OPINION:
Through the SpaceX IPO, Elon Musk has become the first trillionaire in history.
Before the offering, his net worth stood at roughly $820 billion. He has now crossed the $1 trillion threshold for the first time.
Whether this is good news or bad depends on whom you ask.
First, some facts worth knowing. After the collapse of socialism in the Soviet Union and Eastern Europe and the end of Maoist socialism in China, the number of billionaires rose dramatically. Around 2000, there were about 470 billionaires worldwide. Today, there are roughly 3,400, a more than sevenfold increase.
In 2000, their combined wealth totaled $898 billion. Today, it stands at about $20 trillion. Adjusted for inflation, billionaire wealth has grown roughly twelvefold since the turn of the millennium.
Anti-capitalists view this development with outrage. In a world still marked by poverty, they see it as a scandal. Yet over the same period, poverty has declined sharply. The share of people living in extreme poverty fell from 29.3% in 2000 to about 10% today (and would be only 6.5% under the World Bank’s prior methodology).
According to the zero-sum mindset embraced by anti-capitalists, this should not have happened. Yet where could the growing wealth of the superrich have come from if the number of extremely poor people declined so dramatically at the same time?
The figures show that the fundamental assumption of anti-capitalists — that the rich became wealthy only at the expense of the poor — is false. The rise in the number of billionaires and the decline in extreme poverty have the same cause: economic growth.
Mr. Musk’s story shows that the American dream remains vibrantly alive. He arrived in Canada as an immigrant from South Africa and later moved to the United States, where he built Tesla and SpaceX into extraordinary successes. He is far from alone.
Sergey Brin reached the U.S. as a child with his family from the Soviet Union and co-founded Google with Larry Page. Jensen Huang was born in Taiwan, immigrated here as a child and built Nvidia into one of the world’s most valuable companies.
Such stories also rebut the common claim that today’s fortunes are mostly inherited. The opposite is true. In the U.S., the share of self-made billionaires is higher than ever. According to Forbes, about 73% of American billionaires built their wealth themselves, while only about 27% inherited most of it.
What drives individuals like Mr. Musk? In a June 2016 conference appearance, he explained his motivation:
“There are a lot of negative things in the world. There’s a lot of terrible things happening all the time. There are lots of problems that need to get solved — lots of things that are miserable and kind of get you down. But life cannot just be about solving one miserable problem after another. That can’t be the only thing. There need to be things that inspire you — that make you glad to wake up in the morning and be part of humanity. It is time to go forth, become a star-faring civilization, be out there among the stars, expand the scope and scale of human consciousness. I find that incredibly exciting. That makes me glad to be alive.”
Less than three decades ago, Mr. Musk sat by a swimming pool with former PayPal colleagues, poring over a dog-eared manual for a Russian rocket engine. When a friend asked about his plans, he replied: “I’m going to colonize Mars. My mission in life is to make mankind a multiplanetary civilization.”
His colleague’s response: “Dude, you’re bananas.”
Today, Mr. Musk dominates the global space industry. Of the 324 orbital launches conducted last year, 165 were performed by SpaceX. If SpaceX were a country, it would rank first worldwide, well ahead of China’s 88 launches.
Of the roughly 15,000 active satellites now in orbit, about 10,000 belong to Starlink. Mr. Musk has cut launch costs by approximately 95% compared with the space shuttle era and pioneered the first reusable orbital rocket — a feat no government space agency has matched.
Critics often argue that Mr. Musk’s fortune rests primarily on government subsidies. They frequently cite a figure of roughly $37 billion in support. The claim is misleading. Much of that sum represents payments under contracts for services rendered, especially those made to SpaceX.
When NASA could no longer reach the International Space Station after the space shuttle’s retirement, the agency turned to SpaceX in what many called a “Hail Mary” move. Mr. Musk has saved the agency far more than he has ever cost it.
Even if one accepts the $37 billion figure at face value, it amounts to less than 4% of his current net worth.
• Rainer Zitelmann is the author of a new book, “New Space Capitalism.”
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