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 THE CASE FOR NATIONALIZING ELON MUSK  
[https://portside.org/node/16500] 

 

 Kate Aronoff 
 February 8, 2018
Working In These Times
[http://inthesetimes.com/working/entry/20899/elon-musk-spacex-tesla-falcon-heavy-launch]


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 _ As she notes, Musk’s future-oriented empire—Tesla Motors,
SolarCity and SpaceX—has benefitted from around $5 billion in local,
state and federal government support, not to mention many years of
foundational public research into programs like rocket technology. _ 

 PETER PARKS/AFP/Getty Images, After the SpaceX launch, it’s time to
demand that Musk give back a share of his profits 

 

On Tuesday, Elon Musk launched some stuff into space. The SpaceX
Falcon Heavy rocket was shot into the Solar System, tailed by a Tesla
Roadster blasting David Bowie songs, reportedly the fastest car ever
to be released into orbit. Each Falcon launch is only expected to cost
around $90 million—a bargain in the world of extraterrestrial
exploration. 

_Scientific American _gawked
[https://blogs.scientificamerican.com/observations/elon-musk-does-it-again/],
“Elon Musk Does It Again,” praising the “bold technological
innovations and newfound operational efficiencies that allow SpaceX to
not only build its rockets for less money, but also reuse them.”
That view—shared by several other outlets—fits comfortably with
the Tony Stark-like image Musk has crafted for himself over the years:
a quirky and slightly off-kilter playboy genius inventor capable of
conquering everything from outer space to the climate crisis with the
sheer force of his imagination.

One of Musk’s long-term goals is to create a self-sustaining colony
on Mars, and make humanity an interplanetary species. He hopes to
shoot two very wealthy people around the moon
[https://www.theguardian.com/science/2017/feb/27/spacex-moon-private-mission-2018-elon-musk]
at some point this year. Musk has invested an awful lot of public
money into making those dreams a reality. But why should Americans
keep footing the bill for projects where only Musk and his wealthy
friends can reap the rewards? Enter: the case for nationalizing Elon
Musk, and making the U.S. government a major stakeholder in his
companies.

The common logic now holds that the private sector—and prodigies
like Musk, in particular—are better at coming up with world-changing
ideas than the public sector, which is allegedly bloated and allergic
to new, outside-the-box thinking. Corporations’ hunt for profits and
lack of bureaucratic constraints, it’s said, compel cutting-edge
research and development in a way that the government is simply
incapable of. With any hope, more of these billionaires’
breakthroughs than not will be in the public interest.

The reality, as economist Mariana Mazzucato argues in her 2013 book
_The Entrepreneurial State: __Debunking Public vs. Private Sector
Myths_, is very different. Many of the companies that are today
considered to be headed by brilliant savants—people like Steve Jobs
and, yes, Elon Musk—owe much of their success to decades of _public
_sector innovation, through repackaging technologies developed over
the course of several decades into new products. Take the iPhone,
essentially a collection of Defense Department research and National
Science Foundation-grant projects packed into one shiny machine.

“The prospect of the State owning a stake in a private corporation
may be anathema to many parts of the capitalist world,” Mazzucato
writes, “but given that governments are already investing in the
private sector, they may as well earn a return on those
investments.”

As she notes, Musk’s future-oriented empire—Tesla Motors,
SolarCity and SpaceX—has benefitted from around $5 billion in local,
state and federal government support, not to mention many years of
foundational public research into programs like rocket technology.
SpaceX itself exists largely for the sake of competing for government
contracts, like its $5.5 billion partnership with NASA and the U.S.
Air Force. The U.S. Department of Energy invested directly in that
company, as well as in Tesla’s work on battery technology and solar
panels. The latter is perhaps the biggest success story of the
Department of Energy stimulus grant that also supported Solyndra, a
solar energy company reliably held up by the Right as an example of
the government’s failure to make wise investment decisions.
“Taxpayers footed the bill for Solyndra’s losses—yet got hardly
any of Tesla’s profits,” Mazzucato notes.

