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Why Governments Can’t Unplug From Elon Musk · Trumponomics

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Speaker 1: Bloomberg Audio Studios. Podcasts.
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Speaker 2: Radio. News.
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Speaker 1: I'm Stephanie Flanders, head of government and economics at Bloomberg,
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Speaker 1: and this is Trumponomics, the podcast that looks at pretty
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Speaker 1: much everything in the economic world of Donald Trump. Today,
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Speaker 1: we're stepping back from the news for one of our
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Speaker 1: sporadic conversations about a book that I think casts new
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Speaker 1: light on some key Trumponomic themes. The book is Muskism,
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Speaker 1: A Guide for the Perplexed. It came out a few
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Speaker 1: months ago, and I should say it's not a traditional
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Speaker 1: biography of Elon Musk, but an analysis of Muskism as
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Speaker 1: a worldview, or as the book puts it, an operating
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Speaker 1: system for the 21st century. Now, We should probably also
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Speaker 1: add it's not a sympathetic portrait of the man or
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Speaker 1: that worldview, but the authors do capture some of the
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Speaker 1: big developments in 21st century capitalism and Trumponomics that we're
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Speaker 1: living with now. that were either pioneered or greatly exploited
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Speaker 1: and accelerated by Elon Musk. And those authors, I'm happy
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Speaker 1: to say, are with me now. Ben Tarnoff, technologist and
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Speaker 1: co-founder of Logic Magazine, who's written for a lot of
1:21
Speaker 1: publications and also wrote in 2022 the book Internet for
1:26
Speaker 1: the People, The Fight for Our Digital Future. Ben, thanks
1:29
Speaker 1: for joining Trumponomics.
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Speaker 2: Thanks so much for having us.
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Speaker 1: And Quinn Slobodian is Professor of International History at Boston University,
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Speaker 1: a Guggenheim Fellow for 2025-26, and author of the book
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Speaker 1: Hayek's Bastards, Race, Gold, IQ, and the Capitalism of the
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Speaker 1: Far Right, which won a bunch of awards, including National
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Speaker 1: Book Critics Circle Award. Quinn, welcome.
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Speaker 3: Happy to be here.
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Speaker 1: Thank you. I'm going to not necessarily point particular questions
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Speaker 1: at either of you and just hope that you've reached
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Speaker 1: a kind of symbiosis having written this book together. One question,
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Speaker 1: the obvious one, is why write Muskism? What was the
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Speaker 1: point of doing it?
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Speaker 3: Well, I think we'd both been in the same position,
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Speaker 3: which is being overwhelmed by the presence of Musk and
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Speaker 3: in many ways wanting to mute him from our stream,
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Speaker 3: both metaphorically and literally. But especially at the height of
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Speaker 3: Doge and after having respectively reviewed the Isaacson biography, we
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Speaker 3: felt like there was a story about Musk that wasn't
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Speaker 3: really being told. There was really a more structural story,
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Speaker 3: a story about political economy, less about his psyche and
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Speaker 3: his drug habits, and more about the world that made
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Speaker 3: him possible. So we really wanted to explain this gap
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Speaker 3: between his absurdity, grotesqueness, and almost risibility And then the
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Speaker 3: fact that he has been rewarded more generously and opulently
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Speaker 3: by the global economy than any person in history. How
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Speaker 3: can you account for this gap between a kind of
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Speaker 3: a mockery of a man and the rewards of the system?
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Speaker 3: That was the motivating question I think we set out
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Speaker 3: to answer.
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Speaker 1: That was what was striking to me. Some of it
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Speaker 1: was illuminated by his life story, or you were using
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Speaker 1: bits of his life story to show how he had
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Speaker 1: come to exemplify these kind of key features of a
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Speaker 1: certain model of capitalism. And as you say in the book,
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Speaker 1: an operating system for the 21st century. Also a very
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Speaker 1: prominent feature of Elon Musk is his political worldview. But
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Speaker 1: For this conversation, I'm particularly focused on these sort of
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Speaker 1: elements of his approach to capitalism that you draw out.
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Speaker 1: One of them is this key theme, his approach to
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Speaker 1: business that doesn't try to escape the state, but actually
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Speaker 1: using the state to build market power, to build wealth
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Speaker 1: and profit. So maybe take us through that and a
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Speaker 1: little bit of where we've seen that in his life story.
