Capitalisn’t: How ‘Muskism’ Is Changing American Capitalism

Episode Transcript

Quinn Slobodian: The interesting thing about Musk, he doesn't think about politics in the way that the tradition of neoliberalism and classical liberalism before had thought about it. Principles of compromise or meeting people halfway would be the exact wrong kind of solution to be coming to. If you're an engineer, there are good solutions, and the kind of engineer Musk sees himself, there are good ways of organizing things, and then there are bad ways of organizing things. Your goal is to optimize. If you approach the social contract, society, as a problem of optimization and efficiency, you lose 90% of the history of political thought, and you start speaking a language that normal people find very alienating. That's where we are.

Bethany McLean: For the better part of the 20th century, capitalism has been defined by Fordism, the new organization of production invented by Henry Ford, and then exported worldwide. Will the 21st century be defined as the century of Muskism?

Luigi Zingales: According to Quinn Slobodian, Professor of International History at Boston University, and his co-author Ben Tarnoff, in their new book entitled Muskism: A Guide for the Perplexed, it will be the case. Muskism is not a coherent doctrine articulated by Elon Musk, but rather a pattern of ideas and practices that emerges from his actions, rhetoric, and historical context. In your view, Bethany, what is the defining feature of Muskism?

Bethany: I think the thing that surprised me the most about it and that I find the most interesting is what they call state symbiosis. The idea is that contrary to the public perception, Musk is not a libertarian at all, at least not in the way most of us think about being a libertarian. He is not seeking to get rid of the government, but rather to use it. Or as they write, the government isn't something to be minimized or eliminated. It can be instrumentalized as a source of power and profit.

The state isn't the enemy. It's not opposition to business. It's a partner, or maybe even something more dependent. At one point, they say the goal is to vassalize the state so that it can only act by purchasing services from private providers. He said this on a podcast. I think it's much more likely that private actors will continue to take on more and more state functions until it's difficult to find the difference between the US state and private Silicon Valley firms. Luigi, what do you think is the defining characteristic?

Luigi: I think it is the primacy of infrastructure as power. From PayPal to SpaceX, from Starlink to Tesla, Musk rejects the global supply chains, aims for vertical integration, and production becomes a fortress-like self-contained system. Whoever owns the infrastructure sets the rule.

Bethany: I guess it sets up a system of power without democratic constraint where private actors are the true problem-solvers. In that sense, it's an evolution of ideas we've talked about on the podcast before, in which the government as a problem-solver has increasingly become a totally marginalized idea. That makes Muskism, I think, uniquely dangerous in the extent of that belief and the implication that the messiness of democracy, the fact that people aren't just interchangeable variables, is just bad programming. Bad programming should be just fixed or removed, right?

Luigi: Yes, so instead of depending on the state, you depend on Musk.

Bethany: In his previous book, Slobodian explores the secessionist tendency of the right. Musk plays a big role in this space, interestingly enough. Let's talk to Quinn Slobodian and make sense of all of this. There's this definition of Muskism, the belief that civilizational progress should be led by founder-controlled firms operating at planetary scale with democratic institutions relegated to support roles. Do you think that's fair?

Quinn: I'm not even sure if support roles is the part that needs to be added there at the end. The thing that my co-author Ben Turnoff and I were trying to get at with the notion of Muskism was, first of all, to break away from the idea of libertarianism as a guiding way of understanding what was going on in Silicon Valley. Certainly, by the time all of the Silicon Valley leaders were lined up on the dias behind Trump for his last inauguration, it seemed clear that there was something more like what we call state symbiosis going on.

What kind of state that is? This is only to respond to the democratic part of the phrase you just mentioned, is, I think, quite open for negotiation. I don't think that there is a core need for democratic validation for the kind of possibilities for profit accumulation and production that they have in mind. What is it that Muskism entails then? What are the core things we're arguing? One of the one-line definitions we use is that it's the promise of sovereignty through technology that cashes out as greater dependence on private service providers.

You have a promise of what we call electric autonomy through not just the electric vehicle, but really what he calls the Tesla ecosystem, which stretches from solar cells to microgrids to storage units on the wall of your garage to a car which can double as a backup battery energy storage site and also, in his vision now, a site for decentralized computing. You have Starlink and SpaceX, which, in different ways, offer sovereignty to states as a service through the ability to launch satellites, through surveillance, through battlefield communication.

