Renowned Silicon Valley venture capitalist and PayPal co-founder, Peter Thiel, recently reiterated his concerns about generational conflict and the future of capitalism. His views, which gained traction after a warning in 2020, seem to have hit the mark once again.
Following the Tuesday night victory of democratic socialist Zoran Mamdani in the New York City mayoral race, Thiel’s five-year-old email warning to industry stalwarts like Mark Zuckerberg and Marc Andreessen has resurfaced. In the email, Thiel cautioned, “When 70% of Millennials say they are pro-socialist, we need to do better than simply dismiss them by saying that they are stupid or entitled or brainwashed; we should try and understand why.”
In a recent interview with the Free Press, Thiel expanded on these concerns, highlighting how strict zoning laws and construction limits have benefitted boomers through property appreciation. However, such laws have been a nightmare for millennials who are struggling to afford homes. Thiel argues that this situation could lead to a rise in communism among the youth. “If you proletarianize the young people, you shouldn’t be surprised if they eventually become communist,” he explained.
Despite his disagreement with Mamdani’s approach to New York’s housing affordability issues, Thiel commended the mayor-elect for addressing the problem more than most establishment figures.
Thiel’s uncertainty about whether the younger generation genuinely favors socialism or are simply disappointed with capitalism is also worth noting. “So in some relative sense, they’re more socialist, even though I think it’s more just: ‘Capitalism doesn’t work for me. Or, this thing called capitalism is just an excuse for people ripping you off,’” Thiel added.
Affordability Politics
The recent victory of Mamdani has shed light on the voters’ shift away from Republicans, with moderate Democrats also winning with campaigns focusing on the cost of living.
Polling expert Frank Luntz has termed the off-year election results as a “wake-up call” for both parties to address the affordability crisis, differentiating it from inflation.
Thiel empathizes with voters who are seeking bold solutions for pressing issues like student debt and housing costs. He noted that previous attempts to address these issues have been ineffectual, leading voters to embrace proposals that are outside the typical political discourse, including “some very left-wing economics, socialist-type stuff,” according to Thiel.
‘Old People’s Socialism’
Thiel observed that the growing popularity of socialism among younger Americans is concurrent with a “multi-decade political bull market.” This period of heightened political intensity is marked by people increasingly looking to politics to resolve their issues.
Thiel also argued that there is a significant disparity between people’s hopes and reality, with this gap being wider than ever. “There are some dimensions in which the millennials are better off than the boomers. There’s some ways our society has changed for the better,” Thiel said. “But the gap between the expectations the boomer parents had for their kids and what those kids actually were able to do is just extraordinary. I don’t think there’s ever been a generation where the gap has been as extreme as for the millennials.”
When asked about the possibility of a revolution, Thiel expressed skepticism, noting that communism and fascism are typically youth movements. However, given the aging demographics in America, Thiel believes that if the U.S. becomes socialist, it will be an “old people’s socialism” focused more on free healthcare and the like. “The word ‘revolution’ sounds pretty high testosterone and violent and youthful. And today, if it’s a revolution, it’s 70-something grandmothers,” Thiel concluded.
