Peter Thiel: The U.S. Government Is "Socialism Without The Five-Year Plan"

Entrepreneur and investor Peter Thiel spoke to a group of student entrepreneurs at Stanford this evening, and at the end one student asked him what he thought the U.S. government should be doing to spur innovation.

His response: "The U.S. government is socialism without the five-year plan. As a result, we have much worse outcomes than the Soviet Union in the 1950s."

His words seemed calculated to shock, but his point was that the government is "huge" but ineffective because it acts randomly.

He went on to say that it's considered folly to think that humans can predict and influence the future. Both the right and the left believe that, although may have different opinions about who's in control -- God, free markets, psychology, fashion, or the environment, for instance.

He thinks that's wrong -- people can and should try to predict the future.

The student followed up by asking him to summarize his desired five-year plan in a few seconds.

"Make the government much more technologically efficient," he said. That's the "low-hanging fruit."

The moment was ironic because Thiel's entire investment philosophy is based on making bets on big, world-changing technologies like space travel and electric cars -- the kinds of things that governments used to do. But here, he seemed to be endorsing MORE government interference.

Unless this was all a backhanded way of saying that the government should be much smaller -- in other words, get rid of the "socialism" part altogether.

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