Peter Thiel’s Unfortunate World: On “The Know-It-Alls” by Noam Cohen
FEBRUARY 11, 2018
THE PIT OF Peter Thiel’s ghoulishness may be bottomless, but scraping the sides for highlights is worthwhile. The vampiric impulses of Silicon Valley’s libertarian overlord combined with his endorsement of Donald Trump during the 2016 election make him look like a supervillain, but the really terrifying thing about Thiel is the reach of his tentacles and the number of people and companies his money and ideology have influenced.
Noam Cohen, a former columnist for The New York Times, traces that legacy in The Know-it-Alls, a history of Silicon Valley through the people who shaped it, from John McCarthy, a pioneering midcentury AI researcher, to Mark Zuckerberg. Each of the men (they’re all men) in his focus does something essential to change the culture and economics of the technology start-up world, but this book has a long shadow on its pages. It could just as well have been organized “before Thiel” and “after Thiel.” Once he arrives, there is nothing he does not touch.
Only at the beginning is the narrative Thiel-free. McCarthy, who lead the charge of “hackers,” as Cohen calls them, headed west to Stanford University when he left the Massachusetts Institute of Technology in 1962. He’s an essential opening figure, but the book gets going with the story of Frederick Terman, a professor and eventual Stanford University provost who made connecting the university with the business community his life’s work. And work it did. Major successes like Yahoo!, Google, and Instagram came from Stanford, though they did so long after he died — he positioned the university to prepare for those idea-to-incorporation-to-funding tracks. Research, then, was not done for the sake of academic curiosity and public betterment but for the creation of successful corporations. It has no doubt worked out well for the students of Stanford. For everyone else, it’s hard to say.
Another foundational influence for Terman came from his father, Lewis Terman, who developed and popularized the IQ test. He conducted a study of children’s intelligence and then tracked their lives, comparing a group of gifted children to a control group of average intelligence. And, wouldn’t you know it, the high IQ group did better. Except, there’s a hitch:
[Lewis] Terman repeatedly intervened in the lives of his high-IQ subjects, often without their knowledge […] He wrote them recommendations for admission to Stanford, gave small sums of money during tough times, and, in one case, helped a fourteen-year-old be placed in a good foster home rather than returned to his abusive father. (To be clear, Terman didn’t intervene to help any in the control group.)
Eugenic overtones aside, it would be possible to forgive a researcher for fighting against the tide to prove their ideas correct. It is hard to be wrong, and if Terman believed beyond all doubt that those whom he deemed smarter were smarter and therefore more deserving of success, it would be frustrating to see the situation play out differently. Still, because, as Terman’s friend Edwin Boring said, he “thought of the intellectually elite as those who would save civilization for democracy,” he shouldn’t be forgiven for putting his foot on the scale when the stakes were so high. False objectivity is a canard offered to justify discrimination of all stripes, and Lewis Terman’s belief that a specific kind of intelligence is both testable and obviously superior is in line with, for example, recently fired Google employee James Damore’s noxious, sexist, scientifically bunk manifesto about the innate abilities of women.
Cohen mostly gives his subjects the benefit of the doubt. Neither of the Termans faces much scolding in the book for their actions. Larry Page and Sergey Brin of Google did not leave their altruistic and academic interests behind to get rich, but instead were begrudgingly pulled into starting a company run on advertisements by the irrepressible will of the market. It is both an exercise of good faith and a frustrating unwillingness to point out the obvious. Cohen is a reluctant polemicist, mostly acting as a diplomat, telling the stories of these men through verified fact and, when necessary, the slanted commentary of their peers and colleagues.
This is often disappointing, especially when he deals with figures like Jeff Bezos or Bill Gates. The former’s awful treatment of workers comes tacked on at the end of his chapter, while the latter’s pervasive anticompetitive behavior is only mentioned later, in a chapter about Marc Andreessen. Cohen is building an argument about the creation of a culture and is more interested in the role these tycoons played in laying the groundwork than in their less admirable actions or their consequences.
