This is the 3rd post of 5 containing the transcript of a podcast hosted by Eric Weinstein interviewing Peter Thiel.


Student Debt

Peter Thiel: It's like, again, if you come back to something as reductionist as the ever escalating student debt, you know, the bigger the debt gets, you can sort of think what is the 1.6 trillion, what does it pay for? And in a sense, it pays for $1.6 trillion worth of lies about how great the system is.

Peter Thiel: And so, the more the debt goes, the crazier the system gets, but also the more you have to tell the lies, and these things sort of go together. It's not a stable sequence. At some point this breaks. You know, again, I would bet on a decade, not a century.

Eric Weinstein: Well, this is the fascinating thing, you, of course, famously started the Thiel Fellowship as a program which, correct me if I'm wrong on this, 2005 is when student debt became non-dischargeable even in bankruptcy.

Peter Thiel: Yes. The Bush 43 bankruptcy revision. If you don't pay off your student loans when you're 65 the government will garnish your social security wages to pay off your student debt.

Eric Weinstein: Right. This is amazing that this exists in a modern society. And of course, well, so let me ask, am I right that you were attacking what was necessary to keep the college mythology going, and you were frightened that college might be enervating some of our sort of most dynamic minds?

Peter Thiel: Well, I think there are sort of lot of different critiques one can have of the universities. I think the debt one is a very simple one. It's always dangerous to be burdened with too much debt. It sort of does limit your freedom of action. And it seems especially pernicious to do this super early in your career.

Peter Thiel: And so, if out of the gate you owe $100,000, and it's never clear you can get out of that hole, that's going to either demotivate you, or it's going to push you into maybe slightly higher paying, very uncreative professions of the sort that are probably less good at moving our whole society forwards. And so I think the whole thing is extraordinarily pernicious.

Peter Thiel: I started talking about this back in 2010, 2000, it was already like controversial, but it was not, you know... younger people all agreed with me.

Eric Weinstein: The younger people did?

Peter Thiel: And it's a decade later, it's a lot crazier, we haven't yet completely won, but I think there are sort of more and more people who agree with this. I think at this point the Gen X parents of college students tend to agree, whereas I would say the baby boomer parents, you know, 15 years ago, would not have agreed.

Peter Thiel: The 2008 crisis was a big watershed in this too, where you could say the tracking debt, you know, roughly made sense as long as everything, all the tracked careers worked, and 2008 really blew up, you know, consulting, banking, you know, sort of a number of the more track professions got blown up, and so that was kind of a watershed.

Eric Weinstein: I mean this is incredibly dangerous, but also, therefore, quite interesting, if you imagine that the baby boomers have, in some sense, in order to keep the structure of the university going, have loaded it up with administrators, have hiked the tuition much faster than even medical inflation, let alone general inflation, this becomes a crushing debt problem for people who are entering the system.

Eric Weinstein: I saw a recent article that said that the company that, I think it's called Seeking Arrangements, which introduces older men and women with money to younger men and women with a need for money for some sort of ambiguous hybridized dating, companionship, financial transfer. And the claim was that lots of students were using this supposed sugar daddy-ing and sugar mommy, I don't know what the terminology is, in order to alleviate their debt burden.

Eric Weinstein: It's almost as if the baby boomers, in so creating a system, are subjecting their own children to things that are pushing them towards a gray area a few clicks before you get to honest prostitution.

Peter Thiel: No, look, I don't want to impute too much intentionality to how this happened.

Eric Weinstein: No, no, no, it's somewhat emergent.

Peter Thiel: I think a lot of these, it was mostly emergent, mostly these things people, you know, yeah, that we had sort of somewhat cancerous, we don't distinguish real growth from cancerous growth, and then once the cancer sort of the metastasizes at a certain size, you know, you have, you sort of somehow try to keep the whole thing going, and it doesn't make that much sense.

Peter Thiel: But yes, I think one of the reasons, one of the challenges in, on our side, let's be a little more self critical here, on this, is that the question we always are confronted with, well, what is the alternative? How do you actually do something?

Peter Thiel: And it's not obvious what the individual alternatives are. You know, on an individual level, if you get into an elite university, it probably still makes sense to go, you know, it probably doesn't make sense to go to number 100 or something like this.

Eric Weinstein: Yeah, I think that's right.

Peter Thiel: There is sort of a way it can still work individually even if it does not work for our country as a whole. And so, there are sort of all these challenges in coming up with alternate tracks.

Peter Thiel: I think in software there's some degree to which people are going to be hired if they're just good at coding, and it's not quite as critical that they have a computer science degree. You know, can one do this in other careers, other fields? I would tend to think one could. It's been slow to happen.

