The Pessimistic Billionaire

Article excerpt

Byline: Niall Ferguson

Venture capitalist Peter Thiel has made a fortune as an investor. Why is he so worried about the future?

Damn. Peter Thiel is smarter than I am.

It's not just that, as the founder of PayPal, president of the hedge fund Clarium Capital, managing partner of the venture-capital firm Founders Fund, and one of the early angel investors in Facebook, he's vastly and maddeningly wealthier than I am. I have met some people even richer than Thiel who turned out to be intellectually vacuous.

It's the fact that Thiel is also one of the most interesting and original thinkers in America today--something you'll already know if you've read the darkly powerful article he published in National Review last year titled "The End of the Future."

Thiel is not the only dotcom billionaire to have views on history and politics. Google's Eric Schmidt is writing what promises to be a fascinating book on the impact of the Internet on democracy. Also impressive is Yuri Milner's vision of the whole of humanity connected to form a single megabrain. But most Silicon Valley sages tend to be incorrigible optimists. And the fact that technology has made them so rich as individuals makes you wonder--just a little--when they proclaim that technology will save us all. They would say that, wouldn't they?

Thiel's pessimism is therefore unusual, as is his conservatism. He is an avowed libertarian, with a preference for Ron Paul among the Republican candidates. Yet he also retains a surprisingly strong belief in the capacity of government to promote technological advances--a belief more reminiscent of John F. Kennedy's Camelot than today's Cato Institute. So it was appropriate that when I interviewed him recently it was in the main hall of Harvard's Kennedy School of Government.

Part of Thiel's message is calculated to unnerve a liberal Harvard crowd. I ask him why he thought that for the past 30 years innovation has been so narrowly concentrated in technology and finance, with miserably little progress in, say, energy. "Everything else is being regulated to death," he replies. "From a libertarian perspective, with regulation we have become a much more risk-averse society."

However, when it comes to questions about health care, nuclear power, and education, Thiel readily concedes that government has a role to play--just not the one it plays today. …