Max Taylor/The Atlantic

Peter Thiel seems to enjoy confounding expectations. So perhaps it shouldn't have been surprising to hear the multimillionaire libertarian technologist extol the virtues of making little money and massive state projects.

In Thiel's new book, Zero to One—heavily praised by many reviewers, including my colleague Derek Thompson—he argues that the rate of innovation has gone down. Challenged on that view by David Frum, during an interview Wednesday at the Washington Ideas Forum, Thiel clarified what he means: Sure, there are plenty of shiny new objects coming out of Silicon Valley. But what about big leaps?

"It's a narrow kind of progress, reflected in stagnation in our society," Thiel said. "Median wages have not gone up that much in last 40 years." While people in the tech industry are "always pumping their companies, their inventions, their research," those are often incremental breakthroughs, the sort of thing that makes a lot of money very briefly but is obsolete within a year or two. As for what major shift these devices effect ... well, there isn't much.

The people who've really made massive innovations are those that make more splash than money, Thiel countered. "The Wright brothers didn't make money. Tesla made no money," he said. The steam engine drove the Industrial Revolution, but "even in 1850, most of wealth in Britain was still held by landed aristocracy."

Of course, for every Tesla there's an Edison who struck it rich. But Thiel's underlying point—that the ideas that make the most money in the short term are often not those that make much lasting difference—is an interesting provocation to a society that is obsessed with and rather proud of its innovation and disruption.

Frum countered, though, that many of the big projects Thiel praises are the massive engineering projects popular in the age of great state power. If that era was personified by Robert Moses, surely the libertarian Thiel would associate more with Jane Jacobs, the avatar of local control?

Not quite: "I’m partial to Robert Moses," Thiel admitted, but he said what he admires about these projects is the complex coordination they entail, a coordination that was once the province of the state. Today, though, he believes that not only does the state not necessarily have a monopoly on this coordination but it may have lost the ability altogether. Thiel unfavorably compared the execution of HealthCare.gov with the moon landing or the Manhattan Project, alluding to the famous correspondence that kicked off the atomic bomb.

"Today an letter from Einstein would get lost in the White House mail room," he joked—or perhaps he wasn't joking at all.