The Economics of Space Exploration Contests, Entrepreneurship, and Special Interests in Space National Debate Topic Space Exploration Study Guide November, 2011

Can we return to the Moon for just $30 million? Though a the title sponsors of the first X PRIZE, fraction of total funds needed to land a rover on the Moon, the jumpstarting 26 teams from 7 differ- Google Lunar X PRIZE contest has inspired over two dozen teams ent nations to pursue their passions to begin design and development, and has assisted their efforts to by competing for the prize. Those 26 raise funds for lunar exploration. The Google Lunar X PRIZE offers teams combined spent more than $30 million: “to the first privately funded $100 million to win teams to safely land a robot on the sur- the prize. Since face of the Moon, have that robot travel SpaceShipOne won 500 meters over the lunar surface, and the prize, there has send video, images and data back to the been more than $1.5 Earth.” (Read the details of this moon billion dollars in pub- exploration contest at: www.googlelunarxprize.org) lic and private expen- diture in...the private spaceflight indus- Contests have a long history of enabling exploration across land, try. space.xprize.org/ansari-x-prize sea, air, and now outer space. Dava Sobel’s Longitude recounts the British government’s £20,000 prize offered to the inventor of a Arrayed against the entrepreneurs way to measure longitude, in order to increase ocean exploration. and enterprises of the New Space Industry, are the cost-plus contrac- Lunar X The Ansari X PRIZE was modeled after the Orteig Prize, won by Char- tors of the Old Space industry. Prize competitors les Lindbergh in 1927 for being the first to fly non-stop from New York NASA’s just-announced deep space to Paris, and mirrored the hundreds of aviation incentive prizes offered rocket, with its $35 billion price tag, would be built by cost-plus early in the 20th century that helped create today's $300 billion com- space contractors. To get Congressional funding NASA and lob- mercial aviation byists will likely try to undermine industry. Dr. less-expensive New Space launch Peter Diamandis systems and exploration projects. designed the NASA and the Old Space contractors prize after read- are accustomed to cost-overruns ing The Spirit of (and profits from cost-overruns): St. Louis about costs that include lobbying Congress the winning of for projects like the new “monster the Orteig Prize. rocket” (see page 8). This year, space ... The Ansari exploration’s future is being debated family [became] Charles Lindberg wins the Orteig from high school to Congress. Scaled Composite’s SpaceShipOne wins the Ansari X Prize Prize for crossing the Atlantic. www.EconomicThinking.org/Space/ The Economics of Space Exploration 1 ECONOMIC THINKING • MACKINAC CENTER

Returning man to the moon is less rocket science called than rocket engineering. NASA’s success as a research “spam in and development organization contrasts with its a can” in inability over decades to reduce costs for The Right Moon Express Hires FIRST Stuff. transporting payloads into space. The Robotics Champions to research and design skills needed to The Develop Lunar Robots develop new technologies differ Right from the skills and capabilities to the Moon Stuff –both the book 12 september 2011 to drive manufacturing and and movie–show the MOUNTAIN VIEW, Calif. — Moon Ex- operational costs down history and great accom- press, a Google Lunar X PRIZE contender, has announced that it has established the for commercial plishments of the U. S. “Moon Express Robotics Lab for Innova- launches. space program. But top- http://moonandback.com/2011/09/12/moon-express- hires-first-robotics-champions-to-develop-lunar-robots/ NASA was success- down space enterprise ful early, designing has been expensive. rockets and rovers. Moon Express, a con- But from there, tender for the Google competing engineering teams with commercial (rather Lunar X PRIZE, recently The than Race military) design Back and operational experience can hired a team to commer- better advance space launch and vehicle technologies. cialize micro-rovers (story at right). This is tion” (MERLIN) and hired a team of the In a competitive market, diverse designs are developed and tested. nations’ brightest engineering students NASA’s Space Shuttle turned out to be way too expensive, slow- along the lines of NASA’s who became international superstars ing space exploration for decades. original mission to re- through the FIRST Robotics Competition. search space technology MERLIN will develop robotic technology Jeff Greason, President of XCOR con- supporting the company’s lunar explora- trasts the very different economics of and assist initial devel- opment, but then to al- tion missions under the leadership of commercial aerospace transportation in Marco Chacin, a graduate of the Interna- low private firms im- a recent TED talk (see link). The Shuttle, tional Space University who holds a PhD prove and commercialize Soyuz rocket, and Boeing 747 are made in Aerospace Engineering and developed space technologies. robotic solutions for the JAXA/ISAS “Hay- of alumi- abusa” asteroid sample return missions. num and carry about the same Dozens of private space The engineering team hired by Moon amount of fuel, and the 747 is more firms have failed, erasing Express was mentored at the NASA Ames complex technology than either millions of investment Robotics Academy, where they also devel- Soyuz or dollars. No one can oped innovative lunar micro-rover con- Shuttle. But