Is Elon Musk the Henry Ford of Our Time?

A new biography, Elon Musk: Tesla, Space X, and the Quest for a Fantastic Future, provides more evidence that America does not face secular stagnation—a state of slow growth and little innovation. I have always been skeptical of this claim, because many of the statistical measures on which it relies are those of our centralized government that miss out on improvements in health and enormous benefits of new technology, particularly the internet.

But some intelligent observers, notably Peter Thiel, have argued that recent gains are narrowly focused on information technology. As Thiel provocatively puts it: “We were promised flying cars, and instead what we got was 140 characters.”  Musk, however, has become a billionaire by building actual products that do gesture to a fantastic future where such items as flying cars are imaginable.

One is an electric car, Tesla, that has attracted attention not only for its battery engine, but for its aesthetics. It combines Silicon Valley know-how with Hollywood dazzle.  Space X is in some respects an even more impressive achievement. This start-up has found ways to launch payloads into space for a fraction of the cost of Lockheed and Boeing. And Musk also controls a third company, SolarCity, that installed and now manufactures solar panels.

All these companies make physical products that do far more than simply improve the circulation of information. One of the strengths of Ashlee Vance’s fine biography is that his description of these companies operations is sufficiently detailed that we can see how the information revolution is beginning to start a revolution in the world of things as well. Tesla’s cars have been described as computers on wheels. The most obvious influence of Silicon Valley is the replacement of the dashboard with and Ipad-like screen. But more importantly, all of the operations are continually monitored and optimized by algorithms. And both Tesla and Space X have greatly benefited from computers in their designs. Unlike companies of old that had to proceed mostly by trial and error in the physical world, Musk and his associates can model designs on the computer screen in all their aspects.  The companies thereby save a lot of money in the process and steal a march on their rivals. Thus, the overall message is that Musk’s success has come from recognizing the capacity of information technology to transform manufacturing.

With the rise of other technologies that bridge the gap between the information and physical world like 3-D printing, Musk’s vision is likely to become the storyline of the coming decades. Musk is a billionaire because he got there first. Of course, there remain questions about the future of his own companies.  For instance, Tesla is now a luxury good, the cost of which exceeds the typical Mercedes or BMW. To justify its high stock price, it must be able to make battery cars  at cheaper prices. But the story of modern technology is that it rapidly becomes available down the income scale. The most cheerful news from this biography is that radical beneficial innovation for the masses may now be coming to the physical world as well as the information world.

The book briefly discusses Musk’s ideas of a hyperloop,  a new model of transportation in which people in pods would be shot through tubes and ride on a cushion of air at speeds of up to 700 milers an hour. While this seems like science fiction, Musk last week launched a design competition to move the project from the drawing board to the transportation grid.  Before reading the biography, I would have thought such a concept impossible to achieve. I still think it unlikely to come to fruition any time soon. But this book demonstrates that Musk combines such a powerful vision with such operational competence that it would be a mistake to discount the prospects of any of his ventures.