Peter Thiel is the hedge fund manager who held a lecture at Stanford. Only six people showed up to the lecture, and one of those was Max Levchin. After the lecture, they began to talk and the talk ended with the decision to start the company PayPal. In 2002, they had merged the company with a company called X.com, which was founded by Elon Musk, and PayPal was sold to eBay for $1.5 billion (Read more about it in The Engineer). In 2004, Peter Thiel made a $500,000 angel investment in Facebook for 10.2 percent of the company. He's not afraid of the current high valuation of Facebook - or the high valuation of other technology companies. This is probably not another Dot-com bubble since businesses today are being built more slowly and the valuations are still high - but not as high as the valuations were in 2000 during the Dot-com bubble.
The problem today with the world economy is that we are not moving forward in terms of progress - we are almost moving backwards. Technological progress only seems to occur in areas such as the computer industry and the finance industry. Companies are only solving small problems, creating features, and few are addressing the world-changing, hard problems. Examples of past world-changing problems are flying to the moon or inventing the first car.
"What's desperately needed in our society is companies that represent genuine progress, not just frantic change from one fashion to another."
We used to build faster cars, and faster aeroplanes such as the Concorde - but Concorde stopped flying in 2003 without a replacement in near sight. We are currently flying as fast as we did in the 1970s. One another example is alternative energy. The price of oil is higher today compared to the 1970s - but alternative energies are still expensive. Yet another are of concern is medical drugs - there are only 1/3 of new drugs in the pipeline that there used to be 15 years ago.
According to Peter Thiel, regulations are the big problem. Entrepreneurs can't take the risks they need to create technological progress, and that's also the reason to why we today have an economic crisis. It's much harder to get a new drug through the FDA process since it takes a billion dollar.
"I don't even know if you could get the polio vaccine approved today."
Another example is the Golden Gate Bridge. It took 3.5 years to build the bridge in the 1930s. In comparison, there's a construction of an access highway on one of the tunnels that feeds into the bridge, and it will take at least 6 years to complete it.
Peter Thiel is negative to the governments trying to spend money to get out of the current crisis. It won't work since we have no technological progress. We did have technological progress in the 1930s - which is why we got out of that depression. For example, the movie industry, the aerospace industry and the plastic industry were developed back then.
The question for the US and Europe is how to restart growth? But the real solutions are not being discussed by politicians. Members of the Obama and Bush administrations are not engineers or scientists, so they can't really discuss the solutions anyway. John F. Kennedy could talk about the nuts and bolts of the Apollo space program and all the details of what was needed to make it happen - politicians can't do that today.
Peter Thiel is a fan of Ron Paul and shares some of the arguments made by the Tea Party movement. The government is inefficient and it can't do anything right and only wastes money. What the US has today is an extremely big government - he compares it with a socialist government. The problem is that the current US government doesn't have a five-year plan as the socialist governments had - it has no plan whatsoever!
To restart growth, we need lower energy prices. The US should build more nuclear power plants - they are the best way to get energy without affecting the climate. We need more realism and start to build things that work - and we need less "environmental-minded" people. Peter Thiel prefers things that actually work. Politician tend to get more and more environmental-minded to get re-elected - but that's not the right way to go. The question to ask when finding new energy sources is:
"Can you get it to work at a lower cost than existing technologies?"
Peter Thiel also thinks that we should be more equal. In terms of inequality, we are back at the levels from 1789. Large inequalities has only been ended through communist revolution, war or deflationary economic collapse.
Since I wrote this article, I've come up with someone with the goal to restart technological progress, and that someone is Elon Musk. He's building electric cars through Tesla Motors, because it's cheaper to power them with electricity compared with gasoline powered cars. To power these cars with cheap and clean electricity, he's installing solar panels through SolarCity. He's building rockets through the company SpaceX with the goal to colonize Mars. To replace the Concorde, he has ideas for electric airplanes that are actually faster than the Concorde was. If you want to read more about it, you should read my biography on Elon Musk: