PETER THIEL: THE DREAM OF A MYSTICAL TECHNOCRACY

On 10 October 2022 / Dossier The Truly Powerful, Finance, IBI World Germany / Leave a comment

He is one of the most powerful men on earth. But he does not want to lead a country, and it is ridiculous (as well as untrue) to accuse him of wanting to dominate the world. Peter Thiel believes in the right of each individual to freely create his own destiny, but also in the ability to renounce, through inability, laziness or misfortune, to do so – and be guided by those who, instead, have forged their own destiny as one builds a fortress. A fortress full of mysticism, linked both to Celtic myths (such as Tolkien) and to those of Catholic religious extremism – a dangerous road, travelled in the past by many of the theorists of German National Socialism[1], wanted by those who, after the birth of industrial capitalism, saw in the emancipation of the people and women, and in the secularisation of the State, a sign of weakness that would lead to the end of the Aryan civilisation – for millennia the ruler of humanity.

Thiel has amassed inconceivable wealth (over 7 billion dollars)[2] by successfully speculating on a number of technology companies (Facebook, Paypal, Airbnb, Spotify, LinkedIn[3], Palantir Technologies – a company linked to the CIA[4] – and SpaceX), and has for years been on the list of the richest people in the world[5]. With that money, he has built a network of entrepreneurs, investors and technicians, specialised in new technology start-ups, to earn even more in the future[6]: with the declared goal not of wealth, but of power[7].

He was born on 11 October 1967 in Frankfurt, Germany, to parents who moved around a lot because of the work of his father, Klaus Friedrich Thiel, a chemical engineer. When Peter is one year old, the family moves to Cleveland, Ohio; then to South Africa, to Namibia, then back to America, this time to California, to Foster City (in the heart of Sillicon Valley) – Peter is ten years old. He excels at school: he is a star pupil, especially in mathematics – and at only six years old, he learns to play chess to become one of the top ten chess players in America[8]. This is his main characteristic: he is extremely competitive, and does not know how to lose – he is caught up in the fury: ‘Show me a good loser and I will show you a loser’[9]. He is passionate about fantasy related to Celtic mysticism, to the point of naming some of his companies after ‘Lord of the Rings’ inspired names[10].

PayPal

October 2000, Peter Thiel with Elon Musk, founders of PayPal[11]

Unlike many Sillicon Valley entrepreneurs who built their careers as engineers, Thiel at Stanford University majored in philosophy[12]. As a student, he founded a right-wing newspaper, still up and running, called The Stanford Review[13], whose motto is: Fiat Lux (‘Let there be light’)[14]. He went on to university, graduating with a law degree in 1992[15], then moved to New York and began his career at the law firm of Supreme Court Justice James Larry Edmondson, later becoming a lawyer for Sullivan & Cromwell. Then he got fed up, became a financial trader for Credit Suisse, or prepared speeches for the former Secretary of Education, William Bennett. In 1996 he decided to radically change his life[16]: torna in California, si appassiona ad Internet e fonda Thiel Capital Manageme: he returned to California, became passionate about the Internet and founded Thiel Capital Management Llc, financed with a million dollars from loans from friends and relatives[17].

In California, Thiel met Max Levchin – a Ukrainian computer engineer who became a billionaire with the start-up Affirm[18]. The three guys founded Confinity Inc[19]. It is 1998, at the beginning of the digital payment era: the startup develops a cryptographic system that allows online payments and prevents the identity of the person opening an account from being verified: ‘The ideal place to launder the money that online fraudsters were taking from identity theft victims,’ says Max Chafkin in his book ‘The Contrarian’[20]. Together with Max Levchin and the rest of what was later to be called the ‘PayPal mafia’ (Elon Musk and billionaire Reid Hoffman, co-founder of LinkedIn[21]), the biggest online payment system. In March 2000, Confinity merged with X.com – an online bank founded by Elon Musk. In 2001, X.com is renamed to PayPal, its turnover grows at a fast pace and, in 2002, it is listed on the stock exchange[22].

