The Creative Monopoly
By DAVID BROOKS
As a young man, Peter Thiel competed to get into Stanford. Then he
competed to get into Stanford Law School. Then he competed to become a
clerk for a federal judge. Thiel won all those competitions. But then he
competed to get a Supreme Court clerkship.
Thiel lost that one. So instead of being a clerk, he went out and
founded PayPal. Then he became an early investor in Facebook and many
other celebrated technology firms. Somebody later asked him. “So, aren’t
you glad you didn’t get that Supreme Court clerkship?”
The question got Thiel thinking. His thoughts are now incorporated into a
course he is teaching in the Stanford Computer Science Department. (A
student named Blake Masters posted outstanding notes online, and Thiel has confirmed their accuracy.)
One of his core points is that we tend to confuse capitalism with
competition. We tend to think that whoever competes best comes out
ahead. In the race to be more competitive, we sometimes confuse what is
hard with what is valuable. The intensity of competition becomes a proxy
for value.
In fact, Thiel argues, we often shouldn’t seek to be really good
competitors. We should seek to be really good monopolists. Instead of
being slightly better than everybody else in a crowded and established
field, it’s often more valuable to create a new market and totally
dominate it. The profit margins are much bigger, and the value to
society is often bigger, too.
Now to be clear: When Thiel is talking about a “monopoly,” he isn’t
talking about the illegal eliminate-your-rivals kind. He’s talking about
doing something so creative that you establish a distinct market, niche
and identity. You’ve established a creative monopoly and everybody has
to come to you if they want that service, at least for a time.
His lecture points to a provocative possibility: that the competitive
spirit capitalism engenders can sometimes inhibit the creativity it
requires.
Think about the traits that creative people possess. Creative people
don’t follow the crowds; they seek out the blank spots on the map.
Creative people wander through faraway and forgotten traditions and then
integrate marginal perspectives back to the mainstream. Instead of
being fastest around the tracks everybody knows, creative people move
adaptively through wildernesses nobody knows.
Now think about the competitive environment that confronts the most
fortunate people today and how it undermines those mind-sets.
First, students have to jump through ever-more demanding, preassigned
academic hoops. Instead of developing a passion for one subject, they’re
rewarded for becoming professional students, getting great grades
across all subjects, regardless of their intrinsic interests. Instead of
wandering across strange domains, they have to prudentially apportion
their time, making productive use of each hour.
Then they move into a ranking system in which the most competitive
college, program and employment opportunity is deemed to be the best.
There is a status funnel pointing to the most competitive colleges and
banks and companies, regardless of their appropriateness.
Then they move into businesses in which the main point is to beat the
competition, in which the competitive juices take control and gradually
obliterate other goals. I see this in politics all the time. Candidates
enter politics wanting to be authentic and change things. But once the
candidates enter the campaign, they stop focusing on how to be
change-agents. They and their staff spend all their time focusing on
beating the other guy. They hone the skills of one-upsmanship. They get
engulfed in a tit-for-tat competition to win the news cycle. Instead of
being new and authentic, they become artificial mirror opposites of
their opponents. Instead of providing the value voters want — change —
they become canned tacticians, hoping to eke out a slight win over the
other side.
Competition has trumped value-creation. In this and other ways, the competitive arena undermines innovation.
You know somebody has been sucked into the competitive myopia when they
start using sports or war metaphors. Sports and war are competitive
enterprises. If somebody hits three home runs against you in the top of
the inning, your job is to go hit four home runs in the bottom of the
inning.
But business, politics, intellectual life and most other realms are not
like that. In most realms, if somebody hits three home runs against you
in one inning, you have the option of picking up your equipment and
inventing a different game. You don’t have to compete; you can invent.
We live in a culture that nurtures competitive skills. And they are
necessary: discipline, rigor and reliability. But it’s probably a good
idea to try to supplement them with the skills of the creative
monopolist: alertness, independence and the ability to reclaim forgotten
traditions.
Everybody worries about American competitiveness. That may be the wrong
problem. The future of the country will probably be determined by how
well Americans can succeed at being monopolists.
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