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Speaker 2: Well, this is one of the misconceptions that accompanies quite
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Speaker 2: a bit of the commentary on Musk, which is to
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Speaker 2: present him as a libertarian, as a figure who's interested
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Speaker 2: in shrieking the state or escaping the state. But what
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Speaker 2: one finds when you look at the entire arc of
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Speaker 2: Musk's career since his early beginnings in Silicon Valley during
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Speaker 2: the 1990s dot-com boom is that he has consistently sought
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Speaker 2: to instrumentalize the state as a source of power profit,
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Speaker 2: that far from trying to exit the state, he has
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Speaker 2: tried to achieve what we describe as state symbiosis. So
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Speaker 2: to find a profitable integration with government power in ways
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Speaker 2: that help him build his businesses. And the really clarifying
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Speaker 2: case here is that of SpaceX, which more than any
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Speaker 2: of his other ventures has managed to really achieve this
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Speaker 2: extraordinary level of state integration.
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Speaker 1: I mean, it's funny because I was talking to someone
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Speaker 1: in Europe about, you know, they were doing a sort
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Speaker 1: of classic economic study of public-private partnerships and how the
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Speaker 1: Europeans had worked with various rocket manufacturers and others and
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Speaker 1: which ones were successful and which weren't. And I was
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Speaker 1: asking him sort of, okay, but is it a success
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Speaker 1: if you've got a lot of rockets but you're completely
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Speaker 1: dependent on this one private sector project? company that you've
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Speaker 1: worked with. I mean, that is one of the key
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Speaker 1: things that you bring out, these sort of public-private partnerships today,
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Speaker 1: not partnerships of equals, especially when you see things like Starlink.
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Speaker 3: Yeah, I mean, if one of the canards we were
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Speaker 3: hoping to dispel with the book was this idea that
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Speaker 3: Silicon Valley ideology can be easily summarized as libertarianism, I
5:50
Speaker 3: think another one of the easy dismissals of Musk that
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Speaker 3: we wanted to unsettle was the idea that he's simply
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Speaker 3: a crony capitalist and a kind of a parasite on
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Speaker 3: the system. If you follow the stages of his career,
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Speaker 3: as Ben suggested with the example of SpaceX, he's been
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Speaker 3: extraordinarily adept at making himself useful to the government at
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Speaker 3: different moments. When he rolls out SpaceX in 2002, that's
6:13
Speaker 3: to aid in the expansion of the global war on
6:17
Speaker 3: terror and the new model of network-centric warfare that Rumsfeld
6:21
Speaker 3: imagines it to be conducted through. But then just a
6:24
Speaker 3: handful of years later, he is making himself useful to
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Speaker 3: Obama in the green industrial policy that's designed to electrify
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Speaker 3: the auto sectors to make America less dependent on fossil
6:35
Speaker 3: fuel and less required to enter in quagmires like the
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Speaker 3: Iraq war. So he is actually, as you're saying, managed
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Speaker 3: to offer an expansion of state capacity in certain ways.
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Speaker 3: We talk about this as sovereignty as a service, which
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Speaker 3: in very concrete ways allows governments and clients to do
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Speaker 3: things that they couldn't do before, right? It's very important
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Speaker 3: even as critics to point out that he, through SpaceX,
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Speaker 3: has reduced the cost of putting mass into orbit by
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Speaker 3: over 90% across 20 years of business. So that seems
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Speaker 3: on its face like a kind of positive thing, you
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Speaker 3: could say, a successful public-private partnership, good industrial policy. But
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Speaker 3: it comes with this catch, of course, which is that
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Speaker 3: he holds veto power ultimately over that feature of state
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Speaker 3: capacity you've just gained through your contract with him. And
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Speaker 3: this is made extremely clear, of course, through the discretionary
7:32
Speaker 3: and arbitrary and unexplained and actually disavowed decisions to turn
7:37
Speaker 3: off internet connectivity in the battlefield for the Ukrainian armed
7:40
Speaker 3: forces on at least one occasion in Kherson and probably
7:44
Speaker 3: in Crimea as well. So this is the promise of
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Speaker 3: sovereignty through technology that cashes out as deep dependency on private,
7:53
Speaker 3: ultimately unaccountable individuals. And Musk is in some ways only
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Speaker 3: the most extreme and exaggerated version of that phenomenon across
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Speaker 3: the digital capitalist space.
