Posted by In-Cog-Nito on November 21st, 2004 (All posts by In-Cog-Nito)
Here’s a good article by Paul Jacob on the merits of defunding NASA, and allowing private enterprise to lead the charge into space.
Americans and scientists and the current space industry must wean themselves from the idea of subsidy — a point I often make, of other industries, in my Common Sense e-letter. No matter how expertly NASA charges corporations for its services, such as satellite placement and repair, the very existence of a government-funded service bureau introduces a corrupting element into the industry.
Private enterprise can bloom in space. But only by getting NASA and government subsidies out.
Update: Ken made an excellent point in the comments. I was reponding, but I’ll respond here.
The free market has a record of innovation, lowering cost, and improving quality, particularly so in the high tech/high science industry. Government can and should piggy back off the private sector.
You would be surprised what private enterprise will fund. For example, say launch costs for putting heavy loads into space are cut to the point of commodity. Then the variable cost of the high-end research is diminished more or less to the research itself. Even that would probably benefit from privatization. Some company out there will want to look into Magnetic Sail Plasma Beam Propulsion. VC funded startups would want to patent it. Skunk works for the big defense companies would be the candidates with the infrastructure and knowledge base to support it. Letting a VC funded startup shoulder the cost for an expensive bleeding edge technology has historically been a very successful model. For that one startup that figures it out, the payoff would be, literally, astronomical. The other 99% of VC funded startups may be complete duds/write-offs. But that payoff is exactly what VC’s are gunning for. Say I am Kleiner Perkins. I would set aside $100 million, find 10 companies showing the most promise in space propulsion and put $10 million into each. If there aren’t any companies, I would incubate them (KPCB has an in-house entrepreneur program iirc) I would then syndicate the companies to where I own about 20% of each company to lessen the risk, and the companies would get more money to work with. So each company would get about $50 million in funding. If even one company does hit it big, that $10 million is going to be worth a lot more than $100 million. What’s high end space propulsion worth? If they had a lock on Magnetic Sail Plasma Beam Propulsion, I would value it in the public markets to the tune of $5 to $10 billion. 20% of $5 billion is $1 billion, for a 10 fold return on the original investment of $100 million. Bingo, science fiction becomes reality, and we have a new propulsion system.
It’s one scenario. But my main point is that government has a lackluster track record for innovation. They tend to play it safe when it comes to being a catalyst for major change. So why not let the profit-driven private sector do it? It may not seem as “noble” as the pure pursuit of science, but it has a knack of getting the job done.