In 2009, Peter Thiel declared that “the great task for libertarians is to find an escape from politics in all its forms”. Today, his protégé J.D. Vance occupies the Vice Presidency. His companies just landed over $10 billion in federal contracts. Thiel’s network commands AI policy, government efficiency initiatives, and the regulatory apparatus they once promised to dismantle. So, what happened? The standard answer, that they sold out, misses something fascinating. It follows an intellectual logic of anti-democratism fueled by the perverted self-image of being the future civilization’s architects.

When Liberalism Met Democracy

Thiel, as the most famous one, has long turned his back on democracy: “Most importantly, I no longer believe that freedom and democracy are compatible”. The tension between liberalism and democracy isn’t new. Nineteenth-century liberals feared democracy precisely because it meant to be ruled by the mob.

Mill’s On Liberty (1859) articulated what would become liberalism’s permanent anxiety about democratic power. The greatest danger to freedom comes not from dictators but from what he called the “tyranny of prevailing opinion”, the pressure to conform to what most people think. His famous harm principle states that people should be free to do whatever they want unless they hurt others. But this principle reveals more problems than it solves. It shows us an uncomfortable truth: the same democratic majority that gives government its legitimacy can also crush individual freedom.

Where Mill theorized the problem, Tocqueville documented its mechanics. Writing two decades earlier in Democracy in America (1835), Tocqueville provided an analysis of how democracy’s egalitarian drives inevitably erode individual distinction. Democratic citizens don’t merely dislike superiority, they rather instinctively mobilize against it, voting to constrain “excellence” through progressive taxation, regulatory handicapping, and social stigmatization of achievement. His concept of “soft despotism” described a novel form of tyranny: not the sovereign’s sword but the bureaucrat’s pen, creating what he memorably called a cage of “small and complicated rules” that gradually extinguishes individual initiative. Citizens, preferring security over liberty and redistribution over dynamism, become willing architects of their own subjugation. Tocqueville’s concepts, although not acknowledged,are prominent in “Tech-Bro’s” worldviews like Marc Andreessen who wrote The Techno-Optimist Manifesto (2023). When Andreessen rants against social responsibility and regulatory stagnation, he channels Tocqueville’s core insight: democratic equality murders technological progress and produces risk-averse citizens.

The Austrians

Hayek’s knowledge problem demonstrated that markets process dispersed information more efficiently than democratic deliberation. Mises’ calculation problem showed that without market pricing, rational resource allocation becomes impossible. These insights revealed systematic tensions between market efficiency and democratic governance. Democratic voters systematically lack specialized expertise for complex policy domains. Political incentives distort economic calculation through short-term electoral pressures. Yet neither Hayek nor Mises rejected democracy categorically. They proposed constitutional frameworks reconciling market efficiency with democratic institutions, by constituting market and individual freedoms.

Enter the Sovereign

Where the Austrians hesitated at democracy’s threshold, Carl Schmitt, the “Crown Jurist of the Third Reich”, kicked down the door entirely. His critique cut deeper than Hayek’s knowledge problems or Mises’ calculation debates. Schmitt questioned the very legitimacy of democratic proceduralism, exposing what he viewed as liberalism’s fundamental delusion: that politics could be domesticated through procedure.

Schmitt’s case rests on two concepts. First, the friend-enemy distinction: politics, in his view, isn’t deliberation but existential conflict, identifying who threatens your existence. Second, his infamous formulation: “Sovereign is he who decides on the exception.” Eight words that, according to Schmitt, expose law’s dirty secret: every legal order depends on extra-legal force. The sovereign doesn’t follow rules; he suspends them, standing outside the legal order while grounding it. These concepts converge in his assault on parliamentary democracy. Channeling Hobbes’ maxim that “authority, not truth, makes law” (auctoritas, non veritas facit legem), Schmitt diagnosed what he saw as liberalism’s core fantasy: that rational discussion could resolve political conflicts. Parliament becomes “eternal conversation”, a bourgeois debating society mistaking talk for action while real power operates elsewhere. Schmitt’s decisionism (Dezisionismus) prioritizes action over process. The exception, whether crisis or emergency, reveals what normal politics conceals: legal orders rest on someone’s decision to create them. His dictum “the rule lives from the exception” inverts constitutional logic entirely. In Schmitt’s framework, exceptions aren’t deviations from authority but its source. The constitution doesn’t limit the sovereign, he decides when it applies. The theory’s seductive danger lies in its sophistication. Schmitt presents authoritarianism not as crude tyranny but as philosophical necessity. When democratic procedures become “obstacles”, bypassing them appears essential rather than criminal. This framework creates the intellectual cover for legal dictatorship: maintain constitutional appearances while gutting constitutional substance. For Schmitt, this wasn’t a flaw. It was the entire point.