Then more abstractly, but nevertheless importantly, through things like X and AI, he's offering a kind of epistemic sovereignty to clients by saying, "Here's a service that will keep at bay intrusive forms of politics and pernicious memes and mind viruses that we promise you have been cleansed from the system which you're buying from us as the Grok chatbot or the XAI large language model." It's a relationship to both states and households that has this promise of sovereignty in an evermore uncertain world that nevertheless falls short of a kind of survivalism or something.

Bethany: Is this idea, and I can tell already I'm going to struggle with saying this word, is this idea of sovereignty-- [laughs] I don't know why it's so hard for me. Is that the key thing that distinguishes Muskism from traditional crony capitalism? People might say, capitalism with hype, state dependence, monopoly power, that's Musk, it's crony capitalism. Do you think that idea is the core distinguishing factor?

Quinn: One of the things that we ended up having to do in the course of writing this book, especially as people who started out as very deep skeptics and critics of Musk himself, is to have to give him his due at certain points. Normally, I think one would think about crony capitalism would be that it's holding back modernization of certain sectors because there is some patronage networks that work for people's bottom lines and enrichment of their insider networks, but it doesn't actually help to bring them to the cutting edge of innovation in this or that sector.

One of the interesting things about Musk's products is he actually has been pushing out the frontier of innovation. SpaceX, since its founding in 2002, has reduced the cost of putting mass into orbit by over 90%. He did that not just because he paid a guy off in a back room, but because he actually did, through a lot of innovations, vertically integrated the production, stopped relying on outside suppliers, had got a team of engineers around him such that they could solve these hard problems about how to pull off these things from a practical point of view.

Insofar as, I think, crony capitalism has that implication of the defense of backward technologies for personal reasons of enrichment, it doesn't really seem to fit, because the only reason he has been successful is he's made outrageous promises and then partially delivered just enough that investors continue to express their confidence in him.

Luigi: I agree with this view because there is no doubt that Musk has been an enormously successful entrepreneur. I think the comparison with Ford is probably more appropriate. This is where I would like to understand the difference, because Ford could develop basically independently of the state. He was not a customer for the product. Did not really contribute to the creation of the product.

Yes, at the end, he was sending the troops when there was a labor revolt, but that's about it. Now, we are in a world in which the government is an essential component in the business process. Number one, the government creates the fundamental research that enables this to take place. Number two, the government becomes the major customer. You cannot dispose off the government, but then they both fear tremendously democracy, but in a sense, Musk fears democracy more because it may undermine his own business model. Democracy did not really mess around with Fordists that much, but it could really change around the relationship between the state and Musk. That's the reason why I think they want to dominate the state in a way that is even different from crony capitalism. Crony capitalism is sucking up the milk of the state. No, no, no. Here, it's controlling the state.

Quinn: Yes, and there is a difference that a biologist would use between parasitism and symbiosis. We chose the term symbiosis for a reason, is that there is a kind of exchange that happens in the relationship between Musk and his state customers that is not one-way enough that one would start to think of it as parasitical. To go back to your original comparison between Ford and Musk, it is something we thought about a fair amount. The interesting difference, too, is that the magic of Fordism, as people understand it, was the way it was able to stabilize the inherently disruptive qualities of capitalism, especially in a period of upheaval and move from one mode to another.

How does a new sense of belonging, willingness to cooperate with the employers, a kind of moderation prevail when, based on everything we know about social forces, we should often expect revolts, revolutions, anger, discontent? Fordism, in that sense, was a kind of model of social peace. The way that democracy and capitalism were reconciled in the ways that people-- like Martin Wolf now retroactively celebrate, was really at the heart of what made Fordism Fordism. What's interesting about Musk, rather than an ideology of social peace, it actually actively seems to be an ideology of social war.

Musk not only is not seeking a kind of equilibrium state or a kind of social calm or compromise of the kind that the mass consumption plus mass production virtuous circle was able to purchase for Ford for a period of time and Fordism for a period of time. Musk seems to almost require the multiplication of senses of social threat and crisis, in a way the forward motor of his ideology and the one that we could associate not just him, but someone like Alexander Karp or Peter Thiel as well, is they actually are not promising intergenerational upward mobility or even really mass prosperity or a higher standard of living.

What they're really promising, and this comes through clearly if you read something like the book, The Technological Republic, is they're promising security and safety and protection from the pervasive risks that they spare no verbiage in conjuring up for you as a potential part of this contract. The move for Musk from the cherry red Roadster in the Obama era, which I think was still more of a Fordist product in the sense that it said to Americans, "You can go green without really changing much about your lifestyle." We can fight climate change while also still having beautiful vehicles in our garages. It might even look nicer.

