Extreme wealth has always played a role in democracies. Money has always talked, especially in the US. Years ago, Lawrence Lessig, the great legal scholar, calculated that most of the campaign funding for members of Congress and aspiring politicians came from one-twentieth of the richest 1% of Americans – about 150,000 people. This is about the same number as those who are named “Lester” and explains the title of his book: The USA Is Lesterland.
But that particular corruption of American politics only involved billionaires like the Koch brothers playing organ-grinders to congressional monkeys. The obscene wealth generated by the tech industry has catapulted a new organ-grinder into the heart of the machine. He was able to pay his way in with a spare quarter of a billion dollars that he happened to have lying around. And now the wretched citizens of the US find themselves living in Muskland.
At the time he made the decision to ensure that Trump got elected, Musk was estimated to be worth $244bn. That didn’t mean, of course, that he had that amount of hard cash in his possession, just that he owned millions of shares in a number of companies that he had founded which were judged by investors to be valuable liquid assets that could be sold if necessary.
Hold on to that thought: it may come in useful.
How did Musk become so rich? It started, really, with PayPal, of which he was one of the founders, and from the sale of which he emerged with enough money ($175.8m) to become an early investor in Tesla and chair of its board. In 2002, he founded the rocket company SpaceX and, later, Starlink – which has launched thousands of low-orbit satellites for providing internet connectivity to remote regions. In 2015, he founded a solar power company, Tesla Energy, and Neuralink, a company aiming to integrate the human brain with AI the following year. In 2017, he founded The Boring Company, which did what it said on the tin, namely digging tunnels.
And then in October 2022 he lost his mind, bought Twitter, and renamed it X. This last decision was a commercial disaster, but it gave him a huge megaphone which he deployed to support Trump’s campaign. It also got him a place right at the heart of the US government, with a mandate to dig deep into the machine, find out how it worked and – allegedly – to detect fraud and eliminate waste.
As his goons were rooting through the innards of the federal payment system, one wonders if they came across some of the disbursements that the government has made to his companies. Payments from Nasa to SpaceX, for example, for launching stuff into orbit – or eventually bringing home astronauts from the International Space Station. Or subsidies and tax refunds to Tesla, whose early survival was ensured by government loans.
There are some rich ironies to be found here. Could the Elon Musk who ranted that the US should “get rid of all subsidies” be the same Elon Musk who decided to build SpaceX, Tesla, Neuralink and Starlink in the US rather than in his native South Africa? For, as the tech pundit Scott Galloway puts it: “There would be no SpaceX without Nasa, its largest customer. Tesla built its Fremont factory with a $465m DoE loan in 2010, and its first 200,000 cars benefited from tax credit subsidies of up to $7,500. For years the company was able to report profits thanks to the ‘sale’ of emissions credits to other carmakers. All told, the company has accepted an estimated $2.5bn in government support.” And all of those subsidies went through the federal payments machine.
At the moment, Musk looks unstoppable because he hasn’t yet triggered Trump’s narcissistic envy, and his wealth isolates from the consequences of his actions. But nothing lasts for ever and there are some encouraging straws in the wind. One is that Tesla is no longer looking as good as it once did. Sales of its cars are down 45% in Europe – at a time when EV sales there are generally up by 37%. And Muskwagens are losing ground to increasingly more attractive EVs from Kia and the Chinese challenger BYD.
And then there’s what Tesla owners are ruefully calling “the Musk factor”. Owners of the company’s hideous Cybertruck, for example are finding red swastikas spray-painted on them in car parks. One sometimes sees Tesla saloons with embarrassed notices on their side windows saying “I bought this before we knew Elon was crazy”. There’s even a poster showing Musk standing in a Tesla giving a Nazi salute with the caption “0 to 1939 in 3 Seconds”. And Tesla stock is now on a downward track, which means that Musk’s net worth is not what it was. Who knows, maybe one day Trump will be richer than him after he’s finished looting Ukraine.
What I’ve been reading
Talking to ourselves
A fine essay by Renée DiResta on what’s happened to democracies’ public sphere.
Herd mentality
A really sombre Substack post by Charles Arthur.
How Europe was left in the cold
Nicholas Colin is back online. This post shows why he was missed.
