Over the last four decades, George Gilder has been one of the most influential writers on economic growth and prosperity, and technology’s key creative role in them. In 1981 Gilder’s book, Wealth and Poverty, hit all the bestseller lists and helped define the “supply-side,” low-tax economic revolution that characterized the eight years of Ronald Reagan’s presidency. Reagan himself frequently cited Wealth and Poverty.

In the late 1980s Gilder turned his attention to technology and wrote several books predicting tech’s future impact, including Microcosm (1989), Life After Television (1990), Telecosm (2000) and The Silicon Eye (2006), as well as The Scandal of Money (2009). Gilder is presently wrapping up his next book, Life After Google, which will publish later this year.

Q: Is technology progress accelerating or decelerating at the level of society?

Gilder: It’s continuing to advance, accelerating in some areas, such as cryptography and sensors, and bogging down in others, such as semiconductors and “clean energy.” We don’t even have robust distributed power. I completely agree with Peter Thiel on the essential thesis that technology progress is not inevitable. It’s the product of human creativity, which always comes as a surprise to us. If creativity didn’t come as a surprise, we wouldn’t need it, and socialism would work. Today we need creativity across the board.

Q: What do you mean by that?

Gilder: I like to tell the story that Margaret Mead told, of these mariner tribes that once made their living building streamlined canoes to go out and catch fish in huge volumes, but over time just forgot how to make the canoes. They forgot the crucial factor in their prosperity. When Mead found them, they were sitting on the beaches gazing glumly out at the ocean. They were on a path to extinction with no idea that streamlined canoes were the solution to their problem.

Q: But today learning is captured and stored forever on billions of devices. It’s not going to disappear.

Gilder: We’re still at risk from this kind of amnesia. We’ve forgotten the real entrepreneurial sources of creativity and progress. In my last book, The Scandal of Money, I talk about governments having forgotten what money is for and how it works. As a result, they’re issuing more and more of it, on the assumption that somehow money constitutes wealth, instead of realizing that money measures wealth. Now, the biggest industry in the world economy is the $5.1 trillion per day currency-trading carnival, which, in the end, doesn’t even yield stable currencies. It doesn’t even provide a measuring stick for entrepreneurial activities. So I think it’s perfectly possible for people to blind themselves to the real sources of their progress and prosperity.

Q: Well, government can inflict damage at the margins and not see the boiling frog problem. The slow growth coming out of the 2007–09 recession showed that. As Scott Grannis and others have pointed out, the U.S. today would be a $21 trillion economy instead of an $18 trillion economy, if only we’d grown at 3% per year during the recovery. But to government, the difference between 2% and 3% growth in any given year doesn’t look like a big deal.

Gilder: I think that’s all true. However, measuring progress through GDP is treacherous. GDP is a general measure with a dollar index, and I don’t think it captures the qualitative nature of technological progress. All real increase in human welfare derives from invention and creativity, which is summed up in technological progress. Now, the great recession of 2008–12 or 2013 was a really serious event, despite the so-called stock market boom that went on.

Q: So-called boom? Stocks have more than tripled since March 2009!

Gilder: Which, I think, is nullified by the drastic shrinkage in the number of public companies. Since the 1990s there has been a 50% drop in the number of public companies, and a 50% drop in the number of shares, plus a real dearth in IPOs—a 90% drop in the average annual number of IPOs. So-called Communist China now has twice as many IPOs as we do, and a smaller government measured by share of GDP.

If you consider the entrepreneurial doldrums instead of GDP, we’re not making progress at the rate we did in the 1980s and 1990s. However, the sources of revival are very much present. There’s a worldwide eruption against U.S. stagnation in the crypto-currency movement, which is a global campaign, and many of its leaders are outside the U.S. It’s providing alternatives to this daily $5.1 trillion in gambled money. It’s providing alternatives to today’s porous, insecure Internet, in which Equifax or Yahoo can lose hundreds of millions of items of personal data and the reaction of the big five Internet leviathans is merely to demand more passwords. They make our computers increasingly inaccessible to us but not to the pop-up malware minuses called “ads.” All of this is being remedied through the new crypto-currency movement that began in 2009 with Satoshi and bitcoin.

Q: In fact, blockchain is much bigger than crypto-currency.

