A Twinkle of Hope

Obama has moved space policy in the right direction, but we still have a long way to go.


By any reasonably objective measure, U.S. human spaceflight policy is an awful mess. We have spent hundreds of billions of federal taxpayer dollars during the last half-century, with little to show for it in terms of significant human expansion off the planet. In some ways, we have gone backward.

The United States sent a dozen people to the surface of the moon more than four decades ago, at horrific cost. Next December it will be 40 years since the last man kicked up the dusty lunar regolith, with only a few hundred people going into space in the ensuing four decades, at an average cost of about $1 billion each. We have spent $100 billion to deploy a space station that we cannot support without purchasing rides and lifeboat services from the once-feared Russians, who have accordingly been jacking up the price. Every time the National Aeronautics and Space Administration (NASA) renews the ferrying contract, Congress must waive the Iran/North Korea/Syria Non-Proliferation Act, which bans purchases of goods or services from countries who aid any of those countries in developing missiles or nuclear weapons, since Moscow continues to help Iran do both. 

There are near-term, cost-effective solutions to our space problems, but the people who guide policy in Congress aren't interested in them, insisting instead on pouring further tens of billions into a giant rocket that probably will never fly and that internal NASA documents show is unneeded. Maintaining existing aerospace jobs—"the seen," in Frédéric Bastiat's famous formulation—trumps the unseen jobs and wealth that won't be created due to the forced misallocation of resources. And none of this gets us any closer to the moon or Mars.

Whether the federal government should be sending humans into space at all is a legitimate question, but not for the purposes of this article. Instead, our question is this: Given that human expansion into space is a good thing for both preservation of the species and for the future of freedom, what federal policies would best accelerate that outcome in a market-oriented fashion and at a reasonable cost to the taxpayer?

Space Policy Takes a Wrong Turn 

To answer that question, we have to diagnose the problem by examining the historical roots of current policy dysfunction. Human spaceflight in America got off on the wrong foot, born as it was in the national Cold War panic over Sputnik and the space race with the Soviet Union. In our rush to beat the godless commies, instead of focusing on the steady long-term establishment of a competitive launch industry that would eventually make spaceflight affordable, Americans used unreliable ballistic missiles to transport people into orbit. With the "success" of Apollo, false lessons were cemented into place. We achieved John F. Kennedy's goal of landing a man on the moon and returning him to Earth before the decade was done, but in doing so we created a space policy monster.

The problem is that sending people into space was an urgent national priority for a decade at most. Since the late 1960s, it has no longer been a pressing issue for most people or their elected representatives. The spending persists because Americans have a vague sense that it is important to have a space program, but few can articulate why. The result is policy inertia: Since NASA has always sent people into space (as far as Americans with limited historical knowledge are concerned), and no one else has done it, NASA must always send people into space, even if in reality the agency fails at even that. 

This mind-set helps explain the overreaction to the Obama administration's 2009 announcement that it would pay commercial providers to get astronauts into Earth orbit so that NASA could focus on getting them beyond Earth orbit. When the sense that the United States should rule space combined with partisan revulsion at Obama, the result was unhinged commentary about "the end of American human spaceflight" and other canards.

There was a third, more powerful source of pushback against the new policy, one that shouldn't surprise anyone familiar with the economic theory of public choice. President Dwight Eisenhower famously warned the American public about the military-industrial complex. Less familiar is the Apollo-born iron triangle of the human spaceflight industry, NASA, and Congress, an arrangement that has lived on through the space shuttle and space station programs.

The model was that NASA would dictate requirements and design, then hire contractors to develop, test, and operate the system. This would be accomplished via cost-plus contracts, in which bidders were reimbursed for labor and materials, with a fixed fee for profit, plus overhead that funded research and marketing for new work (which created a significant barrier to entry for newcomers who didn't have existing contracts to help pay for their own R&D and bids). The work would be spread across as many states and congressional districts as possible (sometimes beyond practicality) to maximize political support for the program, although this practice also maximized costs through travel inefficiencies and the confusion caused by complex interfaces and subcontracts. The best part for the contractors was that their reimbursement was based mainly on labor and materials. Although they could get a bonus for hitting a deadline or staying within a budget, they generally got paid regardless of results. 

