Democracy is the Source of Stagnation

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In the run-up to the 2024 election, we’re doing things a little differently here at Valley Letter. For the six weeks leading up to the election, we’ll be diving into the political scene in Silicon Valley, exploring everything from alternative systems of government to specific policy pitches from the likes of Peter Thiel, Sam Altman, and Ben Horowitz.

In a disillusioning two-party system, expand your mind with these bold ideas that cross party lines and question everything we think we know about politics in America.

There's a creeping sense that something isn’t right with our world. Sure, technology is everywhere, and we’re more connected than ever, but where’s the bold progress? Where are the flying cars and revolutionary energy solutions we dreamed of? Instead, as Peter Thiel famously put it, “We wanted flying cars, instead we got 140 characters.” In that one line, he captured a lot of frustration with the state of the world today. 

We’ve traded in real-world innovations for digital distractions. Social media companies, streaming platforms, and cloud services dominate our lives, but when you step back and look at it, this isn’t the future we were promised. So what happened? Why have we stopped pushing for big, transformative changes?

Stagnation: A Return to the Norm?

Before diving into Thiel and Eric Weinstein’s takes on stagnation, it’s important to understand what it means and why it’s happening. According to Vaclav Smil, the renowned energy researcher, technological stagnation is less of a crisis and more of a return to the historical norm. Smil notes that the incredible bursts of innovation from the 19th and early 20th centuries were outliers. As he puts it, the shift from a world reliant on manual labor to one of electric light, urban infrastructure, and modern appliances represented an unprecedented acceleration in human progress—one we haven’t seen since — and might never experience again.

Smil points to the slow growth in essential sectors like agriculture, energy, and transportation as evidence that the pace of real progress has ground to a halt. And while we continue to see incremental improvements in things like healthcare and energy production, they’re nothing compared to the seismic shifts of the past. Today’s innovations? A few percentages of growth here and there. Useful, sure, but not revolutionary.

The Politics of Stagnation: Playing It Safe

So, if stagnation is real, what’s causing it? PayPal founder Peter Thiel argues that modern democracies are to blame. It’s a relatively simple idea: we’ve built systems that value safety, regulation, and maintaining the status quo over bold experimentation and innovation. In other words, we’ve become so risk-averse that we’ve trapped ourselves in a cycle of stagnation.

Thiel has been vocal about how our political and institutional frameworks stifle innovation. “No polymaths allowed,” he says, a biting critique of how our society has moved away from valuing the kind of broad, cross-disciplinary thinkers who can shake things up. Instead, we’ve focused on specialization and bureaucratic regulation to such an extent that disruptive ideas are seen as a threat, not an opportunity.

Weinstein, a mathematician and physicist as well as managing director of Thiel Capital, explores further how democracy itself has become a barrier to progress. According to him, modern democracy no longer functions as a tool for enacting the will of the people. Instead, it has become a way to maintain institutional stability. Elections don’t offer real choices; they offer two candidates who have already been filtered through a system designed to avoid disruption. “Democracy is the greatest threat to democracy,” Weinstein says. What he means is that the version of democracy we now live under isn’t about empowering citizens but about protecting the institutions that have emerged from democratic processes.

This obsession with stability and safety has made our political systems, and by extension our economies, incredibly risk-averse. Thiel is particularly critical of how this dynamic has played out in Silicon Valley, where even the tech world—supposedly the hub of innovation—has been hijacked by this mindset. Instead of working on flying cars or nuclear fusion, the brightest minds in tech are optimizing social media platforms and building tools for advertising. We’ve lost the ambition for real-world, groundbreaking progress.

Specialization: Killing the Polymath

One of the core problems both Thiel and Weinstein highlight is the rise of hyperspecialization in modern science and technology. In the past, innovation came from polymaths — people who could connect the dots between fields and drive change through bold, interdisciplinary thinking. But that’s not how things work anymore. Today, scientists and technologists are funneled into narrow, specialized areas where they’re expected to master a specific niche and stick to it.

This hyperspecialization, according to Weinstein, has created a self-policing system that suppresses dissent and discourages big-picture thinking. “There is no level you can rise to in [a] field that allows you to question the assumptions of that field,” Weinstein explains. You can win the Nobel Prize in Physics but you won’t receive tenure if you start questioning the status quo.

This narrow focus may make us better at refining existing ideas, but it stifles the kind of creative thinking necessary for big, transformative breakthroughs. Take Francis Crick for example — one of the scientists who discovered the structure of DNA and a physicist, not a biologist. With modern hyperspecialization, this kind of interdisciplinary research is deeply discouraged.

