I surprised both my friends and myself during an argument over coffee the other day. My very good friend Tom is a fan of iconoclastic businesspeople, people who dream big and dare bigger – people like Steve Jobs and Elon Musk. I had an unusually visceral response when he complimented Musk, and I was particularly inarticulate about my thoughts.
I am a free-market guy mostly, but I also believe in vigorous oversight, because far too many businesspeople will push boundaries and take advantage.
It’s a logical outcome of the widely-held view that a businessperson’s main goal is to maximize returns to shareholders. Behaviors like price fixing, price gouging, withholding new products that will cannibalize existing products, adopting rosy economic-growth forecasts when funding benefit-defined retirement programs all reward shareholders at the expense of collective utility, which is – or at least should be – the goal of any economy. In other words, businesspeople will most often choose narrow benefits over broader benefits because their goals, performance assessments, and compensation are aligned with narrow company-specific performance rather than wider economic performance.
And that’s cool. Try to reward a CEO on a broad economic performance metric on which they will have very little impact and you’ll very quickly have an unmotivated CEO. Or need to search for a new one.
But without a vigorous counterpoint (i.e., public regulation) to enforce collective utility, we end up with society as a whole bearing externalities, costs that are created by individual entities but paid for by the collective. Which leads to income disparities (shareholders get all the rewards while non-shareholders get zero rewards but have to cover part of the costs), which further frays our community.
But back to Elon Musk. I have two views of him, and there is some nuance in them.
Musk is brilliant. Tesla will change our world at least as dramatically as Amazon restructured retail shopping – and I’m all in on that change. Moving our transportation economy to sustainable fueling is seismically positive. It will reorder our world, but that huge disruption will leave us in a far better place than we are now.
He is also highly skilled at building companies. Counting PayPal, Tesla, SpaceX, and The Boring Company he’s had a significant role in creating four companies that are thriving, which is a great indicator of the appeal their products and services have to people.
But.
His Twitter acquisition shows hubris. He fancies himself an expert in social media and public conversation with no evidence of his expertise. He hasn’t grown up in social media companies, learning the essential issues, understanding the wants or needs of the broader markets, differentiating among the various markets and market segments. He’s extrapolating his personal experience, assuming his experience is the same as everyone else’s, which it certainly isn’t.
People have followed him on Twitter because of his brilliance in engineering and creating companies, not because of his opinions on other topics. Like many other users, he’s using that platform to opine about stuff in which he has little to no expertise. And as long as he’s just one user spouting nonsense, then I have no issue. Free speech and all. But when he uses advantages gained elsewhere to buy influence where he hasn’t earned it, then I do have an issue with it.
The best analogy I can come up with on the fly is Microsoft buying its way into search with Internet Explorer by bundling it with Windows. Windows won its dominant position in the marketplace by its features and its marketing and its sales to personal-computer manufacturers. IE had not earned a market-leading position by its performance. So to force IE into that leadership position by power earned elsewhere undermines collective utility.
Similarly, I think, Musk views himself an expert on speech and social media. He’s transferred the appeal he has because of his engineering and company leadership into social media, but the jury is still out on the latter. He hasn’t earned a leadership position in that area.
To me this whole discussion gets into Ayn Rand territory, where she believed there exists a small number of supermen, disproportionately gifted and superior to everyone else, who need to be allowed to exercise their genius so the rest of the world can benefit from it.
But.
Those people don’t exist. There are geniuses among us, but they have no emotional or moral superiority to the rest of us. They are no less petty and no more aware about our community, its needs, and how we interact than those less blessed with brainpower or technical insights. That their genius manifests in commercial success makes them no better – and no worse – than the rest of us. I don’t begrudge these titans of industry their hard-earned rewards – and to have outsized commercial success you have to work hard – yet many of these self-same titans seem to believe that brilliance in one space equals brilliance everywhere. Musk himself seems to believe that his own brilliance knows no limits.
I respectfully disagree.