Peter Thiel: Social Contract vs Scapegoating

if you go to the anthropological
myth of the Enlightenment it’s the myth
of the social contract so what happens
when everybody is that everybody’s
else’s throat what the Enlightenment
says is everybody in the middle of the
crisis sits down and has a nice legal
chat and draws up a social contract and
that’s maybe maybe that’s the founding
myth the central lie of the
Enlightenment if you will and what
Girard says something very different
must have happened and when everybody’s
at everybody’s throat the violence
doesn’t just resolve itself and maybe it
gets channeled against a a specific
scapegoat where the war of all against
all becomes a war can of all against one
and then somehow gets resolved but in a
in a very violent way and so I think you
know what what Girard and Schmidt or
Machiavelli or you know the
judeo-christian inspiration all have in
common is this idea that human nature is
problematic its violent it’s um you know
it’s it’s it’s it’s it’s it’s not
straightforward at all what what you do
with this on it’s not sort of simply
utopian or where we can say that
everybody’s not fundamentally good where
someone like Gerard and Schmidt very
much disagree is that Gerard believes
that once you describe this it has this
dissolving effect so scapegoating
violence only works if you don’t
understand what you’re doing and so if
we say well we have we have a crisis in
our village and we’re gonna have a
so that everybody can you know get out
all their negative energy and you know
will target this one elderly woman that
only works if you don’t think of it as a
fake psychosocial thing right once you
think of it in those terms it stops to
work and so there’s sort of a there is
the sense of late modernity where this
unraveling has been for Girard an
ambiguous thing
it’s both a bad thing because they’re
these cultural institutions that were
the only way we had ever had of working
and they’re there unraveling

but it’s also inevitable we can’t
somehow put the genie back into the


Mimetic Desire: A Valuable Theory

You don’t have to believe in everything Peter Thiel says to take interest in René Girard’s mimetic theory, which argues that what we desire what we percieve others desire.

Mimetic Desire in Children

If 3 three-year-olds are in a room full of toys and one child grabs a toy, which toy do the other 2 children want?

The Answer: the toy the first child grabbed.

Why: They want it because the first child wants it.

This obviously leads to conflict, so there must be something more going on.

Girard’s answer is that we unconsciously redirect our conflicts to an external scapegoat, who distracts us from our immediate conflicts.


About René Girard:

Frank Luntz: The Younger Generation is Losing Faith in Capitalism

Some big interviews on CNBC on Tuesday with some of the nation’s most powerful business leaders and investors had a common theme: what an Elizabeth Warren presidency would mean for the markets and corporate America. Frank Luntz, pollster and political strategist, joins “Squawk Box” to discuss Warren’s chances of winning.

Peter Thiel on “The Straussian Moment”

says well we’ve had all these years of
warfare over religion we’ll stop asking
important questions and all these
decades these centuries after the
Enlightenment here’s the world we’ve
reached this is the way I read you you
can correct my reading but let me finish
quoting you instead of violent wars
there could be violent video games
instead of heroic feats
there could be thrilling amusement park
rides instead of serious thought there
could be intrigues of all sorts
in a soap opera it is a world where
people spend their lives amusing
themselves to death close quote
now that is a devastating indictment of
much of contemporary America correct
well it is I mean I think this has been
the trend of modernity now it’s it’s
it’s not as though politics has
disappeared though it’s it’s often just
gets displaced in various ways but but
yes I think there is this this
incredible degree to which we’ve we’ve
we’ve substituted the realities of
politics for these sort of increasingly
fictionalized worlds and and it’s
probably uh that’s probably a very very
unhealthy thing there’s sort of a
slightly different frame that I’ve often
given on this is is that in in the last
40 or 50 years there’s been a shift from
exteriority which I which you know doing
things in the real world to the sort of
interior world which is sort of in a way
can be thought of this also the shift
from politics to entertainment or
something like that and and the the from
a dr. Phil a the powerful frame I give
is you know almost exactly 50 years ago
today and you know July of 1969 men
reached the moon and three weeks later
Woodstock began and with the benefit of
hindsight we can say that that’s when
you know progress ended and when the
hippies took over the country or
something like that and then we’ve had
we’ve had this incredible shift to
interior tea in the decades since then I
would include things like the drug
counterculture I would include
videogames you know maybe a lot of
entertainment more generally you know
there’s sort of parts of the internet
that can be scored both ways but but
certainly there all these things where
we’ve shifted towards the you know your
world of yoga meditation there’s a world
of interior culture that sort of and it
Rene Girard is in some ways the
addresses an aspect of human nature well
it’s it’s good it’s the very thing that
the Enlightenment says no no don’t even
think about such things right
yeah well the Enlightenment always
whitewashes violence it’s one of the
there are many things we can’t think
about an under Enlightenment reason but
one one is certainly violence itself and
and if you go to the anthropological
myth of the Enlightenment it’s the myth
of the social contract so what happens
when everybody is that everybody’s
else’s throat what the Enlightenment
says is everybody in the middle of the
crisis sits down and has a nice legal
chat and draws up a social contract and
that’s maybe maybe that’s the founding
myth the central lie of the
Enlightenment if you will and what
Gerrard says something very different
must have happened and when everybody’s
at everybody’s throat the violence
doesn’t just resolve itself and maybe it
gets channeled against a a specific
scapegoat where the war of all against
all becomes a war can of all against one
and then somehow gets resolved but in a
in a very violent way and so I think you
know what what Gerrard and Schmidt or
Machiavelli or you know the
judeo-christian inspiration all have in
common is this idea that human nature is
problematic its violent it’s um you know
it’s it’s it’s it’s it’s it’s not
straightforward at all what what you do

