As I write this, Elon Musk is currently the richest person on Earth (and possibly soon Mars), with a wealth of… (googles it for this article) …HOLY SHIT 185 BILLION DOLLARS? JESUS CHRIST, I DIDN’T KNOW IT WAS THAT HIGH.
Sorry, I didn’t realize it was that high. I heard he was the richest person but I assumed it was around $100 billion. Wow. That was way higher than I expected.
The point is, he’s currently worth a lot. Which leads to the point I’d like to make, and which will clarify this blog post’s clickbaity title- It’s noteworthy how much the US government helped make the worlds richest man so rich.
SpaceX received contracts from NASA as part of the Commercial Orbital Transfer Services program (COTS! Get it?), as well as the Commercial Resupply Program and the Commercial Crew Development program, all of which are managed by the Commercial Crew and Cargo Program Office (C3PO, another good one! Is there a NASA program that contracts out making great pun acronyms?). This isn’t to say that SpaceX isn’t worthy of praise, just that the company’s existence wouldn’t be possible without the federal government choosing to provide money to the company in the form of these contracts, back at a time before SpaceX was a household name.
Even more dramatic than the help the government gave SpaceX was the loans Tesla Motors got from the Department of Energy in 2010. As part of the Advanced Technology Vehicles Manufacturing Loan Program, the government gave Tesla $465 million in low interest loans, long before it became the most valuable automaker in the world. The only thing more mind blowing than the US government investing way before everyone else is the fact that the investment wasn’t profit motivated. They were giving money to companies for the purpose of accelerating promising technologies.
“Okay Jack, got any other examples,” you ask? Sure, how about this- the five most valuable companies in the world right now are Apple, Google, Microsoft, Amazon, and Facebook. They’re all in the tech sector, and they’re all worth insane amounts of money because they were able to monetize and then monopolize the Internet, the single most valuable creation of the last couple decades, and which was created by the Defense Advanced Research Projects Agency. Come to think of it, DARPA is also the place that kicked off the development of self driving cars, which promises to be another insanely valuable technology that will make Elon Musk super rich. And before we leave the internet behind, I just want to point out that Elon Musk started SpaceX and Tesla after becoming a dot com billionaire as one of the founders of PayPal, another company that couldn’t exist without the internet.
The point is first, that the US government has played a major role in birthing disruptive technologies, and second that this is not recognized nearly enough. The problems with not recognizing it are that first, we don’t do it more, and second, that we allow the value created by taxpayer dollars to be transformed into private fortunes for a tiny handful of fabulously wealthy individuals, who are heralded as singular geniuses and purely self-made men.
Imagine the incredible things we could do if we spent more taxpayer money on developing new technologies. The reason that the government is so well equipped to do this is best communicated by something that not coincidentally was created by NASA- the Technology Readiness Level, or TRL. This scale is a rating system of maturity of a new technology, and inherently recognizes that it takes a lot of time, money, and risk to bring something new from an idea to a product. The sunk costs pose a huge barrier to private funds producing true breakthroughs. And not only are private companies unlikely to take on the risk to fund a breakthrough, they have a huge incentive to kill those breakthrough in the cradle if they ever suspect a new technology would make their own technology obsolete. Just look at how the fossil fuel industries and automotive industry have spent decades trying to prevent the development of the very technologies we desperately need in order to halt rising CO2 levels.
As for the other side of the coin, not only do we need to spend more taxpayer money on technology, we need to make sure the blessings of those technologies benefit everyone and not just a tiny minority. Otherwise the small business owner who became a casualty of Amazon monopolizing retail is going to wish DARPA never made the internet, and the 4 million Americans who get replaced by autonomous vehicles are going to wish DARPA never made that either. The “D” in DARPA stands for Defense. Maybe if the government could defend the rest of us from Elon Musk , all those Advanced Research Projects could do some more good.