In Defense of Elon Musk's Subsidies

in #tesla8 years ago (edited)

Elon Musk: Hero or Villain?

Fame has its benefits and its costs. One benefit is that with a 140-characters Elon Musk can garner more attention for his companies than the best PR team in the world ever could. One of the costs is that it gives people an individual on whom to fixate both their adoration and their ire. A savior, a villain, a scapegoat.

Fossil Fuel Subsidies

To highlight this reality, consider oil subsidies. In 2013 federal and state governments gave away $21.6 billion in subsidies for gas, oil, and coal exploration and production. Since Obama took office these federal subsidies have increased from $12.7 billion to $18.5 billion, an increase of 45%. Over the course of 100 years $470 billion of The People’s money has been handed over to oil companies. Chevron receives $700 million a year. Exxon and ConocoPhillips each receive around $600 million.

Anonymity Advantage

Where is the public outcry? Why is no one fixating on their CEOs and calling them out for taking our money? Well, because who knows who these CEOs are? It probably doesn’t help that any major news outlet that was suicidal enough to seriously run such a story could say “bye-bye” to any one of their biggest advertising customers. Musk on the other hand is well-known and his companies don’t even advertise, though even if they did it would be a drop in the bucket. That’s "click-worthy" news without downside risk.

If Subsidies Are Theft, Who Is The Thief?

Maybe when thinking about subsidies in other contexts (those lacking such a high-profile character) the reality is just more clear: none of these people are taking our money, it’s being given to them. It’s actually quite comical if you really, really think about it. People act like Musk took this money from us in which case I suppose their outrage is somewhat justified. But what is so tragically absurd about this belief is that so few consider pointing their fingers at the people who actually did take the money from us and then gave it to Musk.

Yes, someone took your money and gave it to companies named Tesla Motors and SpaceX, and yes this should bother you profoundly

But no, it wasn’t Elon Musk or anyone at those companies.

Musk and his co-workers simply have the good sense to have a very large and attractive bucket on hand when governments start throwing your money out the window. What do we expect them to do? Ignore a giant pile of cash? It’s not like if no one takes from the pile it’s returned to us. Failing to avail yourself of the funds simply leaves more for your competitors. Think about it this way:

If someone offered you a giant wad of cash, what would you do?

"But these companies wouldn't even EXIST without tax-payer dollars!"

That may be true, but it’s not especially interesting or even testable. In this hypothetical world where Tesla receives no subsidies … do oil, gas, and automobile companies receive subsidies? Yes? Well in that world of course Tesla Motors would not be able to exist. Their competitors have received a literally incalculable advantage (when you factor in the cost of protecting oil routes and waging wars) that simply includes (but is not limited to) trillions in subsidies.

An Equal Playing Field

On the other hand, in a world where such fossil-fuel-based companies did not receive such subsidies, who knows what their products would cost. It may very well be the case that their products would be so expensive it never would have been profitable to produce them in the first place.

After all, why subsidize something at all if there is “sufficient” consumer demand for it?

In short, if not for a century of subsidies, fossil fuels, and things powered by them, would be far more expensive in which case it is entirely possible that a company that has been able to produce competitive products by receiving orders of magnitude fewer subsidies would be highly competitive relative to them in a world in which subsidies do not exist. But that is a world that does not exist.

What Are We Really Mad About?

Are we mad that somebody took our money, or that somebody accepted our money? If we’re mad that our money was taken, Musk is not the enemy and is, quite obviously, a scapegoat. If we are mad that somebody accepted our money, then what we should be asking is, “Who else accepted our money?” Who is “supposed” to receive our money? Personally, I’d rather my money weren’t taken from me at all (in which case maybe I could afford one of his cars ;) ), but seeing as it was, Musk seems like as good a recipient as any.

This isn’t a conclusion I would wish to force on anyone, but the very nature of subsidies requires that someone’s will be enforced over another’s, and if that’s going to be the case, I’d obviously prefer it to be mine (though obviously I had no influence over the decision).

Who Does This Narrative REALLY Benefit?

Finally, people might want to consider what interests are really served by this persistent line of reasoning. Big auto? Big oil/gas/coal? Boeing and Lockheed Martin, both of which are built entirely on government funds and were awarded a monopoly when they joined forces to create the United Launch Alliance, and both of which are at risk of becoming extinct due to SpaceX’s low-cost rockets which are already delivering cargo to space at a fraction of the past cost (and saving taxpayer dollars)? Whoever or whatever is behind this narrative, whether it’s a vested interest who has something to gain from Tesla’s and SpaceX's bad press, or simply the multinational media conglomerates who continue to trumpet this non-story, there is one thing I can promise you: that they are all guilty of the same crime they are accusing Tesla of committing: accepting government funds.

Every company of that size has legal teams, accountants, and lobbyists all of whom exist for the sole purpose of garnering government funds and they are highly compensated.

No doubt a sound investment.

P.S. For those interested in learning more about the United States' 300 year love-affair with energy subsidies check out: What Would Jefferson Do - The Historical Role of Federal Subsidies in Shaping America’s Energy Future

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Are we mad that somebody took our money, or that somebody accepted our money? If we’re mad that our money was taken, Musk is not the enemy...