guess which rocket or cepts. “MERLIN is formed around the best and most accomplished young robotics the Space moon rover designs are engineers,” said company co-founder and Shuttle is best, so this searching CEO Bob Richards. TEDxSanJoseCA - Jeff disassem- and discovery process is www.wired.com/wired/ Greason - Rocket Scientist: Making Space Pay and bled after the key to space explora- archive/11.05/moon.html Having Fun Doing It each flight tion. XCOR’s Jeff Grea- to check for son points out the lead- wear, while 747s take some 10,000 flights. New rockets from ing private launch vehi- XCOR and other firms reach for these commercial cost and op- cles now in development erational standards, in order to dramatically lower costs for have radically different launching people and scientific payloads into space. designs. Who’s is best? Beyond the debate over launch vehicles is a broader debate over “Astropreneur” David manned vs. unmanned Gump’s LunaCorp was exploration, highlighting profiled in Wired in 2003, NASA’s long priority but has since gone out of on the public relations business. David Gump from sending astro- authored Space Enter- nauts into space in- prise: Beyond NASA, pub- stead of boring robots. lished before the 1980s But modern robotic debate topic on space vehicles are better for exploration. But now 26 much space explora- teams have joined this tion, and astronauts-- new race to the moon. www.EconomicThinking.org/Space/ The Economics of Space Exploration 2 ECONOMIC THINKING • MACKINAC CENTER www.spacedaily.com/news/oped-03zzx.html Students debating the Nostalgia For Medieval Explorers Space Explora- Won't Make Us Space Explorers tion topic may be interested in Cheng Ho's travels took him far at the time, but left China in no better position the Kansas State to confront the centuries of decline it has faced until the most recent years. Fair Demonstra- by Jeffrey F. Bell • Honolulu - Dec 03, 2003 tion Debates. I had the opportunity to offer short comments on Talk to “Space Cadets” long enough and they the economics and history of the cases, arguments, and evidence. will inevitably start using historical analogies to “successful” sea exploration programs in order The debates are online: www.youtube.com/user/grehmke to promote their particular vision for future Debate One: Allow Joint U.S./China Space Exploration space exploration. But it is the historical failures The affirmative ended the Congressional ban on joint U.S./China that shed more light on the state of space ef- forts today. space projects and argued for NASA and the Chinese government on develop joint space missions. China’s growing economy will Living in Hawai'i, I constantly encounter refer- allow more spending on space projects, both scientific and mili- ences to the great Polynesian canoe voyages. Another popular model is the age of European tary. Working with China, the affirmative argued, would foster exploration that started with Columbus and better relations. I argued that this assumes governments better Vasco Da Gama. Both had an immense influ- manage space exploration, and noted China’s state enterprises ence on human history, so Space Cadets love to have accumulate vast debt, distorting and endangering the Chinese point to them to describe the potential for the exploration of space. economy. Plus, in recent years dynamic small firms in the New More appropriate lessons can be drawn from two “unsuccessful” sea Space Industry are advancing U.S. space exploration technologies. programs. One which does get a certain amount of play is the Chinese Empire's program of “tribute fleets” that roved throughout the Indian Also, China’s historical experience as a exploration leader, sailing Ocean in the 15th century. Science-fiction writer Vernor Vinge has even the world’s oceans, offers a cautionary tale of what can go wrong named his future interstellar trading culture after the most famous com- with large state-sponsored exploration projects (article at right). mander of those fleets, Admiral Cheng Ho. [In A Deepness in the Sky.] Debate Two: Mining on the Moon The Space Cadet history of The affirmative called for the Federal gov- Cheng Ho's voyages goes like ernment to launch a new program to estab- this (with modern analogies in parentheses): Far-seeing palace lishing mining operations on the moon. The eunuch-administrators (JFK's affirmative claimed only thirty years of oil New Frontiersmen) funded an reserves exist and we need lunar mining for immense program of exploratory new energy sources. Running out seems voyages (Apollo) that extended unlikely given recent huge oil discoveries Chinese influence and culture (“Report says we have more oil than we throughout the Indian Ocean. thought,” Houston Chronicle, Sept. 15, 2011). The size and technical sophistica- Moon mining might be a profitable venture, tion of these ships was far in but would require inexpensive launch capabilities, plus an array of advance of the pitiful Portuguese (Soviet) caravels that were creeping down the West African coast at the same time. When Cheng Ho was on new technologies. Robert Heinlein’s classic novel The Moon is a the verge of rounding the Cape and reaching Europe, a palace revolution Harsh Mistress outlines the technology and potential for future replaced the eunuchs with Confucian scholars (Great Society welfare- lunar mining colonies. In his novel, mining on the moon starts with staters / Nixon Administration warmongers) who lacked the vision to penal colonies similar to past British penal colonies in Australia. appreciate