The path to the infinite economy
by Andrew Gasser
|The Trump landing team for NASA has a very difficult job in the next few weeks. Hopefully, they will conclude that what NASA has been doing since 2004, under Republicans and then Democrats, simply is not working as intended.|
Our community of scientists and engineers cares deeply about space exploration and settlement. As a community, we have been held hostage by decision makers inside Congress. We must drain the swamp and liberate our colleagues and professionals so that they may conduct the people’s business in space. Our decision makers are clearly refusing to acknowledge the fiscal reality in which we live in today: we are nearly $20 trillion in debt as I type this. Cognitive dissonance is strong inside the beltway.
President-Elect Trump campaigned, and won election, by promising to “Make America Great Again”—and this goes for NASA too. To do this, he will have to open up the economic engine of the “infinite economy”. By no fault of the great men and women of NASA, our space program is in a political malaise. Our diligent workforce has been forced to exist and operate in conditions that, putting it kindly, are less than ideal for success. It is time for all of us to acknowledge that the primary path we have set NASA on is not working as intended. But, we do have a path ahead, and it has been in plain sight.
On April 27, 2011, NASA produced the “Commercial Market Assessment for Crew and Cargo Systems” report to Congress. The most critical information in this document is located on page 40, Appendix B, titled “Discussion of Cost Effectiveness of Commercial Cargo Effort.” Consider this Exhibit A for how NASA, and frankly all of government, should work. Appendix B outlined how the private sector, empowered by NASA, was able to design, develop, test, and evaluate (DDT&E) the Falcon 1, the Falcon 9, and the Merlin engine for $390 million:
NASA verified the $390 million development cost to SpaceX. Bureaucrats continue to struggle to understand how this could have been accomplished. It is not difficult to understand and it is not rocket science. NASA simply took a “limited government” approach to DDT&E and they empowered the free market to accomplish the work.
|If the private sector can leverage its investments with NASA to develop new capabilities and markets, why can’t NASA leverage its investments with the private sector to further exploit these capabilities to accomplish its mission?|
What makes America so great is the people, with their spirit of innovation, that is woven into our culture. American Exceptionalism is real and it exists today. America has been and always will be able to produce what it needs. The government must simply remove the shackles of over-regulation in order for greatness to kick in. The impetus for NASA in this case was a requirement to deliver commercial cargo to the International Space Station (ISS). The impetus surprised many when it created much more than was thought possible or expected.
The tool used is called a Space Act Agreement (SAA), a type of “other transactional authority” distinct from conventional contracts. The SAA is incredibly powerful and provides NASA a very flexible financial instrument. The SAA allows NASA to partner with the private sector when there is interest. Moreover, agreed-to performance and financial milestones payments awarded for progress protects NASA and the taxpayer from expensive cost overruns. Constellation was $6 billion over its original budget estimate when it was canceled. With SAAs, the scope and timing of projects are agreed to before the SAA is signed. SAAs are not combative in nature. They are a partnership and in fact promote collaboration between NASA and the industry partner. NASA has insight to what work is being completed while the SAA is in progress.
NASA has spent considerable resources developing commercial cargo to ISS. Spinoffs and ancillary benefits from this SAA are already being realized. There is a consensus among a majority of industry experts that the low Earth orbit (LEO) market can be commercialized utilizing the private sector, with NASA being a major stakeholder. Being a major stakeholder, though, does not necessarily mean being the largest. As the LEO market develops, the economy will grow. NASA will no longer be a major stakeholder in LEO, but instead just one stakeholder or many, as the private sector market share overtakes the government. So the obvious question is this:
If the private sector can leverage its investments with NASA to develop new capabilities and markets, why can’t NASA leverage its investments with the private sector to further exploit these capabilities to accomplish its mission? NASA is simply walking away from a magnificently developed capability after expending meaningful capital. Not taking full advantage of this capability is fiscally irresponsible. As Robert Heinlein once put it, “Once you’re in orbit, you're halfway to anywhere.”
The economics of space exploration and settlement are truly infinite.
President-elect Trump has stated that he wants to bring the manufacturing base back to America and create American jobs. A pro-growth space policy that promotes the public-private relationship, encourages private sector investment, and refuses to over-regulate the private sector, will stimulate economic growth and development.
One such example is SpaceX’s “Red Dragon” mission to Mars in 2018. While NASA is helping SpaceX with guidance, it is providing no direct financial support to the company. It is very safe to say this mission would not have happened in 2018 without the Commercial Orbital Transportation Services (COTS) program. While not intended, the COTS investment by NASA empowered SpaceX to allocate its own resources to develop further capabilities that otherwise would not have been realized.
The best possible outcome to a vibrant government space agenda is the creation of new markets free from over-regulation. There is some evidence this is occurring with the development of not just new vehicles but also new ventures. The private sector is leveraging NASA’s COTS investment. This economic growth and development will not only be centered in the space sector.
|The president-elect has already come out in support of the commercial approach and this is refreshing even if there is not a lot of “meat on the bones” yet. By utilizing the public-private relationship we can unleash NASA’s true potential.|
While Elon Musk has publicized his plans to go to Mars by 2025, Jeff Bezos is also working to open up the infinite economy. Bezos has made it known that he has two more vehicles in various stages of development at Blue Origin. In addition to his flight-tested New Shepard suborbital vehicle, the New Glenn and New Armstrong orbital launch vehicles are also in preliminary development stages.
Instead of spending billions of dollars on a new launch vehicle, could NASA instead spend its scarce fiscal resources developing mission hardware that would effectively utilize our COTS investment? For those who are demanding a destination there is a study funded by NASA that shows how we could go back to the Moon, very quickly, utilizing our COTS investment (see “Cutting the costs of a human return to the Moon”, The Space Review, July 27, 2015).
Space community scientists, engineers, and the taxpayers benefit from all of this economic activity. The capabilities created by this one SAA may very well end up being the genesis of a market that no one would have predicted. Job creation will continue. Jobs created by firms like Blue Origin, SpaceX, and NanoRacks are highly-skilled ones that pay much better than the service sector.
While no one can definitively say what President-elect Trump’s space policies will be, there are many clues as to what we can expect from his administration. History has shown us that economic freedom and personal liberty are institutionalized in his personal and business life. The characteristics are reflected in the way he operates his firms. We should expect that these core beliefs will be well represented in his space policy as well.
Mr. Trump has clearly demonstrated he likes building off of his personal successes and learning from other’s mistakes. Recent history has shown us that both NASA and the private sector have had success utilizing SAAs. It has also shown that very large programs inside NASA will inevitably fall behind schedule and suffer cost increases. Trump has a documented history of coming in ahead of schedule and under budget on very large projects. Bringing in technical business leaders, some of whom have a “Silicon Valley” mindset, will do wonders for NASA and America.
“A new future requires new leadership.” – President-Elect Donald J. Trump
The president-elect has already come out in support of the commercial approach and this is refreshing even if there is not a lot of “meat on the bones” yet. By utilizing the public-private relationship we can unleash NASA’s true potential. The brilliant men and women who work at NASA can then focus on the difficult ideas and technologies that will propel America, and humanity, to go beyond low Earth orbit.
Through this approach we can open up the “infinite economy” for everyone and Make America Great Again… in space.