The Free Market Of Space

I&I Editorial

They didn’t carry the gravitas of the 1960s NASA missions, but Saturday’s SpaceX launch and Sunday’s dock with the International Space Station are more than historical footnotes in human space travel. They’re another step in the commercialization of space.

Few would argue that America’s moonshot should not have been a government project. A raging Cold War with the Soviet Union made it necessary to develop a space program and put men on the moon before the communists did. In a number of ways, NASA was an extension of our national defense.

Today, though, we have a Space Force. Let it take care of defense duties. The private sector can handle travel and exploration.

The privatization or commercialization of space shouldn’t be an alien idea in a country built on enterprise, where the innovative and the industrious are always looking for that next market. What we once considered “the final frontier” is now a grand business opportunity. The private sector is far ahead of the federal space administration, which hasn’t launched astronauts into space in nearly a decade.

“We see that the government is not necessary for space exploration; engineers and pilots do not suddenly become smarter when they are hired by NASA. Indeed, because a free market in space industries would be open to all competitors, we have every reason to expect technological innovation to be much quicker than in a monopolized space program.”

That was written by Texas Tech economics professor Robert P. Murphy not in response to the weekend’s events but in celebration of the successful 2004 mission of SpaceShipOne, which won the $10 million Ansari XPrize, awarded “to lower the risk and cost of going to space by incentivizing the creation of a reliable, reusable, privately financed, manned spaceship that finally made private space travel commercially viable.”

The Federal Aviation Administration, in its 2019-2022 strategic plan, said commercial space transportation will continue its “rapid evolution” and provide “opportunities for robust economic growth, supporting the American people and global leadership for the United States,” as well as “facilitate the burgeoning outer space economy.”

Naturally, analysts are bullish on private space ventures.

“Bank of America Merrill Lynch sees the size of the space industry octupling over the next three decades, to at least $2.7 trillion,” CNBC reported in 2017.

At the low end is a forecast from the U.S. Chamber of Commerce, which expects the “sector will increase from approximately $385 billion today,” in 2018, “to at least $1.5 trillion by 2040.”

“That would amount to roughly 5% of U.S. GDP at that time,” said the Chamber.

Last year, research from the Wharton School found that while “for decades, relatively easy access to space and the big profits to go with it have dangled elusively just over the horizon,” now “more than a few signs are pointing in the direction of a robust, varied space age of viable commercialization.” 

The profit motive of the commercialization of space even led NASA to announce last year it “is opening the International Space Station for commercial business so U.S. industry innovation and ingenuity can accelerate a thriving commercial economy in low-Earth orbit.” This is the same NASA that at one time discouraged private-sector efforts to develop space programs.

Such commercialization-through-exploration has a distinguished pedigree.

The Age of Exploration, which began in the late 15th century, lasted through much of the 16th century, and during which Europe discovered and colonized the Western Hemisphere, was itself an early capitalist enterprise. That’s particularly true in North America. Exploration and commercialization go hand-in-hand. Risk-reward is at the heart of the free market system, and nothing is more risky, nor potentially more profitable and beneficial to humanity, than the undiscovered riches of a new world.

The value of space goes beyond tourism and cargo shipments (private companies began delivering freight to the International Space Station years ago). Pharmaceutical firm Amgen has said it developed its stem cells and osteoporosis drugs faster in the microgravity of ISS than on Earth. Other items that are better manufactured in space include optical fibers and some products of 3D printing, including human organs.

And, as we said before under a previous banner, “there are natural resources out there to be mined and with them wealth to be created. The moon, nearby asteroids and planets hold precious metals that are needed here on Earth. Let the private sector retrieve them.”

Markets are also more efficient than government programs, doing more with less. SpaceX, for instance, “has spent less money in the 16 years since its founding,” Ohio Republican Rep. Bill Johnson wrote in 2018 in The Hill, than NASA “spent building the Space Shuttle Challenger.”

“At $150 million a launch, SpaceX is able to operate $250 million cheaper than the closest private-sector competition, and NASA costs are even higher. The average cost to launch a NASA shuttle is $450 million a mission.

“So what does all of this mean? When private companies are left to succeed on their own merits, new products, services, and ideas are developed at the best quality for the lowest price.”

The lesson from space for a nation that is optimistic, dynamic, and moving forward, if we might borrow from a self-serving, and fallacious, remark from Hillary Clinton, is that markets work. Nothing has improved lives the way free enterprise has. Yet there’s more than a whiff of socialism poisoning our air, clear evidence that many in our political class have too much space between their ears.

— Written by the Issues & Insights Editorial Board