Because new technology is as Thiel often quips limited to the world of bits rather than the world of atoms. Paul Krugman once asked, if you go into an average house right now and you take out all the screens, could you tell that you're not in the 80s?
Gordon in the Rise and Fall of American Growth gives a similar example, what if you went into a time capsule between say 1890 and 1950 compared to 1960 and 2010? In one case you're going to see skyscrapers, commercial airplanes, nuclear power plants, electricity everywhere, cars going at amazing speeds. In the latter case what's the difference, people paying with their phones and different fashion mostly.
'Innovation' in the internet age, say the last 30 years has mostly been limited to enable hedonistic digital consumption with very little impact on how we fundamentally move through the world. The difference between a car right now and a car 30 years ago is that you can now play angry birds on a tablet. A 100 years ago to 50 years ago meant going from horse carriages to trains and from weeks on a ship to hours on a plane. Today the average person crosses the Atlantic no faster than we did decades ago.
That's why productivity growth is low, the world hasn't changed that much. There's still marginal improvements obviously which do add up over time but the 'unprecedent pace of innovation' you hear about from tech evangelists is nowhere.
Another interesting thought experiment is, how many digital services, modern tech and so on would you be willing to trade for something mundane, say your dishwasher, a hot shower, the toilet, a car, soap, if you could only have one or the other? I think it really puts into perspective how much or rather little value those 'innovations' add.
Gordon in the Rise and Fall of American Growth gives a similar example, what if you went into a time capsule between say 1890 and 1950 compared to 1960 and 2010? In one case you're going to see skyscrapers, commercial airplanes, nuclear power plants, electricity everywhere, cars going at amazing speeds. In the latter case what's the difference, people paying with their phones and different fashion mostly.
'Innovation' in the internet age, say the last 30 years has mostly been limited to enable hedonistic digital consumption with very little impact on how we fundamentally move through the world. The difference between a car right now and a car 30 years ago is that you can now play angry birds on a tablet. A 100 years ago to 50 years ago meant going from horse carriages to trains and from weeks on a ship to hours on a plane. Today the average person crosses the Atlantic no faster than we did decades ago.
That's why productivity growth is low, the world hasn't changed that much. There's still marginal improvements obviously which do add up over time but the 'unprecedent pace of innovation' you hear about from tech evangelists is nowhere.
Another interesting thought experiment is, how many digital services, modern tech and so on would you be willing to trade for something mundane, say your dishwasher, a hot shower, the toilet, a car, soap, if you could only have one or the other? I think it really puts into perspective how much or rather little value those 'innovations' add.