Donald Trump, Peter Thiel and the death of democracy
This is a fantastic article and should be as read as widely as possible.
As written by Ben Tarnoff
In the Guardian
https://www.theguardian.com/technology/2016/jul/21/peter-thiel-republican-convention-speech
Tonight, tech billionaire Peter Thiel will speak at the Republican national convention and make his case for why Donald Trump should be the next president of the United States. Most of the media is baffled by Thiel’s endorsement. And it’s true that at first glance the two men aren’t an obvious match. Trump is an authoritarian populist who promises to abolish free trade. Thiel is a self-described libertarian who worships capitalism. Thiel is also one of the most powerful people in Silicon Valley – and Silicon Valley hates Trump.
So why would Thiel embrace Trump? So far, observers have offered two explanations. One is Thiel’s contrarianism; another is his lifelong crusade against “political correctness”. Thiel certainly enjoys courting controversy, whether it involves funding a lawsuit to destroy Gawker or funding a fellowship to induce kids to drop out of college. And Thiel shares Trump’s antipathy to the “politically correct” rhetoric of diversity and multiculturalism, as well as to affirmative action.
But neither of these reasons speak to Thiel’s deeper affinities with Trump. What Trump offers Thiel isn’t just an excuse to be contrary and politically incorrect. Trump gives Thiel something far more valuable: a way to fulfill his long-held ambition of saving capitalism from democracy.
In a 2009 essay called The Education of a Libertarian, Thiel declared that capitalism and democracy had become incompatible. Since 1920, he argued, the creation of the welfare state and “the extension of the franchise to women” had made the American political system more responsive to more people – and therefore more hostile to capitalism. Capitalism is not “popular with the crowd”, Thiel observed, and this means that as democracy expands, the masses demand greater concessions from capitalists in the form of redistribution and regulation.
The solution was obvious: less democracy. But in 2009, Thiel despaired of achieving this goal within the realm of politics. How could you possibly build a successful political movement for less democracy?
Fast forward two years, when the country was still slowly digging its way out of the financial crisis. In 2011, Thiel told George Packer that the mood of emergency made him “weirdly hopeful”. The “failure of the establishment” had become too obvious to ignore, and this created an opportunity for something radically new, “something outside the establishment”, to take root.
Now, in 2016, Thiel has finally found a politician capable of seizing that opportunity: a disruptor-in-chief who will destroy a dying system and build a better one in its place. Trump isn’t just a flamethrower for torching a rotten establishment, however – he’s the fulfillment of Thiel’s desire to build a successful political movement for less democracy.
Trump is openly campaigning on the idea that American democracy should belong to fewer people. When he talks about deporting 11m immigrants, or promises to build a database of Muslim Americans, or praises FDR’s internment of Japanese Americans during the second world war, or encourages violence against black protesters at his rallies, he’s making an argument about who counts as an American (native-born whites) and who doesn’t (everyone else). “Real” Americans get to enjoy the rights and privileges of citizenship; racial outsiders and internal enemies do not.
This is certainly racist, and possibly fascist. It’s also profoundly anti-Democratic. It’s debatable how many of Trump’s campaign promises he could actually fulfill if elected, and how many he would even want to. But one indisputable effect of a Trump administration would be to diminish American democracy by lending credibility and resources to the forces of white supremacy and ultranationalism.
Such an outcome would fit Thiel’s purposes well. For Thiel, a smaller, more easily manipulated mob is preferable to a bigger one. If democracy can’t be eliminated, at least it can be shrunk through authoritarianism. A strongman like Trump, by exploiting the racial hatred and economic rage of one group of Americans, would work to delegitimize and disempower other groups of Americans. He would discipline what Thiel calls “the unthinking demos”: the democratic public that constrains capitalism.
Limiting democracy isn’t the same as limiting government, however. And this distinction matters to Thiel, who believes that government has an important role to play. Unlike most libertarians, Thiel recognizes that only the state can provide the public goods on which private profit-making depends. He often speaks of his admiration for the Apollo space program, which he considers the crowning achievement of a golden age of federal funding for science. Since then, as he explained in an interview with Francis Fukuyama, “an ossified, Weberian bureaucracy and the increasingly hostile regulation of technology” have crippled government’s capacity to foster technological innovation.
Following this logic, what’s needed is a state that bankrolls scientific research at midcentury cold war levels – without the comparatively high tax rates and social spending that accompanied it. Corporations would mine this research for profitable inventions. The public would foot the bill and ask for nothing in return.
The problem with traditional conservatives is that they’re too anti-government to fulfill this vision. Fortunately for Thiel, Trump is no traditional conservative. One of his talking points is a trillion-dollar infrastructure plan, which he openly compares to the New Deal. But if Trump is heretical enough to support public spending to stimulate growth, he’s orthodox on the question of who should benefit from that growth. Federal spending is fine so long as its benefits flow to the rich: Trump’s proposed tax reform would slash rates for the top 0.1% of American taxpayers.
Thiel’s preferred political future isn’t hard to picture. The government shoulders the research costs for capitalists but makes no demands and sets no conditions. An authoritarian leader uses racial anger to set one portion of the population against another, and cracks down on those he sees as alien or illegitimate. The state becomes even more responsive to the needs of capitalists and even less responsive to the needs of workers and citizens. What Thiel calls the “oxymoron” of “capitalist democracy” is resolved – by jettisoning democracy.
This may sound like dystopian science fiction, but it’s also a perfectly reasonable political objective for someone of Thiel’s class position. It’s easy for liberals to dismiss Thiel as a “comic-book villain”, but this caricature obscures the fact that Thiel is a sophisticated thinker – and a perceptive one. His central observation, that American capitalism is facing a crisis, is unquestionably correct.
The past four decades of economic data make that crisis clear. Since the 1970s, the US economy has enjoyed far lower levels of growth than it did during its midcentury golden age. From 1920 to 1970, real per-capita GDP grew by a staggering 2.41% a year on average. From 1970 to 2014 it slowed considerably, to 1.77%. The slowdown in labor productivity has been even starker.
Thiel is acutely aware of these numbers. He is, in fact, obsessed with economic stagnation. Over the long term, stagnation doesn’t just threaten capitalism by limiting growth; it also runs the risk of turning people against capitalism, as their wages and living standards deteriorate. This is already happening, as the popularity of the Bernie Sanders campaign made clear. A Harvard survey from April found that a majority of millennials now say they reject capitalism; a third say they support socialism. The precise meaning of this poll is arguable, but it’s clear that young Americans, who make less money than their parents did at their age and have higher rates of poverty and unemployment, are moving left.
It’s safe to assume that Thiel is paying attention. The next American electorate will be more nonwhite, more working-class, and more leftwing. And they’re likely to demand more democracy, not less – not only from the political system, but from the economic system as well. That sets them on a collision course with elites like Thiel.
Above all, Thiel is an innovator. He has made his fortune by recognizing the potential of an idea long before his peers. Silicon Valley, along with most of American business, may dislike Trump. But that doesn’t mean they couldn’t someday embrace the kind of politics he represents. A Trumpist state could do much to soothe the crisis of capitalism: it could pour public dollars into discovering the next lucrative technology for the private sector while holding the line against the redistributive clamor of a rising millennial majority. Thiel has a history of making bets that pay off big. With Trump, he may have made another.
