SpaceX Paves New Future for Private Space Exploration, But Congress Could Ruin All Progress

As SpaceX gears up for its planned space launch this week to the International Space Station, Congress is preparing to vote next week on a spending bill that would require NASA to select a private company for the commercial crew program. If passed, Congress would effectively end the innovative competition that has developed between private companies for space travel. Voting for this bill would be a short-sighted attempt to save money and would have dire consequences for private development in space.

What we have now. Although the current setup is not ideal, it does establish healthy competition between multiple private companies vying to become the replacement for the now retired shuttle program. NASA offers subsidies to companies in the competition. It is not full funding, but supplemental funding. As a result, at least five companies are currently receiving subsidies and competing.

The results of this competition have been impressive and two of the companies, SpaceX and Orbital Sciences, have planned missions to the International Space Station this year. Private companies have already designed multiple designs for orbital vehicles and launching systems . This kind of healthy competition is necessary to ensure that the developers continue to efficiently produce high-quality products at the lowest possible price.

Private manned missions to space are not expected to occur until 2017. Once a company has demonstrated they are capable of reliably transporting both cargo and people, NASA may choose them to be the official replacement of the shuttle program.

What we may get. If Congress passes the bill, NASA will be forced to choose the replacement company now, instead of after a company demonstrates they are capable of fully meeting the requirements. The chosen company (most likely SpaceX) will receive increased funding in an attempt to increase the speed of development. All other companies will no longer receive any funding.

With one company receiving heavy government subsidies, the others will not be able to effectively compete. Can you imagine what would happen to Pepsi if Coke suddenly started receiving massive government subsidies? It seems Congress is becoming even more reliant on picking winners than market competition to produce viable businesses.

Once the competition is gone, costs are likely to increase, innovation is likely to slow, and deadlines are even less likely to be met. The chosen company will no longer face the myriad of risks that are keeping it in line today: the risk of another company doing the job better, cheaper, quicker, or safer. The company has already won the money, so why work that hard?

Why Congressmen want to kill competition. Representative Ralph Hall (R-Texas) spoke at a hearing on Capitol Hill last Wednesday stating, “I hear excuses and delay after delay for the supposedly simple act of delivering cargo to the space station.”

Excuse me Rep. Hall, but can you explain to me what is so “simple” about escaping Earth’s gravity, controlling the force of rocket engines, and safely docking with a small station floating 230 miles above the Earth’s surface? Nothing is more likely to compromise a mission to space than a rushed job. Plus, without competition, the prevalence of delays is likely to increase because the company is no longer trying to beat out others. The company will develop faster if it is competing  in a space RACE.

Hall goes on to state, “NASA's spent $1.6 billion on this effort so far and the nation doesn't have very much to show for it."

There is plenty to show for it. Sierra Nevada’s Dream Chaser, SpaceX’s Falcon 9 rockets and Dragon Capsule, Orbital Science’s Cygnus craft, and Antares rocket. All of these developments would have cost NASA billions of dollars, yet they have only spent millions in subsidies.

It should be noted that Hall is the chairman of the House Committee on Science, Space, and Technology.

An ideal solution. Claiming that the subsidies cost too much is an understandable argument given today’s economic situation, and actually, I agree. But there are ways to preserve competition and reduce the subsidies at the same time.

One approach would be to  simply reduce the amount of subsidies given to each company, or do away with the subsidies all together. W Many people fear that private companies wouldn’t be able to develop the necessary technologies without the assistance of government, but I disagree.

Admittedly, development might be slower initially, but that isn’t necessarily a bad thing as discussed above. Eventually , companies would develop more robust techniques that would likely allow them to develop faster.

Most importantly, companies will be required to develop some form of income to keep them afloat and pay for their research and development. Planetary Resources, the private asteroid mining company, is already doing this (read more here). Companies that rely on their own budgets spend their money more effectively and reduce waste, while companies who are given money from the government for nothing do not have that incentive.

My ideal solution might not appeal to everyone, but that’s fine. What isn’t acceptable is Congress choosing to invest taxpayer money in an unproven company that has lost all incentives to be efficient. The last thing we need is to preemptively bail out a company that hasn’t even fully developed yet.

How much do you trust the information in this article?

Ian Yamamoto

Ian is a Public Policy major with a minor in Law, Science, and Technology from the Georgia Institute of Technology. He has studied at Oxford in the UK and has interned for the trade and immigration department of a think tank in Washington, DC. He has two years of research experience with open source software and economic freedom. His current focus is on using technology that enhances voluntary exchange, such as the internet, to advance political interests and economic knowledge.

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