In private and in public, I’ve long known Joe Lonsdale to be one of Silicon Valley’s most unapologetic voices. Probably most famous for co-founding Palantir with his longtime mentor, Peter Thiel, Lonsdale displays little inhibition at a time, and in an industry, when the gap between what people say publicly and what they profess privately often couldn’t be wider. For better or worse, Lonsdale provides an unvarnished expression of the venture capitalist id—and occasional fodder for its liberal caricature.
Lonsdale, after all, spent much of his early career in Thiel’s footsteps. He served as an editor of the Stanford Review, the provocative conservative student publication that Thiel co-founded, years earlier; interned at Thiel’s PayPal before it became a Mafia; and eventually became a right-hand man to Thiel, himself. Lonsdale would become one of the first employees at Thiel’s first investment shop, Clarium Capital, and then in 2004, helped him found Palantir, the data-mining, terrorist-hunting software company that made them both fabulously wealthy. That kickstarted a meteoric career—interrupted by a too-tangled-to-quickly-explain personal scandal—in which Lonsdale struck out on his own, founding the wealth management platform Addepar and a venture capital firm, 8VC.
Yet overdramatizing the association with Thiel, or “PT” as associates often call him can sell Lonsdale short. Unlike Thiel, as one person who knows them both well put it, Lonsdale has “almost no filter.” And so over the years, Lonsdale has emerged as one of the most effective, iconoclastic, and yes, often abrasive, defenders of the ultra-rich, especially the younger generation of elites who rank among his friends. If the debate over inequality in America is a contest between the trust we place in a democratic but lumbering public sector versus an ambitious but unaccountable private sector, Lonsdale is an earnest spokesperson for the latter.
He and I disagree on plenty: I do not think inequality is a “fake issue,” and his view of the world can strike me as chillingly Darwinian. But at least he’s not in a defensive posture like so many of his peers. The other week, I called him at his new home in Austin—he recently fled the Bay Area—to discuss his defense of the ultra-wealthy, his admiration for Elon Musk’s approach to philanthropy, and why he’s been hosting Ron DeSantis for dinners. (Our conversation has been edited for clarity.)
Theodore Schleifer: Let’s start with the big thing you and I always discuss privately. It’s become very popular for politicians and activists to criticize billionaires and other wealthy people. What do you think those people get wrong about billionaires in America?
Joe Lonsdale: I wouldn’t try to glorify the billionaire class. I think that’s silly. At the same time, I wouldn’t want to live in a country that didn’t allow people to become billionaires. I think we have lots of examples of that around the world, where, if you have a country where it’s impossible to become a billionaire, it’d probably be impossible to create massive wealth. And in the process of creating [wealth], you’re probably solving a lot of problems.
In general, there’s a lot of billionaires who are creating a lot of awesome things, and who do have a sense of duty. It’s like with Noah in the Bible, where he’s like, “If I can even find ten good people, would you please not destroy these cities?” when he’s talking to God. There’s so much good done by the ones that are good, that that actually outweighs the fact that there is some waste, and there’s some people who you and I are both like, “Oh my God, I can’t believe that person really has all that wealth.”
One thing I want to note is that wealth inequality goes up every time I start a company.
You think creating economic value can lead to more inequality.
By definition it leads to more inequality. Literally. If I told you that all I’m going to do from now on is stay on the beach and spend my money and buy ridiculous jewelry for my wife, and not put any more money into innovation, that would reduce inequality massively—because my wealth would go way, way down. And if I just took the money and built things, that’s going to increase inequality massively. Inequality is bad logic. Of course we have a problem, but the problem is a [lack of] opportunity for the least well off.
Inequality, you’ve said, is a fake issue.
Well, it’s not a fake issue that we have a huge part of society that’s struggling. It’s not a fake issue that we have a working class that has a way too high cost of living, and that healthcare is too expensive and that education is broken. And that there’s communities that can’t get ahead because of structural inequality we’ve put in place—structural lack of opportunity, I’d call it, because inequality is a bad word. And it’s not a fake issue that there’s certain parts of society that have certain advantages that we haven’t done a good job of giving to others. But you’re never going to make everyone have the exact same opportunity. It’s not possible.
What about the broader critique that the ultra-wealthy have too much power and influence in society?
I think the corporations are much scarier to me than a wealthy person, just because a big corporation has a really clear profit incentive to capture things and keep competitors out. That’s really broken a ton of our industries.
When they’re not working through corporations, there’s a lot of causes that wealthy people [support] that on the whole, tend to be good. I don’t agree with all of them, but I think it’s probably a positive thing overall for them to push what they think is helpful for society using their wealth.
One of the reasons I enjoy talking to you is because you articulate what other people think privately. Do you think that wealthy people have gotten too sheepish about talking about this stuff?
Oh yeah, everyone’s really afraid to say, “Oh it’s good to be wealthy. It’s good to have more wealth. It’s good to work harder.”
It feels like the billionaire critics—largely those on the left pushing things like wealth taxes—are winning the public argument.
I’m kind of like a junior billionaire, probably, if you measure it properly right now. I have friends who are 20 years older than me who have been much more successful, who are many times my wealth and many times my influence.
I think it’s really good for the world for me to actually decide to keep working hard and keep starting these companies and keep building things, and then, by the way, to use my wealth to try to get things done.
You should want me to create more wealth. You’re not supposed to say that in society. Everyone is supposed to shut up, I guess, and not talk about it.
Let’s talk about using that wealth. When it comes to solving public problems, whom do you trust more: private philanthropists or the public sector?