How the Failure of “Prestige Markets” Fuels Populism

Prestige is in our genes. According to biological anthropologist Joseph Henrich, it evolved because we are a cultural species, in the sense that our individual survival depends on acquiring the knowledge that resides in the collective brain. We acquire it through imitation, but we need to decide whom to imitate. Numerous scientific studies have shown that we tend to imitate people who are perceived to have prestige, a sense that develops very early in childhood.

Henrich suggests that this is the outcome of an evolutionary game in which prestige is payment for the generosity with which the prestigious share their knowledge. We share alpha-male dominance with our primate cousins, but prestige – a form of “payment” that predates money, wages, and stock options – is quintessentially human.

While prestige solved a problem that has been with us throughout our evolution, it has had to interact with the technological changes of the past half-century. In particular, the rise of what economists call skill-biased technical change – the reliance of modern technologies on highly skilled workers – has led to growing wage differentials between skill levels.

In his new book The Future of CapitalismPaul Collier argues that this increased wage inequality has changed the self-perception of the highly skilled: their professional identity has gained greater salience than their sense of themselves mainly as members of the nation. Using a model of human behavior proposed by George Akerlof and Rachel Kranton, Collier argues persuasively that the satisfaction conferred by one identity relative to another – say, the profession over the nation – depends on the esteem with which others regard that identity.

As wage differentials grew, and the highly skilled shifted the focus of their identity from nationhood to profession, the value for all others of maintaining their national identity decreased. The low-skilled were trapped in a less valuable national identity.

This dynamic, according to Collier, explains the vote for Brexit in Britain and the rise in right-wing nationalism in other rich countries: it is concentrated among lower-skilled inhabitants of more rural, less ethnically mixed environments where traditional national identity is still dominant. It also explains declining trust in elites: because members of the elite identify primarily with their more global professional identity, they are perceived as caring less about their reciprocal obligations with the rest of the nation. Delegating choices to experts is passé, because experts no longer care about the rest of us.

Rising wage differentials may destroy the equilibrium proposed by Henrich. If the prestigious are already very well paid, and are not perceived as being generous with their knowledge, prestige may collapse. This may be another instance of the incompatibility between homo economicus and community morality emphasized by Samuel Bowles in his book The Moral Economy: the self-interested, transactional behavior that defines the market is not acceptable in the family or the community.

The collapse in the prestige equilibrium can do enormous damage to a society, because it may break the implicit contract whereby society uses critical skills. To see why and how, look no further than what has happened in Venezuela.

In 2002, then-President Hugo Chávez’s left-wing populist rhetoric targeted the national oil company PDVSA. The company was already a state-owned enterprise, so nationalization was not the issue. For Chávez, the problem was PDVSA’s meritocratic culture: to succeed in the company, political connections were of no use. What the company valued most was the knowledge needed to manage a complex organization.

Social barriers to entry at PDVSA were low, because Venezuela had a 50-year history of free university education and decades of generous scholarships to study abroad, especially in oil-related fields. But once in, advancement was merit-based. A similar culture developed in the power sector, the central bank, universities, and other entities that were critical for state capacity.

