The a16z Show - a16z Podcast: From Jobs to Flying Cars

Episode Date: May 15, 2017

In this lively conversation -- from our recent annual tech and policy summit in Washington, D.C. -- Axios' Dan Primack interviews a16z co-founder Marc Andreessen about the two major narratives dominating discussions about the tech industry right now: the industry is building stupid stuff; and tech is “evil” (or at least has an outsized impact, is destroying jobs). Part of the problem, Andreessen argues, is that we don't have enough technological innovation: With higher productivity growth, we'd have higher economic growth and more opportunity. But without enough opportunity, we're all at risk on all sides of the ideological spectrum. And actually, both the "tech is stupid" and "tech is evil" narratives are true... in different sectors [hint: those afflicted by Baumol’s cost disease]. So what then are the roles for policymakers and and entrepreneurs in addressing these issues, including jobs? Ultimately, Andreessen argues, success in Silicon Valley isn't really about good idea vs. bad idea at all … and it's all eventually political. (Bonus: why Andreessen stopped tweeting!) Stay Updated:Find a16z on YouTube: YouTubeFind a16z on XFind a16z on LinkedInListen to the a16z Show on SpotifyListen to the a16z Show on Apple PodcastsFollow our host: https://twitter.com/eriktorenberg Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Thanks for joining the A16Z podcast. I'm Margaret Wenmacher, a partner here at the firm. I wanted to introduce the conversation between Dan Premack and Mark Andresen that we hosted at our recent policy summit in Washington, D.C. Please enjoy. You've talked about in the past how you actually think that technology hasn't necessarily moved as fast as people think it has. I'm curious, do you feel that the pace of change,

and I know that's a vague thing, has been speeding up lately? Because that seemed to be the consensus there, that tech advancements are coming faster. than they have in the past. Right. Great, thanks. And thanks, Dan, for doing this. So there's been two narratives

on the tech industry and on tech change over the last decade. One narrative has been sort of continuous in sort of years one through nine over the last decade, which is tech is dead, tech is over, tech is dumb,

tech is stupid, tech is a bubble. It'll crash in a minute. You know, Silicon Valley is just a bunch of kids running around, you know, raising too much money and blowing out. That part's accurate. Right, okay. And, you know, producing a bunch of photo sharing apps

and like, you know, the golden days of innovation are over and like this, all this stuff is a, bunch of hot air and it doesn't matter. In the last 12 months, it's flash cut from that to tech is overwhelmingly impacting the world in the economy. Tech is having way too dramatic of an impact. Tech has become way too important. Tech is fundamentally affecting the economy, changing jobs, destroying jobs, robots, the Terminator, like it's all of a sudden come crashing

down. So how do you reconcile these two kind of diametrically opposed views, right? It's worthless or like sort of infinitely powerful, or kind of at least generally two diametrically opposed views. So then you say, okay, well, what's going on? And so maybe I start with a pop quiz. So, so sort of four big questions on how to think about the pace of change in the economy and the impact of technology. So one is the way economists measure the pace of technology innovation in the economy is through measuring productivity growth. And productivity growth, is through measuring productivity growth. And so would we expect, based on the current narrative for productivity growth, it's the ability for the economy to generate more output with less input. And technology is the main driver of productivity growth, machines providing leverage to human effort. And so would we expect, based on the current narrative for productivity growth to be at generational highs or generational lows? Well, what we expect would be generational highs, but it's been flattish. But what we're getting is generational lows. What we're getting is like 1% annual productivity gains. And in fact, there's a whole genre of books with titles like

The Rise and Fall of American Growth and the Great Stagnation, written by top economists talking about how apparently, back to the first thesis, about basically there's no innovation and productivity growth is not actually happening. Second is, would we expect the rate, you know, the era of the disruptor and all the startups and all the great companies, you know, that we have here today, would we expect the rate of creation of new companies in the economy to be at a generational high or generational low? Should it should be high. I know we're at a low outside, although I don't know what the breakout is when you think tech companies is a piece of that. Right. So, well, the problem is so actually, it's interesting. So tech companies are a tiny, tiny, tiny part of the overall creation of companies.