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Speaker 1: The Ukraine case, It was very striking. And you remind us,
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Speaker 1: the Polish foreign minister has suggested after one of these
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Speaker 1: incidents that they might be forced to look for other
8:12
Speaker 1: suppliers if Starlink was an unreliable provider. And Musk just said,
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Speaker 1: be quiet, small man, which I think embodies obviously the
8:20
Speaker 1: way he approaches things. Peter Thiel famously thinks you should
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Speaker 1: just build monopoly businesses. You don't want to actually have competition.
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Speaker 1: You want to be in the only one in your space.
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Speaker 1: He is quite suspicious of government and wants to replace government.
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Speaker 1: And And Elon has had this different approach of colonizing
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Speaker 1: the state. But the monopoly control is a big piece
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Speaker 1: of it.
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Speaker 2: Teal is a funny case because, of course, among his
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Speaker 2: best-known ventures is Palantir, which was founded shortly after SpaceX.
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Speaker 2: And benefits from, I would say, many of the same
8:55
Speaker 2: political economic developments rides this contracting wave of the war
9:00
Speaker 2: on terror here. and successfully implants itself deeply in the
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Speaker 2: American state, just as deeply as SpaceX. So while Thiel,
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Speaker 2: as you point out, has fashioned himself as a libertarian
9:13
Speaker 2: ideologue of sorts, his actual business practices do bear some
9:18
Speaker 2: resemblance to this muskist state symbiosis dynamic that we're describing.
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Speaker 2: But I think that does point to a deeper dissimilarity
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Speaker 2: between the two men, which is that Thiel has always
9:33
Speaker 2: been interested in presenting himself as an intellectual of sorts,
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Speaker 2: as someone who has intellectual and ideological motivations for his actions,
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Speaker 2: whether or not those entirely justify or align with the outcomes.
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Speaker 2: Whereas Musk, and this is something that I think made
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Speaker 2: writing about him a bit challenging, but also quite interesting,
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Speaker 2: one finds Musk's ideology if you like, in the everyday
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Speaker 2: operations of his businesses, particularly before he turns to the
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Speaker 2: far right. He's generally disinclined to make the kind of
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Speaker 2: grand pronouncements that a Peter Thiel might. But if you
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Speaker 2: want to learn what is the operating system of Muskism,
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Speaker 2: You actually have to look at how does he practice
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Speaker 2: capitalism every day.
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Speaker 1: One of the other themes that you're sort of pulling
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Speaker 1: out from his version of capitalism is that he was
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Speaker 1: kind of ahead of his time before deglobalization. He was
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Speaker 1: into a sort of fortress economy approach to building things,
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Speaker 1: a very vertically integrated production at the time where actually
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Speaker 1: most other big businesses around the world were actually building
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Speaker 1: their very globally integrated supply chains. That is something that
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Speaker 1: comes through and in the end is a great advantage
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Speaker 1: for him, I guess.
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Speaker 3: Absolutely. And that's, I mean, following what Ben said, our
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Speaker 3: analog really here is Fordism, right? And Fordism is not
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Speaker 3: a system that people understood purely by reading the life
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Speaker 3: and work of Henry Ford, but it's something they understood
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Speaker 3: by seeing how he organized manufacturing and then the world
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Speaker 3: outside the factory. But this feature of Musk that is
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Speaker 3: often related to Ford, namely vertical integration, this desire to
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Speaker 3: bring as much as possible of the production under the
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Speaker 3: roof of one firm, has often been remarked on as
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Speaker 3: a unique feature of Musk. He was doing it before
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Speaker 3: it was cool, so to speak, right, already in the
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Speaker 3: 2000s at the high point of kind of supply chain
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Speaker 3: capitalism and high globalization. He was already trying to make
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Speaker 3: as many of the components himself, reduce dependency on contractors
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Speaker 3: and so on. That's always been remarked on, but very
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Speaker 3: rarely or if ever explained. Where did the inspiration for
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Speaker 3: this come from? And I think this is one of
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Speaker 3: the interventions of our book, actually, is to draw on
12:05
Speaker 3: his South African upbringing, not only or merely to explain
12:10
Speaker 3: his later turn to ethno-nationalist and exclusionary racism, but to
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Speaker 3: explain some of his political economic inclinations. So late apartheid
12:20
Speaker 3: South Africa, where, of course, he was raised and left
12:24
Speaker 3: in his late teens, was in a third way in
12:28
Speaker 3: contradistinction to U.S.-led globalization already at the time and Soviet-style
12:34
Speaker 3: search for self-sufficiency in a block model. South Africa was
12:38
Speaker 3: creating what we call fortress futurism. They were using IBM
12:41
Speaker 3: mainframes to practice apartheid. They developed their own nuclear bomb.