Gilder: Absolutely. A totally insecure Internet is being addressed globally by the movement toward blockchain: distributed security, a “layer-eight” new security architecture for the Internet. A Blockstack to replace the increasingly perforated Internet stack. So, yes, I think that the foundations for an era of very rapid growth exist, which is what my book Life After Google is all about.

But for the last ten years we’ve actually been moving backward in some crucial measures. It’s not good to have most of the stock market’s advance be in five companies, which buy back their own stock and buy up the shares of their rivals. I’m talking about Google, Apple, Facebook …

Q: Amazon and Microsoft.

Gilder: Those companies are supremely great companies, but thy’re going over the hill.

Q: I want to get back to blockchain, but first finish your point about small business stagnation. The Kauffman Foundation agrees. It studies a broad base of small businesses and startups, not just the glamorous unicorns in California and Seattle, and has concluded the same thing: Business formation has really slowed down.

Gilder: And these are all bad signs. They don’t represent some fundamental change in technology. They reflect an attack on the educational system by foisting the smothering $1.5 trillion burden in loans on students to support a ridiculously overwrought leftist bureaucracy of indoctrination. They also reflect an expansion in the administrative state through massive increases in regulations, rules that really favor big companies. And not because of their alignment with technological opportunities, but because of their abilities to lobby, lawyer, litigate and find paths through the maze of rules.

Q: Let’s get back to blockchain. What have you discovered so far?

Gilder: The blockchain field is an amazing efflorescence of creativity, entirely comparable to the dot-com eruption of the 1990s. It will similarly have a lot of losers, seminal losers like Netscape, as well as obscure, prospective giants like Amazon and Google.

Q: Are you ready to name the winners and losers?

Gilder: I will be in about two months.

Q: One of your lifelong theories, which reaches back to your 1980s bestsellers Wealth and Poverty and The Spirit of Enterprise, is the role of the human spirit and human agency, something economists and governments don’t see or don’t want to acknowledge.

Gilder: It’s the greatest of all forces. Think about what’s going on in the U.S. today, particularly in our university system. As Tyler Cowen describes in his book The Complacent Class, we’ve adopted a kind of ideology of cautionary principles and stationary states. He really puts his finger on it. We’re not living in an age of boldness and abundance, but in an age of retrenchment and shrinking horizons and careful rearrangements of existing resources. A lot of it is epitomized by this whole idea that unless human beings stop moving, the climate’s going to collapse on us.

The climate-change paralysis has been very destructive, not only to our national economy but particularly to Silicon Valley. Every time I find a company that’s doing everything right, I discover a peculiar feature of its technology that’s designed chiefly to stop it from emitting carbon dioxide. And that feature twists the technology into a pretzel, making it less useful and less promising. Take Google. It’s making an elaborate effort to render all of its massive data centers around the world “carbon-neutral.” They’re all linked up to various druidical Sunhenges of solar panels or quixotic kites or windmills. I mean, that’s some archaic way to produce energy!

I think we’re really in the middle of a loss of confidence, a loss of courage that is expressed and perpetrated by a massive expansion in regulations. This began in the Bush era, was vastly expanded during the Obama years, but has now been marginally retrenched. My hope is that the Trump retrenchment signals a truly new approach to the world and the human predicament.

Q: Well, I think that’s what Peter Thiel has been talking about in numerous interviews. He was born in 1967, so some of his earliest memories are of the Apollo moon landings, when the space program was going full-throttle. There are a handful of people, who, like Thiel and Elon Musk, were influenced by the big physical projects NASA’s space program represented. Against those, social media looks trivial.

Gilder: Yes, I think Elon Musk is a tremendous entrepreneur, yet he’s a quite retarded thinker.

Q: Do explain!

Gilder: I call him the Elmer Gantry of Silicon Valley. He’s a wonderful entrepreneur, but when he starts pretending that he’s an ethical visionary, that human life is just a simulation in a smarter species’ game…. I mean, those guys make some calculation based on false assumptions about life in outer space. Then they assume—because, as we all know, technology’s “inevitable”—that technology must produce vastly more sophisticated simulation systems in other universes that actually encompass our own universe. Thus, they’ve just reduced us to entities in an alien algorithm.