But you do have an outsized impact. I mean, you talked about you should buy Google stock. If you look at the top five stocks, I think, or top five companies in terms of market cap now are tech companies. Whereas just five years ago, I think only Microsoft was in that group. Yeah, I think that's right. And let's, let's come. back to that because that is a big deal. But generally what's happening is the rate of introduction of new companies in the economy has been falling for 40 years and it's showing no sign of resuming. So there's more economic stability as measured by company creation and destruction than there has been in 40 years. Third is, would you expect the rate of destruction of jobs? So when we talk about employment, we always talk about the headlines are always net employment gains or losses, right? But the net is the result of adding up, you know, taking all the gross

ads and then subtracting all the gross number of jobs destroyed. And so economists also measure overall gross job creation and overall gross job destruction, would you expect the rate of job destruction to be at a generational high or low? Again, I should expect it's generational high. It's low outside of the financial crisis era. Exactly right. Yeah, it's spiked up during that, but it's come right back down. Like it's just, it's crashed back down again. And then, so the rate of job destruction is at a generational low. And then fourth is, would you expect the time that people spend in a job to be at a, at a generational high or a generational low? In other words, the rate of individual turnover and individual going from job to job. You'd expect high

turn right? And instead, guess what, the rate of actual job turnover is it, is it, not even actually that was a little bit, that was a little bit softer, it's not generational lows, but it's been slowing for 20 years. And it's quite slow. And so I actually think I'm sort of a complete, I guess, contrarian, radicalness point, which is the problem that we have today is not too much technological innovation at all. The problem overwhelmingly is that we don't have enough. And the reason I say that so confidently is because if we had higher productivity growth, we would have higher economic growth. If we had higher economic growth, we would have higher job creation. We would have faster rising incomes.

We would have more opportunity for people, and people would be more optimistic about the future. Instead, because we don't have enough technological change hitting the economy, we don't have enough growth. Because we don't enough growth, people don't sense opportunity. And then that translates to zero-sum politics. And in the valley, that translates to if I'm gaining somebody else must be losing, which is sort of this wave of kind of these weird anti-tech politics actually playing out in the tech industry. And then in the rest of the country, it's translating into, I am not doing well, and it must be somebody's fault.

And I just say, I think the zero-sum mentality is the dangerous thing. And I think we're all at risk on all sides of the ideological spectrum right now falling into it. You talk about how the narrative switched, that 12 months ago, that it was, you know, bubble everything's, you know, too much. And then it's switch. I'm curious, you brought up the political piece. Specifically, from stupid to evil in one step. Stupid to evil. How much of the-with nothing in the middle?

Like, we didn't get like three weeks where it was like, hey, this is pretty good. Well, so I'm curious. Do you think that's, what do you think is behind that? I mean, is November's election, the reason for that? That's the reason for the switch? was building. It was building. And so, well, so because, because the previous narrative was wrong, right? The idea that there was nothing of any significance happening is also wrong. So that narrative was wrong. It wasn't there was nothing of significance. It was that people were

thinking that what was being built was too significant, from pricing standpoint, that it was too significant. I know there was the whole nobody in Silicon Valley is doing anything important, but that started to go away a little bit. Oh, I don't know. We kept hearing it. I mean, you still hear it from time to time. The article still pop up. It's the, it's the other guaranteed headline. It's the other guaranteed way to get a thing on page one of a newspaper. That's true. This is all stupid. Yeah. It's just, this is all evil as all of a sudden sell more papers? So if you don't think innovation is going at a, I don't want to say transformational, because certainly things that are happening now are transformational, every time

there's been kind of a platform shift, call a platform shift, and whether you want to go from horses to cars and oxen to tractors or even desktop to mobile, there's always been kind of dislocation, there's been a little bit of a trough. The argument seems to be right now that even among those who think in the end there will be more new types of jobs, we don't know what they'll be, it's not going to be a labor problem, but that this particular trough could be deeper, it could be longer than in the past, because really the big, we don't really know what the big next thing is, right? You went from the farms to manufacturing to the service industry and where the technology seems to be going right now, particularly aimed at the service industry,

and there doesn't seem to be an obvious next thing. Yeah, so I don't worry about that at all, and I will describe why, which is what's happened and the way to reconcile the stupid versus evil position, the way to reconcile it is, they're both true. They're true in different sectors. The polar arguments are true in different sectors. And so what's happening is the economy is bifurcated. And the way to look at this is prices, the prices of products. And so there are sectors of the economy that I would describe as the fast productivity growth sectors of the economy that also tend to be the less regulated sectors of the economy that also happen to be the sectors that have been affected deeply by technology. And there are some of those. And you just give three quick examples of those. Media is one. And one of the reasons why the press has worked up on these topics is because the impact of technology on media has been profound. So the media industry has been, productivity growth in media industry has been astonishingly high because of this, the new distribution mechanism called the Internet. Right. And so this has really been, you know, the story in the, and obviously, for example, the news business, like there's been a lot of job loss because of this sudden, the sudden radical dislocation of this new technology. Retail, right, it's playing out right now. Actually, retail, it's interesting. Retail, it used to be believed that retail was not going to be a sector ever subject to technology and productivity growth, because how could, what could you do? Like, you need the store, you need the inventory in the store, you need the person to be able to check things out. Like, it was a relatively stagnant industry in terms of technological change. And then two things happen. One is Walmart. and now Amazon, and of course, now there's waves of retail bankruptcies as consumer shopping

