Peter Thiel, a prominent billionaire, has issued a cautionary statement regarding the increasing embrace of socialism in the United States. This comes on the heels of a past remark he made five years ago, which has gained renewed attention following Zohran Mamdani’s electoral success in New York City.

In 2020, the venture capitalist from Silicon Valley emailed Mark Zuckerberg and others, highlighting the need to seriously consider the growing socialist inclinations among young people.

Thiel, cofounder of PayPal, remarked, “When 70 percent of millennials express pro-socialist views, dismissing them as merely foolish, entitled, or brainwashed is insufficient. We must strive to understand their perspective,” he wrote, then aged 58.

He suggested that economic factors play a significant role: “It seems straightforward to me that excessive student debt or unaffordable housing leads to prolonged periods of negative capital, hindering the accumulation of assets like real estate. Without a stake in capitalism, people may turn against it.”

On Wednesday, Chamath Palihapitiya, a fellow venture capitalist, shared Thiel’s message, coinciding with discussions over Mamdani’s victory. The email has since garnered 4.5 million views.

Asked to comment on his previous statement, Thiel warned in an interview with the Free Press, “If you push young people into a proletarian state, don’t be surprised if they eventually lean towards communism.”

He went on to explain that strict zoning laws and construction limits were good for boomers, who have seen their properties appreciate, but have been terrible for millennials who have had an extremely hard time buying homes.

And while Thiel, who has an estimated net worth of $20.8 billion and considers himself libertarian, disagrees with Mamdani’s answers to New York City’s housing affordability crisis, he credited the mayor-elect for talking about the issue more than establishment figures. 

Billionaire Peter Thiel has issued a stark warning about the rise of socialism in the United States

He spoke about New York City Mayor-elect Zohran Mamdani’s victory, running as a Democratic Socialist

Mamdani, 34, became the first New York City mayoral candidate since 1969 to win more than a million votes by exploiting the anger of younger voters at spiraling costs in one of the most expensive cities on Earth. 

They then globbed on to his promises of cheaper housing, an increased minimum wage, a freeze on rent hikes, free bus services, fully-funded daycare and city-owned grocery stores.  

In doing so, he secured over 50 percent, and a nine-point margin over his nearest rival, the establishment Democrat Andrew Cuomo, who ran as an Independent.

But Thiel said he is unsure whether young people are actually in favor of socialism or if they have just become disillusioned with 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,’ he said.

Thiel then went on to express sympathy for voters seeking bold ideas to fix issues like student debt and housing costs, which he said politicians previously only addressed by ‘tinkering at the margins.’

Those incremental approaches haven’t worked, Thiel said, spurring voters to warm up to proposals outside the normal political discourse, including ‘some very left-wing economics, socialist-type stuff.’

Taken together, Thiel said he is not surprised that young voters gravitated toward Mamdani. 

‘Capitalism is not working for a lot of people in New York City,’ the venture capitalist said. ‘It’s not working for young people.’

Mamdani, 34, surged to victory by exploiting the anger of younger voters at spiraling costs in one of the most expensive cities on Earth

Voters globbed on to his promises of cheaper housing, an increased minimum wage, a freeze on rent hikes, free bus services, fully-funded daycare and city-owned grocery stores

He noted that the surge in popularity of socialism among young voters comes amid a ‘multi-decade political bull market’ in which politics is becoming more intense and people are looking more at politics to help them solve their problems.

Part of that, Thiel said, is due to a mismatch between people’s hopes and reality.

‘Younger generations are told that if they do the same things as the boomers did, things will work out well for them,’ he said. 

‘But society has changed very drastically and it doesn’t work in quite the same way.’

‘There are some dimensions in which the millennials are better off than the boomers,’ he continued. ‘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 were actually able to do is just extraordinary. 

‘I don’t think there’s ever been a generation where the gap has been as extreme as the millennials.’ 

His comments came as the United States’ housing market is seeing a meltdown with potential buyers pulling out of sale contracts in shocking numbers, as their demands for expensive repairs and huge price chops are not being met.

And sellers are mad they are even making these demands.

Sellers now outnumber buyers in the housing market by about 500,000, according to a new report from Redfin.

Buyers are using that imbalance to wield more negotiating leverage, and as they demand high price cuts, sellers are refusing to face reality.

In August, an estimated 56,000 purchase agreements were abruptly cancelled, representing 15.1 percent of homes that went under contract that month, said the report.

That equals a staggering one in seven home deals in which a buyer pulled out. That’s the highest cancellation rate ever recorded in August since Redfin began tracking the metric in 2017.

Still, Thiel said he does not believe a socialist revolution is on the horizon – given that communism and fascism are ‘youth movements’ and America’s demographics are aging, with fewer children being born.

‘And so we have more of a gerontocracy, which means that if the US 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,’ he said.

Thiel denied that a socialist revolution is coming to the United States

‘The word “revolution” sounds pretty high-testosterone and violent and youthful,’ he continued. ‘And today, it it’s a revolution, it’s 70-something grandmothers.’

The billionaire concluded by saying: ‘We’ll see how Mamdani can do as mayor of New York.

‘But I would say [his victory is] symptomatic of things being very unhealthy. It’s symptomatic of establishment parties not tackling certain very basic problems or having broken this generational compact.’

Despite this, Republican strategists have said they would be delighted to see Democrats run on a similar agenda to Mamdani’s elsewhere in the country during next year’s midterm elections. 

They feel confident his appeal ends at the limits of New York City, and that his policies would lead the Democrats into political oblivion nationally.