Why Elon Musk is the future
By Ajay Sabharwal
Among some of the criticisms of capitalism put forward by left-leaning or socialist academicians and journalists is the idea that wealth creation equates to rent-seeking. Many on the left conveniently choose to forget that capitalism is also about value creation. It is about creating new products, developing new technologies and as several great entrepreneurs have shown us — doing so with limited resources. Building something of greater value with the same or fewer resources is what drives genuine economic growth and for that very reason innovation has been among the central tenets of a market based economy.
Paris Marx, a socialist writer and urbanist recently wrote in a manner similar to many other before him, criticizing the work of a technology entrepreneur suggesting that tech entrepreneurs are in it solely for themselves and do not really wish to contribute to the public good. His article for the Jacobin Magazine was titled ‘Elon Musk is not the future’ and this piece was syndicated on the Indian website ‘The Wire’ on 21st February 2018.
Paris Marx divides his article into three parts. The first deals with what he calls ‘the flawed cult of Elon Musk’ where he claims that most of Musk’s ideas are either driven by automobiles and or are in thin air. In the second part he conveniently suggests that ‘tech’s transport solutions don’t work’, while in the third, he claims that tech entrepreneurs deliberately delay the advancement of new technologies for their motives. He either chooses to forget or has never known that advancement in technology by companies has led to the greatest wealth creation for tech entrepreneurs and CEOs.
His claims in the first two parts also fall flat in our point-by-point analysis of his article. The central premise itself seems nothing more than a cheap attack on one of the most successful tech innovators of our times. Marx forgets that Musk is not just any other tech billionaire but someone who has been actively working towards bettering our lives on earth (or attempting to take us elsewhere if it can’t improve by much here). The larger point remains that Musk’s work is not just driven by technological innovation and towards a better future for humanity but that it transcends the general desire for mere profit making. Though there are not many tech billionaires for whom one can say that they are only in it for the money, Elon Musk, as he himself has shown us multiple times, is among the last people to be criticized to be in his line of work solely to line his own pockets. A good example of this can be found here. This is link (or the image below) reads the letter Elon Musk wrote when he opened up many of Tesla’s patents for those who wanted to use them in good faith.
This is action by itself suggests how a businessman can be benevolent and that too, to Marx’s horror — Elon Musk himself.
Marx begins by saying that Silicon Valley has no shortage of big ideas for transportation such as underground tunnels and vacuum tubes, but that these ideas are mere fantasies of wealthy tech CEOs. He ascertains that “none of these technologies will come to fruition in the way they promise” even “if they ever become a reality at all.” Marx believes that the technologies needed to transform the American transportation networks already exist, but Americans are “being denied the technology of the present ” by politicians who according to him are bought over by the fossil fuel lobby and “addicted to a damaging “free market” ideology”. He ends his introduction by announcing that out of all tech CEOs, Elon Musk is the worst.
In the first section, titled ‘The flawed cult of Musk’ Marx argues that Musk receives a lot of good press and is undeserving of it. He claims that Musk is revered in a manner similar to other tech entrepreneurs and is considered infallible “simply because [he] has built some successful companies”. On the contrary, Elon Musk has received criticism from all corners of the media, experts, scientists as well as his business contemporaries. Irrespective, praise for Elon Musk cannot be equated with arguments for his infallibility.
The author claims that Musk is seen to be correct just because he claims to know the answer to a problem. The reality is that Musk has been criticized for making tall claims and has been seen as as wrong till he has been able to solve the said problem in its entirety. Whether it be SpaceX or Tesla, Musk’s claims have been considered unrealistic by large sections of the media, academia and the business world only to be accepted as feasible only after he was turned his ideas into reality.
One cannot be certain if Marx is being sarcastic in suggesting that America has turned to rich entrepreneurs for solving its problems in the last few decades. The reality is that American was built on the idea of the primacy of entrepreneurship; it has survived on and with that idea and to this day, derives so much of its economic power from entrepreneurs themselves. The contributions of American innovators and entrepreneurs in the 20th century have benefited not just American society but humanity as a whole. Musk’s work has been no different.
