Thursday, October 28, 2021

What Is It About Peter Thiel?

Silicon Valley is not a milieu known for glamour and charisma. Still, Peter Thiel has cultivated a mystique. A billionaire several times over, Thiel was the first outside investor in Facebook; he went on to co-found PayPal, the digital-payment service, and Palantir, the data-intelligence company that has worked with the U.S. government. He has co-written a business best-seller, “Zero to One,” and launched a hedge fund; he now runs three venture-capital firms. But Thiel’s aura emanates not so much from these achievements as from a more general fish-out-of-water quality. In 2018, citing a regional intolerance of conservative perspectives, he moved from Silicon Valley to Los Angeles; he recently purchased a mansion in Miami Beach. He served on Donald Trump’s transition team and, in an address before the Republican National Convention, declared, “I am proud to be gay.” He has invested in efforts to “cure” aging, and also in libertarian organizations that hope to create floating cities in international waters. He publishes long, winding essays on politics, globalization, economics, and the nature of humanity that often contain Biblical epigraphs and references to the philosophy of his late mentor and friend, the anthropological theorist RenĂ© Girard. Thiel also has side projects: Frisson, a now shuttered lounge and restaurant in San Francisco; American Thunder, a short-lived conservative publication geared toward Nascar fans; and the bankrolling of a lawsuit launched on behalf of the wrestler Hulk Hogan, which culminated in the 2016 bankruptcy of Gawker Media.

Thiel has fans who follow him in his peregrinations. He has become a center of gravity in the culture of Silicon Valley, and his infrequent talks and essays are circulated and analyzed by both admirers and critics. In “The Contrarian: Peter Thiel and Silicon Valley’s Pursuit of Power,” the Bloomberg journalist Max Chafkin argues that Thiel “has been responsible for creating the ideology that has come to define Silicon Valley: that technological progress should be pursued relentlessly—with little, if any, regard for potential costs or dangers to society.” Thiel’s devotees see him differently—as a techno-libertarian who associates technological advancement with personal freedom, scientific progress, and even salvation.

Fascination with the rich is pervasive and inevitable, and, as a conservative in a superficially progressive industry, Thiel naturally attracts adherents. Still, he is an odd entry in the Silicon Valley pantheon. He is not a technologist or a product visionary; he does not helm a company that obviously shapes everyday life. Steve Jobs, Bill Gates, Jeff Bezos, and even Mark Zuckerberg have their own fan clubs, but there are no equivalents to Thielian exegesis; few people seem to bother speculating on the intellectual roots of Mark Zuckerberg’s business philosophy. How has a tech investor with esoteric interests captured the imaginations of so many? What is it about Peter Thiel?

Thiel was born in Frankfurt, Germany, in 1967, and first came to the United States as an infant. The family moved to Cleveland in 1968, but later relocated to what was then South West Africa, where Thiel’s father, a chemical engineer, oversaw the development of a uranium mine near Swakopmund. They returned to the U.S. when Thiel was still a young child, settling in Foster City, a middle-class suburb in the Bay Area. Chafkin describes Thiel’s upbringing as Christian and writes that his parents were eventual “fanatical Republicans.” (Thiel denies claims that his parents were Evangelical or Republican.) Thiel, meanwhile, became an archetypal nineteen-eighties geek—a talented student, chess player, and science-fiction enthusiast who was bullied by his peers.

Thiel arrived at Stanford in 1985. He played speed chess, discovered Ayn Rand, and gravitated toward the work of Girard, a professor at the school. Thiel was particularly taken with Girard’s concept of mimetic desire. “Man is the creature who does not know what to desire, and he turns to others in order to make up his mind,” Girard wrote. “We desire what others desire because we imitate their desires.” Mimetic desire involves a surrender of agency—it means allowing others to dictate one’s wants—and, the theory goes, can foster envy, rivalry, infighting, and resentment. It also, Girard wrote, leads to acts of violent scapegoating, which serve to preclude further mass conflicts by unifying persecutors against a group or an individual. Thiel would later use this framework to develop his own theories about politics, tech investing, and culture.

