[Music]
Peter: Late economist and foreign policy analyst,
Hoover-fellow Harry Rowen writing in
1996. Quote, "When will China become a
democracy? The answer is around the year
2015. This prediction is based on China's
steady and impressive economic growth,
which in turn fits the pattern of the
way in which freedom has grown in Asia
and elsewhere in the world." Worked in
South Korea, worked in Taiwan, economic
growth leads to democracy. In China, what
went wrong? Thiel: Well oh Peter, this is always
a setup for me to start by both
flattering you and criticizing you a
little bit. since there was that very
famous Reagan speech you gave that you
wrote for Reagan, where it was
"Tear down that wall, Mr. Gorbachev".
And it was very effective. But,
perhaps it was not only in the West that
we learned lessons from it. The Chinese
Communists also paid very careful
attention to it, and they learned that
you had to have
Perestroika without Glasnost. You had to
get rid of the Marxism without getting
rid of the Leninism. And they
learned somehow the very opposite
lessons of that fateful year in 1989.
Tiananmen worked in China
and that is what
continue to works. I think that's
sort of a simple first cut.
There was nothing about history that is
automatic or predetermined. It's always a
question of agency of people and and
unfortunately China took
the lesson very much to heart, and has
stayed on this trajectory as per capita
GDP is close to ten thousand
dollars, which was sort of the point
where you know democracy was supposed to
start taking over. And it seems to have
anything then been going the opposite
direction. Or there's
another sort of
historical riff I have on this that I
was thinking about the other day. Where
there was this famous
interview with Zhou Enlai in the
early 1970s, where they asked him about
the French Revolution, and what did he
think of the French Revolution and he
said "You know, it's too early to tell.".
Which was seen as sort of a
funny diplomatic answer at the time. But
I've come to think that there's sort of
a very sinister way of thinking about
that answer. Which is that in
some sense the French Revolution, it
ended. It ended in 1794 when the insanity
burned itself out and you had Thermidor.
And then of course when you had
the Russian Revolution, one of the
promises Lenin had was that the Russian
Revolution, the Communist revolution
would never have a Thermidor. But it took
a little bit longer than five years as
did in France. But I'd argue you
had something like Thermidor, 1956 when
Khrushchev gave the Anti-Stalin speech
certainly by the time of Gorbachev. China,
what Zhou Enlai was saying in that
speech was that China is the one country
that is still true the spirit of the
French Revolution. It is the one country
in the world in which there will never
be a Thermidor. And that is-
and then of course the
way this manifests is that it will
still continue in the sort of
revolutionary communism. That will
have one genocide thing
after another, and that
continues under Xi. Peter: Still China, three
quotations. Two of them from heroes of
the Mont Pelerin Society. Friedrich Hayek
in 1982. "The mere idea that a planning
authority could ever possess the
information necessary to run the economy
is a somewhat comic fiction, What prices
ought to be can never be determined
without competitive markets", close quote.
If you want economic growth you must
permit free markets. Quotation two, Milton
Friedman 1991. When the regime in China
introduced a greater measure of economic
freedom that generated pressure for more
political freedom and that led to
Tiananmen square". If you permit
free markets, sooner or later your people
will demand political freedom and
they'll be hard to handle. Quotation
number three, Peter Thiel. Speaking last
November. "Artificial intelligence is the
big eye of Sauron, watching you at all
times in all places",
close quote. Will artificial intelligence
overturn Hayek and Friedman? Will it
enable China to achieve sustained
growth without economic or political
freedom? Thiel: Well, let's not be
too dogmatic in answering this. So,
I certainly think
that it's possible
the form that totalitarianism has
in China will exhaust itself, that
it will hit some kind of crisis at some
point. China does have
some very serious demographic
challenges. Maybe it's sort of,
like you say, it's a revealed preference
that people don't want to have children
because it's very cruel to allow a child
to be born into such a horrible society.
So, I think there are
ways that we can speculate on how it
might ultimately on exhaust itself.
But I think we should
not be dogmatic on the other side and
assume that it automatically will. And
that perhaps it can
sort of develop, perhaps it can sort of
catch up, you could sort of get things to
work, and there are probably
certain parts of the economy where you
don't need to be that free, or that
creative, or that innovative. There is
just sort of copying things that work.
Just copying the West. And
maybe you can't get quite our
standard of living, but maybe you can get
to a half our standard of
living or something like that. Peter: But you're
not singling out
AI as a game changer here? You tend to
poopoo the notion that AI will change
things? Thiel: Well I think if it's
unclear- I think there's always a
lot of propaganda around all these
buzzwords. And so I think it's
somewhat exaggerated. But
yes, of course, there's sort
of a continuation of the computer
revolution, where you'll have
more powerful Leninist controls, and you
can have certain- maybe the
farmers can sell the
cabbages in the market and you can
still have face recognition
software that tracks people in all
times in all places. And so there's sort
of a hybrid thing that might work
for you no longer than we'd like. Peer: Okay.