It was a moment of democratic, still optimism, let's say, about slowing down, maybe even halting climate change. By the time you get to the rollout of the Cybertruck, things look quite different, as we talk about in the book, because if you're paying attention, you know that climate change will no longer be stopped, and that climate risks will continue to propagate.

The product that Musk is now selling is also tooled to the zeitgeist, too, where he's saying, "Now I'm selling an electric vehicle so that you'll have security when the grid goes down, when the next tornado hits, when the next unexpected blizzard hits in March or April or whatever." That is also just the tenor of Muskism is different than Ford, too, in the sense that it offers protection rather than prosperity.

If I can just add one more thing about the Ford comparison, his relationship to finance is quite interesting to look at and compare to Musk, because in a way, the inter-complementary nature of Ford's antisemitism was very much tied into his anti-financism. He believed that Wall Street was out to get him, that the financiers were always trying to defeat him, and that he needed total control, partially because East Coast financiers read Jews, in his mind, were trying to undermine his Midwestern ethic of the artisanal workshop, spilled out to the size of the River Rouge plant.

Musk also expresses these moments, as do people like Karp, about hatred of short sellers and hatred of those parts of the market that tend not to believe his outsized promises, but he is much more dependent on it than someone like Ford was. He actually needs to be able to go to the Gulf and get capital to help buy Twitter or to help back the new big XAI rollout, spending a billion dollars and burning a billion dollars a month right now.

This is why I think stories that have tended to be circulating now, especially on the more tech-critical side of the progressive left, about the endgame being the network state or totally privately run cities, either in the Caribbean or the South Pacific, we feel those miss the mark because if you want to do the kind of investment at scale that the AI model, for example, requires, you can't do it on an island in the Caribbean.

You literally need the conscription of all of the social forces available to make it possible to build out data centers of the size you need to make credit available at the depth that you need, and to win authorities over to a project that will be transformative, not just for a small number of people, but as you keep promising your investors, for everyone.

Bethany: I wanted to broaden out for a bit just because you invoked Martin Wolf, and we've had him on this podcast. We, too, have argued that capitalism and democracy go hand in hand. It sounds, maybe not necessarily from this book, but from some of your other books that you more see them maybe as diametrically opposed. I'm reading into the comments you just said now, but it sounds like from that, you see democracy at its best as perhaps keeping the worst elements of capitalism in check. I'd love for you to articulate what you think about that relationship.

Quinn: Sure. I wouldn't say that I think that they are diametrically opposed, but that they have a very unstable relationship to one another. If you look at the history of the 19th and 20th century, then you see a very halting expansion of what we would think of as democracy, just keeping it narrowly to the idea of suffrage. You could read this as a long-term process of the fumbling towards institutional arrangements within which democracy would not offer an existential threat to the basic premises of a capitalist order, however understood, minimally understood as like a system in which most of the resources are allocated by private means.

The story of my first major book, Globalists, was about this from the 1910s to the 1990. How did a period in which there could have been many moments where capitalism was unseated altogether nevertheless keep capitalism as the dominant and eventually the triumphant mode of organizing political economy by the end of the 20th century? The way that I argue that that worked was partially by narrowing the definition of what democracy meant, partially by taking certain decisions out of democratic elected governments' hands that might produce anti-capitalist alternatives, and then, in some cases, by scaling downward to create sites of investment and the organization of labor that acted as zones of exception from that normal democratic oversight or legal accountability.

This dance between democracy and capitalism, which is really what characterizes neoliberalism in the 20th century, has been about saying, how do we make these two things work together? The interesting thing about Musk, just taking him as of an intellectual figure, is not a question he really asks himself. He doesn't think about politics in the way that the tradition of neoliberalism and classical liberalism before had thought about it.

That tradition was, at some level, about people in space coming together and forming relationships, either coercively or voluntarily, and then agreeing on a set of binding principles that somehow split the difference between the material needs and interests of everyone adequately that it would tumble along for a while until the next paradigm came along. That would be a way of thinking about the politics from the lived world into something like, let's say, social media, where then people wonder if the public sphere is being tainted or civil society is being hollowed out.

Musk and Andreessen and Altman and all of them work from the network out. They think first about a form of sociability and human connectivity that is online, in which people are primarily signal sending and receiving nodes in more or less horizontal and decentralized networks. Then working backwards from there, they ask, what kind of a society could best serve the primary imperatives of that networked world?