In 1987, Thiel launched a campus monthly, the Stanford Review, with Norman Book, a high-school friend. At a time when other politically active Stanford students were petitioning for South African divestment and protesting the university’s plan to house the Reagan Library, the Review was avowedly conservative. Early issues, Chafkin notes, included a front-page story on liberal professors who were “closet Marxists”; an op-ed casting aspersions on the inclusion of nonwhite authors in a Western Culture course; and a strange, satirical sex column, “Confessions of a Sexual Deviant,” about a straight young man who was celibate by choice. As the AIDS crisis raged in the Bay Area, the monthly printed treatises against “unnatural forms of sex” and “homophobia-phobia.” Chafkin writes that, when a Stanford senior was charged with sexual assault, the Review published an ardent defense of the rapist.

After law school, Thiel clerked for a conservative judge in Atlanta, then became a first-year associate at a corporate-law firm. He quit his law job after seven months, worked for a while as a derivatives trader, and co-authored a book about campus politics, “The Diversity Myth,” with David Sacks, a friend from the Review. He started a hedge fund, Thiel Capital, with money raised from family and friends, and then, in 1998, met a young cryptographer, Max Levchin, and invested in his startup. Within a year, Thiel was the C.E.O. of Levchin’s company, Confinity, which offered a money-transfer service called PayPal. For Thiel, the service had revolutionary potential: a digital wallet, he said, could lead to “the erosion of the nation-state.” Confinity went on to hire four former Review editors, and half a dozen former staffers.

For a time, PayPal shared a floor with another digital-payment company, X.com, founded by Elon Musk. Like X.com, PayPal began to offer incentives to new customers—ten dollars to every new user, and ten dollars for every new user referred. PayPal was not registered as a bank, and did not collect information about its users; as a result, Chafkin writes, it could be used for illicit transactions that many banks and credit-card companies did not tend to support (porn, gambling), and which the company later banned. Meanwhile, Levchin created an eBay bot that contacted sellers, expressed interest in their wares, and then asked that they implement PayPal in order to be paid. (The company donated the items that it bid for and won to the Red Cross.) Thanks to these ethically dubious techniques—which might now be referred to as “growth hacking”—PayPal’s user base boomed.

By early 2000, PayPal and X had roughly the same market share, and both were losing money After some discussion, the two companies merged under the X name, with Thiel as the executive vice-president and Musk as the C.E.O. According to Chafkin, Thiel disappeared from the company after the 2000 market crash. (Thiel denies quitting at this time.) But, months later, while Musk was on his honeymoon, a group of senior PayPal employees launched a coup, ousting Musk by threatening to resign, and having Thiel instated as the C.E.O. Citing sources close to the negotiation, Chafkin writes that, a year after the takeover, as PayPal prepared to go public, Thiel offered the company’s board an ultimatum: he wanted more equity or he would quit. (Thiel denies any ultimatum.) The board granted him the equity. Shortly after PayPal began trading, in 2002, Thiel flipped the company, selling it to eBay for one and a half billion dollars. As soon as the acquisition closed, he issued a press release announcing his resignation. Rather than continuing to lead PayPal, Thiel planned to start another hedge fund.

Dodge the rules, skirt the law, shiv your business partner, abandon your friends: Chafkin argues that the Silicon Valley edition of this playbook was written at PayPal. Perhaps for this reason, the company’s early executives and employees became known as the “PayPal mafia.” A group portrait made in 2007, for a story in Fortune, suggested that they embraced the moniker. In the photograph, twelve former PayPal employees sit in a restaurant. They are styled like the Corleone family, in plush tracksuits and back-room casual. Musk is conspicuously absent; Thiel sits center stage, at a two-top covered in neat towers of poker chips. With his high forehead, deep-set blue eyes, and faint smile, he looks placid and amused.

