946: Why Elon Will Fail

Politics is hard tbh

The only time my writing made its way into an academic journal, it was to answer the question “Why will Elon Musk fail at creating a third political party?”

Elon announced the new “America Party” yesterday, and the piece appeared way back in the Fall 2018 issue of the Stanford Social Innovation Review.

So, technically, it wasn’t about Elon specifically. But it was about the exact kind of misplaced confidence he’s now putting on full display.

The question “How can philanthropists influence politics?” is important. The answer often lies in how different politics is from both business and traditional philanthropy.

You won’t be surprised to learn that the best attitude for successful business people pivoting to politics is not “sounds easy”.

“Not hard tbh”

Politics isn’t rocket science. It’s harder.

And more than being difficult, it is different from other things Musk has ‘revolutionized’:

Those differences are why Musk will fail.

But first, here's why third parties typically fail.

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Third Party Failure

Duverger’s Law is a political science principle that says when you have single-member districts with winner-take-all elections, like we have here in America, you end up with just two major parties.

Third parties might pop up, but they rarely last. Usually, that is because voters don’t want to “waste” their vote on someone who can’t win. Over time, the system rewards coalitions and penalizes fragmentation.

Sting Once and Die

There’s also a second part of Duverger’s Law, often overlooked. While third parties in winner-take-all systems rarely survive, they can disrupt. They catch fire around a big issue the major parties are ignoring: the Free Soil Party on slavery, the Progressives on corporate power, or Ross Perot on the deficit.

When they gain traction, one of two things usually happens:

1. They fade after being absorbed: A major party co-opts their issue and pulls their voters in. (Example: the Democrats absorbing much of the Progressive agenda in the early 20th century.)

2. They act as spoilers and trigger realignment: By splitting a coalition, they may help the opposing party win in the short term—and force a long-term rethink. (Think George Wallace’s 46 electoral votes for the American Independent Party in 1968 realigning Southern whites into the GOP.)

Third parties don’t win elections, but they win arguments.

This is encapsulated in the saying “Third parties are like bees: they sting once and then die.”

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Will Elon’s Party Sting or Just Fail?

OK, back to why Elon will fail. My one academic article is titled Two Approaches to Advocacy, contrasting a nuanced “nonmarket” perspective with a rigid “market” perspective.

Most successful business people excel in market environments where the rules are fixed, upside is unlimited, downside is capped at what you invested, and everyone is playing with the same scoreboard.

But politics doesn’t work like that. It’s not about disruption or innovation, but navigation. The nonmarket perspective understands that power is contested, opposition is organized, and stakeholders are often chasing very different things. In business, there is complexity to valuation - adjusting for the value of money over time, accounting for risk, jockeying over equity and debt and board votes and so on. But at the end of the day, it’s all about dollars. Not so in politics, where a dizzying array of stakeholders chase an untold variety of goals.

Elon brings a market mindset to a nonmarket arena. That’s why Elon’s “America Party” won’t launch. It’s trying to escape gravity without understanding the atmosphere.

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Unless …

Theodore Schleifer, The New York Times reporter with the biggest finger on the pulse of billionaires in politics, hints at how Elon’s party may launch:

… an initial approach could be to back America Party candidates in just two or three Senate races and between eight and 10 congressional races in next year’s midterm elections.

He reiterated a version of that plan on Saturday, saying on X that he would “crack the uniparty system” through “extremely concentrated force at a precise location on the battlefield.”

Recent political history has been unusually close, with Congress and the presidency toggling back and forth over slim margins for five years now. And this narrowly targeted approach, which would likely caucus with one of the two parties to determine a majority, is more similar to a centrist partisan faction than to a full-scale new party.

And it reminds me of a big bet that did pay off.

Thiel Round Two

Peter Thiel backing J.D. Vance is a perfect example of how billionaires can shape politics, but only when they play by its rules. Thiel didn’t try to launch a flashy new party or rewire the system; he picked a candidate, poured money into a GOP primary, and helped Vance win within an existing coalition.

That’s not disruption, it’s leverage. Unlike Elon’s moonshot, Thiel’s move showed that if you want to influence politics, you don’t build your own rocket but buy seats on rockets with the potential to steer the current parties.

Thiel stayed in the background, and Elon has proven unable to do that. So mark this down as unlikely.

Perot Round Two

The other potential play is just that a single-minded focus on one issue, like the “sting-once” parties that change the political system in prior generations. Musk is trying that with fiscal responsibility, launching in explicit opposition to Trump’s debt-exploding budget.

But again, Elon has proven unable to remain focused politically. We could get into his ketamine use and the scatterplot charts of his Twitter usage demonstrating he never sleeps. But let’s just say it is unlikely an Elon-driven party will focus the way Ross Perot did.

What Dems Must Do