
Peter Thiel: There Are No Good Bets Against Globalization - riffer
http://www.hoover.org/publications/policy-review/article/5646
======
Andrew_Quentin
An awful piece. I repent that I read it. His introduction is good though.
Grand claims, appealing to ancient lands, myths.

However, the man seems to have no patience. Jumping from one idea to another
like an adolescent trying to figure out what to do with himself. Grand claims,
without explanation or elaboration, merely statements. We have lost the way of
the ancients. By ancients we are probably led to believe the innocence of
Aristotle.

A complete mess. Examples selected. A very narrow argument. Not a person
engaging, not really a person communicating, but, possibly, a person with an
agenda, someone who is trying to "school" the great ignorant public, to fill
the place of the ancient medieval priests.

That is my impressions. Of which I might be entirely wrong. I must however
say, his world is dark, made dark by limitations of his imaginations, by loss
of hope in the human spirit, by lack of understanding of the human resilience.

Europe has free trade, it has too a fairly similiar ideologies of democracy
and capitalism, yet each country in europe is as different as China and
America. Globalisation in practice is much different from the globalisation of
rhetoric. No need to use the bible. Nor repeat the term apocalyps on and on in
the introduction, to present an impression of something really serious, deep
and secret being told.

Tell what the world is, we have the brains to understand what it should be.

Though this I should not say - I am frankly disappointed in the consciousness
of Hacker News who allowed this article to get sufficient point to make me
force myself to read a most ghastly article.

~~~
akamaka
Well, I'm glad that I forced you to read the article, because I really enjoyed
reading your comments. :)

Although I agree with you, I did enjoy Theil's essay. I think it really
captures and explains the desperate and almost suicidal mindset that is so
common. You put it well. His is a dark world of little imagination and not
much faith in humanity.

------
limist
Interesting that this was published in January 2008, and likely written before
that. Rightly or wrongly, economic globalization's image didn't end that year
untarnished.

The world's a really complex system, even limited to just the human-systems
part of it, and the <50 miles from satellite orbits down to deep-sea drilling
that concerns said humans. So in forecasting and speculating on the future, we
can't help but project our own fears and hopes - in this case, Thiel is a
capitalist/investor who makes a long case for going long on the world economy,
with some Biblical quotes and economic history to make it interesting, if not
quite convincing. Too many false dichotomies are given - I think it's a good
bet the future will not run like a decision tree.

In particular, Thiel wrestles with the fairly old internal contradictions of
capitalism that many other thinkers have, some much more in depth. To use one
more Biblical reference, the Rapture for globalization is a totally "flat"
world of complete freedom for labor and capital (and technology, but
presumably not land). Global capitalism runs, shuffles, or stumbles towards
that end, with much of its participants heedless of the journey, never mind
its destination.

For example, since capitalism's purpose is to accumulate capital for its own
sake, it cannot help but be global (early on, slave trade/colonialism), and it
cannot help but work against itself in the long run (We'll up profit margins
by outsourcing! But wait, then those outsourcers will get richer, and compete
to squeeze our own profit margins. Yah, but then they'll outsource too! But
wait, the planet is finite...). While it is a very resilient economic system,
what might follow it as its contradictions come fully into play is far from
clear.

As an aside, here's someone else who's view on the current globalization
situation is, I've found, comprehensive and coherent:

<http://www.iwallerstein.com/>

~~~
byrneseyeview
You are anthropomorphizing "Capitalism," as a sort of aggregate of all
capitalist behavior, but with a single goal. That's not accurate.
_Individuals_ certainly try to accumulate wealth, but the best way to make a
lot of money is to find a better or cheaper way to do something--a side effect
of which is the impoverishment of somebody else. Just look at, e.g., the way
Sun nearly killed IBM in the late 80's and early 90's. Sun never made as much
as IBM did, but the people who founded Sun made more than they otherwise would
have.