the value of oceanic exploration. The new administration cut seafaring out of the budget. Eventually, the building of ocean-going ships Debate Three: Asteroid Mining was banned, China turned inward and left the world of the future to be The third debate was over a proposal for mining near-Earth as- dominated by Europe (USSR / Japan / Red China). teroids, and argued the benefits of gathering rare earth metals and But some years ago, I read some of the actual literature on that short other minerals. The affirmative claimed the venture would cost period of Chinese oceanic voyaging. The real story is that those tribute $300 billion and earn $1 trillion in ten years. I noted that though fleets were very much like our current space program: vastly expensive, China is now the low cost producer, rare earth metals can be but producing no useful results other than propaganda. At each port found in the U.S., other countries, and in large quantities on the stop, the local sultans or maharajas proclaimed themselves vassals of the ocean floor. Mining deep under Celestial Emperor, expensive gifts were exchanged, and then the fleet the sea would be expensive, sailed on. but likely less expensive than The Chinese didn't get any colonies, forts, naval bases, or trading posts. mining asteroids. A powerful They seem not to have even collected taxes or tribute on a long-term basis from the places they visited. There was no increase in trade or in- side benefit for the affirmative, dustry that can be traced to Cheng Ho's voyages. however, would be developing the technology to divert aster- The emigration of the Overseas Chinese population so prominent in the economic life of this area today is completely unconnected to Cheng oids heading toward Earth. Ho. The Chinese Empire spent a huge amount of public money on these -- Greg Rehmke, voyages and in return it got a short-lived boost in prestige and a few grehmke@gmail.com alien animals for the Emperor's zoo. www.EconomicThinking.org/Space/ The Economics of Space Exploration 3 ECONOMIC THINKING • MACKINAC CENTER pajamasmedia.com/blog/how-congress-sabotages-space-exploration/ reason.com/archives/ 2011/ 05/23/lunar-lunacy How Congress Sabotages Lunar Lunacy Space Exploration Space Waste We cannot afford to continue to do space business as usual as the Peter Suderman from the July nation becomes more and more fiscally strapped. 2011 issue of Reason July 20, 2011 - 12:14 am - by Rand Simberg Congress may not be very in- The Space Shuttle Atlantis closed its hatch at the International vested in sending Americans back Space Station on Tuesday, for the last time, not just for that orbi- to the moon. It is nevertheless ter, but for any. It separated from the ISS, and will perform a few forcing the National Aeronautics and Space Administration final tasks in orbit over the next couple days. Then, weather per- (NASA) to spend millions of dollars on a lunar program going mitting, it will fire its orbital maneuvering engines to slow itself, nowhere. and start its long, last fall back into the atmosphere, with a final In March, Congress voted for a three-week continuing budget stop of the wheels on the runway in Florida, where it will spend resolution that compels NASA administrators to continue spend- the rest of its days in a museum at the NASA Kennedy Space ing $1.4 million a day—about $29 million over the course of the Center. After a little more than three decades of operation, the three-week budget extension—on Constellation, an initiative Space Shuttle program will be over. aimed at sending American astronauts to the moon. This despite Ironically, it takes place on the forty-second anniversary of the the fact that the Obama administration shut down the program first landing on the moon (July 20th), an event that many at the last year. time thought would kick off a great age of space exploration, to www.usatoday.com/tech/science/space/2005- This isn’t the first be followed by lunar bases and human missions to other plan- 09-27-nasa-griffin-interview_x.htm time Congress has ets. In fact, the Shuttle program, initiated shortly after that NASA administrator says space voted to continue monumental achievement, was thought to hold the key to the shuttle was a mistake funding the zombie rest of the solar system. Instead, it served to keep us trapped in By Traci Watson, USA TODAY program. Last sum- low earth orbit for almost four decades. Posted 9/27/2005 11:03 PM mer the legislature approved a short- With the Shuttle’s retirement this week, the nation is now de- The space shuttle and International pendent on the Russian Soyuz to not only get its astronauts to Space Station — nearly the whole of term extension of and from the ISS, but to continue to provide the “lifeboat” in the U.S. manned space program for the Constellation’s fund- the event of an emergency in orbit. There is now no backup to past three decades — were mistakes, ing while attempting that system — if something goes wrong with it, we will have no NASA chief Michael Griffin said Tuesday. to negotiate a new budget. As negotia- access at all, which could be disastrous for not just those NASA chief Michael Griffin on the space aboard the station, but for the facility itself. shuttle: "It is now commonly accepted tions dragged on, Congress passed This situation has led some (including some who should know that was not the right path." more short-term better) to panic and go off on flights of fancy about keeping the In a meeting with USA TODAY's edito- continuations. Each system going. Even former NASA