Lachlan Mitchell rails against the inflated ego of Elon Musk, a self-professed saviour of all of humanity’s pressing issues
He seems to be the man of the hour, the discussion that never leaves the news. Elon Musk, vanguard of the future! Public discussions seem to centre around him being an example of how we’re entering a new technological age, unbridled by the limitations of government or financial limitations. With his reach and apparent goodwill, he promises to make the crises of the day disappear before your eyes. To many people, the promise of Elon Musk is benevolence personified. A saviour of the contemporary era. But his motivations are, unsurprisingly of any Silicon Valley entrepreneur, far less generous.
He is a billionaire of impossibly large wealth, mostly built from his formative role in Paypal and subsequent investments over the years, including in SpaceX and Tesla, with which he is increasingly associated. They are Musk’s flagship properties—he is as much them as they are him. At both companies, he is CEO and architect of their products. He is also their main backer and their corporate mascot, something very rarely seen outside of the Silicon Valley bubble. His billions are now directly linked to the fortunes of these two companies. But this is where things get interesting.
Without getting too into the economic know-how that I admit confuses me, Tesla—and to a lesser degree SpaceX—function the way they do (unprofitably but pushing ahead at full speed) due to the way they structure their debt. I will focus primarily on Tesla here, because the company is the one that lives and dies by this structure. Tesla struggles extremely hard to find financing outside of Musk, government subsidies and the rare venture capitalist. So, Tesla and Musk plunge themselves into debt in order to prop up the company. With such extreme debt and great scepticism about their capacity to repay, this has the effect of making their bonds literally worthless. However, the key thing here is that their debt is special—it is convertible debt, which means it is transferable into equity (desirable value), if their stock prices reach a certain threshold. This is much more desirable than cold cash because it means that instead of a cash payout, Tesla will be seen as not only viable to invest in, but profitable for successive governments to continue giving subsidies to, with their interest in removing fossil fuels from the roads. However, this has a time limit. March 2019 is the first instance in which these bonds will mature and become viable. If Tesla’s stock does not reach the threshold by this time, which is about 350 USD a share, both Tesla and Musk’s fortunes will be in grave danger and the possibility of bankruptcy will become more than a looming threat.
As Tesla’s CEO and public face, it is directly up to Elon Musk to ensure that Tesla is successful in their aforementioned goal. As a public figure of international notoriety, he is the driving force behind what makes the company interesting to the world over. As a Silicon Valley tech billionaire with grandiose ambitions and the arrogance to match, he appeals to many sides—the oil and car corporates who realise that a shift towards electric technology is the only way their respective companies will survive the public crucifixion following peak oil; to neoliberal governments who want to pay lip service to environmentalism while not backtracking on their corporate backers; to many tech figures who believe in the ability of the hyper-rich to best save the great unwashed from themselves, and finally, to young, misguided and foolish libertarians who believe in Musk as a figure that can unite the apparent blessings of capitalism with environmental interests without the limitations of government, despite Musk relying heavily on government backing to remotely succeed. As such, he is the perfect figure to lead Tesla’s desperate charge for security.
Within the last few months, there has been an exponential increase in Musk’s social output, and more notably, an increase in the declarations of goodwill on his end. This stretches from solving the world’s transport issues, from his grandiose Hyperloop to his mainstay (Tesla), to his now-nefarious associations with the Thai Cave Rescue of the last couple of weeks. He’s even promised to fix Flint entirely, intentionally choosing a problem that has been a notable failure of two presidential administrations in order to emphasise the appeal of private industry, and therefore, Tesla. He is crafting an image of someone who is truly dedicated to solving the world’s problems, both on a macro and micro scale. He believes in the power of private enterprise, and only private enterprise, to serve humanity. All this is what he would also like you to think, an image he has crafted and come to rely on. But he has now come to lean so heavily on the myth of his own making that anything less than that draws fire and outrage.
This is obvious in his recent social media exchanges; ranging from the basic denial of the journalistic capabilities of those who question his increasingly frenzied tweets; to his rewriting of socialist theory to assuage his insecurities about being a billionaire that relies on worker exploitation to ‘do good’; to his repugnant tweets pushing the idea that one of the heroic cave divers was a paedophile, because the guy questioned Musk’s relevance to the rescue and his motive in making very public acts of goodwill. Which as we can see, are more to do with rescuing Tesla from itself and reminding himself that he can save people. Which makes me question his rabid fans, of which there are many. Those who have an excuse for every action. How many of them are aligned with the utopian idea of relieving the world of the burdens of energy, or finding untold wonders amongst the stars? How many of them are simply entranced by the possibility of being the man on top, free from moral consequence in search of the greater good? It is worrying.
He is not any closer to a saviour than any other billionaire exploiter—he is just deluded enough to think otherwise.