Elon Musk: The Snake Oil Salesman of the 21st Century
By Joan Barrera, Economic and Technological Analysis
In contemporary popular narrative, Elon Musk embodies the figure of the visionary genius, a real-life Tony Stark leading humanity toward an interplanetary and sustainable future. However, behind the brilliant facade of reusable rockets and electric cars, a more complex and contradictory reality emerges: that of a master of promises, a snake oil salesman of the 21st century whose empire has been built not only with private capital, but significantly—and often decisively—with public money, subsidies, and government contracts. While he fervently preaches privatization and free markets, his companies depend on subsidies to a degree that belies his libertarian rhetoric.
Rhetoric vs. Reality: The Privatization Preacher
Elon Musk has positioned himself as a champion of deregulated capitalism. His statements against taxes, unions, and state intervention are frequent and forceful. He promotes a vision where innovation is the exclusive fruit of individual genius and business competition, without government "interference."
This narrative, however, clashes head-on with the foundations upon which his companies stand. Far from being examples of purely private success, Tesla, SpaceX, SolarCity (now part of Tesla), and Neuralink have been, at different times and to varying degrees, massive beneficiaries of incentives, guaranteed loans, tax credits, and public contracts.
The Business Model: Promise the Future, Collect in the Present (From the Public)
1. Tesla and the Subsidy Ecosystem
- Federal and State Tax Credits (U.S.): For years, Tesla depended on selling emissions credits (ZEV credits) to other manufacturers, a mechanism created by government regulations. Without this revenue, which in some quarters represented the entirety of its profits, the company would have struggled to show profitability. Additionally, buyers of its cars benefited from significant federal tax rebates (up to $7,500) and state incentives, an indirect subsidy that boosted sales.
- Direct Subsidies and Loans: In 2010, Tesla received a $465 million loan from the U.S. Department of Energy, crucial for developing the Model S. Although it was repaid early, it was a lifeline at a critical moment. At the state and local level, gigafactories in Nevada, Texas, New York, and Berlin have negotiated incentive packages worth billions in tax exemptions, discounted land, and public infrastructure.
2. SpaceX: The Pentagon and NASA's Star Contractor
SpaceX is perhaps the clearest example. Its success is largely due to being the primary private contractor for NASA and the U.S. Department of Defense.
- NASA Contracts: From its early days, SpaceX was rescued with a $1.6 billion NASA contract for cargo transport to the International Space Station (ISS). Subsequently, it has won multibillion-dollar contracts for astronaut transport (Commercial Crew program) and for developing the Artemis lunar lander (valued at $2.9 billion), competing against a consortium led by Blue Origin.
- Military and Government Contracts: It launches satellites for the Pentagon and the U.S. Space Force. The Starlink project, presented as a commercial initiative, has received hundreds of millions in subsidies from the FCC (Federal Communications Commission) program to bring internet to rural areas, and its use in conflicts like Ukraine (initially funded by donations and later by government contracts) demonstrates its geostrategic value and dependence on political decisions.
3. SolarCity and the Green Energy Business
SolarCity, the solar panel company founded by his cousins and acquired by Tesla in 2016, grew exponentially thanks to tax incentives for solar energy and financing schemes backed by public policies. Its business model was intrinsically tied to these subsidies.
The Smoke: The Perpetual Promise and Media Distraction
Musk's strategy goes beyond accessing public funds. He is a master at selling the future. He announces products and deadlines (the Tesla Semi, the Cybertruck for years, the 2020 Roadster, autonomous taxis "next year" since 2016, the Hyperloop, Mars colonization by 2024-2026) that systematically get delayed or never materialize, but which generate headlines, keep stock valuations high, and divert attention from present problems (production issues, quality concerns, labor conditions, regulatory lawsuits).
This "promise economy" allows him to continue attracting investment (both private and public) based on potential that is always just around the corner. This is the smoke he sells: the vision of a brilliant future that justifies all the subsidies and concessions of the present.
Conclusion: The State Capitalist of the 21st Century
Elon Musk is not the libertarian hero he claims to be. He is, rather, the archetype of the 21st-century state capitalist: an entrepreneur who shrewdly exploits the regulatory framework, incentives, and public coffers to build empires, while simultaneously criticizing the hand that feeds him. His genius lies not only in engineering, but in financial and narrative engineering: in turning technological promises into stock market realities and transforming public money into private capital, legitimized by an epic of planetary salvation.
Selling smoke isn't selling, nothing. In Musk's case, it's selling a vision so powerful that it makes governments, markets, and citizens willing to pay in advance, time and again, with public funds and faith in the future, while his companies' present relies on those very subsidies that his ideology claims to despise. Therein, perhaps, lies his true and most controversial innovation.