As a founder of PayPal, early investor in Facebook, founder of Palantir, early backer of Donald Trump’s presidential campaign, public intellectual and billionaire venture capitalist, nobody has exploited the various political and economic crises of the US’s post-Reagan era as successfully as Thiel. “Competition is for losers,” Thiel wrote in his 2014 political and economic manifesto, Zero to One, and losing is something Thiel has avoided with startling consistency. If anyone still subscribes to the progressive view of capitalism as a source of enlightenment and peace, the story of Peter Thiel’s career should be enough to disabuse them. The state may be the source of this tool, but it is money and fighting spirit that determines who ultimately benefits from it. But there is another, starker view of economic law, in which it is a kind of weapon, deployed by the powerful to hoard their advantages and exploit the weak. The classically liberal view would be that markets work best where law creates the “rules of the game” (contracts, property rights, regulations) that everyone agrees to abide by, in an egalitarian and peaceful fashion. Which is it? Is capitalism a guarantor of peace, or a proxy for war? The answer partly depends on how one understands the institution on which capitalism has always tacitly depended: the rule of law. For these thinkers, still lionised by American libertarians and reactionaries, entrepreneurs were the last best hope for “the West”, having retained the courage to break rules and invent new futures. For conservative Austrian economists such as Joseph Schumpeter and Ludwig von Mises, it was now socialism that threatened to sedate people, and only capitalism that could revive their heroic, warlike, masculine passions. Where politics was fuelled by unruly “passions”, which risked tipping into violence, markets allowed people to be governed by their more sedate and reasonable “interests”.įollowing the rise of state socialism in the 20th century, however, many economic liberals came to defend capitalism for the opposite reason. What Hirschman showed was that the case for commercial society was generally advanced not in terms of how it would enrich people, but in terms of how it would pacify them.
In his classic 1977 study of the history of economic ideas, The Passions and the Interests, the economic theorist Albert Hirschman examined the political and moral arguments that were made in favour of capitalism prior to its “triumph” in the late 18th century.