That, I think, is why you see internal contradictions. You're pointing out
that the best capitalists do stuff that harms the average capitalist; if
Myspace is making money, there's always a Zuckerberg waiting to ruin things.
But of course, there is no "Capitalism" that encompasses all of the goals of
Myspace's owners _and_ Facebook's.

That also takes care of the apparent contradiction of outsourcing. The
capitalists who lose to outsourcing don't like it; the outsourcers do. There's
less money made (since the outsourcers charge less), but the economy is more
efficient. That's capitalism--the net result of lots of self-interested
people, who often act against one another's interests. It's not the vision of
capitalism in which the rich, as a group, make consensus decisions to advance
their collective interests.

Thus, that version of capitalism is wrong.

Oh, and slavery and colonialism are much, much older than capitalism as we
understand it today. In fact, one can make the case that slaves are the oldest
form of property. Certainly, I've never heard of a civilization that advanced
at all and never had slaves.

~~~
nl
* Just look at, e.g., the way Sun nearly killed IBM in the late 80's and early 90's. Sun never made as much as IBM did, but the people who founded Sun made more than they otherwise would have.*

I don't disagree with your general arguments, but this bit is factually wrong.
IBM's problems in the late 80's and early 90's were to do with the rise of the
PC industry, not the Unix workstation. Yes, IBM had a dysfunctional Unix
strategy during that period, and yes it lost sales (some to Sun) but it wasn't
Sun that was killing it, it was the rise of client server computing. If Sun
hadn't been there then Apollo (remember them?) or HP or maybe even SGI

~~~
byrneseyeview
Thanks for the clarification. Are there any good sources (books, articles) on
this period and what happened to IBM? I've read about it from IBM's point of
view, but when your business is selling Big Iron, you figure you fail because
of something Big Iron-related, not something external.

------
dfa
Wonderful! So this means I and other Americans will soon legally be able to
purchase prescription drugs from other countries where drug companies sell
them for much less money? Oh, I forgot; "globalization," as meant by
multinational corporations and policy makers, doesn't work that way.

Globalization is not a two-way street, and while it would certainly be foolish
to bet against it when it means American jobs being shipped to other countries
where labor is cheaper and the cost of living is lower, betting against
consumers being able to import goods from those same countries where
multinationals sell their products for cheaper seems, for the time being
anyway, to be a pretty safe bet.

~~~
dantheman
The only problem with globalization is the lack of truly free trade. If
countries didn't have to subsidize nonproductive sectors of the economy then
the costs of living would equalize much quicker - see farm subsidies, tariffs,
and the ban on imports of certain goods.

~~~
dfa
I don't think it's the _only_ problem with globalization, but having recently
paid out-of-pocket for an expensive, patented prescription drug, I think it's
one of the biggest, and much of the hollow pro-globalization, pro-free trade
rhetoric I hear from government and big business never addresses it.

I am curious about why others downvoted my original post; do people here
really think this sort of protectionist price discrimination is OK?

~~~
natrius
I think it's only okay in certain circumstances. Many governments participate
directly in their healthcare markets, which affects the prices at which
pharmaceuticals can be sold in such a country. If goods with manipulated
prices are allowed to be traded freely, the prices in other countries will be
affected as well. Companies that produce the goods in question will either
have to accept lower profit margins or refuse to sell their goods in
manipulated markets. Regardless, such a policy would lower the expected value
of future technological advances in the field, which would result in less
effort being directed to such advances.

It is undesirable for technology to advance at a slower pace than would be
possible if people were expected to pay market prices for the products the
technology would help to improve or create. If you value future advances in
technology, you should want your government to minimize manipulation of the
markets for such technologies. If, on the other hand, you'd like as many
people to benefit from current technology as cheaply as possible, you should
want your government to force prices down as much as possible.

