Behind the Bastards: Part Two – How Peter Thiel Became the Gravedigger of Democracy

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Introduction

In this gripping second part of the "Behind the Bastards" series, host Jack O'Brien delves deep into the controversial life and career of Peter Thiel, a figure whose actions and ideologies have significantly impacted modern democracy. Joined by Noah Schachtman, contributing editor for Rolling Stone and Wired, the episode unpacks Thiel's transformation from a promising law graduate to a pivotal player in Silicon Valley and conservative politics.

1. Early Career and Shift from Law to Right-Wing Politics

Jack O'Brien opens the discussion by exploring Thiel's initial foray into the legal profession and his subsequent departure from it. At [07:27], O'Brien remarks:

Jack O'Brien [07:27]: "Peter just doesn't have any interest in doing that. That's a regular life. That's an ordinary people kind of thing to do is like starting at kind of the bottom rung of your career and working your way up."

Thiel's dissatisfaction with his legal career led him to co-author The Diversity Myth alongside David Sacks in 1995, a publication aimed at critiquing multiculturalism on college campuses. This move marked Thiel's early alignment with right-wing intellectual circles, fueled by support from conservative think tanks like the John M. Olin Foundation.

Jack O'Brien [12:28]: "Peter's involved with these right-wing moneyed interests... He is a conservative pundit before he starts funding conservative causes."

Key Insight: Thiel was not a traditional founder who pivoted from business to politics; instead, he was actively recruited by established conservative entities seeking influential voices to challenge the liberal status quo.

2. Founding and Managing PayPal

The conversation transitions to Thiel's pivotal role in co-founding PayPal, highlighting his management style and strategic innovations. Thiel's approach was marked by openness and a flat organizational structure, allowing for transparency and collective decision-making.

Jack O'Brien [37:25]: "His Hallmark Management MO at PayPal was the all hands open book session... that access to information coupled with the lack of offices created a flat structure where any idea could win the day."

One of PayPal's significant contributions under Thiel's leadership was the development of the CAPTCHA system, designed to combat online fraud by requiring users to distinguish letters from a background that machines couldn't easily interpret.

Jack O'Brien [45:27]: "Levchin calls the program Igor because of this guy that Kotenek had caught, and he builds this program, and it's for PayPal to stop fraud. This is what becomes Palantir."

Key Insight: Thiel's tenure at PayPal showcased his ability to foster innovation and implement effective anti-fraud measures, laying the groundwork for future ventures like Palantir.

3. Conflict with Elon Musk and Departure from PayPal

A notable episode in PayPal's history was the clash between Peter Thiel and Elon Musk over company direction, particularly regarding technological platforms. Their personal animosity culminated in Thiel orchestrating a leadership coup, leading to Musk's ousting.

Jack O'Brien [40:56]: "Peter orchestrates a coup against Musk while Elon is on vacation."

Despite their disagreements, this conflict underscored Thiel's assertive nature and his ability to navigate power dynamics within a burgeoning tech company.

Key Insight: Thiel's strategic maneuvers at PayPal not only cemented his leadership but also demonstrated his willingness to eliminate rivals to maintain control.

4. Founding Clarium Capital and Investment in Facebook

Post-PayPal, Thiel established Clarium Capital, a hedge fund that became instrumental in his early investment activities, including a pivotal stake in Facebook. Although he initially invested heavily, his skepticism about Facebook's long-term valuation led him to retreat, missing out on substantial profits.

Jack O'Brien [67:48]: "He thinks Facebook is overvalued, and so he fails to roll his investment forward. As a result, despite being famous as this early Facebook investor, he doesn't make much money off of Facebook."

Thiel's investment strategy often reflected a blend of foresight and ideological blind spots, where his understanding sometimes outpaced his ability to capitalize fully.

Key Insight: Thiel's early investment in Facebook demonstrated his keen eye for potential, yet his reluctance to commit entirely hindered his financial gains from the platform's success.

5. Ideological Evolution Post-9/11

The aftermath of September 11 profoundly influenced Thiel's worldview, steering him towards neoconservative ideologies. He began to perceive liberal democracy as vulnerable, advocating for strategies to dismantle governmental structures in favor of libertarian ideals.

Jack O'Brien [73:19]: "He thinks that everything about liberal democracy, about civil rights has to change."

Thiel's participation in organizing symposiums and his writings during this period reflect a deepening alignment with political movements aimed at reshaping American governance and society.

Key Insight: Thiel's experiences post-9/11 catalyzed a shift towards more radical political stances, intertwining his business endeavors with broader ideological battles.

6. Founding Palantir and Anti-Government Sentiments

Leveraging PayPal's anti-fraud technology, Thiel co-founded Palantir, a data analytics firm with significant government contracts. Despite his initial revolutionary aspirations to separate money from the state, Palantir became a tool for governmental oversight and intelligence.

Jack O'Brien [45:27]: "This app to build this kind of a crazy board system is what becomes Palantir."

Key Insight: Thiel's endeavor with Palantir illustrates a complex relationship between his libertarian ideals and the practical applications of his technological innovations within governmental frameworks.

7. Thiel's Venture Capital Activities and Continued Influence

Through Clarium Capital and other investment vehicles, Thiel continued to shape Silicon Valley's landscape, backing startups that aligned with his vision of disrupting traditional power structures. His support for controversial figures and funding of media outlets further solidified his role as a significant influencer in both tech and political spheres.

Key Insight: Thiel's sustained investment activities reflect his commitment to fostering environments that challenge prevailing norms, reinforcing his status as a "gravedigger of democracy."

Conclusion

Peter Thiel's journey from a disillusioned law graduate to a powerful entrepreneur and political mover is marked by strategic brilliance intertwined with ideological fervor. His actions at PayPal, investments in Facebook, founding of Palantir, and vehement political engagements paint a portrait of a man deeply invested in reshaping both technology and governance. This episode of "Behind the Bastards" sheds light on the intricate and often unsettling mechanisms through which Thiel wields his influence, positioning him as a formidable figure in the ongoing discourse about democracy and power.

Notable Quotes

• "Peter just doesn't have any interest in doing that. That's a regular life."
  — Jack O'Brien [07:27]

• "His Hallmark Management MO at PayPal was the all hands open book session."
  — Jack O'Brien [37:25]

• "Peter orchestrates a coup against Musk while Elon is on vacation."
  — Jack O'Brien [40:56]

• "He thinks Facebook is overvalued, and so he fails to roll his investment forward."
  — Jack O'Brien [67:48]

• "He thinks that everything about liberal democracy, about civil rights has to change."
  — Jack O'Brien [73:19]

Disclaimer: This summary is based on the transcript provided and aims to capture the essence of the podcast episode. For a complete understanding, listeners are encouraged to tune into the full episode of "Behind the Bastards."