From the article:

This is the second of a two-part series on the causes of America’s decline—economic, industrial, social, spiritual—and two prominent intellectuals who address themselves to remedies. Part 1 can be found here.

(Part 1 focused on Professor James K. Galbraith, progressive economist; and Part 2 focuses on Peter Thiel, venture capitalist and entrepreneur)

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Peter Thiel made his initial fortune by cofounding (and then selling) the electronic-payments service PayPal. Since that time, Thiel has created various other enterprises, ranging from venture-capital firms such as Founders Fund to a data-analysis firm named Palantir... Thiel explained Trump’s rise as a response to national decline resulting from the damaging consequences of free trade, out-of-control militarism, increasingly expensive health care, rising student debt, and stagnant wages.

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Thiel argues that technological and scientific progress, the basis for economic growth, has stalled out. The lack of innovation in energy, agriculture, medicine, and science in general, he contends, has cut into standards of living that can no longer be attenuated by accumulation of consumer debt and cheap goods from free-trade partners, particularly China. Even gains in the digital tech sector, where Thiel made his initial fortune, he explains as having stalled out and now amount to illusory productivity.

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However, Thiel diverges from the progressive Galbraith and speculates that the decline in technological innovation has been concealed by battles over identity politics. It is here Thiel begins to bring questions of culture and psychology into his inquiry.

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What, then, is this psychological factor that can reverse our national decline, so overcoming the hurdles on right and left? This is Thiel’s question. His reply appears to be the use of René Girard’s famous scapegoat mechanism to break a societal bottleneck.

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In effect if not by conscious design, he has selected as collaborative scapegoats Google, the politically correct “left,” and China. It appears that Thiel, and fellow travelers such as Missouri Senator Josh Hawley, want to rally the fractious American people (as FDR did in is time) by focusing their anger on enemies, foreign and domestic, to generate unity and get the populace to consent to great technological innovations underwritten by the government while being distracted from the true reasons for our inability to progress technologically and economically. If the culprits above are scapegoats in the Girardian sense, to what degree is the blame laid upon them false, and what true culprit is Thiel distracting from? (bold added)

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As Galbraith pointed out in The End of Normal, the era of solid economic growth from the end of World War II to the two oil shocks of the 1970s has been behind us for quite a while. What we in the U.S. experience now is a consequence of the end of that solid growth era: a country ruled by corporate elites who have captured the machinery of government to enrich themselves at the expense on non-elites. This is what Galbraith calls the predator state. These predatory oligarchs and their rule of the country are what Thiel, a billionaire, seems to want to distract from while simultaneously drumming up anger against his coalition of scapegoats to make possible great technical and scientific projects underwritten by the government. (bold added)

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Thiel has made the accusation that Google is committing treason by working for the Chinese government on AI research, spurning working with the U.S. government, and should be investigated by the FBI and the CIA. It appears, however, that Thiel, as a libertarian, harbors an ideological opposition to AI and is ideologically and personally given to cryptocurrencies, Bitcoin in particular.

There is a further irony in that Thiel’s company, Palantir, is utilized by various U.S. government agencies for data collection and surveillance, an apparent contradiction for an ideological libertarian.

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There may be a kernel of truth to Thiel’s accusation that the American left’s obsession with identity politics conceals the lack of material progress in the U.S. since the end of the era of solid growth. Intellectuals on the left, such as the American literary theorist Walter Benn Michaels and political scientist Adolph Reed, have long criticized leftist obsessions with identity politics as a neoliberal weapon to distract from issues of class and economic inequality.

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We arrive at the dominant scapegoat in Thiel’s playbook: China. Like Thiel’s accusation against the left, his scapegoating of China has kernels of truth in it. There were warnings about the dangers of free-trade agreements in the early 1990s. Sir James Goldsmith, financier and politician, cautioned about the dangers in his books The Trap and The Response. In particular, Goldsmith was concerned about the negative effects of labor arbitrage on the fabric of Western societies and even had a prescient warning about China’s ability to provide Western corporations with a massive reservoir of cheap labor and run large trade surpluses

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So it appears Thiel’s focus on China is not without merit. But he seems intent on taking a highly competitive rival and converting it into an enemy of the U.S., as evidenced his numerous speeches and interviews about China. Adversary and competitor are two different things. There is a bit of blame deflection here, as it was U.S. corporations and their owners who chose (and were not forced) to engage in free trade with China, taking advantage of its massive army of cheap labor and nonexistent safety standards for profit—and thus abetting China’s growth into a formidable economic powerhouse.