This week’s Twitter kerfuffle is all about public funding. Elon Musk decided to label National Public Radio’s account first as “government-influenced media,” which it previously applied to state-operated media outlets that shade into propaganda. Later, the label was changed to “government-funded media.”
NPR, which maintains that its editorial content is independent and has a history of running stories critical of the US government, decided to leave the platform rather than accept either new label.
While NPR does receive government funding through grants, it says that money represents less than 1% of the nonprofit’s revenue. In 2022, NPR reported $US309 million in revenue; it noted an $US80,000 grant from the National Endowment for the Arts, while its member stations may receive government funding that contributes to their licence payments.
Critics quickly pointed out that two of Musk’s most successful companies, SpaceX and Tesla, are also government funded, and indeed receive much more money as a share of revenue and an absolute number.
SpaceX’s ties to the US government
SpaceX is, after all, primarily a government contractor, racking up $US15.3 billion in awarded contracts since 2003, according to US government records. Its most important businesses are launching astronauts and scientific missions for NASA, and flying satellites for the US military.
Musk may quibble that payments for goods and services aren’t government subsidies but he owes the existence of the company to NASA. If the US space agency hadn’t backed the rocket-maker with a critical contract in 2008, the company likely would have failed.
Moreover, SpaceX’s business model has been working with NASA to develop space vehicles like the Falcon 9 and Dragon that it can then offer to private customers. These public-private partnerships have saved money for the government while helping to create a surge in private space activity; they aren’t the result of an entrepreneur acting alone. Meanwhile, SpaceX sought and is still seeking $US885 million in government funding to support broadband access in rural communities.
Tesla has been supported by government subsidies
Tesla, on the other hand, has actually benefitted from a number of outright subsidies created by the US government to encourage the development of electric vehicles to reduce carbon emissions. Notably, the auto company received a $US465 million preferential loan from the US Department of Energy in 2010, which it paid off in 2013.
Through 2020, the company benefited significantly from tax credits given to consumers who buy electric cars, which have reduced the cost of Tesla vehicles by $US4,000 to $US7,500. One attempt to track all these subsidies, including state and local incentives to support manufacturing facilities, estimates the total benefits at nearly $US3 billion.
Why is Musk going after NPR?
It’s strange that Musk is making such a big deal about NPR’s government funding, especially when Tesla is working to take advantage of the newest set of EV tax credits passed as part of the Inflation Reduction Act by cutting prices and ensuring its batteries are made in the US.
At an earlier point in his political evolution, Musk was often criticised by the right — notably 2012 Republican presidential candidate Mitt Romney — for accepting subsidies at Tesla. SpaceX’s rival defence contractors, meanwhile, launched a lobbying campaign criticising the company’s NASA partnerships as a kind of soft corruption. Despite these experiences, Musk has never been shy about suggesting that competitors benefit from overly generous government support (sometimes with good reason.)
Musk’s critique of NPR seems mostly designed to drive agita and engagement on his social media platform, but we might also consider it a teachable moment. In the modern economy, it’s rare that any successful enterprise succeeds without government support, whether that’s direct funding, basic R&D, or effective regulation.