Peter Thiel has an interview at CNET that I agree with to a shockingly high degree. That’s not say I expected something bad from Thiel but simply that I tend to disagree a lot when someone takes on as wide a set of issues as he did, from IPOs to the Arab Spring.
My most fundamental quibble is with this
I don’t think most of the economy should be planned. But I think to the extent you’re going to have large government, it would be good if the government should be planned rather than unplanned. If you’re going to invest in alternate energy, you should have a plan of what kind of alternate energy you should be investing in, and you shouldn’t be randomly buying lottery tickets. Planning is preferable to buying random lottery tickets or politically motivated lottery tickets, which is the concern with the clean-tech stuff
All the Keynesian kind of thinking suggests that macroeconomics is important independent of the micro stuff. So it doesn’t matter what the regulations are–it matters what’s necessary to get the animal spirits back. It matters to print the right amount of money for the monetary policy. Get the fiscal stimulus right.
Economic policy should be heavily weighted towards short-run concerns. Are we getting monetary policy right? Do we have the correct amount of stimulus. These are the things that policy should concern itself with because they are up close and dominated by factors that we have some control over.
The long run economic path is dominated by factors that we cannot see and have almost no control over. A focus on the short run should even dominate our regulatory concerns because we can see pinches in prices and shadow prices right now, that need to be alleviated.
Our work on the future should be much more philosophical.
Let me give two concrete examples.
One, I happen to think urbanism is not long for this world. I think that telecommunications and automated transportation will solve the agglomeration at a distance problem before technology solves the basic problems of congestion.
This implies that the efficient organization of society will be highly dispersed and sprawl oriented, especially here in the Western Hemisphere were we have absolutely tons of land.
That’s all well and fine as a forecast but I could be completely wrong. And, betting America on the notion that I am right is not wise. On the other hand we can see that per square foot housing and office space prices are way too high in the cities that we have. That’s a regulatory problem that can be addressed immediately with immediate gains. If it so happens that core cities become ghost towns over the next 40 years then that’s what happens.
However, in the next five years there are huge gains to loosening regulations on urban construction.
Two, over the long long term I think that emulations will be the dominant part of the economic landscape. No one should be betting the farm on this but people should be thinking philosophically about what it means to be an emulations. Are emulations “human?” What is it to be conscious? Is it always okay to create life, even when you have an expectation that that life might be miserable?
Not that we can do anything about it at this point but we can set the table intellectually.
That’s a core difference between policy which should focus on outcomes and philosophy which should try to unpack a problem so as to be better prepared to produce good outcomes in the future.