administrator Mike Griffin, rial board, Griffin said NASA lost its way time, Sen. Richard who created a controversy a few years ago by declaring the in the 1970s, when the agency ended Shelby (R-Ala.) in- program a “mistake,” [see insert] is now saying that it should go the Apollo moon missions in favor of serted language forc- on. developing the shuttle and space station, ing NASA to continue which can only orbit Earth. ... But it’s simply impossible at this point to close the “gap” with funding Constellation the Space Shuttle. As former Shuttle program manager Wayne even though it had Hale warned at his blog three years ago, the supply chain of been closed. Not surprisingly, expendable parts (such as external tanks) is gone, and couldn’t much of that money goes to be recreated for two or three years. And beyond that, it would Shelby’s constituents. simply be impractical to fly safely with only three orbiters left. Nor was Congress unaware of The end of the Shuttle program ends more than the Shuttle the problem. In June 2010, era. Historians in the future will note that it ended a false no- NASA Administrator Charlie tion, one half a century old: that humanity would open up space Bolden wrote a letter to through the application of command-economy government Shelby warning that continuing programs. The future, even the immediate future, of human to fund the defunct lunar pro- spaceflight lies not with a single type of vehicle developed by gram would waste more than and for a massive government bureaucracy, but with public/ $200 million. By the time the private partnerships that create a robust, competitive commer- March extension passed, cial spaceflight industry. This is the only practical way forward to NASA had blown more than close the gap between the end of the Shuttle and new domestic $250 million on keeping the capability that will eliminate our reliance on the Russians. program alive. Continued on page 5 www.EconomicThinking.org/Space/ The Economics of Space Exploration 4 ECONOMICECONOMIC THINKINGTHINKING •• MACKINACMACKINAC CENTERCENTER Congress Sabotages Space Exploration (continued. from page 4) www.thefreemanonline.org/featured/the-sources-of-invention/ Unfortunately, Congress, caring more about space pork than progress, continues to have other plans. Last year, it passed an authorization bill demanding that NASA The Sources build a new heavy lift vehicle by 2016, using Shuttle components and contracts. They called it the Space Launch System, but others have called it the Senate Launch System, after the rocket scien- tists on the Hill who came up with it. Absurdly, they expect of Invention NASA to build this vehicle faster than it was going to deliver the Ares launcher from Constellation, with less funding, and they by John Jewkes want to use it as a launcher for an overpriced NASA-developed capsule to ISS, despite the fact that it is ridiculously oversized for The author [was] Professor of Economic Organization in the University that mission. In the markup that came out of the Commerce, of Oxford. This article first appeared in the January 1958 issue of Lloyds Bank Review [and] was reprinted by the Foundation for Eco- Justice, and Science Appropriations Committee last week, they insisted on funding these for three billion dollars for next year, an nomic Education. Page numbers in brackets. See URL for full article. increase over NASA’s request (though below the level author- It seems to be almost universally assumed that the launching of ized last year, and not enough to actually make the program suc- the space satellites was made possible only by employing vast cessful, if indeed there is any amount of money that can do that). teams of technicians working together in large research institu- Given that the overall NASA budget is being reduced to pre- tions under close central guidance and with unlimited resources 2008 levels, they got the money for this in part by reducing the and equipment. This may be true, although nobody in the Western funding for the commercial crew program, from the $850 million world can actually know that it is so. Any suggestion that the dif- request to a little over $300 million. ference between failure and success might have resulted from a In other words, they are starving off funds from the one program pathbreaking discovery by some worker not in a large institution that can quickly close the post-Shuttle gap and pouring it into a and perhaps not even interested primarily in high- altitude rockets rocket to nowhere, but one that continues to generate jobs in would, nearly every where, be instantly dismissed as ludicrous. All the states and districts of the congresspeople and senators on this is indicative of the degree to which we are now dominated by the space committees. Beyond that, they also cut the funding to the doctrine that technical progress can come only from mass the technology programs that offer hope of actually making attacks upon set problems. travel beyond earth’s orbit practical and affordable, demonstrat- In fact, a glance at the history of the high-altitude rocket hardly ing once again that while they talk a good game of wanting NASA supports such a theory. Some of the more important early scien- to send humans out to explore, such a goal takes a distinct back- tific writings on this subject, published in 1903, were those of a seat to keeping the campaign contributions and votes coming. Russian schoolmaster, [p. 115] K. E. Ziolkowsky. He made many fundamental contributions to rocket technology. (Russia was Fortunately, while they