Peter Thiel is a supporter of libertarian causes and of the Republican Party's extreme right-wing. Individual rights and liberties, and limiting the role of government are at the centre of libertarian ideology. It's therefore ironical that Silicon Valley's pre-eminent libertarian, described as one of the leading public intellectuals by his boosters in the academia, is the promoter of a start-up which engages in surveillance activities which intrudes into individual privacy and contracts primarily with governments.
Thiel is a promoter of Palantir, a $17 bn data analytics firm whose primary business includes capturing and analysing individual data for national security and law enforcement organisations. Helping the state on citizen surveillance, which infringes on individual privacy, is central to its work. Palantir is heavily reliant on government contracts which make up more than half of its revenues. Its contracts in the US with CIA and local police departments have courted controversies and allegations of preferential treatment. Now the same is happening in Europe.
Palantir has positioned itself as a uber-nationalist company, declaring its commitment to national security issues and avoid business with China and others not allied with US interests. Thiel being one of the biggest Republican donors and a big Trump supporter, there have been several allegations that Palantir has benefited preferentially from US government contracts.
To the extent crony capitalism is the existence of mutually beneficial relationship between business and government, Peter Thiel and Palantir should count as its totemic example in the world of Big Tech.
On a related note, and in the context of the failure of the Silicon Valley Bank, Thiel's Founders Fund advised its portfolio companies to move deposits to other lenders amidst concerns about SVB's health, thereby amplifying the run on the Bank.
In the 48 hours before the Fed stepped in, almost 500 VCs signed a statement saying they would encourage portfolio companies to keep using SVB if it were recapitalised — though two of the biggest, Andreessen Horowitz and Founders Fund, were both absent from that list.
Scott Galloway described Thiel and Co's actions during the SVB crisis as that of "venture catastrophists"
Several hundred VC firms signed a letter committing to keeping their business with SVB, intended to make the asset more attractive to an acquirer. More interesting than who signed the letter was who didn’t. In sum, venture capital firms that have a vested interest in destabilizing the banking system and the dollar, via crypto investments, have morphed from Americans to agents of chaos. I believe Marc Andreessen or Peter Thiel could have stopped the run with one tweet. They chose not to.
This is what an FT article wrote in the context of the role played by some venture capitalists during the SVB crisis,
When concerns about SVB’s balance sheet rose last week, VC firms including Peter Thiel’s Founders Fund urged portfolio companies to act in their own best interests and remove funds. This helped to trigger a run on the bank. There is a broader charge of hypocrisy towards some of the venture capitalists who chafe against government regulation of tech but demanded regulators step in to help SVB depositors. Going online to plead for support “was an ‘atheist in a foxhole’ moment”, says one executive at a venture capital fund who was derisive of his peers’ conversion.
So what do you call libertarians who are self-styled public intellectuals, whose businesses make majority of their money out of government contracts, are crony capitalists, and who lose no opportunity to appropriate gains but socialise losses?
I have written earlier about the hypocrisy of Silicon Valley's Tech entrepreneurs and on the giant hypocrisy in the bailout of Silicon Valley Bank.
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