He is right to call for disruption—but wrong about what counts as real change
Rejoinder to NYT Hard Fork’s Interview “Interesting Times: A Mind-Bending Conversation with Peter Thiel“
Peter Thiel’s claim that Western society has endured 50 years of “technological stagnation” has become a staple of Silicon Valley contrarianism—and it featured prominently in his recent Hard Fork interview with Ross Douthat on July 11, 2025. While Thiel raises valid concerns about institutional sclerosis, his argument rests on a narrow and romanticized view of progress. He overlooks the dialectical nature of innovation: Incremental, re-combinatory advances often accumulate into transformative shifts. The internet and AI are not trivial “bits” innovations; they are systemic forces reshaping economies, governance, and social life. Historically, periods of perceived stasis—such as the Gilded Age—have been preludes to disruptive institutional and technological renewal. Our challenge is less a depletion of ideas than a misalignment of institutions and incentives. The future may look different from mid-century science fiction, but it is not static. It is already unfolding—if we create the frameworks to harness it.
Beyond Stagnation: Rethinking Peter Thiel’s Innovation Thesis
Peter Thiel has never shied away from unsettling orthodoxies. Among his most provocative claims is the idea that the West has experienced a profound “technological stagnation” over the past half-century. This is more than a critique of GDP growth; it is a cultural diagnosis: The future we were promised—the flying cars, the interplanetary voyages, the limitless energy—has failed to materialize. In his now-famous quip, “We wanted flying cars, instead we got 140 characters,” Thiel casts our digital triumphs as a pale substitute for the grand ambitions of the mid-20th century.
Thiel’s argument, echoed by economists like Robert Gordon and Tyler Cowen, draws a sharp distinction between progress in “bits”—software, data, networks—and stagnation in “atoms”—energy, transportation, manufacturing, medicine. He points to the retirement of the Concorde as emblematic: Commercial air travel is no faster than it was in the 1960s. Advances in energy remain incremental, not revolutionary; the promise of nuclear power faded. Life expectancy gains have slowed. To Thiel, the story of the past fifty years is one of narrowing horizons: Scientific potential untapped, ambition dulled by bureaucracy and risk-aversion.
There is some truth here. Institutional sclerosis—manifest in regulatory inertia, litigation risk, and the bureaucratization of science—has constrained certain kinds of innovation. The U.S. struggles to build high-speed rail, let alone new nuclear plants. Major infrastructure projects often languish in procedural purgatory. If the moonshot projects of the 1960s were enabled by bold public investment and a culture that tolerated risk, today’s environment appears more cautious, less willing to embrace uncertainty.
But Thiel’s thesis is also deeply flawed. It rests on a reductive view of innovation, an overly selective reading of history, and a failure to grasp the feedback processes that drive transformative change.
The Dialectic of Progress: From Quantity to Quality
At the core of Thiel’s narrative lies a romantic expectation that innovation should appear as discrete, dramatic breakthroughs—visible, monumental, and physical. Yet history and philosophy suggest otherwise. As Hegelian dialectics reminds us, quantity and quality are interdependent: Cumulative incremental changes often precipitate qualitative leaps. What appears slow and marginal in the short term can, over time, cross a threshold and reorder entire systems.
Consider the internet. Dismissed early on as a tool for academics, it has since restructured global commerce, governance, and social life. Its impact may lack the physical grandeur of a new power plant, yet its systemic consequences—platform economies, real-time communication, algorithmic governance—are profound. Artificial intelligence illustrates the same principle: Decades of incremental progress in hardware, algorithms, and data infrastructure have converged into systems capable of creative and cognitive tasks once considered uniquely human. These are not trivial changes; they represent epochal shifts in the architecture of modern life.
Thiel’s binary—bits versus atoms—obscures this reality. Digital technologies are not an isolated domain of progress; they are general-purpose technologies that reshape physical industries, from logistics and energy optimization to precision agriculture and drug discovery. To frame their influence as somehow “less real” is to misread the nature of technological transformation itself.
