A Tale of Titans: How the PayPal Mafia Shaped America
In 2002, eBay purchased the online payment processing company PayPal for $1.5 billion – a hefty purchase even for the rapidly growing e-commerce platform. The acquisition of PayPal aimed to allow simpler and more secure online payments on the eBay site, giving customers the ability to connect their PayPal account and transfer money through it. While the purchase positively impacted eBay, several prominent PayPal executives disagreed with it and even left the company as a result. The executives and employees who left are now called the “PayPal Mafia”, and have gone on to contribute to some of the most significant technology brands today, including YouTube and Yelp.
Two of these executives became Silicon Valley heavyweights who continue to influence the American economic and political landscapes. The first is Elon Musk, who made his first fortune with the sale of Zip2, a new take on city guide software, to the tune of $22 million. He went on to use the money to fund X.com, which was one of the first online banking services. In 2002, X.com merged with PayPal’s parent company, Confintinity, co-founded by then-chief executive Peter Thiel. Both men became exceedingly wealthy from the sale, and used the capital to make investments that would one day make them billionaires. While they would eventually split paths, both Musk and Thiel would profoundly affect modern America and spur change in countless sectors of the economy and government.
Elon Musk used his share of the wealth to develop SpaceX, a private aerospace manufacturer, in 2002. While SpaceX was not the first of its kind, seeing as Amazon founder Jeff Bezos had created Blue Origin four years before, SpaceX became more popular due to the concept of cheaper space travel and a less apocalyptic tomorrow. Today, SpaceX competes for contracts against other aerospace manufacturers from the National Aeronautics and Space Administration (NASA) in order to deploy its reusable “Dragon” rockets capable of landing back on Earth. The company also plans to send its Starship rocket to the Moon within the decade, although like many aerospace projects, it has faced several delays.
Thiel also began to work closely with the government in his own capacity. In 2003, he founded data analytics company Palantir to create a variety of software for data processing, statistical modeling and artificial intelligence. The United States government is the company’s most lucrative client in regards to contracts, including one worth nearly $1 billion.
The two men are not merely icons who soak in the admiration of fans; their accomplishments have had a significant impact on how companies, the public and the government operate in their daily lives. Specifically, Palantir’s software informs the world’s most powerful military, and SpaceX continues to fundamentally alter the direction of the human species. While these may seem like significant positive contributions on the surface, further consideration reveals a more complicated picture.
Thiel’s Palantir operates in the same covert fashion as many other lucrative government contractors. By nature, the company requires the harvest of tremendous amounts of information in order for its software to create more accurate results. Because of this data collection, it is clear Palantir has little interest in protecting the privacy of citizens. According to Business Insider, Denmark even sanctioned the software due to concerns about police use of its data aggregation services. If the technology was invasive enough to spark legal restrictions, then it is only logical to conclude Palantir’s involvement with the data of American citizens is far greater than we realize. Thiel’s company directly contributes to the growing surveillance state threatening the digital freedom of hundreds of millions of people.
Thiel also makes substantial political donations to the Republican Party. He sank millions into previous presidential candidate Donald Trump’s unorthodox campaign through Super PACs and personal donations. He is also now backing several candidates aligned with both Trump and the “America First” movement. Blake Masters, a candidate for the Arizona Senate, only just resigned from operating several organizations founded by Thiel in order to focus on the election. Regardless of one’s personal views on their politics, when elections are flush with cash by private interests, they gain more capital to use toward increasing their chances of winning.
On the other hand, Elon Musk’s influence tends more toward transportation and economics. Musk proposes various transportation solutions outside of Tesla that consistently run into development issues. The Hyperloop, first proposed by Musk in 2012, still does not have a working design and garners much criticism from engineers and scientists. The Boring Loop, originally meant to consist of 15-passenger pods moving at 150 miles per hour, is now two single lane tunnels with colored lights and dangerous congestion issues, despite promises of traffic-free transport. Musk’s activity is also the subject of a feud between him and the Securities and Exchange Commission, which sued Musk in 2018 for allegedly costing investors large amounts of money by asking his followers whether Tesla should become a private company. Musk is currently seeking to terminate the settlement, but continues his online shenanigans – including posting memes and firing back at critical politicians.
Despite their large numbers of both dedicated followers and ravenous detractors, neither Musk nor Thiel should be painted as a savior or as a devil. While they both have visions of a better future, their companies seem more inclined to break new ground in each industry – not necessarily for the better or worse. Along with their fellow PayPal Mafia members, they have radically altered the American landscape on numerous fronts. Our only hope is that they do not take American society hostage for their own gain.