Exit or Exclusion?

While Schmitt provided the authoritarian playbook, Murray Rothbard discovered something perhaps more insidious: a market-based path to the same destination. Where Schmitt’s sovereign simply seized power, Rothbard’s anarcho-capitalism would privatize it, transforming democratic exclusion from political crime into property right. Rothbard’s intellectual path reads like a controlled experiment in libertarian logic taken to its natural conclusion. In the 1960s, he championed Black separatist movements as radical federalism: let every group govern itself through voluntary association. By the 1990s, the same man was writing admiringly of David Duke and advocating what he delicately termed “separatism” of a decidedly paler variety. This wasn’t ideological drift but ruthless consistency. Rothbard had discovered what he considered the anarcho-capitalist paradox: a stateless society requires near-universal agreement about property rights, but actual diverse populations, in his view, could never agree on what property means, who counts as people, or which rights matter. Rothbard’s logic, however repellent, followed its own internal consistency. Private courts, he argued, only function when everyone accepts their legitimacy. Protection agencies can’t protect property without shared definitions of property itself. The anarcho-capitalist machine, with its market mechanisms replacing state force, required what democracy could never deliver: consensus on fundamental parameters. When Rothbard concluded that diverse populations would never achieve this consensus on limited government, his reasoning led him to a grotesque conclusion: stable free markets, in his framework, require racially homogeneous communities. Faced with what he saw as this realization, Rothbard believed he confronted the libertarian’s ultimate choice: abandon the dream of stateless capitalism or abandon the diversity that made consensus impossible. His embrace of racial separatism represented, in his mind, not a betrayal of libertarian principles but their logical fulfillment. If markets require homogeneity to function, then exclusion becomes, within this twisted logic, economic necessity.

Enter Hans-Hermann Hoppe, Rothbard’s designated intellectual heir, who systematized the anti-democratic logic into its final form. His Democracy: The God That Failed (2001) attempts to prove that libertarian society requires systematic exclusion. The argument unfolds in three moves. First, standard Austrian economics: democratic politicians are renters who strip-mine public resources, while monarchs are owners who preserve capital. Second, the extension of time preference to demographic categories: in Hoppe’s model, different populations exhibit inherently different temporal orientations, making democratic inclusion of “high time preference” groups civilizationally destructive. Third, the solution:

“There can be no tolerance toward democrats and communists in a libertarian social order. They will have to be physically separated and expelled from society. Likewise, in a covenant founded for the purpose of protecting family and kin, there can be no tolerance toward those habitually promoting lifestyles incompatible with this goal. They—the advocates of alternative, non-family and kin-centered lifestyles such as, for instance, individual hedonism, parasitism, nature-environment worship, homosexuality, or communism—will have to be physically removed from society, too, if one is to maintain a libertarian order.” Hans-Hermann Hoppe, Democracy: The God that Failed (2001)

This resolves Rothbard’s diversity problem through sequential logic: if heterogeneous populations prevent market consensus, then homogeneity must be engineered first. Libertarian principles apply only after demographic curation. The anarcho-capitalist utopia requires an authoritarian admission committee. Hoppe’s intellectual maneuver represents a fascinating case study in ideological problem-solving. One might call it the libertarian’s equivalent of cutting the Gordian knot. Faced with the rather inconvenient fact that not everyone shares his enthusiasm for unfettered markets, he simply takes the non-believers out of the equation entirely. This constitutes less a theoretical breakthrough than a frank acknowledgment of libertarianism’s practical limitations, dressed up as philosophical sophistication.

Rather than engaging in the tedious work of democratic persuasion, Hoppe proposes what we might generously term “market-oriented demographic optimization.” Liberty transforms from universal birthright to exclusive club membership, complete with rigorous admission standards and effective enforcement mechanisms. What emerges is a curious hybrid: anarcho-capitalism with authoritarian characteristics, or perhaps authoritarianism with libertarian branding. The market society becomes viable not through the invisible hand’s gentle guidance, but through the very visible hand of systematic exclusion. Democracy’s cardinal sin, in this framework, isn’t inefficiency but inclusivity, the regrettable tendency to count votes from people who fail to appreciate the wisdom of letting markets sort everything out.

