Elon Musk added a new toy to his collection with the $44 billion purchase of Twitter. I am sure he will be happy with his new toy. He has already fired senior management, thousands of others are expected to be ousted or stiffed. Already reports are that new racist messages are being sent. It appears to be a victory for capitalism and free speech. Wall Street should be happy.
With all the worry about what will happen to Twitter and whether it was worth it for Musk to buy it there is another question simply being ignored in the main steam press–Why should anyone be allowed to be worth what Musk is and why should he be able to drop $44 billion to buy anything, let alone Twitter?
Capitalism is amazing. It has produced unprecedented wealth in the world. It is the story of the wealth of nations, of the occasional person who rises from nothing to become rich. It has brought forth technological innovations never seen before. It has transformed peoples’ lives in countless ways.
Yet it has also given us the serious gaps in inequality both with the US and across what used to be called the North and South or First and Third Worlds. It has given us pollution, global warming, colonialism, and reinforced and transformed racism and sexism. For free marketers it is all about freedom and creative destruction, for its critics it has done little, especially in recent times, to address poverty, disease, and the quality of life for billions of people across the planet.
Musk is a living embodiment of Ayn Rand’s John Gault. To many he is a hero because of Tesla and the coming electric car. Or he is a hero because of SpaceX and the race to Mars. Or simply he is a hero because he shows the power of capitalism to produce wealth for its own sake. Yet we have to remember that he is worth so much because he exploited so many workers. He is not the self-made person many assume–he was born rich and used his privileges to enrich himself. Now he is super rich and can use his power not with great social responsibility, but in a way that caters to his whims and desires.
Musk is more powerful than a nation state. His musing about how to settle the Russian war against Ukraine to the former’s advantage is more than simply idle thoughts. Rumors that Star Link–the satellite service Musk owns–were manipulated and blacked out the Ukrainian army at one point show the power he could exert over matters of war and peace and national sovereignty.
But let’s put the $44 billion in perspective. How large is that amount? If Musk were a state, his $44 billion would make him the 86th largest GDP in the world. His purchase of Twitter would be slightly larger than the $41 billion GDP of Serbia, yet just shy of the $47 billion of Lithuania. His expenditure to buy Twitter is larger than the total GDP of the 31 poorest nations in the world.
This $44 billion is almost three times as large as the total amount of military aid the US has given to Ukraine since Russia invaded. It represents about half the equivalent of total global aid to Ukraine since the war started.
But what if we are not talking about military aid? World Program USA estimates that it would take $40 billion to end world hunger and feed the most hungry for a year. The Organization of Economic Cooperation and Development (OECD) estimates it would take $50 million to reach 70% vaccination level for the entire planet. According to the World Health Organization, “At a potential cost of about $5 per dose, including its distribution, it would cost around $325 million to administer each year across ten African countries with a high incidence of malaria.”
The World Bank estimates it would cost $150 billion to provide potable water to all who need it. Closer to home, the Department of Housing and Urban Development (HUD) estimates it would cost $20 billion to end homelessness in America and the remaining $24 billion of the purchase price of Twitter could feed all the hungry 60 million Americans who visited food shelves last year.
There are countless other things that could have been better funded or spent on globally or in the US that could have helped millions of people. While governments and societies as a whole should be responsible for doing this, Elon Musk had a choice and an opportunity to prove capitalism can do something good. He opted not to do that. Remember that the next time someone praises his genius.