Since powdered rhino horn has (rightly) been banned, only two aphrodisiacs remain: political power and great wealth. Of these, the second is the more interesting, partly because most humans, especially journalists, seem to be affected by it. It’s what leads them to assume that if someone is fabulously rich, then she or he must be very smart. That’s why the super-rich are invariably surrounded by fawning sycophants – and also why they eventually come to believe that they themselves are geniuses.
Which brings us neatly to Peter Thiel, Silicon Valley’s leading contrarian. With a net worth of perhaps $5bn (£3.9bn), he is undoubtedly rich, though not in the Elon Musk, Jeff Bezos or even Bill Gates league. But since he is the only public intellectual that the tech industry has produced, there is a widespread belief that he must also be a deep thinker, which is why organisations ask him to give “keynote” speeches.
The function of such addresses is to give an elevated tone to what are otherwise sordid proceedings, which explains why Thiel was invited to address the 2022 bitcoin conference in Miami, which was billed as “a four-day pilgrimage for those seeking greater freedom and individual sovereignty”. Given that the attendees at this shindig were likely subscribers to the view that he is a genius, it was an easy gig for the great man. Think of it as Narendra Modi addressing the annual conference of the Bharatiya Janata party and you’ll get the general idea.
Thiel was there to tell the attendees that they were the Lord’s anointed. Bitcoin is the new gold that one day should take its place alongside the precious metal as the world’s store of value, replacing equities (ie company shares), which, at $115tn are currently much bigger than gold ($12tn). This will happen when the value of a single bitcoin (currently about £30,000) will increase by at least a hundredfold, making a single coin worth £3m. But it will only happen if a sinister cabal of old-world reactionaries – the “finance gerontocracy” of the veteran investor Warren Buffett, Jamie Dimon (head of JP Morgan Chase) and Larry Fink (chief executive of BlackRock) – is defeated.
Stirring stuff, eh? The strange thing is that this call to arms was delivered in such a shambling manner. Here is a literal transcription of the relevant passage, starting 14 minutes into Thiel’s speech:
“Why has it [bitcoin] not yet converged with gold for, um, or even with the equity markets more broadly, and what what is going to, you know, what is it going to take for this for this to happen? And, ah, I know that sort of the ways we oftentimes talk about, um, businesses or technologies, you know, how great the technology is, how great the code is, how great the math is, you know, how how it’s sort of innovative, but I want to sort of suggest that we should maybe think of, we should think of, we should think of it at least in one dimension as sort of a political question and it’s a movement and it’s a political question whether this movement is going to, um, succeed or whether, um, whether the enemies of the movement are going to succeed in stopping us and so I want to maybe end with, um, you know, an enemies list.”
Thiel’s rhetorical deficiencies make him an unlikely leader of a political movement. But the aphrodisiacal effect of his wealth meant that his speech was widely reported. Yet the strange thing is that his record as an investor seems patchy, to say the least. He made his first pile from PayPal, which was a shrewd bet. He was the first big investor in Facebook, sure, but then he tried to persuade Mark Zuckerberg to sell it to Yahoo for $1bn in 2006 and then sold much of his holding after the company’s IPO in 2012. He foresaw the banking catastrophe of 2008, but failed to sell out beforehand. And, according to his biographer, much of his wealth comes from his skill at finding clever ways to limit his tax exposure: his investments in Facebook, Palantir and some others were made through a vehicle known as a Roth IRA that was originally intended for “ordinary” people – ie middle-class taxpayers. As David Runciman put it in his book review of Max Chafkin’s The Contrarian: Peter Thiel and Silicon Valley’s Pursuit of Power: “Thiel is not a genius investor. He is, like almost everyone else, a nervous investor, prone to panic and regret. He’s just another hedgie chasing his tail.”
But if Thiel isn’t a genius, or even a latterday Cicero, he’s nevertheless dangerous. In an essay published in 2009 he famously said that he no longer believed that freedom and democracy are compatible. And he’s using his money to try to change the balance of power in the deadlocked US Senate in the next round of congressional elections by giving two $10m donations to the Super Pacs that are backing two of his proteges, JD Vance and Arizona Republican Blake Masters. In that sense, Thiel looks less like a tech genius and more like the Koch Brothers – Charles and his late sibling, David – who have done more to reshape Republican politics than anyone other than Donald J Trump. And that’s a good reason for taking him seriously, whatever happens to bitcoin.
What I’ve been reading
Why Slaughterhouse-Five resonates 50 years later is the subject of a lovely review essay on Kurt Vonnegut’s great novel by James Parker in the Atlantic.
Musings on a Chameleon is a memorable John Knowles essay from 1988 on Truman Capote in Esquire.
Trick or tweet
For a great blog post by a shrewd observer, look no further than Scott Galloway writing about Elon Musk and Twitter.