Peter Thiel has only just sat down at a corner table in Palo Alto’s Evvia restaurant and he is already into a disquisition on the history of financial bubbles. “This,” he declares, after listing the frequent market eruptions of the past three decades, “is historically very anomalous. There was one bubble in the 1920s and one in the 1720s.” It is the sort of sweeping statement, delivered with flat finality, that Thiel thrives on. Since he has made billion-dollar fortunes twice over, in very different corners of the investment world (though one of the billions was promptly lost again), you’re inclined to give him the benefit of the doubt. But you also can’t help thinking: really? What of the railroad bubble of the 1870s or the periodic booms and busts of capitalism’s gilded age? As with many of the eclectic assertions Thiel (pronounced “teal”) uses to pepper his conversation – allusions to Dickens and Shakespeare as well as the broad swaths of economic, technological and political history – you wish you could secretly Google under the table to fact-check. Now the 46-year-old Facebook billionaire, former hedge fund star and self-styled libertarian Big Thinker is ready to declare one final bubble. This time it is the result of excessive government borrowing to refloat a world struggling to get beyond the financial crisis. With this, he argues, we have arrived at the Last Bubble. There will be no more. Period. Evvia is a Greek taverna that gives off a complacent lunchtime hubbub in this wealthy Silicon Valley enclave. It is half a block from the location on University Avenue where Facebook had its start. The $500,000 Thiel invested in the company in 2004 made him its first outside backer and has entered Valley legend: at the time of Facebook’s initial public offering last year, his personal stake was worth $1.25bn. The same building is now home to Palantir, a secretive data-mining company that made its name working for the CIA and which is among Thiel’s most successful recent investments with his venture capital firm Founders Fund. A couple of blocks further down the road is the spot where PayPal, the online payments company that he co-founded during the dotcom boom before selling out to eBay in 2002, started life. Thiel, who trained as a lawyer and worked as an investment banker before making it big among the engineers of Silicon Valley, arrives looking trim and wearing a blue V-neck sweater with no shirt underneath. He initially suggested breakfast: he has more time in the mornings. But, in the event, he seems happy to spend more than two hours over lunch holding forth on the state of the world. His manner is both purposeful and wary. He seems unabashed about making declarative statements that take a big swing at controversial ideas but cloaks them in hesitant “ums” and takes several runs at formulating his thoughts. He begins almost every statement with the words “I think”, as though politely leaving it up to the listener to choose whether to swallow each new assertion as undeniable fact. Such as: “And of course, um, and of course as a libertarian, I think it’s imperative that we stop another massive terrorist attack on the US because the worst thing that could happen to this country is that we could get another Patriot Act.” Diving head first into big ideas is a mark of the high seriousness that Silicon Valley types like to affect, and Thiel is no exception. Though it isn’t entirely down to him that we plunged into the history of financial bubbles with barely a moment for niceties. I had reminded him of a conversation we had several years ago, before the housing bubble became apparent. Thiel, whose Clarium Capital hedge fund was then nearing the peak of its success, predicted that further success in the investment game would depend on being able to ride a series of unexpected booms and busts in unconnected parts of the financial world. The good years in the middle of the past decade brought Clarium Capital a gusher of cash from new investors, inflating its value to more than $7bn. But following a few bad bets, the hot money flowed out again. His summation: “We had, basically, six very strong years and then, basically, two-and-a-half bad years.” He admits to outright investment gaffes but says his biggest mistake was taking short-term money from investors who blinked when times got tough – particularly since his investments turned on making unorthodox bets that went against conventional wisdom. One miscue was to cling to a bearish position throughout 2009 and 2010, in the face of a broad market rally. At one point, Clarium had lost 70 per cent of its value. He still displays signs of bitterness, as much over his investors’ unwillingness to give him credit for his contrarian successes in the good years as for the way they fled when times got tough. “They’ll still be kind of annoyed because you made money and [think] you got lucky,” he says.
Thiel knows the menu well and is solicitous. He recommends the lemon soup but declares it “all quite good”. We both order the soup to start, and fish for the main course. Venture capital, where success depends on picking winners in the next hot tech markets and sticking with them, seems a long way from riding booms and busts as a hedge fund manager. In Thiel’s world, however, all things are connected, as he stitches ideas together into a grand unifying theory of our times. The pieces fit together something like this. The historically anomalous bubbles of recent years – Japan’s stock market boom of the 1980s, the dotcom mania of the 1990s, the housing finance frenzy of the past decade and, now, the government bubble – all resulted from the fact that people retained outsized expectations for the future, even as reality came up short. Twitter may not be enough to take civilisation to the next level The reason for this expectation gap, Thiel argues, is that technological progress came to a halt at the end of the 1960s. As the website of Founders Fund declares: “We wanted flying cars, instead we got 140 characters.” Thiel is still making it up to Twitter for this jab: it’s a perfectly fine company, he says, and may even be worth the high valuation placed on it by Wall Street, though he adds with deadpan irony that “it may not be enough to take civilisation to the next level”. No matter that Thiel has made a fortune on Facebook (according to Forbes, his total wealth is $1.8bn): the internet, in his version of events, has not been enough to make up for an innovation shortfall. He is wary of talking publicly about Facebook, since he still sits on its board. But he does say this about the company: “The nuanced truth is, Facebook is a great company, it is a specific success – it is not, however, enough to save our civilisation. Those are not inconsistent statements, you know.” As to why progress stalled, he says he is less certain. But if pressed it becomes apparent that he has plenty of theories. In one succinct formulation, he puts it this way: “We landed on the moon in July 1969 and Woodstock started three weeks later. With the benefit of hindsight, that’s when the hippies won and somehow progress sort of died, the idea of progress came to an end.” The food arrives. The egg-lemon soup has a pasty texture but tastes good, so I decide that means it’s probably authentically Greek. I ask Thiel if he follows the paleo diet, which involves cutting out grains, potatoes and refined sugar and has become popular among Silicon Valley strivers (and which I confess to following sporadically myself). He says he goes “back and forth on it” but then offers a typically assertive theory. “You should not eat sugar. In almost everything there are different permutations of what one can do but if you drastically cut your sugar consumption, I think you’ll be much healthier. That’s the only rule.” We move to the challenges of self-improvement. At the start of this year Thiel, who in his youth was a nationally ranked chess player, decided that an hour-and-a-half a day spent playing online chess was too much wasted time, so he deleted the program from his computer – only to download and then delete it again “maybe a dozen times” since. I push him for other shortcomings, with the argument that no one will believe an excess of chess-playing is his main character flaw. He cautiously offers bad time management and says he is “not that detail-oriented.” What about seeing other people’s points of view, I suggest? “I think I’ve gotten better at that over the years,” he says. “I think in my twenties I tended to think of all people as sort of more or less alike.”
He goes on: “I now think that people are really different in all these subtle ways that are very important. So if you give critical feedback to people, there are some people who will be in tears and others with whom it won’t even register.” He sounds equally uncomfortable discussing himself. The “ums” multiply as he tries to explain why he threw in law and banking and came to Silicon Valley to pursue something far more world-changing. “There was this decision to move back to California and try something new and different,” he says as though it were something that happened to someone else. He is similarly vague when talking about the origins of his personal philosophy. “I’ve always been very interested in ideas and trying to figure things out.” His undergraduate degree, from Stanford University, was in philosophy but his stance against the dominant political philosophy on many issues seems more visceral than intellectual. “I think that one of the most contrarian things one can do in our society is try to think for oneself,” he says. He only really regains his stride when talking about how technological ambition has gone from the world, leaving what he calls an “age of diminished expectations that has slowly seeped into the culture”. Predictably, given his libertarian bent, much of this is traced back to regulation. This is his explanation for why the computer industry (which inhabits “the world of bits”) has thrived while so many others (“the world of atoms”) have not. “The world of bits has not been regulated and that’s where we’ve seen a lot of progress in the past 40 years, and the world of atoms has been regulated, and that’s why it’s been hard to get progress in areas like biotechnology and aviation and all sorts of material science areas.” … The main courses have long since arrived and Thiel has been picking at his salmon without much interest while ignoring the dollop of mashed potato on the side. The dark wedge of collard greens on my plate packs a rich and tangy punch, like swallowing a week’s supply of vitamins in one go, though it rather overshadows the sole alongside. Despite occasional bouts of determinism – “On my bad days I find the sort of Spenglerian decline of the west very compelling” – Thiel says he believes in the unconstrained ability of individuals to make a difference. But, he complains, “People have become too incrementalist and too risk-averse and not trying hard enough.” He holds up Elon Musk, a friend from the PayPal days and now head of both electric carmaker Tesla Motors and private rocket company SpaceX, as an example of how big ideas can still flourish. By comparison, says Thiel, most people are trapped by social conformity into spouting received ideas, from “the average liberal in San Francisco …[to] the average church lady in Alabama”. The result, he says, is that “I never know how much people believe any of the stuff they say”. Despite this, he still claims to be an optimist. Though his is not the kind that seems endemic in Silicon Valley, where a Pollyanna-ish belief in the best outcome reigns supreme. “I believe things could be a lot better,” he says, in self-justification. “There are all these things that aren’t being done.” The fact that “we’re not finding cures to cancer” or that a third of people past the age of 85 have Alzheimer’s, for instance, is a “crazy catastrophe”. “I think that all these things could be eminently curable,” he says. “I think that we could find much cheaper sources of energy if we worked at this. I think there could be, you know, radical life extension.” Although Founders Fund has stayed away from energy, which has proved a graveyard for start-up investors, it has backed a number of new biotech and healthcare businesses with ambitious goals. For Thiel, only an acceleration of technology can provide the solution. Take the problem of uncontrolled government surveillance. While many would see that as the result of too much technology in the hands of an unchecked intelligence establishment, Thiel thinks there isn’t enough. “If you can figure out effective ways to identify terrorists, then you don’t need to be as intrusive. It’s a lack of technology that drives intrusive behaviour,” he says. This is the sort of problem Palantir is trying to solve.
Over coffee, I have another go at the personal stuff. I wonder how he feels about the caricature of him as a techno-utopian libertarian billionaire. Is he concerned about being seen as, well, flaky? “If that’s the meanest thing they said about me, I’d be happy about that,” he counters. He claims that, ultimately, libertarianism – though not about to become a dominant ideology in the US – is now an influential strand of thinking that will have a bearing over the next decade on issues as varied as whether to intervene in foreign wars or to legalise marijuana. And he saves a last jab for the Tea Party movement and its attempt to reach back to the past in search of solutions to the problems of the present. “We can’t go back to the past. If you literally went back to the past, you’d just get back to the messed-up present. We need to think of a future that’s different from the past.” It’s past two o’clock and the taverna, with its own archaic echoes of a culture from far away, has almost emptied. Polite and attentive to the last, Thiel makes sure he has given a thorough response to any outstanding questions. Then he is gone as abruptly as he arrived, leaving a faint echo of the future.
Peter Thiel, the Silicon Valley billionaire investor, seemed out of place, diminished, when he walked up to a podium at the National Press Club on Monday. Thiel has made a fortune and cultivated a public persona based on his confident predictions about technologies that most of us barely understand. His mode of talking, in the past, could be called utopian/dystopian Manicheanism. He has described a marvellous world that could be—space colonies and abundance fuelled by biotech, cheap energy, and brilliant robots—and then explained why our risk-averse culture and stifling, confiscatory government prevent us from achieving what should be ours. At this most recent speech, though, he spoke about a topic we know all too well: Donald Trump. The core of Thiel’s message came in a line that seemed designed to generate laughs. “No one would suggest that Donald Trump is a humble man,” Thiel said. “But the big things he’s right about amount to a much-needed dose of humility in our politics.” Suggesting humility as Trump’s true strength is essential Thiel: provocative, surprising, and based on the idea that he sees something in plain sight that the rest of us have missed.