Q: That’s a pretty demoralizing view of life.

Gilder: It’s really nuts. It’s clinically crazy. But I hear lots of otherwise brilliant people talk in these terms. I think it’s a Silicon Valley dementia that’s going on, which probably results from a religious collapse. I think G.K. Chesterton put it very well: When people stop believing in God, they don’t believe in nothing; they start believing in anything. Such as, we’re part of a computer simulation, or that there are infinite numbers of multiple parallel universes, or that a planet, which has endured orders of magnitude greater amounts of carbon dioxide through eons of geological history (producing photosynthesis in the process), will suddenly founder on an increase of .003 to .004 of a percent. You know, those bizarre, speculative fantasies that you hear very solemn, professorial figures espouse. It’s an amazing phenomenon of our time.

Silicon Valley should stop trying to obsolete human beings and figure out how to make them more productive again.

Q: Today’s Silicon Valley, I think, is a throwback to the Progressive era of the early 20^th century. The idea that grass-roots capitalism is dead, and that the smartest people should run society along scientific management principles. Life organized as a Frederick Taylor factory.

Gilder: I think you’re right. A lot of people have an incredible longing to reduce human intelligence to some measurable crystallization that can be grasped, calculated, projected and mechanized. I think this is a different dimension of the kind of Silicon Valley delusion that I describe in my upcoming book.

Q: Having lived my adult life in Silicon Valley, I think today’s dirty secret is a kind of nerd fascism, wherein it’s thought that only the highest IQs have legitimacy.

Gilder: I’ve argued with Charles Murray on this point. Murray is a wonderful figure and a terrific libertarian, but he does have a kind of fetish for IQ tests. He really believes they measure something definitive, discrete and reliable. But I’m as skeptical of that idea as you are.

Q: The highest IQ people have a tendency to want to reduce everything to algorithms and predictability, but in doing so, they cut out the surprise. Yet all great discovery and innovation, by definition, comes as a surprise.

Gilder: Yes, they’re destroying information rather than expanding it. If something’s determinist, it can’t generate information. As Claude Shannon showed, information is the unexpected bits, the bits that can’t be directly calculated from the database.

Q: If the U.S. is shooting itself in the foot with bad regulatory and monetary policy, which countries are getting it right?

Gilder: Israel—in many important fields. It’s the leader in cryptography, which is the basis of an emerging distributed computer architecture. And, although China has reactionary politics, it is becoming incredibly technologically creative, producing all sorts of interesting new technologies and projects. This is why I think capitalism is probably more important than democracy, at least in the short run. A democratic republic is critical to maintaining a ground state that doesn’t get completely manipulated by one government or another. But capitalism really provides the avenues of freedom and creativity that can carry the human race forward, even in the face of obtuse tyrannies among the politicians.

Q: Since your next book is titled Life After Google, are we to assume that Google and the current big tech leaders are at their peak?

Gilder: Yes. The Google paradigm of massive data centers and artificial intelligence determinism will be transcended in the next era. We’ll leave behind the big tech view that human progress springs from some inexorable Darwinian model that allows the big winners to take all, and then project themselves into outer space. Determinist materialism is contrary to the deepest insights of 20th-century mathematics and philosophy that sprang from Kurt Gödel and his incompleteness principle, as well as John von Neumann’s oracular computer model and Alan Turing’s further findings of incomputability. All of these technologies themselves refute the very determinism that Silicon Valley seems to return to in its concepts of what intelligence is.

Q: Why would a smart company like Google get it wrong?

Gilder: The advances in machine learning that Google trumpets and preens about really just advance in the speed of processing. The Google guys woke up with a Moore’s Law bonanza from the chip industry and imagined that they had invented it. When their Go-playing computer can play more Go games in a minute than the whole human race has played through all of history, that’s not a great advance in intelligence. It’s the same intelligence just accelerated to terahertz speeds. Yet this creates an illusion of super-intelligence, that machine learning can somehow gain consciousness and usurp humans.

Q: Again, the nerd IQ arrogance that artificial life will trump real life.

Gilder:  In my book, there’s a chapter on the conference in Asilomar, that was financed by Elon Musk, and that I think was a kind of intellectual nervous breakdown. All the Google people were there to tell the world that the biggest threat to the survival of human beings was artificial intelligence, which they themselves were creating. What a great bonfire of vanities!

