On April 25, Space Exploration Technologies (SpaceX) announced it was filing a formal protest in the U.S. Court of Federal Claims over an Air Force contract with United Launch Alliance (ULA). While ostensibly this protest is for the sake of more competition over contracts for public funds, Musk’s goals seem, instead, to be to maintain the flow of public resources into his company and others like it. In much the same way as private companies profit off of publicly funded university research (commonly called the neoliberalization of academia), Musk and other New Space actors are working towards the neoliberalization of spaceflight. Musk’s protest comes after the Air Force awarded ULA with a block contract of 36 rocket cores. The contract with ULA is part of the Air Force Space Command’s block-buy strategy designed to save money. Air Force Space Command commander Gen. William Shelton claims the service has already locked in $4.4 billion in savings. SpaceX’s suit challenges those decision over which the company is capable of competing. The courts could open for competition those decisions challenged by SpaceX. The formal complaint can be found at the SpaceX site, strategically named freedom to launch.
Elon Musk, President of SpaceX, argues that Air Force and other national defense contracts should be open to competition. Musk must have forgotten about the exclusive use contract SpaceX has with NASA for the use of launch pad 39A at Kennedy Space Center. This contract was protested by Blue Origin on September 13, 2013 for concerns over the competitive process for awarding the exclusive contract. While it may be easy to point out Musk’s hypocrisy, to argue that this makes his argument any less valid would be tu quoque.
Musk has a point if we take his argument to be that exclusive contracts by the federal government are problematic. But how much better are so called competitive contracts? Well that depends on what you want to see out of those contracts.
Musk’s SpaceX is one of many New Space companies that are seeking entry into the contemporary spaceflight and space resource development markets. These companies could be described as part of a larger movement for neoliberal privatization, of which competition is a central tenet. The neoliberal argument of privatization is that the private sector is naturally more efficient than the public sector. This argument relies on the coercive power of competition. In 2003 Musk argued that “the way an industry improves is that new companies enter a market with a lower price or superior product. This creates a forcing function for the whole market to improve.” Competition is also closely connected to the neoliberal resistance towards state regulations. What Musk and other New Space companies seem to want to see, is increased competition through deregulation and privatization to improve the efficiency of spaceflight.
Although New Space companies advocate deregulation and tout the superior efficiency of the private sector, they are simultaneously lobbying for protective regulations and the allocation of public resources. Importantly, the industry cannot survive without both of these important connections to the state, much less operate more efficiently without them. Michael Gold of Bigelow Aerospace argues before congress in 2012 that “In order to enjoy the opportunity presented by commercial space the risk of regulatory confusion must be eliminated as quickly as possible.” Yet without regulations limiting the liabilities of spaceflight companies, they could not even afford to insure their launch vehicles. Even Bigelow has been extremely active in lobbying for regulations protecting property rights in space despite being illegal according to the Outer Space Treaty. New Space companies are also directly reliant on public resources, despite the claims of increased efficiency and cheaper prices. Often times, these prices are only made possibly by the use of public resources. The aforementioned exclusive use contract for launch pad 39A between NASA and SpaceX is an example of this. Other examples include Bigelow Aerospace’s plan to attach one of their inflatable modules to the ISS. Not only does Bigelow get the use of this multi-billion dollar, international public resource, NASA will pay them for the privilege! Additionally, NASA’s multi-billion dollar asteroid capture mission will have their targets selected by a team from Planetary Resources Inc., a company seeking to mine mineral and other natural resources from near Earth asteroids. The problem is not that the actions of New Space companies are contradictory to their public positions, but that their ostensible goals are fundamentally different than those which they are actually pursuing. Rather than increased efficiency, they are creating a space program that serves the financial interests of a select group of corporate actors without allowing points of intervention for a democratic citizenry. This is the same kind of corporate welfare seen elsewhere in the contemporary economy.