behavior is shifting online. So that's a sector where tech has had and is having a big impact. And then financial services, at least in part, and specifically you could cite investment management, stock trading, index funds. You know, you can now get world-class investment management. As a consumer, you can get world-class investment management for, you know, less than 10 basis points. You know, their fidelity and Vanguard are fighting over pennies to be able to manage your money in the stock market, which is fantastic from a consumer standpoint, but of the result of dramatic tech change. And so in these sort of high productivity growth sectors, what's happened is prices are crashing, right? And so it's a consumer utopia, right? Because the

consumers have access to the internet and Netflix and Amazon and Vanguard and it's all absolutely spectacular. But there is huge change happening and a lot of job loss and a lot of job transformation. So that's where the prices are crashing. Then there's the other sectors of the economy where the prices are front and center, right? Health care is the sixth of the economy. And the prices in health care are shooting straight up to the right. Education is another one. And then a third example would be real estate and construction, where the prices just sort of continuously rise, both actually for the land, especially in high, high income areas, or high sort of economic opportunity areas, but also the actual price of construction keeps rising. And so in those sectors,

take healthcare education as kind of the two big examples. There, people are not upset about job transformation and technological change. People are upset because everything costs too much and is getting very expensive, even more expensive, very fast. And so we're looking, you know, we're looking forward into a future where if you want to send your kid to college, it's $500,000. a year. Like, that's not, you can extrapolate out, you can see that. We're looking into future. I mean, the health care debate today is fundamentally because health care is too expensive and we all want more than we can get. And as a society, we want more than we can get. And it's just like we can't afford it. And it's a pricing issue. In those sectors,

technology is having next to no effect, right? And as measured by economists, there's next to no productivity growth, which is why the prices are spiraling out of control. And so my point is, we're really mad about the sectors in which tech is having a big impact. And then we're also very mad for the completely opposite reason at the if the sectors for tech is not having a big impact. The kicker to the whole thing, back to your, back to your question, the kicker to the whole thing is if you have, the sectors where prices are crashing by definition, right, are shrinking as a percentage of the economy, and the sectors where prices are rising are growing as a percentage of the economy. And so what's actually

happening is the sectors where tech is not having a big impact are growing and will eventually be the entire economy, right? So TVs are going to cost $10 and health care is going to cost a million dollars. Like this is where this is all headed. Right. And so as a consequence, jobs, The answer is we're all going to be employed in health care and education, which is actually what's happening. Except that there's one problem with that, which is that when you look, for example, I think it's something, I'm going to screw this number up, but something like 3% of Americans right now are employed as cashiers, another 6% as, quote, retail workers, somebody on a floor somewhere in a retail store. A lot of those people, you have a massive skills gap for going, particularly to health care and education, depending on how you define those things. You know, Silicon Valley talks about this. Does Silicon Valley have a role in trying to figure out some sort of solution to this? because there is going to be that, I mean, hell, it's the sort of thing that foments social unrest.

I mean, if you have lots of, and when you think of some of those jobs, it's not just the entry-level jobs when you're 16. I mean, you were, what, a corn shucker and you worked in the back of a restaurant because you couldn't get promoted to the front of the restaurant. And they... I didn't have the personality for it. You didn't have the personality. It's fair. But, like, it's not just entry-level jobs for 16-year-olds. It's also for folks who, say, have had drug issues in the past or criminal issues in the past.

If those jobs disappear and they're replaced by higher-skilled jobs, what from your perspective happens to that group of people? I mean, is, you know, there's talk about UBI? Is that a solution from your perspective? What do we do? What do people in D.C. do? Yeah, so I've got a personal perspective on this. I grew up in rural Wisconsin. If you saw the photos of Mark Zuckerberg on the farm a few days ago,

learning how to milk a cow, it was not far from where I grew up. He was doing all the things that I got to do when I was growing up. And you knocked on strangers' doors in Ohio and were like, I'm really hungry. Can I have dinner? Exactly. No, no, the cows provide the dinner. That's the whole point of the cows. So I grew up in the rural Midwest, specifically rural Midwest, 1970s, 1980s.