~~~
dfa
If they dislike the price controls and monopsonies that exist in other
countries, they can avoid those markets entirely. Once they agree to
participate and begin exporting their drugs, we should have every right to
import them back at a discount. As large corporations have shown in the past,
they have no issue with planned economies, as long as the planning is done in
their favor (China, Dubai).

It is horribly unjust for Americans, many of whom have no or poor health
insurance, to be forced to pay more money than anyone else on earth for
prescription drugs. If Big Pharma, which spends disproportionate amounts of
money on direct marketing to consumers, can't produce the medications we need
cheaply and efficiently, that represents a market failure, and the government
should step in and take the lead role in drug development. Research could be
done through the NIH grant system and the results could be given away,
unpatented, to the entire world. We could get the same results for less money,
as the NIH doesn't need to make a profit and has no stock holders to answer
to. It could even serve to improve our global reputation, showing the US to be
a force for good in the world.

~~~
natrius
> _If they dislike the price controls and monopsonies that exist in other
> countries, they can avoid those markets entirely. Once they agree to
> participate and begin exporting their drugs, we should have every right to
> import them back at a discount._

As I mentioned, both of those options would make drugs less profitable, which
would lead to fewer advances in technology. Prohibiting the reimportation of
drugs can be a sensible policy.

> _It is horribly unjust for Americans, many of whom have no or poor health
> insurance, to be forced to pay more money than anyone else on earth for
> prescription drugs._

Unfair, perhaps, but unjust? Fixing this problem would either require selling
to everyone at American prices (which could also be described as unjust), or
selling to everyone at the lowest prices available. Both options would be less
profitable that the current system, which would slow the rate of advancement
in drug development.

> _[Maybe] the government should step in and take the lead role in drug
> development._

That can also be a sensible policy, and the American government already does
fund a considerable amount of drug development.

~~~
dantheman
Prohibiting the importation of drugs cannot and is not something anyone should
be for. It is highly immoral and it says that your own government wants to
deprive you of things that others have. Now if the governments that get the
discounts are forced to ban the export of drugs, well then that is completely
different story.

------
gmlk
The entertainment business (MPAA, RIAA, etc) are a very powerful
antiglobalization force? They are in fact betting against real globalization.
Just consider regional coding for DVDs or the fact that there is not just one
Apple iTunes Store but that every nation needs to have its own?

With other words: What does "globalization" really mean?

~~~
dfa
_With other words: What does "globalization" really mean?_

Empirically, it appears to mean a global market for land, labor, and capital
with national and regional markets for consumer goods.

~~~
gmlk
Thank you, I'm going to plagiarize that ;->

------
cmars232
Resilient communities are a good hedge against globalization.

Best case, resilient communities can mitigate the harmful effects of
globalization, improve local quality of life and dampen the magnifying network
effects (whether financial, political, or natural). They can provide a
"monkeysphere" that members can care about and be held accountable to, an
excellent alternative to all the divisive, useless rhetoric and posturing in
the MSM.

