'Technology is at the center': entrepreneur and philanthropist Peter Thiel on liberty and scientific progress

Reason, May, 2008 by Ronald Bailey

I FIRST MET Peter Thiel--co-founder of PayPal, angel investor in Facebook, founder of the hedge fund Clarium Capital Management, adviser to the Singularity Institute for Artificial Intelligence, and self-described libertarian-at a party in his San Francisco home last September. Perhaps 100 digerati wandered through Thiel's sleek Marina District townhouse, chatting amiably over wine and canapes in rooms filled with up-to-the-minute abstract art.

The party launched the second annual Singularity Summit, held at the nearby Palace of Fine Arts during the ensuing two days. The Singularity, a term coined by the science fiction writerVernorVinge in 1983, refers to the eventual technological creation of smarter-than-human intelligence. Just as our model of physics breaks down when it tries to describe the center of a black hole, Vinge observed, our attempts to model the future break down when we try to foresee a world that contains smarter-than-human intelligences. The Singularity Institute takes it for granted that exponentially accelerating information technology will produce such artificial intelligences; its chief goal is to make sure they will be friendly to humans.

In 1987, while studying philosophy at Stanford, Thiel helped found the libertarian/conservative student newspaper The Stanford Review. As a law student at Stanford he was president of the university's Federalist Society. After working briefly for the law firm Sullivan and Cromwell in New York, Thiel switched to trading derivatives for Credit Suisse Financial. In the mid-1990s, Thiel transformed himself into a venture capitalist and a serial entrepreneur. He returned to California, where he has backed a number of startups. In addition to PayPal and Facebook, Thiel has invested in the social networking site LinkedIn, the search engine company Powerset, and the Web security provider IronPort.

Thiel also joined the culture wars by co-authoring The Diversity Myth: Multiculturalism and the Politics of Intolerance at Stanford (1996), and was an executive producer for the 2005 feature film Thank You for Smoking, based on Christopher Buckley's politically incorrect novel of the same name. Besides backing the Singularity Institute, Thiel pledged a $3.5 million matching grant in 2006 to the Methuselah Foundation to support its anti-aging research agenda.

I interviewed Thiel between sessions at the Singularity Summit.

reason: I've been told you consider yourself a libertarian.

Peter Thiel: I would consider myself a rather staunch libertarian. If we went down a list of litmus-test questions, I would probably score pretty well.

reason: How did that come about?

Thiel: Personal history is always tricky, but it was partially shaped by thinking about the totalitarian disasters in the 20th century. When I was growing up in high school, the Cold War was still very much going on, and the complete lack of freedom seemed like an absolutely terrible thing.

The kinds of authors I read in junior high school and high school weren't classic libertarian writers, but they definitely pushed one in that direction. So, for example, Solzhenitsyn in The Gulag Arcbipelago showed how terrible the totalitarian system was. Or in the fiction context, Tolkien and The Lord of the Rings expressed the ideas that absolute power corrupts absolutely, that the ideal world is one in which people enjoy more freedom, and that that's a world where you'll have the greatest amount of human prosperity and happiness and ultimately achievement.

reason: You were a Stanford undergrad and law student. After you graduated, your career seemed to be taking a policy wonk direction.

Thiel: As an undergraduate at Stanford, I started The Stanford Review, which ended up being very engaged in the hot debates of the time: campus speech codes, questions about diversity on campus, all sorts of debates like that. I ended up writing a book on it, The Diversity Myth, the thesis of which was basically that there was no real diversity when you had a group of people who looked different but thought alike, and what really was needed was a diversity of ideas.

In parallel I was obviously on the law track. I worked at a law firm in NewYork very briefly. I'd always been good at math--I was a nationally ranked chess player as an undergraduate--and I shifted over into trading financial derivatives at Credit Suisse Financial Products in '94.

reason: How did you make that transition?

Thiel: They gave me a math test, and I got all the questions right.

I moved back to California in '96. I started a small fund and started investing in tech companies. In the course of that, I invested in PayPal in late '98. I came on board as the interim CEO, and it evolved from four of us to a 900-person company. At this point, it's up to about 7,000 people working for the PayPal division of eBay. Basically creating this new payment system from scratch, which was one of these Holy Grail type of things that a lot of people had been focused on. The basic thought was if you could lessen the control of government over money and somehow shift the ability of people to control the money that was in their wallets, this would be a truly revolutionary shift.