can slow down American enterprise, they probably further ahead of other countries in thought and work on can’t stop it (unless they make it illegal for private entities to go rockets in 1908 than now.) Perhaps the most important scientific into space). SpaceX, United Launch Alliance, Boeing, Sierra Ne- contribution to rocket theory, however, was made by Hermann vada, Bigelow Aerospace and others are going to continue to move forward and some time, probably within the next year Oberth, a teacher of mathematics in Transylvania, who in 1928 published his classic, By Rocket into Interplanetary Space. (particularly if SpaceX docks a Dragon capsule with the ISS later this year, as currently planned), will be looking better and better. German Rocket Experts In fact, in an authorization committee hearing last week with Between the two world wars practical interest was maintained by administrator Bolden, even some of the committee members are a group of young German amateurs, some of whom were des- starting to understand the implications of their disastrous policy tined to become later outstanding figures in this field. During the preferences: We’re still talking late this decade, early ’20s before war the German military authorities took up the development of we have a human-rated [SLS] vehicle,” [Bolden] said. That, a the rocket and finally produced the V2, which covered a distance member of the committee later noted, makes it unlikely the of 120 miles with a deflection of only 212 miles from the target, MPCV would be able to serve as the backup for commercial reached a speed of 3,000 miles per hour and a height of nearly 60 providers for accessing the ISS unless the station’s life is ex- miles. When Germany was finally overrun, the Peenemünde ex- tended beyond 2020. perts were scattered. Some went to the United States and Britain; As the commercial providers continue to meet critical mile- more finished up in Russia. stones at modest costs, and the government rocket program Considering the rapid progress made by Germany in a relatively continues to be bogged down in mismanagement and bureauc- short period during the war, the development of high-altitude racy, just as Constellation was, it will become clear to everyone rockets since that time seems to have been fairly slow every- else in Congress that we cannot afford to continue to do space where; for by 1945 there was no doubt that a satellite could be business as usual as the nation becomes more and more fiscally placed in the sky by the use of rockets and there was no great strapped. As not just the Shuttle era, but the government- mystery about how, in general, this could be done. The fundamen- directed human spaceflight era ends, we’re finally going to get a tal discoveries in regard to high-altitude rocket propulsion, as dis- space program that looks like America, whether the defenders tinct from the refinement and development of these [p. 116] of the status quo like it or not. ideas, were made by independent enthusiasts working with limited www.EconomicThinking.org/Space/ The Economics of Space Exploration 5 ECONOMIC THINKING • MACKINAC CENTER resources under discouraging conditions and for long ridiculed or Twentieth-Century Inventions ignored by the main bodies of organized science and technology. The first task was to pick out a group of twentieth century inven- A New Theory of Progress tions which might be regarded as a fair cross-section of the tech- Even, however, before atomic energy and the sputniks, new no- nical progress of the past fifty years; to make as detailed a study as tions had been gaining ground about how inventions could best be possible of the conditions under which they had arisen and, in stimulated and how scientists and technologists might be em- particular, to try to identify the respective parts played by individ- ployed to the best effect. (These ideas began to be strongly advo- ual inventors, the research activities of firms of varying size, of cated only during the 1930's. Before that time, it will be recalled, it universities, and of other institutions where research is con- was commonly believed that the problem of production was ducted. A list of about sixty inventions was studied, ranging from solved and that the distribution of wealth was the important task acrylic fibers to the zip fastener, from air conditioning to to be dealt with; that technical progress was perhaps going on too xerography.2 [p. 119] quickly and that scientists and technologists were probably doing The clearest conclusion emerging from the inquiry was that sim- more harm than good in the world.) ple generalizations are not possible. The important twentieth cen- The new doctrines really amount to a claim that the world has tury inventions have arisen in all sorts of ways and through the suddenly become a different kind of place, that the lessons of the activity of all the different possible agencies. More than one-half of past have largely become irrelevant and that we must all now ad- the cases can be ranked as individual invention in the sense that just ourselves and our thinking accordingly. This "modern" view much of the pioneering work was carried through by men who can be summarized as follows. were working on their own behalf without the backing of re- search institutions and often with limited resources and assistance In the nineteenth century, most inventions came from the individ- or, where the inventors were employed in institutions, these insti- ual inventor who had little or no scientific training and who tutions were, as