The libertarian entrepreneur and venture capitalist Peter Thiel co-founded PayPal, was an early investor in Facebook, and currently serves as president of the global macro hedge fund Clarium Capital. He has donated money to several libertarian causes, including the Seasteading Institute, a group exploring ways to build autonomous communities in the ocean. He recently announced the creation of the Thiel Fellowship, which will award $100,000 each to 20 people under 20 years old to “stop out” of college and create their own business ventures.
In October, Thiel sat down with Senior Editor Tim Cavanaugh to talk about exit rights, the higher education bubble, and the Facebook-inspired film The Social Network.
Q: The Facebook movie has just come out. Could you speak about the accuracy of the movie?
A: Hollywood is a little bit of a zero-sum game—there can only be so many celebrities—whereas I think technology is fundamentally about creating a win-win where everybody can do better. The film tries to impose a Hollywood, or governmental, win-lose mentality on a world that’s fundamentally about winning and winning.
Q: PayPal was initially viewed as highly utopian—maybe not by you, but by the world—as a possibility of revolutionizing the whole money system. Does the actual PayPal experience indicate that there’s no escape from the government and from the dollar system?
A: It’s not easy to escape. The regulatory issues surrounding the payment and monetary system are formidable. I think we are heading toward a world where people have somewhat more control over their money than they did 30 or 40 years ago. One macroeconomic way of describing this is that we’re seeing lower and lower rates of inflation.
Q: Talk about the Seasteading Institute.
A: The goal has been to try to create some kind of space outside of politics. There’s so much about the political sphere that has become just poisonous. It’s about people collectively hating other people. That’s basically what politics is about: collective hatred.
We need to figure out a way to escape from it. Even if a lot of people do not want to live on platforms in the ocean or floating ships or floating cities, I think the option of opting out of politics will make it a lot better. However screwed up California is, it would be a lot more screwed up if people weren’t allowed to leave. The freedom to leave is one of the most fundamental freedoms.
Q: One of the things you’re saying people should be able to leave is college.
A: If you want to have a discussion of where there is a bubble in the U.S., it is in education. There’s been more inflation in education than any other sector of our economy over the last 30 years. In practice, the problem is that people end up amassing enormous amounts of debt in college or graduate school, and this tremendously constrains their future options. They cannot choose to do things that they really want to do or things that would really transform the society. Instead they’re tied to this incredible mountain of debt. I don’t think as a society we should be encouraging this.
Q: Right now we’re in a period of retrenchment with ObamaCare and an administration that’s married to a big-government idea of how to solve problems. Yet we’re also seeing a huge backlash against that in the streets. Where do you think we are in terms of an understanding of government and the proper role of a state?
A: We are in a surprisingly libertarian moment. More so than I would have thought two years ago. At the same time, I remain pessimistic about how much hope we can have through merely political means in the long term. There’s usually something very hard for libertarians about being able to win elections. Politics becomes libertarian as an absolute last resort.