THE UNITED STATES OF ELON MUSK?
July 15, 2022 | Expert Insights
The global economic recession, triggered by the COVID-19 pandemic, has left the billionaire class largely unscathed. According to Oxfam, their collective wealth has increased by $3.9 trillion in 2020 alone, even as half a billion people have descended into poverty. Naturally, this has been accompanied by a concomitant rise in their power and influence. Today, behind the scenes, surreptitiously wealthy entrepreneurs wield immense influence to shape policies that impact the lives of millions. Among the uber-wealthy, tech innovators, in particular, have profited immensely from the pandemic, adding billions to their already substantial personal wealth and influencing financial markets. In fact, six of the world’s richest people
today are tech titans, including Amazon founder Jeff Bezos, Oracle founder Larry Ellison, Microsoft founder Bill Gates, Google founders Larry Page and Sergey Brin, and former
Microsoft CEO Steve Ballmer. While all of them hold considerable sway over global markets and politics, they pale in front of the outsized influence of Elon Musk – the richest
person on the planet. With his fingers in many pies, including space internet, interplanetary space crafts, autonomous driving, e-commerce, artificial intelligence and now even social media, Mr Musk is an institution by himself. At a net worth of nearly $300 billion, it is reported that he is worth more than the GDP of nuclear power like Pakistan! All this translates to
significant political, commercial, and social clout. So, how did he reach this pinnacle of his global influence?
A GLIMPSE OF THE PAST
Mr Musk co-founded his first tech venture with his brother immediately after school. Known as Zip2, this was an internet start-up company that provided an online city guide containing maps, directions, and yellow pages. Musk had been able to sign up major players in the newspaper publishing industry, including the New York Times, who used the platform to advertise local businesses to their online readers. Back then, this was the first time that anybody had created a digital map and combined it with listings found in printed anthologies.
In 1999, Compaq, an American IT company, acquired Zip2 for more than $300 million in cash and $34 million in stock options. Since Musk had a 7 per cent stake in the company, he made $22 million from the sale. Immediately afterwards, he invested $10 million into his second start-up, named X.com. This venture was another first of its kind, allowing
people to transfer money over the Internet instead of waiting for cheques to clear over weeks on end. Indeed, Musk was one of the earliest pioneers who took the world of financial payments online. A year after its launch, X.com merged with another company called Confinity to create PayPal. The rest is history, as PayPal went on to become the leading payment system in the world. When it was taken over by eBay in 2002, Musk made $180 million from the sale as the largest shareholder in the company. Sitting on a sizeable fortune at the age of 30, he began to devise yet another business plan. He used the proceeds from his PayPal stake to establish SpaceX (Space Exploration Technologies Corporation). The company has now become synonymous with private space travel and satellite broadband services.
AN ASPIRING SPACE MOGUL
Although Musk had initially funded SpaceX with his own money, he gained enough experience over time to attract millions of dollars from NASA. His company was one of the first private entities to sign high-profile contracts with this premier U.S. aerospace agency to ship cargo to the International Space Station (ISS). Among SpaceX’s many accomplishments
was the development of the Crew Dragon, a manned spaceship which went on to become the first private, crewed spacecraft to reach the ISS in 2020. After almost two years of shuttling astronauts to the ISS for NASA, SpaceX is now carrying out private charter flights as well. It was the first to launch an all-tourist crew into orbit in September 2021, thus revolutionising space exploration and transportation. Going forward, Musk has publicised plans to send an astronaut to Mars by 2025 in a collaborative effort with NASA. For him, colonising the Red Planet and building a greenhouse there has been a long-standing dream, as he apprehends an extinction-level event on planet Earth that would make it inhabitable. According to him, multi-planetary travel will be crucial for the survival of humanity. Whether or not one agrees with his dire predictions and assessments, one thing is absolutely certain. Today, Musk has single-handedly ushered in more innovation to space travel than global space powers like the U.S., Russia, China, and India. Adding to his power and influence in the space industry is the much-touted Starlink project, which seeks to build a mega-constellation of satellites to provide internet connectivity in previously remote and inaccessible regions. With time, its costs are expected to rival that of terrestrial infrastructures, thus displacing cellular broadband. If everything goes according to plan, Starlink is likely to generate $30 billion- $50 billion each year for SpaceX. The powerful potential of Starlink has been clearly visible in the ongoing Russia-Ukraine war. Responding to a Ukrainian plea for internet service, Elon Musk has activated Starlink satellite broadband service to bring connectivity within areas hit by Russian military attacks. Trucks with Starlink user terminals have been sent to Kyiv so that the country remains online amidst a full-scale invasion. Reports also indicate that elite Ukrainian drone units are using Starlink to destroy dozens of Russian targets at night. Starlink thus provides the ability to Musk to influence interstate conflicts with his private assets.