12:45
Speaker 3: They built out their own auto industry through licenses from
12:47
Speaker 3: the major companies. And Musk seemed to have brought this
12:51
Speaker 3: mentality with him. He sells and has been successful in
12:56
Speaker 3: marketing to both households and nations, the idea that you
13:01
Speaker 3: can harden the walls of your own security in a
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Speaker 3: time of increasing threats, whether those are climate-related, social-related, political-related, immigration-related.
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Speaker 3: So this seemed to have sort of prepared him in
13:15
Speaker 3: advance for what we now think of as a more
13:17
Speaker 3: recent trend towards reshoring, re-territorialization, and deglobalization. He was already
13:24
Speaker 3: on that train. And when COVID hit in 2020, he
13:26
Speaker 3: was especially well-suited to pivot to a more domestically anchored
13:31
Speaker 3: production model because he was already doing it. And furthermore,
13:35
Speaker 3: he'd already sold that model abroad. So the Gigafactory in
13:39
Speaker 3: Shanghai had opened in 2019. It would open a few
13:42
Speaker 3: years later in Brandenburg. So he's interestingly globally franchising a
13:47
Speaker 3: model that is at least partially premised on deglobalization. And
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Speaker 3: that's one feature of Musk that I think is often overlooked.
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Speaker 1: What you've just talked about for an individual business or
13:59
Speaker 1: for his business, as you suggest, he's also kind of
14:02
Speaker 1: selling it to individuals implicitly that they can be, there's
14:06
Speaker 1: almost like a kind of prepper feel to it. As
14:09
Speaker 1: you say, he sells the fantasy that states and individuals
14:13
Speaker 1: in an increasingly unstable world can fortify their self-reliance by
14:17
Speaker 1: plugging into his infrastructures. But of course, the paradox is
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Speaker 1: that They become reliant on him in the process.
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Speaker 2: No, I think that's absolutely right, that this sovereignty through
14:27
Speaker 2: technology can be scaled either up or down. It can
14:30
Speaker 2: be scaled up to the level of the nation state
14:32
Speaker 2: so he can sell satellite service or launch service to
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Speaker 2: militaries and intelligence agencies around the world who are attempting
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Speaker 2: to protect their countries in a world that feels increasingly unstable.
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Speaker 2: but that he can make that same promise at the
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Speaker 2: individual level. We quote from a presentation he gave where
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Speaker 2: he described a integrated Tesla dome where the various technologies
15:06
Speaker 2: that are provided by Musk could help you achieve total
15:12
Speaker 2: self-sufficiency in a storm. So for instance, you would have
15:17
Speaker 2: solar panels on your roof, You would have a Tesla
15:21
Speaker 2: battery in your basement. You would have a Starlink receiver
15:25
Speaker 2: up top. So you're able to continue to get electricity.
15:29
Speaker 2: You're continued to get Internet service. And you have a
15:32
Speaker 2: Cybertruck in the garage. And when we try to explain
15:35
Speaker 2: this concept of the prepper side of Muskism, we often
15:41
Speaker 2: use the Cybertruck as a perfect visual illustration of that,
15:45
Speaker 2: because it really is. the car that is designed for
15:48
Speaker 2: the end of the world. I mean, not practically speaking,
15:51
Speaker 2: as various researchers have discovered.
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Speaker 1: Certainly not designed with aesthetics in mind.
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Speaker 2: No, and I think its actual resilience is somewhat debated.
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Speaker 2: But in terms of the cyberpunk look, what it's telegraphing
16:06
Speaker 2: is the notion of a world that is breaking down,
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Speaker 2: a world of social and political and infrastructural and even
16:14
Speaker 2: ecological change chaos, that you'll be fine driving through the
16:19
Speaker 2: hordes of protesters or the flood zone in your cyber truck.
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Speaker 2: And that, I think, it also helps explain how he
16:27
Speaker 2: has pivoted politically. Because if you think about Musk purely
16:32
Speaker 2: as the Obama era, bright green future guy, as we
16:36
Speaker 2: call it, then it can be a bit bewildering to
16:40
Speaker 2: now see his current political and ideological incarnation The Cybertruck,
16:46
Speaker 2: I think, helps provide that missing link of the future
16:49
Speaker 2: getting darker and the response being more about adaptation and
16:54
Speaker 2: hardening rather than trying to actually solve the deeper problems.