Q: To continue your Tom Wolfe allusion, where are you finding the people with the right stuff today?

Gilder: Well, it was Alexandra Wolfe’s Valley of the Gods that focused on Peter Thiel and the Thiel Fellowship Program, which gives $100,000 in grants to kids who leave college to start an innovative new company. In Life After Google, I tell the story of Vitalik Buterin, who was born in Russia and moved to Canada and who was initially turned down for a Thiel Fellowship. Buterin was almost at the Cinderella age of 21, when they broke down and gave him his $100K. He created Ethereum, an amazing new computer platform based on a new blockchain that he invented and programmed with a new computer language called “Solidity” and financed with a new currency called “ether” that he generated based on a new unit of computational value called “gas.”

Buterin has violated all the principles of Silicon Valley Venture Capital—that you can only change one thing at a time. You can launch a new internal combustion engine in your carriage, as long as you’re careful not to remove the horse. If a company plans to make a software innovation coupled to a hardware innovation, it’s a very doubtful prospect. So Buterin’s quadrilateral achievement is a stunner. He’s one of the great figures in today’s world economy, leading a global movement of some 2,000 initial coin offerings on Ethereum, which has raised close to $5 billion for an array of new inventions, new distributed systems and new security architectures.

Q: Who else?

Gilder: Another Thiel Fellow I’ve encountered is Austin Russell, founder of Luminar. Forbes just named him the chief manufacturing guy in its 30 Under 30 list. As a kid, Russell appraised all the current LiDAR systems for self-driving cars that were demoed during the cross-country DARPA test, on which the current self-driving car industry is founded. Google hired the key winners of that test, and they are the key figures in self-driving technology across the board, from Waymo to Aurora.

But Russell saw that all this technology couldn’t possibly create a self-driving car that could survive amidst the myriad conditions a car actually encounters on the world’s roads, which are full of surprises. Such things can’t be anticipated merely by statistical machine-learning models, because these are, fundamentally, high-entropy events. A car has to be able to see and respond to combinatorial events that can’t be anticipated. So you need to have LiDAR systems, vision systems, for the cars that are 50 times better than the ones that are currently being tried. After receiving the Thiel Fellowship, as well as money from the Thiel-backed 1517 Fund, Russell took Luminar into stealth mode. Starting from scratch, he created a 50-fold better system, which is based on new frequencies, innovative hybrid-chip technology and rastering lasers. It’s now been adopted by Toyota and by three other industry-leading auto companies. This is an amazing feat for Luminar, led by a young man Peter Thiel lured out of college.

Q: Others?

Gilder: Stephen Balaban at Lambda Labs. He based his work on the knowledge that the real source of machine learning is fast parallel computation. Balaban took game machines and made mobile data centers from them that function as well as Google centers do, but at a small fraction of the cost. He’s making tremendous advances and has all sorts of high-level customers. There’s a whole new Internet and security architecture emerging.

Q: A lot of the security stuff is coming out of Israel, isn’t it?

Gilder: Yes. Buterin was a bitcoin exponent and a cofounder of Bitcoin Magazine. He went to Israel and encountered experiments that went beyond bitcoin in so-called “colored coins,” or tokens and “mastercoins,” that had smart-contract functions. He recognized that Israel was leading the world in cryptography. And that was really the source of Ethereum. It’s exciting to see all the advances that are coming from outside the normal channels. The venture capitalists are racing to catch up with these random guys from places like Guatemala and India, Estonia and Canada.

This phenomenon isn’t so different from the first group of outliers we saw at Intel in the 1960s. That’s when Silicon Valley emerged from the semiconductor industry, which began with Intel Corp., National Semiconductor and a few others in the Valley. Those guys came from all around the world and gathered in Silicon Valley. Gordon Moore was from San Francisco, but Bob Noyce was from Iowa! Most of the profits in the early years came from Dov Frohman, who was from Israel, and Andy Grove, who was from Hungary, and Jean Hoerni, who was from Switzerland. So I see a kind of rebirth of the Silicon Valley dream. It defies the current Silicon Valley re-centralization of leviathan companies that chiefly buy up their own rivals and buy up their own stocks with zero-interest money pumped out by central banks.

