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Commentary: Thiel shows why tech billionaires are the new robber barons
June 2, 2016 / 4:02 AM / a year ago

Commentary: Thiel shows why tech billionaires are the new robber barons

C.K.G. Billings, a Gilded Age plutocrat, rented the grand ballroom of the celebrated restaurant Sherry’s for an elaborate dinner on March 28, 1903. He had the floor covered with turf so that he and his 36 guests could sit on their horses, which had been taken up to the fourth-floor ballroom by elevator. Library of Congress

Throughout history, wealthy industrialists have engaged in vendettas. The venture capitalist Peter Thiel, we now see, is no different. What’s different is Americans’ expectations.

What the public is seeing is the disruption of the belief in Silicon Valley exceptionalism -- that, unlike Gilded Age robber barons, 21st-century digital plutocrats are transparent in their dealings while building and using their great wealth.

Thiel did not cause the growing public disillusionment with Silicon Valley. But his secret funding of the privacy lawsuit of Hulk Hogan, the former pro wrestler, against Gawker may help accelerate it.

Silicon Valley has been distinguished, the entrepreneur and investor Michael Lazerow writes, by core principles of trust and openness. Many business analysts agree. But people are starting to look at Facebook and Google and wonder how they are more trustworthy or transparent than Standard Oil or U.S. Steel, the Gilded Age corporate behemoths.

Thiel appears to have a political and social viewpoint grounded on a subversion of libertarian principles, in which what’s good for him, or his companies, is, by extension, a public good. Hence, destroying Gawker is not just revenge or a kind of political act, it’s in Thiel’s words “philanthropic.”

Regardless of what you think of the Bollea v. Gawker case, it stretches the idea of what people usually think of as charity. Litigation finance is typically a business venture. It doesn’t become charity because a wealthy person uses it as a template for a personal crusade and then insists he’s doing everyone else a favor.

John D. Rockefeller and Andrew Carnegie, plutocrats of the Gilded Age, used their money against their enemies, to be sure, enemies that included newspapers and magazines that disagreed with them for all sorts of reasons.

They also engaged in philanthropy and public works. Carnegie, for example, funded and built the New York Public Library system. Unlike Thiel, the Gilded Age robber barons knew the difference between their businesses and charitable endeavors.

In this way, Thiel epitomizes why polls show people losing trust in Silicon Valley. Many are growing disillusioned because they bought what Silicon Valley sold them: an idealistic and almost utopian vision in which the technological advances of the Information Age would change the world -- or at least the Western world -- for the universal good.

Peter Thiel speaks during a news conference at the National Press Club in Washington, October 3, 2011. REUTERS/Yuri Gripas

Instead, what they see is powerful corporations and billionaires acting like -- lo and behold -- powerful corporations and billionaires. Critics see the realized visions of powerful Silicon Valley companies benefiting mostly those companies and their executives.

This may not be fair. After all, the public has benefited quite a lot from Silicon Valley’s technological advances. Google has allowed us to travel the world and get almost any information while sitting at our desks. Thiel’s PayPal helped democratize currency and commerce, and also made it easier to donate to charity.

But it’s easy for people to forget how far they’ve come. Especially when measured against the virtual utopia that they were sold with almost religious fervor by Silicon Valley.

The tech billionaires didn’t make their money by founding public institutions; indeed, some of them look more like the new robber barons. Maybe it’s time for Silicon Valley to tone things down. To admit that, no, the Valley can’t solve all human problems -- not even close -- and never will.

That may actually help rebuild some of the lost trust between it and the public.

As for Gawker, it disseminated a sex tape of a retired pro wrestler. Let’s not pretend that the website did it as part of a great journalistic mission. Gawker did it to lure eyes to its website while smugly saying the First Amendment sheltered it.

But at least Gawker did this openly. It didn’t post the sex tape on another website that it was secretly backing because of something Hogan did to upset it 10 years ago. Gawker didn’t call it philanthropy.

The Gawker litigation will stand, or be struck down, on its constitutional merits. Thiel is right when he said it’s not for him to decide the fate of Gawker -- that if people want to see more of the Gawker brand of media, they’ll rally around Gawker.

The problem isn’t the way Thiel used his money. It’s his pretensions about it.

But most of all, the problem is that we expected anything different.

About the Author

Keith Emmer is an attorney and media consultant

The views expressed in this article are not those of Reuters News.

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