Thiel argues that our culture actively punishes polymaths—those rare individuals capable of operating across multiple fields. “No polymaths allowed,” he says, pointing out how our educational and institutional systems are designed to produce specialists, not generalists, and that an interest in multiple fields is often labeled as a lack of discipline or commitment. This narrowing of focus has profound consequences. Without polymaths, we lose the ability to tackle complex problems from multiple angles, and our capacity for innovation shrinks.

The Decline of Revolutionary Science

Nowhere is this stagnation more apparent than in the world of science. Weinstein has repeatedly expressed his frustration with the lack of significant breakthroughs and Thiel echoes this sentiment, pointing out that many of today’s scientific advancements are incremental rather than revolutionary. In his view, the background innovation that once fueled entire industries has slowed to a crawl. He contrasts this with the 1930s, a period he describes as remarkably fertile for technological and scientific progress. He has a point: during that decade, aviation took off, the plastics industry boomed, and household appliances transformed everyday life. In contrast, today's scientific landscape is far less dynamic.

Weinstein argues that the problem isn’t that we’re not learning new things — we obviously are. But the system we’ve built around science prevents us from translating that knowledge into meaningful, real-world innovations. Part of this, he suggests, is due to the politics of science itself. In an age of hyperspecialization, dissent is seen as dangerous, and revolutionary ideas are suppressed before they can challenge the status quo.

Why Democracy Struggles to Innovate

At the heart of Thiel and Weinstein’s critique is the idea that democracy, as it currently operates, has become a machine for maintaining stability, not fostering innovation. Modern democracies, they argue, prioritize safety and regulation over risk and reward. This shift has profound implications for our ability to innovate.

Weinstein points to the political process itself as a key culprit. He describes how elections are no longer about offering real choices to the public but about presenting two candidates who have been carefully vetted by the system to ensure they won’t upset the balance. This creates an environment where bold ideas and radical change are viewed as threats, not opportunities. “Democracy is the greatest threat to democracy,” Weinstein argues, suggesting that the institutions we’ve built to protect democracy have become obstacles to progress.

Thiel, meanwhile, focuses on how this risk-averse mindset has infected the tech industry. He argues that Silicon Valley, once the epicenter of bold, world-changing innovation, has become a place where volatility is mistaken for dynamism. Rather than pushing the boundaries of what’s possible, tech companies are focused on incremental improvements and optimizing existing platforms. The ambition for revolutionary change has been replaced by a desire to avoid disruption.

But there is another culprit within the democratic system, too: voters. Studies show that, for the 2024 election, the issue most on voters’ minds is inflation, followed by immigration, healthcare, and jobs. Of course, this isn’t anything new — people vote based on their immediate problems and fears, rather than their long-term goals. Folks simply don’t vote for pie-in-the-sky ideas like a cross-country maglev system or the colonization of Mars.

Even the Space Race, which in retrospect is viewed as the event that captivated America, had to be ‘sold’ to the general public. Nasa hired former newsmen to work as reporters inside the agency as ‘brand journalists’, choosing which stories to release and how to make them accessible. They also partnered with LIFE Magazine and created detailed press packets complete with accurate model spacecraft, maps, and charts for TV broadcasters.

When the White House Bans Math

Another way that modern democracies cause stagnation is through the vehicle of censorship. In a recent interview, Weinstein referenced a conversation between Marc Andreessen and the White House, where he was told: “We [the government] classified whole entire areas of physics in the nuclear era and made them state secrets … and that research vanished.”

Censorship in the name of national security occurs even in purely academic contexts. Just think of the “A-Bomb Kid” – John Aristotle Phillips, a Princeton student who designed a fission bomb and saw his thesis excluded from the university’s archives and the document itself censorsed. Weinstein summarises: “So there is a question, which is, if you're any good at physics, are you potentially committing a capital crime by advancing the field?”

Breaking the Cycle of Stagnation

So, how do we break out of this cycle of stagnation? For Thiel and Weinstein, the answer lies in rethinking the structures we’ve built. Thiel advocates for a cultural shift that embraces risk and rewards bold experimentation. He believes we need to dismantle the bureaucratic and regulatory systems that stifle innovation and create space for polymaths—those rare individuals capable of thinking across disciplines—to thrive.

Weinstein, on the other hand, focuses more on the political side. He argues that we need to rethink how democracy functions, particularly when it comes to how we elect leaders and make decisions. In his view, we need a system that encourages dissent and values innovation, rather than one that suppresses it in favor of maintaining stability.

Ultimately, both thinkers agree on one thing: the world we’ve built is unhealthy. Our political and institutional systems are designed to minimize risk, but in doing so, they’ve also minimized the potential for real, transformative change. If we want to break free from the stagnation we’re in, we need to be willing to embrace the unknown, take risks, and challenge the status quo. Otherwise, we might just be stuck in 1973, with nothing but better screens to show for it.

What do you think? Are we really stuck in the past? Let us know on X.

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