No, Elon Musk, Stay-at-Home Orders Aren’t ‘Fascist’

by | May 1, 2020

Originally published at Barron’s | May 1, 2020

Stay-at-home orders are “fascist” and “not democratic.” At least, that’s according to Tesla CEO Elon Musk, who railed against the orders Wednesday on a conference call to discuss his company’s results.

Tesla makes a range of cool cars and trucks. They are sleek, stylish, powerful, and green. The company is the creation of one of the 21st century’s most renowned entrepreneurs. Musk is an engineer by training and a serial entrepreneur who, in addition to running Tesla, has founded a web software company, an online payments company, and a venture aimed at making space travel possible for anyone.

No doubt, Musk is ambitious, creative, and wildly successful. But that does not qualify him as an expert on either democracy or epidemiology. Since he has chosen to opine publicly, he should be prepared for corrections.

Let’s start with democracy. The United States is a representative democracy. In the U.S., citizens elect their representatives at all levels of government—local, state, and federal. Those elected representatives either pass new laws or, working within the confines of the constitution, execute existing laws. Certain executives, above all the president and governors, have powers enshrined in the constitution, law, or legal precedent to make decisions that, by some, may be seen as infringement on their rights.

For example, the Trump administration has used executive orders for many reasons, among them restricting immigration, altering wildlife-conservation areas, and permitting the use of lead ammunition for hunting. None of those decisions required new legislation and some were seen as infringements on rights. Previous administrations have also frequently issued executive orders. Indeed, the prerogative extends back to George Washington. Article II of the Constitution provides the president with executive authority to determine how the law should be applied, and almost every president in history has used that power, with recent presidents—Democrat and Republican alike—resorting ever more frequently to executive orders to carry out policy.

Similarly, state governors are considered in the law to have executive authority, which can vary by state according to its constitution, legislative history, and tradition.

So, unless Musk believes the U.S. or state constitutions are themselves “fascist” or “not democratic,” many of the powers exercised by executive authority are fully compatible with U.S.-style representative and constitutional democracy. Musk is welcome to his opinion about executive orders and much else, as is his constitutional right. But if he feels executive authority has gone too far, he is within his rights to seek redress through the courts or to remove public officials in elections. Either approach would be democratic and surely not fascist.

But if all Elon Musk had done in his tirade this week was reveal his ignorance of law and history, that could be easily overlooked as another example of why wealth and wisdom seldom are found in the same person.

Rather, the most dangerous aspect of his remarks was his assertion that free will trumps all. “Give people back their goddamn freedom,” he said. But your right to swing your fist ends at my nose, to paraphrase a line attributed to former U.S. Supreme Court Justice Oliver Wendell Holmes. Or, in the context of the ongoing pandemic, you might say: Your right to freely associate and thereby risk your and other peoples’ lives by transmitting Covid-19 is limited by the rights of others to not be harmed by your actions. 

It is the same as restricting the amount one can drink before driving. Or does Musk believe Tesla drivers should be able to motor off after more than a few?

Elon Musk received a bachelor’s degree in economics from the Wharton School at the University of Pennsylvania. Maybe he missed the lecture on externalities in economics, or he would have well understood the preceding paragraphs. It is not an infringement of personal liberty when society asks you to halt actions that put others at mortal risk. 

Liberal thinking is foundational to modern democracy. Individual liberty resides at the heart of the U.S. Constitution and underpins our representative democracy. But liberal thinking is not the same as unbridled libertarianism. Absolutes are rare, above all in civil society. Liberty in democratic society has limitations. Unfortunately, successful, self-made people can be blinded by delusions of meritocratic free will, which is why, when it comes to organizing society’s affairs, entrepreneurs need not apply.

Filed Under: Economics . Politics

About the Author

Larry Hatheway has over 25 years experience as an economist and multi-asset investment professional. He is co-founder, with Alexander Friedman, of Jackson Hole Economics, LLC, which offers commentary and analysis on the global economy, policy & politics, and their broad implications for capital markets. Prior to co-founding Jackson Hole Economics, LLC Larry worked at GAM Investments from 2015-2019 as Group Chief Economist and Global Head of Investment Solutions, where he was responsible for a team of 50 investment professionals managing over $10bn in assets. While at GAM, Larry authored numerous articles on the world economy, policy-making and multi-asset investment strategy.

Larry was also the lead investment manager for various mandates, funds and an actively managed multi-asset index. Larry also served on the GAM Group Management Board, was Chairman of the GAM London Limited Board and served as member of the GAM Investment Management Limited Board. Larry was also Chairman of the GAM Diversity & Inclusion Committee. During his tenure at GAM, Larry was based in London, UK and Zurich, Switzerland.

From 1992 until 2015 Larry worked at UBS Investment Bank as UBS Chief Economist (2005-2015), Head of Global Asset Allocation (2001-2012), Global Head of Fixed Income and Currency Strategy (1998-2001), Chief Economist, Asia (1995-1998) and Senior International Economist (1992-1995). During his tenure at UBS, Larry was also a standing member of the UBS Wealth Management Investment Committee. While at UBS, Larry worked in Zurich, Switzerland, London, UK (various occasions), Singapore and Stamford, CT.

At both GAM Investments and UBS Investment Bank Larry was widely recognised for his appearances on Bloomberg TV, CNBC, the BBC, CNN and other media outlets. He frequently published articles and opinion pieces for Bloomberg, CNBC, Project Syndicate, and The Financial Times, among others.

Before joining UBS in 1992, Larry held roles at the Federal Reserve (Board of Governors), Citibank and Manufacturers Hanover Trust. Larry Hatheway holds a PhD in Economics from the University of Texas, an MA in International Studies from the Johns Hopkins University, and a BA in History and German from Whitman College. Larry is married with four grown children and a loving Cairn Terrier, and resides in Wilson, WY.

Related Posts

Pin It on Pinterest

Share This