Why is Elon Musk becoming an active advisor to Donald Trump?

Billionaire Elon Musk has been tasked with leading the new Department of Government Operations (Doge) for incoming President Donald Trump.

In a statement released on social media, the US president-elect said Musk – along with former Republican president Vivek Ramaswamy – will “dismantle government regulation, reduce excessive regulations, reduce wasteful spending, and reorganize government agencies”.

It’s a role the tech entrepreneur has undoubtedly prepared for through his business leadership, and one he’s spent months arguing about.

But it’s also one that is expected to give him power over government policy – and the ability to control his existing businesses.

Musk told a Trump rally in October that he believed the US government budget could be cut by “at least” $2tn from about $6.5tn. He also suggested that the number of government employees could be significantly reduced.

Meanwhile, Ramaswamy has put forward plans to abandon a number of government departments including the Department of Education, the Nuclear Regulatory Commission, the Internal Revenue Service and the FBI.

The way Musk has run his firms may reflect what Americans can expect Doge to do.

In October 2022, Musk took over the social media platform Twitter – which it renamed X – in a $44bn (£38.1bn) deal, to remove its content moderation policies and block users it thought had broken its rules on hate speech and misinformation.

Among the reinstated users is Trump, who was banned following a protest at the Capitol in January 2021 after he continued to say that the 2020 election was against him.

Musk’s takeover saw major changes at the company.

He reduced X’s workforce from about 8,000 to 1,500. In April 2023, he told the BBC that his reason for doing so it was “if the whole ship sinks, nobody gets a job”.

“His idea of ​​success was to let more people go,” said Alex Waddan, a professor of US politics at the University of Leicester.

Faced with out of advertisers despite his loosening of the forum’s speech policies, the businessman also monetizes the site to increase his income.

He turned the blue tags – which previously indicated that a high-profile account was bona fide – into a subscription model, and included advertising payments to “verified” users from the number of interactions they received.

But these changes had some unintended consequences.

Following the appeal, X has issued gold or silver ticks to legitimate brands and accounts to avoid confusion with fake ones – meaning the green ticks only mean the account has been paid.

Incentivizing users with a share of advertising revenue has also provided an opportunity for so-called bot farms to make money by sending automated content to get more interactions. Musk said his team has repeatedly cleaned up bot accounts.

Critics say his reforms have fueled hate speech and misinformation – although he has argued that the site is not politically neutral.

“As a serial entrepreneur, Musk has never stopped trying to improve the efficiency of institutions in his businesses,” said Thomas Gift, professor of political science and director of the Center for US Politics at University College London.

He also added that although Musk’s main role will be to “break through the red tape that is the US federal government”, his position will give him power in the new administration.

“While his role at the Department of State for Government Operations will be informal, there is no doubt that he has Trump’s ear — at least for now.”

Musk’s Doge calls are themselves a reference to a a meme featuring a Shiba Inu dogwhich then gave its name to the cryptocurrency Dogecoin. They were both frequently referred to on the Internet.

Christopher Phelps, a professor of modern US political history, says the term is “an admission of deregulation by being part of what they’re going to do”. Crypto prices surged after Trump’s election again indicates that the incoming president will provide a more liberal regulatory environment.

But Musk’s calls may stem in part from frustrations he’s had with his other ventures: electric car company Tesla and rocket company SpaceX.

Tesla has been repeatedly accused by the US government of trying to prevent its workers from unionizing – which in some cases is against federal law.

Musk – who has it estimated at $290bn (£228bn) – he previously said he was “not against all unions”, but that the auto workers union “has a history of destroying the product so that the company cannot compete”.

In September Musk threatened to sue the Federal Aviation Administration over its plans to fine his company SpaceX $633,000 for alleged license violations related to rocket launches at Cape Canaveral in Florida. He accused the organization of “excessing the law”.

He has also repeatedly stated that he wants to colonize Mars, as well as SpaceX’s Starship program it is an attempt to make that happen.

But in September, he wrote that this was possible “as long as the leadership is not disturbed” and said that the Doge is “the only way to extend life beyond Earth”.

So is part of his motivation to take on the role of his US-based diversified business?

Musk “will personally benefit from a lot of the deregulation that he touches,” said Prof Phelps, adding: “I think putting someone who is a billionaire and who runs big companies in charge of a federal deregulation project is inherently conflicted. interest.”

“There is no doubt that Musk has a strong interest in controlling the US because of his many businesses,” Prof Gift said.

“At the same time, it’s hard to make the case that it’s the only thing driving him.

“Musk has taken great personal and political risk by working for Trump, and most of his actions and speeches seem to reflect someone who is committed to his beliefs.”

Prof Waddan admits: “Obviously you have skin in the game and there is self-interest, but equally you can have a sincere belief that there is too much government regulation and too much government management.”

Musk donated a reported $200m (£157m) to Trump’s 2024 presidential campaign, and appeared to speak at many of his rallies.

Professor Phelps describes his relationship with Trump as “commercial”, adding that the Doge’s role “gives him a lot of symbolic power – and perhaps the power to get the most important things done”.

Since the South African born billionaire is not a US citizen by birth, he cannot become president – something he already has frustrated by some famous faces who were involved in politics in the past.

But Musk can influence US policy, and Trump will have a sympathetic adviser to call upon.

“Trump is looking to surround himself with loyalists in his new administration, and no one has been more loyal than Musk since he announced his support for Trump,” Prof Gift said.

“Not only did Musk go ‘all in’ in supporting Trump personally and financially during the campaign, but he also became a trusted advisor on topics as diverse as technology policy in the Ukraine war.”

In the first sign of the influence a tech entrepreneur might be rewarded for his loyalty, Musk was participated in a call between Trump and Ukrainian President Volodymyr Zelensky following the election. The war in Ukraine will be a major foreign policy issue when Trump takes office.

“That’s quite surprising,” said Prof Waddan. “Normally, even your biggest donors wouldn’t get this kind of access.”