“Five hundred people will have job security for the next decade, but how much value does it create for the entire economy ? It may not be enough to dramatically improve living standards in the U.S. over the next decade or two decades.”
It's strange that someone as successful as Peter Thiel has been in the startup world, a world built on providing value, would make such a statement. What does the number of permanent or semi-permanent jobs have to do with the amount of value being created by something like twitter? If it took 100,000 employees to run twitter as it exists today, would that make it more valuable to the economy? Of course not.
If it only took one guy to design, build, ship, and sell the iPhone, Apple would be far more valuable to the economy, not less. You'd free up all those talented people to go out and create even more value on their own.
Also, he seems to equate increased $$ with increased living standards. By and large that's been historically true, but it's a bit misleading. Even if twitter made 0 money and created 0 jobs, it would still improve living standards. Certainly not in the way indoor plumbing or electricity raised living standards, but it still makes people's lives easier, which, by definition, improves living standards.
> If it took 100,000 employees to run twitter as it exists today, would that make it more valuable to the economy? Of course not.
> If it only took one guy to design, build, ship, and sell the iPhone, Apple would be far more valuable to the economy, not less. You'd free up all those talented people to go out and create even more value on their own.
I think it depends, really. Historically, talented people have created new industries/companies that employed a lot of less talented people and allowed them to live a comfortable life. I suspect the focus of his worry is that these less talented people are nowadays less often reaping the benefits of the innovations talented people create.
Historically, those industries required less talented people in order to stay in business. Somebody has to sell the product, answer the phones, sweep the floors, etc. If you created a company that could operate with out all of those less talented people, this would be a boon.
Even if you presume all those less talented employees are mindless drones, if you can provide the same service with fewer employees, you now have all the value created by that service, plus you have all those extra mindless drones to go produce value someplace else.
As to your second point, I can't imagine that's what he's really thinking. The few talented people who create the twitters, iphones, etcs, are far outnumbered by the millions of less-talented people who actually use those products.
> Historically, those industries required less talented people in order to stay in business. Somebody has to sell the product, answer the phones, sweep the floors, etc. If you created a company that could operate with out all of those less talented people, this would be a boon.
> Even if you presume all those less talented employees are mindless drones, if you can provide the same service with fewer employees, you now have all the value created by that service, plus you have all those extra mindless drones to go produce value someplace else.
Right, but what about the time when there's nothing sufficiently valuable for those people to do? Historically, we've been very able to replace old jobs with new ones - technology simultaneously freed people up and created new job growth segments. The question is whether technology is still capable of creating enough new jobs.
Providing value is nothing more than fulfilling someone else's desire, whether that desire is for a shiny new car that accelerates very quickly, or a new way to communicate, or something pretty to look at, or something delicious to eat, or etc., etc.
Luckily, human beings have essentially unlimited desires. For this reason, there will always be sufficiently valuable things for people to do.
If there is truly nothing valuable for an entire population to do, ie if machines can fulfill every desire we can dream up, it means humanity has finally created utopia.
Unlimited desires is probably a stretch. Substantial, certainly.
The problem is not utopia, it's the situation where there's nothing useful for, say, 20% of the population to do. I think there's plenty for the highly intelligent and well educated to get on with, but for those without (and perhaps unable to achieve) that level of education, it's a tougher situation.
> If it only took one guy to design, build, ship, and sell the iPhone, Apple would be far more valuable to the economy, not less. You'd free up all those talented people to go out and create even more value on their own.
I wonder what your plan is to gainfully employ 7 billion talented people that are freed up. Do you envision a world where 7 billion people come up each with a revolutionary change that improves some aspect of shelter/feed/transport/communicate/socialize/entertain/learn fundamental needs that people have?
It's strange that someone as successful as Peter Thiel has been in the startup world, a world built on providing value, would make such a statement. What does the number of permanent or semi-permanent jobs have to do with the amount of value being created by something like twitter? If it took 100,000 employees to run twitter as it exists today, would that make it more valuable to the economy? Of course not.
If it only took one guy to design, build, ship, and sell the iPhone, Apple would be far more valuable to the economy, not less. You'd free up all those talented people to go out and create even more value on their own.
Also, he seems to equate increased $$ with increased living standards. By and large that's been historically true, but it's a bit misleading. Even if twitter made 0 money and created 0 jobs, it would still improve living standards. Certainly not in the way indoor plumbing or electricity raised living standards, but it still makes people's lives easier, which, by definition, improves living standards.