Peter Thiel
Photo Credit: Wikipedia
February 5, 2014
|
The cult of the libertarian-minded ultra-weatlhy would make an
intriguing anthropological case study. But it would be a case study with
a twist: its research subjects increasingly control our economy, our
politics, and even our personal lives.
We’re dealing
with a cohort of highly fortunate, highly privileged and highly unaware
individuals who have been inappropriately lionized by society. That
lionization has led them to believe that their wealth and
accomplishments are their own doing, rather than the fruits of
collaborative effort – effort which in many cases was only made possible
through government support.
But instead of thanking the
government and the taxpayers for their good fortune, they’ve allowed
their own good press to go to their heads. And they’re biting the hand
that feeds them, attempting to shut down the system of taxpayer support
and government action which created their world.
Our
money-obsessed society gives them far more praise and then they deserve.
Our corrupted political system gives them far more influence than we
deserve. And, slowly but surely, they are now turning their considerable
resources to dismantling government’s role in society.
Call
them the “cool tycoons of libertarianism.” They have neat ideas (when
they’re not talking about government or the economy, that is). They have
neat toys and neat houses. But what they would do to our society isn’t
neat at all.
Here are five of them.
1. Tom Perkins
Perkins
has already received well more than his deserved 15 minutes of fame.
But, while he’s been appropriately reviled for his infamous
“Kristallnacht” comment, comparing the treatment of America's 1% to that
of Jews in Nazi Germany, too few people have taken to task for the
depth of his ignorance on economic issues.
That
ignorance was in full display when he went on Bloomberg television to
“apologize” for his Nazi reference – an occasion in which he spent far
more time defending his ugly worldview than he did apologizing.
In
his original comments, Perkins compared “the progressive war on the
American one percent, namely the ‘rich’” with Nazi persecution of Jews.
But as we first
reported,
much of the “persecution” which triggered Perkins’ outrage involved his
ex-wife’s hedges; it was a one-paragraph item in the San Francisco
Chronicle criticizing author Danielle Steele's landscaping. It wasn’t a
progressive critique; it was an aesthetic one.
Nobody’s
criticizing all wealthy people, of course. In fact, a number of them
showed uncommon good sense during the Perkins kerfuffle. The investment
firm which Perkins cofounded tweeted that “We were shocked by his views …
and do not agree.” Silicon Valley investor
Marc Andreessen called him an unprintable name. (Well, okay: it isn’t unprintable. Andreessen called Perkins an “asshole.”)
Perkins’
defense of his initial comments on Bloomberg betray the shallowness of
his libertarian thought. He insisted that his fellow tycoons are “job
creators,” despite the fact that they’ve been paying very low taxes for
more than a decade – and there are no jobs!
Perkins also
insisted that society should “let the rich do what the rich do” and
enjoy the expanded job opportunities that will flow from that. But on
Wall Street the rich were allowed to do what the rich do and it robbed
the economy of millions of jobs and trillions in wealth. Apple and other
big tech manufacturers were allowed to “do what they do” and hundreds
of thousands of jobs were shipped overseas.
Perkins
defended the incivility of the San Francisco tech crowd by saying that
“maybe have to put up with some techno-geek arrogance to get those sorts
of folks thinking.” But what, exactly, are these geeks thinking about?
One of the most stunning things about Silicon Valley triumphalism is the
way it celebrates itself for what are, after all, a very mediocre set
of inventions.
Truly smart tech companies are few and
far between. Facebook? An accidental discovery by two guys who thought
they were creating a college students’ app and still can’t design a
decent user interface. Uber? An obvious idea with a nice user interface.
Zynga? The less said the better.
Nor was Perkins
himself the winner of some Darwinian free-market competition. He made
his money the old-fashioned way: by meeting two brilliant guys named
Hewlett and Packard and getting them to hire him.
Perkins himself
was never the entrepreneur or the innovator at Hewlett-Packard. He ran
the research department, then became general manager of its computer
division.