Thiel prefers to remain behind the scenes as much as possible. Perhaps scheming, as when he got Musk (who was on his honeymoon) dethroned from his position as CEO of PayPal and replaced by Thiel himself[23]. ‘The relationship between the two is a complicated one,’ explains Chafkin: ‘Thiel is the man behind the sale of PayPal to eBay, which brought Musk the large amount of dollars that allowed him to found SpaceX and Tesla. And SpaceX itself was later rescued, at a time of severe financial difficulties, thanks to Thiel’s money. Let’s say that the relationship between the two has always been one of love-hate“[24].

During the launch of PayPal, representatives from Deutsche Bank and Nokia use PayPal to send Thiel $3 million in venture capital[25]. The company was sold to eBay for $1.5 billion a few months later[26]. Thiel, who had 3.7 per cent of the company ($55 million), resigned as CEO soon after the sale[27]. In October 2002 he used USD 10 million to found the hedge fund Clarium Capital Management Llc San Francisco[28] (formerly Thiel Capital Management Llc)[29]. Thiel explains: ‘the big macroeconomic idea we had at Clarium was that peak oil is running out and there are no easy alternatives’[30].

The new company is being sued by minority shareholder Amisil Holdings Ltd. Nicosia (Cyprus) for fraud: Thiel wants to liquidate all the small investors, but Amisil, who invested in December 1997, when the company was still called Thiel Capital, refuses to sell its share and waits for the value to rise further – but Thiel does not pay dividends and eventually ousted Amisil and took control of its share[31]. The funds managed by Clarium reached USD 8 billion in 2008. However, as of 2011, annual earnings dropped to no more than 400 million due to numerous unprofitable investments and customer payouts[32].

Palantir Technologies – ‘the eye’ of the CIA

The group, known as ‘The PayPal Mafia’[33]: six members, Peter Thiel, Elon Musk, Reid Hoffman, Luke Nosek, Ken Howery and Keith Rabois, became billionaires[34]

In May 2003, Thiel founded Palantir Technologies Inc. with friends Alex Karp and Joe Lonsdale. Palo Alto, California[35]. The company’s name is that of the seer stone in the Lord of the Rings trilogy[36]. The start-up specialises in the analysis of big data and is backed by the CIA, then goes public through a stock market listing in 2020, although much of the company’s business remains shrouded in military secrecy: Palantir hunts terrorists, monitors the coronavirus and tracks illegal immigrants on behalf of the US government[37]; the company develops computer products for counter-terrorism, fraud, military and industrial espionage, natural disaster prediction and mass surveillance[38].

Its speciality is to channel the most disparate information from various sources such as phone records, IP addresses, financial transactions, conversations, travel data, social media activity, public camera recordings and geolocation data[39]. Not surprisingly, the company has close ties to the White House (and a central role in Trump’s line on immigration)[40], and earns money through rich contracts with the CIA, the Army and ICE (the federal anti-immigration agency)[41]. The company, however, is not a government agency, and in recent years has started to seek private clients. Large companies such as the JP Morgan bank, Airbus, Fiat Chrysler[42] and Ferrari Auto have requested customised software systems from Palantir[43].

Chafkin comments: “This is one of his many contradictions: he started out as a liberalist ideologue who shuns any state interference in the lives of citizens, writing fiery editorials in the Stanford Review, but then he founded Palantir, which is one of the highest expressions of so-called ‘surveillance capitalism’, in the way it hoards data, extracting it from Facebook for example, to profile people online“[44]. Innocent people, who have done nothing, but on whom Palantir prepares immense dossiers.

Thiel owns about 8 per cent of them, partly directly and partly indirectly[45]: “However, the company has never produced a positive surplus since it was founded in 2003. In 2019 it made a record income of $742.5 million, 25 per cent more than in 2018. Nevertheless, it lost USD 579 million (..). Over the next few years, the US administration will pay at least $741 million for Palantir’s consulting services, a figure that could potentially grow to $2.9 billion’[46]. In 2020, the company is valued at $20 billion[47]. Since it went public, its shares have continuously dropped in value[48], but as long as there are government contracts, Palantir will be unsinkable[49].