In the late nineties, Thiel was known primarily for his work with PayPal; a small audience also knew him through his public writing, which included a polemic against “mindless” multiculturalism at Stanford, published in the Wall Street Journal, and another against affirmative action, published in Stanford’s magazine. (Both were co-authored by Sacks.) As the new millennium began, however, Thiel’s interests and profile began to shift. Chafkin writes that, following September 11th, Thiel became “increasingly consumed by the threat posed by Islamic terrorism,” and grew skeptical “of immigration, and of all other forms of globalization.” While working at his new hedge fund, Clarium Capital, Thiel bankrolled a project called Palantir—its name was inspired by a “seeing stone” from J. R. R. Tolkien’s “Lord of the Rings” trilogy—which sought to collate and analyze an abundance of government data, from financial records to cell-phone logs. Palantir reportedly used software developed at PayPal to identify criminal networks and mitigate fraud; the idea was that, if the software was good enough to identify money launderers, it could probably identify terrorists, too. (Thiel says that Palantir used no PayPal tools whatsoever.) “It was assumed that this would violate certain pre-9/11 privacy norms, but that would be totally fine in a post-9/11 world,” Chafkin writes. Then as now, it can be hard for outsiders to get a handle on how well the software works: Chafkin claims that, at least at first, Palantir’s intelligence offerings were “effectively useless” and “more a demo than a real product.” (Thiel denies this characterization.) The C.I.A. invested through its venture-capital arm, and the N.Y.P.D. was a customer. Palantir, which went public last year, is now valued at more than fifty billion dollars.

In 2004, Thiel invested in Facebook, loaning it what would later translate to a ten-per-cent stake in the company. Around the same time, he organized a small symposium at Stanford on “Politics and the Apocalypse.” Thiel’s contribution, later published as an essay titled “The Straussian Moment,” was built on the premise that September 11th had upended “the entire political and military framework of the nineteenth and twentieth centuries,” demanding “a reexamination of the foundations of modern politics.” The essay drew from a grab bag of thinkers—it meditated on Thomas Hobbes and John Locke, then combined ideas from the conservative political theorists Leo Strauss and Carl Schmitt, who wrote about the inadequacies of liberal democracy, with the work of Girard—to offer a diagnosis of modernity. “A religious war has been brought to a land that no longer cares for religious wars,” Thiel wrote. “Today, mere self-preservation forces all of us to look at the world anew, to think strange new thoughts, and thereby to awaken from that very long and profitable period of intellectual slumber and amnesia that is so misleadingly called the Enlightenment.”

The social contract had proved inadequate, Thiel argued; because “the West” had become secular, rational, and capitalist, there was seemingly no ideologically consistent mode of retaliation for September 11th. Thiel hypothesized that Schmitt, a legal scholar and member of the Nazi Party, would have called for “a new crusade”; such a response was incoherent, however, in a secular culture that disavowed its own violent nature. Thiel quoted Strauss, who wrote that the United States owed its greatness “not only to her habitual adherence to the principles of freedom and justice, but also to her occasional deviation from them.” Acknowledging such deviations was considered “politically incorrect,” Thiel wrote, but the U.S. could still use invisible, unaccountable, extralegal, and extrajudicial channels of transnational power. Finally, he drew on Girard’s mimetic theory to lend his ideas greater urgency: countries, racing to acquire nuclear weapons for mimetic reasons of “prestige,” were raising the likelihood of “unbounded apocalyptic violence.” The “destiny of the postmodern world,” Thiel concluded, would be either “the limitless violence of runaway mimesis, or the peace of the kingdom of God.”

“The Straussian Moment” is sometimes considered a key text in the Thiel canon, even though it is strangely hard to find. (It seems to circulate primarily as a PDF of a photocopy, uploaded to Evernote.) In 2019, it was the subject of an interview with the Hoover Institution’s Peter Robinson; earlier this year, it served as the backbone of a widely read Amazon review of “The Contrarian,” which argued that Thiel’s criticisms of globalization, and his recent seeming embrace of nationalism, could be interpreted as attempts “to buy time against the apocalypse for the complete revelation of the innocent victim.” In many respects, “The Straussian Moment” is an artifact of its era: the “Politics and Apocalypse” symposium happened around the same time that Palantir was founded, and it’s not surprising that Thiel was thinking about global intelligence apparatuses after September 11th. But it is unusual for an entrepreneur or investor to publish a disquisition on modernity. Why did Thiel need such a high-flown theory of civilization and its discontents? Was his view of the world motivating his actions, or was it justifying them?

