One of the biggest barriers to getting leftists to understand economics is their pathological misunderstanding of how wealth works. The average socialist/communist thinks that billionaires are surrounded by piles of filthy lucre that sit there in a lair, inert. Like Smaug the Dragon or Scrooge McDuck, they imagine Jeff Bezos and Elon Musk lying among piles of golden ducats and doubloons, making snow angels with their ill-gotten gains.
I recently suffered this weapons-grade delusion in a debate hosted on the disgraced state broadcaster, the BBC. Invited on to discuss the benefits and drawbacks of the super-rich, I was up against someone introduced as a “comedian and activist.” I shouldn’t have been surprised to be faced with such funny views.
The issue under discussion was Musk’s recent new deal as CEO of Tesla. If he hits an insanely ambitious set of targets, a modern industrialist’s version of the Trials of Hercules, then the tech genius could, in 10 years, become the world’s first trillionaire. To put into perspective how difficult hitting these targets will be, they include selling 1 million humanoid “Optimus” robots. These are far from ready, and none have yet been sold.
He also needs to sell two and a half times more Teslas in the next ten years than have so far sold in the entire existence of the company. Faced against these odds, Hercules would probably prefer the Nemean Lion or the Cretan Bull.
If Musk hits these targets, he will have turned Tesla into far and away the biggest and most profitable company on earth, and generated more value than any other businessman in history. This will include more than $7 trillion for the investors who consented to back this deal. Not to mention tackling climate change, which Tesla will do more to ameliorate than any Green Party oddball.
So, based on his behaviour so far, and the behaviour of other members of the super-rich, what would Musk do with that trillion dollars? Well, likely he would invest it all back into the other earth-changing technologies he has already been developing. I’m not actually a paid Elon-shill, so I won’t list them all off, but to pick on Neuralink alone, imagine what that company could do with the backing of a trillionaire? The paraplegic, especially children in the poorest countries, could be fitted with life changing tech.
And the same is true for so many of the super wealthy. One favourite of mine is the little-known Joe Liemandt. After creating a company so successful that he personally is now worth $6 billion, Liemandt has turned his attention towards education. In the pilot school in the US where he is now principal (headmaster to us Brits), Liemandt has built a system where, with just two hours of AI-led teaching a day, the students rank in the top 1% in America and love school so much they ask to cancel the holidays.
Having seemingly cracked how to run a great modern school, Liemandt is dedicating his life to scaling his model across first America, then the whole world. Fittingly for this piece, America spends $1 trillion a year on school education, with pretty mediocre results. Imagine what an entrepreneur like Liemandt could do with that sort of firepower.
Because the truth is that billionaires having the capacity to put their own money towards moonshot projects (in some cases, literally), they care about the outcomes much more than if it were taxpayers’ cash being spent by bureaucrats. Not only is the taxpayer not on the hook for these sorts of ambitious projects, but some of the most successful people in history being personally invested in their success ensures their commercial viability.
The proof of this can be seen when one compares NASA to SpaceX. Only one was the only entity capable to saving those astronauts stranded on the International Space Station last year. It wasn’t the public body.
We shouldn’t be surprised that leftists don’t understand how the real world works; they don’t live in it. They don’t even know how to count. But if trillionaires came into being, revolutionised the education system and more, then maybe they’d learn.
This article originally appeared at CapX.
The post In Defense of Wealth was first published by the Foundation for Economic Education, and is republished here with permission. Please support their efforts.
