Peter Thiel: Capitalism Isn’t Working For Young People

November 14, 2025 — In 2020, you wrote an email that’s going hyper viral right now, in the wake of Zohran Mamdani’s sweep in the New York City mayoral race. What was the context and inspiration for that email?

Peter Thiel: I had articulated versions of this email for a very long time. It wasn’t just something that came out of the blue in 2020. When I started the Thiel Fellowship, where we gave people money to drop out of college in the fall of 2010, the one broad policy point that I kept hammering was this runaway student-debt problem.

If you graduated in 1970 with no student debt, compare that to the millennial experience: too many people go to college, they don’t learn anything, and they end up with incredibly burdensome debt. Student debt is a version of this generational conflict that I’ve talked about for a long time.

The rupture of the generational compact isn’t limited to student debt, either. I think you can reduce 80 percent of culture wars to questions of economics—like a libertarian or a Marxist would—and then you can reduce maybe 80 percent of economic questions to questions of real estate.

It’s extremely difficult these days for young people to become homeowners. If you have extremely strict zoning laws and restrictions on building more housing, it’s good for the boomers, whose properties keep going up in value, and terrible for the millennials. If you proletarianize the young people, you shouldn’t be surprised if they eventually become communist.

SF: Can you speak to the idea of a “generational compact”? You recognized its disintegration before almost anyone else, and noted that it would likely lead to a resurgence in interest in socialism.

PT: Younger generations are told that if they do the same things as the boomers did, things will work out well for them. But society has changed very drastically, and it doesn’t work in quite the same way. Housing is way more expensive. It’s much harder to get a house in a place like New York or Silicon Valley, or anywhere the economy is actually doing well and there are a lot of decent jobs. People assume everything still works, but objectively, it doesn’t.

Boomers are strangely uncurious about how the world is not really working for their kids. It’s always hard to know how much bad faith there is or how bad the actors are. I think it’s odd that people thought it was odd that I was complaining about student debt in 2010, when even then the growth in student debt was an exponential process. The national student debt was $300 billion in 2000, and it’s now more than $2 trillion. At some point, that breaks.

SF: Exit polling after Mamdani’s victory shows that his voters were likely motivated by two things: high rent and student debt. His voters were largely college-educated city transplants, renters, and people under 30. Does his victory prove the thesis you laid out in your 2020 email?

PT: I’m obviously very biased against socialism. I don’t think socialism has solutions to these problems. I don’t think Mamdani particularly has solutions. I don’t think you can socialize housing. If you just impose rent controls, then you probably have even less housing, and eventually, it’s even more expensive.

But to Mamdani’s credit, he at least talked about these problems. So my cop-out answer is always to say: The first step is to talk about the problems, even if you don’t know what to do about them. There’s been a failure of, let’s say, the center left-center right establishment to even talk about them.

I don’t know if I would say that young people are pro-socialist. I would say they are less pro-capitalist than they used to be. If capitalism is seen as an unfair racket of one sort or another, you’ll be much less pro capitalism. So in some relative sense, they’re more socialist, even though I think it’s more just: Capitalism doesn’t work for me. Or, this thing called capitalism is just an excuse for people ripping you off.

SF: But practicability aside, what do you think is the motivating factor? What does it mean to be alienated from capitalism to the extent that you feel compelled to vote for somebody despite the infeasibility of their own policies?

PT: I’m always hesitant to speak categorically about all the voters. But there’s a part of all of this that—even if I don’t like it—I find at least understandable. It’s not this weird mystery. You’re not going to tinker with student debt at the margins, like Biden tried to do, and solve it. That won’t work. And there’s been all sorts of tinkering at the margins with rent control in New York. That hasn’t quite worked.

So the idea is: Maybe we should look for solutions outside the Overton Window. And that includes some very left-wing economics, socialist-type stuff. I don’t think those ideas will ultimately work, but they’re more than whatever was on offer. Cuomo did not have a plan for housing. He didn’t even think it was an issue. And of course, he’s been in politics and government for many, many years, so it’s hard not to ask: Why is he going to do something now, if he hasn’t done anything before? So, I’m not optimistic about Mamdani, but if you score it relatively, this is the kind of thing that’s going to happen if you look outside the Overton Window for solutions.

SF: A lot of people are drawing comparisons between President Donald Trump and Mamdani. Both led vibes-based campaigns, were joined by unlikely allies, and promoted policies centered on grievance. They are both hyper charismatic. What do these similarities say about what most resonates with voters in our digital age?

PT: I stress the negative. It’s how fake the other people are. It’s just, the average—I’m not sure who to pick on—Jeb Bush or whatever, where everything is just precisely choreographed in this extremely fake way, and you can’t say anything charismatic. There is some kind of authenticity to Trump and Mamdani. I’m not sure that they’re perfectly coherent, nor perfectly authentic. But this is what the establishment Republicans and establishment Democrats really don’t like about Trump and Mamdani, is that they can’t even call them inauthentic, because both are somehow more authentic than what the parties have. If you’re someone like Paul Ryan and you think Trump is fake, what does it say about you? What does it say about your lack of charisma, your lack of ability to speak to people?