Just as he is revolutionising space travel, Musk is also modernising ground transportation. Having become the CEO of Tesla – an electric car company, in 2008, he has carved a niche for himself in the automotive industry. Amidst growing concerns over the debilitating impact of climate change, he has consistently and percipiently advocated for all-electric
cars based on sustainable energy and clean fuel. In addition to this, he has made forays into semi-autonomous and fully autonomous vehicles. Tesla is presently carrying out beta trials for its “full self-driving” tech, which seeks to improve the future of autonomy in current and new generations of vehicles. Such autopilot features are expected to reduce traffic fatalities and enhance safety and convenience behind the wheel. Software updates will also be designed to improve functionality over time. Today, Tesla is considered to be the world’s most valuable automaker by market cap, accelerating the transition to sustainable transportation in the world. It has managed to grow into a trillion-dollar enterprise by diversifying into
other areas such as solar panels. The company currently produces two rechargeable solar batteries – one for home backup power and off -the-grid use and the other for commercial
or electric utility grid use. In an increasingly climate- conscious and tech-savvy world, Musk’s grip over such futuristic industries will only bolster his influence.
ARBITER OF PUBLIC DISCOURSE
A perennially restless Musk has now set his eyes on one of the biggest social networking platforms. Having reached a deal to buy Twitter for $44 billion, he is now in charge of
the digital world’s ‘public square’, populated by millions of users. Although Twitter is merely a fraction of the size of Facebook (FB) or TikTok, its value lies in the concentration of
elite political and media figures on the platform, who use it to air their views. No other network has been able to replicate its messaging and news-breaking utility till now.
This adds yet another level of control to Musk’s formidable arsenal, as he can now influence politics, finance, and culture by determining the contours of online public discourse.
More importantly, he will have access to massive quantities of data, which is the new oil. This naturally opens several lucrative opportunities while also arming him with the most
powerful weapon in the world – knowledge! It is worth remembering that Musk is a free speech absolutist. As a result, there are valid fears that he will open the platform to extremists who were previously filtered out by content moderation guardrails. Under the guise of free speech for everyone, hate-mongers and other malicious actors may be able to peddle disinformation, lies and half truths. Under Musk, a Twitter ban on Mr Donald Trump may not be even considered!
Elon Musk has displayed the remarkable ability to influence world affairs in other ways. With a mere tweet, he can cause the prices of his favoured digital assets to rise or fall. Who
can forget the day when Bitcoin had risen by a whopping $4,000 after Musk changed the bio of his Twitter account to “#bitcoin”! Similarly, when he criticised the environmental
impact of crypto mining, prices had nosedived like never before. Not to forget the surge in obscure meme coins like Dogecoin, after Musk had tweeted about it. Sometimes, Musk can even move markets accidentally. For instance, when he tweeted ‘Use Signal’ on one occasion, referring to the encrypted messaging app, the price of a Texas medical device maker having a similar name had increased 5,100 per cent in three trading days. This clout does not extend to the financial markets alone. With his money and social capital, Musk can influence individuals, politicians, organisations and even governments to change their existing perceptions and shape the policy landscape. Together, SpaceX and Tesla are estimated to have spent around $2 million on political lobbying in 2021. Musk is also a major donor to politicians in the U.S., cutting across party lines.
- So much wealth, power and infl uence concentrated in a single individual is scary. Even more worrying is that such a phenomenon could spread, creating a clique of superrich individuals who may band together irrespective of their nationalities. Their power to change public discourse and existing narratives can only be imagined.
- Money talks and can always be used to evade accountability for a select few. Even more worryingly, it entrenches a deeply unequal economic system, which is also socially and politically treacherous.