Facebook

French Polynesia: the project for a self-sufficient island, powered by solar energy, fed with hydroponic crops and quenched with desalinators^[50]

After PayPal and Palantir, Thiel shifted his focus to social media: in 2004 Thiel chose a promising young man, Mark Zuckerberg, and became the first outside investor in Facebook, buying 10.2 per cent for $550,000: ‘I felt comfortable pursuing their original vision. And it was a very reasonable valuation. I thought it would be a pretty safe investment“[51].

Thiel was instrumental in shaping Zuckerberg: this relationship continued even as Thiel became increasingly controversial in the technology industry, and a frequent target for Facebook critics[52]. In May 2012, he sold 16.8 million Facebook shares for $638 million – and although he has now sold most of his shares (earning around $1 billion[53]), Thiel has remained on the Meta Group’s board[54] until February 2022.

In 2005, after producing the film ‘Thank You for Smoking’[55], a satire of cigarette advertisers[56], Thiel went on to launch new companies, including Founders Fund, a major venture capital firm that invests in startups[57], as well as several others, from aerospace to the internet, from artificial intelligence to longevity: in its portfolio (more or less 80 companies[58]) are, in addition to Palantir, SpaceX (the largest private manufacturer of rockets, founded by Musk with the project to take men to Mars[59]), Asana Inc (industrial productivity), Airbnb (tourism), Zynga (game developer), Spotify (music) and others[60]. In October 2017, he funded 3TBioscences, a start-up specialising in finding therapies to cure cancer by leveraging the immune system[61]. From 2015 to 2017, he worked with the start-up accelerator Y Combinator[62].

Its investment philosophy revolves around product quality and the power of venture capital as a force for good[63]. In 2017, Founders Fund purchased bitcoins worth around $15-20 million. In January 2018, the company told investors that, due to the soaring value of cryptocurrency, the bitcoins purchased were worth hundreds of millions of dollars[64]. Also in 2017, Thiel was one of the first outside investors in Clearview AI, a facial recognition technology startup[65] that has been heavily criticised by privacy rights advocates[66]. Sea Steading builds artificial, self-sufficient islands[67], although the future, for Thiel, is New Zealand, which he sees as an ideal place in the event of a climate catastrophe, and where he bought a 193-hectare estate and citizenship[68].

Despite this, when the pandemic broke out, Thiel did not hide out in New Zealand (which he has abandoned since 2017), but in his Maui home, paid $27 million in 2011, a record price at the time – 4500 square metres of space with an ocean view and beachfront pool[69]. And this is where Thiel’s prognostications about how technology will enter all parts of our lives became reality: factories standing still, restaurants closed, shopping malls empty, colleges and schools abandoned… so Zoom entered every home – as Marc Andreessen said ‘Software is eating the world’. Amazon flourishes, Netflix ditto. All socials grew, Amazon +71%, Apple +51%, Facebook +31%; even Thiel got richer thanks to his share in the payment processing company Stripe, but all companies won a bit – including Palantir, excluding only AirBnb, because of the decline in tourism[70].

He has his own hyperbaric chamber, pursues a paleo purifying diet[71], ed è convinto di poter campare almeno fino a 120 anni[72], usando anche metod, and is convinced that he can live to at least 120 years, even using very unorthodox methods, such as transfusing the blood of young people[73]. He has pledged £3.5 million to a Cambridge gerontologist, Aubrey de Grey, who is searching for the key to immortality[74]. He is also on the board of the Singularity Institute for Artificial Intelligence[75]: “The Singularity is the technological creation of an intelligence more intelligent than human intelligence. There are several technologies… going in this direction… Artificial intelligence… direct brain-computer interfaces… genetic engineering… different technologies that, if they reached a threshold of sophistication, would allow the creation of an intelligence more intelligent than the human one“[76].