Worst case, they're the ones still eating and recovering ground after the the
zombies/terrorists/enemy paratroopers/global pandemic/massive earthquakes
strike.

~~~
tomjen3
That is an incredible nice way to pad conservatives on the head for being
backwards. Globalization is a good thing, so why would you want to hedge
against it?

------
barmstrong
I only read the first third of this - but did anyone else find it wandering
without clear points or thought process? It was fairly confusing, not because
of the content, but how it was written. Was surprised to see this come from
Peter Thiel, but I haven't read much of his stuff so who knows.

------
h3h
Thiel is still an extreme pessimist with regard to the future and this seems
to be his attempt at embracing the views of his intellectual opponents by
running the "Optimistic Thought Experiment", which he nonetheless disclaims
with "Unlike more rigorous forms of scientific investigation, there are no
empirical means to falsify these mental exercises. The optimistic thought
experiment exists largely in the mind. The vistas of the mind are not always
the same as reality."

Fair enough, Thiel, but aren't your doomsayer projections also a direct form
of thought experiment, based on extrapolation just the same?

He goes on to outline what he thinks are three defining markets (or
distortions thereof) that could utterly define the future ("China", "Internet"
and "hedge funds"), and claims that the markets are woefully out of alignment
with reality. I think we have to take his view with a large grain of salt
here, considering his bias: he's a global macro hedge fund manager who also
invests in Internet startups.

I think he's probably right about a lot of the distortion and possibly right
about some of the importance of these markets, but he doesn't even mention any
other possible contenders (energy industry transformation? nanotech? biotech?
government competition?). I think it's a mistake to assume that any one or
three factors will determine the mid-term future when there are literally
trillions of factors in play. Then the logical conclusion is that we can't
really know or predict anything about the mid-term future, which may be
largely right, but I think there is possibility to predict with narrow foci,
like "What will happen in transistor design?" or "What will happen in nuclear
reactor design?"; though those too will always be hampered by revolutions that
we never see coming.

Overall, I hope Thiel is wrong about a lot for the reasons that he so adeptly
explains: there's not much else to hope for if the alternative to what you
want is total destruction and nonexistence.

------
mkramlich
I started reading the article with interest due to the topic and the author.
However, after getting many paragraphs into it and seeing the repeated
references to religion, superstition and apocalypse the author frankly lost me
and I aborted. I would have liked to read something actually about
globalization, but if that was coming up later in the piece I'll never get to
it. Life is too short for some things.

------
ziweb
I just posted my thoughts on it here. <http://bit.ly/b7tGcm> I'd post it as a
comment but it's too long.

He's good on the financial advice but bad on everything else. Why would you
promote Defense technology if you think the biggest risk in the future is war?
Shouldn't you be promoting peace?

~~~
lotharbot
1) That's not too long for a comment. This isn't twitter; we're used to
comments that are several paragraphs long.

2) If you do post a link to something, use the full link. Link shorteners like
bit.ly are frowned upon at HN. This isn't twitter; characters are not at a
premium, and many of us prefer to see the real destination of the link.

~~~
ziweb
Thanks. I'm new here and I'm mostly used to the derp derp stuff, so your
comment was helpful. I'm assuming there is no way to embed html here?

------
herdrick
Some interesting ideas, but:
<http://www.imagesjournal.com/issue02/features/groeng1.gif>

------
chrismealy
This is the same Peter Thiel that was recently complaining about women being
able to vote.

[http://gawker.com/5231390/facebook-backer-wishes-women-
could...](http://gawker.com/5231390/facebook-backer-wishes-women-couldnt-vote)

~~~
gort
The offending statement is:

"Since 1920, the vast increase in welfare beneficiaries and the extension of
the franchise to women — two constituencies that are notoriously tough for
libertarians — have rendered the notion of “capitalist democracy” into an
oxymoron."

In essence, this appears to be the claim that women are by and large not
libertarian voters, and less so than men. This is a mere statement about the
world. Believing this statement does not commit you to believing Women Must
Not Be Allowed To Vote.

If you object to the statement then you are committed to Women Are Just As
Likely To Vote Libertarian As Men; I'm guessing Thiel has some actual
empirical data to suggest this isn't so.

~~~
_delirium
Considering that the preceding sentence explains that the 1920s---before those
two things happened---were the last decade in which one could be optimistic
about politics, and then explains that those two things happening was the
reason for the loss of optimism, I don't think it's too much of a stretch to
interpret his statement as: the expansion of welfare and the granting of
suffrage to women have turned out to be bad for America.

It's possible that he really thinks, instead: while those two things have
rendered "capitalist democracy" an oxymoron, which I dislike, I nonetheless
must agree that those two things happening was a good idea (for other reasons,
presumably). But that certainly isn't the connotation of the words he chose.
One could be forgiven for reading him to imply that he was at least _not a big
fan of_ either the expansion of welfare or the granting of women's suffrage.