Hewlett-Packard itself would never succeeded without Uncle Sam. As Bloomberg News
has reported,
“Defense contracts spurred the growth of the instrument-maker
Hewlett-Packard not long after its founding.” (Today HP is one of the
nation’s l
argest defense contractors.)
But
guys like Tom Perkins don’t know how to say “thank you.” Instead, when
they’re asked to people like him live in a “bubble,” they tend to answer
as Perkins did, by claiming that it is “a bubble that has changed the
world.”
Actually the government changed the world. So
did brilliant inventors like Bill Hewlett and David Packard. Guys like
Tom Perkins, while they may have been smart and/or hard-working, mostly
caught a lucky break. But they’ve managed to rewrite their own histories
as a libertarian fantasy, a Victory of the Supermen upon which all
others must gaze in wonderment and awe.
And don’t forget to say nice things about the hedges.
2. John Mackey
John
Mackey, CEO of Whole Foods, is one of the nation’s most visible
“free-market libertarians.” Mr. Mackey said this about government, and
specifically about Obamacare, last year on
NPR:
“In
fascism, the government doesn't own the means of production but they do
control it and that's what's happening with the health care program
with these reforms and so I'd say the system is becoming more fascist.”
Presumably
that means that the privatization of government services – an effort
which includes every major defense contractor in this country – is a
“fascist” scheme. We haven’t heard Mr. Mackey make that argument,
however.
The “fascist government Mackey despises
provides a number of services which have helped make him become very
wealthy. The USDA, for example, certifies that the food sold in his
stores is organic. Without that certification, Whole Foods customers
would have no way of trusting Mr. Mackey’s claims about his food. His
business probably wouldn’t have gotten off the ground without it.
And
that’s not all. Government built and maintains the roads and rails
which bring Mr. Mackey’s goods to each of his far-flung stores.
Government regulators ensure that his stores’ food is grown, prepared,
packaged, and shipped in a manner that is safe and disease-free.
Without government, John Mackey would still be running a little hippie store in Austin.
Mr.
Mackey believes that business, not government, is best suited to
addressing society’s ills. He points to his corporation’s own health
plan as proof, claiming that it’s superior to Obamacare. Actually, it’s
quite similar to Obamacare. Like the president’s plan, Mackey’s offers
employees a choice of private-sector insurance options.
But
the benefits are much worse in Mackey’s program. As Consumer Watchdog
points out, Whole Foods employees have “astronomical” deductibles and
copayments. If corporations can do the job better than government can,
why is Mackey’s plan so much worse?
While government is evil in Mackey’s eyes, he’s a great believer in the existence of “
heroic business.”
And yet, Mr. Mackey doesn’t exactly practice what he preaches. Consider
this quote from Mackey: “Business is based on cooperation and voluntary
exchange. People trade voluntarily for mutual gain. No one is forced to
trade with a business.”
Really, Mr. Mackey? Whole Foods
is well-known for buying out all its competitors in a city or region.
Some of the competitors it closed down this way include Wild Oats,
Wellspring, Bread & Circus, Mrs. Gooch’s, Food for Thought, and
Fresh and Wild.
A former Whole Foods employee
described what happened
after Mackey’s corporation shut down the competing Wild Oats store or
in his town: “Within one year of this merger … prices on many items went
up by 15-20%. At the time our cat food was $13.59 a bag, today it is
$16.59 and mostly due to the lack of competition in the market (another
nearby WFM in another region has a lot more competition and the food is
at its original $.59).”
For a believer in the “free
market,” Mr. Mackey certainly seems to do everything he can to suppress
it. In fact, the Federal Trade Commission was forced to step in on
antitrust grounds over Whole Foods handling of Wild Oats stores. Whole
Foods finally
settledand agreed to sell off the remaining Wild Oats locations, but by then the damage to the “free market” had already been done.
Mr. Mackey, who is 60 years old and has no children, reportedly views himself as a “
daddy”
to his employees. If so, he can be a Scrooge-like one. Despite the
corporation’s PR campaigns claiming otherwise, Whole Foods pays at or
near the minimum wage for many positions in its stores.