His philosophy

Rod D. Martin, Peter Thiel’s philosopher mentor[77]

He has invested with Valar Ventures in many startups, including the conference room rental service Breather and the mobile tax service Taxflix[78], and most recently gave $27 million to XanPool (a payments and liquidity network similar to MasterCard or Visa from Hong Kong that has an open network of individuals and companies instead of banks[79]) and Mithril Capital[80] (which supports startups in all sectors that incorporate technology)[81]. Then there is the Thiel Foundation and the Thiel Fellowship, which annually awards $100,000 to 20 candidates under the age of 20 to drop out of college to pursue their business dreams[82]. The Thiel Fellowship is based on the belief that college costs too much for what it yields, and that it is better for smart kids to skip it in order to start achieving their goals as early as possible.

In an epic dispute between billionaires, Jeff Bezos stated: “Peter Thiel is a contrarian. You just have to remember that naysayers are usually wrong’. Peter Thiel responds: ‘The contrarians may be mostly wrong, but when they get it right, they really get it right’. His philosophy can be described in a few sentences: don’t copy others – look in the shadows where no one is looking[83]: “When there are many people doing the same thing, there is a lot of competition and little differentiation. You generally never want to be part of a popular trend… So I think trends are to be avoided. What I prefer is a sense of mission. Working on a unique problem no one is solving elsewhere“[84].

In 1998, he wrote ‘The Diversity Myth’, which is an attack on liberalism and the multiculturalist ideology that dominated Stanford at the time. He argues that multiculturalism leads to a diminution of individual freedoms[85]. It is not surprising, therefore, that he is a member of TheVanguard.Org (an online community of extremists[86]), a neo-conservative pressure group that was created to attack MoveOn.org, a liberal lobby. Thiel describes himself as ‘very libertarian’[87]. TheVanguard is run by one Rod D. Martin, a philosopher Thiel greatly admires: “Rod is one of our nation’s leading minds in creating new and necessary ideas for public policy. He has a more complete understanding of America than most leaders have of their own affairs“[88].

According to Martin, since the 17th century, a number of enlightened thinkers have led the world away from the old nature-bound life (he cites Thomas Hobbes’ definition of life as ‘ugly, brutish, and short’), and directed it towards a new virtual world in which we have defeated nature. True value today consists of imaginary things. Thiel says that PayPal is motivated by this belief: that value can be found not in real manufactured objects, but in relationships between human beings. PayPal is a way to move money without restrictions. Bloomberg explains: ‘For Thiel, PayPal was all about freedom: it would allow people to bypass currency controls and move money around the world’[89].

Thiel’s philosophical mentor is René Girard of Stanford University, an advocate of a theory of human behaviour called mimetic desire (Mimetic Theory). Girard believes that people are essentially sheep and copy each other without thinking. The desired object is irrelevant; all you need to know is that human beings will tend to move in packs. Hence the financial bubbles. Hence the enormous popularity of Facebook. Girard is a regular at Thiel’s intellectual soirees. In that context they talk about everything except sheep things like art, beauty, love, pleasure and truth[90].

French philosopher René Girard, one of Peter Thiel’s reference points[91]

The Internet is immensely attractive to someone like Thiel, because it promises a free and virtual world in human relations and business, freedom from pesky national laws, and opens up a world of free trade and anarchic expansion. Thiel also seems to approve of tax havens, and claims that 40 per cent of the world’s wealth resides in places like Vanuatu, the Cayman Islands, Monaco and Barbados. I think it is fair to say that Thiel, like Rupert Murdoch, is anti-tax, anti-government and anti-any form of state aid[92]. He also likes the globalisation of digital culture because it makes the overlords of the banks difficult to attack: ‘You can’t have a workers’ revolution to take over a bank if the bank is in Vanuatu,’ he says[93].

So, by his own admission, Thiel seeks to destroy the real world, which he also calls ‘nature’, and replace it with a virtual world – and it is in this context that we have to see the rise of Facebook: it is a successful experiment in global manipulation, fascinating for a bright young neo-conservative with a penchant for techno-utopian fantasies like Peter Thiel[94]. But sometimes he tends to overdo it – as when, in 2016, Forbes revealed that he was secretly funding lawsuits in an attempt to destroy Gawker Media[95].