In addition to the financial motives of contractors, NASA has an intrinsic conflict of interest because it decides whether it needs to develop new hardware or can instead use equipment off the shelf. This isn't a problem for other operational agencies. The Coast Guard, for example, doesn't do vehicle development—it relies on shipyards. Like any bureaucracy, the agency has a bias in favor of commissioning new equipment, even if existing solutions will do the job, because the more expensive option gives it more control and justifies higher budgets.

This system made some sense in the context of Apollo and the space shuttle, and perhaps even the space station, where new things were being tried and program risk was substantial. But when President George W. Bush announced his new Vision for Space Exploration in 2004, a year after the loss of the shuttle Columbia, NASA persisted in its old cost-plus ways, despite the fact that building new rockets and capsules was no longer rocket science. 

By the time the ensuing return-to-the-moon program, Constellation, was canceled in 2009, it had only a low probability of flying in 2017, three years later than originally scheduled. It had expended more than $10 billion with little to show for it except a half-finished capsule and a flawed suborbital test flight of a mock rocket that differed from the final design in every important respect except its shape. But the contractors got paid, and they provided campaign contributions to the representatives and senators on the committees that authorized and appropriated funds for NASA.

After the Obama administration announced its modest policy changes, the space policy establishment disingenuously and often mendaciously sought to preserve its decades-long rent seeking by feeding into national anxieties about American exceptionalism and the president himself. Sadly, the old guard has had some success.

The few members of Congress who pay attention to space policy (because it benefits their states and districts) reinstated an unneeded heavy-lift vehicle, which they called the Space Launch System (SLS, known to cynics as the Senate Launch System) and a lunar capsule, which was part of the original Constellation program. This forced NASA to waste billions of dollars a year indefinitely, even though the SLS has no funded missions and will not fly for many years. Meanwhile, in pending appropriations bills, Congress is not even providing sufficient funding for the rocket itself. Worse, it is shortchanging the only initiative—the Commercial Crew Program—with any prospect of eliminating our reliance on the Russians anytime soon, while essentially eliminating funding for the advanced technologies needed to get humans beyond Earth orbit. In mid-November, Congress appropriated about $400 million, less than half NASA's request for the Commercial Crew Program.

This bad policy gets perpetuated because most people on Capitol Hill, members and staff alike, are too busy with more important matters than space and tend to defer to colleagues who compete for space-committee assignments so that they can keep the pork coming. The situation has been aggravated by the Obama administration's political missteps. Despite adopting the best space policy in years, perhaps ever, it blundered in rolling out the changes and remains inarticulate, confused, and confusing in explaining them, allowing obfuscation by supporters of the status quo to go largely unchecked. It is ironic that an administration otherwise hell-bent on increasing government ownership and control in so many other aspects of American life would be the one that finally came up with a policy designed to privatize a function that has long been performed by a government agency, with the explicit goal of encouraging competition. 

Onward and Upward 

Can space policy be fixed? Not without the national will to do so. It would take either real visionaries making policy decisions or some sort of existential crisis (e.g., an asteroid with our number on it) to break out of the policy logjam. But the chances of the former are not as low as one might think. Had Rep. Ralph Hall (R-Texas) not switched parties seven years ago while being allowed to keep his seniority, the 88-year-old defender of the status quo would not be the current chairman of the House Science, Space, and Technology Committee. Instead the chairmanship would have fallen to Rep. Dana Rohrabacher (R-Calif.), who has defended the administration's space policy. Rohrabacher will almost certainly take over when Hall retires or is term-limited out in five years. If Newt Gingrich by some miracle wins the GOP presidential nomination and the White House, he would be the most space-conversant commander in chief in American history. So the stars might yet align.

What would a visionary space policy look like? It would have to be a radical departure from the monopsonistic Apollo model, in which the government is the only customer for a single major system, with no redundancy or backup. Ignoring the absurd 2010 law requiring NASA to develop the SLS, the end of the space shuttle provides an opportunity to get NASA out of the launch business and scale back to its original form, before the distorting space race of the early 1960s. Originally, NASA concentrated on basic technology development for aviation and space, just as its predecessor, the National Advisory Committee on Aeronautics (NACA), had for aviation. The NACA had industry as a customer, soliciting needs from the companies and performing useful basic research that advanced aviation as a whole. NASA's original charter, the Space Act, does not mention developing or operating vehicles to send humans into space. In fact, as amended in the '90s, it calls for the agency to promote and utilize commercial enterprise wherever possible. 