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Speaker 3: One of the things we also wanted to push back
17:00
Speaker 3: at in the book is the idea that at some
17:02
Speaker 3: point in the relatively recent past, quote unquote, Musk went crazy.
17:06
Speaker 3: In fact, we think that if you follow certain guiding principles,
17:10
Speaker 3: he's actually been quite consistent. And the shift from the
17:13
Speaker 3: sort of cherry red roadster to the Cybertruck may look
17:16
Speaker 3: like a kind of U-turn, but if you think about
17:19
Speaker 3: even awareness of climate change and its consequences and how
17:22
Speaker 3: that's sharpened and radicalized from 2008 when he rolls out
17:26
Speaker 3: the Roadster to the 2020s when he rolls out the Cybertruck, well,
17:31
Speaker 3: the way we understand the future under conditions of climate
17:34
Speaker 3: change has also darkened, right? There's no longer this vision
17:38
Speaker 3: of the possibility of an energy transition in which middle-class
17:42
Speaker 3: consumer lifestyle would remain relatively untouched. There's no prospect of
17:46
Speaker 3: that now, right? Radical weather events are a matter of fact.
17:50
Speaker 3: Extreme transformations of landscapes and territories, whether through forest fires
17:56
Speaker 3: or flooding, are now a matter of seasonal occurrence. So
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Speaker 3: you actually are still the green musk. It's just that
18:03
Speaker 3: the world has changed around you.
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Speaker 1: Yeah, and I think people in that conversation for many
18:09
Speaker 1: years didn't want to sound like it was too late
18:12
Speaker 1: or too... paint only a negative vision. They wanted to
18:15
Speaker 1: suggest that you could still do things because they didn't
18:17
Speaker 1: want to instill a sort of apathy. But I think
18:19
Speaker 1: given the direction that things have gone, they've sort of
18:21
Speaker 1: given up on that.
18:23
Speaker 3: Yeah, there's a fatalism now, even in the ecological community.
18:37
Speaker 1: With the prepper point and the sort of self-reliance, I
18:39
Speaker 1: had a sort of ludicrous example when I interviewed him.
18:42
Speaker 1: down the line in a kind of remote interview for
18:45
Speaker 1: a big conference actually in London and just as we
18:49
Speaker 1: were about to start and his was obviously one of
18:51
Speaker 1: the highlights of the program was to talk to him
18:54
Speaker 1: there had been these big storms in Texas where he
18:57
Speaker 1: was he was in his house near quite near the
18:59
Speaker 1: factory the SpaceX factory and there'd been these big power
19:02
Speaker 1: outages so we lost all contact And then he came
19:05
Speaker 1: back on about 15 minutes later, and it transpired that
19:08
Speaker 1: his WhatsApp video interview was being powered by one of
19:11
Speaker 1: the batteries of his Tesla car. And after about 15 minutes,
19:15
Speaker 1: he switched to the other battery of the other car.
19:17
Speaker 1: But this is obviously what, you know, everyone should be
19:20
Speaker 1: trying to do. But you made the point that on
19:24
Speaker 1: the other side of these kind of monopoly sort of,
19:26
Speaker 1: you know, very dependent relationships that... Pentagon and other parts
19:31
Speaker 1: of government have got into that, you know, their service
19:35
Speaker 1: was being provided, that they were actually, he was doing
19:37
Speaker 1: something more cheaply and better than any other government contractor
19:41
Speaker 1: had been able to do. Where that failed was in
19:44
Speaker 1: the case of Doge. I mean, how do you, when
19:46
Speaker 1: you think about the themes in your book, what new
19:48
Speaker 1: light does that cast? on the DOGE experience?
19:51
Speaker 2: Yeah, I think DOGE really represents an inflection point in
19:55
Speaker 2: the arc that we're tracing. Because if you think about
19:57
Speaker 2: state symbiosis, as you suggested, symbiosis in ecology is a
20:03
Speaker 2: relationship of mutual benefit between two organisms, right? Whereas in
20:08
Speaker 2: the Doge experience, it seems to tip over into something
20:12
Speaker 2: perhaps closer to parasitism, where Musk actually directly enters the state,
20:19
Speaker 2: doesn't just provision the state with services of sovereignty, but
20:24
Speaker 2: begins to exercise a degree of sovereignty himself, personally, which
20:28
Speaker 2: is quite unprecedented in his history, and does so not
20:34
Speaker 2: very clearly to his own financial benefit.
20:37
Speaker 3: The chapter we have about Doge is called State X.