It is clear that the goals of these New Space companies are decidedly undemocratic, even plutocratic. Therefore if transparency and democratic citizen participation are goals of and for the space program, the competitive contracts which Musk vouches for don’t do the job. Uncompetitive block-buy contracts are, of course, no better. A space program that serves the needs of citizens rather than private interests will require an entirely different mode of operation that relies more on participatory decision making and is less technocratic, driven by experts largely on the payrolls of companies who stand to benefit a great deal from their decisions. So in a sense, Musk doesn’t go far enough. Not only should block-buy contracts be eliminated from the space program, but perhaps all space companies and their contracts should be open to public scrutiny before any resources can be dispersed. That would really make for a competitive environment.
What a totally bizarre misrepresentation of the NewSpace wave of commercial space companies. I’m sure if you had been writing in 1985 you would have portrayed the the wave of small computer manufacturers and software developers as a neoliberal cabal aiming to seize the country’s information processing sector using stolen government technology.
The NewSpace movement is about drastically lowering the costs of space access and space applications. If it fails to offer lower costs, then it will just fade away just as happened with magnetic bubble memory, Wang word processors and other forgotten tech of the 80s.
So far, however, NewSpace looks to be succeeding. For example, a NASA study found that the Falcon 9 was developed for about a tenth of what it would have cost the agency to develop the exact same rocket. The Falcon 9 has attracted several billion dollars in commercial launch contracts after a long period in which no US company won any major commercial satellite launches. ULA’s EELVs are only affordable by the Defense department. An Atlas V costs DoD about $400M to launch vs $100M for a Falcon 9. Most taxpayers would agree that a price difference that huge justifies a lawsuit.
The Falcon 9/Dragon and Orbital Sciences Antares/Cygnus cargo delivery systems were developed with support from NASA of only $800M. That’s half the cost of a single Shuttle flight. This wasn’t a gift from NASA but a purchase of an essential service needed to keep the ISS alive. (NASA spent billions on the Ares I launcher before it was canceled.) The Dragon not only delivers cargo but brings it back to earth as well. Only the US, Russia, and China have developed spacecraft that can do that and they did it with gigantic national space programs.
You point to the Bigelow module going to the ISS. The only goal of this is to test expandable habitat technology. The module will contain little else but sensors to monitor its environment (e.g. outgassing from its materials). To portray it as a great boon for Bigelow at NASA’s expense is silly. It will cost NASA all of $18M versus the hundreds of millions it would have cost the agency to implement the same project internally.
I could list many other cases of drastically lower cost launch and space systems coming from the NewSpace generation of entrepreneurial companies. They are not united by any sort of anti-government philosophy. Most just want the private sector and government to focus on what each does best so as to develop space in the most cost-effective manner possible.
It’s interesting that NASA’s commercial space initiatives have been under constant attack by Republican congresspersons eager to protect the NASA centers and big contractors in their states and districts. Here is an example of the left attacking commercial space because it is a threat to a view of the superior efficacy in tech development of government over the private sector. NewSpace is getting it from both sides so it must be doing something right.
I’m not sure you represent the author’s argument either correctly or fairly. Your first statement about the early computer industry is a strawperson bordering on a “poisoning of the well” ad hominem.
The author is merely pointing out that they are not really “free market” or competitive endeavors; increasing efficiency may be incidental or even an excuse or post-hoc rationalization of a larger process of neoliberalization. He argues that they are behaving much like other private firms who seek out favorable public policies and non-competitive contracts to increase their private profits, largely without significant representation of the interests of large sections of the public.
You may be finding difficult to engage with this argument because you have already presumed from the outset that an idealized market model accurately describes the relationship between private space firms and government here rather than inquire into whether it actually does. You write, “If it fails to offer lower costs, then it will just fade away.” This has hardly been the case for private military contractors like Halliburton or Blackwater/Academi. What makes you so sure that it would be true for private space contractors? Moreover the statement, “Most just want the private sector and government to focus on what each does best so as to develop space in the most cost-effective manner possible,” requires empirical justification. Do you actually have evidence concerning the desires and wants of space company entrepreneurs? This may just be an idealization or public rhetoric that gives these companies a free pass from the kind of scrutiny any expensive public endeavor should receive.