And so this was at a point, right, agriculture was in like, severe distress and had been through a 200-year process of transformation, and there were all kinds of chaos happening in agriculture, but lots of farmers. And then actually manufacturing was in distress, right? We had light manufacturing where I grew up, but we were right next door to Michigan, which had the onslaught from the Japanese and the German automakers in the 70s and 80s. And so we felt all this really acutely. So this is this is the world I grew up in. Again, though, what I would say is, I think it's a coastal conceit that the problem is these idiots can't keep up with the change. I don't think that's the problem. At least that was

not the problem I experienced when I was there. The problem was, it was not a question the rate of changes, the question of whether the opportunities existed. And this is sort of the thing, maybe this is sort of a thing, people, it's hard to put yourself in the sermon of mind if you didn't grow up in a place like this, but it's not that people work their entire lives in the Midwest doing, you know, the really brutal, rigorous work of, you know, farming. The farmer Mark was just with, like, he hasn't had a day off since 1981, right? I mean, like, these people work hard. Sunrise to sundown every day, seven days a week. Like, these are hard, brutal jobs. The truck driver is a job people talk about all the time. And I mean, I, you know, I, look, I grew up, my town,

the basic main feature of my town was a truck stop. Like, it was like, that was like basically it. Trucking, I mean, these people work incredibly hard. Trucking is a brutal job. Trucking will take 10 years off your lifespan. Trucking is a very, very rough job and has this externality where you kill people because, like, you fall asleep on the freeway and, like, you crash. And when trucks crash, it's a big problem.

So these are hard and brutal jobs. Most folks in those jobs don't want their kids to spend the rest of their lives working. They're just like every other parent that want a better life for their kids. And the question is not so much, like, what happens to that job? The question is, what's the opportunity? where are things going to go in the future? And then what happens is, well many people from the coast show up and say, oh, I've got good news for you. We're just going to write you all bigger checks, right? We're just going to write you all bigger, you know, whatever you want to call it. These are not answers,

right? These don't, you take these messages to the Midwest and they laugh at you. And the county I grew up in, right, flipped predictably, right, flipped from Obama to Trump precisely because of this, right? Because the message coming in that case out of the Democratic Party wasn't working at all. And so it can't be an answer of what are we going to do for these poor people. Oh my God. You know, that can't be the answer. The answer has to be an opportunity-based answer. It has to be, here is the growth, here's the opportunity. Now, that said, I deeply agree with what you said, which is the crux the entire thing is skills, right? The crux of the entire thing is skills in education. And that is an area, and this is a big theme of, you know, what we talked about already today, and we'll

keep talking about is a big thing is happening in Silicon Valley is you're seeing a lot more founders and startups trying to go after the problems and the opportunities in these larger, slower productivity growth, growing areas of the economy, including health care, but also education, right? And so as an example, we have a company Udacity that's aimed squarely at this problem, right, with an entirely new way to think about having both real education, but also real certification for education, linked directly to new employment opportunities. And there's a broad range of other education startups in Silicon Valley trying to solve this problem. And I think that's, that is one. I mean, now, there's a set of other issues that we need to talk about. Like,

also internal migration turns out to be a big issue. Land use regulations are a big problem. You mentioned, like, what happens to people with, you know, either drug issues or ex-convicts. They're professional licensing is another big issue. So there's, there's, there's like lots and lots of issues, but it's an issue of trying to figure out how to clear a path forward so that people see opportunity in their lives. I'm curious, one solution, not a one size of it's all, but there's lots of talking. This particularly comes out of the valley or out of the New York, Texas and et cetera, is more people, in this goes to education.

It skills more, you know, teach people to code, learn to code. I'm curious because this is the life you came from, and there is an argument that gets made that when you look at where artificial intelligence is heading, and look, it's down the road because I still can't tell my phone necessarily to order a pizza and get the pizza in my house. but the AI, the way it's going, it's going to be able to, the basic coding, it's going to be able to do that even though there's an inherent creativity in computer science, AI is heading towards a place where it's going to be able to mimic a lot of that. And so that you might be creating a generation of coders who by the time they're 35 aren't going to have anything to do. Yeah, so this is where it just gets kind of hand-wavy. Like at some point we can just say, oh, whatever it is, AI is going to be able to do that and we just kind of hand-wave.

I guess I can tell you, when you talk to professional AI researchers, they're worried about the opposite problem, which is they're going to disappoint. Yeah. So AI, AI has this long history of having had, AI is not a new topic. AI has been a topic continuously since the 1940s. The concept was first invented like 1942, 1942, 1943 by Alan Turing and his colleagues. And there's been wave after wave after wave of AI, and you go back and read about all this stuff when it happened. There was wave after wave of AI hype and then huge disappointment. And in fact, there was a huge, actually AI bubble in the 80s where there was just tons of AI companies trying to have made all these problems, some of you may remember medical diagnosis are going to be transformed and all these things. And then it crashed. And then it crowds. so hard that the entire field almost got completely written off in the following 20 years. The thing that does seem to be different, it is it is working in the way that it, in the way that AI actually works, it is working now. Like the drone stuff, these guys are talking about, like we can do, we're going to be able to do autonomous drones, which is, I think, a very good thing. We're going to be able to do self-driving cars.

