“In a 2009 essay called The Education of a Libertarian, Thiel declared that capitalism and democracy had become incompatible. Since 1920, he argued, the creation of the welfare state and “the extension of the franchise to women” had made the American political system more responsive to more people – and therefore more hostile to capitalism. Capitalism is not “popular with the crowd”, Thiel observed, and this means that as democracy expands, the masses demand greater concessions from capitalists in the form of redistribution and regulation. The solution was obvious: less democracy.“
During my lectures, I sometimes say that in our time, we have to be careful about 3 totalitarianisms; One is the totalitarianism of the state, which we could call fascism (the Stalinist Soviet model was the other form of it) ; the second is the totalitarianism of the commons, which we could call common-ism, marked by a belief that everything should be a commons and everything should be purely horizontal. Belief in a absolute solution stands in contrast to the multi-modal approach we follow at the P2P Foundation, which is not about making one modality absolute, but about thinking about their optimal configuration. Making the commons the prime attractor of our society and economy does not mean that our society only consists of commons.
But there is a third totalitarianism that is very dangerous nowadays, the totalitarianism of the market, terribly mislabeled in the U.S. as ‘libertarianism’. It comes in two forms, one is the current neoliberal system which wants to subsume the whole of society to the dictates of oligarchic finance; but there is another one that is equally dangerous and particularly significant for the peer to peer movement, because it often disguises itself in p2p language. And that is anarcho-capitalism. This political and social movement believes in distributed markets, that would dominate all of our lives. It is based on a distrust of democracy, and building tools that avoid democracy, replacing ‘one citizen one vote systems’, with ‘one dollar one vote’ systems. Much of the force behind Bitcoin and the blockchain comes from this underlying sensiblity. However, without countermeasures and social governance, any system based on a competition for scarce resources, leads inevitably to the creation of monopoly, as players of the game with the same name know all to well. So in practice, anarcho-capitalist technical solutions lead inevitably to the domination of oligarchic market forces. In this way, libertarianism is really the handmaiden of the neoliberal oligarchy. When libertarians become rich capitalists themselves, the veil separating the two evaporates, as with the Koch brothers.
But nowhere is this clearer than with Peter Thiel, a commercially successful libertarian who supports the authoritarian presidential candidate Donald Trump. This may sound contradictory, as why would a freedom-loving libertarian support authoritarian leaders, but the following article explains the logic behind the choice, which is really the hatred of democracy, and the vision that government should be exclusively at the service of the private sector, unhindered by democratic baggage.
Here are the excerpts from the excellent analysis by Ben Tarnoff:
“In a 2009 essay called The Education of a Libertarian, Thiel declared that capitalism and democracy had become incompatible. Since 1920, he argued, the creation of the welfare state and “the extension of the franchise to women” had made the American political system more responsive to more people – and therefore more hostile to capitalism. Capitalism is not “popular with the crowd”, Thiel observed, and this means that as democracy expands, the masses demand greater concessions from capitalists in the form of redistribution and regulation.
The solution was obvious: less democracy. But in 2009, Thiel despaired of achieving this goal within the realm of politics. How could you possibly build a successful political movement for less democracy?
Fast forward two years, when the country was still slowly digging its way out of the financial crisis. In 2011, Thiel told George Packer that the mood of emergency made him “weirdly hopeful”. The “failure of the establishment” had become too obvious to ignore, and this created an opportunity for something radically new, “something outside the establishment”, to take root.
Now, in 2016, Thiel has finally found a politician capable of seizing that opportunity: a disruptor-in-chief who will destroy a dying system and build a better one in its place. Trump isn’t just a flamethrower for torching a rotten establishment, however – he’s the fulfillment of Thiel’s desire to build a successful political movement for less democracy.
Trump is openly campaigning on the idea that American democracy should belong to fewer people. When he talks about deporting 11m immigrants, or promises to build a database of Muslim Americans, or praises FDR’s internment of Japanese Americans during the second world war, or encourages violence against black protesters at his rallies, he’s making an argument about who counts as an American (native-born whites) and who doesn’t (everyone else). “Real” Americans get to enjoy the rights and privileges of citizenship; racial outsiders and internal enemies do not.
This is certainly racist, and possibly fascist. It’s also profoundly anti-Democratic. It’s debatable how many of Trump’s campaign promises he could actually fulfill if elected, and how many he would even want to. But one indisputable effect of a Trump administration would be to diminish American democracy by lending credibility and resources to the forces of white supremacy and ultranationalism.
Such an outcome would fit Thiel’s purposes well. For Thiel, a smaller, more easily manipulated mob is preferable to a bigger one. If democracy can’t be eliminated, at least it can be shrunk through authoritarianism. A strongman like Trump, by exploiting the racial hatred and economic rage of one group of Americans, would work to delegitimize and disempower other groups of Americans. He would discipline what Thiel calls “the unthinking demos”: the democratic public that constrains capitalism.
Limiting democracy isn’t the same as limiting government, however. And this distinction matters to Thiel, who believes that government has an important role to play. Unlike most libertarians, Thiel recognizes that only the state can provide the public goods on which private profit-making depends. He often speaks of his admiration for the Apollo space program, which he considers the crowning achievement of a golden age of federal funding for science. Since then, as he explained in an interview with Francis Fukuyama, “an ossified, Weberian bureaucracy and the increasingly hostile regulation of technology” have crippled government’s capacity to foster technological innovation.
Following this logic, what’s needed is a state that bankrolls scientific research at midcentury cold war levels – without the comparatively high tax rates and social spending that accompanied it. Corporations would mine this research for profitable inventions. The public would foot the bill and ask for nothing in return.
The problem with traditional conservatives is that they’re too anti-government to fulfill this vision. Fortunately for Thiel, Trump is no traditional conservative. One of his talking points is a trillion-dollar infrastructure plan, which he openly compares to the New Deal. But if Trump is heretical enough to support public spending to stimulate growth, he’s orthodox on the question of who should benefit from that growth. Federal spending is fine so long as its benefits flow to the rich: Trump’s proposed tax reform would slash rates for the top 0.1% of American taxpayers.
Thiel’s preferred political future isn’t hard to picture. The government shoulders the research costs for capitalists but makes no demands and sets no conditions. An authoritarian leader uses racial anger to set one portion of the population against another, and cracks down on those he sees as alien or illegitimate. The state becomes even more responsive to the needs of capitalists and even less responsive to the needs of workers and citizens. What Thiel calls the “oxymoron” of “capitalist democracy” is resolved – by jettisoning democracy.
This may sound like dystopian science fiction, but it’s also a perfectly reasonable political objective for someone of Thiel’s class position. It’s easy for liberals to dismiss Thiel as a “comic-book villain”, but this caricature obscures the fact that Thiel is a sophisticated thinker – and a perceptive one. His central observation, that American capitalism is facing a crisis, is unquestionably correct.”