A Debate with Peter Thiel (Who is Not Present)
In this article, Jerome Ambrose conducts an interview, which in its own due course becomes a debate, with PayPal, Palantir and Founders Fund founder, philanthropist and activist Peter Thiel, for Wonk Bridge.
In this, the first round of the interview, which then becomes a debate (while being neither), Ambrose and Thiel discuss matters of Silicon Valley humanism, big tech business ethics, the Libertarianism that is Mr. Thiel’s own personal creed, and the morality of monopolies.
Peter Thiel is not present in any physical respect for this interview (an interview which then becomes a debate, while being neither); this article is in no way affiliated with Mr. Thiel and only represents him insofar as each and every one of Mr. Thiel’s “responses” are in fact extracts from his book Zero to One: Notes on Startups, or How to Build the Future.
Each of them is posed by Mr. Thiel in advance of Mr. Ambrose’s contributions. Therefore it is probably truer to say that it is in fact Mr. Thiel who is interviewing Mr. Ambrose for Wonk Bridge, not the other way around.
Extract from Zero to One:
“Unlike people on the East Coast, who all wear the same skinny jeans or pinstripe suits depending on their industry, young people in Mountain View and Palo Alto go to work wearing T-shirts. It’s a cliché that tech workers don’t care about what they wear, but if you look closely at those T-shirts, you’ll see the logos of the wearers’ companies — and tech workers care about those very much. What makes a startup employee instantly distinguishable to outsiders is the branded T-shirt or hoodie that makes him look the same as his co-workers. The startup uniform encapsulates a simple but essential principle: everyone at your company should be different in the same way — a tribe of like-minded people fiercely devoted to the company’s mission.”
Ambrose: In many respects I believe that this passage epitomises a few of the main tendencies of real believers in big technology. Those main tendencies can summarised by saying that, via either a genuine naivete or by design, the paragons of big tech display their anti-humanism in plain sight.
Mr. Thiel makes the faux differentiation between East Coast professionals and the Palo Altonese without really making it clear whether or not he intends to make them sound exactly the same but for a differentiation in the length of their sleeves or their denim quotient. There’s an implication in the passage, an astute one, that companies are reflections of those people who work for them.
Beyond that, there are two things here that I find interesting. The first interesting thing is what Mr. Thiel leaves out. The second is the relationship of Thiel’s conception of the perfect workforce to his contentions elsewhere about a changing world and what that means for the relationship of innovation and monopoly power.
In terms of what the author leaves out: we have no sense about how this uniformity of personhood in the company is achieved. Should it be brought about through targeted hiring? Surely, hiring all of one type of person is bad recruitment. Should it be enforced through vehemency of company culture and those kinds of employee-body customs that keep those employees in the office until they are a part of it, as opposed to vice versa? Surely, this is cavemanlike in its grasp of the sophisticated factors needed for optimal work, for the need for a working man or woman to rest and to preserve themselves beyond their job, and it is surely the more likely of the two possibilities to be the one intended by the writer.
Also, what does “different in the same way” mean? To his credit, Mr. Thiel in this book is generally pretty good at resisting the easy charms of the platitude, though he succumbs to it here.
In terms of the relationship of Thiel’s ideal workforce and his views on innovation, we can see the first comings of a contradiction that will ultimately come to subsume the work — there is an obvious disconnect between a workforce all “different in the same way”, either too naturally alike to think differently or too held within the “company’s mission” to be able to step out and look beyond it, and the expectation of responding to a world whose key challenge is its violent and unpredictable variety.
Extract from Zero to One:
“The competitive ecosystem pushes people toward ruthlessness or death.
A monopoly like Google is different. Since it doesn’t have to worry about competing with anyone, it has wider latitude to care about its workers, its products, and its impact on the wider world. Google’s motto — “Don’t be evil” — is in part a branding ploy, but it’s also characteristic of a kind of business that’s successful enough to take ethics seriously without jeopardizing its own existence. In business, money is either an important thing or it is everything. 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.”
Ambrose: There is certainly a point here that makes one want to write a utopian capitalist fable: about the lonely little company, sat alone in its field now that all its competitors have been bested or eaten, and it wonders as to the purpose of its existence now it is alone. And then it realises it can use its power to turn this barren little field into a beautiful garden, marshalling the infinite faculty and resources at its disposal to do so.
In an ideal situation, where the evolution of the tech company had a well-defined moral compact, Mr. Thiel’s idea might have a chance at coming to pass. However, what many larger tech companies have been demonstrated as lacking is a moral imagination — it is a different beast to the technical and procedural imaginations, which they clearly possess in great quantities.
Moral imagination, if we take the time to restate Mark Johnson’s definition of it, means envisioning the full range of possibilities in a particular situation in order to solve an ethical challenge. It calls upon all the abstract faculties in order to be effective — abstract faculties, as we’ve hinted at so far and will discuss more later, being something that is somewhat at odds with the mindset of the individual who is enthusiastic about late-period capital. Late-period capital aims to make life as resource-intensive as possible without making it uncivilised, seeing little use for the abstract faculties — the ability to conceptualise and envision from a broad basis of perspective, plans whose degree of long-term intention involve a degree of inherent self-sacrifice and the deferral of ends, to consider the abstract goods of human development, to conceive of human good in ways that go beyond material concerns.
[To need any of these things would be to admit that we are ourselves one node in a historical continuum, in which the past is affective of the present and so of the future, and that interpreting these effects is valuable — and capital’s fundamentally ahistorical tastes are what inflamed Marx with the inspiration for his own dialectical theory of history. Whatever one’s view of the Marxian theory, it cannot be said but to have grown out of capitalism’s sense of predestination; its unwillingness to apply discrete and inviolable significance to anything; its disdain for history.]
To put it in more economic terms, the abstract faculties concern theoretical value , value which is not yet actual— as I suggested, this seems chicken feed at best in an era of neoliberal late capital, which is so presentist it will often sell even the family silver as soon as someone calls it profitable.
For a singular instance of this, consider British premiere Theresa May’s 2016 sale of the UK’s ARM Holdings, which should have been valued above all else as one of Britain’s few institutions built to withstand the negative initial years following Brexit, at a stunningly low rate to Japan’s SoftBank Group. It was her first act on the job. That ARM technology is vital to Japan’s plans to beat the USA in supercomputing (by revitalising Fujitsu) suggests, nevertheless, its theoretical value; a theoretical value that will in the not too distant future become decisively actual. It suggests that, whatever intelligence led Ms. May to greenlight ARM’s sale, the firm’s theoretical value didn’t much come into it. The buyer had a truer sense of it, though.
Let is never be said that an individual with wealth necessarily does not or cannot have a moral imagination — although it is probably germane to say that an individual with moral imagination tends to become rich, if they do at all, as a result of plans that involved ambitions and designs other than simply becoming rich. It is also germane not to think that all individuals who become rich incidentally have moral imagination.
To suggest that “Monopolists can afford to think about things other than making money” as Mr. Thiel does is hopelessly idealistic relative to the force of will a given individual can typically exert against the instinct to grow their means, especially when they have already sublimated most of the rest of their personhood, given most of their lives in the quest to establish such dominance— monopoly pricing is the foremost characteristic of the monopoly for a reason. It is also hopelessly idealistic given that monopolism is the filial corporate relation of authoritarianism, and one can no more expect an individual with absolute power to use it ethically than one can expect a famished polar bear to spare two helpless Inuit children after their parents have already been consumed.
Neither of them have a scale or relative measure for their actions other than appetite, so we should expect neither to act as though they do. Neither of them have powers of moral imagination to exercise.
Moreover, it is not whether or not monopolists can think about things other than making money — it is whether or not they will.
In sketching out his criteria for what constitutes a company with monopoly potential, Thiel names several attributes: “proprietary technology, network effects, economies of scale, and branding”. Hard to contest in and of themselves, and yet Mr. Thiel insists on a conception of business beyond the in-and-of-itself, and this is the first of many instances in which the ‘humanist’ element of Mr. Thiel’s ambition contradicts its capital element.
The more one contemplates the uttering of the phrase “Don’t Be Evil” outside of the extroverted, cutesily vindictive context of a Google marketing pitch, the more the phrase’s natural character seems to affirm itself. It cordons off only the negative absolute. It seems, to my perhaps prejudiced ears, the talk of the benevolent slaveholder.
“Don’t Be Evil”. This is not particularly hard to do; but there are many intervening degrees between what’s “Good” and what’s “Evil”. Indifference to those intervening degrees and where one sits on them is a failure of the abstract faculties, and thereby a failure of the moral imagination.
Extract from Zero to One:
“Most people think that the future of the world will be defined by globalization, but the truth is that technology matters more. Without technological change, if China doubles its energy production over the next two decades, it will also double its air pollution. If every one of India’s hundreds of millions of households were to live the way Americans already do — using only today’s tools — the result would be environmentally catastrophic. Spreading old ways to create wealth around the world will result in devastation, not riches. In a world of scarce resources, globalization without new technology is unsustainable.”
Consider that passage alongside:
“So why are economists obsessed with competition as an ideal state? It’s a relic of history. Economists copied their mathematics from the work of 19th-century physicists: they see individuals and businesses as interchangeable atoms, not as unique creators. Their theories describe an equilibrium state of perfect competition because that’s what’s easy to model, not because it represents the best of business. But it’s worth recalling that the long-run equilibrium predicted by 19th-century physics was a state in which all energy is evenly distributed and everything comes to rest — also known as the heat death of the universe. Whatever your views on thermodynamics, it’s a powerful metaphor: in business, equilibrium means stasis, and stasis means death. If your industry is in a competitive equilibrium, the death of your business won’t matter to the world; some other undifferentiated competitor will always be ready to take your place.”
Ambrose: It seems fair to say that Mr. Thiel’s philosophy concerns getting the world to justify his business — regardless of the expansiveness of his general conception of that business, it is oriented from its own perspective, not that of a perceived global need.
When it is convenient for Mr. Thiel to justify his expansionism and monopolistic appetite by appealing rhetorically to social mores, striking the pose of code-of-business-as-social-service-and-conservator-of-nature, he will do so, as in the first excerpt above. However, when it is convenient to disregard these mores, he will leverage a vastly tasteful intellect to do just this, as in the second passage, which sees him debating with iconoclastic verve against the historical view of competition as a natural positive in business.
There is no consideration of the ‘catastrophes’ that can be engendered by ill-considered instances of technological innovation, except insofar as such potential catastrophes can justify progress; it is symptomatic of the contemporary technologist’s two-dimensional thought about the behaviours and principles of effect; the ‘physics’ if you will, of commercial technology.
For all its accoutrements that suggest high-handedness and progress through the intellect, the big tech creed Mr. Thiel epitomises seems in fact to be based on a certain kind of libertarian conservative instinct to practice something solely because one has the freedom to do so. Technologism, therefore, is a church of the root instinct to power in a way not far removed from the polity of Sparta, the writings of Rousseau and of Carlyle, Fichte, Mazzini, the dark side of Dickens[1], and Nietzsche.
We’ve seen that, like them, Mr. Thiel abjures the source of personhood — a personal life — in favour of absolute devotion to, and self-nullification for, the working cause. He argued for this in his first extract far more convincingly that his half-hearted defence of human individuality here (“they see individuals and businesses as interchangeable atoms, not as unique creators”, much like Mr. Thiel does not). Not merely sacrifice but self-denial, not in the name of one’s friends or of principles from which one does not otherwise stand to gain, but in the name of a greater institution of power, is the moral imperative that unites Mr. Thiel in spirit with Fichte.
Incidentally, one suspects, as opposed to intentionally.
Nevertheless, it is this association that makes it exceptionally hard to believe that Mr. Thiel acts with the best of a wider group of interests at heart — it is against the spirit of his own openly declared libertarianism to be so delegatory and self-sacrificing, not to his company’s nobly indifferent aim, but to the dissent and disagreement of other opinions, in such a way as democracy at least occasionally requires. As a rapid whippup to the search bar and back again will tell you, libertarianism makes pursuit of freedom in some ways as fanatical and superstitious as once were the Doctors of the Church’s pursuit of heavenly favour.
A similarly quick trip down this link will tell you that Mr. Thiel does not believe that freedom can coexist with democracy. How, then, bar a form of technocratic authoritarianism — another name for the monopoly politics he favours — does he propose that such globe-sparing innovation, as he believes is required, could possibly come about? These Cameralistic notions fit, surely, as a social compact to go with his preference for monopoly?
Not merely sacrifice but self-denial, not in the name of one’s friends or of principles from which one does not otherwise stand to gain, but in the name of a greater institution of power, is the moral imperative that unites Mr. Thiel in spirit with Fichte. Incidentally, no doubt, as opposed to intentionally, though our man is far too intelligent and well-read for us to be able to dismiss the possibility of his familiarity with the father of German idealism.
And it is worship of one’s own nation, and its power, that ties Thiel unequivocally to the lineage of Fichte and those other men we mentioned — although in Thiel’s case, the nation he worships is confined to a single valley in the realm of the corporeal, all the while it extends across the world in the realm of the binary (his present exile from it notwithstanding).
Extract from Zero to One:
“[The fourth social trend to have emerged to root out our belief in the existence of compelling secrets] is “flatness.” As globalization advances, people perceive the world as one homogeneous, highly competitive marketplace: the world is “flat.” Given that assumption, anyone who might have had the ambition to look for a secret will first ask himself: if it were possible to discover something new, wouldn’t someone from the faceless global talent pool of smarter and more creative people have found it already? This voice of doubt can dissuade people from even starting to look for secrets in a world that seems too big a place for any individual to contribute something unique.”
Ambrose: The above paragraph, and the ones which predate it in the book, sees Thiel attempting to diagnose some of the most prevalent conditioning social trends to have emerged in recent decades, at which he proves remarkably perceptive. He cannot be said to be wrong in flagging any of them up as reasons why people are shy to look for secrets, in the manner that he is, for instance, wrong in his equation of the expansion of franchise to women and beyond with the inevitable failure of capital democracy.
He aptly diagnoses overtly function-based education (which he for one reason or another refers to as “incrementalism”) as that which dissuades youth permanently from interest in achievements outside of accepted bounds, the kind that don’t result in the award of gold stars. He makes acute note that our times are exceedingly risk averse, that the notion of being intellectually on one’s own, caught between choruses of objection and the prospect of being wrong, make independence of this kind unbearable for all but the mighty few. He then notes complacency as the third of the four proverbial horseman, before composing the extract we’ve seen above, dedicated to a torpor and sense of flatness about what remains possible.
These truly must be negative sentiments that hold young minds back from wider ambition. But the reason for this, to my mind, must concern simple meaning — not meaning as unanswerable philosophical proof, or high-minded abstract ideal, but meaning as a practical necessity for living, and how it ties back to all of our economic and philosophical considerations of the monopoly model Thiel’s advocating for. I’m talking of meaning that is visible to the disinterested everyday eye, meaning that is not contemplated abstractly from afar but lived among and passed by each day, as the inhabitants of Rome or of Djenné do.
It is very possible that the kind of innovation for which Thiel has advocated during our ‘exchange’ is different from mine — it is as possible that the kind of innovation for which I would advocate is different from yours. It is possible that, if his idea of innovation concerns the marginal utilities we’ve seen in the 10s, if his idea of progress feels a mania for the technical and only a sentimental attachment to the social (remember when we spoke about big tech being above petty social concern?), then it’s possible that monopoly can sustain these types of innovation forever.
After all, being marginal, these innovations are aimed at maintaining paradigms, not shifting them — and only the attempt to shift or break paradigms carries risk, and only when paradigms are shifted or broken can true progress come about. They are the essence of complacency about which Mr. Thiel speaks, and the root of the sense of pervasive ambient meaninglessness that, in his correct estimation, hamstrings our young.
While you can sustain an argument for these kind of marginal innovations semantically, they are not meaningful. The elevation of the pursuit of marginal, minor goals to a pinnacle in our society is, I would uncontroversially allege, one reason behind spiking degrees of mental illness in that same society. Just as Mr. Thiel neglects the third, social dimension of business, he neglects the main and most obvious component of what makes a task meaningful: whether or not it is worth doing.
Regardless of our feelings about religion, we might freely store vicarious interest in the architecture of the Great Mosque of Djenné, in its value as the linchpin of its particular society, its beauty and its longevity. Regardless of our feelings towards ritual mortal combat, we can marvel at the scale of the Colosseum, stand in awe of its historical pregnancy, and give contemplative thanks that it remains standing, a reminder of how far we have, non-linearly but surely, come from all it represents.
These are examples of how these societies purposed the lives of their able towards manifestations of value. That is, surely, meaningful.
What is the summum of big technology’s meaningful investments in the Romantic era[2]? The collective positive and serious production of these tiny disruptive companies blooded by the donations of venture capitalists, among whom Mr. Thiel stands a figure of profound and historic influence? Trivial applications, social platforms whose use is almost universally misuse, which, in tracking valuable behavioural data, make tradable commodities of aspects of the individual human experience that should be above such concerns.
The energy and fervour these applications can create is ultimately hollow — non-relational, amounting to little and so meaning even less. Because they serve entertainment with low-faculty appeal only, and in such a way as obviates human judgement; because they promote a static life in such a ways as does not draw the various imaginations; because they rarely afford the chance to positively affect our neighbours; and because they promise stress and tribulation without means of creating lasting, tangible works which makes such suffering meaningful, they do not really enable unity, the development of shared robust concern, and valuing.
And though it goes without saying we should not be looking to brutal or dogmatic means of establishing unity as our forebears did, shared robust concern and a valuing of human dignity and capacity among our multivariate people, if we accord ourselves to the kind of non-meaning that Mr. Thiel’s words abjure and that his investment portfolio heartily promotes, we will have little cause for monuments of our own.
Extract:
“Escaping competition will give you a monopoly, but even a monopoly is only a great business if it can endure in the future. Compare the value of the New York Times Company with Twitter. Each employs a few thousand people, and each gives millions of people a way to get news. But when Twitter went public in 2013, it was valued at $24 billion — more than 12 times the Times’s market capitalization — even though the Times earned $133 million in 2012 while Twitter lost money. What explains the huge premium for Twitter?
The answer is cash flow. This sounds bizarre at first, since the Times was profitable while Twitter wasn’t. But a great business is defined by its ability to generate cash flows in the future. Investors expect Twitter will be able to capture monopoly profits over the next decade, while newspapers’ monopoly days are over.”
Ambrose: Nowhere hereafter is there any consideration of what, exactly, the consequences of this could be — the supplanting of a high-value, high-content institution (New York Times), allied to humanism and the scientific method, with a an institution that tends to low-value, low-content, generally though not exclusively (Twitter). The portfolio of consequence is left unopened — a neglect spurred by the thesis in the paragraph’s end, that “ a great business is defined by its ability to generate cash flows in the future”.
This may be the case when business is considered only by its own axioms, but business that has social ties must obey to some degree a social compact — in fact, any company that trades with the public does. A great business may, by those two dimensional measures, be defined by its ability to generate cash flows in the future — adding the third dimension would seem to suggest that a great business, as opposed to a merely functional business, should provide meaningful service to those who patronise it, while also generating cash flow. That might then spur the notion of a business’ being defined by its impact on those whom it serves.
It is no good, asinine even, to take, as an underpinning physic of an argument about business, the idea that business are estimable and answerable only to themselves, are only definable relative to themselves and their competitors — it ignores an entire key axis of consideration (the social), a stroke of ignorance, indicative of a fundamental difference in thought which forever strands the intentions of the likes of Mr. Thiel from anything approaching common concern.
It is also, ironically relative to Mr. Thiel’s avowed aim to harness or match or serve the violent dynamics of a changing world through his business, this mentality that guarantees such world-abetting ambition will never be met, except perhaps incidentally and in part. While, in accordance with Google’s maxim, he may not “be” evil as such, Mr. Thiel overlooks key social dimensions when brewing his business methods, even as he takes care to highlight them rhetorically. This approach to legacy building means that it is likely that part of Mr. Thiel’s own legacy will be to permit or enable the “evil”, banal though it may be, in the same way as all such flagrant self-regard permits evil.
Mr. Thiel is far from alone in living by this kind of philosophy. He is shorthand, in this sense, for his entire industry — the one which he funded, which spurned him, and the one to which he will be inextricably connected so long as he lives, and beyond.
For all of Mr. Thiel’s degree of general erudition, his utilisation of his own faculties calls to mind Bertrand Russell when Russell spoke on the remedy to youthful cynicism. Financiers, in Russell’s words, were (as they still are) allowed a freedom spared of medics or architects; those professions’ obvious importance to public health and safety necessitate a high degree of education, but, as per Russell, “ a financier is allowed to operate freely without any knowledge at all of the multifarious effects of his activities, with the sole exception of the effect upon his bank account”.
The maniacal excision of the third, social dimension from Thiel’s reasoning — one which is reflective in general of the Silicon Valley approach, dictated entirely by business logic and only decorated by other principles — causes the ability to think in the abstract to atrophy, and makes such an idea as thinking abstractly seem redundant where the ability endures. As Thiel has it, even a talented abstract thinker in Silicon Valley follows by no moral-primary compass, or even something so basic as a sense of effect; the abstract thought is used only to service the commercial instinct to create new technology and make money, which are the only effects worth contemplating.
I will walk out with Russell himself:
“How pleasant a world would be in which no man was allowed to operate on the Stock Exchange unless he could pass an examination in economics and Greek poetry, and in which politicians were obliged to have a competent knowledge of history and modern novels! Imagine a magnate confronted with the question: `If you were to make a corner in wheat, what effect would this have upon German poetry?’ Causation in the modern world is more complex and remote in its ramifications than it ever was before, owing to the increase in large organizations; but those who control these organizations…do not know the hundredth part of the consequences of their actions.”[3]
Follow Wonk Bridge for part two of Jerome Ambrose’s non-debate with Peter Thiel, in which the economic validity of Mr. Thiel’s vaunted monopoly theory is put to the test.
Coming soon.
All quotes attributed to Peter Thiel are, unless specified otherwise, extracted from Zero to One: Notes on Startups, or How to Build the Future, by Peter Thiel with Blake Masters, published by Penguin Random House USA.
Reproductions of material from the book are undertaken under the auspices of section 107 of the Copyright Act 1976, in which allowance is made for “fair use” of this copyrighted material for purposes such as criticism, comment, news reporting, teaching, scholarship, education and research. This content has not been monetized.
[1] The “Dickensian Aspect” of big technology deserves greater consideration — and by Dickensian aspect, I refer to the gulf between the goods big tech sentimentally posits to do (as Dickens posited to do, and indeed did, through and because of his work) and the callousness of self-interest and disregard for the object of the work they really exhibit (as, should you follow that link and read the article in question, you will see Dickens did too).
[2] ‘Romantic’ here refers to the period of globally disruptive start-up culture taking place after the dot.com bubble, coinciding with the shift to handheld — a period in which Mr. Thiel himself transitioned from a short spell as a founder into his more long-lived occupation of investor.
[3] Bertrand Russell, “Youthful Cynicism” as anthologised in In Praise of Idleness
