Why Peter Theil is Half-Wrong

It would be more interesting to read why Peter Theil is All Wrong. He had absolutely no data to back his assertion that, except for computing, technological progress has stalled. He referred to data in his National Review piece, "The End of the Future", but, gosh, he didn't have any and didn't have any idea how to get it. So he decided to use economic growth as a surrogate for technological progress, based on the theory that progress implies growth.

There is no proof that progress in technology inevitably results in economic growth. That's a belief system arising from the post-war glory years that were the last half of the 20th century, when advertising campaigns by the likes of GE and Dow Chemical tried to convince us that our well-being was due to their efforts. "Better living through chemistry." "Progress is our most important product."

It might as easily be that economic growth results in technological progress. The more profitable companies are more they have to spend on research that isn't aimed at next year's bottom line. It might even be that both growth and progress are caused by wars, and the problem is we haven't had a big one lately.

In order to buy Theil's inverted implication, we first have to buy the premise. Progress implies growth. Where's the evidence for that? What we saw was a correlation, not a causal relationship.

Even if it were true, progress in one place, say China, doesn't necessarily mean growth in another, say the US. There is a reason why virtually all consumer electronic products are made in China, and it isn't cheap labor, but superior technology. It's not that we don't want to make the stuff here. We no longer can.

Likewise, progress in robotics does not imply economic growth in places where robots displace workers, especially if those places don't make the robots (and probably even if they do). Western economies are built on consumerism. To the extent that technologies reinforce consumerism, by giving us jobs making things to buy, they grow the economy. When technology moves to another place or "increases productivity" by building the same amount with fewer workers, we lose our jobs and can't buy anything.

Rather than thumping technological progress - there's been plenty of it - Theil might have taken a peek at the balance of trade.