Capital’s Militant

He’s not as rich as Jeff Bezos, not a social media star like Elon Musk, nor an icon like Bill Gates. Yet he is the most interesting of the Silicon Valley tycoons, for more than any other he embodies the new breed of capitalist ideologue. Rather than using politics to make money, he uses his billions for politics, in the hope of emancipating the rich from ‘the exploitation of the capitalists by the workers’. Peter Thiel (b. 1967): German by birth, American and South African by upbringing; according to Forbes, he is worth $4.2 billion. Equipped, in contrast to his peers, with a degree in philosophy and a doctorate in law, he likes to affect the posture of a philosopher king. In his most ambitious piece of writing, The Straussian Moment (2004), he sketches a kind of Geistes Weltgeschichte in light of 9/11, citing with carefully cultivated intellectual effrontery Oswald Spengler, Carl Schmitt, Leo Strauss, Pierre Manent, Roberto Calasso, and name-checking Machiavelli, Montaigne, Hobbes, Locke, Hegel, Nietzsche and Kojève.

Ever since his university days, Thiel has been devoted to a kind of impudence of position, always embracing the most conservative one possible (he has been an admirer of Reagan since high school). According to his biographer Max Chafkin, Thiel felt that ‘mainstream liberals had accepted communists, but conservatives were unable to bring themselves to associate with members of the far-right…He really wished the right would become more like the left’. Enrolling at Stanford, the most reactionary of the top-tier universities, Thiel spent his time railing against what he saw as the institution’s endemic leftism, co-founding the Stanford Review with the blessing of conservative guru Irving Kristol and financial backing via the Olin Foundation (a key entity in funding and organizing the neoliberal counteroffensive, as documented in my forthcoming book, Masters: The Invisible War of the Powerful Against their Subjects). It campaigned against multiculturalism, political correctness and homosexuality. Its editorial board was composed exclusively of men.

On LGBT rights, the review claimed that ‘the real scourge was homophobia-phobia, that is, fear of being labelled a homophobe… anti-gay bias should be rebranded “miso-sodomy” – hatred of anal sex – to focus on “deviant sexual practices”’. According to The Economist, the article ‘even defended a fellow law student, Keith Rabois, who decided to test the limits of free speech on campus by standing outside a teacher’s residence and shouting “Faggot! Faggot! Hope you die of AIDS!”’. (Rabois would later become one of Thiel’s closest business partners.) Thiel went on to co-author The Diversity Myth: Multiculturalism and the Politics of Intolerance at Stanford (1995), published by a right-wing think tank, the Independent Institute, thanks again to a grant from the Olin Foundation. Formidable chess player that he is (a ‘Life Master’), Thiel already understood that to fight the battle of ideas effectively, adequate funding was required. He complained that ‘only one in four Stanford alumni were millionaires’ – further proof, in his eyes, of the uselessness of the traditional academic curriculum.

Following brief stints as a lawyer and derivatives trader at Credit Suisse, Thiel returned to California in 1998 and established his own investment fund, Thiel Capital Management, with $1 million raised thanks to ‘friends and family’ (in all the biographies this episode is vague; as we know, the first million is always the hardest). The turning point came in 1999, when Thiel founded PayPal with a group of friends (thanks especially to Max Levchin, a Ukrainian-born cryptographer who thought up the basic algorithm for the system of online payments). This economic venture claimed an ideological motivation: ‘The driving ideal of PayPal’, he wrote, was to create ‘a new world currency, free from all government control and dilution – the end of monetary sovereignty, as it were’. The so-called PayPal mafia was formed: a famous photo depicts the audacious youths (all men) dressed as Italian-American mobsters of the prohibition era. Six would become billionaires. It’s notable that three had a past in apartheid South Africa: Thiel, Musk and Roelof Botha, PayPal’s CFO, later partner at the investment fund Sequoia. Thiel has a difficult relationship with Musk: amongst other things, he removed him as CEO of PayPal when the latter was on his honeymoon.

Thiel made $55 million from PayPal in 2002, launching him into the world of venture capital. The list of companies he has invested is extensive (Airbnb, Asana, LinkedIn, Lyft, Spotify, Twilio, Yelp, Zynga). His fame as a far-sighted capitalist was cemented in 2004 when, as the first external investor, he gave (a mere) $500,000 to Mark Zuckerberg in exchange for 10.2% of Facebook’s shares, earning him over a billion dollars. If instead of realizing his stake, however, he had participated in Facebook’s recapitalization, he would now have around $60 billion. This hasn’t been his only mistake. In 2004 he refused to invest in Tesla and YouTube (both founded by ex-members of the PayPal mafia). In 2006, when Musk needed funds to develop Tesla’s electric cars, Thiel passed on the opportunity – a costly choice, given capitalization surpassed $2 billion in 2010 and peaked at $1,061 billion in 2021, a growth of 50,000% (by April 2023 this had dropped back to $584 billion, but still represents a rise of almost 30,000%). Musk put Thiel’s refusal down to ideological reasons: ‘he doesn’t quite fully buy into the climate change thing’.