That all ends when he reaches Thiel. Cohen starts swinging and landing blows. Thiel is a hypocrite (fundamentally against government intervention in the business world, unless it’ll help him), an aggrieved figure in search of a grievance (the conservative magazine he started in college would, if no recent controversy was suitable for its purposes, concoct one), and a trolling commentator who believes, as he wrote in 2009, that “the vast increase in welfare beneficiaries and the extension of the franchise to women […] have rendered the notion of a ‘capitalist democracy’ into an oxymoron.” Cohen’s knockout comes from tying Thiel’s worldview back to those who came before him. He lays it out in the book’s most important paragraph:
[C]ut through Thiel’s eccentricities and harsh language and you discover that Thiel is simply articulating the Know-It-All worldview as best he knows how. In Thiel’s ideas one finds Frederick Terman’s insistence that the smartest should lead, as well as his belief in using entrepreneurism and the market to introduce new technologies to the people. There is the hackers’ confidence that technology will improve society, as well as their suspicion of ignorant authorities who would try to rein in or regulate the best and brightest. There is the successful entrepreneur’s belief that the disruption that has made him fabulously wealthy must be good for everyone. The main difference between Thiel and his peers is that he acts forcefully and openly in support of his ideas, while they are inclined to be more cautious and circumspect.
This changes the conversation about how Thiel relates to his peers. Like the Republican Party members who more or less vote along the lines of President Donald Trump’s agenda but criticize his demeanor, the problem that his peers have with him is not that his beliefs matched with his power are destructive but that he says aloud what others merely think. Thiel believes that, as Cohen writes, “monopoly businesses like Google, Facebook, and Amazon serve as a welcome replacement for government.”
Zuckerberg, Bezos, and Alphabet’s power trio don’t seem to have many problems with that. Whether they see the end point of that or not — as Cohen puts it, a transition from “democracy to technocracy” as tech companies become so large that there are able to set policy priorities — is difficult to say.
The next chapters focus on the so-called PayPal Mafia, which lays Silicon Valley’s meritocratic bona fides further to waste, and Jimmy Wales, Wikipedia’s co-founder, who demonstrates that it is possible to drag the powerful away from negatively altering their platforms with advertising, at least if the companies are young enough and the user base is organized. They offer useful, but ancillary information and they’re a palate-cleanser buffering the book’s first hinge chapter, on Thiel, and its last, on Zuckerberg. Cohen explains Zuckerberg’s development as a programmer and entrepreneur. His first major lesson came from the Facemash debacle, dramatized in The Social Network: “[H]e now grasped what would be the primary challenge in running a successful social site: enticing people to share their personal information online.” And do that he would. He also got an early lesson in crushing the competition, picking Facebook’s expansion spots by which schools were closest to having a similar system up and running. The most interesting pieces of the chapter, however, are not about Facebook’s past but its future. Though it’s not clear how he exercises his power or what it means to him, Zuckerberg is one of the world’s most powerful people. Cohen examines the letter Zuckerberg and Priscilla Chan, his wife, wrote to their daughter about the good the pair of them could do for the world, focused on the power of an expanding internet.
They write, “It provides education if you don’t live near a good school. It provides health information on how to avoid diseases or raise healthy children if you don’t live near a doctor,” and so on. Cohen describes it as a “generous impulse” but overall, “a disturbing package: a world filled with isolated individuals […] who are expected to fend for themselves rather than look to the community for sustenance.” Then he proceeds to point out the obvious: that better health care requires more hospitals, clinics, and doctors, better education requires better schools and teachers, et cetera. Internet resources are not infrastructure and meaning well is not good enough for one of the most powerful people in the world with so much control over when, where, and how millions of people digest information.
Zuckerberg’s biggest failure to date was his attempt to bring a limited internet called Free Basics to those who could not afford it in India. The plan, theoretically altruistic at its core, had all sorts of problems that, depending on one’s perception of Zuckerberg, were born of ignorance or malice. The Indian government ultimately rejected the plan. Given the reaction of Andreessen, a Facebook board member, it seems like the right call. He tweeted, “Another in a long line of economically suicidal decisions made by the Indian government against its own citizens,” and, “Anti-colonialism has been economically catastrophic for the Indian people for decades.” But it hardly seemed like Facebook, as a company, had the well-being of the Indian citizenry at heart. Cohen’s theory is more plausible: “Zuckerberg was conceiving a new civilization before our eyes and if he succeeds, he would be responsible for something grander than Julius Caesar or even Bill Gates could have ever imagined.”
