Ezra Klein interviews libertarian billionaire venture capitalist, hedge fund manager, and founder of PayPal Peter Thiel on his new book and on his thoughts on the state of the world:
Peter Thiel is best known as the billionaire technology investor who founded the e-payment giant PayPal and the massive data analysis firm (and security contractor) Palantir. Oh, and he also tried to build a libertarian utopia on a giant platform in the open sea....
He argues that monopolies are good, and that it's competition, red in tooth and claw, that often destroys industries....
Klein asks him for what important truths he believes in:
Peter Thiel: That as a business, you should strive for monopoly, and that competition is very overrated. We live in a world where we're always told to compete intensely. It's how we're educated. It's how so much of our system is organized. I think that if you want to compete super intensely, you should open a restaurant in DC. There'll be competition — but you won't make any money or do anything.
Competition makes us better at that which we're competing on, but it narrows our focus to beating the people around us. It distracts us from things that are more valuable or more important or more meaningful.
Ezra Klein: You have this great line in the book that monopolists can afford to think about things other than making money, and non-monopolists can't. What you seem to be arguing is that the highest good of a company is to become dominant enough that it develops the fuck-you profits needed to create a Bell Labs, or to send weather balloons up into the air, or to create worldwide internet. It’s almost like you see the point of capitalism as creating companies able to fund technological philanthropies. Is that right?
Peter Thiel: In business, you do have to think about money to some extent. If you weren't thinking about that at all, then things would go wrong in fairly fast order. But I find that companies that are simply mercenary are quite uninspiring.
Like Google, which could have been just a search engine "able to extract huge advertising revenues" but instead it wants to "categorize and make accessible all the world's information." It digitizes books and sends "camels across the Sahara to work on mapping the desert." (Well, that and a few other things, like spying on us for the government, but no need to mention that.)
So competition should be just for the little people now, scrambling over each other to snag those prime minimum wage jobs? The great and mighty need to be allowed to have weightier issues on their minds than the mere struggle to compete!
Peter Thiel: One of the ideas I'm very skeptical of is that people learn from failure. I think, in practice, failure's really demotivating. Hopefully, you have the character to persevere and keep going, but I think the default is that failure is powerfully demotivating. But success is very motivating.
So NOW is the time when suddenly competition doesn't look so good? When the 99 percent are scrabbling around for the crumbs while the richest ten percent
own 87 percent of the world’s wealth? When the top one percent holds nearly half the world's wealth? When the top 10 percent in the US holds 75 percent of the country's total wealth? When the top one percent in the US owns just under 40 percent of the country's wealth?
That's when it's time to rethink the value of competition? That's when it's time to freeze things as they are because monopolies are so freeing and creative and failure is so demotivating? Time to draw up the drawbridge, when you've found yourself king of the castle? With the amassed wealth now to rig contracting, regulatory structures, tax policy, and the political system in your own favor and set it in stone for the foreseeable future?
Perhaps not too surprising from the #4 ranked billionaire on Forbes' 2014 Midas List, a person who believes that extending the franchise to women has been antithetical to "capitalist democracy” and that freedom and democracy are no longer compatible.