20:41
Speaker 3: And our working assumption is that he thinks reformatting and
20:45
Speaker 3: restructuring the government will be very similar to the way
20:48
Speaker 3: he restructured and reformatted his own businesses. He thought, like Twitter,
20:52
Speaker 3: it would not only be easy, but it might also
20:54
Speaker 3: be fun. He gamified the practice of Doge quite literally
20:58
Speaker 3: by naming it after a meme coin. But it was
21:02
Speaker 3: also continuous with things that came before, like the other
21:04
Speaker 3: Obama examples we've already cited. Doge was created inside the
21:09
Speaker 3: shell of the U.S. Digital Services Office, which was created
21:13
Speaker 3: under Obama, in the effort to upgrade, modernize, and bring
21:16
Speaker 3: online the government's databases. So there is a continuity there
21:20
Speaker 3: that we think is under-remarked on, that in his case
21:24
Speaker 3: was radicalized to such a point that gutting the parts
21:28
Speaker 3: of the government that were seen as inefficient did create
21:31
Speaker 3: a kind of blank slate into which could be plugged data.
21:34
Speaker 3: next generation of government provisioners as a kind of radical
21:38
Speaker 3: way of displacing the old primes and contractors and database
21:43
Speaker 3: providers that used to do that job. So grok for government, right,
21:48
Speaker 3: which is now something and is not only getting big
21:52
Speaker 3: contracts at high levels of security clearance for the United
21:57
Speaker 3: States defense wing. But it's something that probably wouldn't have
22:00
Speaker 3: happened without Doge. So looking at it in terms of
22:03
Speaker 3: dollars and cents and saying he didn't save the money
22:06
Speaker 3: he said he was going to, we think is the
22:07
Speaker 3: wrong lens. If you look at it as a kind
22:10
Speaker 3: of internal reformatting, then it may not have succeeded to
22:13
Speaker 3: the extent he hoped, but it has certainly made the
22:16
Speaker 3: government now much more dependent on his generation of service providers.
22:21
Speaker 1: Interesting. We've obviously talked in different ways on this show
22:24
Speaker 1: and in general when you think about the way the
22:27
Speaker 1: global economy has gone. We have these companies that have
22:30
Speaker 1: now often seen much more powerful, much bigger than governments.
22:35
Speaker 1: And sometimes in the case of the sort of symbiosis
22:38
Speaker 1: that we're talking, there's a sort of mutual dependency there
22:40
Speaker 1: to some degree. But obviously, the government can't exercise the
22:44
Speaker 1: kind of regulation over SpaceX that it would exercise in
22:48
Speaker 1: relation to a more distanced business. We're talking in the
22:52
Speaker 1: week where Donald Trump has emphatically emphasize the idea of
22:57
Speaker 1: self-regulation for the AI companies, which may end up, at
23:00
Speaker 1: least by their own account, their own AI models may
23:03
Speaker 1: end up being more powerful than any tool that has
23:07
Speaker 1: ever been created by a technology company. Reading your book,
23:11
Speaker 1: does that help understand that process that we're seeing with AI?
23:15
Speaker 1: Does it provide any clues for how governments could handle
23:19
Speaker 1: that relationship with the tech companies?
23:21
Speaker 3: Well, I think part of the lack of accountability you
23:23
Speaker 3: just described is by design, right? I mean, the way
23:27
Speaker 3: the military brought down costs for these services was often
23:30
Speaker 3: by not doing procurement along models of a spec contract,
23:36
Speaker 3: which they had direct oversight over, but just saying, listen,
23:39
Speaker 3: here's what we want. You do it however you need
23:41
Speaker 3: to do it. We don't need to know how you
23:42
Speaker 3: do it, and we don't need to have any kind
23:44
Speaker 3: of IP rights or kind of further purchase on the
23:48
Speaker 3: things that you're selling to us. You can sell it
23:50
Speaker 3: to the market and to us and elsewhere. And that's
23:52
Speaker 3: been the 21st century digital capitalist service model. The fact
23:57
Speaker 3: that it's become so oriented to government has been clarified
24:01
Speaker 3: by Alexander Karp's recent co-authored book, The Technological Republic, which
24:05
Speaker 3: came out when Ben and I were writing this book
24:08
Speaker 3: and which we found very clarifying because it's basically delivering
24:12
Speaker 3: a muskist manifesto. It's saying, Silicon Valley needs to come
24:17
Speaker 3: home to the state, re-recognize its role in public purpose,
24:21
Speaker 3: and digital capitalism is actually not about making people's lives
24:26
Speaker 3: more pleasant or expanding out possibilities of direct democracy or
24:31
Speaker 3: connecting you with friends and people in the world the
24:33
Speaker 3: way it had been sold in the Web 2.0 era,
24:36
Speaker 3: but it's actually about securing national sovereignty against external and
24:42
Speaker 3: internal threats. And that transformation of the rhetoric of what
24:48
Speaker 3: Silicon Valley is and what it does has not coincidentally
24:52
Speaker 3: accompanied the shift from the Web 2.0 platform era to
24:56
Speaker 3: the Gen AI LLM era, which requires, as we describe it,
25:02
Speaker 3: a much different relationship to the government, right? It's not
25:05
Speaker 3: capital light in which the users create all the information
25:08
Speaker 3: and the product. It's capital intensive and And it requires
25:12
Speaker 3: access to federal lands, cheap access to energy, water, credit markets.