Marx’s claim that Musk’s ideas are half-baked or that they are deliberately designed to delay the construction of transportation infrastructure is based on shaky ground. The truth is that the development and execution of a new-age technology does not take the same amount as laying down prevalent widespread technologies. The magnitude of the projects being proposed by Musk does not just require time but a due process as well. It requires constant tinkering and experimentation along with a sizable capital deployment to ensure the implementation of the most innovative solutions. Thus, this process of going from 0 to 1 (nothing to something) isn’t always linear. Moreover, it takes years (and in some cases decades) for R&D teams to successfully test a prototype. The process is bound to get slow. What must also be understood about the ‘wait period’ for such technologies is relative to the level of technologies already developed. Musk’s SpaceX works as good example to elucidate this larger point about new and better technology requiring constant effort over a long time period. SpaceX started in 2002 and its first successful ground pad landing came in December 2015. The Falcon Heavy was developed and used by February 2018. The point being made, which Paris Marx fails to understand is that good technology takes time. His trivialization of Musk’s work does not stop here.
Paris Marx further ridicules Musk's work by suggesting that Musk hasn’t even done much real work. He says that Musk’s major achievement is that he “elevated the the profile of electric cars.” To argue that Elon Musk merely elevated the profile of electric cars does not just take away well-deserved credit from Elon Musk for his work but is also unsound. Since the inception of Tesla, electric vehicles on the road have not just increased in absolute terms, but their share is the overall automobile market has risen too. Total electronic vehicle sales have been up by a factor of 40 from less than 5,000 in 2008–11 to almost 200,000 in 2017. To look at a more recent comparison of the Electronic vehicles and overall automobile sector — in 2016 when the automobile sector grew by 0.39 percent the electric vehicles market increased by 36.6 percent. In 2017, the automobile market in the United States shrunk by 0.71 percent, whereas the electric vehicles market grew by over 26 percent.[1] If one were to agree with the proposition that Elon Musk has merely shed light upon the idea of electric cars one could decide to stop here. However, such an argument would be incomplete. Tesla Motors has swiftly captured this fast growing market and currently dominates almost half of it, which shows that Tesla is not a mere PR stunt.[2] Its position has provided it with the sort of influence where it can influence change not just in the EV industry but in the automobile industry at large. Realizing the potential of the EV market, many large automobile manufacturers have been incorporating changes to gain from the market, hence investing in cleaner technology.
What must also be brought to light is that Tesla itself has been developing and bringing to the masses, cheaper car models. The Roadster might have put it on the map, but Tesla is also gaining traction from a new generation of buyers for its much cheaper sedans. It must also be understood that starting off with high-end technology cars that are expensive enables car companies to be able to produce cheaper cars of greater value. For example if a $100,00 car has attributes X, Y and Z, the car company producing the model could work towards 3 different models each valued at $35,000 with a different attribute. The path to engineer a better quality car, building up from cheaper and therefore less efficient technology will not only be more likely to fail but will inevitably push up the cost of development and production.Thus, getting cleaner and more efficient technology in the automobile market at cheaper costs is among the chief contributions of Tesla Motors and for that Elon Musk must be credited. Its models have a higher range of operations and the milage or cost/mile is also significantly lower at mere cents per mile. Apart from operational costs, battery costs have been brought down as well. These are real tangible changes that impact the market as a whole.
