There has been a flood of columns, editorials, and opinions about Elon Musk’s growing wealth. Rather than reviewing them, I’ll offer my own view.
I don’t care that Elon Musk is rich. I don’t care that he makes a great deal of money. I do care about how he has made that money.
I agree that Mr. Musk is a genius but I think his genius takes a form that is not widely recognized. He is neither an engineering genius nor a political genius. His real talent is an extraordinary ability to see where government policy, public institutions, and society are headed and to position himself ahead of those trends.
To paraphrase Bill Clinton, Mr. Musk repeatedly figured out which way the parade was going and got out in front of it.
It is a pattern. He did it first with PayPal, then with Tesla, and then with SpaceX. The common factor is not government contracts, subsidies, or tax policy. Those are merely different mechanisms. The common factor is that Mr. Musk recognized emerging government priorities before most of his competitors and built businesses that would benefit from them.
His companies might well have succeeded without government action. They almost certainly would not have succeeded as quickly.
That distinction matters. Human lifespans are finite. Capital compounds. If PayPal had grown at a tenth of the rate it did, Mr. Musk would not have become a billionaire until much later. If Tesla and SpaceX had developed more slowly, he would have accumulated wealth, influence, and opportunities at a very different pace. The acceleration mattered.
Those who respond to Mr. Musk’s wealth by demanding higher taxes are missing the point. To the best of my knowledge, no millionaire in American history has ceased to be a millionaire because of higher taxes. The same is true of billionaires. I see no reason to believe the world’s first trillionaire, should one emerge, will be any different.
The lesson is not that Elon Musk should be poorer. The lesson is that government should think carefully about the incentives it creates. If immense fortunes can be built by correctly anticipating the direction of public policy, then we should expect more people to devote their talents to that pursuit.
Mr. Musk did not create the parade. He saw where it was going and got there first. He has now done that three times.
I will agree quite a bit, but it wasn’t just anticipating policy. He was also exceptionally good at acquiring grants and subsidies and hiring former govt officials to grease everything. Looking at the bigger picture, I am not sure how effective it is for so much of a nation’s wealth to be tied up in the hands of one person. We now have to an unprecedented degree a large percentage of our economy under control by POTUS also. Truly centralized govt and wealth doesnt seem like a good combo in the long term.
Steve