But the idea that AI is sort of this magic pixie dust that we sprinkle in anything, and therefore all the programmers are going away. It's just, I mean, it's just science fiction. Okay. Right. If anything, actually, what's going to happen is the programmers are going to get, the programmers in it are going to be higher paid because they're going to be higher productivity. Right? Because productivity also, important thing to remember is productivity

also drives compensation. The more productive somebody is, the more technological leverage somebody has in the job they have, the more they get paid. The more their skills are worth on the market. And so I actually think probably the opposite is going to happen, which is we'll have more programmers than ever because we'll be able to apply software to more fields than ever. We can talk more about that. And programmers end up being higher paid because you're going to have a programmer assisted by an AI who's then going to be much more productive, going to be able to write much better code. And it's probably worth noting. I look back, there was a business week on that Bloomberg Business Week cover story maybe eight years ago, which was a future of work sort

of story. And the number one job that they said was going to be destroyed in the United States specifically was software engineer. Yeah. And it was all going to go offshore. I mean, you know, as you know, like we're on the receiving end of the exact opposite accusation every day, which is all these software people are paid too much money and destroying all the cities. So driving the gentrification crisis. So we're getting it coming and going on that one. There's an old, you know, the Peter Thiel line of the promises flying cars, which by the way, apparently is now coming. So, you know, he must be just thrilled. Weird. By the way, it's funny. He refuses to admit.

that he actually does, well, no, he refuses to actually back the fly. He doesn't think flying cars are a good idea. I know, but you'd think he'd want, just one that he could put in his backyard just to fly around? One would think. Or maybe just waiting, let somebody else produce them and then I'll buy mine. I'm looking forward to it. There's a guy actually working on the Iron Man suit. Have you seen the videos?

No. There's a guy who actually has... What the hell is the practical application of the Iron Man? To fly. Oh, just to fly. Okay. Yeah. Yeah, but it can also shoot like fireballs out of your hands.

We already know how to do that. That's the easy part. In fact, Washington is ringed by companies that know how to do that. Well, there's a guy at TED and the Jetpack. The problem is doing that in free. Is this the guy at TED? There was a guy at the TED conference. Yeah, yeah.

Yeah. But it's not a jet pack. It's like, it's like, it's on your feet and you're, it's, I mean, it's astonishing. You see, I don't know the technical definition of jet pack. Is there a tech? Yeah, the jetpack, it goes on your back. You're saying this goes on your back. That's the pack.

That's the pack. That's good to know. These are arm jets. These are arm jets. This is totally different. Totally different. What I'm curious, is there a technology? So going back to the flying car, is there a technology, don't go back to when you were a kid,

but say maybe 10 years ago that you thought we would have commercialized at this point that doesn't exist yet? You know, so it's a, so this is actually, I think the weird thing. So I'll make maybe an audacious claim and then try to defend it. So I actually have reached the point where I think that all of the ideas in tech and all the ideas in Silicon Valley are good ideas. I don't think there actually are bad ideas. I mean, maybe we could pick a couple.

But they actually all seem to be good ideas. The reason I say that is they all do seem to actually happen at some point. It's just it's a timing issue. And goes back to your question, which is the time. Timing is really, really hard. I'll just give you one random example of that. So, you know, the poster child for access during the dot-com era, what's Pest.com, and that stupid sockpuppet became an icon. And it was sort of proof of like, it's all the articles the time was like, this is proof of how crazy all this stuff has gotten is this idea that you'd ship a 50-pound bag of dog food, right, without online commerce.

It's just notty. And you'd ever be able to make any money doing it. And then this company, Chewy, just got bought for $3 billion by Pest Mark. Yeah, yeah, which, and guess what? Online dog food sales. And so, like, that works. Online pet food sales, like, worked. By the way, smartphones, you know, were invented originally in the mid-1980s, and then a lot of us had, like, nerdy, weird versions of them in the 90s, if you remember the trio. And then the iPhone mainstream in 07. Apple invented the iPad in

1989. They called it the Newton. It became a laughing stock. It was a huge failure. The iPad is the Newton. Everything other than the pen, they figured out you could just do it on the screen. But other than that, it's the exact same thing. And so timing is the hard part. And so I guess the answer is I'm generally sort of like always super dissatisfied. Like we have all these people with all these incredible ideas. And many of them are happening. And then, and then, you know, there's going to be a whole generation of founders this time, just like there were last time of the time before that, where they actually have the right idea. They get the timing wrong. The startups can't survive long enough. Like the timing has to, when you start a company, you basically, basically starts a