Marx suggests that Musks’s ventures apart from Tesla are also focused on automobiles. He mentions “SolarCity’s advertising emphasizes suburban, car-dependent living; the Boring Company is an inefficient and unworkable attempt to solve traffic congestion without reducing the number of cars”. As far as The Boring Company is concerned it must be realized that it is a very recent project. It started almost a year ago and as its current projects are in relatively early stages, it requires time to be judged on its potential. What must be taken into account is that this company does not aim to reduce the number of cars as the author demands. If it doesn’t aim to reduce cars on the road, how can it be argued that it will be inefficient if it doesn’t solve traffic congestion? The hyperloop proposal, Marx suggests, leaves the “door open to cramming vehicles in vacuum tubes.” The author conveniently seems to reject the fact that the hyperloop is primarily meant to carry people. Yes it does keep the option open for cars to be carried but that doesn’t stop being from being carried either. The inconsistency in the author’s arguments is that he wants to reject both alternatives being offered by Musk. There is a problem if Musk builds environment friendly cars and gets them to the road, and even if he builds super-fast next generation transport systems that would reduce dependence on cars, Marx objects. Marx’ inconsistencies however, do not end here.
Marx’s next criticism of Musk is that he “valorizes individual transportation”. Even if that is the case, there is nothing wrong with it. One cannot simply take away the choice of individuals to drive their way to work or elsewhere just because more people can fit inside a train. Economist Amartya Sen wrote that “development consists of the removal of various types of unfreedoms that leave people with little choice and little opportunity of exercising their reasoned agency”.[3] Genuine economic development always creates economic freedom, which in turn, comes with a multitude of choices and to take away those from the individual is not just taking away free-market capitalism from America but the very democratic ethos of the marketplace that provides the individual with genuine agency.
Most certainly, Elon Musk stands to gain from the expansion and profit of his company but that in no moral or ethical way must be frowned upon. He has taken risk in a sector where not many were willing to bet. While making money, he has also made the world a better place by providing cleaner and more efficient technology. To suggest that he must put others needs before his own is unfair. In fact Musk will only end up making money if he can provide products or services that are useful to other people. Just like any other businessman, Elon Musk has to taken into account “the needs of the many” in order to turn a profit.
In the next section, the author claims that ‘Tech’s Transport Solutions Don’t Work’. First all, it would help Paris Marx to realize that Elon Musk is not Silicon Valley. It must also be understood, as pointed out earlier, that revolutionary technological changes take time because they require significant tinkering, research, funds and the right kind of manpower and talent.
Why is it that tech entrepreneurs, today, can say that technological breakthroughs are close? Because the technological innovations in the recent past have it possible for tech CEOs and experts alike to suggest that a lot more is imaginable for the future than was previously thought. They thus, think that the next revolutionary technology will be available much earlier. Sometimes they may fail to reach the goals they set for themselves over a short period, but that cannot be a strong enough reason for tech companies to not continue to work in that direction. Failure, especially in trying to create new technology only suggests that tech companies are getting closer to success, provided they do not repeat the mistakes made in their research process.
The author mentions Waymo’s lack of progress in the field of self-driving cars. It might help the author to understand that Elon Musk, the man he so scathingly challenges, has disagreed with the approach taken by Waymo, that uses Light Detection and Ranging (LIDAR) technology. Musk, calling it out as a “crutch” has suggested that the way forward is cameras.[4]
Coming to the question of tunneling costs, comparing tunneling costs in two different part of the world must incorporate respective differences in pertinent economic indicators. Areas where labor costs are lower, energy is cheaper and manufacturing materials are easily procured, will stand to gain in terms of a cheaper tunneling process as compared to their developed and high-wage paying counterparts. The cost of setting up high-speed rail or bringing hyperloop solutions would also be affected by the tunneling costs in the United States. Even after mentioning that Musk’s proposed pricing has already been matched in other parts of the world, the author accepts that “the high cost of high-speed rail isn’t a technology problem” but one with “the way US approaches infrastructure projects”. However, we do not get to know what the author means by this statement. Whether there is a need for increasing public investment or private is something the author doesn’t clarify. However, if it is a question of reducing cost, one way is to open up the process to as many bidders as possible. As the number of competitors in the market increases, the potential cost will come down. Elon Musk is contributing to solving the price problem by entering the market space for building tunnels and thus, benefiting the infrastructural situation in the United States.