As Mazzucato finds, the private sector hasn’t done much to earn its
reputation as a risk-taker. Corporations and venture capitalists often
adopt conservative thinking and fall into “path dependency,” and
are generally reluctant to invest in important early-stage research
that won’t necessarily turn a profit in the short-run. This kind of
research is inherently risky, and the vast majority of this kind of
protean R&D (research and development) fails. For every
internet—birthed in the Defense Department—there are a well over a
dozen Solyndras, but it’s virtually impossible to have one without
the other.

The problem runs deeper still. Whereas in the past public sector
research has been able to attract top-tier talent, the myth that the
private sector can do what the State can’t has created a negative
feedback loop whereby bright young scientists and engineers flock
toward a private sector that goes on to further its reputation for
being the place where the _real _innovation is happening.

The alternative Mazzucato suggests is to socialize risk and reward
alike, rather than simply allowing companies that enjoy the benefits
of public innovation to funnel their profits into things like stock
buybacks and tax havens—or, for that matter, flamethrowers
[https://www.theverge.com/tldr/2018/2/1/16954950/elon-musk-flamethrowers-sold-out].
When companies like SpaceX make it big, they’d be obligated to
return some portion of their gains to the public infrastructure that
helped them succeed, expanding the government’s capacity to
facilitate more innovative development.

All this is not to say that there isn’t a critical role to play for
people like Jobs and Musk in bringing new technology to the market. In
all likelihood, Tesla’s Powerwall and SolarCity panels will play a
key role in our transition off of fossil fuels. But lionizing Musk as
the sole creator of the Powerwall and this week’s space launch
stands to perpetuate a dangerous series of myths about who’s
responsible for such cutting-edge development. Through smart
supply-and-demand-side policy, states can play a crucial role in
shaping and creating markets for the technologies we’ll need to
navigate the 21st century. This can happen not just through R&D but
also through developments like fuel efficiency standards, which
encourage carmakers to prioritize vehicles that run off of renewable
energy.

Given the mounting reality of climate change and the necessity to
rapidly switch over to a clean energy economy, there’s also a bigger
question about how actively the state should be encouraging certain
_kinds_ of research and manufacturing. During World War II, the United
States essentially had a planned economy
[http://jwmason.org/wp-content/uploads/2015/05/Mason-2017-Destructive-Creation-review.pdf]:
By 1945, around a quarter of manufacturing in the country was under
state control. The reason for that was simple—the U.S. government
saw an existential threat, and directed some of its biggest
corporations to pitch in to stop it or else risk getting taken over by
the state.

There’s some Cold War nostalgia to hoisting shiny objects into
orbit—a telegenic show of America’s technological supremacy. But
it may not be much solace to coastal residents forced to flee in the
coming decades, whose homes are rendered unlivable by a mixture of
extreme weather and crumbling, antiquated infrastructure. And if
you’ve watched any number of big-budget sci-fi productions over the
last several years, it’s not hard to imagine Musk’s Martian colony
spinning off into some Elysium-style eco-apartheid, where the
rich—for the right price—can escape to new worlds while the rest
of us make do on a planet of dystopian slums, swamps and deserts.

Today, the risk posed by climate change is greater still than that
posed by fascism on the eve of World War II, threatening to bring
about a planet that’s uninhabitable for humans, and plenty hostile
to them in the meantime. In such a context, do we _need _to launch
cars into space? Maybe not. If the public sector is going to continue
footing the bill for Elon Musk’s fantasies, though, he should at
least have to give back some credit, and a cut of the profits.

Kate Aronoff is a writing fellow at _In These Times_ covering the
politics of climate change, the White House transition and the
resistance to Trump’s agenda. Follow her on Twitter @katearonoff
[https://twitter.com/katearonoff]

Reprinted with permission from _In These Times_
[http://inthesetimes.com?utm_source=reprint&utm_medium=article_link&utm_campaign=portside].
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