We need a policy that encourages innovation, entrepreneurialism, competition, and the creation of the markets that drive all of those things. There are three key elements to making this happen: smarter procurement, smarter regulations, and the overdue recognition of property rights. 

First, if the government is going to be involved at all, it should be a better and smarter customer. There is historical precedent for this.

Early last century, Congress passed and the president signed into law the Kelly Act, a.k.a. the Air Mail Act of 1925. The idea was to take a service that the government needed anyway (moving mail from points A to B) and use it to encourage the foundation of a new industry, in this case aviation. In the late 1920s, this legislation, along with NACA's technology research, provided key support for the development of fledgling airlines. If we believe that it is important to create a cost-competitive space transportation industry, and if we think that we should be sending humans beyond low Earth orbit (which, as the late science fiction writer Robert Heinlein famously said, is "halfway to anywhere"), the air mail experience offers a blueprint.

NASA has already demonstrated the potential cost-effectiveness of such an approach with the Commercial Orbital Transportation Services program, which is on the verge of developing two new providers of cargo services to the International Space Station (ISS), using fixed-price milestone-based contracts under which the contractor isn't paid until the milestone is achieved. In an appendix to a Spring 2011 report to Congress, the agency noted that for less than $300 million in taxpayer money, NASA had encouraged the creation of an entire new launch capability and a recoverable pressurized capsule, allowing it to have cargo delivered reliably to and from the ISS for much less money. The traditional NASA/Air Force cost-estimating models predicted that the new systems would cost from three to 10 times more than they eventually did, because the models assumed traditional cost-plus contracts. NASA could build on this recent success by extending the milestone concept from space station cargo to space station crew delivery and then to a much larger market.

There is another market that could serve for the space industry the same role that mail did for aviation. For a mission to deep space, the vast majority of the launch payload is propellant. The giant Saturn V that delivered astronauts to the moon in the 1960s was so big because it had to lift all the propellant needed to get the astronauts to the lunar surface and back in a single flight. NASA did it that way because it was in a hurry to beat the Russians to the moon and had no experience with orbital assembly or propellant storage and transfer in space. But today, having decades of experience with such things, we can do it smarter. 

In mid-October, a leaked internal NASA briefing showed (no doubt to the dismay of those insisting that NASA build the SLS) that using propellant depots in low Earth orbit for deep-space missions would save the nation tens of billions of dollars by eliminating the need for a very expensive Saturn V–like vehicle. Instead, the propellant could be delivered on multiple flights of existing commercial rockets, as could all of the hardware. 

Beyond saving taxpayer money, this approach would create a market for competing launch providers, driving up flight rates (which is essential to reducing per-flight costs on a system with high fixed costs) and driving down the price per pound of payload delivered to orbit. Most of the current cost of spaceflight is due to massive fixed costs. Low flight rates mean high average per-flight costs. But beyond reducing costs for existing systems, it would create an excellent market for new providers with untested systems, both reusable and expendable, because unlike an expensive satellite, the payload itself would be little missed if it didn't make it to orbit (propellant costs about as much per pound as milk). Even small vehicles could play, because propellant is almost infinitely divisible. 

As the air mail market did for airlines, the need for propellant could jumpstart a robust and affordable space transportation industry that would finally, after years of failure, open up possibilities for wealth creation off planet. More important, the creation of a market for rocket propellant in space would lead to the development of off-planet resources to provide it (e.g., using the abundant water that NASA probes are increasingly finding on the moon or in other bodies). This will further drive down the cost of accessing and inhabiting the inner and outer solar system.

The second leg of the space policy stool is smarter regulation to encourage entrepreneurship and accept risk. For instance, current law prevents the Federal Aviation Administration's Office of Space Transportation (FAA-AST) from regulating the safety of passengers aboard spacecraft; it is constrained to regulating only those issues that affect uninvolved third parties. The hand of the state has rested lightly on the space industry so far, thanks to that 2004 law, which imposed an eight-year moratorium on regulation. The view at the time was that until private space passenger vehicles actually took flight, the industry was too poorly understood to intelligently regulate. The moratorium is about to expire, and the House is willing to extend it to cover another eight years after flights begin. But the Senate is resisting the extension, demanding stricter regulation while simultaneously seeking to cut the budget of the FAA-AST. If the stalemate continues, the industry could wind up regulated out of existence before it even gets off the ground.