Political Solutions for Students

Eric Weinstein: Well, so you and I have been excited about a great number of things that have been taking place outside of the institutional system, but one of the things that I continue to be mystified by is that we are somewhat politically divided, where you are well known as a conservative and I really come from a fairly radical progressive streak. So, we have this common view of a lot of the problems, but sometimes we come to very different ideas about how those problems should be solved.

Eric Weinstein: Do you want to maybe just try riffing?

Peter Thiel: Sure.

Eric Weinstein: Like, assume that we somehow found ourselves in possession of some degree of power, with an ability to direct a little bit more than we have currently. What would you do to create the preconditions - so not necessarily picking particular projects - but what would you try to do to create the preconditions where people are really dreaming about futures, both at a technological level, family formation, making our civil society healthier. Where would you start to work first?

Peter Thiel: So, I'm always a little bit uncomfortable with this sort of question, because-

Eric Weinstein: You can turn it on me, too.

Peter Thiel: ... because I feel like, you know, we're not going to be dictators of the United States, and then, you know, there all sorts of things we could do if we were dictators. But certainly, I would look at the college debt thing very seriously. I would say that it's dischargeable in bankruptcy, and if people go bankrupt then part of the debt has to be paid for by the university that did it. There has to be some sort of local accountability. So, this would be-

Eric Weinstein: Love that.

Peter Thiel: ... that would be sort of a more right wing answer.

Peter Thiel: The left wing answer is we should socialize the debt in some ways, and the universities should never pay for it, which would be more the, you know, Sanders-Warren approach. But so, that would be one version.

Peter Thiel: I think one of the main ways inequality has manifested in our society in the last 20, 30 years - I think it's more stagnation than inequality - but just on the inequality side it's the runaway housing costs, and there's sort of, there's a baby boomer version where you have super strict zoning laws so that the house prices go up, and the house is your nest egg. It's not a place to live, it's your nest egg for retirement. And I would, yeah, I would try to figure out some ways to dial all that stuff back massively.

Peter Thiel: And that's probably intergenerational transfer, where it's bad for the asset prices of baby boomer homeowners, but better for younger people to get started in sort of family formation or starting households.

Eric Weinstein: What do you think about the idea of a CED, a college equivalency degree, where you can prove that you have a level of knowledge that would be equivalent, let's say, to a graduating Harvard chemistry major, right? Or a fraction thereof, where you have the ability to prove that through some sort of online delivery mechanism, you can-

Peter Thiel: Great idea. I love it.

Eric Weinstein: Yeah?

Peter Thiel: I think it's very hard to implement. Again, I think these things are hard to do, but great idea.

Peter Thiel: But look, we have all these people who have something like Stockholm syndrome, where they, you know, if you got a Harvard chemistry degree, and if you suspect that actually the knowledge could be had by a lot of people, and if it's just a set of tests you have to pass, that your degree would be a lot less special, you'll resist this very, very hard.

Peter Thiel: You know, if you're in an HR department, or in a company hiring people, you will want to hire people who went to a good college because you went to a good college, and if we broaden the hiring and said we're going to hire all sorts of people, maybe that's self-defeating for your own position. So, you know, I think one should not underestimate how many people have a form of Stockholm syndrome here.

Eric Weinstein: I should've said earlier that the Thiel Fellowship, for those who don't know, is a program that has historically, at least began paying very young people who had been admitted to colleges to drop out of those colleges. So, they got to keep the idea that they'd been admitted to some fairly prestigious place, but then they were given money to actually live their dreams and not put them on hold.

Peter Thiel: Yes, it has been an extremely successful and effective program. It's not scalable.

Eric Weinstein: Right.

Peter Thiel: So, we had to hack the prestige status thing, where it was as hard, or harder, to get a Thiel fellowship than to get into a top university. And so, that's part that's very hard to scale.

Eric Weinstein: When I was looking at that program for you, one of the things that I floated was the idea that if you look at every advanced degree, like a JD, or an MD, a PhD, none of them seem to carry the requirement of having a BA, which is quite mysterious.

Eric Weinstein: And if you fail to get a PhD, let's say, there's usually an embedded master's degree that you get as a going away present. And therefore, if you could get people to skip college, if you give them, perhaps, four years of their lives back, and you could use the first year of graduate school, which is very often kind of a rapid recapitulation of what undergraduate was, so everybody's on a level playing field, and then, worse comes to worst, people would leave with a master's. They would, in general, get a stipend, because a lot of the tuition is remitted to them in graduate programs. Is that a viable program to get some group of people who are highly motivated to avoid the BA entirely as sort of the administrator's degree rather than the professor's degree?

Peter Thiel: Let me see. There are all these different subtle critiques I can have, or disagreements, but yeah, I think the BA is not as valuable as it looks. I also think the PhD is not as valuable as it looks.

