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