It would be a good reference to include the example of Elon Musk’s other company — SpaceX and the work it has done in pioneering space exploration equipment and technology. After years of success in building and sending lighter rockets to space, on 6th February 2018, SpaceX conducted Falcon Heavy’s maiden launch carrying Musk’s Tesla Roadster as a dummy payload. Falcon Heavy is a reusable super heavy-lift launch vehicle which has a price range of between $90 million to $120 million. In comparison other super heavy-lift launch projects cost as much as $1.5 billion per launch. The cost of a comparable (but slightly larger) launch vehicle, Saturn V was $185 million in 1969–1971 dollars which translates to over $1.1 billion in 2016 dollars. The more recent Space Shuttle had a cost million per launch between $450 million to $1.5 billion by the time it stopped operations in 2011. Keeping these numbers in mind, one cannot help but appreciate how Musk has done the same job at a fraction of the cost. In fact, Wire.com, where this article was syndicated, ran another story on the same day, written by the Wire Staff titled, “NASA’s $1 Billion ‘Leaning’ Launch Tower Likely to Bite the Dust After Just One Use” The sub-heading read, “The mobile launcher for the Space Launch System rocket, initially meant for the launch of Ares 1, will likely only be used once despite its expensive price tag” The entire article can be found here.
This only strengthens the argument that Musk’s efforts in cutting costs by using reusable technology is the need of the hour, especially to save American tax dollars. One can expect the same kind of cost reduction in transport infrastructure with adequate technological innovations.
In the third section, the author claims that tech entrepreneurs want to delay the advancement of a said technology and hence, mean to serve their own selves. Marx claims that Elon Musk deliberately advocates supposedly unrealistic technologies so that he can keep the automobile industry’s dominance in the twenty first century.
It must be accepted that Public transit and high-speed rail are directly opposed to his interests since they are direct substitutes of the products he offers i.e. cars. There is no denying this. This is akin to solar power companies rallying against coal or petroleum. In the business sense of things it is the norm. However, to suggest that Musk deliberately spreads ideas that will never come to fruition so that they can be “used by certain groups to campaign against funding for apparent efficient transportation” is not a strong argument. Even if we leave aside the work done as a result of Musk’s hyperloop competition, advances made by other companies cannot be ignored. Hyperloop One (recently funded by Richard Branson) held the first full scale Hyperloop test back in May 2017. It might help the author to know that project has already raised $245 million of real money in the real world for executing this idea across the world.[5] This is not mere fantasy on some white paper but, is in fact, an idea that is being brought to reality. Those following the news in India would know that Maharashtra government has signed an MoU with the same company to build the Mumbai-Pune hyperloop. [6]
It must also be brought to the author’s notice that on the question of efficiency, the loops are projected to be lighter and cheaper to build, once economies of scale are achieved, as compared to intra or inter-city rail. Added costs are a result of the constraints of the areas of operation. Laying down a hyperloop network is bound to cheaper in a state like Texas as opposed to California, which advocates for and has more regulation for such projects.
As far as the question of the substitution with cars is concerned, Musk is just being a businessman. He wishes to do to public transit, especially railways, what modern rail threatens to do to the automobile industry — make it obsolete. The only difference is that hyper loops are the technology of the future whereas rail networks are not. In comparison to automobiles, railways are cheaper because of economies of scale and not because of innovation. Cars are an accepted mode of transport even if they are more expensive because they add to the convenience of the user. Humans, as economic beings, find it reasonable to exchange some money for some added convenience in their lives. To suggest that individualized transport is not efficient because everyone cannot afford a car and to also argue that individualized transport will stop working because roads will eventually get congested because of too many cars does not hold together. The author wants to criticize the solutions proposed on both ends of the argument where he doesn’t want cars or their next-gen public transport replacements. Marx’s only solution seems to be stuffing more people inside trains (and building more of them). To top it all, the author suggests that it is Musk whose solutions are conservative and would delay the future. If anything, it is Paris Marx who wants to delay it. It is hard to understand, how on one hand the author cries for help on bringing down the cost of public transit and on the other he rejects the idea that is being implemented to do so. This only highlights the hypocrisy of the author whose remarks cannot be taken to be a legitimate criticism of Elon Musk.