In 2007, the online magazine Gawker had targeted him with articles alluding to his then-secret sexual orientation (he now declares himself ‘proud to be gay’^[96] and married Matt Danzeisen, in Vienna, in October 2017[97]), and criticised his skills as an investor. Thiel did not respond directly, but waited for the right moment to take revenge. When, in 2012, Gawker published a video of wrestler Hulk Hogan caught in intimacy with a friend’s wife, Thiel supported Hogan in a lawsuit that ended in a $115 million settlement[98] that bankrupted the magazine: ‘This lawsuit is one of the greatest acts of philanthropy I have ever made‘^[99].

Political relations

From left: Donald Trump, Peter Thiel, Tim Cook (CEO of Apple) and Safra Catz (Director of American Intelligence and co-CEO of Oracle Corp, America’s highest paid female CEO[100]) [101]

Thiel is a registered member of the Republican Party, and has contributed to several campaigns, such as that of Ronald “Ron” Paul (nicknamed Dr. No for opposing the funding of any government expenditure not explicitly authorised by the Constitution[102]) in the 2008 presidential election, and then Willard Mitt Romney, senator for Utah and CEO of a consulting firm[103] in the 2012 election, when he was defeated by Barack Obama[104].

He has donated millions to several other presidential candidates, and was an early supporter of Texas Senator Ted Cruz, financing his campaign for Attorney General in 2009 and for the Senate in 2012, or supported the campaign of Republican Senator Josh Hawley, who like Thiel hates Google – until he met Donald Trump[105], who calls him a trailblazer and a visionary[106]. Thiel was one of the very few Trump supporters from Silicon Valley[107]. He has subscribed to the extreme line on immigration, and even sexual harassment – and to support a counter-propaganda in the media and on social networks he has donated a billion dollars[108].

Many Facebook employees are furious about this – but Zuckerberg has defended him: ‘We cannot create a culture that says it cares about diversity and then excludes nearly half the country because it supports a political candidate‘[109]. Thiel, in 2019, then attended a dinner with Zuckerberg and Trump at the White House[110]. Later, responding to Congress about Facebook’s role in the campaign, Zuckerberg admitted that he had underestimated his own role[111].

Thiel spoke at the Republican National Convention in July 2016 and was his Silicon Valley liaison, bringing together key executives for a meeting at Trump Tower[112]. He was welcomed into Trump’s inner circle (they call him the ‘Shadow President’), given an office in Trump Tower[113] and worked on the transition team, in which he served a manager from Thiel Capital, Michael Kratsios[114]. For Steve Bannon and Trump, Thiel is the superhero who made victory possible[115]. For Thiel, on the other hand, Bannon is the extreme curb to the Islamisation of the West, the great immanent danger of our time, which leads him to collaborate with various organisations of fundamentalist Christianity – first and foremost those linked to Steve Bannon[116]. For Thiel and Bannon, giving up democracy, or trade with China, is less serious than losing the thousand-year war against Islam[117].

21 July 2016: Thiel speaks at the Republican National Convention at the Quicken Loans Arena in Cleveland[118]

Rejected by the people of Silicon Valley, in 2018 Thiel moved to Los Angeles, and took his staff of 50 with him[119]. In January 2018, he attacked ‘the left-wing ways of Silicon Valley’, which he said were an obstacle to progress and contributed to the establishment of ‘a one-party state’, lamenting the absence of conservatives from the tech industry[120]. Disappointed by Trump’s handling of the pandemic crisis[121], Thiel announced his intention to move to Switzerland to avoid paying the taxes that the Biden administration would certainly demand of him[122].

He continues to sponsor Kris Kobach, who is tougher than Trump on immigration and denies the criticality of COVID, supporting his candidacy in the Senate with $2.1 million – but lost[123]. Nevertheless, even with the new administration, Palantir’s market capitalisation rises to $68 billion[124]. On 7 February 2022, Thiel announces that he will leave the board of Meta, after 17 years at the helm of Facebook, to support pro-Trump candidates in the 2022 mid-term elections[125]: Blake Masters (Arizona) and J.D. Vance (Ohio)[126]. These are two former managers of the Thiel Capital Group[127].

