My friends are big fans of David Graeber’s Bullshit Jobs and Debt. Having been more a listener of his, I find his candor amusing and cutting. So when I happened upon him and Peter Thiel talking, I wasn’t going to miss it despite knowing little about what it was actually onTurns out this is from the book launch of Zero to One.. Going into it, I anticipated an alignment in their values — moreso than one might think purely because the comparably less famous Graeber is anarchist and Thiel is libertarian; this is why I think of this as a conversation rather than a debate. I suspected their alignment given my own sensibilities that anarchists and early stage startup founders have a lot in common¹, in the mold of Aaron Swartz or early-SpaceX Elon Musk.

Overcoming stagnation: working outside or within systems?

While they agreed over the fundamental issue that we live in a world of technological and creative stagnation and the need for actions, they differed over methods of action. Thiel’s perspectives often circle back to a technological lens, where he can champion the solutions in Zero to One: working in small coordinated but non-democratic teams which are well outside systems/institutions. In contrast, Graeber’s is to work in small groups that are democratic and decentralized based on his experience within anarchist groups.

As a technologist, I initially agreed with Thiel’s position and was also unsure of Graeber’s approach. But as Thiel explained his uncertainty, citing anecdotal evidence that democratic startups eventually fall apart where hierarchical onesWhich I think he is careful to not call dictatorial. thrive, I tended to disagree with Thiel. In my experience, founder-led startups will mostly begin with engineers and the average one tends to skew towards being less concerned about social and political issues which are, in my opinion, actually responsible for the systems we see today that they are working against. If we were more concerned with developing solutions of scale and breadth that require directors, not dictators, I can see Graeber’s logic: his solution is for groups to embrace a rotating policy that eschews permanent leadership structures. Of course, Graeber’s not interested in pursuit of power or profits but in creating an egalitarian world².

Further, Graeber argues that monopolies —like Apple, Google and Facebook — operate in competitive markets that largely stifle innovation because systematic profits aren’t achieved through production of goods/services but through rent extraction; an example is Apple using the App Store to extract “rent” from developers that prevents new monopolies from emerging.

What makes this rent extraction possible? Well, one is likely the abolition of regulated monopolies (think Bell Labs) but the other thing we lost with that is the higher corporate tax³. Today’s corporate tax rates are lower so companies invest profits in financial activities and engage in rent extracting predatory activities that then drive up debt. This, to a layman (not an economist) like me, seems a better explanation of why lower corporate taxes explain the drop in productivity and why we aren’t reindustrializing — hence the technological stagnation.

The more interesting exchange occurs when Thiel’s quesitoned about his start-ups being entrenched in the system he is criticial of. The standout example pertinent is when Thiel is questioned about Palantir working with the CIA, which goes on to underscores Graeber’s point that one eventually ends up working within the system — whether one changes it or becomes a part of it is a different matter altogether.

From Monopolies to Money

I think the refreshing thing for me (unless I misunderstood) is that Graeber agrees with Thiel that monopolies, but only as long as they aren’t rent extracting. Bureaucratic monopolies have proven to be effective in achieving great things quickly — like Apollo and the Manhattan project — under the right conditions. Corporate monopolies, like Bell Labs, demonstrate that acceleration can happen through productive innovation whereas current monopolies, like financial institutions, create a culture of stagnation through — to use a Graeberism — “a direct assault on the human imagination”. Aside from the corporate taxes that incentivise rent seeking behaviours, social welfare economic policies (such as universal basic income) could also overcome the grander creative stagnation evident today.

Money isn’t just measuring the value of stuff. It’s also measuring the value of human actions and it’s also a promise of future creativity.

David Graeber

Graeber evidences how the UK’s social welfare policies unleashed creativity in the sixties, a period that coincided with the emergence of new bands (like the Beatles) and musical trends every few years. But today’s conditional welfare policies (which he says are from the Blair-era) hinder discovering today’s Beatles.

Now John Lennon is, like, lifting boxes in some department store’s welfare conditionality so we are never gonna hear the new the new trend.

David Graeber

Competition and Debt Kill Eccentrics

Though we are in the company of the leading contrarians of our time during this talk, such public intellectualism feels increasingly in short supply. The average person (like my mom, who never went to university) still thinks that academia is a home for eccentric thinkers but that is no longer the case, which Graeber and Thiel remind us poignantly:

Almost any functional society, almost any society which has ever existed, has something which they do with brilliant, imaginative, but extremely impractical people. We don’t know what to do with them anymore. They’re all living in their mothers’ basements saying weird things on the internet, and you can’t tell which are crazy and which actually have something to contribute. You used to put them in academia, but now academia is all about self-marketing. Being in academia, I can see very easily what’s happened in my own discipline where any kind of new thinking is really discouraged.

David Graeber

The eccentric university professor is a species that is going extinct fast.

Peter Thiel

Today, academics compete for finite resources in an endless grant-writing cycle. This aligns perfectly with Thiel’s general thesis that competition kills innovation. But the role of debt in promoting stagnation is also a key point, which Graeber reminds us by citing the UK’s introduction of student loans that successfully made university education less about exploration and more about getting a job.

I find Graeber’s position more far-ranging than Thiel’s — his commentary captures the Thielian view of competition, but also of debt’s role in promoting stagnation. The matter of debt is perhaps less concerning to the billionaire elite. But Graeber is also more tuned to the need of individuals who aren’t billionaires or as close to Silicon Valley, where networks can promote the eccentrics. How do we help such individuals flourish, he asks? As a non-billionaire academic who has tried to start startups, it was easy to side with Graeber that working on side projects from within existing structures is important even if progress feels glacial. For the idea is to not only work for personal liberation, but for something greater. And we must take such thinking beyond technology, too, if we are to unearth the next Beatles.

Footnotes