The other area where regulatory underbrush needs to be cleared is the International Trade in Arms Regulations (ITAR), which complicates selling U.S. space hardware overseas and restricts Americans' ability to even discuss the technology with foreign nationals. Since 1999, when all satellites, regardless of their use, were classed as munitions, and control of the munitions list was moved from the Department of Commerce to the State Department, the international exchange of parts and ideas in the space trade has been choked off by bureaucracy. Meanwhile, U.S. space companies have lost billions to foreign providers as satellites made in other nations fill the sky via foreign launchers. Another result of ITAR's restrictions is that U.S. space firms must undergo a long, painful process to hire foreign nationals, including workers from that well-known nest of spies north of the border in Canada. There are periodic attempts to reform the law, including the introduction of a bipartisan House bill by Rep. Howard Berman (D-Calif.) in early November, but as of this writing ITAR's extreme and often irrational strictures remain in place.

But reducing space transportation costs through smarter procurement and regulations is not enough. To utilize extraterrestrial resources, we have to create a legal environment in which commercial operations can flourish. 

Buying a Piece of the Moon 

At the heart of Western prosperity, particularly in the Anglosphere during the last few centuries, lie clear and freely transferable property rights, protected under the rule of law. As Peruvian economist Hernando de Soto has written, property rights are a key difference between the development of British America (the U.S., Canada, and to a lesser extent Belize) and Latin America. In his 2000 book The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, De Soto describes the essential (if not sufficient) role that the official recording of property ownership plays in allowing individuals and corporations to borrow capital and grow wealth. Absent legally recognized rights to buy, own, and sell titled property, the act of getting a loan to improve, mine, drill, or otherwise generate profit from that property becomes difficult, if not impossible. This availability of capital is the sine qua non of wealth creation, and it largely explains why the West is rich and others (particularly in the Third World) are poor. 

Many people believe that the 1967 Outer Space Treaty, which prohibited claims of national sovereignty on other terrestrial bodies, therefore denied private property in space. But this isn't true. Although the Soviets wanted the treaty to be explicit in banning private property, the Johnson administration fought hard to keep that from happening. While states themselves are forbidden from owning space property, there is no language in the treaty preventing the U.S. or other governments from recognizing and legally recording claims by private citizens (although physically defending them might be another matter). The 1979 Moon Treaty does outlaw private property there, but it has not been ratified by the United States or any other spacefaring nation. 

Accordingly, the nonprofit Space Settlement Institute is championing a bill called the Space Settlement Prize Act, perhaps more appropriately titled the Space Homesteading Act. As institute founder Alan Wasser explains on the Space Settlement Initiative's website: "The proposed legislation would commit the U.S. to granting that recognition [of property rights in space] if those who have established settlements meet specified conditions, such as offering to sell passage on their ships to anyone willing to pay a fair price. Entrepreneurs could use that promise of U.S. recognition to help raise the venture capital to develop the ships needed to make the claim." 

An outfit calling itself the Lunar Embassy has been selling deeds to plots of land on the moon for years; the going rate is currently about $20 an acre. But because those claims aren't legally recognized, they are little more than amusing novelty items. Official U.S. government recognition could change that and, as Wasser points out, create a real market for deeds. That market, in turn, could generate billions in venture capital for land claims on the moon, asteroids, and other planets. A lively trade in lunar property would be a useful repudiation of the Moon Treaty, minimizing the power of that document to shape customary international law. Perhaps most important, recognition of lunar property rights would make it clear that the U.S. government wants to encourage the private settlement of space.

Would it be possible to make these policy changes? Not in this Congress, and probably not with this president. Real change can only come under new leaders, both on the Hill and in the White House, who actually care about civil space policy as something other than a source of national prestige or high-tech welfare. Space must be viewed not as a program, or as a pristine preserve for scientists, but as a resource-rich frontier for the expansion of humanity and freedom, as Europeans saw the Americas half a millennium ago. Moving toward a new policy requires recognizing that Apollo is finished and that neither the Apollo program nor any government 10-year plan was ever going to be the key to unlocking the space frontier. 

Half a century after the first human spaceflight, Washington must finally recognize that the same principles that opened the American frontier—minimal regulation, entrepreneurship, free markets, private property, and rugged individualism—apply equally to the final one.

Rand Simberg is a consultant in space business and technology and adjunct scholar at the Competitive Enterprise Institute.