Monopoly Profits Fund Everything Else

The opposite of perfect competition is monopoly: a company so good at what it does that no other firm offers a close substitute. Thiel is not talking about illegal bullies or government favorites, but companies like Google, which has not seriously competed in search since the early 2000s.

Monopoly profits buy the ability to think beyond today's margins. A monopolist can care about its workers, its products, and its long-term place in the world, because it is not locked in a daily fight for survival. Ethics, in Thiel's framing, is partly a luxury that only durable profits can afford.

Compare value created to value captured. US airlines move millions of people and create enormous value, yet in 2012 they earned 37 cents per passenger trip. Google created less total value than the airlines that year but kept over 21 percent of its revenue as profit, more than 100 times the airline industry's margin. Creating value is not enough. You have to capture some of it.