Among
other things, that means that this anti-government zealot is being
subsidized by government programs so that he can keep underpaying his
employees. Here’s how
that works:
Anyone who earns 130 percent of the Federal poverty line or less
(currently about $25,400 for a three-person household) is eligible for
food assistance. That’s $12.21 per hour for a full-time employee.
The employment website
Glassdoor.com
lists salaries for a number of Whole Foods positions. Jobs that start
in the $8/hour range or below include assistant bulk buyer, cashier’s
assistant, bakery assistant, cashier, customer service representative,
and associate. There are dozens of jobs whose average pay is less than
that.
Why don’t both parents work? Sometimes it’s
because there’s only one parent at home, with two kids to raise. That’s
no way to treat the grandkids, Pop.
One more thing:
Mackey doesn’t think the climate change is real, either. So he doesn’t
just think he can do government’s job better than government can. He
also thinks he knows more about science than scientists do. Sounds more
like an ego problem than a difference in ideology.
3. Peter Thiel
Whatever
his shortcomings, John Mackey can also be an engaging and interesting
personality. Internet tycoon Peter Thiel, on the other hand, shows all
the signs of being a rather unpleasant individual. He doesn’t think
women or minorities – excuse me, I mean “welfare beneficiaries” – should
be allowed to vote, for one thing. Since 1920,” Thiel fulminated in an
essay, “the extension of the franchise to (these two groups) have (sic) turned ‘capitalist democracy’ into an oxymoron."
Give
him points for honesty: “I no longer believe that freedom and democracy
are compatible,” writes Thiel. That’s not an unusual point of view in
one strain of libertarian thinking. But it’s unusual to hear it stated
so plainly.
In his rather comically grandiose essay,
Thiel compares the criticism his undergraduate newspaper received at
Stanford to the “carnage” of “trench warfare on the Western Front in
World War I.” Thiel, who made his fortune at PayPal with Elon Musk, has
shown none of his former partner’s genius for technological and business
creativity.
And speaking of grandiosity, Thiel tells us
that “the founding vision of PayPal centered on the creation of a new
world currency, free from all government control and dilution” – and
presumably controlled instead by the likes of Peter Thiel. He waxes
equally excessive about Facebook and other Internet companies, touting
their inability to overthrow democracy and replace it with a newer and
“freer” (at least for Peter Thiel) digital regime.
But
Thiel’s expansive vision doesn’t end with regime change. “By starting a
new Internet business,” he writes, “an entrepreneur may create a new
world.” (By now, Star Trek fans may be noticing a growing resemblance
between the essay’s author and a certain
semi-omnipotent recurring character.)
Thiel
is honest about one thing, if only inadvertently, when he writes that
“the prospects for a libertarian politics appear grim indeed.” That’s
true. His brand of politics is extremely unpopular with the general
public. But he fails to take that thought to its logical conclusion:
democracy is the free market of governance. When Thiel rejects its
judgment he contradicts his own political philosophy.
But
Peter Thiel has a much bigger problem than that. He clearly believes
that he and his fellow Internet success stories are a brand of Nietzsche
ubermenschen. “The fate of our world,” he writes, “may depend on the
effort of a single person who builds or propagates the machinery of
freedom that makes the world safe for capitalism.”
In other words: there’s an app for that.
But
Thiel, along with the other boys in his treehouse, made his millions by
relying on taxpayer-funded and democratically-managed assistance every
step of the way. Like Facebook and the other big tech corporations,
PayPal was built on the government-created Internet. It is accessed by
computers whose core technology was funded by government research. The
vast majority of its customers are able to read its instructions because
of government-funded education.
4. Elon Musk
As
the old brain-teasers used to say, “one of these things is not like the
others.” Elon Musk differs from the other people on this list in one
very important way: He’s a smart guy who actually invents things. They
are real things, useful things, tangible things. Where the other Silicon
Valley libertarians merely imagine they’re real inventors like Ford and
Edison, while doing nothing more than making trivial front-ends for
existing technology, Musk really seems to be what he appears: an
inventor and entrepreneur in the old-school style.
