Had Elon Musk ever taken a beginning economics course (which it is clear he has not) he would have stumbled upon the following graphic in the first chapters of his textbook.
Assuming that Musk could understand the riddle hidden in the graphic, he might have wondered, “Hmmm. If no one is working, then who will purchase my Teslas.” No problem. Investors will simply give their money away to . . . Well, to everyone. In exchange for . . . doing nothing. (See, BBC, “Elon Musk tells Rishi Sunak AI will put an end to work.”)
That is how Musk does business. With every marginal increase in productivity, he could throw it back into R&D, or he could invest it, or buy something. Or, he could just give it away. That’s how all investors do business.
The truth is, like many “self-made” oligarchs Musk believes that he won his billions through sheer genius. The arrows in the chart are just sand in the eyes. Genius builds things and gives shit away. That’s how genius works.
Adam Smith tells the story, almost certainly apocryphal, of a fire engine boy who is charged with opening a valve on the steam engine so that the boiler doesn’t blow up. In a stroke of genius, the fire engine boy reasons “by tying a string from the handle of the valve which opened this communication to another part of the machine, the valve would open and shut without his assistance, and leave him at liberty to divert himself with his play-fellows” (Wealth of Nations, chap. 1). Okey-dokey. I guess that’s how efficiency works. Right Elon?
Except that the fire engine boy needs to supplement his family’s income so that they can afford food, clothing, and housing. Which means that his innovation actually cost him his job and drove his family into the poor house.
Innovation does give rise to efficiencies, but only up to the margin. If my innovation drives down demand for the goods it generates beyond a certain point, I’m not going to implement it. So, for example, fruit producers in the valley could lease fruit picking machines and send all of their migrant laborers packing. Except that migrants pick fruit at a far lower marginal cost than any machine. (Where do you think your $1 apple comes from?)
Hegel tells a similar story. In Philosophy of Right (1821), he argues that mechanization will allow human beings to step aside and install machines in their place. Woowoo! Except it didn’t happen.
Yes. The workday decreased from seven days, twelve hours a day, to six days and ten, to five days and eight. But ask any worker how this happened and they will tell stories about fellow workers who lost their heads fighting Pinkertons on the picket line.
Investors don’t like it when workers steal their productivity. Just ask Elon Musk. Ask him about organized labor and the Fremont plant. Musk loves to tell the story about how he gave workers everything they could possibly want without their having to work through union bosses. Yea. Right.
So, before you purchase tickets for your life of leisure in the Bahamas, take a close look at the circulation chart above. Don’t worry. Your job is not going anywhere.
Marx-Marks 