25:16
Speaker 3: So since November 2022 and the rollout of ChatGPT, a
25:21
Speaker 3: shift has happened, which Musk has very much accompanied, which
25:25
Speaker 3: requires a deeper and more mutually coordinated relationship between big
25:32
Speaker 3: tech and the United States government. And that will not
25:37
Speaker 3: change from one administration to the next. unless the political
25:41
Speaker 3: economy of the United States somehow diversifies away from what's
25:45
Speaker 3: now a kind of one-way bat on the drive towards
25:50
Speaker 3: AGI through scaling. So we think that, you know, the
25:54
Speaker 3: United States is in a tough spot that isn't isolatable
25:58
Speaker 3: to individuals. It's not a Trump-Musk thing. It's not even
26:01
Speaker 3: an Altman-Amade White House or Wong thing. It is a
26:06
Speaker 3: structural relationship between Silicon Valley and the United States economy.
26:10
Speaker 3: that needs to be addressed at a deeper level, and
26:13
Speaker 3: that right now no one is really charting a way
26:16
Speaker 3: out of. Right now there's a kind of cry of pain,
26:18
Speaker 3: you could say, in the data center revolt, but there
26:21
Speaker 3: isn't something like a real roadmap to how there could
26:24
Speaker 3: be a different version of American capitalism. What's interesting, I'll
26:29
Speaker 3: just add one thing and then Ben can jump in
26:31
Speaker 3: on AI, is if you look globally, how have other
26:34
Speaker 3: parts of the world confronted this same conundrum? The EU
26:38
Speaker 3: and the UK is interesting because they're partially due to
26:42
Speaker 3: the wake-up call of Musk, doing their best now to
26:44
Speaker 3: accelerate drives towards something like digital sovereignty, to use what's
26:48
Speaker 3: now the big watchword, which means replace Musk's companies, replace
26:53
Speaker 3: Zuckerberg's companies with clones that are homegrown. That takes political will,
26:59
Speaker 3: deep capital markets, and engineering know-how. Perhaps only one of
27:03
Speaker 3: those three has actually been achieved so far. But if
27:07
Speaker 3: you look further afield, if you look at China, for example,
27:10
Speaker 3: They provide the best example of how you deal with
27:12
Speaker 3: this conundrum. They welcomed in parts of Musk's technology. They
27:16
Speaker 3: gave him a red carpet to Shanghai. But they added
27:20
Speaker 3: an asterisk that CATL needed to be making the batteries
27:24
Speaker 3: for the Tesla cars. And that's now allowed them to
27:28
Speaker 3: use it as a springboard towards global dominance of lithium-ion
27:31
Speaker 3: battery production and actual global dominance of EV production technology.
27:36
Speaker 3: Brazil and India are other countries that have shown more backbone,
27:39
Speaker 3: you could say, South Africa too, vis-a-vis this problem of
27:42
Speaker 3: muskist dependency. So that spectrum of responses, policy responses, will
27:48
Speaker 3: probably also apply in the AI era as well.
27:52
Speaker 1: You say, somewhere in your book, I think you say
27:54
Speaker 1: you're not sort of assuming necessarily that muskism will succeed.
27:58
Speaker 1: But if you're a policymaker who kind of doesn't see
28:01
Speaker 1: the mass of voters as non-player characters, where do you start?
28:06
Speaker 1: Or what's the mentality that you talk about in Muskism
28:10
Speaker 1: is pretty widespread now and is a challenge to governments
28:14
Speaker 1: that are trying to approach things in a more traditional way,
28:17
Speaker 1: or at least think about people?