I think there’s a lot of times when there’s misaligned incentives and you’ve got to be really careful if people are really doing something for philanthropic reasons, or if there’s some other thing they’re trying to do. But I think if the incentives are appropriate, I do tend to trust private actors more—just because this comes back to human nature. If you’re spending your own money, you’re going to be a lot more careful with how you’re spending that money.
I’m not saying that private philanthropy doesn’t do lots of stupid things all the time, but on average, I trust people to spend their own money a little bit better.
I definitely agree there are times when philanthropists can move more nimbly. But the tradeoff, as I’ve seen it, is that it’s fundamentally less democratic to have wealthy people who are unelected—
—But that’s not what democracy means. Democracy doesn’t mean that there’s not certain people who are going to be—you’re always going to have certain celebrities who are more influential people, who are listened to more. It’s not undemocratic to have celebrities. It’s not undemocratic to have leaders in society.
You’re not worried about the philanthropic power of, say, Bill Gates? Gates has more influence over the direction of critical scientific research than most governments.
I don’t think there’s anything wrong with the fact that if you’re a really good builder, people listen to you more. I think that’s always going to be the case. I think there’s people who have too much influence for the wrong reasons—there are actors or actresses who get tons of influence in our society because they’re good actors, and that’s more ridiculous to me.
But isn’t it still more undemocratic, though? I wonder whether that’s the tradeoff we have to accept.
I agree if people are very poor, you can have economic influence over them and that’s really bad. And we’ve got to protect them with rules and that’s fine. I agree with the moderate left on that. But in terms of the power that is dangerous—between you and me, I’m much more afraid of what governments are going to tell either of us to do.
You’re friendly with Elon Musk. What do you think about where he is on his own philanthropic journey?
Elon should be just super, super focused on everything he’s doing right now. I think the most charitable thing Elon could do for the world, by far—and I really mean this—the most charitable thing he could do for the world is spend a little bit more time on his [tunnel building] Boring Company. This may sound silly to people. But if you look at philanthropically, what do we really care about? The lives of the working class and the least well-off in our society and economic access to our cities is extremely important.
You called yourself a junior billionaire. I know you’re against a wealth tax. But do you think you should pay higher taxes?
I think I should pay taxes for different things. I should pay less taxes when I’m making money and want to recycle it to build more things. And I think I should pay much more taxes when I’m buying expensive jewelry, or a nice car, if I want to buy a boat or maybe a third or fourth house.
But in sum, the effective tax rate for wealthy people?
I think if you’re on the left, your first question is what is the fair amount for you to pay. “Isn’t it fair for you to pay more?” Left people, I realize, mean very well doing that. And a lot of people on the right say, “What is the optimal thing for our society? For poor people and economic growth and how our society works?” And I think you have to balance those two.
Even if it was optimal long-term for society, you wouldn’t want to not tax rich people. That’d be stupid and morally wrong. But then, even if it felt unfair, it’s actually more fair long-term for the economy to be functional and growing.
So I don’t think I should pay a lot more. I think I should pay for different things.
There is a flourishing wealth management industry—tax minimization, asset preservation, I always crack up at these euphemisms—all of it perfectly legal. Do you think any of that is unethical? Or is all fair in love and war?
I think you set the rules and people should optimize within the rules. I think it’s what everyone does.
One thing I did with some of my Palantir shares—and everyone would tell me not to tell you, but I don’t care—is I took some of them and invested some of them into the market directly. And if you invest directly in the market with the shares, you donate them to a fund, and then you don’t have a tax event right then. So you’re able to diversify a little bit. None of this is my money—I can’t buy anything with it yet for eight years. It’s a totally kosher thing. I think some people would say that that’s some kind of loophole. But I mean, I think it’s a smart thing to do.
What I don’t like are these really complicated reinsurance schemes, where people have effective tax rates of 4 percent or 5 percent. That’s something I think probably should be closed. I haven’t done any of that bullshit offshore or whatever. That’s something that is so extreme that yeah, you probably should look into it. If you’re going to be taxing me 33 percent, 36 percent, whatever, you shouldn’t be taxing someone else 4 percent because they have some really crazy, super complicated scheme.
You’re a growing force in Republican politics. What are some of the conservative special-interest groups that you think have too much power?
The health care interests: pharma, the hospitals—they play both sides, but they pay the right off more … I like Kevin McCarthy on certain things. I know people don’t like him—I like him overall—but the pharmaceutical industry is the issue on which I have trouble talking to him because he gets lots of donations from it, just as the left gets donations from other people. And I think he’s too easy on them.
Also the defense-industrial complex. This is really important to me. People always assume that I’m some pro-war part of the defense-industrial complex because I founded Palantir. That annoys me more than almost anything else. We founded Palantir because the defense-industrial complex was so freaking broken and corrupt and wasteful.
As an aspiring major player in the Republican fundraising world, who are some of your favorite Republicans?
I’ve had DeSantis over for dinner twice. He impressed a lot of my famous friends, whose names I’m not allowed to make public. You don’t agree with everyone on everything—I think the Florida Legislature did a lot, by the way, they’re super competent—and I agree with him on most things.
He’s a really thoughtful guy. A lot of people say, ‘Oh, he can’t be president because he’s not enough of a gladhander in person. He’s a little bit dorky in person, which I appreciate, honestly, because I’m obviously somewhat dorky myself. And so we had some really good conversations. I think he’s a very serious player. I really hope Trump does not run again.
Do you think the G.O.P. has been irreparably tainted by him?
I don’t think that’s how things work in our society. I don’t think that things get irreparably tainted. I think that there were a lot of mistakes and there are a lot of things that I was really unhappy to see. There are certain ways I want a president to act. I don’t want a president to be trying to own the libs, or whatever the hell you call it.