Religious issues

Father Arne Panula, one of the most powerful men in Opus Dei and brotherly friend of Peter Thiel[128]

In July 2017, Father Arne Panula, Vicar of Opus Dei[129], who ran a bookstore in downtown Washington with a huge church attached, died of cancer. The CIC (Catholic Information Center) chapel is packed with young people for midday Mass and offers the Eucharist less than half a mile from the Oval Office. Father Arne graduated from Harvard, where he discovered Opus Dei, and received his doctorate in theology from the University of Navarre in Pamplona, Spain with a thesis on John Henry Newman and divine providence – an Anglican priest, converted to Catholicism, and rose to immense power in the international administration of the Vatican[130] and now – just over a century after his death, beatified by Pope Benedict XIV[131].

Upon Father Arne’s death, it turns out that he was a close friend of Peter Thiel, and a close circle of ‘billionaires and Supreme Court justices’[132]. Father Arne befriended Thiel when Thiel was attending the Opus Dei house at Stanford[133]. Mary Eberstadt, in her book on Father Arne, relates that “Between him [Thiel] and Father Arne there is a decades-long intellectual friendship, born when Father Arne was a young campus chaplain at Stanford University and Peter Thiel was an undergraduate student. From different perspectives, they found themselves united against the antinomian mantra “Hey, hey, hey, Western civilisation must go!”. The two remained in constant conversation and philosophical camaraderie until Father Arne’s death“[134].

For Thiel, however, Opus Dei remains a closed door forever: the Catholic Church’s most powerful and secretive organisation is openly hostile to homosexuality[135]. It probably matters little, because Peter Thiel, like the entire right-wing tradition steeped in medieval mysticism, does not act in the name of God, but in the name of himself and of a tradition and heroic vision in which the individual supersedes every point of reference – even religious ones. In recent years, Thiel has been forced to face the fact that Steve Bannon went to prison, and that Trump was defeated first electorally, and then politically and – perhaps – legally. The esteem that Thiel had shown for him was greatly diminished.

While Musk and Bezos dream of going to Mars and saving the ecosystem (if there is money to be made) Thiel remains a white fly, one who no longer belongs to the far right, or Silicon Valley, or anything else. As he has always said, he does not follow the light, where everyone is, but the dark, where no one is looking, and where, he hopes, there are still the greatest discoveries to be made, treasures to be conquered and heroic deeds to be performed.

[1] https://www.abendblatt.de/ratgeber/wissen/forschung/article106983061/Nazi-Ideologie-bei-Tolkien.html ; https://idw-online.de/de/news108087

[2] https://www.bloomberg.com/billionaires/profiles/peter-a-thiel/ ; https://www.celebritynetworth.com/richest-businessmen/ceos/peter-thiel-net-worth/

[3] https://www.crunchbase.com/person/peter-thiel

[4] https://www.repubblica.it/economia/affari-e-finanza/2017/03/13/news/palantir_il_braccio_tecnologico_della_cia_ora_i_privati_fanno_a_gara_per_i_suoi_software-160502661/ ; https://techprincess.it/palantir-contratti-cia/

[5] https://www.forbes.com/profile/peter-thiel/?list=forbes-400&sh=4a5d36fc533a

[6] https://www.crunchbase.com/person/peter-thiel

[7] Max Chafkin, The Contrarian. Peter Thiel, New York, Pinguino, 2021

[8] Nel 1992, ha raggiunto un picco di 2342 dalla United States Chess Federation (USCF). Ha ricevuto il titolo di Life Master: https://it.celeb-true.com/peter-andreas-thiel-american-entrepreneur-venture-capitalist-author ; https://ratings.fide.com/profile/2022389 ; https://www.chessgames.com/player/peter_thiel.html

[9] https://www.theguardian.com/technology/2008/jan/14/facebook

[10] https://www.startupmag.it/peter-thiel/

[11] https://www.repubblica.it/venerdi/2021/10/08/news/peter_thiel_il_lupo_cattivo_della_silicon_valley-319683735/

[12] https://www.latimes.com/business/technology/la-fi-tn-who-is-peter-thiel-20180215-story.html