Elon Musk Versus Capitalism

According to Musk and his supporters, many of the entrepreneur’s operational problems could stem from:

  • Tesla employee that has done “damaging sabotage to our operations.”
  • Someone on the inside that may have purposefully started a factory fire, which delayed Tesla production even more than it already has been.
  • Incompetent drivers, involved in fatal accidents, who did not put their hands on the wheel of his self-driving cars.
  • A SpaceX supplier’s faulty steel strut, which caused an explosion.
  • Someone shooting down another SpaceX rocket from the sky in another company failure.

Even if some of Musk’s claims are factual, one would think that he could make the problems go away with the over $5 billion in government money he’s reaped.

Which begs the question: Why are taxpayers footing the bill for a private entrepreneur?

Sure, the concept may sound like a good idea. Electric cars and space travel, they both sound awesome. And I’m sure they’d benefit our country as a whole. But seriously, why are the American people forced to be investors in his vision?

According to Forbes, Musk is the 53rd richest person in the world, worth over $20 billion. Why isn’t he willing to do what every other entrepreneur does? The name of the game is called risk. Launching a business is a gamble. When you believe in yourself, you take the risk because you believe the reward will be worth it. Why doesn’t Musk use his money, and his money only? Why are millions of everyday Americans financing the enterprise of a multi-billionaire?

Musk is free to build his vision.

He’s free to seek out capital support to finance his venture. And he’s free to build, fail, build again, fire non-loyal employees, bring charges against saboteurs, and then build again, and do that as often as it takes to see his vision become a reality. That’s the American Dream. But avoiding risk by sucking up government subsidies and tax incentives circumvents that process.

How many other visionary entrepreneurs are being financed by the American taxpayer via the U.S. government? That is not supposed to be why the American people pay taxes!

It took Henry Ford 20 years, multiple failures, and plenty of funding challenges to make his vision a reality. Unlike Musk, he improved his products on his own dime, not off the backs of the American taxpayers.

Under capitalism, the government does not fund private enterprise. If someone is looking for the government to finance your business, they might want to move to a socialist or communist country.

They pick winners and losers in business. We don’t do that in the U.S. At least, we didn’t used to. Maybe Musk, who recently proclaimed himself to be a socialist, doesn’t know that. Apparently, the Obama Administration didn’t know that either, since they authorized most the financing.

What I’d like to know is, at what point do we cut our losses? Every business owner who is failing to make a profit has to make the decision, at some point, to shut down operations. If Musk cannot turn a profit with billions in government subsidies (and even more billions in the bank!), it’s time to shut down and turn off the taxpayer spigot.

And if, in good faith, he can show that a working profit model is in the near future, when will we, his investors, be seeing a return on our investment? I’m not just talking about cool cars and rich people finally being able to shuttle out to space – I’m talking about things that benefit the blue-collar men and women of this country.

I won’t hold my breath.

Joe Messina, is host of the nationally syndicated The Real Side w/Joe Messina,  Learn more at www.TheRealSide.com.

 

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