28:20
Speaker 3: Well, this comparison to Fordism was really helpful for us
28:23
Speaker 3: to help answer the question that you're posing, because for
28:27
Speaker 3: all of its demerits, the Fordist model did have a
28:31
Speaker 3: kind of social contract built into it, right? There was
28:33
Speaker 3: a version of consent, both implied and realized through things
28:39
Speaker 3: like collective bargaining agreements, mass consumption, upward generational economic mobility.
28:46
Speaker 3: Our motivation writing this book was to ask whether or not,
28:49
Speaker 3: in fact, there was the equivalent for Musk and his
28:53
Speaker 3: confreres in the digital capitalist leadership class. How did they
28:57
Speaker 3: think they would secure consent in a time of extraordinary disruption.
29:02
Speaker 3: How do you anchor society when people's lives are being
29:05
Speaker 3: upended in that way? And what has been so surprising
29:10
Speaker 3: for us to see is how thin their response is, right?
29:12
Speaker 3: Musk has a very, you could say cybernetic, and we
29:15
Speaker 3: call it a kind of cyborg conservative response, which is
29:19
Speaker 3: to take for granted that people are so plugged into
29:22
Speaker 3: their network technologies that you can effectively reprogram their brains,
29:26
Speaker 3: or in his terminology, inject a mind virus that will
29:30
Speaker 3: beat the mind virus of your opponents and thereby jump
29:34
Speaker 3: them into your kind of apocalyptic hysteria about racialized immigration fears.
29:41
Speaker 3: And thus, they will cling to you and the contract
29:44
Speaker 3: will be secured through their fear, really, of what he's
29:48
Speaker 3: protecting you against. Alternatively, the trickle-down effect of the profits
29:53
Speaker 3: made in his business's through things like the integration of
29:56
Speaker 3: the SpaceX stock into people's index funds, is also seen
30:00
Speaker 3: as a way to secure people's sense of obligation, really,
30:04
Speaker 3: to Musk as the engine of economic growth. And this
30:07
Speaker 3: goes for the tech class as such. But this, we think,
30:11
Speaker 3: is an inadequate way of securing legitimacy and consent. And
30:17
Speaker 3: in fact, the last few months of the data center revolts,
30:22
Speaker 3: as they've been described, the level of popular objection to
30:29
Speaker 3: the effects of AI and tech on their lives reaches
30:33
Speaker 3: a level of cross-party consensus that one would think normally
30:37
Speaker 3: is unreachable in American life, right? There's actually nothing that 75%
30:42
Speaker 3: of Americans agree on, except for now that AI will
30:46
Speaker 3: make their lives worse, that data centers are things to
30:49
Speaker 3: be rejected in their immediate neighborhoods. So that is an
30:52
Speaker 3: enormous political challenge. from the point of view of the
30:55
Speaker 3: tech class. And the question me and Ben keep asking
30:59
Speaker 3: ourselves is, is that actually a flaw or will that
31:03
Speaker 3: be a dismissible bug? Will the next generation of politicians
31:08
Speaker 3: be able to articulate a version of the future that
31:11
Speaker 3: puts them in harness, that decreases their centrality to American
31:15
Speaker 3: economic life? Or will these data center uprisings be symbolically
31:21
Speaker 3: registered at the campaign trail, but then dismissed as soon
31:25
Speaker 3: as the politicians come back into power.
31:29
Speaker 1: That is a tantalizing question to leave in people's minds.
31:32
Speaker 1: And maybe we'll get you back in a couple of years,
31:35
Speaker 1: see if anybody has answered the call in the US
31:37
Speaker 1: or anywhere else. But Ben Tarnoff and Quinn Slobodian, thank
31:41
Speaker 1: you so much. Thanks for listening to Trumponomics from Bloomberg.
31:49
Speaker 1: It was hosted by me, Stephanie Flanders, and I was
31:51
Speaker 1: joined by the authors Ben Tarnoff and Quinn Slobodian. Trumponomics
31:56
Speaker 1: was produced by Sam Asadi and Moses Andam with editorial
31:59
Speaker 1: guidance from Megan O'Neill from Bloomberg Economics. Sound design was
32:03
Speaker 1: by Blake Maples and Kelly Gary. Amy Keene is the
32:07
Speaker 1: executive producer of Talk Podcast and Cheryl Brumley is the
32:10
Speaker 1: head of podcasts at Bloomberg. And to help others find us,
32:14
Speaker 1: please rate and review us highly wherever you listen.