Coming back to the issue of the hyperloop — it can be considered a futuristic substitute of the railway. Even if states or cities wish to spend money on modern rail or other technologies of the present, one cannot argue that such investment are meant for the far-sighted future. If Elon Musk is successfully able to introduce a new and revolutionary technology, the scale of which can render ‘modern’ rail obsolete, he will be rewarded for his endeavors no matter what. There is enough economic incentive for him to invest in and produce the new technology at a faster rate, because if he would not, other players in the market (such as Hyperloop One) would dominate the space.
The author’s incessant pitch in favour of the style of development practiced by the People’s Republic of China stems from ignorance of political reality. The centralized control exercised by the Chinese government over the economy is a strong factor in ensuring the streamlined rolling out of infrastructure projects such as high speed trains. Such cohesion is possible only within a certain kind of political system. One is almost tempted to make a punny comment on how Marx isn’t going to argue for the dissolution of the American democratic federal system just to get more high speed trains but such commentary is not the purpose of this article. If anything, Paris Marx’s views are consistent with those of the German philosopher, with whom he shares his surname. This article will not dwell on where and when “real socialism” has been tried or how it can make American transportation better. We find it best to leave it to the fine sense of judgement of the reader to understand why we do so.
Before concluding this critique of Paris Marx’s unscholarly attack on Elon Musk, it must be pointed out that in both versions of the article (Wire.com & Jacobin) the first mention of Elon Musk is linked to a Jacobin article by Jathan Sadowski titled, ‘Silicon Valley for Trump’. The sub-heading reads, “It’s no surprise that Elon Musk agreed to advise Trump — their politics are more similar than you might think.” This is another pathetic attempt to link figures that left-leaning authors despise. The question of Donald Trump’s presidency is not being addressed in this article but it must be pointed out that Musk, who joined two of Trump’s advisory committees in December 2016, resigned from both in June 2017, protesting the decision to withdraw the United States from the Paris Agreement. The committees he had joined were meant to give Trump the perspective of business leaders on how to create more jobs, one specifically focused on manufacturing. Surely, the authors of both articles are not opposed to more people getting jobs.
As far as Elon Musk is concerned he is a businessman. His attempts at making more money cannot be looked down upon. The earth/humanity saver inside him cannot possibly be ridiculed because he puts his money where his mouth is. If he wants to stop the excessive use of foil fuels, he invests in making a car that does not depend on them. If he thinks our future, as a species, on this planet is bleak, he invests billions of dollars into trying to take us to space. He stands to make a profit if he is right but he also stands to make a loss. That is his skin in the game, just like any other businessman. To bring in some more Talebian wisdom, businessmen cannot afford to be wrong for too long. Unlike journalists without skin in the game or IYI college professors, they stand to lose their ability to be wrong again if they have been wrong too often. The fact that Musk has survived this long only shows that he has not been wrong.
Author’s biases
The author is a supporter of economic liberty & free markets, and has an inclination towards libertarian conservatism.
References
[1] http://evadoption.com/ev-statistics-of-the-week-historical-us-ev-sales-growth-market-share/
[2] https://www.forbes.com/sites/niallmccarthy/2017/08/14/tesla-dominates-the-u-s-electric-vehicle-market-infographic/#55eceb037be4
[3]https://developmenthannahclifton.wordpress.com/2013/04/03/amartya-sen-on-development/
[4] https://futurism.com/elon-musk-lidar-tech-autonomous-vehicles/
[5] https://www.recode.net/2017/9/21/16344268/hyperloop-one-raised-85-million-tunnel-700-million-valuation
[6] http://indianexpress.com/article/business/companies/virgin-hyperloop-richard-branson-to-come-to-maharashtra-reduce-mumbai-pune-travel-time-to-25-minutes-5068989/
Many articles have been linked directly in the article.