History Misunderstood: The Myth of Civilizational Fatigue
Thiel invokes historical analogies—Rome’s decline, Ming China’s retreat from maritime exploration—to warn of civilizational stagnation. Yet these comparisons collapse under scrutiny. The Western Roman Empire did not fall because it ran out of inventiveness; it collapsed under fiscal exhaustion, demographic stress, pandemics, and geopolitical fragmentation. Similarly, Ming China’s turn inward reflected administrative centralization and political orthodoxy, not a lack of technical imagination. Stagnation, where it has occurred, is rarely the simple result of cultural timidity. It is almost always structural—rooted in resource constraints, institutional rigidity, or systemic shocks.
More importantly, even periods labeled as “stagnant” often served as incubators for later transformation. Apparent pauses in innovation can conceal the slow accretion of capacities, ideas, and practices that later erupt in disruptive change. Which brings us to an overlooked truth in Thiel’s argument: disruption matters—but not always in the way he thinks.
The Necessity of Disruption—Institutional, Not Just Technological
Here, Thiel might be accidentally right: Renewal often follows rupture. The so-called Gilded Age (1870s–1900s) was a paradoxical period—explosive industrial growth paired with rising inequality and social unrest. Its contradictions ultimately set the stage for Franklin D. Roosevelt’s New Deal, a sweeping reconfiguration of the American political economy. That institutional overhaul created conditions for broad-based prosperity, middle-class formation, and decades of technological dynamism—from highways to household electrification to medical advances.
What appears as stagnation, in other words, may be a prelude to systemic reinvention. The 1970s were not the end of progress but the beginning of a structural adjustment to the contradictions of postwar capitalism: Inflation, energy shocks, and globalization. Today’s world, wracked by climate imperatives, demographic shifts, and digital disruption, may likewise be approaching a tipping point. If history is any guide, the next wave of innovation will be inseparable from institutional and social reordering, not simply from bigger R&D budgets or a handful of “moonshots.”
Innovation as Recombinant, Not Ex Nihilo
Thiel also misses a core insight from modern innovation theory: most breakthroughs are recombinations of existing components. Joseph Schumpeter’s notion of “creative destruction” and Brian Arthur’s work on technology evolution both underscore that novelty rarely emerges fully formed. The airplane synthesized engines, aerodynamics, and lightweight materials; the smartphone combined telephony, microprocessors, GPS, and the internet. The same holds for AI: No single eureka moment, but decades of recombination reaching critical mass.
To privilege spectacular, stand-alone inventions as the only metric of progress is to misunderstand how transformation actually occurs. Our era’s innovations may lack the theatrical visibility of Apollo 11, but their structural impact—on labor, governance, and human identity—could prove no less revolutionary.
So, Are We Stagnating?
If stagnation exists, it is less technological than institutional: A sclerosis of governance, an aversion to risk, a thickening of bureaucratic arteries. These are real constraints. But they do not signal a depletion of innovative potential; rather, they point to a misalignment between our capabilities and the frameworks through which we deploy them. Thiel’s lament for flying cars is less instructive than the question it implies: How do we build systems—legal, economic, cultural—that allow incremental advances to scale into systemic gains?
The task ahead is not to romanticize an imagined golden age of industrial grandeur, nor to double down on techno-fetishism. It is to reimagine the social contract that governs innovation—to create conditions where disruption, when it comes, channels toward inclusive progress rather than deepened inequity. That means rethinking regulatory regimes, rekindling public investment in mission-oriented projects, and cultivating a culture that prizes exploration without discarding social responsibility.
Thiel’s provocation is valuable because it forces us to confront a tension at the heart of modernity: The belief in perpetual progress colliding with the lived experience of systemic drag. But his story is incomplete. What he calls stagnation may in fact be transition—a dialectical moment where incremental change accumulates toward a qualitative break, one likely to be as much institutional as technological. The future may not look like the jetpack fantasies of the 1960s. It may look stranger, and—if we get the frameworks right—richer than we dare imagine.
While the Hard Fork episode was engaging in tone, its execution was subpar for those seeking depth. Douthat’s frequent interruptions and conversational detours left Thiel’s key claims only partially developed. Rather than systematically unpacking the stagnation thesis, the discussion oscillated between politics, theology, and cultural anecdotes without synthesis. This rejoinder attempts to address what the interview left fragmented: A coherent examination of whether we are truly stagnant—or in the midst of a structural transformation.