The Silicon Valley Synthesis

The internet turned these anti-democratic theories from fringe literature into a live political current. Early blog networks linking libertarians, entrepreneurs, and programmers bypassed traditional gatekeepers, carrying ideas from Hoppe and Schmitt into online spaces already primed to distrust mass politics. Silicon Valley’s meritocratic self-image, where winners are “exceptional” and the rest irrelevant, fit neatly with theories that treated the majority as a drag on progress. Entrepreneurs building global platforms ran into regulators and local politics, and didn’t need much convincing that democracy was a bug, not a feature. Curtis Yarvin’s Unqualified Reservations became the key translation layer. Mixing programmer’s prose with political theory, he stripped Schmitt and Hoppe to engineer-friendly formulas: “CEO as sovereign,” “exit over voice,” “democracy is broken.” This flattening was the point. Anti-democratic theory became easier to circulate precisely because it was less about reading Schmitt and more about running the world like a startup.

Here’s where the story takes a very interesting turn. The new right movement, for all its theoretical genealogy tracing back through Schmitt and Hoppe, is fundamentally anti-intellectual. And this isn’t a contradiction, it’s the point. Silicon Valley’s cultural DNA, forged in the mythology of college dropouts who built billion-dollar companies, treats traditional scholarship with the same disdain it reserves for legacy code. Academia, with its peer review and rigor, represents everything the “move fast and break things” ethos despises: slow deliberation, collective knowledge production, and worst of all, criticism without skin in the game. The tech-bro’s strip political theory for parts like deprecated software: extract the useful functions, ignore the dependencies. The contempt for academia runs deeper than methodology. It is about competing visions of meritocracy. Universities reward careful thinking, citations, and institutional validation. Silicon Valley rewards shipping code, raising capital, and exit valuations. When Thiel funds his fellowship specifically for college dropouts, he’s not just investing in talent, he’s declaring which form of intelligence matters. The message is clear: those who can, build companies - those who can’t, get tenure.

The 2008 financial crisis delivered Peter Thiel a particularly expensive education in the limits of contrarian investing. Clarium Capital imploded, a humiliation that stung double for someone who’d built his reputation on spotting what others missed. The debacle coincided with a growing obsession: taxes. California’s combined rates could claim over half of any future gains, assuming he managed to generate any. For a libertarian watching his fortune evaporate while the state prepared to tax what remained, the solution seemed obvious: why not simply leave?

Thiel’s first response was preparing exit. New Zealand citizenship, acquired after spending precisely twelve days in the country, provided jurisdictional diversification. He funded seasteading experiments and floating city-states, elaborate thought experiments in competitive governance for those who found democracy incompatible with competence. Yet even as he bankrolled these geographical solutions, Thiel remained intellectually captivated by a more ambitious proposition circulating through Yarvin’s network: what if instead of fleeing democracy, you could systematically displace it? The ideas filtering through these online salons offered a seductive alternative to tax havens and floating platforms.

State Capture

Between 2009 and 2016, Thiel shifted from exit to capture: rather than creating new states, why not overtake the most powerful one first to implement the vision of competing sovereign corporations?

This strategic pivot drew validation from Singapore’s authoritarian technocracy, which demonstrated superior administrative outcomes under Lee Kuan Yew’s three-decade rule. Singapore’s Internal Security Act exemplifies Carl Schmitt’s “state of exception”—the sovereign power to suspend normal legal procedures when circumstances demand it. The neo-reactionary movement views this model as vindication of anti-democratic governance, treating citizens as shareholders in a depoliticized administrative apparatus.

In my ideal neocameralist state, there is no political freedom because there is no politics. Perhaps the government has a comment box where you can express your opinion. Perhaps it does customer surveys and even polls. But there is no organization and no reason to organize, because no combination of residents can influence government policy by coercion. […] Singapore in particular works very hard, and very famously, to suppress politics and political freedom. My understanding—perhaps someone can correct me—is that almost everyone in Singapore has no interest at all in antigovernment politics, that people really are genuinely happy to simply think about their own lives. Curtis Yarvin, Against Political Freedom (2007)

Yarvin’s neocameralist framework provided the intellectual architecture for Thiel’s capture strategy—a systematic replacement of democratic governance with corporate technocratic structures. Where Yarvin theorized the elimination of politics in favor of administrative efficiency, Thiel recognized the practical pathway: embedding private infrastructure so deeply into state operations that sovereignty itself becomes a corporate function. The “Dark Enlightment” Plan: remodeling the state to a business which owns a country, with a single executive, akin to a CEO or monarch, wielding centralized power. This movement provides the theoretic foundation, while a resourceful network of founders and billionaires provide the infrastructure and real influence.