Both. It takes two.

Actually, it takes a couple hundred million to fork over that money without a serious fight. Anyone who is paying taxes without putting up any kind of resistance is also part of the problem.

That said, I think Elon Musk is putting the stolen money to reasonably good use. If he is siphoning out funds in a way that results in government losing power vis-a-vis the rest of us, then I won't put him at the top of my list of bad guys.

Just closer to the bottom.

The existence of other subsidies is entirely irrelevant to the question. Just because people are getting away with murder doesn't mean we excuse one of them in particular for killing people we don't like.

Finally, subsidies are a tiny crumb in the US federal budget. The largest share goes to the military-industrial complex and is used to maintain the de facto global empire.

That's where the anger, err constructive action, needs to be focused. However, while there is a war on, that's also the hardest place to make an impact.

This is why I think those of us who are anarchists just need to focus on building the new society and not worry too much about rearranging the nooses on the state's gallows.

With the rise of Tesla Motors we are now seeing a massive turn away from fossil fueled cars from all manufacturers because it's now plain to see electric cars will be the future simply because they are better in pretty much every way.
And with the rise of SpaceX we are seeing a new interest in space that had sadly died of when NASA being funded by the government didn't get the investment they needed to push space travel forward.

People like Elon Musk should be given as much funding as they need to change the world for the better because let's face it the Government's of the world are simply incapable of changing it in the ways that are needed.

I agree. I believe that in a world where we all had control over where our taxpayer dollars went, Musk would get more money, not less! He has single handedly played a huge role in reigniting countless imaginations as well as hope for a better future which we can make.

IMO, world you described above cannot exist in today's democracy 1 man - 1 voice . Musk is not about money, he follows his dreams. To achieve his goals he uses what he can. But many (including me) are agreed with his goals.

Hero and innovator. He has the talent, audacity, and business sense to make a difference, break the log-jams in the auto and energy industries to herald a new era in transportation and efficient energy use. We have all thought the world should change, but who among us has really taken on the entrenched corporations to drive significant improvements? Musk has.

What about the exploration of space? We all think humans should be exploring and colonizing space. We know it must become more economical. Yet national space agencies have been disappointing in the speed of their progress. Who has developed reusable, cost efficient, booster rockets? Who is planning a manned trip to mars, years ahead of NASA? Musk has.

He has opened his patent portfolio around the battery solutions for his Tesla cars, for other companies to freely use. He designed a much more efficient and less costly solution to the high speed train, which was approved in California, for free! His design would save the state billions of dollars. Who gave it away and brought attention to other innovators to carry it forward? Musk did.

Musk is a rebel. One who has a vision, talent, and tenacity to improve the human condition and push us collectively forward to a better future.

Great article @andrarchy!

After reading more about Elon Musk after having read your "Tesla vs Steemit" post I have started to admire the guy. He really makes the future seem a lot more brighter the way he is handling his companies and what they are doing for the population. I really don't mind his company gets all the money they do, some others should be getting a lot less, in my opinion.

"Personally, I’d rather my money weren’t taken from me at all (in which case maybe I could afford one of his cars ;)"

Haha, when will we see the first "Tesla purchased thanks to Steemit" posts pop up I wonder. :D

Haha, good question, hopefully I get to write that post :)

I'll make you a deal, if this comment reaches $30,000 I'll put a down payment on a Model 3 and if it reaches $70,000 i'll go pick up a Model S next week ;)

If I'm living in a simulation, I had better be sitting in a simulated Tesla.

Since you repeatedly use the term "give", it's worth noting that "subsidies" in this case were paid back in full by Tesla:

"Tesla Motors, just cut the government a $451.8 million check, which means that Tesla has paid off its entire Department of Energy loan plus interest. “Following this payment, Tesla will be the only American car company to have fully repaid the government,” the company boasted (emphasis Tesla’s)."
http://www.bloomberg.com/news/articles/2013-05-22/tesla-pays-off-its-465-million-loser-loan

You're talking about a loan, I'm talking about subsidies. They're different things.

Hey no worries :)

What do you think of the Hyperloop?

Is it a failure or a good idea? (I tend to think the first.)

I think that thinking about these things in terms of "failure or success" isn't very helpful. Is it a good idea? I don't know how you argue that attempting to develop more efficient and less expensive forms of mass transit is a bad idea. Will it fail? Most entrepreneurial endeavors do. However, since the hyperloop tech is open sourced there are many companies attempting to make it work, which certainly increases the odds.

In terms of what we could learn from building it, it's certainly very valuable knowledge. But I forsee that it wont take off. It's simply too expensive and difficult compared to traditional railroads (or maglevs).
I can't help but think that the hyperloop was never meant to succeed as a new way of transportation. But it's more like a steppingstone for something else entirely.
Guess i'll have to wait and see.

Probably a failure, but never say never...

"Any transport system would be energy efficient if you put solar panels on top of it"

Hero or villain? I don't know but what I know is that he is a visionary mind. He truly is a man who changes the world. My fullest respect

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