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137

Peter Thiel

"Monopolists lie to protect themselves"

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notes

Cohen, N. (2017). Peter Thiel. In Cohen, N. The Know-It-Alls: The Rise of Silicon Valley as a Political Powerhouse and Social Wrecking Ball. New Press, pp. 137-160

139

After some fumbling with other ideas, Thiel and Levchin came up with PayPal, which would create “a new Internet currency to replace the U.S. dollar.” Thiel pitched the idea as fulfilling his anti-government dream of a global market that protects the welfare of the public by empowering them as consumers: “What we’re calling ‘convenient’ for American users will be revolutionary for the developing world. Many of these countries’ governments play fast and loose with their currencies. . . . Most of the ordinary people there never have an opportunity to open an offshore account or to get their hands on more than a few bills of a stable currency like U.S. dollars.” But there was that other thing, too, the chance to make a fortune. If you happened to create and own a new digital currency, you could collect a cut from each online transaction. You would become the middleman of e-commerce, commerce, as David Shaw and Jeff Bezos had sketched out, without incurring a retailer’s burden of keeping track of orders, maintaining warehouses, and making deliveries.

does your currency have an army tho. no? ok bud

—p.139 by Noam Cohen 5 years, 7 months ago

After some fumbling with other ideas, Thiel and Levchin came up with PayPal, which would create “a new Internet currency to replace the U.S. dollar.” Thiel pitched the idea as fulfilling his anti-government dream of a global market that protects the welfare of the public by empowering them as consumers: “What we’re calling ‘convenient’ for American users will be revolutionary for the developing world. Many of these countries’ governments play fast and loose with their currencies. . . . Most of the ordinary people there never have an opportunity to open an offshore account or to get their hands on more than a few bills of a stable currency like U.S. dollars.” But there was that other thing, too, the chance to make a fortune. If you happened to create and own a new digital currency, you could collect a cut from each online transaction. You would become the middleman of e-commerce, commerce, as David Shaw and Jeff Bezos had sketched out, without incurring a retailer’s burden of keeping track of orders, maintaining warehouses, and making deliveries.

does your currency have an army tho. no? ok bud

—p.139 by Noam Cohen 5 years, 7 months ago
141

[...] it appeared to Thiel and his comrades, multiculturalism had the single, overarching purpose of coddling the weak. Stanford students, some of the most talented young people of their generation, shouldn’t need to be shielded from occasional strong language or from the uncomfortable fact that the world’s best thinkers were not neatly divided among various racial, sexual, ethnic, and social groups.

hahahahaaaaaa

—p.141 by Noam Cohen 5 years, 7 months ago

[...] it appeared to Thiel and his comrades, multiculturalism had the single, overarching purpose of coddling the weak. Stanford students, some of the most talented young people of their generation, shouldn’t need to be shielded from occasional strong language or from the uncomfortable fact that the world’s best thinkers were not neatly divided among various racial, sexual, ethnic, and social groups.

hahahahaaaaaa

—p.141 by Noam Cohen 5 years, 7 months ago
141

“In the multicultural allegory, the wealthy are per se oppressive, because their success creates misfortunes for others. The other two possible causes of poverty—bad fortune or bad choices—are rejected a priori. Quite naturally, multiculturalists conveniently overlook the fact that without productive people paying taxes, there could be no welfare for the poor.”

aaaaaaaaah kill me

—p.141 by Noam Cohen 5 years, 7 months ago

“In the multicultural allegory, the wealthy are per se oppressive, because their success creates misfortunes for others. The other two possible causes of poverty—bad fortune or bad choices—are rejected a priori. Quite naturally, multiculturalists conveniently overlook the fact that without productive people paying taxes, there could be no welfare for the poor.”

aaaaaaaaah kill me

—p.141 by Noam Cohen 5 years, 7 months ago
148

These two distinct pools of candidates for PayPal resulted in an initial staff that was nearly all white and nearly all male. Of the six original founders, the one nonwhite person was an immigrant from China. All were men. All but Thiel were twenty-three or younger. Four had built bombs in high school. A picture of the staff six months later shows that it had grown to thirteen and included one woman, an office assistant. “The early PayPal team worked well together because we were all the same kind of nerd,” Thiel recalled. “We all loved science fiction: ‘Cryptonomicon’ [by Neal Stephenson] was required reading, and we preferred the capitalist Star Wars to the communist Star Trek.”

good lord

thought: homogeneity as a symptom. a symptom of what? not sure, but it's definitely not good

—p.148 by Noam Cohen 5 years, 7 months ago

These two distinct pools of candidates for PayPal resulted in an initial staff that was nearly all white and nearly all male. Of the six original founders, the one nonwhite person was an immigrant from China. All were men. All but Thiel were twenty-three or younger. Four had built bombs in high school. A picture of the staff six months later shows that it had grown to thirteen and included one woman, an office assistant. “The early PayPal team worked well together because we were all the same kind of nerd,” Thiel recalled. “We all loved science fiction: ‘Cryptonomicon’ [by Neal Stephenson] was required reading, and we preferred the capitalist Star Wars to the communist Star Trek.”