five-year fuse. If the idea doesn't hit, if the idea doesn't hit critical mass sort of in society with the customers in the first five years, you basically lose the company. And then somebody else picks it up and runs with it. And so that is sort of, that's actually probably the single biggest thing that tortures us more than actually. And I bring it up because so much of the dialogue when people comment on tax, so much of it is around good idea versus bad idea, which I think is actually not the main question. I'm going to ask one last thing on this kind of general topic, then move on something new, which is you've talked about how you have sometimes an imaginary Peter Thiel actually on your shoulder. He lives right here. Who whispers sweet contradictions in your ear. And I'm curious, when it comes to this general issue,

which is, you know what, we're all going to be, we, you know, society, we're all going to be, okay, tech is going to be a force for good in the end. And from a labor perspective, particularly, people are going to figure out, what is he whispering in your ear? What's been the most convincing thing he's whispered in your ear to say, you're wrong, Mark. We're all, we're all in deep, deep shit. Oh, it's the, it's actually why he's a Trump supporter. It's the extreme form of the stagnation thesis. It's the extreme form of the other thesis. It's much more like the book, the great stagnation is kind of representative. It's a Tyler Cohen. It's a great economist wrote this book. And it's, Peter sort of believes the deep version of that thesis, which is basically, yeah, we talk,

it's the, it's the slogan. We were promised flying cars. We got 140 characters. So like he cites as an example. He's like that it was at the Golden Gate Bridge, I forget the exact numbers, but the Golden Gate Bridge was built from start to finish in like, I don't know, two and a half years for a price of, you know, in modern adjusted terms, some, you know, crazily low number. Like, they just did it. And then he's like, his house in San Francisco, he cites, they've been working a new on-ramp for the bridge. And it's been, they've been in the planning phase and the initial construction for 10 years. And just the on-ramp will cost like inflation adjusted like 15 times as much as the entire bridge cost. Right. And so, and so he basically goes through, you know, another argument

he'd make is air travel. Like we, yeah, drones, whatever. Whatever the argument he'd make is, like, we got to the point where we could figure out how to get passenger planes close to Mach 1. We figured that out, like, 40 years ago. We briefly had the Concord to get, and then we decided we didn't want that anymore, and now we're still flying at sub the speed of sound. Like, what the hell?

He is back against a supersonic jet company. Yeah, there is actually. There are new, actually, Silicon Valley starting. There are new actual supersonic jet companies in Silicon Valley, which is not something I ever thought would happen. So it's basically, but it's the strong version of the stagnation thesis, which is, yeah, in the world of bits, yeah, it's all good. You can do whatever you want.

it's all great, but like the majority of the world is the world of Adams, and in the world of Adams, he would make the claim that innovation has been comprehensively outlawed, actually formally outlawed by the legal and regulatory and political apparatus, and then sort of culturally outlawed where we've sort of stagnated as a culture and we don't want, we fundamentally don't want change anymore and we just decided to stagnate. By the way, there's another Tyler Cohen who wrote the, they're fairly close in their views. Tyler wrote The Great Stagnation. His new book is, I think it's called the complacent culture.

And it's the cultural side of this argument, which I know Peter also believes. Is it a responsibility, particularly of a startup, or maybe a quasi-mature startup, to give serious thought to the second and third-degree effects of their technology? So, you know, we're building whatever we're building. This is the use case. This is our use case. This is why people are going to buy it.

How much responsibility they have to think of how somebody else might use it or what might come down the line? I would say a lot, but with two caveats. And so on the lot, I would say, I think we all have responsibility to think about the implications of what we do. And I actually also believe that most of us do. I think there's, I have met, I generally believe in the idea that everybody's the hero of their own story, right? And so we all have an internal narrative. Like, I'm the protagonist, and you all are like, in D&D, we called you all non-playing characters. Like, you're all like,

you know, video games, you're all bots. Like, I've got my moral path, right? And I know what I'm about. I don't know about the rest of you guys. And we kind of all have that point of view, right? We each have a, we each have a sense of ourselves as making moral progress through life. And then it turns out we don't all agree on our respective views. And so I actually think most people in most fields of human activity, and I know most people in the valley have a very strong view, like in private, after a few drinks, they will tell, like, no, I really do believe what I'm doing, XYZ. There is not a lot of historical evidence that either the inventors of a new technology or anybody else can anticipate the effects very well. And my favorite story,

there's lots of stories on this, but my favorite example, this is Thomas Edison invented the phonograph, and, like, literally, they didn't quite know what it was going to be for, and they made a list of the use cases and applications. One thing is music was not on the list. It was just viewed as like, that's just not something you would, why would you do that? Why would you listen to music in your home? And then the other was the Edison, personal number one thing that he just thought was a slam dunk for market adoption, right, was, of course, listening to religious sermons. So you would, you know, being a god-fearing Christian, you know, white male in that era, you would come home at night, you would take off your black