Eric Weinstein: Oh, you know how to hurt a guy.

Peter Thiel: So, I sort of feel it's a problem across the board. It strikes me that what you're proposing is a bit of an uphill struggle, because at the top universities the BA is the far more prestigious degree than the PhD at this point. So, if you're at Stanford or Harvard, you know, it's pretty hard to get into the undergraduate, and then you have more PhD students than you have undergraduates.

Peter Thiel: There are all these people who are a very questionable track. They've made questionable choices. And they probably are going to have some sort of psychological breakdown in their future. You know, their dating prospects aren't good. There are all these things that are a little bit off.

Peter Thiel: So yeah, in theory, if you had a super tightly controlled PhD program, that might work, but you have to at least make those two changes. As it is, the people in graduate schools, like, it's like Tribbles in Star Trek. We have just so many, and they all feel expendable and unneeded, and that's not a good place to be.

Peter Thiel: And, whereas I think the undergraduate conceit is still that it's more K-selected instead of R-selected, that it's more that everybody is special and valuable. You know, that's often not true either.

Peter Thiel: So, I'd be critical of both, and I think, but yeah, if we could have a real PhD that was the required, you know, that was much harder, and that actually led to sort of an academic position or some other comparable position, that would be good.


Peter Thiel: You know, one of the questions I always come back to in this, is what is the teleology of these programs? Where do they go? One of the analogies I've come up with, is I think elite undergraduate education is like junior high school football.

Eric Weinstein: Junior high school football. I did not see that coming.

Peter Thiel: Playing football in junior high school is probably not damaging for you, but it's not going anywhere-

Eric Weinstein: Ah, I see.

Peter Thiel: -because if you keep playing football in high school, and college, and then professionally, that's just bad. And the better you are, the more successful you are, the less well it works.

Peter Thiel: And then the question is what's the motivational structure? And when I was an undergraduate in the 1980s there was still a part of it where you thought the professors were cool, it might be something you'd like to be at some point in the future, and they were role models, just like in junior high school football an NFL player would have been a role model.

Eric Weinstein: But now it just looks like brain damage in both sides.

Peter Thiel: And now we think it's, yeah, you're just doing lots of brain damage, and it's a track that doesn't work, and therefore the teleology sort of has broken down.

Peter Thiel: So undergraduate, part of the teleology was that it was preparing you for graduate school, and that part doesn't work, and that's what's gotten deranged. Then graduate school, well, it's preparing you to be a postdoc, and then, well, that's the postdoc apocalypse, or whatever you want to call it, postdocalypse.

Eric Weinstein: Postdocalypse?

Peter Thiel: Postdocalypse.

Eric Weinstein: You heard it here, folks, postdocalypse.

Peter Thiel: But just at every step, I think, the teleology of the system is in really bad shape. Of course, this is true of all these institutions with fake growth that are sociopathic or pathological, but at the universities it's striking as very bad.

Peter Thiel: And I think this was already true in important ways back in the '80s, early '90s, when I was going through the system. And when I think back on it, I think I was most intensely motivated academically in high school, because the teleology was really clear. You were trying to get into a good college. And then, by the time I was at Stanford, it was a little bit less clear, by the time I was at law school, really unclear where that was going. And by the time I was 25 I was far less motivated than at age 18, and I think these dynamics are just more extreme than ever today.

Eric Weinstein: What I find so dispiriting about your diagnosis is first of all that I agree with it. Second of all, if we don't train people in these fields, if we don't get people to go into molecular biology, or bioinformatics, or something like that, we're never going to be able to find the low hanging fruit in that orchard. So, it seems to me that we have to find some way that it makes sense for a life to explore these questions.

Conformity and Malthus

Eric Weinstein: One of the things that I don't understand, and I don't know if you have any insight, is it feels to me that almost all of our institutions are carbon copies of each other at different levels of quality. And that there are only a tiny number of actually innovative institutions. It used to be that, you know, Reed college was sex, drugs, and Goethe, and you had St. John's with the great books curriculum that didn't look like anything else, or Deep Springs, and the university of Chicago was crazy about young people, but the diversity of institutions is unbelievably low. Is that wrong?

Peter Thiel: I think that's fair, but I would say the bigger problem with a lot of these fields is, yeah, I think we have to keep training people. I think we need to keep training people in physics or even these fields that seem completely dead, you know?

Eric Weinstein: That’s super important.

Peter Thiel: But I think the question we have to always ask is how many people should we be training-

Eric Weinstein: Way fewer.

Peter Thiel: -and my intuition is you want the gates to be very tight.

Peter Thiel: One of my friends is a professor in the Stanford economics department, and the way he describes it to me is they have about 30 graduate students starting PhDs in economics at Stanford every year. It's six to eight years to get a PhD. At the end of the first year, the faculty has an implicit ranking of the students, where they’ve sort of agreed who the top three or four are. The ranking never changes. The top three or four have, are able to get a good position in academia, the others not so much.

Peter Thiel: And, you know, we're pretending to be kind to people and we're actually being cruel.

Eric Weinstein: Incredibly cruel.

Peter Thiel: And so, I think that if there are going to be - you know, it's a supply demand of labor - if there are going to be good positions in academia, where you can have a reasonable life, it's not a monastic vow of poverty that you're taking to be an academic, if we're going to have that, you don't want this sort of Malthusian struggle. If you have 10 graduate students in a chemistry lab, and you have to have a fistfight for a Bunsen burner or a beaker, and you know, and if some somebody says one politically incorrect thing, you can happily throw everyone, them all out of the overcrowded bus. The buses still overcrowded with nine people on it. That's what's unhealthy.

Peter Thiel: And so, yes, it would be mistake to say we should dial this down and have zero people in these fields.

Eric Weinstein: Right. But this is what's scary to me.

Peter Thiel: That's not what I'm advocating, or what was being advocated here, but there is a point where if you just add more and more people in a starvation Malthusian context, that's not healthy.

Power Laws

Eric Weinstein: Well, this gets to another topic which, I think, is really important, and it's a dangerous one to discuss, which is it seems to me that power laws, those distributions with very thick tails where you have a small number of outliers that often dominate all other activity, are ubiquitous, and that particularly with respect to talent, whether we like them or not, they seem to be present, where a small number of people do a fantastic amount of all of the innovation.

Eric Weinstein: What do we do, if power laws are common, to make people more comfortable with the fact that there is a kind of endowment inequality that seems to be part of species makeup? I mean, I don't even think it's just limited to humans.

Peter Thiel: Well, I'm not convinced these sort of power laws are equally true in all fields of activity. You know, the United States was a frontier country in the 19th century, and most people were farmers, and presumably some people were better farmers than others, but everyone started with 140 acres of land, and there was this wide open frontier. Even if you had some parts of the society that had more of a power law dynamic, there was a large part that didn't. And that was what, I think, gave it a certain amount of health.

Peter Thiel: And yeah, the challenge is if we've geared our society saying that all that matters is education, and PhDs, and academic research, and that this has this crazy power law dynamic, then you're just going to have a society in which there are lots of people playing video games in basements or something like that.

Peter Thiel: So, that's that's the way I would frame it. But yeah, I think there definitely are some areas where this is the case. And then we just need, you know, we need more growth for the whole society. If you have growth, you'll have a rising tide that lifts all boats. So, it's the stagnation, is the problem.

Eric Weinstein: Well, I've joked about this as we are not even communistic in our progressivism, because the old formulation of communism was from each according to his abilities, to each according to his needs, and the inability to recognize different levels of ability. I mean, almost every mathematician or physicist who encountered John von Neumann just said, "The guy is smarter than I am." He's not necessarily the deepest, or he did all of the great work, but you know when you're dealing with somebody who's able to employ skills that you simply don't have. I mean, I know I'm not a concert pianist, and-

Peter Thiel: Right. Look, I don't know how you solve the social problem if everybody has to be a mathematician or a concert pianist. I want a society in which we have great mathematicians and great concert pianists. That seems that that would be a very healthy society. It's very unhealthy if every parent thinks their child has to be a mathematician or a concert pianist, and that's the kind of society we unfortunately have.

Next post on Friday will be Political Violence and Distraction Theories.

New Comment
1 comment, sorted by Click to highlight new comments since:

Just read this about 3 years later. I found Thiel to be mostly spot on. Especially:

Peter Thiel: Right. Look, I don't know how you solve the social problem if everybody has to be a mathematician or a concert pianist. I want a society in which we have great mathematicians and great concert pianists. That seems that that would be a very healthy society. It's very unhealthy if every parent thinks their child has to be a mathematician or a concert pianist, and that's the kind of society we unfortunately have.

Which seems to point to the fact that the root cause of many societal ills is that the average human psyche simply can't accept the fact that in Thiel's language, the vast majority of children, including most likely theirs, will never be a great mathematician or concert pianist. (or attain an equally prestigious position)

Since human prestige by definition is defined relative to other humans and thus only a tiny minority could ever be near the top. 

Yet there seems to be some instinctual demand for an individual to be special in some way and furthermore that this must be recognized by some sufficiently large group. i.e. for a child to grow into an adult, mediocre in every way, is seen as a tragedy.

Thus necessitating a huge amount of distortions everywhere, across all institutions and policies causing damage in innumerable ways, to compensate.