Thiel was one of the few successful businesspeople to endorse Trump at the Republican National Convention this summer and, more recently, he pledged $1.25 million to support his campaign. While this is a trivial amount to Thiel, personally, and would be unremarkable in a normal Presidential campaign, it is among the largest single gifts in support of Trump (most of the money was given to a super pac that backs Trump) and generated enormous anger among Thiel’s peers. After hearing calls to have Thiel kicked off the board of directors of Facebook, Mark Zuckerberg wrote a note to staff defending him. “There are many reasons a person might support Trump that do not involve racism, sexism, xenophobia or accepting sexual assault,” Zuckerberg wrote. Similarly, Sam Altman, the president of Y Combinator, an influential startup incubator, wrote a series of tweets simultaneously attacking Trump for being “abusive, erratic . . . unfit to be President” and also defending his decision to keep Thiel as an adviser to Y Combinator; “YC is not going to fire someone for supporting a major party nominee.” Soon after the controversy arose in mid-October, Thiel announced plans to give this talk to defend himself and the man he wants to be President. His speech is unlikely to change minds about Trump, though it probably will shift how some people think of Thiel. It revealed that, contrary to his pose as a Delphic seer and public considerer of the inconceivable, he is a conventional, right-leaning scold, comfortable with vague assertions. (Thiel also responded to questions about his secret financing of Hulk Hogan’s lawsuit against Gawker for publishing Hogan’s sex tape, offering the dual argument that he was driven by a desire to give Hogan—a mere “single-digit millionaire”—his day in court and to protect the First Amendment.)
Thiel laid out a grim, near-apocalyptic view of America, one in which citizens are “stuck in a broken system” and as he put it in the post-talk discussion, that America “is on the Titanic and we’re going to sink.” He listed familiar reasons for American despair: rising medical costs, a huge trade deficit, student debt. The protagonists in his national drama are Trump voters that he, generously, counts as fifty per cent of the American population. The villains are élites in their coastal bubbles of Silicon Valley and Washington, D.C., who “do not intend to tolerate the views of half this country.” These élites, he said, have destroyed our government’s competence. The U.S., he argued, used to do great things like sending people to the moon and building the interstate highway system, but now it can’t do anything right. He supports Donald Trump, he said, because Trump “rejects the false, reassuring stories that tell us everything is fine.” Thiel explained: “Very unusually for a Presidential candidate, he has questioned the core concept of American exceptionalism. He doesn’t think the force of optimism alone can change reality without hard work. Just as it’s about making America great, Trump’s agenda is about making America a normal country.” Thiel defined a normal country as one that doesn’t have a trade deficit, doesn’t fight many wars, and that has a government that “actually does its job.” While some of Thiel’s statements were explicitly wrong—far fewer than half of Americans support Trump, whose unfavorable ratings have hovered around sixty per cent—most were what might be called truth-adjacent. Yes, student debt has risen and there are real issues to address, but it is hardly a sign that the nation is in collapse. (Thiel is famous for railing not just against student debt but also against the idea that a college education is worthwhile.) Trade has, indeed, hurt many Americans, but it has also helped many others—and the help far outweighs the hurt. Also, it is not just a tiny coastal élite who support it; most Americans do. The U.S. has a pretty “normal” trade deficit, lower than that of Canada, New Zealand, and the United Kingdom. Thiel’s talk felt much like other political speeches. The building blocks of his argument were a mishmash of decontextualized thoughts reassembled to form a simplistic narrative of good and evil, heroes and strawmen. Thiel’s odd but fascinating past statement suggested the possibility of a thoughtful, if idiosyncratic, synthesis of libertarianism and Trumpian populism. But that wasn’t the case. Thiel’s speech—celebrating big government projects, condemning trade and the price of a college education—was as much a rebuke of libertarianism as of Republicanism.
Thiel has earned his place among technology visionaries. He created PayPal and was among the first to understand Facebook’s power. I’d be curious to hear what he thinks the next decade holds for Internet-related startups. He used to present radical libertarian views that didn’t catch on but were fun to hear about. He was, for example, probably the most famous supporter of the seasteading movement, which imagined anarcho-libertarian societies built on artificial islands. Some of his statements over the years have been very troubling. In 1998, he co-authored a book condemning affirmative action and diversity efforts on college campuses as anti-white. Ten years later, he wrote, “I no longer believe that freedom and democracy are compatible.” He explained his thinking, in part, by pointing out that women got the vote and women are “notoriously tough for libertarians.” Thiel received a bit of a pass for these offensive ideas because they seemed to be the unfortunate side effects of his radical libertarianism and the privilege of a deep thinker exploring the outer reaches of acceptable discourse.
But the man who spoke at the National Press Club had no deep, coherent philosophy. He seemed libertarian at times and, at others, he supported a far more activist government. Throughout, he presented an insufficiently examined enumeration of urges and angers, not a program for governance. His ideas are such an odd assortment of left-wing, right-wing, and wingless nihilism that it’s hard to think of any movement or thinker that shares them—other than Donald Trump.