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“The way you’d expect things to be working in a healthily globalized world is that capital would flow from the slow-growing to the fast-growing economies — from the developed to the developing world.
“This was the way the trade patterns looked in 1900, which was a relatively open free trade world where the UK had a current account surplus of 4% of GDP and the capital got exported to invest in Russian railroads or Argentina or all sorts of other countries that had higher growth rates and promised a higher return on capital. That’s the way globalization is supposed to look.
“Today, it’s quite the opposite, where the capital is flowing uphill from China to the US and it’s sort of the other side of these enormous current account and trade deficits the United States has. And so we’re sort of exporting $100b a year to China and importing and importing $450b a year from China, and then China is an economy that’s growing let’s say 6.5% a year and is investing in an economy that maybe is growing 3% a year when the flow should be the other way around.”
Video interview of Thiel at Economic Club of New York, March 2018