Cohen’s overarching ambition is to prove that Silicon Valley’s cultural and economic problems are woven together. Fixing the business side with antitrust enforcement will not fix the cultural problem of arrogance, and while the discreet parts are more or less clear when it comes to Amazon and Alphabet, Facebook presents a problem.
Jonathan Taplin, author of Move Fast and Break Things, argues that repealing the Safe Harbor provision in the Digital Millennium Copyright Act is a good idea, but its limits are obvious. His primary concern as a former music and film producer is protecting rights holders, and while repealing the provision, which allows sites like YouTube to take little responsibility for users who post copyrighted material, would be a step in the right direction, its implication for the populace seems miniscule compared to the problem at hand. Taplin also suggests taking the Bell Labs approach and forcing the major tech companies to share their patents with anyone who asks. This antitrust decision led to the creation of Texas Instruments, Motorola, and other companies and would be another good step, though considering the weight of the network effects on the side of Google, Amazon, and Facebook it seems unlikely to work, at least in the short and medium terms.
Cohen’s suggestions, which are geared more toward a cultural-economic hybrid solution, are less useful, though given his totalizing view of the problem, it’s hard to imagine any other outcome. In the book’s coda, he sums up the bad news like this:
When you have been isolated and treated as a commodity by big companies, whether as a target of advertisers or as a potential “start-up of you”; when you lose the ability to protect your fellow citizens online and off because of the assault on business regulations and a social safety net; when you see obscene wealth delivered to the hands of a few; when hostility and incivility is the coin of the realm in online conversation; when racial, ethnic and gender inclusion are considered assaults on freedom. … Well, naturally, you lose hope and feel unprotected.
It’s hard to argue with that, and there are no simple solutions to the problems as Cohen sees them. Still, what he has to offer — “a prescription for a just society that begins with ‘a commitment to the local, the plural, the small scale, and the active’” — is like recommending a tire pressure adjustment to fix a car without an engine. Yes, of course, those things are good. But individual actions proffered for systemic problems always fall short.
What both writers are unwilling to name is the crisis brought on by the neoliberal hegemony that enables Republican and Democratic administrations alike, alongside Congress, to decide against effectively prosecuting, regulating, or taxing these giant monopolies. Maybe the technology world advanced too rapidly for lethargic bureaucrats who lacked the imagination to see that the consumer-focused anti-trust position advanced into consensus by Robert Bork, the coward infamous for his role in the Saturday Night Massacre, was and is woefully inadequate. They couldn’t see or they did not care to see that consumer interest was not a functional frame when hundreds of millions of people are not the consumer, but the thing being consumed. Meanwhile, the European Union, the entity most willing to take shots at the Silicon Valley giants, issued the largest antitrust penalty in history — $2.7 billion — to Google for its anticompetitive practices, but even that was just a fine. A large one, sure, but Alphabet had $90.27 billion in revenue in 2016. And so they’ll march on. The value of a monopoly is hard to quantify but the fines, unless they are constant and constantly gigantic, seem insufficient because the best result is a well-behaved monopoly instead of no monopoly at all. Even then, society is still handcuffed to the whims of obscenely wealthy individuals who can, as Thiel did with Gawker, spend until their poorer enemies no longer exist. And though what he did was particularly shady and disgraceful, it is a version of what his peers do every day. It is what capitalism demands, what sleepy bureaucrats invite.
Their ideologies are corrosive and would always have been problematic, but the crisis is that their ideology or competency was relevant in the first place. Their level of power — so vast and so undemocratically amassed — is the problem. A healthier and more democratic society would be one where such a thing is not possible in the first place. All there is to do now is to break up the companies and aggressively tax the über rich, though neither is particularly likely anytime soon. What comes next, instead, will be further concentration. More power for fewer people. The longer it goes on, the harder it will be to strip away.