in the case of universities, of such a kind that the worked largely with simple equipment and by empirical methods individuals were autonomous. and unsystematic hunches. The link between science and technol- ogy was slight. The jet engine was invented and carried through the early stages of development almost simultaneously in Great Britain and Ger- In the twentieth century, the argument runs on, the [p. 117] char- many by men who were either individual inventors unconnected acteristic features of the nineteenth century are rapidly passing with the aircraft industry or who worked on the airframe side of away. The individual inventor is becoming rare; men with the the industry and were not specialists in engine design; the aircraft power of originating are largely absorbed into research institu- engine manufacturers came in only after much pioneering had tions of one kind or another where they must have expensive been carried on. The gyro-compass was invented [p. 120] by a equipment for their work. Useful invention, in particular, is to an young man who was neither a scientist nor a sailor but had some ever-increasing degree issuing from the research laboratories of scientific background and was interested in art and exploration. large firms which alone can afford to operate on an appropriate scale. There is increasingly close contact now between science and The process of transforming liquid fats by hardening them for use technology. The consequence is that invention has become more in soap, margarine, and other foods was discovered by a chemist automatic, less the result of intuition or flashes of genius and working in an oil industry, who pursued his researches and his more a matter of deliberate design. The growing power to invent, efforts to get the process adopted, singlehanded. The devices combined with the increased resources devoted to it, has pro- which made practicable the hydraulic power steering of motor duced a spurt of technical progress to which no obvious limit is vehicles were primarily the work of two men, one of whom to be seen. worked strictly on his own, while the other was the head of a small engineering company. In this article are set down some of the results of an inquiry, shortly to be published in full,1 designed to test these opinions The foundations of the radio industry were laid by scientists; but against the observable facts. It was hoped in this way to make the majority of the basic inventions came from individual inven- some contribution to a better understanding of the dynamics of tors who had no connection with established firms in the com- industrial societies. The study, it must be repeated, covered a pe- munications industry or who worked for, or had themselves cre- riod before atomic energy and space satellites. It may be that ated, new small firms. In the case of magnetic recording, the early these latest spectacular discoveries, and the circumstances in crucial invention came from an independent worker, as did a num- which they have arisen, rob earlier experience of all pertinence ber of the major inventive improvements; the interest of the for thinking about the future. I personally have doubts about this companies arose much later. The first successful system for the but cannot enlarge on them here. [p. 118] catalytic cracking of petroleum, which opened up the way for many later advances, was the product of a well-to-do engineer Further, the study was confined to inventions as contrasted with who was able to sell his ideas for development to the oil compa- the development of those inventions; it was concerned with the nies. early crucial periods of radical innovation and not the later stages of improvement and exploitation of the original discoveries. It is, No Standard Pattern of course, impossible to draw a sharp dividing line between the The history of the evolution of the cotton picker reveals two two. On the other hand, it would be futile to deny that some new main lines of progress: in each case, individual [p. 121] inventors ideas are more revolutionary than others, that certain concep- working with limited resources were able to take their ideas to tions start a long chain of consequential improvements and that, the point where large firms were prepared to buy or license their unless the flow of these seminal ideas can be maintained, technical patents for subsequent development. Bakelite, the first of the progress will finally come to a stop. thermosetting plastics, was produced by a brilliant sole investiga- www.EconomicThinking.org/Space/ The Economics of Space Exploration 6 ECONOMIC THINKING • MACKINAC CENTER tor. The first, and still the most important, commercially practica- what is least organizable. The director of a large research institu- ble method of producing ductile titanium was conceived of by a tion is confronted with what is perhaps the most subtle task to be metallurgist working in his own laboratory. found in the whole field of administration; a task which calls for a In the application of automatic transmissions to motor vehicles, rare combination of qualities, scientific ability commanding the the credit for mechanical novelty has to be shared between indi- respect of colleagues, and also an aptitude for organizing a group. vidual inventors and companies, but the former should probably There are many cases to support the conclusion that a large re- rank above the latter; actually, the ideas of a shipbuilding engineer search organization may itself prove to be an obstacle to change. lie behind much of the modern