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Commencement Address

Peter Thiel, co-founder of worldwide online payments system PayPal

Thank you for the kind introduction. I’m honored to be here. Like most graduation speakers, my main qualification would seem to be that I am one of the few people who are even more clueless about what is going on in your lives than your professors and your parents. Most of you are about 21 years old, and you are about to begin working; I haven’t worked for anybody for 21 years.

But if I try to think of a reason why it makes sense for me to speak here today, I would say it’s because thinking about the future is what I do for a living, and this is a “commencement.” It’s a new beginning. As a technology investor, I invest in new beginnings; I believe in what hasn’t yet been done.

That is not what I set out to do when I began my career. When I was sitting where you are, back in 1989, I would have told you I wanted to be a lawyer. I didn’t really know what lawyers do all day, but I knew they had to go to law school – and school was familiar to me. I had been competitively tracked from middle school to high school to college. By going straight to law school, I knew I could keep on competing at the same kinds of tests I’d been taking ever since I was a kid – but I could tell everyone that I was doing it for the sake of becoming a professional adult.

I did well enough to be hired by a big New York law firm. But it turned out to be a strange place: from the outside everybody wanted to get in; and from the inside everybody wanted to get out. When I left the firm – after 7 months and 3 days – my co-workers were surprised. One of them told me that he hadn’t known it was possible to escape from Alcatraz. That might sound odd, because all you had to do to escape was walk through the front door, and not come back. But people really did find it very hard to leave, because so much of their identity was wrapped up in having won the competitions to get there.

Just as I was leaving the law firm, I interviewed for a Supreme Court clerkship. This was the top prize for a young lawyer; it was the last stage of competition. But I lost. At the time, I was devastated. About a decade later I ran into an old friend, someone who had helped me to prepare for the interview but whom I hadn’t seen in years. His first words to me were not, “Hi Peter” or “How are you doing?” but rather “Aren’t you glad you didn’t get that clerkship?” If I hadn’t lost that last competition, I never would have left the track laid down since middle school. I wouldn’t have moved to California or co-founded a startup. I wouldn’t have done anything new.

Looking back at my ambition to become a lawyer, it looks less like a plan for the future and more like an alibi for the present. It was a way to explain to anyone who would ask – to my parents, to my peers, and most of all to myself – that there was no need to worry, I was perfectly on track. But it turned out that my biggest problem was taking a track without thinking hard about where it was going.

When I co-founded a technology startup, we took the opposite approach. We consciously set out to change the direction of the world. Our goal was to replace the US dollar by creating a new digital currency. When we started, I was the only person on the team over 23 years old. When we released our product, its first users were the 24 people who worked at our company. Meanwhile there were millions of people working in the global financial industry. And when we told some of them about our plan, we noticed a clear pattern: the more experience someone had in banking, the more certain they were that our company could never work. They were wrong; people around the world now rely on PayPal to move more than $200 billion every year. We failed at our greater goal; the dollar is still dominant. But we created a successful company. We learned that doing new things is difficult, but it is possible.

At this moment in your life, you know fewer limits, fewer taboos, and fewer fears than you ever will in the future. So, do not squander your ignorance! Go out and do what your teachers and parents thought could not be done, and what they never thought of doing.

This is not to say that we should assume there is no value in teaching and tradition. Here we can take inspiration from a graduate of Hamilton College, the illustrious (and notorious) Ezra Pound, class of 1905. Pound was a poet; he was also a prophet, and he announced his mission in three words: “Make it new.” When Pound said “make it new,” he was talking about the old; he wanted to recover what was best in tradition and to render it fresh.

Here at Hamilton, in America, and in that part of the world called the West, we are all part of an unusual kind of tradition. The tradition we’ve inherited is itself about doing new things. The New Science of Francis Bacon and Isaac Newton discovered truths that had never been written down in books. Our whole continent is a New World. The Founders of this country set out to create what they called a New Order for the Ages. America is the frontier country. We are not true to our own tradition unless we seek what is new.

So how are we doing? How much is new today? It is a cliché to say we are living through a time of rapid change. But it is an open secret that the truth is closer to stagnation. Computers are getting faster, and smartphones are somewhat new. But jets are slower; trains are breaking down; houses are expensive; and incomes are flat. Today, the word “technology” means “information technology.” The so-called “tech” industry builds computers and software. But in the 1960s, “technology” meant airplanes; medicines; fertilizers; materials; rockets – technology was advancing on every front and leading to a world of underwater cities, vacations on the moon, and energy too cheap to meter.

We have all heard America described as a “developed” country, setting it apart from countries that are still “developing.” This description pretends to be neutral, but it suggests that our tradition of making new things is over. We are developed, and that’s it. For us, history is over. Everything there is to do has already been done, and now the only thing left is for others to catch up. In this view, the 1960s vision of a better future was just a mistake.

We should refuse the temptation to assume that our history is over. If we choose to believe that we are powerless to do anything that is not familiar, we will certainly be right. But we will not be able to blame nature. It will be our fault.

Familiar tracks and traditions are like clichés: they are everywhere; they may sometimes be correct; but they are often justified by nothing except constant repetition. I will end by questioning two clichés in particular.

The first comes from Shakespeare, who wrote this well-known piece of advice: “To thine own self be true.” Shakespeare wrote that, but he didn’t say it. He put it in the mouth of a character named Polonius, whom Hamlet accurately describes as a “tedious old fool” – even though Polonius was senior counselor to the king of Denmark.

Shakespeare is telling us two things. First, do not be true to yourself. How do you know you even have such a thing? Your self might be motivated by competition with others, like I was. You need to discipline your self, to cultivate it and care for it, not to follow it blindly. Second, Shakespeare is saying that you should be skeptical of advice, even from your elders. Polonius is a father speaking to his daughter, but his advice is terrible. Here Shakespeare is a faithful example of our Western tradition, which does not honor what is merely inherited.

The other cliché goes like this: “Live each day as if it were your last.” The best way to take this advice is to do exactly the opposite: live each day as if you will live forever. That means you should treat the people around you as if they too will be around for a long time.

The choices you make today matter because their consequences will grow greater and greater. That is what Einstein was getting at when he supposedly said that “compound interest is the most powerful force in the universe.” This isn’t just about money; you will get the best returns in life from investing your time to build durable relationships.

In one sense all of you are here because you were approved by the admissions office to pursue a course of study, which is now over. In another sense you are here because you found your own group of friends to sustain you along the way, and those friendships will continue. If you take care of them, they will compound in the years ahead.

Everything that you have done so far has had some kind of formal ending, some kind of graduation. You should, and I hope you will, take time today to celebrate all that you have achieved so far. But remember that today’s commencement is not the beginning of one more thing that will end. It is the beginning of forever.

And I won’t delay you any further in getting on with it. Thank you.

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