What's Wrong With Silicon Valley Libertarianism?

Peter Thiel, founding investor in PayPal Jin Lee / Bloomberg-Getty Images

If you've seen The Social Network, you may have caught a glimpse of Peter Thiel. He was the first outside investor in Facebook, putting up $500,000 to finance the site's original expansion in 2004. In the film's version of events, he connives with Sean Parker, the founder of Napster, to deprive Mark Zuckerberg's friend Eduardo Saverin of his 30 percent stake in the company. Aaron Sorkin's screenplay devastates the German-born venture capitalist in a line: "We're in the offices of a guy whose hero is Gordon Gekko."

While he clearly enjoys playing Richie Rich—profilers have commented on his McLaren supercar, his apartment in the San Francisco Four Seasons, his white--jacketed butler—Thiel fancies himself more than another self-indulgent tech billionaire. He has a vision, and has lately been spending some of the millions he has made on Facebook and PayPal—which he founded—trying to advance it.

Thiel's belief system is a mixture of unapologetic selfishness and economic Darwinism. In a personal statement produced last year for the Cato Institute, he announced: "I no longer believe that freedom and democracy are compatible." The public, he says, doesn't support unregulated, winner-take-all capitalism, and so he won't support the public any longer. "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," he writes. If you want to go around saying that giving women the vote wrecked the country and still be taken seriously, I suppose it helps to hand out $100 bills.

What differentiates Silicon Valley's style of libertarianism from Glenn Beck's raving-weeping variety is its laissez-faire attitude toward personal behavior and the lack of demagogic instinct. Thiel, who is openly gay, wants to flee the mob, not rally it through gold-hoarding or flag-waving. Having given up hope for the United States, he writes that he has decided to focus "my efforts on new technologies that may create a new space for freedom." Both Theil's entrepreneurship and his philanthropy are animated by techno-utopianism. With PayPal, he sought to create a global currency beyond the reach of taxation or central-bank policy. He sees Facebook as a way to form voluntary supra-national communities.

Offline, Thiel is the lead backer of Sea-steading, a movement to create law-free floating communes and explore space, with the avowed aim of creating new political structures even farther offshore. That could take some time, but Thiel has a plan for that too. He has given millions to the Methuselah Foundation, which does research into life-extension based on the premise that humans can live to be 1,000 years old. At PayPal, he proposed making cryogenic storage an employee perk.

It should be noted that Thiel has also supported some good causes, like the Committee to Protect Journalists. But his latest crusade is his worst yet, and more troubling than the possibility of an unfrozen-caveman venture capitalist awakening in the 22nd century and demanding his space capsule. The Thiel Fellowship will give entrepreneurs under age 20 a cash award of $100,000 to drop out of school and pursue their business ideas. In announcing the program, Thiel made clear his contempt for U.S. universities, which, like governments, he believes, cost more than they're worth and get in the way of what really matters in life, namely tech startups.

Where to start with this nasty idea? A basic feature of Thiel's world view is its narcissism. Thiel fellows will have the opportunity to emulate their sponsor by halting their intellectual development around the onset of adulthood, maintaining a narrow-minded focus on getting rich as young as possible and thereby avoid the siren lure of helping others or pursuing knowledge for its own sake. Thiel's premise is that America suffers from a deficiency of entrepreneurship. In fact, we may be on the verge of the opposite: a startup bubble in which too many weak ideas find funding and every kid dreams of being the next Mark Zuckerberg.

There is, of course, another model of Silicon Valley politics, which finds its exemplars in the clean-tech race, in Google's self-driving cars, wind farms, and Bill Gates's philanthropy. Zuckerberg himself shows signs of actually caring about other people, having just donated $100 million to support change in Newark, N.J.'s blighted public-school system. Tech prodigies sometimes grow up late. Here's hoping Thiel will one day as well.

Editor's note: Due to an editing error in "High-Tech Hogwash" (October 25), we implied that the quote "We're in the offices of the guy whose hero is Gordon Gekko" came directly from the film "The Social Network." In fact, the line appeared in an early version of Aaron Sorkin's screenplay, not in the finished film. We apologize for the confusion.

Jacob Weisberg is chairman of the Slate Group and author of The Bush
and In an Uncertain World: Tough Choices from Wall Street to Washington.