progress, but both in Britain and Ideas emanating from outside may be belittled or passed over. "Is the United States inventors working singlehanded have contrib- not every new discovery a slur upon the sagacity of those who uted a great deal to the present-day mechanisms. Up to 1938, only overlooked it?" And it will always be seductive for an established one large aircraft manufacturer had organization to take the smaller risks taken much interest in the helicopter and more prudent routes when [p. 133] and even that only as the result of the [Small and large organizations] the rare and larger prizes are likely to personal interest of the head of the firm: are subject to quite different laws. be found in other directions. the progress was made by the enthusi- Can the Pace Be Forced? asm of individual inventors, usually with In the one case the aim is to limited resources, obtaining backing in Here, then, is the dilemma which con- unlikely quarters in a manner which achieve smooth, routine, and fault- fronts any community trying to make the best of the native scientific and would parallel the many stories of "he- less repetition, in the other to roic" invention in the nineteenth century. technical originality of its members. On break through the bonds of routine the one side are the views of those, at To mention one or two inventions from the moment it seems in the majority, the field of consumer goods, the and of accepted ideas.... a large re- who conceive of the possibility of forc- groundwork for the successful Ko- ing the pace, as it was recently put by dachrome process was laid by two young search organization may itself one research director: collaborators, both musicians, whose ideas were taken up by a large photo- prove to be an obstacle to change. We find the self-directed individual being graphic firm; the safety razor came from largely replaced by highly organized team attack in which we employ many people who, if left entirely to their two [p. 122] individuals who struggled through financial and tech- nical doldrums to great success; the zip fastener came from the own devices, might not really be research-minded. In other words, we hire people to be curious as a group . . . we are undertaking to create minds of two engineers and was only taken up for large- scale production many years later; the self-winding wrist watch was research capability by the sheer pressure of money . . . . invented by a British watch repairer. ... On the other hand are the fears of those, at present much in the minority, who suspect that such forcing tactics will mean that we The Communists Had None may frustrate the awkward, lonely, inquiring, critical individuals One significant exception is that, in none of the sixty cases stud- who, to judge by past experience, have so much to give but can so ied, had contributions been made by Russian workers subsequent easily be impeded. To pose the question in concrete form: the last to the Revolution. Before that date, numerous names of distin- time that a new form of propulsion, the jet engine, came to be guished Russian contributors crop up: the early Russian work in conceived it was pressed forward by individual workers who had rockets has already been mentioned; in the early efforts linked to meet frustrations and indifference, even resistance, on the part with television occurs the name of Rosing; Zworykin, who later of established institutions. We are, presumably, not at the end of on in the United States was to make one of the vital contributions such innovations; there may be other new forms of motive power to the perfection of television, acquired his interests in this field in to come. [p. 134] ... St. Petersburg before the first world war; Sikorsky, the great It may be that there are no clear-cut answers to such weighty American helicopter pioneer, had in fact built two helicopters in questions. But the study of the inventions of the twentieth cen- Russia as far back as 1909. tury would seem to support the following generalizations. Knowl- But, after the Revolution, it seems clear that Russia made no im- edge about innovation is so slender that it is almost an imperti- portant contributions in radar, television, the jet engine, the anti- nence to speculate concerning the conditions and institutions biotics, the man-made fibers, the newer metals, the catalytic crack- which may foster or destroy it. But, in seeking to provide a social ing of petroleum, the continuous hot strip rolling of steel, silicones framework conducive to innovation, there would seem to be or detergents, until others had shown the way and revealed what great virtues in eclecticism. If past experience is anything to judge could be done. [p. 126] ... by, crucial discoveries may spring up at practically any point and at any time. Size May Be No Advantage [I]t is erroneous to suppose that those techniques of large-scale As contrasted with the ideal ways of organizing effort in other operation and administration which have produced such remark- fields, what is needed for maximizing the flow of ideas is plenty of able results in some branches of industrial manufacture can be overlapping, healthy duplication of efforts, lots of the so-called applied with equal success to efforts to foster new ideas. The two wastes of competition, and all the vigorous untidiness so foreign kinds of organization So that large research organizations can to the planners who like to be sure of the future. perhaps more easily become self-stultifying than any other type of The full article provides many