20 Mar Elon and Tesla, Redux: Leveraging Wealth for Power
The other day, Claire Lehmann, the self-described “radical centrist” and founder of the formerly popular, formerly heterodox online magazine Quillette, posted on Twitter (ironically) that Elon Musk and Tesla are, more or less, getting what they deserve. With Tesla dealerships under attack by firebombers and Molotov Cocktails and individual Tesla owners beset by acts of criminal vandalism, Lehmann declared that such is the price of political activism. Although she conceded that “property damage is obviously wrong,” she nevertheless insisted that when “the world’s wealthiest individual” leverages his “wealth for influence and power” a backlash is “inevitable.”
This is an interesting take, to say the least, especially given that the world’s wealthiest individuals have been leveraging their wealth for influence and power since time immemorial. Indeed, for most of human history, wealth and political power were synonymous, two sides of the same coin. Now, however, with Musk doing things she dislikes, Lehmann thinks that a backlash against such things is inevitable, even as she, apparently, misses the proverbial forest for the trees here.
To be fair, Lehmann is not necessarily wrong. The backlash against Musk and Tesla is hardly surprising. The problem with Lehmann’s contentions – which are, in many ways, reasonable surrogates for the attitudes of the ruling class more generally – is that it is selectively outraged. And as such, it indemnifies specific uses of wealth to leverage political power while condemning Musk et al. for far less odious “leveraging.”
In the contemporary sense, leveraging wealth for political power exists on a continuum with four principal points. The first of these is the most obvious, as well as the most frequent. People with considerable wealth often use it to mount and finance campaigns for elected office. Examples here include Donald Trump, Illinois Governor J.B. Pritzker (D), New York Congressman Dan Goldman (D), the Kennedy family, the Roosevelt family, and so on (and so on and so on). One presumes that Lehmann would find it unacceptably anti-democratic for conservative protesters to firebomb Hyatt hotels or Levi’s retail stores, although one can be forgiven for wondering how she would feel about leftists doing the same to a Trump casino. In any case, this type of “leveraging wealth” is common practice.
The second point on the continuum would include people like Commerce Secretary Howard Lutnick or Treasury Secretary Scott Bessent, people who have done extremely well in business, who have made a great deal of money, and who have, as a result, become well-placed and very powerful political appointees/adviser. Again, this is a phenomenon that has existed for a long time. Former Goldman Sachs executive/co-chairman and Treasury Secretary Robert Rubin is, perhaps, the most famous plutocrat-turned-government-adviser in recent memory, but he was hardly the first. As I note in The Dictatorship of Woke Capital:
Herbert Lehman, a liberal Democrat and a partner in his family’s now-defunct investment firm, Lehman Brothers, had succeeded FDR as the governor of New York and later served in the Roosevelt administration. Investment banker C. Douglas Dillon served both the Kennedy and Johnson administrations as treasury secretary. And his replacement, Henry Fowler, left government service and became a partner at Goldman Sachs.
Again, this is standard practice, and, contra Lehmann, no one has ever suggested keying the front doors of Goldman Sachs’ HQ in Battery Park.
The third point on our line is a small one and a new one, created specifically for Musk – just as his position and his department were created specifically for him. For the most part, the difference between Musk and Rubin is that Rubin (and Bessent, Lutnick, and everyone who came before them) resigned from their previous jobs before taking their government positions. That is, as I have noted previously, no small difference. It is HUGE, in fact, although not necessarily in the sense that Lehmann suggests. Lehmann mocks Musk for thinking that he is the “victim” of the backlash against his leveraging of wealth for power, seeming to imply that the American people are the real victims. This is true, but only for the American people who are shareholders of Tesla. The conflict here is real and serious, not because Musk is using his access to government to enhance his wealth but because his unwillingness to leave his role at Tesla (and SpaceX) is doing the opposite to the wealth of his shareholders. As the CEO of the company, Musk has a fiduciary duty to his shareholders, and the importance (or ridiculousness, depending on one’s perspective) of his work with DOGE doesn’t change that. As a fiduciary, his clients must come first.
Not surprisingly, that brings us to the fourth and final stop on our continuum, the ultimate abuse of fiduciary duty combined with the ultimate abuse of the democratic process: ESG. I won’t bore you with a long recitation of ESG’s sins against shareholders and democracy. You can find that here, here, or here. What I will do, however, is reiterate the fact that ESG is a far greater breach of fiduciary duty and a far greater threat to “our democracy”™ than Elon Musk has ever been or ever will be. Guys like Larry Fink – to name just one – leverage wealth for influence and political power but do so infinitely more irresponsibly and anti-democratically than Musk (or Trump or…anyone, frankly). They leverage not only their own wealth, but trillions of dollars of our wealth – mine, yours, public employees’, etc. – to evade the democratic process and to achieve political ends beyond the demos’ control. That is monstrously abusive.
In her defense, Claire Lehmann did write about ESG once, but only to deride its practitioners’ pretense to moral superiority. The whole “leveraging” wealth for power bit seems to have escaped her critique. That’s not exactly surprising. It seems to escape many of those who comment on the subject and who fashion themselves informed about it but don’t bother to understand its true malevolence. At the very least, Elon is operating openly and transparently and under the authority of the elected head of the executive branch. That’s far more than anyone can say about Fink, et al.
One wonders if Lehmann would be as cavalier about violent attacks against BlackRock properties. One suspects – and hopes – she would not be. One also suspects, therefore, that her antipathy to Tesla’s plight is about more than just comeuppance for the wealthy who stray from their lane. It’s about personalities and politics she dislikes.
