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Elon and the case for India

By: Sachee Trivedi

In the month, when the US has received a decisive mandate delivered by its democratic voting process, there is one man who has become the surprise star of Trump’s campaign – Elon Musk. I will concede that as a retired engineer myself, I have immense admiration for Elon’s engineering prowess. But getting back to the election context, I believe Elon’s real importance to this election lies in the issues that he has raised and the questions that he is asking. These are the same issues that have been hotly debated in India in each of the last three elections, the last one being in June of this year. In each of these three elections, Prime Minister Modi has been given the mandate by the people to address these tricky, sticky issues.

Manufacturing is the backbone of an economy

In May 2020, India Prime Minister Modi, issued a clarion call to Indian corporates, medium and small businesses, scientists, engineers and factory workers to make India self-reliant in manufacturing. This came in the wake of the COVID-19 pandemic breakout that saw India and many countries in the world begging China for face masks, hand sanitisers, surgical gloves and medical equipment. Modi was criticised for being nationalist, protectionist, anti-globalisation, regressive, and also elitist – he was allegedly pushing people into tough manufacturing jobs rather than cushy service sector jobs.

Modi stood his ground, for he construed reliance on exports a matter of national security and freedom. He believes that solutions for the problems specific to India can be most effectively and economically solved by Indian businesses. Finally, he believes India can help her neighbours and allies in times of need only if India herself is self-reliant.

Elon’s work with SpaceX and Tesla has taught similar lessons. He did not like being beholden to the Russians for rockets for SpaceX or to Britain’s Lotus for Tesla’s design and delivery schedule. As an example, he realised that changing the height of the car or changing the design of the door handles require a Herculean effort and delays as the entire car manufacturing is one giant, inflexible, global supply chain. In Tesla, he learnt the hard way, that first he had to build the machines that could then build the machines (cars) – and he did just that, despite the entire Wall Street, at one point, rooting for his failure. His experience with both SpaceX and Tesla is that when manufacturing disappears from the country, then the population loses its ability to tinker with designs, materials and processes and that is when innovation stops.

Manufacturing is not just about jobs, it’s about being able to solve problems, it’s about expressing creativity and in times of war and pandemics, it is about national security.

Frugality is a virtue

India successfully launched its Mars orbiter, Mangalyan, for $74m and its moon lander, Chandrayaan, for $75m. The price was notably less than the Hollywood sci-fi thrillers, The Martian and Gravity, that cost north of $100m – each. Instead of being hailed for its high-quality engineering and research, India Space Research Organisation (ISRO) was met with jeers and condescension over its low budget launches. Western and domestic media alike questioned if India should even be attempting space missions given its low budget of around a billion dollars compared to c.$25bn for NASA and India’s developing economy status. Mr. Modi is undeterred and has opened up Space research to private sector players – this has already spawned a large startup ecosystem in this field.

Elon has championed low-cost space launches in his company SpaceX. He has painstakingly brought down the cost of a launch in the range of $60-90m per launch as compared to $2 BILLION per launch for NASA’s Space Launch System (SLS)[1]. Musk has been an open critic of NASA and US Government’s cost-plus programs that leave no incentive for government contractors to cut costs or time. Musk fired 75% of Twitter’s staff and is now leading the effort to make US Government efficient.

Bloated budgets, wasteful, delayed projects deserve no celebration. Efficient, innovative, nimble organisations need to be hailed.

Governments need to be downsized

Government of India has historically owned and run some of the largest Indian businesses – railways, electricity generation and distribution, water utilities, coal mines, aluminium plants, airports, airlines, telecom, hospitals, insurance, banking – you name it. Prime Minister Modi has famously said that the Government has no business to be in business. He has systematically been lowering government stakes in public sector companies by selling them to private buyers or by taking the companies public. He has been vilified in the media for this – he has been accused of selling the family silver to shore up reserves. But Mr. Modi is a staunch believer of private enterprise as a driver of competitiveness and efficiency. Most importantly he believes that uncheckered power to the government officials breeds corruption. Mr. Modi has also taken upon himself the deregulation of the complex web of laws that are paralysing Indian businesses.

Its almost as if Mr. Modi and Mr. Musk have been singing from the same hymn sheet.

Mr. Musk believes that Government is a corporation which is a monopoly. Its also the one that is allowed legally to do violence. He argues, why would you want to give a corporation with no competition, that can’t go bankrupt, more money. He doesn’t advocate that the Government shouldn’t exist or there are no good or necessary things that Government should do. But he believes in accountability. There is no way to give them any feedback for their poor service. He cites the example of the Department of Motor Vehicles (DMV) – who do you complain to about them? That’s why he believes the government should do the least! Mr. Musk campaigned for deregulation.

Government truly has no business being in business. Over-regulation is stifling businesses.

Media needs reform

This is the trickiest issue and one where the Indian and American democracies are intertwined.

In the 2014 election in India and the 2016 election in US, Mr. Modi and Mr. Trump were the ‘outsiders’ in New Delhi and Washington DC respectively. Their opponents were more seasoned politicians, with deeper pockets and with a greater sway over legacy media.  Both Mr. Modi and Mr. Trump used the nascent social media to reach their voters directly and won their respective elections against all odds.

2019 election was a smooth one for Mr. Modi, but the 2020 election was rough for Mr. Trump. The same social media that helped Mr. Trump in his first term, had swung to the left, and the platforms censored information that could’ve potentially benefited Trump.

2024 election was a tough one for Mr. Modi as there was widespread fake news floating uncensored on social media that swayed the voters across the country. Mr. Modi won but with a narrow margin. Meanwhile, with Elon having purchased Twitter, social media in the US became a more balanced voice and that helped Trump. The legacy media remained overwhelmingly biased against both Mr. Modi and Mr. Trump and you’d think they shared their scripts – the keywords being ‘fascist’, ‘Hitler’, ‘dictator’, ‘democracy in danger’, ‘constitution undermined’, ‘divisive’, ‘polarising’ to name a few.

The foregone conclusion in both the countries is that legacy media has lost credibility. Social media platforms can seesaw between censoring truth on one extreme to dishing out uncheckered fake news on the other extreme. In both US and India, the three pillars on which our free, democratic societies stand are government, judiciary and journalism. It seems the third leg is broken and needs some serious re-think.

Conclusion

The oldest democracy in the world, the US, and the largest democracy in the world, India, are struggling with many common issues. It is a validation of sorts for India, that it is already on the journey that the US is going to embark on – manufacturing, frugality, government efficiency. US should take note from India’s experience, that there is no quick fix for these issues.

I am optimistic about the future of India. I am optimistic about the future of US. I am optimistic about US and India developing deeper relations and collaborating on some of the biggest issues facing our economies. I am optimistic about the investment returns to be reaped as both these countries look inward for much-needed policy reforms.

For more information please contact Spotlight Family Office Group at Info@SpotlightFamilyOffice.com.

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[1] Reducing the Cost of Space Travel with Reusable Launch Vehicles