But really, the argument at hand is about the politics of the situation. The privatization of space has proceeded largely without public input. So, the depiction of the situation as a power battle between certain business elites and governmental agencies seems at least somewhat accurate, and it draws attention to a concern as important as whether or not such firms are, in the end, saving taxpayers money.
” Your first statement about the early computer industry is a strawperson bordering on a “poisoning of the well” ad hominem.”
The close analogy of NewSpace and the PC movement is not a strawperson and to suggest that it is just confirms to me that the facts of NewSpace are not known by the author or by you. (And an accusation of ad hominem is a non sequitur. I made no attack on the author’s reputation to discredit him so that his argument is not listened to.)
“He argues that they are behaving much like other private firms who seek out favorable public policies and non-competitive contracts to increase their private profits,”
Space is not just about govt contracts. There is an existing $200B+ private space industry that includes commercial launchers, commercial communications satellites, commercial earth observation satellites, satellite radio and TV, etc. This industry is very competitive, though till now it has mostly consisted of large companies.
Startups and new entrants like SpaceX, Blue Origin, XCOR, Masten Space, Virgin Galactic, Planet Labs, Skybox, Zero Gravity Solutions, exactEarth, Nanoracks, etc are expanding that industry by (1) lowering the costs of existing space related products and services, e.g. innovative space transport like SpaceX’s reusable first stage, and (2) creating new space products and services such as space tourism, maritime tracking, microgravity biotech, etc.
Yes, many, though not all, NewSpace companies seek to supplement their commercial markets with government contracts. In the case of SpaceX, currently about 60% of their manifest is with commercial companies. The rest with NASA. They would like to balance that out with defense launch contracts but are being shut out of competing for such payloads by the ULA block buy, which they are now challenging court.
“presumed from the outset that an idealized market model accurately describes the relationship between private space firms and government”
I don’t presume the idealization of anything. The development of space will be messy and chaotic just like everything that happens with humanity.
“If it fails to offer lower costs, then it will just fade away.” This has hardly been the case for private military contractors like Halliburton or Blackwater/Academi. ”
Fading away is the overwhelmingly dominant fate of most new companies. There are thousands of companies that form every year and most all of them will not survive even a few years. That’s because their goods and services will not find a market. If NewSpace companies do not offer superior goods and services, e.g. lower costs, they will never get established in the first place and will fade away, leaving the space industry as it is.
” Do you actually have evidence concerning the desires and wants of space company entrepreneurs? ”
I have been following the NewSpace industry closely for 15 years and each company has a unique story and situation. XCOR, for example, was started by 4 people I know who combined their credit cards to raise enough money to get started around 1999. They are all extremely smart people who could have made big salaries in secure jobs in other fields but they are also space nuts who decided to pursue their dreams of going to space. The company has had huge ups and downs yet has managed to survive and is finally starting to thrive. A couple of govt contracts were important along the way but mostly they have done commercial work.
Elon Musk started SpaceX in 2002 with money from his share of the Paypal buyout. He could have easily turned that $200M into billions by staying in the IT field but, as he has explained in many interviews, he chose to pursue the technologies of particular interest to him: space, electric cars and solar energy. By 2008 and after 3 rocket failures he was essentially broke. A successful launch and a couple of key contracts for SpaceX and Tesla saved his companies at the last second from “fadiing away”.
I could tell similar stories about all the companies above. To say that the people involved went through the hell of starting up ventures in such incredibly difficult technologies just to get “non-competitive contracts” with the govt is risible.
I suggest that anyone aiming to understand “space policy and the governance of spaceflight and space resource development” actually go out and meet the people involved in spaceflight, both at the govt level, e.g. the FAA AST office, and in industry, especially the NewSpace sector. Don’t just cut and past headlines into a predetermined political dogma.