The populist revolt equated knowledge with privilege and threw it out the window. When the merit culture was threatened, the company went on strike, and more than 18,000 workers – over 40% of the company’s labor force and almost all of its senior management – were fired. As a result, there was a spectacular collapse in the performance of the oil industry and, eventually, in all the other institutions affected by the war on expertise, leading to the catastrophe that is Venezuela today.

The lesson is clear. Given the requirements of today’s technology, dismissing expertise as privilege is dangerous. But because gaining expertise takes time and effort, it is not freely accessible to “the people.” The only way to sustain it is through an implicit prestige market: the experts are supposed to be generous with their knowledge and committed to the nation. Society “pays” them back by according them a social status that makes their position desirable, even if wage differentials are compressed, as they often are in the public sector (and were in Venezuela at the time of the lethal attacks on expertise).

The alternative to populism is an arrangement whereby experts demonstrate authentic public spiritedness in exchange for society’s esteem, as often happens with military leaders, academics, and doctors. A well-functioning prestige market is essential to reconciling technological progress and the maintenance of a healthy polity.

Why a Universal Basic Income Would Be a Calamity

How long before the elites decide the unemployed underclass shouldn’t have the right to vote?

 Finland has been testing a basic income for 2,000 of its unemployed citizens since January, and UBI proponents say the Nordic country is providing an example for the U.S. It will be interesting to see the Finnish results, but Americans shouldn’t read too much into the outcome of a small-scale, early-stage trial. Look instead to Saudi Arabia, which for decades has attempted the wholesale replacement of work with government subsidies. Perhaps more than half of all Saudis are unemployed and not seeking work. They live off payments funded by the country’s oil wealth.
.. Regular citizens lack dignity while the royal family lives a life of luxury. The technocratic elite has embraced relatively liberal values at odds with much of the society’s conservatism. These divisions have made the country a fertile recruiting ground for extremists.
.. At the heart of a functioning democratic society is a social contract built on the independence and equality of individuals. Casually accepting the mass unemployment of a large part of the country and viewing those people as burdens would undermine this social contract ..
.. It would also create a structural division of society that would destroy any pretense of equality.

.. UBI supporters would counter that their system would free people to pursue self-improvement and to take risks. America’s experience over the past couple of decades suggests that the opposite is more likely. Labor Department data show that at the end of June the U.S. had 6.2 million vacant jobs. Millions of skilled manufacturing and cybersecurity jobs will go unfilled in the coming years.This problem stems from a lack of skilled workers. While better retraining programs are necessary, too many of the unemployed, or underemployed, lack the motivation to learn new skills. Increasingly, young unemployed men are perfectly content to stay at home playing videogames.

.. Perhaps it could work as only a supplement to earned income.

..In the same Harvard commencement speech in which Mr. Zuckerberg called for a basic income, he also spent significant time talking about the need for purpose. But purpose can’t be manufactured, nor can it be given out alongside a government subsidy. It comes from having deep-seated responsibility—to yourself, your family and society as a whole.

When Technology Sets Off a Populist Revolt

If you think globalization, immigration, trade and demographic change have contributed to displacement and political anger, wait until robots take away millions and millions of jobs, including those requiring the use of a well-trained brain.

.. “It seems likely that the top 10 to 20 percent of any profession — be they computer programmers, civil engineers, musicians, athletes or artists — will continue to do well,” he told me. “What happens to the bottom 20 percent or even 80 percent, if that is the delineation? Will the bottom 80 percent be able to compete effectively against computer systems that are superior to human intelligence?”

Others in Silicon Valley, most notably the venture capitalist Marc Andreessen, have dismissed this concern as Luddism, assuring people that new jobs always replace the ones that vanish.

.. And it is hardly surprising for stalwarts of an industry to claim it won’t harm anyone. What is more notable is what sometimes is called “argument against interest” — people criticizing a thing from which they stand to benefit.

.. The only answer, he believes, is massive economic redistribution via something like a guaranteed minimum income. The idea has been gaining ground.

“Does capitalism need to be reinvented for modern technology? I’m absolutely convinced it does,” he said.

.. To be plain, Mr. Khosla and others of like mind in the valley are not radicals. They are speaking of a new social contract, in which an undisrupted few assume new obligations to the disrupted many, in order to be freed to go back to their disruptive works.