If you work that way with a really, really severe case of engineering mind, which is what Musk has, then not only are you actually the worst nightmare of someone like Friedrich Hayek, who saw this utilitarian thinking, Saint-Simonianism thinking, mechanistic thinking as what he was fighting against, but you're also in a place where principles of compromise or meeting people halfway would be the exact wrong solution to be coming to.

If you're an engineer, there are good solutions, and the kind of engineer Musk sees himself, there are good ways of organizing things, and then there are bad ways of organizing things. Your goal is to optimize. If you approach the social contract, society as a problem of optimization and efficiency, you lose 90% of the history of political thought, and you start speaking a language that normal people find very alienating.

That's where we are with someone like Musk, is he speaks in a way that doesn't make sense to most people because most people experience the world in a very different way than he does. We don't think of ourselves as non-playing character bots who have chips inserted in our brains that make us act in one way only, and we need to wait around for someone else to insert another chip on our brain, which is quite literally how he understands how most people operate because we come to our politics through a dynamic interaction with our world and the people around us. Unfortunately, for all of us, that's not the way that he sees things.

Luigi: To some extent, he seems very much a product of his grandfather. As you know, his grandfather was a leader of the technocratic movement in Canada that wanted to replace democracy with a society run by engineers and scientists. It seems that they're closer to that particular view of the world of the beginning of the 20th century than anything else. No?

Quinn: I think so. It's an argument we handle with some care in the book, because he only knew him for a couple of years, and even then, as really a baby. He died, I think, when he was four, when Elon Musk was four. If those ideas came to him, then it was somehow indirectly, not seemingly through his mother, who is not someone who really entertains this level of philosophizing. If not that, then there is a kind of elective affinity somehow between their two ways of approaching the world, which I do also find uncannily similar.

Even if one doesn't make the claim that it somehow genealogically came from him, then the point still stands, which is it's like a remnant of a moment in the 1930s when people were losing faith in the viability of democracy, and they felt drawn to these megaprojects of social transformation that would render out of service many of the normal veto points of collective discontent and put a lot of power into the hands of a central dictator-like engineer.

This is indeed why Fordism was so popular under so many different political conditions in the 1930s. Stefan Link is a great historian and wrote a book called Forging Global Fordism. He describes quite literally how Ford's book, My Life and Work, became a bestseller in the United States, sure, but then also Nazi Germany, also the Soviet Union, fascist Italy. All of these places found it possible to adopt his ideas of top-down rationalization for their own political ends.

It definitely seems that the incredible concentration of power and leverage in the hands of a small number of people that we're living through now has also offered fertile soil for the sprouting up of that delusionary sense of possibility again, and has also made enough people persuaded by the incremental material improvements that happen through them buying into these fantasies that it's, in a way, as I began by saying, one of the contenders for a dominant way of organizing the world.

We always find it helpful to point out that one of the top 10 holders of Tesla stock is the Norwegian oil fund. In Norway, the sale of Teslas fell off by 90% in the last year, and yet the future of the Norwegian welfare state is very much dependent on people continuing to be persuaded by the fantastical projections of someone like Elon Musk.

This is, I think, an important thing that we're trying to draw attention to, that his mania, such as it is, is also a load-bearing infrastructure for the global investment community right now, and will become even more so in a couple of months with the IPO of SpaceX, which he's already set up to fast-track into the indexes, so that it will immediately then become part of index funds and even more enmeshed, I think, in everyday people who might be very anti-Musk in their personal life, but are now wound up with his fantasy world in intimate ways regardless.

Bethany: Let's pause on that for a minute because I've always been fascinated by this distinction between the fraudster and the visionary. I've argued at times that these characters are actually really quite similar. This financial fabulism of Musk, how unique do you think that is to him? How much do you think that is a feature of particularly the American business landscape now, and maybe one that's led by him? In other words, is it Musk's lineage that made Sam Altman possible?

Quinn: I think he's very much part of a larger cast of characters in this case. As we describe in the Silicon Valley chapter of our book, when he arrives in the valley in 1995, this was the era when many, young people able to spin plausible yarns were making their fortunes, often on technologies that would either lose money for years or never work at all. It's something he learnt in a milieu of other people doing the same thing.

There is definitely a dynamic in the United States that corresponds to both the importance of venture capital as a part of the investor market, and then, of course, just the retail investor. Then, the institutional investor beyond them. The venture capital being the sector of finance capital you need to persuade first to be able to get the kind of development money and the seed money that all of these startups require at the beginning of the development of their products before the IPO, before the VCs can exit.

