US Edition
Anyone who has read Walter Isaacson’s compelling new biography of Elon Musk would not have been surprised by the Tesla and SpaceX chief executive’s latest Twitter storm, in which he endorsed an apparently anti-Semitic tweet, saying it was the “actual truth”.
This is not because Musk actually is anti-Semitic; it is possible I missed it, but there doesn’t appear to be any evidence of Musk holding such views in Isaacson’s book – and Isaacson spent a very long time shadowing Musk, with extensive interviews with both him and more than 100 business associates and friends.
Rather it is because Musk has a habit of writing inflammatory tweets, or impetuously firing off posts before thinking through what he’s actually saying, how it might be interpreted, and what impact it might have. It’s an almost tourettes-like affliction.
Prior episodes include a tweet in which he said he was taking Tesla private and had lined up the funding to do so, when in fact his Saudi backers had made no such commitment. The whole thing quickly fell apart, culminating in multiple lawsuits.
Another was his infamous “pedo man” tweet, aimed at an unassuming British diver who helped rescue twelve young footballers from a flooded cave in Thailand. Musk was provoked, admittedly, but it was schoolboy behaviour.
Part of the problem with Twitter as a forum for free speech is that it positively invites ill-considered posts that on reflection the perpetrator would not have ventured and certainly would not have said to anyone’s face.
Many tweets are also capable of gross misinterpretation, made worse by lack of context and qualification.
Years after the event, I still get tweets along the lines of “Oh, you’re the guy who wants to murder my granddad”, after writing at the height of the pandemic that by disproportionately affecting the elderly, Covid might prove mildly beneficial from an entirely clinical economic perspective because it would help remove the unproductive from the economic mix.
During the recent UK Covid Inquiry hearings it emerged that Boris Johnson had privately expressed a similar point of view by saying that Covid was “just nature’s way of dealing with old people”. Callous perhaps, but objectively true.
In any case, Twitter – rebranded as X since Musk bought the company – weaponises and amplifies remarks like these, often rendering them something that isn’t meant and making them easy meat for today’s increasingly vicious culture wars and political divisions.
Musk says he bought Twitter so as to promote free speech and counter the “woke-mind virus” that seemed to be infecting the platform. But as he is finding to his cost, it is a thin line that separates free speech from hate speech.
No doubt goaded by his girlfriend, Grimes, and humbled by the torrent of big companies pulling their advertising, Musk has since claimed that he was misrepresented; welcome to the club.
He’s also tried to make amends by saying that anyone using language such as “decolonisation” and “from the river to the sea” in the context of the Israel/Hamas conflict will be immediately suspended.
What’s all this got to do with economics? Well, many people think Musk’s acquisition of Twitter is his first major, wealth destroying mistake as a consummate risk taker.
Personally I wouldn’t bet on it; at almost every turn in his mercurial rise, it has been possible to say that the risks were such that he was almost bound to come a cropper. Yet so far, all his really big, visionary bets have paid off.
Luck or judgement? Who knows, but reading this biography, you rapidly come to appreciate that it is Musk’s self diagnosed “Aspergers” that is a large part of the ruthlessness and drive that helped make him the world’s richest man, a position he spars for with his great rival as a space entrepreneur, Amazon’s Jeff Bezos.
Musk plainly enjoys some of the accoutrements of success – private jets, unfettered access to the rich and powerful, glamorous girlfriends and so on, but money is not the primary motivation; for him wealth is merely a means to an end of driving through transformational technological change.
Nations are capable of remarkable things when at war; the fight for survival instils in them a determination to overcome seemingly impossible odds that you don’t find in peacetime.
It’s the same with Musk; he runs his companies as if on a permanent wartime footing, and when they grow lazy and complacent, or seem to forget the mission, he steps in to create chaos and a renewed sense of urgency. In his mind, no obstacle is insurmountable.
This may be partially true of all outstandingly successful entrepreneurs, but Musk has these characteristics to the power of ten.
All of which raises an interesting question. Musk is obviously unique in many respects, a genuine oddball who courts and delights in controversy – a drama queen as well as a serial creator of hugely successful businesses.
But he is also one of what is now a veritable army of extraordinarily impactful entrepreneurs that the US economy has given birth to these past 150 years. That the US can continue to foster such transformative wealth creators is testament to its enduring qualities as an economic superpower.
Sadly, the same cannot be said of the UK and Europe more widely. Why is this? Too much tax? Too much regulation? Not really. The World Bank’s last published “Ease of Doing Business” survey placed the US at just sixth in the rankings, with a score not much higher than that of the UK.
All such surveys are wide open to manipulation and should perhaps be taken with a large pinch of salt – the World Bank has actually discontinued its survey after Chinese meddling – but even so; US markets are notoriously highly regulated and well protected.
Just ask Musk, who nonetheless seems to find either a way around the regulations, or of ignoring them altogether.
The differences on tax are admittedly much bigger. According to the International Monetary Fund’s last published “Fiscal Monitor”, the tax burden in the US was “just” 32.5pc last year, against 38.8pc in the UK and a staggering 47pc in the euro area.
All the same, these factors are not enough in themselves to explain the widening gap in entrepreneurial achievement. Nor is it size of market; the European Union as a whole is bigger, even if absence of a common legal system and language acts as a significant obstacle to its single market pretences.
Ultimately it comes down to culture, attitude, appetite for risk, America’s vast federal budget, and its highly developed capital markets. In the US, risk taking is celebrated and rewarded.
In Europe, where business leaders are encouraged to minimise risk and curb their remuneration, it tends to be the reverse. We look backwards to past glories, not forward to new ones.
Success breeds success, with the US still able to act as a magnet for the brightest, most daring and most accomplished talent from around the world. Musk himself deliberately moved to the US as a young man from South Africa to take advantage of its opportunities. His top people are a showcase of multinationalism.
Even by US standards, Musk is a one-off, with a uniquely demonic drive and demanding nature. He would have been successful almost anywhere. But could he have done Tesla or SpaceX in Britain or Europe? Not a chance, sadly.
This article is an extract from The Telegraph’s Economic Intelligence newsletter. Sign up here to get exclusive insight from two of the UK’s leading economic commentators – Ambrose Evans-Pritchard and Jeremy Warner – delivered direct to your inbox every Tuesday.
Musk could never have made it in Britain, or anywhere else in Europe
Risk taking is rewarded in the US – that’s why it’s a magnet for the best talent