What does Thiel buy into? Between 2004 and 2014 he busily expounded his world-view at conferences; in articles for the Wall Street Journal; in The Straussian Moment; essays such as ‘The Education of a Libertarian’ (2009) for the Cato Institute (a think tank financed by the Koch brothers) and ‘The End of the Future’ for the National Review; another book entitled Zero to One: Notes on Startups, or How to Build the Future (2014) based on a course he taught at Stanford. (This was co-authored with one of his students, Blake Masters, later chief operating officer of Thiel’s investment firm, Thiel Capital, and president of the Thiel Foundation; in 2022 Thiel generously supported his failed campaign for the United States Senate).

In a typical move, Thiel often presents himself and his allies as victims. Just like the French who claim to be victims of North Africans, or Israelis who say the same of Palestinians, the rich are bullied by the poor. Like any reactionary, his is also a tale of decadence. For Thiel, we are in full-blown cultural decline, ‘ranging from the collapse of art and literature after 1945 to the soft totalitarianism of political correctness in media and academia to the sordid worlds of reality television and popular entertainment’. The cause is democracy, in particular its extension to women and the poor (note the association between the two): ‘The 1920s were the last decade in American history during which one could be genuinely optimistic about politics. Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women – two constituencies that are notoriously tough for libertarians – have rendered the notion of “capitalist democracy” into an oxymoron.’

Enlarging the franchise is said to have hindered the technological and scientific progress which in the past permitted the generalization of a certain quality of life, even to those who didn’t deserve it. Since the 1970s – with the exception of the tech industry – this has stalled, with no great innovation registered in transport, energy or even medicine. Thiel concludes that progress is ‘rare’ in human history (perhaps not as rare as he thinks; the invention of the keel for watercraft seemed inconsequential in the medieval period, but it eventually made oceanic navigation possible). His solution: we must return to some kind of monarchical regime, because history’s great inventions have all been produced by companies (or startups) which function as absolute monarchies, or monopolies.

Thiel’s publicity efforts are often dedicated to extolling the parallel virtues of monarchy and monopoly: ‘Monopolists can afford to think about things other than making money; non-monopolists can’t. In perfect competition, a business is so focused on today’s margins that it can’t possibly plan for a long-term future. Only one thing can allow a business to transcend the daily brute struggle for survival: monopoly profits’. In a typical intervention for the Wall Street Journal, ‘Competition is for Losers’, he argues that competition produces copies or improvements of what already exists, but never true novelty – a fact that leads him to argue that ‘actually, capitalism and competition are opposites’.

It feels almost futile to note the logical inconsistencies of these arguments. Thiel maintains that progress is rare in human history, yet absolute monarchies have been the norm, from which one can only deduce that absolute monarchies have seldom generated progress. Monopolies don’t come from nowhere but arise precisely when a firm beats its competitors. One might in fact say that in an unregulated market monopoly is an inevitable result of competition: competing implies winners and losers, and as the winner is increasingly successful it becomes easier for them to dominate. This is why in the proto-history of capitalism of every country, we see the emergence of monopolies. To avoid their formation, it has always been necessary for states to implement anti-trust laws. Moreover, as soon as they’re established, monopolies cease to innovate and tend to live off rentierism. 

There is an even more fundamental contradiction here. How can someone declare themselves a libertarian yet support absolute monarchy? Whose freedom is he talking about? How many monopolies can the world accommodate? Freedom for the very few, slavery for the vast majority is the destination. Many have discussed the influence of Nietzsche on Thiel’s thinking, but perhaps the more precise reference is Max Stirner. Not for nothing, in Stirner’s Der Einzige und sein Eigentum (1844) the ‘Unique’ or ‘Ego’ is defined by its ‘property’, and may use any means – fraud, deception – to realize its power. For Stirner also, free competition is a limitation on freedom, given that it can only be ensured by a state which begets servitude. How can one be against the tyranny of the state and in favour of absolute monarchy: the most despotic, intrusive and arbitrary kind of state? The answer is Stirner’s notion of the absolute instrumentality of every position. The Unique can say anything it likes if it is useful to him. Thiel has been accused of inconsistency and self-contradiction, but he is merely putting this Stirnean strategy into practice.

