Sorry Peter Thiel; Libertarianism is Not Compatible with Authoritarianism


In most of the political spectrum tests you see these days, there is an axis that reflects the authoritarian/libertarian divide.

This ought to make perfect sense, as it is a spectrum of one’s belief in the authority of the state; one is more libertarian when one wants to see a state with less authority, and vice versa.

Yet, that divide has been challenged lately, most notably from Peter Thiel.

Thiel is a billionaire venture capitalist, and self-described libertarian.

He supported Donald Trump throughout the election, even speaking at the Republican National Convention.

He is hardly the only libertarian to have chosen Trump over Clinton, so that is not particularly interesting news. What is interesting, however, is Thiel’s stated political philosophy; which claims to be libertarian, yet rejects democratic systems, and has a deep authoritarian streak. How can these two things be compatible?

Libertarians Against Democracy

In recent years, Peter Thiel has written extensively about his contempt for democracy.

In a 2009 essay published by the Cato Institute, he went so far as to say “I no longer think that freedom and democracy are compatible”.

In subsequent writings and statements, Thiel has doubled down on this sentiment, lambasting a political system he sees as morally bankrupt and broken. He believes that any system that creates political adversaries who fight over the redistribution of people’s private property is unjust.

Some of these arguments will obviously resonate with anyone of a libertarian persuasion. Thiel doesn’t have to convince anyone here that politics is frequently corrupt, and that sclerotic bureaucracies slow economic growth and steal away individuals’ freedom. Yet, at the same time, the rejection of democracy as a process is worrying.

Sure, there are agorists, anarcho-capitalists, voluntaryists, and the like who might agree that democracy is as illegitimate a system as any government.

However, anyone who accepts that some form of governing authority is needed, or anyone who even just admits that some form of governing authority will in practice always persist, will recognize that there is no better alternative to a democratic system; especially one with deep institutional and psychological checks and balances.

A stable governing process is the core of a stable society; and only with stability can we hope to enjoy the fruits of private enterprise.

Smashing the System

To articulate this argument, let’s start by asking another question: If Thiel hates redistributive government so much, why does he support a president-elect who promises to raise trade barriers and spend massively on building projects?

The answer seems to be the same one I have heard repeated often by many libertarian “Trumpians”; namely, that the system is so fundamentally broken that it ought to be destroyed and replaced with something – anything – else.

The problem with this sort of thinking is that the “something” could be an awful lot worse than what we have today!

A lot of people, including many libertarians, got into a very apocalyptic mindset during the 2016 election. It seems that people bought into the idea that things really couldn’t get any worse, so they may as well tear it down and start over.

However,  a simple glance around the world – at the different governments and institutional structures available – will prove the lie of that sentiment. Things could get an awful lot worse, indeed.

As libertarians who value individual rights and liberties, we should not be so quick to get into bed with ideologues who care little for liberty.

This may be the underlying problem with Peter Thiel’s philosophy; he seems to abstract his own personal liberty from liberty at large.

He idealizes the idea of the startup, with all its dictatorial leadership qualities, as the ideal method for running any organization. He seems to like the idea of running government like a business, with a single authority forcing innovation and efficiency on his underlings.

There is certainly a value in adding competitive forces and other private sector innovations into government agencies, but it is also important to realize that governments are not startups. They are structures that have far different mandates and stakeholders than a private enterprise.

The Importance of Process

For a society to be stable, certain processes must be stable. Core among these is the governing process.

Progress is not a law of nature, rather it is an emergent property of the systems under which people live.

Thus, a government must be one that not only allows individuals to live their lives as they see fit; but is also sufficiently coherent and immutable, allowing those same individuals to make coherent decisions about the future.

When a government is centralized and undemocratic – or say, privately held – many actors may see that the only avenue by which to obtain power, is by force.

We can talk all day about non-aggression as a principle, and the belief that taxation is theft, but these beliefs are utterly meaningless when the fundamental processes by which these principles would be safeguarded are subject to the whims of individuals; or at risk of revolutionary overthrow.

This is why the process is so very important!

Having democratic institutions is not enough, a democracy with no civic norms would be as subject to popular madness as an authoritarian one.

A process is built, and norms inculcated, over time; centuries have helped inform the way Americans see their government, and the responsibility of the various branches to hold each other in check.

The way these checks manifest themselves is less a matter of strict law or hard power; rather it is an ingrained respect for the systems in place.

Destroying that respect, and undermining those institutions simply because we “do not like democracy very much” is short-sighted and incredibly dangerous. Over the long-run, it is these institutions that allow for the practice of free enterprise at all. It is only by enshrining these systems, and accepting them, that we can hope to preserve our liberties and our property. Trusting an authoritarian leader, or an undemocratic system, even if they promise to reduce the size of government now, runs the risk of disaster in the end.

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John Engle

John Engle is a merchant banker and author living in the Chicago area. His company, Almington Capital, invests in both early-stage venture capital and in public equities. His writing has been featured in a number of academic journals, as well as the blogs of the Heartland Institute, Grassroot Institute, and Tenth Amendment Center. A graduate of Trinity College Dublin, Ireland and the University of Oxford, John’s first book, Trinity Student Pranks: A History of Mischief and Mayhem, was published in September 2013.