On November 6, just one day after Donald Trump's victory in the US presidential elections, Elon Musk, the world's richest person, became US$26.5 billion richer.
A week after the elections, in addition to the almost US$26 billion immediately added to Musk’s pocket—whose company's shares have risen by 65% since then—he saw his fortune increase by US$70 billion.
A month later, on December 11, the world's richest man became the first billionaire to reach the US$400 billion mark, according to Bloomberg. But even this unprecedented figure has also been surpassed. At the time of writing, Musk's wealth is estimated at US$486 billion.
According to The Guardian, Musk, who is a staunch supporter of Republican politicians, donated US$277 million to Trump's presidential campaign. His “investments” in US politics assured him excellent results.
Trump was elected with an overwhelming electoral college majority and created a government position for Musk, who will be one of the leaders of the Department of Government Efficiency, a panel with bold ambitions to cut government costs and restructure federal agencies.
The problem is that both Musk and Vivek Ramaswamy, another of Trump’s appointees to the department, are businessmen with major public-private conflicts of interest since most of their companies' contracts involve the US government itself.
To Rodrigo Rodriguez, an economics professor at Rio de Janeiro State University (Uerj, in Portuguese), Musk has bet big on Trump's campaign, mainly “because he is on the radar of federal investigations into his companies."
“The bet he is making on Trump is that he will have a greater capacity to demolish the regulations that persecute him. But he will do so by defending this in terms of 'debureaucratization' or defending the 'economic efficiency' of the country,” the professor told Brasil de Fato.
The source of money
Contrary to what some may think, Musk doesn't build his wealth from daily toil. The entrepreneur owns cutting-edge technology companies such as Tesla and SpaceX, which manufacture electric cars and supply equipment for space travel, respectively. Simone Deos, an economics professor at the State University of Campinas (Unicamp, in Portuguese), explains that a large part of the wealth of millionaires and billionaires like Musk and Trump comes from selling shares of their companies, whose prices fluctuate due to financial speculation.
Musk's companies are publicly traded, that is, their shares are traded on stock exchanges. “Each time the price of these shares changes, the wealth of those who hold shares is also impacted – up or down.”
And this change, caused by financial speculation, “is not about what Musk's companies are earning in the present, but about the possibilities of earning from the change in the political scenario,” explains Rodrigo Rodriguez.
The billionaire's high-tech companies are part of sectors that “were not chosen by chance: They are strategic for the US government for various reasons," Rodriguez points out, emphasizing the role they play in the “trade war with the Global South, especially China”.
Conflict of interest
“Most of the [public-private] relationships that involve US government funding are associated with the billion-dollar contracts with NASA and the US Department of Defense,” added Professor Rodrigo Rodriguez.
SpaceX, for instance, recently signed a confidential contract with the US National Reconnaissance Office (NRO) worth $1.8 billion, according to The Guardian. And Trump's victory in the presidential race also meant a bureaucratic victory for Musk.
The South African-born entrepreneur, a naturalized US citizen, bet big on Trump's campaign “because he is trapped by federal investigations into his companies”, because “he constantly bypasses state interests”, explains Rodriguez. An example of Musk's delusions of grandeur is the investigation into X (formerly Twitter) in Brazil.
In all, Musk's investigations and accusations at the federal level in the US are more than twenty, on issues ranging from discrimination and environmental protection to violations of labor legislation.
The deregulation of which Musk will be one of the leaders in the new Trump era is “the key point for creating more precarious working conditions and increasing environmental degradation, which are the future forms of wealth enhancement and objects of interest” for the tycoon," adds Rodriguez.
However, Musk's actual role within the US government “is becoming less and less likely” and this move would be “more symbolic than practical, as the way to influence the country’s administration will continue to be the traditional lobbying of companies and indirect political agreements.”
Lack of boundaries among powers is “structural”
Musk supports the new Trump era because he believes the financial logic that sustains his companies will be further strengthened. A space where the loosening of corporate laws can be leveraged. “Musk is with Trump because he thinks he will be able to influence deregulation measures in his favor.”
That’s why many accuse Musk of “buying” his way into the government of the most powerful country in the world. “It makes sense because this is a democracy in which the winner is elected in a contest between financial machines and different capitalist projects,” says Rodriguez.
This doesn't mean that money alone, through advertising and electoral donations, elects candidates. “It means that voters’ decisions are strongly influenced by it,” says the expert. This strong influence on the government is not due to a lack of mechanisms to limit them, but is structural, according to the economics professor.
Musk's difference from other tycoons in any other economic sector is that “he acts openly and that makes the problem clearer to us, but it's not because we don't see so many businesspeople campaigning that it's not happening everywhere”.
“We can take measures to curb excesses, but the structural issue would involve a deeper discussion of what guides our democracies,” adds Rodriguez.
Edited by: Dayze Rocha
