Ad Astra, Elon!

By John Ogilvie

SpaceX, the American aerospace giant and rocketry innovator, is now officially a publicly traded company (SPCX). The company’s IPO was the largest in history, raising almost $86 billion USD. The company’s market cap currently sits at $2.6 trillion USD. The valuation of the stock also means that Elon Musk is now the world’s first trillionaire.

As you would expect, the reaction from many (particularly those on the far left) was crazed. The familiar demands have followed: Tax him more, seize the wealth, do something about inequality, save the whales (okay, maybe not that last one), you get the idea.

This reaction says more about these people and the state of our education system than it does Musk. A troublingly large segment of society simply doesn’t understand where wealth comes from, how it is held, or what would happen if the government actually tried to confiscate it. Let’s explore this subject a little bit.

Wealth on Paper

When people hear that Elon Musk is worth a trillion dollars, they have this image in their heads that he has an absurd amount of money sitting in a bank account waiting to be spent. That’s just not the case.

The overwhelming majority of Musk’s wealth exists as shares in the companies he has founded and scaled (Tesla, SpaceX, and others). These are not liquid assets (i.e. cash) in any practical sense.

Those who insist he should simply “pay more tax” on this wealth either do not grasp or choose to ignore what would actually be required. To transform those illiquid assets into spendable cash, Musk would need to sell large blocks of stock. Large, forced sales drive down the share price. The very act of trying to seize the wealth significantly reduces its value. In the process, the companies themselves, built over years of risk, iteration, and execution, would be damaged or destroyed. Employees, suppliers, customers, and the broader ecosystem of innovation would bear the cost. And in the end, the government would only end up getting a fraction of what the assets were originally worth.

These are just the facts. Wealth tied up in assets is not the same as a pile of cash. Treating it as though it were invites policies that are destructive and punish success.

Handouts ?

A second line of attack claims Musk’s wealth is unfair because SpaceX has benefited from US Government support. The suggestion is that taxpayers have been subsidising his success.

Reality says otherwise.

The vast majority of money flowing from the US Government to SpaceX has come in the form of competitively awarded contracts for services rendered (e.g. launching satellites, resupplying the International Space Station, and flying astronauts). These are not blank-cheque R&D grants or non-repayable subsidies for core rocket development. They are payments for work performed under fixed-price or milestone-based agreements where SpaceX had to compete and deliver. These are services that the US government has to perform, so it’s not like they were just spending the money for fun.

NASA itself has calculated that partnering with commercial providers, SpaceX chief among them, has saved the agency tens of billions of dollars compared with traditional cost-plus approaches. Broader estimates, including from within the Space Force, put the total savings from these partnerships in the region of $40 billion USD to date. The government is not “giving” SpaceX money in the sense critics imply. It is buying capability at lower cost and with better results than it was achieving on its own.

Saying that SpaceX has only been successful because of government contracts makes about as much sense as saying that your local plumber is only kept afloat by people with blocked toilets.

It’s also inaccurate to say that SpaceX’s only source of revenue is government contracts. Starlink, the commercial satellite Internet service run by SpaceX, brings in a significant amount of revenue for the company

Strategic Dependence and Sovereign Capability

There are more benefits that SpaceX provides to the US government than just cost savings.

After the Space Shuttle retired in 2011, the United States had no domestic means of sending astronauts to orbit. For nearly a decade, NASA was forced to buy seats on Russian Soyuz spacecraft, at one point paying an eye-watering $90 million per seat. It was expensive and politically embarrassing for the United States. Thanks to SpaceX’s Falcon 9 and Dragon capsule, that’s no longer the case, and America once again has a domestic crewed launch system.

Even now, SpaceX remains the only American option for crewed orbital flight. Without it, the US would once again be dependent on foreign launch providers for access to space. Given the geopolitical events that have taken place over the past several years (e.g. Russia’s invasion of Ukraine), imagine what it would be like if the US still had to get rides on Soyuz rockets. There’s no guarantee that the Russians would even sell them tickets and chances are that if they did they would charge an absolute fortune. It would also be a huge soft power blow for America, having to rely on a strategic rival for crewed access to space.

Talk about awkward.

Value for Money

While the outrage focuses on the size of one man’s paper fortune, the companies involved have delivered measurable value at scale. Reusable rockets were once a pipe dream limited to science fiction. Now, because of SpaceX, they are in common use. Launch costs have fallen by well over 80% from the pre-reuse era, opening capabilities that were previously uneconomic. Thanks to Starlink, anyone on the plant is now able to access the Internet at any time. Before Tesla, electric vehicles were ugly and ludicrously expensive Tesla made them cool and affordable.

SpaceX’s IPO alone has turned thousands of current and former employees, estimates run to around 4,400, into millionaires through equity. Across Musk’s various ventures, roughly 160,000 people are directly employed worldwide. These are not abstract externalities. They are jobs, skills, supply chains, and, in many cases, life-changing financial outcomes for ordinary workers.

Contrast that record with the US Government’s own long experiment in large-scale social spending. Since 1964, Washington has spent an insane $20 trillion USD (inflation-adjusted) on the “War on Poverty.” The official poverty rate has shown little sustained improvement on the metrics that matter most (self-sufficiency, family structure, and long-term mobility). Root causes have proven remarkably resistant to the transfer-and-administer model. One might think this track record would invite a degree of humility before declaring that the real problem is insufficient extraction from people who build things that work.

Also consider the fact that, unlike the government, Elon can’t force you at gunpoint to give him money.

Much of the reaction stems from a clash of fundamental outlooks rather than a simple disagreement over tax policy. Musk operates from a mindset of abundance and radical possibility. Problems are treated as engineering challenges to be solved at scale. Limits are things to be pushed, not accepted as given. Resources are not a fixed pie to be divided more fairly. They can be expanded through ingenuity, cheaper energy, technological leverage, and the willingness to attempt what conventional wisdom declares impossible. This is visible in the decision to pursue reusable rockets when the industry had largely abandoned the idea, in building a global satellite network to connect the previously unconnected, and in treating multi-planetary civilisation not as fantasy but as a civilisational insurance policy worth serious effort.

The opposing outlook starts from assumptions of stagnation and inherent limitation. The economic pie is treated as largely fixed or even shrinking. Wealth accumulated by individuals is presumed to have been extracted from others rather than created through voluntary exchange and value delivered. Growth itself is often viewed with suspicion, whether framed as unsustainable, environmentally destructive, or simply unnecessary once redistribution has met baseline needs. The policy reflex therefore tends toward managing scarcity through heavier taxation, denser regulation, and larger transfer systems rather than removing barriers to the creation of new abundance.

The record suggests that mindsets matter. Those who begin from abundance and the conviction that limits are negotiable through effort and intelligence tend to build the actual tools (cheaper launch, global broadband, desirable electric vehicles) that expand what is possible for millions of people. Those who begin from a mindset of limitation and zero-sum assumptions tend to produce ever-larger administrative systems whose measurable impact on root causes remains stubbornly modest. The hysteria over one man’s paper wealth ultimately reveals more about the mindset of certain individuals than it does about the mechanics of value creation. The actual wealth creators are doing things that were previously believed to be impossible, and from the way things look, they’re just getting started.

So to Elon and everyone else at SpaceX, I say ad astra !