Whether the future would be utopian or apocalyptic, Thiel positioned himself to profit. In 2005, he established a venture-capital firm, Founders Fund, which announced that it would be seeking “riskier, more out-of-the-box companies that really have the potential to change the world.” He developed an interest in life-extension and anti-aging technologies—one of the firm’s early investments was Halcyon Molecular, a startup that sought to defeat aging through the development of genomic-sequencing technology—and in defense contractors, including SpaceX, Musk’s aerospace company. Around this time, Valleywag, a new Silicon Valley gossip blog owned by Gawker Media, began making Thiel a regular subject. A 2006 post, “Three Valley Moguls Dabble in Humanity’s Future,” noted that Thiel—a “Valley exec investing in weird dreams of a super-intelligent race”—had joined the board of the Singularity Institute for Artificial Intelligence (now the Machine Intelligence Research Institute). In a later post, Valleywag mentioned a rumored million-dollar donation Thiel had made to the Federation for American Immigration Reform, a group affiliated with NumbersUSA, a far-right anti-immigration nonprofit. A 2007 post, titled “Peter Thiel Is Totally Gay, People,” was particularly upsetting to Thiel: although many of his friends and colleagues had known that he was gay, he saw the post as an outing.

As the decade drew to a close, Thiel befriended Patri Friedman, a computer programmer and grandson of Milton Friedman, who had written about so-called seasteading communities—hypothetical libertarian utopias floating in international waters. Thiel offered Friedman half a million dollars to start a seasteading nonprofit. He also gave money to the SENS Research Foundation, an anti-aging nonprofit, and to the Methuselah Foundation, an organization dedicated to life extension. In 2009, he wrote an essay for Cato Unbound, an online libertarian journal published by the Cato Institute, in which he stated that he no longer believed “freedom and democracy are compatible,” and that “the vast increase in welfare beneficiaries” and the extension of voting rights to women had “rendered the notion of a ‘capitalist democracy’ into an oxymoron.” (Following backlash to the essay, Thiel put out an addendum of sorts: “While I don’t think any class of people should be disenfranchised, I have little hope that voting will make things better.”) All of this only served as more fodder for Gawker.

Around this time, Chafkin writes, Thiel began reading essays by Curtis Yarvin, a computer programmer and blogger who uses the pen name Mencius Moldbug. Yarvin often wrote on “formalism,” a theory that argues against democracy and in favor of a federal government structure that operates more like a corporation or dictatorship. These views later crystallized into what has been called “neo-reaction.” This ideology, Chafkin claims, holds that climate science is fraudulent, that inflationary currencies are “diabolical,” and that genetic differences predispose certain groups to “mastery” and others to slavery. Thiel, Chafkin writes, “subscribed to the first two views, if not the third.” (Thiel denies subscribing to any such views.)

In 2015, Thiel published an essay, “Against Edenism,” in the Catholic magazine First Things. The piece opened with verses from the Book of Revelation, gestured toward natural-resource scarcity, and culminated in an eschatological argument for the necessity of technological acceleration. “Science and technology are natural allies,” Thiel wrote, “to an eschatological frame in which God works through us in building the kingdom of heaven today, here on Earth—in which the kingdom of heaven is both a future reality and something partially achievable in the present.” (In a letter to the editor, one reader responded with gentle horror: “Christians, as I understand the faith, have no illusions about a ‘New Jerusalem’ in the here and now, or our capacity or wisdom to construct one,” he wrote.) Some years later, in New York, Max Read, a former editor-in-chief of Gawker, would note that Thiel’s politics were informed by “an apocalyptic fear of stasis.” It was for this reason that, unlike most tech investors, Thiel seemed acutely aware that the tech industry might not have “added much to the economy or to human happiness, let alone demonstrated ‘progress.’ ”



from Hacker News https://ift.tt/3mjzfYX

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