On Tuesday's TV show, Glenn took billionaire tech investor Peter Thiel to the backlots of the Mercury Studios for an interview on the green couch. The conversation covered a myriad of topics, but one of the most interesting was their discussion on the counter-culture and the values of Silicon Valley.

Below is a transcript of this segment:

Glenn: Define politics for me, because I’m not in it for politics. I hate politics, and yet I’m known as a political guy. I hate it. I hate all of the people generally speaking in politics. There’s a handful of people that I respect. I’m only interested in politics…not even…I’m only involved in politics to some degree because we have to be. You know what I mean?

But I do believe what I believe. I do have, I guess, a set of political beliefs, but they’re more based in the Constitution and Declaration of Independence than anything a political party says. So my values and my principles are what drive me. The people in Silicon Valley, what are the values and principles? Because right now what’s being taught in school, what’s coming out, Jefferson’s not popular. Marx is popular.

Peter: Right. Well, I would say they are generally politically quite naïve, and they don’t think about politics very much in one way or the other, not as much as you do or even as much, I’m probably unusual in that I probably think about it more than most people do. They generally don’t like it too much. Their instincts are libertarian, but the politics end up being liberal because that’s what’s cool. You know, for us, politics is about ideas, it’s about changing things, but there’s also this other mode where politics is about fashion, and that’s always the risk you have in Silicon Valley. That’s why Hollywood is so liberal. It’s not that the people have thought things through in Hollywood; it’s just cool.

Glenn: So how does Karl Marx become cool and Jefferson become uncool? How did that happen?

Peter: You know, I don’t quite know. I’m more interested in the future oriented question, which is how do we make Karl Marx uncool and how do we make Jefferson cool?

Glenn: How do we do that?

Peter: Don’t quite know about that either, but that’s the question we should be asking. That’s the question you want to fundamentally solve. You know, why is wearing a Che Guevera T-shirt, why is that cool in a way in which wearing a Jefferson—

Glenn: The only answer I can think of is because of a counterculture that whatever the establishment says is cool is not, and so the establishment has been Che is a rebel and, you know, is trouble. Jefferson, we’ve got monuments to him, and that’s the establishment. My hope has come, and this is really a dark hope, but my hope has been at some point that table is going to flip, and the establishment is going to be saying Che and socialism and communism is all neat, and at some point Jefferson, don’t read that. As soon as they say don’t read those things, you’re cool again.

Peter: Yeah, well there’s definitely some sense in which I can’t…there are no perspectives on left of center in the U.S., anywhere left of center, mildly, far left of center, that I think are anything but conventional at this point. I definitely agree that it feels that way. You know, I think, to take sort of a nonpolitical cut at this, I think one of the…you know, the countercultural in the 60s was the hippies. You know, we landed on the moon in July of 1969. Woodstock started three weeks later, and with the benefit of hindsight, that’s when progress ended, and the hippies took over the country.

Today the counterculture is to believe in science and technology. You know, our society, the dominant culture doesn’t like science. It doesn’t like technology. You just look at the science fiction movies that come out of Hollywood—Terminator, Matrix, Avatar, Elysium. I watched the Gravity movie the other day. It’s like you would never want to go into outer space. You would just want to be back on some muddy island. And so I think we’re in a world where actually believing that a better future is possible that you can have agency and work towards a better future, that is actually radically countercultural.

Glenn: Could I offer this to that, that it’s not that we’re anti-science. I think you make a good point in the movies, but I don’t think we’re necessarily anti-science or anti-technology as much as we are becoming more and more fatigued on virtual everything. We want something real. Nothing in our society is real. Our money isn’t real. Our word doesn’t matter anymore. Our communication isn’t real. Nothing is real.

Peter: Well, you know, I’ve often said there’s been this technological slowdown for the last 40 years, and there is probably some strange connection—

Glenn: Explain that, because I don’t think that makes—

Peter: Where we’ve had progress in the world of bits but not in the world of atoms, and this world of bits, we’ve had progress in computers, Internet, mobile Internet. Technology just means information technology. It’s all about bits, but the world of atoms, space travel, energy like nuclear power, biotech, new medical devices, that’s been much slower, and there’s been much less progress in those areas in the last forty years.

Glenn: Because of regulation?

Peter: One’s been regulated, the other has not, but we’ve had this sort of dualistic world where the virtual world of bits has been growing very fast, but the real world of atoms has been kind of stagnant. And I think there’s a strange counterpoint where the same thing happened with our currency, where the real value of money became separate from the virtual in August of ’71 when we went off the gold standard. And so, you know, whatever you think of the gold standard, it had the virtue of connecting the real with the virtual.

Glenn: Meaning something, right.

Peter: They were somehow connected, and so when you separate the two, then you have problems. So I think there’s nothing wrong with cyberspace or computers or anything, but it’s when it becomes separated from the real that it’s bad. And these successful companies have actually been the ones that somehow connected it. Facebook succeeded because it was about real people having a presence on the Internet. There were all these other social networking sites people had, but they were all about fictional people. One of my friends started a company in 1997, seven years before Facebook, called SocialNet. And they had all these ideas, and you could be like a cat, and I’d be a dog on the Internet, and we’d have this virtual reality, and we would just not be ourselves. That didn’t work because reality always works better than any fake version of it.