There is always going to be a money-losing phase. That is also then, interestingly, perversely incentivized to correspond to ever greater valuations of how much this company is going to be worth. As the VCs manage to value it higher and higher, they're also increasing their payday when the thing finally exits in the case that it does. It usually doesn't, but only a few have to, as we know by the power law argument that Sebastian Mallaby and others have made. Only a couple need to work to pay for the rest of the failures.

That need, that imperative to exaggerate and to fabulate, is, I think, completely structural to the Silicon Valley digital capitalist model. You won't find anyone who has held their job for long as a CEO who's not willing to go along with that. It's another thing that's worth pointing out about Musk that's so unusual, is how long he's been the CEO of something like Tesla. It's not actually normal for people to remain CEO for now almost 20 years at that company. In that sense, he is obviously the most visible indicator species of a certain style of digital capitalism, but I think he is not unique. He's just an exaggerated, or like one of the most flamboyant people in the species.

Luigi: Speaking of fabulation, Musk has this obsession with Mars and colonizing Mars. Once I heard Peter Thiel saying that actually Mars is not a technological project, but it's a political project, which goes back to the previous discussion we had about maybe creating a separate state or seceding and et cetera. How do you see the mass myth or project within the context of Muskism?

Quinn: That's an interesting one. It's one we definitely struggled with. It's certainly the case that for someone like Peter Thiel, he's one of the people who's been most on the record, 2009, for example, saying, basically, we need to exit from democracy and all of its forms. There's really only three places we can build something real and new, which is the internet, outer space, or out in the open seas, seasteading.

It makes sense that Thiel would read Musk's project that way as really being more about political experimentation, the creation of new jurisdictions for ever more distant forum shopping, which is, I'm sure, how Peter Thiel imagines interplanetary settlement. We think that Musk intends the Mars project politically, not so much as a dream of doing politics differently beyond the Earth's orbit, but that he uses it as a way to blackmail governments here on Earth.

One of the things that he's fond of doing is saying, "If you don't sign up to my vision of the future, then you are going to be left behind. I'm at the forefront, for example, of reusable rockets. I'm at the forefront of low Earth orbit satellites. I'm at the forefront of building Starship, the biggest rocket ever built," which ostensibly is for Mars colonization. If you look at the coverage in The Wall Street Journal, for example, last week, they had a big piece about how Starship is actually going to revolutionize warfare because Starship is not being used-- won't be used primarily for going to Mars because the orbits only line up every couple of years anyway.

It's a pet project, but it can be used for delivering munitions in ways that keeps the delivery vehicle far out of harm's way from land-based anti-aircraft missile. The Iran war right now probably shows even more that you don't want to have the normal vulnerabilities of F-16s and this kind of aircraft. Starship offers what's called the beyond-the-horizon fleet, basically, where at any moment you can deliver the full payload of the things that you want to your forward operating troops.

That's an example where we think that it would be foolish to take him at his word in this case, to think that he is just doing everything to get to Mars. Rather, the way of framing his intentions as being about Mars actually allows him to produce a bunch more leverage and pressure points on both investors and potential state customers here on Earth. Incidentally, we have a piece in The Atlantic that will come out next week pursuing this in relation to SpaceX, because SpaceX and Starlink, again, on paper, why is he doing it? To get to Mars.

What is Starlink actually doing these days? They've just launched Starlink Mobile. They're beginning to offer direct-to-cell internet service and cell service. They have filed a request with the FCC to increase the number of satellites in orbit from 14,000 to 1 million, meaning this would be a kind of monopoly position in low-Earth orbit for Musk and would potentially be a chance to build out a monopoly on global telecommunications writ large. There's an example where getting to Mars ends up being about political and economic pursuits here on Earth much more than the Heinleinian fantasy that he often spins in his shareholders meetings.

Luigi: To what extent the abundance agenda of Ezra Klein and company isn't just a lighter and maybe kinder version of Muskism? Musk has this intolerance for the veto that democracy puts along the way of the entrepreneur. I think that there is a lot of that in abundance. There's a lot of that in the book Breakneck-

Luigi: -that has been loved by all the venture capitalists and then so on and so forth. What is the relation between the two?

Quinn: We've thought about that as well, because the similarity does seem to be there if you just break it down to its core components. I think that it brings up the question of the comparison to China, which is at the heart, obviously, of the Dan Wang book, but also in the Klein and Thompson book. A lot of what we think of as the emergent Silicon Valley approach to governance could be seen as their attempt to, as they see it, emulate or mimic China.