additional arguments and examples: large organization, since in a measure they are trying to organize www.thefreemanonline.org/featured/the-sources-of-invention/ www.EconomicThinking.org/Space/ The Economics of Space Exploration 7 ECONOMIC THINKING • MACKINAC CENTER www.space-access.org/updates/sau128.html http://spacefrontier.org/2011/09/15/monster-rocket/ Space Access Update #128 9/15/11 • (c) 2011 Space Access Society Monster Rocket Will Eat Impossibly high NASA America’s Space Program system development costs by Ferris Valyn on September 15, 2011 are the heart of the matter The Space Frontier Foundation called Wednesday’s announcement We will ignore for the moment the arguments over whether by NASA that it will attempt to build Congress’s giant monster the old-line NASA human spaceflight establishment is at this rocket a disaster that will devour our dreams for moving human- point capable of putting together an effective exploration ity into space. Rather than breathing life into a dying space pro- program at any cost. The indisputable fact is that their costs gram, it may well kill new initiatives to greatly expand US space for making the attempt have risen to unsupportable levels. exploration and settlement efforts. A NASA study last spring applied government project-cost “It is a sad day for our space pro- estimating models to a recent commercial booster gram,” said Rick Tumlinson, co- development. The result was a cost estimate for the same founder of the Foundation. “The booster done the established NASA way of ten times the amazing possibilities offered by en- actual commercial development cost. This study also looked gaging commercial space to lower at the effect of a hypothetical streamlined version of tradi- costs and develop a sustainable long tional NASA system development methods, and came up with term infrastructure to support a cost estimate of "only" three or four times the actual com- NASA space exploration, settlement mercial cost. and a new space industry have been Note that these extreme cost ratios came from the type of trumped by the greed, parochialism, tools used to come up with initial NASA project cost and lack of vision of a few congres- estimates. In another recent study, the GAO found that a sional pork barrelers intent once dozen or so recent high profile NASA development projects again on building a government super rocket. We’ve been to this actually cost on average over fifty percent higher than their party before, it was a bust then, and it will be this time as well.” initial estimates. The rocket, known as the Senate Launch System by most of the In other words, NASA major project development costs in space community, was formally announced in the very building recent years demonstrably ran roughly fifteen times higher where it was conceived – the U.S. Senate’s Dirksen office than equivalent commercial project costs. Even with a building. Not surprisingly, Senators and Congressmen proudly streamlined "modified" version of traditional NASA procure- spoke of their contribution to this Frankenstein monstrosity, ment practices, costs still would run as much as six times the stitched together from various pieces of pork for congressional commercial equivalents. districts that have been working the system for months. In the current fiscal climate, this is a big problem for those of “Senator Nelson called the SLS a monster rocket and he’s right,” us who'd like to see NASA doing useful space exploration and explained Bob Werb, co-founder and chairman of the board for technology development. It's apparently not at all a problem Space Frontier Foundation. “Although they’re trying to dress it up for those who see NASA primarily as a hometown jobs in the colors of the Saturn V, it’s a Frankenstein rocket, built from program. But that's a short-term outlook - in the long term, rotting remnants of left over Congressional pork. And its budget- the ongoing expensive lack of results will inevitably bring ary footprints will stamp out all the missions it is supposed to NASA down. Ultimately, the real choice is, a new reformed carry, kill our astronaut program and destroy science and tech- NASA with a new and very different way of doing business, or nology projects throughout NASA.“ no NASA at all. -- SLS The Foundation is certain that much like Constellation before it, the Senate Launch System will never stay within its budget or schedule, and in the end will be cancelled. SLS will become the The Economics of Space Explora- most cannibalistic program in NASA’s history, consuming innova- tion study guide was prepared tive programs attempting to lower costs by using commercial by Greg Rehmke for firms to fly astronauts into space, new technologies that would students debating the make exploration more affordable, and of course the payloads the 2011National Policy and new rocket is supposed to carry. Public Forum debate “The Senate’s new Franken-rocket will fail, it will waste billions, it resolutions. Mr. Rehmke will never fly and it will destroy what little credibility our space directs student programs program has left.” said Foundation Executive Director Will Wat- for Economic Thinking. E-mail: son, “It is an un-American solution to a challenge we can solve in [email protected]. Web: an American way with our own commercial space flight compa- www.EconomicThinking.org nies. If it is not stopped the SLS monster will be a death sentence www.LibertyFlix.org for NASA’s once great human space flight program.” www.EconomicThinking.org/Space/ The Economics of Space Exploration 8