How Elon Musk’s Wealth Isn’t Real
There is a real economy and an unreal economy. Confusingly, the unreal one is called just ‘the economy’ and the real one is generally ignored. Understanding this distinction is crucial to understanding how fucked we are, and where we need to be.
The unreal economy is all the markets, GDP figures, and most of the metrics we use to measure reality. They say you get what you measure, and what we measure is unreality. To understand this, just look at the wealth of the ‘world’s richest man’. It’s not real.
Elon Musk’s ‘wealth’ of $265 billion is almost all stock, most of it Tesla. Tesla, however, has never paid a dividend. It has never given shareholders any cash at all. Let’s have a look at Tesla’s latest earnings statements (Q1 2022) to see what this ‘wealth’ actually is.
In 2021, the net income attributable to stockholders (like Musk) was $5.5 billion. You can actually see two figures there, one using GAAP (generally accepted accounting principles) and one that’s even more unacceptable. It’s important to understand that both of these numbers are unreal.
To understand that, however, we need to go back to the Renaissance, when the accounting of Musk’s wealth really started.
Luca Pacioli Sleeps With The Fishes
People from Iraq to China have been ‘accounting’ forever, merchant ledgers are some of the oldest known forms of writing. Capitalist accounting, however, is a whole-ass Renaissance art.
Luca Pacioli, Leonardo Da Vinci’s math tutor and homie, codified modern accounting in the 1494. The art may have come via India or the Muslim world (along with…