The way that they understand the Chinese success is that there's been indeed a symbiosis between tech leadership and party leadership that has allowed for a more rational distribution of obligations and resources around the country, and definitely the steamrolling of any question of local descent or no need to attend to the NIMBYous of this or that province because they were never being considered in this model in the first place.

Musk, Thiel, Klein and Thompson, and Dan Wang all are united by this belief that China is a country of engineers, as Wang puts it, and that part of America's problem is it's a country of lawyers. If it actually wants to achieve these necessary, in some ways civilization-saving technological pushes, then it needs to start being more of an engineer and less of a lawyer. We've thought about that. One of the things that Ben and I both find interesting is that, first of all, it doesn't take seriously the extent to which that apparent partnership between tech leaders and political leaders in China is a clear hierarchy in which the tech leaders are in a very subordinated role.

The Jack Ma example is only the most obvious demonstration for the rest of the class about what might happen if you at all try to speak out of class about the party's leadership style. Also, they assume that the problem of the United States is that we have too many laws, too many veto points, too many voices in the grassroots level. What if the problem with the American capitalist model is that investment is too disorganized, and investment is actually chaotic and not driven by a plan? It's investment, really, not NIMBYous that produced ridiculous valuations and bubbles around what are ultimately now socially destructive technologies, from TikTok to Meta.

TikTok now purchased directly by Trumpist allies. It seems that the failure to discipline capital is actually the core failing of the United States in its attempt to have a more prosperous, abundant society along Chinese lines, not its submission to an excessive number of local nonprofits and community activists. That would be our rebuttal to, I think, all of them who do, I think, they share a certain fetish for that. One wouldn't want to go too far. It's obvious that the discussion about respecting compromise in civil society in many ways is at the core of the abundance agenda.

It's about trying to deliver on the goals that they think Bidenomics was not able to deliver on, which is to create a virtuous cycle where voters are also seeing the material effects of state industrial policy and investment in their everyday lives, and therefore, lending more sympathy to the people in government and putting them back in government and allowing that relationship to expand. Klein and Thompson have a much more subtle and democratic understanding of how politics works than the program version that I'm saying that the tech leaders do. I think that unwillingness to discipline capital itself is probably what unites them.

Bethany: We're almost out of time, which is a bummer, but I had a last slightly odd question for you. You're clearly a science fiction fan. Musk and Silicon Valley have taken criticism for some of their illiteracy regarding many classic texts. What's your favorite example of something that they got wrong? Just for reference, I was watching Lord of the Rings last night, so I fall into this camp too.

Quinn: It's actually become a popular parlor game, in a way, to point out the misreadings of people like Musk of science fiction, which is they overlooked was actually trying to criticize people like them, but they missed the point and thought it was celebrating people like them. This is best summarized in the famous-- There are some famous tweets, and this is one of them, where it's like, science fiction writer, I've written a cautionary tale about the torment nexus. Silicon Valley investor. Check out my new torment nexus.

We were almost a bit wary of just reproducing that, because I think there's some ways in which it's a bit of a trap. I think that Peter Thiel talking to a theologian in Salzburg or making reference to this or that philosopher, René Girard or whatever, misleads those of us who are humanists into thinking that that's a way to decode their behavior and their core motivation. Whereas actually, it's almost more like throwing cookie crumbs over to fool us, to get us off the trail.

We think that capitalists come to their ideas and ideologies in the practice of being capitalists. They don't go to work at 6:00 in the morning and come home at 7:00, and then read a book before bed and get their ideology from the book before bed. They get their ideology from the factory floor, from the ability to persuade investors of the profitability of their company, the ability to win favor with this or that state.

Interestingly enough, though, and this is maybe the way to answer your question, they find useful science fiction as a reservoir of storytelling, as a reservoir of yarns and of speculative projections. That then become the raw material for their sales pitch, that become part of the modules that they click together to sell the next big pension fund on the viability of orbital data centers or humanoid robots or whatever the case may be.

One of the things that we found interesting thinking about this is that Musk has, through his sequence of successes and his ability to fall forward after every apparent obstacle, basically convinced himself that he's invulnerable and that he needs to follow the logic of science fiction to continue to be successful. Not necessarily Asimov, but very much Douglas Adams, Hitchhiker's Guide to the Galaxy, which if you've read it, it's like someone being swept out of their weird town in Northern England and then just spirited around the galaxy, part of these hijinks. It's basically just a goofy caper.

What it does have to it at its core is this zany engine of ironic outcomes where people think something's going to happen and then something else happens. The person who looks like the villain ends up being your friend and so on. We have speculated that Musk has almost absorbed this idea of not historical materialism, but hysterical materialism because he's become persuaded, as he puts it, that the funniest outcome is the most likely.

