Peter Thiel's ideas could revolutionize what it means to be a conservative

At the Republican convention in Cleveland, billionaire investor and entrepreneur Peter Thiel introduced two bold new ideas to his conservative audience. If these make their way into the party's canon, they could usher in a revolution about what it means to be a conservative.

Thiel's first bombshell was to proudly acknowledge his gay identity, and to urge Republicans to shift their focus away from issues of sexuality and gender, scoffing at the debate over "who gets to use which bathroom." "Fake culture wars," Thiel declared, "only distract us from our economic decline."

That certainly seems like good advice. But even more importantly, Thiel talked about the importance of public goods. He praised the big government projects of the mid-20th century, and lamented the fact that these seem to be a thing of the past:

"It's hard to remember this, but our government was once high tech, too. When I moved to Cleveland, defense research was laying the foundations for the internet. The Apollo program was just about to put a man on the moon…

"But today our government is broken…Our newest fighter jets can't even fly in the rain…Much of the time [government software] doesn't even work at all. That is a staggering decline for the country that completed the Manhattan project…Instead of going to Mars, we have invaded the Middle East…It's time to end the era of stupid wars and rebuild our country."

Twenty years after President Bill Clinton declared that "the era of big government is over," a Republican convention speaker is lamenting its demise. Thiel yearns for the days when the U.S. government was able to accomplish big projects. Nor is this the only time he has made this case. In 2012, he praised major infrastructure projects. And in 2011 he advocated more government funding for science.

This is a view that's dramatically at odds with traditional conservative thinking. Instead of government always being the enemy of economic growth and technological progress, Thiel realizes that sometimes government is a crucial ally of the private sector. For decades, supply-side economics, and its recipe of tax and spending cuts, has been conservative and libertarian dogma. But in his 2011 interview with the American Interest, Thiel speculated that this approach, although valuable in the 1980s, might not be appropriate for today's problems:

"The Reagan history of the 1980s needs to be rethought thoroughly…The libertarian, small-government view is not a timeless truth but was a contingent response to…the late 1960s and early 1970s."

Many people have scratched their heads about why Thiel has declared his support for Donald Trump, and why he even went to the GOP convention. The speech suggests that he simply saw an opportunity to steer the conservative ideology away from the stale, worn-out nostrums of the past four decades, and replace them with a new perspective. A Peter Thiel conservatism would see government's role as being much more than simply getting out of the way of the private sector -- he would have it build infrastructure, fund research and promote the national economy.

It's a perspective that a few on the left and in the political center are also toying with. In the past, I've called it "New Industrialism." Of course, Thiel's version would be different from that of the people at the Roosevelt Institute. But it might invigorate a conservative movement still largely stuck in the 1980s.

What would a Peter Thiel conservatism look like in practice? I don't want to put words in the man's mouth, but one idea would be to shift government spending away from entitlements -- especially health care -- and toward spending on infrastructure and research. According to the National Priorities Project, total federal government spending on health care was about $1.1 trillion in 2015 -- about 28 percent of the budget, or 6 percent of gross domestic product. Meanwhile, total infrastructure spending, including federal, state and local, is less than half of that. And federal research spending is less than 1 percent of GDP. A Peter Thiel conservatism might mean spending less on redistribution, and more on the things that complement the private sector and drive broader economic prosperity.

It might also mean trying to get more bang for our government buck. U.S. infrastructure costs, for example, are much higher than those of other nations, thanks to high land and labor costs and an uncompetitive contract allocation process. As Thiel points out, much of the federal government also uses outdated technology. Fixing these problems means focusing not on shrinking the government, but on relentlessly improving the efficiency of its operations.

Naturally, progressives will fight many of these initiatives. But a debate over redistribution versus growth is a much healthier debate than redistribution versus dysfunction.

So I hope that conservatives and Republicans will listen to Thiel and take his message to heart. It's time to leave Reaganomics and culture wars to the history books, and define a new conservative policy program aimed at boosting growth.

Previously:
• 01/11/16 Embolden academia, end tenure
• 12/09/15 OOPS! Tuition-free college isn't all it's cracked up to be
• 11/12/15 Driverless cars beyond the hype
• 11/04/15 China's slump might be much worse than we thought
• 10/22/15 Get used to it: Low interest rates are here to stay
• 10/21/15 Who needs oil when you have a skiiled citizenry?
• 09/01/15 I erred. A national $15 minimum wage is a mistake to avoid. Here's why
• 01/28/15 Societal freedom brings riches: What too many miss

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Noah Smith is an assistant professor of finance at Stony Brook University.