Peter Thiel’s Misjudgment of Trump Was a Failure of Empathy
If you see the world in terms of ideas rather than people, you don’t see anything.
PHOTO CREDIT: Getty Images
"I invest in the person, not the idea."
That's such a common saying among venture capitalists, it's practically a cliché. Ideas don't pan out, companies run out of money, but put your trust and your dollars in a truly great founder and eventually he or she will reward you.
Peter Thiel is the kind of investor who likes to think of himself as spurning conventional platitudes. He credits his $2.7 billion fortune to a mental habit of listening to what everyone around him says and then looking for evidence the opposite might be true.
True to form, when it comes to his investing strategy, Thiel bucks the prevailing wisdom. "We invest in smart people solving hard problems," reads the opening of Founders Fund's mission statement. But the ensuing document devotes most of its attention to the types of problems Thiel and his partners are interested in solving and not much to the people involved. Basically, they're interested in companies that are creating new technologies rather than companies simply finding clever business applications for existing ones.
That orientation has mostly worked out well for Founders Fund, which has outperformed the industry average in returning capital to its limited partners. (Never mind that some of its biggest hits, like Facebook and Airbnb, started out as applications pretty much anyone could have coded, not basic science plays.)
Where it hasn't worked out so well, though, is with what may be Thiel's most high-profile investment. His backing of Donald Trump, while small in dollar terms--his $1.25 million campaign contribution represented less than 0.05 percent of his net worth--was reputationally expensive. It has made Thiel persona non grata in many quarters of Silicon Valley. Worse, perhaps, it has cost him a chunk of his reputation as a man who sees into the future.
And he seems to know it.
Reporting for Buzzfeed, Ryan Mac says Thiel has been telling people in private he is disappointed in Trump so far, pessimistic about his chances to win a second term and concerned that he will lead America into a disaster. He has estimated the odds of the latter at 50 percent. (Although he has also said he believes a Hillary Clinton presidency would have resulted in a financial crisis.) Asked about those private comments, Thiel, via a spokesman, implicitly confirmed having made them, saying resistance to Trump's agenda was "even fiercer than I anticipated."
Thiel's support for Trump was always hard to fathom, so much so it made conspiracy theories like the idea he was trying to undermine democracy itself seem plausible. His stated reasons--reviving American innovation, curbing American militarism, and so on-- simply didn't add up or square particularly well with what the candidate himself was promising.
If Thiel is disappointed with the results so far, that suggests his reasons for throwing in with Trump were the usual pedestrian ones. And that is bizarre, because the one thing you can't say about Trump is he failed to give us ample warning of what a Trump presidency would be like. (When I wrote that he was likely to cause a constitutional crisis, the Russia investigation wasn't yet a twinkle in James Comey's eye.) Never has the truism "character is destiny" been truer. And there's nothing subtle or hard to parse about Trump's character.
I've written before about how I viewed Thiel's backing of Trump as a specific kind of bet, one that embodies his belief that he will live longer than anyone in history and that people like him should have near-absolute license to build "the machinery of freedom that makes the world safe for capitalism." For Thiel to privilege his hypothetical libertarian utopia in the stars above the welfare of everyone now alive represents, I believe, a profound moral blindness, an extreme form of solipsism.
You can see a close relative of this blindness in the writings of James Damore, the Google engineer who was fired this week for his so-called manifesto critiquing the company's efforts to diversify its workforce. Damore is worried that people like him are having their opportunities and intellectual freedoms curtailed in the push to promote people from underrepresented groups. Among his suggestions was a remarkable call for Google to "De-emphasize empathy." He wrote:
I've heard several calls for increased empathy on diversity issues. While I strongly support trying to understand how and why people think the way they do, relying on affective empathy--feeling another's pain--causes us to focus on anecdotes, favor individuals similar to us, and harbor other irrational and dangerous biases. Being emotionally unengaged helps us better reason about the facts.
Damore, who has a master's degree in systems biology from Harvard University, seems oddly unaware of the large and not-particularly-new body of research showing that emotions play a vital role in what we think of as rational processes. (Or maybe that's not odd given the pseudo-scientific drift of several of his arguments.) As the neurologist Anthony Damasio most famously showed, people with brain lesions that prevent them from experiencing emotions are in fact much worse at decisionmaking than those with intact brains.
A lack of empathy doesn't result in smarter decisions or keener judgment. Ignoring the human factor doesn't make you a mastermind. The world is made up of other people; fail to understand them and you fail to understand everything. Choosing to see the world as a place of ideas rather than people may be the contrarian thing to do. But then, as Jeff Bezos memorably put it, "you have to remember that contrarians are usually wrong."
And being wrong most of the time, while perfectly fine in venture capital, is a pretty awful way to choose political leaders.