Elon Musk Shows Corporate Socialism is NOT Capitalism

In a recent article, Bloomberg questions whether Tesla CEO Elon Musk has forgotten about the company’s “Gigafactory 2” based in Buffalo, New York. After describing the factory — built with $750 million of taxpayer funds — as looking like an “empty Walmart Supercenter,” the report reveals that Tesla walled off areas of the plant to hide the full extent of its idled production lines.

It would seem that many are growing tired of Musk’s usual gameplan of using taxpayer money to fund his various ventures and facilities. But Musk appears to have one ardent defender in the form of Democratic New York Governor Andrew Cuomo:

Although Tesla’s main patron, New York Governor Andrew Cuomo, a Democrat, easily won reelection, his opponents have pointed to the Gigafactory 2 deal as a sign of his coziness with moneyed interests. Raymond Walter, a Republican in the New York State Assembly who lost his own reelection bid, says he’s concerned the state has too many “eggs in the Tesla basket, which doesn’t seem like a very strong basket at this point.” When Walter toured the factory in March, he recalls, “it was mostly empty. I would say 10 percent to 15 percent of the floor was being utilized for production. It was not an impressive use of $750 million in taxpayer funds.”  [Source: Breitbart]


Elon Musk’s idled production lines are not capitalism. Capitalism means all property is privately owned, and all profits belong to the profit-maker. But capitalism ALSO means all losses are at the risk of the property owner, and all risks belong to that owner — not the public at large, and certainly not the taxpayer.

Elon Musk is a creature of corporatism, not capitalism. “Corporatism” is my word for corporate socialism. It’s when business is subsidized by government, as Elon Musk’s $750 million idle Gigafactory 2, and also when government becomes so heavily involved in business that nearly all corporate ventures have political influence.

That’s America today, at least much of big business.

Big business in a free economy is actually a good thing. So is small business. All business in a totally free economy is a good thing, because the creators, profit-makers, job-creators and producers are all accountable for their actions. Rationality is rewarded in a free market, while the kind of obtuse inaction and arrogance personified by people like Elon Musk (and his crony, New York Governor Andrew Cuomo) are punished by the reality of losses.

Markets allow producers/business owners and customers to communicate with each other, primarily through profit and loss. Corporate socialism and government regulation/bureaucracy reduce and buffer the ability of consumers to communicate with business. That’s why — in the extreme, consistent case — socialism gets you Venezuela and Cuba, while capitalism gets you what the United States has enjoyed for several centuries now.

That’s also why bailouts are such a bad thing. Most people assume that bailouts are good, and that without government bailouts we’d all be impoverished. But government bailouts and subsidies simply reward the worst behavior while taking money away from smart and capable, responsible people in the private sector who could operate so much more profitably and rationally with that money.

Perhaps you can find projects funded by the government that you consider successful. Perhaps you can find evidence in Elon Musk’s resume of authentic talent and ingenuity. More power to you if you can do so; but this proves nothing about the virtue of corporatism over capitalism. It only shows that the government wasn’t “necessary” for these ventures or these innovators, because these inventions and innovators would have done just fine in the free market economy.

Keep in mind that without at least elements of a free market economy in a society, there are no taxes to collect in order to subsidize the projects like Elon Musk’s $750 million idle Gigafactory 2. That should tell you something right there. If socialism — including corporate socialism — were actually so superior to capitalism, then why does socialism depend on capitalism in order to survive?

I don’t know how many more decades or centuries it will take people to learn simple, basic economics. In America, socialism is on the rise with a large segment of the population, particularly young people. Their ignorance is heartbreaking and destructive.

No civilization can withstand such ignorance indefinitely. If Elon Musk is our only future, then the future won’t be as brilliant as America’s past has been.


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