Thinking about Elon Musk and global poverty

By James Pethokoukis

Uberbillioniare entrepreneur Elon Musk has been involved in a Twitter back and forth about global poverty. CNBC sums it up:

Elon Musk is now worth more than $300 billion, and he’s apparently ready to start spending. The Tesla and SpaceX CEO — whose net worth has ballooned by more than $140 billion this year, thanks largely to the skyrocketing value of his electric automaker — tweeted Sunday that he was willing to consider a proposal from a United Nations official who said that a $6 billion donation from one of the world’s wealthiest people could help stop world hunger. Last week, David Beasley, the director of the UN’s World Food Programme, told CNN that it was time for the ultra-wealthy to “step up now, on a one-time basis” in order to “help 42 million people that are literally going to die if we don’t reach them.” He specifically mentioned Musk and Amazon CEO Jeff Bezos, the two richest men in the world.

Things move fast these days. Musk is now worth $336 billion, according to the Bloomberg Billionaire Index. Anyway, this back-and-forth inevitably raises the issue of global poverty, economic growth, and capitalism. And let’s be clear, the multi-decade decline in global poverty has been because of capitalism, the process of liberalizing markets so poor people can get richer. And with higher incomes comes less hunger and the terrible effects of malnutrition. As an analysis over at Our World in Data points out, “The prevalence of childhood stunting — the key indicator of chronic malnutrition — is strongly related to household income and prosperity.” Here are a couple of interesting charts from an Our World in Data slide deck that I recommend.

If there are effective programs that Musk wants to fund, that’s great. He and the UN can get together. But it’s not hard to see how some of the focus on world poverty serves as a thinly masked attack on capitalism, particularly as practiced by the American superenterpreneurs who dominate the list of the world’s richest people.

Of course, many governments control vastly more resources than even the richest techies. And they don’t need to implement confiscatory taxes to spend more on poverty relief if they so choose. Indeed, America and the world should want more billionaires who get that way by creating innovative products and services for consumers everywhere. And along the same lines, the sort of economic openness and democratic capitalism in which wealth creation flourishes should also be a model for the world’s poorest nations.

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