bow tie, you would sit back and you would listen to religious sermons for two hours. And that would be the killer use case. And so like he did, and of course, he therefore thought of, of course, of moral, an instrument of great moral purpose, because it would make everybody a lot more, a lot more ethical. And so if Edison couldn't figure that out, like, I don't, you know, it's a, it's a stretch to say that the rest of us can. My other favorite example of this, nuclear weapons. Nuclear weapons were, I understand, I wasn't there, I understand hotly controversial when they were invented. Many, many people took very well-meaning, well-intentioned, ethical stands against nuclear weapons. You know, the revisionist historical take is that the

existence of nuclear weapons may have prevented World War III. You know, in other words, in the absence of nuclear weapons, there were a lot of... So far. So far, so far. But look, there was supposed to be, if you read the contemporary accounts of what was happening after World War II, there was supposed to be... I mean, the military spent 30 years preparing for a giant land war, on the plains of Germany, like there was supposed to be this massive military conflict between the U.S. and the Soviet Union, and it never happened. And you could argue it's, it only didn't happen because of mutually assured destruction. And so it may be that nukes saved 200 million lives. And so it's one of those things where I think it's just very hard to predict. The other thing I just think

is I think these become inherently political questions very, very quickly. And I think we all have our own politics and society has its politics. And I think it's very hard. And this also entered into a lot of the, a lot of the base actually run nukes at the time is, you know, or, Actually, bicycles are a good example. There was a moral panic. This is actually a true story. When bicycles were invented, there was a moral panic. People freaked out.

Bicycles were the first mechanism that allowed unmarried young women to easily get to the next village. Seriously. And so young women were, you know, young women would buy a bicycle and they would get on and they would go to the next village. And this freaked out the moral authorities at the time so much that the popular magazines at the time created a concept and popularized it that they called bicycle face. And bicycle faces if you were an unmarried young woman and you rode a bicycle, your face would permanently lock into. because of the exertion, and then you would never be able to find a husband and get married. I swear to God, this is a real thing. This was a thing. Right? And so, and again, today that sounds ridiculous, but at the time, through the moral lens of what it meant to have unmarried

young men and women, like this was a very, very big deal. And so I just think it's, it's, I think it's aspirational to say that we can predict these things. I think in practice, I think things happen, these technologies get invented, they can't be uninvented. I mean, that just simply, Jack Welch just kind of, Jack Welch put this well in time. He just said at one point there was no steel and then there with steel, and people either figured out what to do with steel or not, right? And you could do lots of things with steel. You could build buildings, or you could build battleships. And in fact, people did both, and the world changed. And then it's more a question of how do you adapt. It's more a question of how do you accommodate the change and deal with the change than it is a

question of trying to anticipate it. Outside of events like this, took your voice kind of literally offline. You were the most prolific tweeter, more so even than our president, I think. You, I, I, I, I mean, in fact, to be honest, it wrote this this morning, preparing for this interview is much harder than preparing for the last interview I did with you, because that one I could just read your tweets and I knew what you were thinking. Fantastic. Quick first, why did you leave? I mean, the perception is, obviously, there was the India tweet and there was a hubbub over that,

and then you were just like, screw this, I'm done. Is that accurate? It's sort of this question of, like, why can we talk about some issues? Like, why can we talk about differential calculus and not get, like, all angry about it? Like, if you have different views on differential calculus than I do, like, I respect you, I don't think you're a giant, you know, stupid person. But if we talk about other issues, if we talk about health care policy, like all of a sudden, like, everybody who has the other position from us is evil. And so he goes through kind of what causes some issues to become politicized and other issues not.

And I just think the sphere of issues that are being politicized, at least in the Valley and tech and economics is just really broadening out. I think it's really corrosive to, it's certainly corrosive to discourse. I'm an engineer by background, and my natural inclination is I like to get into the details and I like to try to understand what makes things work. And there are just certain areas that are very hard to have those discussions. And so I just found that that phenomenon was swallowing up almost everything I wanted to talk about. That's interesting. I mean, but it's going beyond some of the, quote, the righteous issue. Not quite maybe the differential calculus, but we were talking back. Say Jessica Levinson, who helped found Y Combinator, she wrote a, she wasn't very, very active publicly from a blogging or tweeting perspective, but was out there a bit.

And she wrote a blog post, I don't know, maybe a month or two ago, basically saying that from here on in, no matter the topic, she was no longer going to publicly write about her comment. She would talk to her friends privately, and that was going to be it. do you feel that there is, I mean, leave aside something really, some of those obvious hot-button political issues, do you feel in the valley that discourse is drying up a little bit? Are people's willingness to have open discourse? Well, open, yes. The open discourse is drying up. Probably the private discourse is probably getting more interesting because people are talking

in private about the things they don't feel like they can talk about in public. This is always one of the things you wonder. This is always kind of the one of the things you wonder is if you suppress speech in the public sphere, how much of it just happens in the private sphere and how much does it actually mutate and possibly get worse in the areas that you care about in the private. It's fear. Some people think this is a big part of the Trump phenomenon is people had, you know, it's the concept of the shy conservative or the Trump supporter who won't admit it. By the way, for example, I will tell you this. I know of exactly two Trump supporters in Silicon Valley, right?