In a way, every time he reaches for something more ridiculous, the world congratulates him and rewards him, so he just keeps going. He's like, "Why would I stop?" That, in some ways, was the puzzle that motivated us at the beginning is, how can this perpetual motion machine of absurdity end up also accumulating the largest stockpile of wealth that the world has ever seen in a single individual? That's a pretty intriguing puzzle, actually.

Luigi: Do I have time for one last short question?

Quinn: Sure. One more. I have to get my kid.

Luigi: It turns out that Musk grew up in South Africa, Peter Thiel grew up in South Africa, David Sacks grew up in South Africa, even you grew up in South Africa, or Lesotho, but it's close to South Africa.

Quinn: Southern Africa.

Luigi: It seems like in the 20th century, most of the thinkers are coming out of Vienna and the Habsburgic empire. Now, most of the thinkers and entrepreneurs seem to come out of South Africa. Is that just a coincidence?

Quinn: It could be. If I were to speculate that it's not, I would say that there's something that those two places have in common, which is they're the sites of late empire. I think Vienna, what made it interesting, as I argue in Globalist, is you had these people who were trained and socialized to be stewards of this rather large empire, and then the empire was suddenly gone. They were forced to reinvent themselves and rethink, what scale does this operate at? Maybe it's the world instead of just the Habsburg empire. Maybe international law needs to be rewritten, not instead of imperial law.

That being thrust from one seemingly eternal paradigm into another quite literally overnight can, I think, have this pedagogical shock effect and force you to reorient yourself. Apartheid South Africa in the '80s and then into the period of one person, one vote after 1994 experienced that as well. They had this era where they were out of step with the rest of the world. They were a white supremacist, essentially a settler colony left at the bottom of a black continent, a black-governed continent by the late 1980s, and then they weren't.

If you were a child of that place, you needed to somehow reckon with that and figure out where to escape to, what scales to operate instead of the scales you'd been raised at. For us, one thing we would say is it's not for nothing that people who were raised in that milieu then fantasize so much about frictionless connection and movement and consumption. One thing I can say as someone who spent some chunk of my childhood there is as a white person who feels like you should be part of a global industrialized north through your socialization somehow, and yet you're not, it really cultivates a strong sense of yearning for access.

You want to be connected. You're looking for a lifeline. You're clinging onto that magazine that comes down to you from the airport in Heathrow or whatever it is. That sense, which is not so far from what Lea Ypi describes in Albania in her childhood, also then cultivates a strong desire for escape, but also where can you make sure that you'll never have to be impoverished again?

For Sachs, he has this wonderful line from 1999 or 2000 that we quote in the book where he says, I imagine one day in the future you'll be able to pull out your phone and order a Starbucks coffee and walk into the cafe and pick it up and pay for it without ever interacting with someone. He said that in the year 2000. It's like, "Okay." In that case, they definitely did make the future. You have to hand it to them. Whether it's a future we want is another question.

Bethany: I found it pretty compelling, especially the role that financial fabulism plays, because I think I've always tended probably to a fault, to think of it as Musk being unhinged or misrepresenting the prospects of his companies in order to get capital. I think there actually is more to it than that. When you see how much it can perpetuate itself, I think that makes me take it more seriously.

Luigi: You're right, but I have to say, the term hysterical materialism is [unintelligible 00:47:23]. I think it's a fantastic term and very appropriate for Musk. A little bit like Trump, I think that this they have in common is they go so extreme that is difficult to take them seriously. As I think as a commentator say, you don't have to take them literally, but you have to take them seriously, and people take them literally, and they don't take them seriously.

Bethany: Seriously, yes. I found the idea that this is something that is vying for perhaps the organizing principle of the future to be interesting. I've tended not, I think as a journalist, maybe not to think about these ways in which people have made sense of the world or made sense of the relationship between the state and private actors. Thinking about this as the direction that we're evolving into, it's a really interesting framework.

Luigi: Yes, absolutely. I have to commend Quinn, because coming into it and having read some of his previous books, I thought he was going with a particular frame of mind. In fact, he is very clear, and in the interview, he was even clearer than in the book. There is no relationship between libertarians and Musk. Musk is almost at the opposite end of the spectrum as a libertarian. That clarity, I think, is very helpful.