Trump represented something the tech-right hadn’t anticipated: a vehicle. He offered what no conventional politician could: a willingness to break things, his contempt for institutional norms, his transactional worldview, his CEO-as-president demeanor. Thiel’s speech at the republican national convention convention speech revealed his calculation:

Good evening. I’m Peter Thiel. I build companies and I’m supporting people who are building new things, from social networks to rocket ships. I’m not a politician. But neither is Donald Trump. He is a builder, and it’s time to rebuild America.

While established Republicans were reluctant, Thiel saw opportunity in chaos. Trump’s promise to “drain the swamp” could mean whatever you needed it to mean. For traditional conservatives, it meant fighting corruption. For the tech-right, it meant clearing space for their own administrative state—one run like a corporation, not a democracy.

What does Peter Thiel have to loose? Surprisingly little. His wealth is hedged and diversified pretty well, his companies are too embedded in defense and intelligence to be easily dislodged, and his New Zealand citizenship provides an escape hatch. The reputational cost of abandoning his former principles? Already paid and irrelevant to those who matter. What’s to gain? Everything. In a corporate-sovereign state, Palantir wouldn’t just have government contracts, it would be the government’s nervous system. Thiel wouldn’t serve power, he’d become it. But the real prize is vindication: proving once and for all that his “exceptional” few can govern better than democratic majorities ever could. For someone who built his fortune on contrarian bets, betting against democracy itself—and winning—would be the ultimate validation.

For achieving this, it seems, he doesn’t need to stage a coup, but rather refactor the government from within. Each democratic process, each public good, will be replaced by a corporate technocratic structure, until sovereignty itself runs on private infrastructure. Palantir might choose who to surveil, Anduril deciding about military action, Starlink and SpaceX decide who gets internet and satellite access. The exception, Schmitt’s moment where law suspends itself, becomes permanent architecture by corporate governance. Each company exercises what Schmitt called sovereign power: deciding the exception, determining when normal rules don’t apply. But unlike Schmitt’s sovereign who dramatically suspends law, these companies never acknowledged law’s authority in the first place. They don’t declare emergencies,they update policies, by executive. If the state gets split up into companies the power to exclude, surveil, silence, or eliminate now runs through corporate boards, not democratic bodies.

The Endgame?

Some operational elements are already visible. DOGE’s mandate to eliminate federal positions mirrors Yarvin’s call for RAGE (Retire all Government Employees). Deportation enforcement and ideological screening foreshadow demographic engineering. Executive orders bypass legislative deliberation, transforming routine governance into Schmittian exception. Where Trump breaks the system, Vance may reconstruct according to principles favoring Thiel and the neo-reactionary movement. Culture war controversies consume opposition bandwidth while administrative restructuring proceeds through less visible channels: Schmittian friend-enemy logic framing cultural disputes as existential, justifying exceptional measures.

The intellectual genealogy demonstrates ideas functioning as both sincere conviction and strategic resource. Schmitt, Hoppe, and Yarvin identified genuine problems, but where the Austrians tried to reconcile the free market and democracy, they concluded to abolish liberal democracy completely. The meritocratic self-image of Silicon Valley thinkers enabled these ideological gymnastics: taking over the state they claimed to despise.

Yet their project embodies a perfect contradiction: they need the rule of law to enforce the rule of CEOs. Corporate sovereignty requires precisely what authoritarianism destroys: predictable legal frameworks, enforceable contracts, property rights that outlast political favor.

The coalition itself reveals deeper fractures. They agree democracy must break but diverge on what follows. Machiavelli described this problem in The Prince: those who help you seize power become your first threat. These problems of infighting and power-plays will start even before their technocratic utopia comes true, exemplified by the Trump-Musk fallout. Furthermore their whole idea of legitimacy lies on this meritocracy and efficiency complex, offering the “optimal” solution to civilization’s problems. But does that constitute long-run legitimacy? I don’t think so. Efficiency-based authority evaporates at first contact with failure. Consider their proposed meritocracy. Who defines merit? By what mechanism? Yarvin can’t answer without introducing either democratic selection (defeating his purpose) or authoritarian imposition (revealing the con).

Nothing here is inevitable. In the end, one asks himself: Why haven’t corporate structures already conquered states through superior efficiency? Why aren’t we ruled by the Medici, Fuggers or the Dutch East India Company? Corporate sovereignty is historically a transitional phenomenon.

The irony is perfect: libertarians learned to love big government precisely because they discovered the path to owning it entirely. Anti-state principles achieved expression not through governmental elimination but through proprietary control. They began by declaring themselves civilization’s future architects. They’re ending by building the architecture of their own irrelevance, mistaking themselves for designers when they’re actually demolition crews, clearing ground for whatever sovereign emerges from the exception they normalized.