Q: Nvidia’s Jensen Huang is a classic outlier. Although Nvidia’s been around for two decades, few saw its potential at the center of AI and machine learning.

Gilder: Nvidia’s an example I use in my book. Nvidia is what makes machine learning possible, not the incremental improvements in machine-learning algorithms that have been developed by the “software-eats-everything” crowd. Nvidia exploits the natural parallelism of image processing. Images are millions of pixels all coming in parallel; graphics processors compute those millions of pixels and, thus, are intrinsically a parallel-processing technology. They were developed for the gaming industry, and now they’re taking over the world.

That’s a hardware breakthrough, not a software breakthrough. And Nvidia led it.

Q: Nvidia is now big itself. It won’t be sneaking up on anyone. Its stock doubled in 2017.

Gilder: Yes, and I fear that Nvidia is now trying to control the whole process. People are buying game modules and putting them together to form little data centers that can do machine learning more efficiently than big data centers, and the Nvidia marketers don’t like it. They say that everyone should buy the company’s hifalutin machine-learning chips, not use their G-force gaming processors. They want you to pay top dollar if you’re going to do parallel processing using Nvidia to do machine learning. This is a classic mistake, which I hope Jensen and Bill Dally and all the other brilliant people at Nvidia reverse in a hurry.

Q: Well, Nvidia’s current stance will just encourage knockoff competition; that’s inevitable.

Gilder: Not only knockoff competition, it’ll encourage others to leap past. There’s a Thiel Fellow named Thomas Sohmers, who left school as a 16-year-old and started Rex Computing. He’s a chip genius and wants to completely change chip architecture. He gave a two-hour speech at Stanford that you can watch on YouTube. He, Austin Russell and Stephen Balaban, were all roommates in a house in Atherton. They’re spreading out now, but they still support one another’s projects through the 1517 Fund.

Q: Does this give you hope for Silicon Valley’s future?

Gilder: It’s fascinating that, despite all of what I regard as delusional ideas, Silicon Valley remains the spearhead of world technology. Balaban is head of Lambda Labs, which is creating these new mobile data centers. He was one of the contributors to facial recognition and is an amazingly inventive guy. He learned Mandarin and then went to Beijing to try to create a Y Combinator technology incubator there. But he was pretty much confounded by the environment in China and came back to Silicon Valley with a new admiration for the amazing spirit of creativity and openness that still prevails here.

Q: Despite the increasing concentration of the Internet in a few giant siloes run by a few big companies that buy up their competitors and buy up their own shares?

Gilder: That won’t last. I’ll refer you to Gordon Bell’s law. Gordon Bell was the technical chief of Digital Equipment and is now at Microsoft. He says that every ten years the rate of progress predicted by Moore’s Law produces a 100-fold rise in computer cost-effectiveness, which then requires a completely new computer architecture. Well, I first started writing about cloud computing in 2006. As a matter of fact, I wrote the first big article on cloud computing in Wired rather than in Forbes.

Q: We’re now beyond the ten-year point of Bell’s Law and cloud computing.

Gilder: And a new architecture is arising. And this new architecture solves the Internet’s increasing concentration problem, as well as remedies the security vulnerability that comes from that concentration problem. And with blockchain, it may even prevent the repeated monetary crises that come from the daily $5.1 trillion in currency trading. A new architecture is emerging around the world, but it’s still largely centered in the Bay area, where Hewlett-Packard started the whole ball rolling from its garage in the 1930s.

So Bell’s Law says we’re ready for a new architecture, and, lo and behold, here it is. It’s based on cryptography, the same cryptography that Claude Shannon and Alan Turing developed during the Second World War. And that cryptography is now generating a new computer architecture based on blockchains, mathematical hashes and an array of associated inventions.

It’s the Great Unbundling. We’ll dissolve all the GAFA fab-five conglomerates. We’ll disperse the clouds of concentrated computing and commerce. We’re moving beyond digital and silicon to analog and carbon nanotubes and hybrid chips with sensors and 5G antennas everywhere. Even money is being disaggregated and reinvented. The clouds are dispersing into the skies—sky computing rendered on your laptop and smartphone, spread across blockchains, transparent and transformative.