good lord

thought: homogeneity as a symptom. a symptom of what? not sure, but it's definitely not good

—p.148 by Noam Cohen 5 years, 7 months ago
157

Thiel’s complaint against eBay wasn’t so much about its monopoly powers, but that it was becoming a monopoly in online payments instead of PayPal. According to Thiel, a truly free market, with perfect knowledge and perfect competition, leads to failure for everyone. “Under perfect competition, in the long run no company makes an economic profit,” he writes, adding the emphasis. “The opposite of perfect competition is monopoly.” Thus, the goal of any sane start-up should be to create a monopoly. When Thiel uses the term monopoly, he hastens to add, he does not mean one based on illegal bullying or government favoritism. “By ‘monopoly,’ we mean the kind of company that’s so good at what it does that no other firm can offer a close substitute,” he writes in Zero to One, his business-advice book.

i wonder if there's any critical analysis of that last point in the book (i can't remember). why can no firm offer a close substitute? why is no one else able to replicate it, if it's lucrative enough that people would want to? if it's based on IP restrictions, then surely that's government favoritism. but if it's not, and if it instead stems from the idea that some lone genius CEO is so high IQ that no one else can come close, then, well, he's an idiot

—p.157 by Noam Cohen 5 years, 7 months ago

Thiel’s complaint against eBay wasn’t so much about its monopoly powers, but that it was becoming a monopoly in online payments instead of PayPal. According to Thiel, a truly free market, with perfect knowledge and perfect competition, leads to failure for everyone. “Under perfect competition, in the long run no company makes an economic profit,” he writes, adding the emphasis. “The opposite of perfect competition is monopoly.” Thus, the goal of any sane start-up should be to create a monopoly. When Thiel uses the term monopoly, he hastens to add, he does not mean one based on illegal bullying or government favoritism. “By ‘monopoly,’ we mean the kind of company that’s so good at what it does that no other firm can offer a close substitute,” he writes in Zero to One, his business-advice book.

i wonder if there's any critical analysis of that last point in the book (i can't remember). why can no firm offer a close substitute? why is no one else able to replicate it, if it's lucrative enough that people would want to? if it's based on IP restrictions, then surely that's government favoritism. but if it's not, and if it instead stems from the idea that some lone genius CEO is so high IQ that no one else can come close, then, well, he's an idiot

—p.157 by Noam Cohen 5 years, 7 months ago
158

Under this theory of benevolent monopolies, government regulations and laws are unnecessary. Taxes are in effect replaced by monopoly profits—everyone pays their share to Google, Facebook, Amazon, PayPal. And in contrast to the government, these profits are allocated intelligently into research and services by brilliant, incorruptible tech leaders instead of being squandered by foolish, charismatic politicians. Levchin, during an appearance on The Charlie Rose Show, was asked about the libertarian cast to Silicon Valley leaders. He said he personally was OK with taxes being used to build and maintain roads, for well-functioning law enforcement and national security. For helping those less fortunate, too. But, he added, “I have relatively low trust in some of my local politicians . . . to spend my taxes on things that really do matter. And so this lack of inherent trust of the local or broader political establishment is probably the most defining, most common feature of Silicon Valley ‘libertarians.’”

what are the axioms here? that people who are smart enough to accrue monopoly profits are also smart enough to put their money in the right place (research-wise) rather than hoarding it for themselves ...? what evidence is there to back this up ... especially historically ...

—p.158 by Noam Cohen 5 years, 7 months ago

Under this theory of benevolent monopolies, government regulations and laws are unnecessary. Taxes are in effect replaced by monopoly profits—everyone pays their share to Google, Facebook, Amazon, PayPal. And in contrast to the government, these profits are allocated intelligently into research and services by brilliant, incorruptible tech leaders instead of being squandered by foolish, charismatic politicians. Levchin, during an appearance on The Charlie Rose Show, was asked about the libertarian cast to Silicon Valley leaders. He said he personally was OK with taxes being used to build and maintain roads, for well-functioning law enforcement and national security. For helping those less fortunate, too. But, he added, “I have relatively low trust in some of my local politicians . . . to spend my taxes on things that really do matter. And so this lack of inherent trust of the local or broader political establishment is probably the most defining, most common feature of Silicon Valley ‘libertarians.’”

what are the axioms here? that people who are smart enough to accrue monopoly profits are also smart enough to put their money in the right place (research-wise) rather than hoarding it for themselves ...? what evidence is there to back this up ... especially historically ...

—p.158 by Noam Cohen 5 years, 7 months ago