Billionaire Elon Musk has been appointed to head the new Department of Government Efficiency (Doge) under incoming President Donald Trump.
In a social media statement, the US president-elect announced that Musk, along with former Republican presidential candidate Vivek Ramaswamy, would "dismantle government bureaucracy, reduce excessive regulations, eliminate wasteful spending, and restructure federal agencies."
This role appears to be one Musk has been preparing for through his business leadership and has actively advocated for over the past few months.
However, it is also anticipated that this position will give him significant influence over government policy and the regulatory landscape affecting his businesses.
At a Trump rally in October, Musk expressed his belief that the U.S. government's budget could be reduced by "at least" $2 trillion from its current level of around $6.5 trillion. He has also frequently proposed significantly cutting the number of government employees.
In contrast, Ramaswamy has presented plans to eliminate several federal departments, including the Department of Education, the Nuclear Regulatory Commission, the Internal Revenue Service, and the FBI.
Musk's management style at his own companies may provide insight into what Americans can anticipate from him at Doge.
In October 2022, he acquired the social media platform Twitter, later rebranded as X, in a $44 billion deal. His goal was to eliminate content moderation policies and lift bans on users accused of hate speech and disinformation violations.
Among those reinstated was Trump, who had been banned after the Capitol riot in January 2021 for claiming the 2020 election was rigged against him.
Musk's takeover brought radical changes to the company. He slashed X's workforce from roughly 8,000 to 1,500. In April 2023, he explained to the BBC that his reasoning was, "if the whole ship sinks, then nobody's got a job."
"His approach to efficiency was to let a lot of people go," stated Alex Waddan, a US politics professor at the University of Leicester.
In response to a wave of advertisers leaving due to his relaxed speech policies, Musk also monetized various features of the platform to generate revenue. He turned the blue verification ticks, which previously signified authentic accounts, into a subscription service and linked advertising income for "verified" users to their engagement levels.
However, these changes resulted in some unintended consequences.
In response to backlash, X introduced gold and silver ticks for brands and official accounts to distinguish them from fake ones, effectively making blue ticks a signal that an account is paid for.
Additionally, incentivizing users with a share of advertising revenue has opened the door for bot farms to profit by posting auto-generated content to increase interactions. Musk has claimed his team is continually purging bot accounts.
Critics contend that his changes have amplified hate speech and misinformation, despite Musk's assertions that the platform is politically neutral.
"As a serial entrepreneur, Musk has been relentless in seeking to enhance institutional efficiency within his own companies," says Thomas Gift, a political science professor and director of the Centre on US Politics at University College London.
He notes that while Musk's main focus will be "cutting through the thicket of red tape within the US federal government," his role will also afford him influence in the new administration.
"Although his position in the Department of Government Efficiency will be more informal, there's no doubt that he has Trump's attention—at least for now."
Musk's advocacy for a Department of Government Efficiency, or Doge, references a meme featuring a Shiba Inu dog, which inspired the name of the cryptocurrency Dogecoin. He has often mentioned both online.
Christopher Phelps, a professor of modern U.S. political history, notes that the name suggests "a nod to crypto deregulation being part of their agenda." Following Trump's election, cryptocurrency prices surged, indicating that the incoming president might promote a more relaxed regulatory environment.
However, Musk's calls for deregulation may also stem from frustrations with his other business ventures: electric vehicle company Tesla and rocket firm SpaceX.
Tesla has faced repeated accusations from the U.S. government of attempting to hinder its workers from unionizing, which can be illegal in certain circumstances.
Musk, who has an estimated net worth of $290 billion (£228 billion), has stated he is "not against all unions," but believes that the auto workers' union "has a track record of destroying productivity so a company can’t compete."
In September, Musk threatened to sue the Federal Aviation Administration over its decision to fine SpaceX $633,000 for alleged licensing violations related to some rocket launches from Cape Canaveral in Florida, accusing the agency of "regulatory overreach."
He has also expressed his ambition to colonize Mars, with SpaceX's Starship program aimed at making this vision a reality. However, in September, he remarked that this goal is only feasible "as long as it is not smothered by bureaucracy," asserting that Doge represents "the only path to extending life beyond Earth."
So, could part of his motivation for taking on this role be linked to his various U.S.-based business interests?
According to Prof. Phelps, Musk "stands to benefit personally from much of the deregulation he advocates," adding, "I think putting a billionaire who runs major corporations in charge of a federal deregulation project is inherently fraught with conflicts of interest."
Prof. Gift agrees, stating, "There’s no doubt that Musk has significant vested interests in the U.S. regulatory landscape due to his numerous business ventures." However, he adds that it is difficult to argue that this is the only factor motivating Musk.
"Musk has taken considerable personal and political risks by supporting Trump, and many of his actions and rhetoric appear to reflect a genuine ideological commitment to the causes he believes in."
Prof. Waddan concurs, saying, "Clearly, he has a vested interest, but it's also possible to sincerely believe that there is too much government regulation and bureaucracy."
Incentive for loyalty
Musk reportedly donated $200 million (£157 million) to Trump's 2024 presidential campaign and made appearances at several of his rallies.
Prof. Phelps characterizes Musk's relationship with Trump as "transactional," noting that the Doge position "affords him significant symbolic power—and possibly the ability to achieve the objectives that matter most to him."
As a South African-born billionaire, Musk is unable to become president due to not being a U.S. citizen by birth, a situation that has frustrated other prominent figures who have ventured into politics.
However, Musk can influence U.S. policy, providing Trump with a sympathetic advisor.
"Trump aims to surround himself with loyalists in his new administration, and Musk has demonstrated unparalleled loyalty since endorsing him," states Prof. Gift. "Musk not only invested heavily in supporting Trump during the campaign but has also become a trusted advisor on a wide range of issues, from technology policy to the conflict in Ukraine."
In an early indication of the influence Musk might gain for his loyalty, he participated in a call between Trump and Ukrainian President Volodymyr Zelensky following the election, particularly notable since the war in Ukraine is expected to be a significant foreign policy focus for Trump.
"That's quite extraordinary," remarks Prof. Waddan. "Typically, even major donors wouldn't have that level of access."
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