SF: In 2016, Trump rose to power due to economic despair in the heartland. This week, Mamdani rose to power due to economic despair in Brooklyn. Is the future of politics just class warfare?

PT: Something went pretty haywire in the Midwest. Aspects of globalization had an extremely bad, disparate impact on a lot of the rust belt cities in the Midwest. One of the troubling legacies of the 28 years from 1988 to 2016, from [George H.W.] Bush, [Bill] Clinton, [George W.] Bush, even [Barack] Obama, is that people were strangely cavalier and indifferent about this.

I really don’t like the socialism of Mamdani, but I’m not surprised. Capitalism is not working for a lot of people in New York City. It’s not working for young people. I don’t think his policies will work, but I’m not surprised he won. In some sense, we’re in this multi-decade political bull market where politics is becoming more intense. People are looking to politics to solve problems. We have this relentless intensification of politics. And I would like this not to be the case. It would be healthy if we had elections in which fewer people voted. I think the turnout was pretty high in New York. I think it would be healthier if people didn’t care, if it didn’t matter who was mayor, and people just didn’t vote. But we’re in a bull market of politics. It’s good for your job in media, but it’s not great for our society.

SF: It would be healthier if people didn’t vote?

PT: It would be linked to a healthier society. It wouldn’t matter who’s president, because if everything’s going reasonably well, the stakes are not that high. It wouldn’t feel this existential. Whereas, if we have less growth, or if the growth is very uneven, and if everything feels very zero sum, then somehow the stakes and politics get very high. And maybe it’s actually really bad if your side loses an election.

I haven’t done a precise study, but I imagine people were less engaged in politics in the ’80s and ’90s, and then it started to turn around at some point—maybe 2008 was a year when people started to get a lot more engaged—and then it’s been steadily building ever since. This political bull market is an unfortunate reality. It’s correlated with things that are not great.

SF: Revolutions are often led by dissatisfied, frustrated elites—Maximilien Robespierre, Vladimir Lenin, Joseph Stalin, Mao Zedong—elites who are downwardly mobile, whose expectations of their lives are lesser than that of their parents.

PT: That’s obviously the boomer-millennial dynamic in spades. Boomers had crazy expectations for themselves, and there were some ways in which they didn’t succeed. Then they projected all their crazy expectations onto their kids in a world where achieving them was completely unrealistic.

There are some dimensions in which the millennials are better off than the boomers. There’s some ways our society has changed for the better. But the gap between the expectations the boomer parents had for their kids and what those kids actually were able to do is just extraordinary. I don’t think there’s ever been a generation where the gap has been as extreme as for the millennials.

SF: So are we headed for revolution?

PT: I still find it hard to believe, because Communism and fascism are youth movements. And the demographic reality is that there are a lot fewer young people than there used to be. People are having a lot fewer kids. And so, we have more of a gerontocracy. Which means that if the U.S. becomes socialist, it will be more of an old people’s socialism than a young people’s socialism, where it’s more about free healthcare or something like that. The word revolution sounds pretty high testosterone and violent and youthful. And today, if it’s a revolution, it’s 70-something grandmothers.

We’ll see how much Mamdani can do as mayor of New York. But I would say it’s symptomatic of things being very unhealthy. It’s symptomatic of establishment parties not tackling certain very basic problems, of having broken this generational compact. I would prefer people to focus more on solving this generational problem. If all you can say is that Mamdani is a jihadist, communist, ridiculous young person, what that sounds like to me is that you still don’t have any idea what to do about housing or student debt. If that’s the best you can do, you are going to keep losing.

SF: If in 10 years, you were pleasantly surprised by the state of America and the world, what would have happened to make it so? Can you walk us through how the next decade could go well?

PT: This is an obnoxious answer of sorts, but it’d be like: The political establishment, the leaders we have, will actually solve some of these problems, and this is the last time we’re going to have this conversation. And if you ask to talk to me a bunch of times over the next 10 years, that won’t be healthy, because it will be because these problems haven’t been tackled or solved. The reason I’m talking to you, and the reason we’re having this conversation, is that we both suspect that this is going to be the first of many.

Peter Thiel and Sean Fischer
The Free Press & Grey Swan Investment Fraternity

P.S. from Addison: We’re happy to report the Free Press is still publishing what founder Bari Weiss calls “both sides of the story” despite her recent ascension to the top job at David Ellison’s legacy acquisition CBS News.

Since the U.S. left the gold standard, owners of assets – like Peter Thiel above – have benefited far more than workers. On an inflation-adjusted basis, wages have barely risen.

For those who are younger or coming from poorer homes, that makes it more difficult to build wealth – and with it, buy a starter home, get married, and start a family.

The full danger of transitioning to a fiat system is still unfolding – and from a demographic perspective, it appears that it won’t end well. That’s why our colleague Harry Dent is in favor of – legal! – immigration.

Importing a fully grown adult without the cost of raising that person since childhood is a significant saving to the economy. However, that in turn raises questions about the role of nation-states. It’s certainly no wonder that younger Americans and recent immigrants support socialist candidates. It’s not ideological – it’s a lifeline given the rising challenge of reaching the American Dream.

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