Two. Right. This is the one other than Peter. This is the thing. The one, only one has even been visible up until recently, Palmer Lucky is the other one, is the founder of Oculus. And so I know of two out of a community of, you know, a tech community of hundreds of thousands of people. And so, like, I guarantee, I don't know, but I can't prove, but I guarantee there are Trump supporters in Silicon Valley who feel like they can't say so. Right. And so what does it do to somebody, right, when they feel like they literally cannot express themselves and, like, what that happened? Like, that's just such an unhealthy place to get to. And it is, I do really worry that is the place we're getting to.

What do you think D.C. least understands about the valley. When I say D.C., I mean, the political infrastructure of D.C. Yeah. So I think the biggest thing is there was a famous, alluded to the nuclear weapons history earlier. There was a British writer, who's actually essayist, and actually turned out he was also a chemical engineer. So he had a feat in kind of both the engineering and liberal arts worlds named C.P. Snow. And he wrote this essay in the 1950s called the two cultures. And it was the two cultures at the time actually was sort of the liberal, you know, sort of through the UK lens. So it was sort of the Oxford, Cambridge, politics, what do they call it, PPE, politics and economics, philosophy, kind of liberal arts kind of

of foundation and a lot of people write in government kind of come up through, you know, politics or philosophy or economics or law. And so sort of the liberal arts culture, if you will, and then the engineering culture. And at the time he wrote the essay, the engineering culture of the time that was the dominant culture was the physicist. And if you read this essay,

and you'd enjoy this, you read this essay and you read about how he would describe the physicists, and you'll immediately think of all of us. Like right now, it's like those pompous, arrogant, like full themselves. That's what you think I think of, yeah, good enough.

No, no, I just mean, I just mean these people, these people, these... I didn't say you were wrong. I was just curious that I didn't realize you knew. Okay. The liberal arts, The general liberalized view is these engineers have full themselves.

They think technology is the answer for everything, and they think technology is going to change everything, and they don't understand normal human beings. The technologists, the engineers, think that the liberalized people are just woefully behind the times, uninformed and can't even have the discussion because they don't understand the technology. And so he describes this dynamic historically that happened at that time. And then what he calls for is he calls the third culture, which is he says, we need to merge the cultures. And we need both sides need to merge the cultures. Both sides need to contribute.

The technologists need to reach out to the people who are on the liberal arts slash policy slash law slash that axis of things and need to do a much better job of explaining and understanding fears and concerns and then explaining the implications and exploring the ideas and making people feel like they're included in the process. But equally, the people on the other side, people on liberal arts side need to really make an attempt to really deeply understand technology. And so I don't know if his essay had any effect back then. I would hope that, you know, the current version of it would be all around the issues we're talking about today. And at least, you know, of course, this conference is a big part of our attempt to do this out here.

And correspondingly, hopefully, if all of you who have, haven't been out to the valley. Hopefully you'll come soon and come see us because this is a big thing that we're trying to, we're trying to, we're trying to help, trying to do our part in helping to blend the cultures. I don't know why I thought of this, but I'm just curious. Just a quick question going back, this is not quite a flying car question, but I've got a six year old, you've got a two-year-old. Are either of them, I assume California, like Massachusetts, around 17 is when you get to a license. Are either of them going to learn to drive a car? I don't know. I think it's possible that the answer is, no. I think it's possible for the six-year-old, the answer is no. I think for the two-year-old,

it's a very real possibility. The answer is no. So the six-year-old, like, I mean, it's already the case if you're a parent, a lot of parents are teenagers, like, it's already the case that if the economics work, an Uber or Lyft account, right, is probably the best way to go because you eliminate a huge amount of risk, right, from teenage drivers. There's all these studies now of actually what happens in the teenage mind, which now explains a lot of my behavior when I was that age of, you know, risk-taking and so forth. And so there's a big advantage to having these services. By the time you get, you know, full self-driving car fleece deployed, and it's, you know, and it's, it's, it's a button on a phone and the ride costs a half or a third of what it costs today. It's going to be so

cost effective and so safe to not drive that I think there's going to be a big, I think a lot of parents are going to push this direction. And this is just a yes, no. Will their kids drive on roads or in the air? Oh, I would certainly hope that it would be so disappointing if they're not in the air. Fair enough. Mark, I appreciate that. Okay, great. Thanks, everybody.