Bethany: I think so, too. For some reason, I may be wrong, but I seem to remember that when we started this podcast many years ago, you were more of a believer, very much a believer in the idea that democracy and capitalism were intimately related. In a sense, Quinn's thinking is also a continuation of the thinking of other people we've spoken to, including Branko Milanovic and others who have argued that, no, there's not really necessarily any relationship between the two.

Luigi: Unfortunately, I sound like a lawyer, but it's very much a question of definition. If you intend capitalism as simply a way where you have freedom of enterprise and people can get rich, I think there is not necessarily a relationship. If you want a society in which capitalism actually is competitive and deliver to a majority of the people, yes, we need a democratic element. To me, this is exactly the fracture that we see taking place today where we see capitalism in the narrowest sense flourish at the expense of democracy. As a result, we don't have a system that actually improves the life of the majority of people. It ends up being quite beneficial only to a small elite.

Bethany: It's actually fascinating how much all of this is a function of short-termism. I have been thinking about that because I first encountered the idea of short-termism way back in the days of Enron, and it became this defining cry of the business world or at least the corporate governance meetings and panels about how we could get rid of short-termism and make everything more long-term, but the fact that the financial markets have become more and more short-term has actually permeated all of society.

You have the capitalists only worried about the short-term earnings, yes, but that has pervaded, I think, their sense of the world, so they no longer worry about keeping the system safe for capitalism by making sure it's working for everybody because everything is so short-term, that as long as it's working for the next quarter, nobody can even pause to think about what happens to capitalism if it stops working for everybody. Does that make sense? Is that an incredibly banal observation, or does that resonate with you?

Luigi: Neither. [laughter] I think that it's not benign, but I disagree, and I disagree for the following reason. It is very much a 1990s view of the world where you have a GE manufacturing earnings so then never to disappoint the next quarterly earnings. Think about the world of today where you have OpenAI. What are the earnings of OpenAI? Did anybody look at the earnings of OpenAI or even Anthropic?

Earnings are nothing. All that matters is the long-term success. Two, I don't think that the long-term is necessarily such a panacea because this view is, "Oh, if we only were long-termists, then all the problems would be solved." Of course, there are problems of being short-termists, but I don't think that the only problem of capitalisms is people are not long-termists enough.

Bethany: Okay. I agree with the second part, and that's interesting. I don't agree with the first part because I think that that ability to be long-term oriented applies to a very narrow number of companies, and is by very much a subset. Even that subset of companies is on a schedule to deliver, which maybe is appropriate. I think the companies that it can escape the stricture of the short-term earnings game are very, very few and far between. They actually, just to bring it full circle or somewhere else, they actually do have CEOs who are financially fabulous and who are able to get the market to believe in the version of the long-term that they're articulating.

Luigi: Absolutely. I think I agree 100% with that. It is fabulism is the opposite of short-term earnings.

Bethany: Yes, but it's a very small set of companies. I think the short-termism applies to most companies.

Luigi: In terms of numbers, they are very small, but if you multiply by market capitalization.

Bethany: [laughs] Or by meaningfulness to the American economy. I suppose that's true. That's fair. I also thought it was really interesting his critique of the thought in abundance. This idea that it's actually the failure to discipline capital, not the fact that we have too many laws. When you think about things that have gone terribly wrong economically, it has been the failure to discipline capital.

This idea that while the private sector wouldn't be pouring all this money into mortgages made to people who couldn't pay them back if it didn't make economic sense. It didn't make economic sense and they did do it. Anyway, I think that's a really interesting way of thinking about maybe we're misdiagnosing the problem, or maybe there are two problems. In other words, you can have a problem of all of these petty laws that are holding back things that should be happening. This broader idea of disciplining capital-- Of course, disciplining capital is antithetical to the notion of the free market, but it's fascinating. Anyway, what did you think when he said that?

Luigi: No, I love that point. I always thought that one big advantage of China is that China has an alternative source of power, which is the Communist Party. Using that power, you can discipline capital in a way that you cannot-- Disciplining capital, not necessarily in an anti-democratic way. Now, China might do it in a non-democratic way, but think about imposing antitrust. It's very difficult to do it in a system where companies have so much political power.

The problem of the United States is that there is no source of power alternative than money. This goes back to the role of democracy, a true democracy, where you have the power coming from the consensus of the people, not from how much money you're paid, is an alternative source of power. In the United States, this representative democracy has been weakened, and so we are into a plutocracy that reinforces the power of money. In China, they have a form of discipline. Now, unfortunately, it's not democratic, and so there are a lot of other problems. I'm not envying the Chinese system, but I agree with Quinn that the Chinese system has a tool that the United States one has lost.