum game, which is leading to a sort of protectionism on our part. Thiel seems to say that, maybe, we shouldn't worry about it so much, or we'll have a coronary. We can't compete with China on labor costs, that much is clear; instead, we need to turn our focus to how we can compete over the long haul: through a focus on technology ... "Technology is a world where it is not a zero sum game and where both sides can win," he says.
Short-term and short-sighted policy prescriptions have hamstrung us for decades ... as one of our commenters said in a recent post, recessions so often come in pairs because, even as the economy gets back on its feet after the first, the structural problems that caused the first often haven't been fully reckoned with -- or analyzed. Sure, current government hyper-spending could be a huge problem if we hit another recession, but for me, it's not so much the spending in and of itself as WHERE the spending is allocated. Defense? F*ck that, if our enemies show up in our town, I'll take care of them. Look at China: The Chinese government dedicates billions of dollars each year to its high tech field, building research institutes and building tech capacity.
Sure, Silicon Valley remains one of the brightest hubs in the world for innovaters and tech wunderkinds, but it is quickly losing its lustre -- as is true for the U.S.'s other tech centers (wherever they are). Increasingly, foreign talent comes to the U.S. to be educated, then takes its skills back whence it came. The high tech brain drain continues, and it's a pretty serious problem. And it's not only India and China that benefit from our fat-headedness, it's Chile, too, which is fast-becoming a tech magnet if you can believe it.
In principal, I like the idea that we are contributing our expertise to developing nations and helping to bring the lowest common denominator higher, but we could be doing so much more to encourage retention in the high tech field. Like, say, encouraging the young f*cks who get cellphones at age 4 to get excited about technological careers early in their educational lives. Right now, the U.S., because of a seemingly hypocritical refusal to recognize its own immigrant identity, rages constantly against unwanted foreign visitors and has made it a bureaucratic nightmare to get a Visa. When one foreign entrepreneur was asked why he wasn't considering the U.S. as home base for his tech company, he said, "too expensive… and who needs to put up with the visa nightmares?"
Really, America? We'll watch football on our phones, but we won't fix our Visa regulations? Is it really more important to keep yelling about those pesky freeloadin' foreigners from our back porch at the expense of becoming a third-rate nation?
You tell me, I'm just a Doctor of Evil.