Tuesday 26 April 2022

Elon Musk and Wasteful Spending

Is there room for another contribution on Elon Musk's takeover of Twitter? Of course there is. The reaction could be seen coming from a mile off. Some people vaguely identifying with the left have said they're off, departing for the greener pastures of Discord and Tumblr. And the right are hailing him as a billionaire messiah set on junking the platform's cancel culture. In truth, Twitter's going to remain pretty much the same. Donald Trump might be let back on for Musk's amusement, and we can look forward to additional features added such as an edit button and whatever else its new proprietor fancies, but the essentials won't change. Unless Musk has spent $44bn just to smash the platform into the wall. Its future as an open-ended network is not likely to change, nor will its status as the establishment's favourite social media tool. The terms and conditions aren't going to get ripped up either. Twitter still operates in dozens of legal contexts, and has to be seen to be doing something about hate speech lest the company gets bogged down by multiple charges in multiple jurisdictions. That means the right wingers full of praise for Daddy Elon are going to be disappointed when it does not become the libertarian free-for-all they've set their blackened hearts upon.

The move to buy Twitter, which came hot on the heels of his acquiring a 9.2% stake in the business at the beginning of the month, is pretty much what we might expect from Musk. Since becoming the world's richest man while, apparently, sofa surfing up and down the Californian coast, Musk has demonstrated that obscene riches offer no protection against buffoonery. It's actually appropriate that he, more so than the "serious" Jeff Bezos, is the global face of the capitalist class. The wealth that is concentrating in the infinitesimally small number of billionaires is, in conventional terms, more than enough to solve hunger and homelessness, fund Covid vaccinations for the global south, and drive an agricultural revolution in sub-Saharan Africa. I'm sure you can think of many other problems. Why then does Musk, with his $260bn fortune and the rest of his parasite class refuse to do anything about it? Are they especially cruel and hard hearted?

Maybe, maybe not. Marx noted that capitalists are personifications of capital. That doesn't mean they are walking piles of money but are the condensation of an exploitative social relation. Why, for example, is Musk very happy to bang the free speech drum - except for his own workforce? To ask the question is to answer it. But Musk personifies more than his automotive interest and the "classical" extraction of surplus value Tesla operates. A great deal of his interests are tied up in "unconventional" projects, such as the Tesla Semi - an electrically powered truck far less economical than existing diesel-powered machines. There's the Hyperloop, which he conned Las Vegas into letting him build beneath their city. This vision of the future consists of a single lane tunnel one can drive a car around. There's no service tunnel, and the number of the cars on the "track" at any one time are few and far between. A mass transit system with neither the mass nor the transit - a far cry from the 1,124mph pods they're supposed to accommodate.

Other boondoggles include wanting to build a roller coaster in one of his factories, a Bond villain-style lair in an extinct volcano, and a viable space tourism business for his super rich cronies. Amidst the nonsense are projects that might have genuine future use, such as the investments in battery technology, the starlink satellites, and the space infrastructure efforts, even if they're justified in terms of his Mars city fantasies. The point is that, despite some diamonds in the rough, what characterises a lot of Musk's interests is wasteful spending. In his recent sofa-surfer interview he said he didn't live a showy billionaire lifestyle, except for his private plane to get him around. The creation of useless infrastructure beneath Sin City, the carbon emissions from the hundreds of SpaceX launches - including launching a Roadster into orbit around the sun, suggests he has a certain blind spot when it comes to his super wealthy footprint.

But wasteful spending is useful spending from the standpoint of capital. It works as a certain form of trickle down by keeping people in jobs to service their desires. See, for example, the debates around the permanent arms economy during the Cold War and the extent to which this spending settled labour markets and provided multiplier effects for ancillary industries. But more importantly, it's not in capital's interest for it to be invested in stopping world hunger, for example. Doing so would put a floor under global living standards, which in turn would strengthen the hand of labour the world over. That wouldn't appear to make much of a difference to Musk and his high end tech interests, but the flip side of battery and electric vehicle production is resource extraction. Which depends on mining, often by low waged workers in the global south, and workers forced into dangerous and cramped conditions by the threat of economic necessity. At a stroke, the guarantee of safe food, drinking water, and accommodation would up the price of their labour power. Very much not in Musk's interests. But it doesn't have to be direct. Any sort of welfare programme that adds to the collective economic clout of the wage earning class upsets the balance of power between it and capital. It's why people like Musk do nothing to alleviate the lot of the impoverished. Why philanthropists like MacKenzie Scott gives to charity as opposed to organisations building collective capacity and political consciousness, and why here in the UK our billionaire chancellor dispenses loans instead of energy price relief. Wasteful spending buttresses ruling class power. Useful spending undermines it.

Which brings us back to the personality of Musk himself. As the wasteful spender par excellence, his tomfoolery matches his "function". Slapping down tens of billions for a social media platform whose results will never match its valuation typifies his class at this time. With galloping inequality, a raging pandemic, an energy crisis, and the climate change threat demanding resources and answers, the masters of this planet will trash this planet and its people for the most frivolous ends. It's not because they're evil, it's because it's in their interests. And this is going to carry on until we put a stop to them.

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jdholmes said...

If, as many speculate, he makes you pay to Twitter, he could make money like a bandit over Twitter. He'll have to keep the charges low enough not to drive everyone out, but Twitter has gotten so habitual for all those people who don't like to or just prefer not to say anything long enough to actually mean anything, and that is a potential market of billions, that it could be a smash success. Wouldn't be actually useful for anyone, but then Twitter never really has been.

Kamo said...

"That doesn't mean they are walking piles of money"

That's the key line in the whole piece. Musk might be worth billions, but it's not tucked under his mattress to avoid solving whatever problems Graun readers think it should be solving, instead those billions are the market value of the investments he has actually made. Even Musk had to seek finance for his purchase of Twitter, he didn't dip into a non-existent money bin. There's a common misconception on the left that 'wealth' is the same thing as piles of cash that could be put to better uses, when in fact wealth it is the value of ownership of what is already in use. That Twitter has a paper value of $X billion doesn't create the physical resources to tackle some other, more worthy, problem.

Graham said...

Musk's wealth is based on the overvaluation of Tesla.

Although, as it involves building a physical product, it differs from most of the internet economy, which involves services, its valuation is typical of the that economy.

The internet magnifies capitalism's tendency to monopolies. In all sections companies strive to become the monopoly supplier of services in attempt to become the Amazon, Google or Facebook of that sector.

The current valuation of Tesla is based on the bet that, as they started development of eclectic cars before the existing car companies, it would eclipse those and become the dominant producer of cars.

This is not going to happen and as such much of Musk's wealth is illusionary.