Unfortunately,
he also hangs around with the wrong crowd. Some of their silly ideas
seem to have rubbed off on him. We don’t know if that happened when he
was working on PayPal with Thiel, or even earlier when they were part of
the same conservative circle as undergraduates at Stanford.
Whatever it was, the tendency for ideologically-based hypocrisy has not entirely eluded Musk. As Mother Jones
reports,
Musk was able to save Tesla Motors – and his sizable ownership stake in
it – with a low-interest government loan. “Shortly after paying off his
$465 million loan,” Josh Harkinson writes, “Musk proclaimed that
government should no longer provide such assistance.”
A
carbon tax would have been better, Musk argued (ignoring the fact that
such attacks appears to be politically impossible right now). The
market, Mosque then tweeted, “will achieve best solution.”
Unfortunately
for Musk, a market-driven economy have never invested in the pure
research necessary to develop personal computing technology and the
Internet. And without those two platforms, Musk would never have had the
financial resources to launch Tesla. So, when Musk tweeted that
“"Technically, I 'got rich' from Zip2 & PayPal w zero govt
anything,” he wasn’t demonstrating anything except his own ignorance of
the economics and history of his own field.
I met Musk
once and was quite impressed with his brilliance. Unfortunately,
brilliance too easily leads to hubris. It’s like the old saying goes:
it’s not what you don’t know that takes you down. It’s what you don’t
know you don’t know. Silicon Valley libertarians, take note.
5. Jeff Bezos
And
speaking of hubris: Amazon’s Jeff Bezos went on 60 Minutes and told the
country that in a few years his corporation will deliver its products
by drone. All that claim did was reinforce the stereotype of the Silicon
Valley libertarian as someone who doesn’t understand the social
realities of the world around him.
Anyone who thinks
an unmanned aircraft filled with valuable goods will routinely survive a
descent path into the most heavily-armed nation on Earth has got
another think comin’.
For some people, the drone claim
was a surprise. But it was part of what has become a routine pattern for
the admittedly brilliant, if ruthless, leader of Amazon: allow the
taxpayers to develop a costly new technology (first computers, then the
Internet, then drones), adopt it for your own profit-making ends, then
cling to a belief system which says that government played no part in
the success of people like yourself.
Much of Bezos’
libertarian worldview has been a matter of private speculation rather
than public advocacy, noted in biographical profiles but much less
visible in public donations and proclamations. The one exception is
education, where Bezos has invested large sums of money in libertarian
and neoliberal efforts to replace public education as we know it with a
privatized, for-profit, anti-union nexus of corporations.
Whether
or not Mr. Bezos is aware of it, the fundamental pattern undermining
our educational system is a simple one: first, starve school districts
of needed funds. Second, lament their declining performance. Third,
claim that something called the “free market” can bring the innovation
necessary to rescue it. Fourth, make greater sums of money available for
private corporations than you were willing to do for public education.
It’s not clear how much of this Mr. Bezos understands. But, as Lee Fang
reported
in The Nation, he has aggressively pushed a destructive privatization
agenda on our educational system through the Bezos Family Foundation.
Bezos
also put a capstone on his hypocrisy by donating $100,000 to defeat an
initiative which would have imposed a mild additional income tax on high
earners. The computing technology which is made Mr. Bezos wealthy was
developed using taxpayer funding which began in the 1950s, when the top
federal income tax rate was 93 percent. Today it is 39.5 percent.
Where
will the innovations of the future come from if the government doesn’t
have the resources needed for investment – either in new technologies,
or in the bright young minds of the future who will someday invent them?
Government is how we create a better world, Mr. Bezos. It won’t just be
delivered to our doorstep by a drone.
Richard (RJ) Eskow is a blogger and writer, a former Wall Street executive, a consultant, and a former musician.
No comments:
Post a Comment