One example. Thiel spends his time denigrating Stanford and higher education in general (even financing, with much fanfare, a foundation for students who abandoned university to found their own startups – with extremely limited results). But he then paid money to teach a course at that very same university, which in turn allowed him to publish a best-selling book legitimated by the Stanford brand (the true number of copies sold remains uncertain: a million, a million and a half, even three million according to various claims, but the real number could be much lower). Another: Thiel spent his youth berating gay people only to come out in 2016, marrying a man and simultaneously admitting to a romantic relationship with a male model. If the ostentatious homophobia of his time as a student can be attributed in part to an anti-PC, anti-diversity crusade, it’s less clear why Thiel would bring a lawsuit against the website Gawker for outing him in 2011. The explanation offered by his biographer is that amongst the major investors in Theil’s capital venture are ‘Arab sovereign wealth funds controlled by governments that considered homosexuality to be a crime’.

This libertarian advocate for absolute monarchy also has no qualms about making money through mass surveillance. In 2003, he founded Palantir, which specializes in big data analysis and immediately received funding from the CIA’s investment fund, In-Q-Tel. Contradiction? In The Straussian Moment, just as he founded Palantir, Thiel wrote: ‘Instead of the United Nations, filled with interminable and inconclusive parliamentary debates that resemble Shakespearean tales told by idiots, we should consider Echelon, the secret coordination of the world’s intelligence services, as the decisive path to a truly global pax Americana.’ Echelon is the most intrusive planetary surveillance mechanism yet devised in human history.

Palantir floundered until in 2011 a rumour began circulating that the company had ‘helped kill Osama’. From then on, contracts abounded, with the German police even seeking its services, which include not only software but also the manpower to use it (the Germans have now changed their minds and want to rescind on the deal). A paradox of capitalist profitability, Palantir is valued at $17.6 billion – without ever generating profits – and today forms the most substantial part of Thiel’s fortune. On the one hand, this libertarian makes his money helping the state spy on people; on the other, he promotes Bitcoin and cryptocurrencies as instruments of emancipation from the tyranny of states (as I discussed in a previous article for Sidecar). This is not a question of incoherence or contradiction: it is pure and simple cynicism. Even his self-image as a ‘contrarian’ is part of the game, the goal being to present himself as an oppressed minority, an outsider, an underdog, an anticonformist. But what kind of anticonformism is it to wish to become rich and powerful? Even the defence of monopoly is perfectly aligned with the zeitgeist: think of the rehabilitation of monopoly by the neoliberals, the veritable ‘revolution in corporate law’ guided by Henry Manne. 

To be sure, this total lack of scruples recalls the attitude of the Nietzschean Übermensch, for whom everything is permissible – to be a libertarian and simultaneously flirt with Opus Dei, participate in the Bilderberg Group, fund Steve Bannon, become for a time Donald Trump’s sponsor in Silicon Valley then standard-bearer for a Trumpism without Trump and finally a promoter of the New Right. (Thiel’s jeremiad against political correctness echoes Nietzsche’s lament in On the Genealogy of Morality about the revolt of slave morality: ‘the higher man is liquidated, the morality of the common man emerges victorious’.) His desire is to oversee a permanent secession not of the plebs from the patriciate, as occurred in ancient Rome (as in the fable of Menenius Agrippa) but of the patriciate from the plebs. Hence the acquisition of a 477-acre estate in New Zealand, and his financing of Seasteading, a project for a self-sufficient community located far out in international waters, which after serious mishaps reduced its ambitions to operating 15 miles from the coast, only to then be shelved entirely. This separatist impulse is also present in his investment in Space-X with Elon Musk: Thiel is far less tepid about the idea of isolating himself in space than ‘the climate change thing’.

Yet the question arises: to what end? The price of nihilism is the meaninglessness of life itself, of one’s own troubles, of wanting to go to one’s grave loaded with gold. It’s no surprise that fear of death seems to be a dominant motivation. It reminds one of Ingmar Bergman’s The Seventh Seal (1957), in which a knight plays his final game of chess against death. This consummate chess player believes death is ‘nothing but a bug in the feature set of mankind, and one he can buy his way out of’. This is why he throws bags of money at ventures such as Halcyon Molecular, Emerald Therapeutics, Unity Biotechnology, Methuselah Foundation, financing start-ups which promise to lengthen life to at least 120 years, the definitive cure for Alzheimer’s and so on. And if all this doesn’t work, he’s ready to have his brain frozen and wait for his reincarnation once technology makes it possible. (He’s not the only billionaire hoping to outsmart death; Jeff Bezos and Larry Page both fund the Alcor Life Extension Foundation ‘which has been freezing bodies and brains of the dead since 1970’.)

The contempt Thiel nurtures towards the rest of humanity must be almost equal to that which he appears to harbour towards the female gender, if he believes us slaves to be so masochistically inclined as to be ready to accept his morality. If he succeeds, he would be the first political activist to win over his audience not by promising anything in particular, but by guaranteeing hell as the only future we – the herd – deserve. The name that has been coined for this new manifestation of global capitalism is truly appropriate: the Dark Enlightenment. Switching off the lights is indeed the inevitable result.

Read on: Marco D’Eramo, ‘Celebrity Thaumaturge’, NLR 74.