The Twitter controversy this week is all about public funding. Elon Musk made the decision to first refer to National Public Radio's story as "government-influenced media," a term that was traditionally used to refer to state-run media institutions that lean towards propaganda. The description was later altered to "government-funded media."
NPR chose to quit the platform rather than accept either new title because it argues that its editorial material is independent and has a history of publishing stories that are critical of the US government.
NPR acknowledges that it receives grants from the government, but claims that these funds account for less than 1% of their overall income. NPR claimed $309 million in revenue in 2022; it also mentioned receiving a $80,000 grant from the National Endowment for the Arts, and its member stations might also get government support that goes towards licence fees.
Critics soon brought out the fact that two of Musk's most successful businesses, SpaceX and Tesla, are also sponsored by the government and do, in fact, receive significantly more money both in terms of a percentage of revenue and an absolute amount.
SpaceX’s ties to the US government
After all, according to US government data, SpaceX has received $15.3 billion in awarded contracts since 2003, making it largely a government contractor. The US military's satellite programme and NASA's astronaut and research mission launches are the company's two most significant industries.
Although Musk would argue that payments for goods and services aren't government subsidies, NASA is responsible for the company's existence. In 2008, the US space agency awarded a crucial contract to the rocket manufacturer, saving the company from imminent failure.
Additionally, as part of its business strategy, SpaceX has been collaborating with NASA to create spacecraft like the Falcon 9 and Dragon that it may later sell to private clients. These public-private partnerships, which are not the brainchild of a lone entrepreneur, have helped the government save money while fostering a boom in commercial space activity. To enhance internet access in remote communities, SpaceX sought and is currently seeking $885 million with government assistance.
Tesla has been supported by government subsidies
Contrarily, Tesla has actually benefited from several outright subsidies established by the US government to promote the development of electric vehicles in order to lower carbon emissions. Notably, the automaker paid off a $465 million preferential loan from the US Department of Energy that it had obtained in 2010 when the loan was made.
Tax incentives that buyers who purchase electric vehicles are eligible for through 2020 have drastically lowered the price of Tesla vehicles by $4,000 to $7,500. The total benefits are estimated to reach close to $3 billion according to one attempt to keep track of all these subsidies, which include local and state incentives to promote manufacturing plants.
Why is Musk going after NPR?
It's odd that Musk is making such a big deal about NPR receiving financing from the government, especially because Tesla is attempting to take advantage of the most recent round of EV tax credits granted as part of the Inflation Reduction Act by lowering pricing and guaranteeing its batteries are built in the US.
Earlier in his political career, Musk faced frequent criticism from the right, most notably Mitt Romney, the 2012 Republican nominee for president, for receiving subsidies at Tesla. Meanwhile, SpaceX's competitors defence contractors started a lobbying effort to denounce the company's NASA partnerships as a form of subtle corruption. Despite these setbacks, Musk has never been afraid to assert that rivals profit from excessively generous government assistance (often for good reason).
We may regard Musk's criticism of NPR as a learning moment, even though it seems to be primarily intended to stir up controversy and interaction on his social media platform. In the modern economy, it is uncommon for any successful business to prosper without backing from the government, whether that be in the form of direct funding, fundamental R&D, or efficient regulation.
