Peter Thiel is on a media blitz, and his latest stop is the General Society of Mechanics and Tradesmen, which was founded in 1785, before New York City had a public school system. Today, it's a tiny, elite (and free) private education institution.

Thiel, who himself attended public school, is now well-known for his initiative to pay would-be college students $100,000 to forego their higher education. He's also a founder of PayPal, and of secretive government tech contractor Palantir, of which he is board chairman. He's also a renowned venture capitalist. (He was a very early Facebook investor.) His techno-libertarianism frequently draws gibes, in part because it extends to the concept of "seasteading," or establishing ocean-based communities with experimental legal and political systems.

On Friday, he was interviewed by anarchist-political-activist-slash-anthropology-professor David Graeber in a vast library room of the General Society. It's part of Thiel's roadshow to promote his freshly released book Zero to One: Notes on Startups or How to Build the Future, which has included an appearance at TechCrunch Disrupt, conducting a Reddit AMA, and blurting on CNBC that Twitter management is probably doing "a lot of pot-smoking." (The event was hosted by the noted cultural journal The Baffler. In a sign of the social graces that would do Peter Gregory, the Thiel-esque character on HBO's Silicon Valley, proud, at one point Thiel referred to The Baffler as "a brochure.")

The conversation hinged on one question: What's wrong with America and what does technology have to do with it? It pitted Graeber's anarchist beliefs that unnecessary corporatized bureaucracies within government, research-science facilities, and higher-education institutions have stalled innovation for the past 40 years or so against Thiel's libertarian beliefs that, well, it's all so messed up that the only way to effect change is to step outside the system and do it yourself. Like, say, start a company.

"We can always blame the bureaucracy, we can blame the superstructures, but I think there is a surprising extent that we can actually start doing something," Thiel said. He pointed to the efforts of his former PayPal colleague, Elon Musk, to rethink space travel with SpaceX as being more productive than attempting to change the funding structure that has crippled NASA's ability to work toward sending humans to Mars.

Thiel's thesis: if change is going to happen on medical research, on climate change, or on getting a man to Mars, it will come from outside of large institutions.

"The preference I have for startups rather than large movements is that you have to convince a much smaller group of people...that the future can look very different," he said.

Graeber, though, blamed the inner workings of now-inevitable large institutions, and their intolerance for both risk and eccentricity--something he flags as a personality catalyst for innovative ideas and general creativity.

Today's society "has nothing to do with its eccentrics," Graeber said. "You used to put them in academia, but now academia is all about self-marketing."

There was plenty Thiel and Graeber did agree about. They both bemoaned our current lack of flying cars, robot housekeepers, and cancer cures, though they differed as to precisely why the pace of innovation thas slowed. They both shrugged off government as useless--though Graeber seems to still be a fan of direct democracy, especially as he says he's seen it function in Madagascar, whereas Thiel claims he's a "political atheist" and stopped believing in all of it long ago.

Thiel admitted that despite his despair that the current hype over Silicon Valley is "a bit off," and that it tends to reward innovation that involves bits rather than atoms, he feels a twinge of hope for the future. That's because he says San Francisco is displacing New York City and Washington, D.C., as the places smart young people are moving in droves.

"There is some sense in which the financial era is over that it has sort of hit a wall and that it is going to be this long deflationary period," he said, noting that New York City's long run as the culturally dominant city in the United States seem, to him, to be drawing to an end. "The banks are slowly going to get shrunk."

He continued: "I think people realized this is not the place to change things, and now it has shifted to Silicon Valley in a really powerful way. I think people have figured out that this is where you can actually change things."

Graeber argued that the financial industry, post-bailout, is still churning. Thiel agreed, but cited the fact that Google has displaced Goldman Sachs as a place young people want to work, as a sign he's correct.

Thiel easily had the upper hand throughout the conversation--and when the audience started asking questions, things got a little worshippy toward him. A commenter compared Thiel to Jesus, referencing Thiel's own previous reference to Jesus being the first "political atheist." (It will no doubt please his detractors that, in his reponse, Thiel showed no humility and dug into his prior writings to reference himself referencing Goethe.)

That said, there was a fair amount of shade-throwing toward Thiel's Palantir's contracting work with massive corporations and the U.S. government, as well as the government's intelligence institutions.

A joke arose early on, when moderator John Summers noted that while Thiel's Palantir works to "empower analysts in finance and national security" when Occupy Wall Street, in which Graeber was highly involved, worked against "empowering analysts in finance and national security."

Thiel accidentally put himself on the defensive later by joking that perhaps startups don't function extremely differently than existing institutions, and saying, "maybe this is my political atheism--or maybe I'm secretly working for the regime here."

Summers and Graeber jumped on the chance to ask about Palantir, Thiel's most recent--and very successful--startup, which is a tech-and-security-centric government contractor. Graeber dug in: Why would someone anti-government work for that very institution?

In his response, Thiel pointed to 9/11. "There were some very big buildings blown up here in New York City." But he stopped just short of patriotism. All the protests under the sun, he said, "did not stop us from getting the Patriot Act. There is something to be said for trying to figure out ways to stop another attack that would curtail liberties even more." And, he added, "if you would have prevented 9/11, I think we would have had much less of a police state."

During audience questions, a recent college graduate implored Thiel to advise him on his job search. Thiel was baffled for the first time in the evening. Another audience member asked Graeber what this room of eccentrics should do to move toward innovating.

No real response there, either.

Published on: Sep 20, 2014