Peter Thiel, the noted Silicon Valley investor, recently wrote the now bestselling Zero to One: Notes on Startups, or How to Build the Future.
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Thiel is an advocate for monopolies. “Competition is for losers,” he says. “People always say that capitalism and competition are synonyms. But I think they’re really antonyms.” Peter Thiel argues that monopolies rise as they uniquely solve a problem. There’s truth to that, but to a larger extent monopolies remain because capitalism encourages efficiency, usually entailing scale, raising barriers to entry and making competition unattainable.
What’s funny is that it’s Peter Thiel, libertarian and Rand Paul supporter, who’s advocating for the concentration of power in monopolies. If Paul Krugman made the same argument would libertarians and the business press be equally laudatory?
The difference of course comes to rights and ownership. Paul Krugman wants single-payer health care, a partial monopoly owned by everyone, for everyone, just like our public roadways. Peter Thiel would have monopolies owned and controlled by individuals. He believes that the freedoms of the capitalist are more important than the beliefs and desires of the many citizens. To put it another way, as said by Thiel in 2009, “I no longer believe that freedom and democracy are compatible.“
This is an echo years past, of the history of railroads. After the Civil War, we as a nation gave new powers to privately held monopolies. These privately owned corporations used their position to enrich a few and exploit the common citizenry. It was disastrous. The railroads used their freedoms to maim their workers by the thousand and not even pay restitution. Thus, we democratically agreed upon unprecedented federal regulations to reign in corporations. It is these regulations that libertarians find so offensive. They want more freedom to exploit.
Some freedoms are mutually exclusive. I can’t own property and be free from an authority that determines who owns what (even if it’s a public ledger — ie bitcoin). Without agreement on the rules of the road, I wouldn’t be free to drive 80mph. I can’t be free from fear without public prohibitions of food poising, slavery, careless building, murder, negligent manufacturing or any other form of coercion including price gouging. I like being free from fear. I support freedom from want. These are the freedoms of the many. Peter Thiel wants more freedom for the privileged rich. Me, I believe in freedom AND democracy.
The Private Monopoly Express shoots ahead of the public interest. The piece is The Right of Way by Beaumont Fairbank, and is in the public domain via the Library of Congress.