Your first statement about the computing industry in the 80’s is a straw man because you presume my position on an issue about which I have made no argument. It is an ad hominem, specifically “poisoning the well,” because you then take this fictitious position and use it for the purpose of discrediting my actual argument. Furthermore, your final paragraph in your most recent comment constitutes more ad hominem attacks as you presume my methodology and rigor without actual information about it and use that unfounded presumption to attack me as a person rather than make any claims regarding the argument being made. I will not make any alterations to the comments already posted. An open discussion where no positions are unilaterally censored is important to me. I also want to make it clear that I will be deleting any future ad hominem attacks from all comments.
I would like to reiterate Taylor’s point that your comment does not portray my argument either correctly or fairly. I am not making an argument about the cost savings or how innovative New Space companies are. Nor am I arguing in favor of block-buy contracts or the domination of the market by industrialist contractors such as ULA. My argument is about competition. The competition that Musk is working towards is a competition between corporations. The only actors who can actually win in these competitions are corporations. Because many of these also rely on public resources for solvency (SpaceX included, Musk has said as much) I find this form of competition to be insufficient. It makes no sense to apply a model of market based competition given the indispensability of public resources. I find the democratization of decision making in spaceflight to be a much more appropriate form of competition. There are many systems by which this might be implemented, one I suggest in the article is that all contracts be open to public scrutiny. Other possibilities are national town hall meetings, citizen panels, and consensus conferences. Lower costs are entirely irrelevant to this argument because it does not value market forces, but democratic systems of governance.
“Your first statement about the computing industry in the 80′s is a straw man because you presume my position on an issue about which I have made no argument.”
You presented an analysis of the situation in A and I said that if you applied the exact same analysis to what I consider a closely analogous situation B, you would get a clearly erroneous result. The logical response to my argument by analogy is to either explain how analogy B is not in fact similar and that your analysis would work fine if applied to it or to admit there are problems with your analysis and to work to correct it.
“It is an ad hominem, specifically “poisoning the well,” because you then take this fictitious position and use it for the purpose of discrediting my actual argument.’
That is not what ad hominem means. If I said no one should listen to your presentation because you part your hair on the wrong side or wear shorts in the winter, that is ad hominem. Showing by analogy that your analysis is weak is a standard tool of legitimate debate. If you want to convince people outside of an echo chamber of the validity of your views, you have to refute such straightforward critiques of it with substantive argument and not complain that the critiques are somehow unfair.
“The competition that Musk is working towards is a competition between corporations. The only actors who can actually win in these competitions are corporations. ..”
Corporations lose big all the time because non-corporations, i.e. consumers, decide their products and services fail to meet their needs in a cost-effective manner. Blackberry, Nokia, Digital Equipment Corp., Iridium, Globalstar, Rocketplane-Kistler, etc.lost big because they failed to provide potential users with the most cost-effective goods and services. Consumers win big in gaining the most cost-effective goods and services. That is how the standard of living rises.
“Other possibilities are national town hall meetings, citizen panels, and consensus conferences. Lower costs are entirely irrelevant to this argument because it does not value market forces, but democratic systems of governance.”
There is nothing more ruthlessly democratic than consumers choosing what and whether to buy something. What you are suggesting is simply adding more government procedures for businesses to deal with on top of a mountain of existing ones. A space company already faces FAA/AST regulations, local and state regulations, enviro studies on every new facility (and these do in fact involve public meetings), liability issues in a litigious culture, etc. To claim that the public and government do not already have enormous influence on an industry like space is to not know that industry.
Your “other possibilities” will not expand democratic influence on the development of an industry like space but do the opposite. They will allow some groups to “correct”, usually by simply blocking, what they see as bad choices made by the public, either directly or via their democratically elected officials.
—
This will be my final comment. I’ll let you have the last word. Thanks for the opportunity to challenge your post.
“Showing by analogy that your analysis is weak is a standard tool of legitimate debate. If you want to convince people outside of an echo chamber of the validity of your views, you have to refute such straightforward critiques of it with substantive argument and not complain that the critiques are somehow unfair.”
Oh that is a real laugh. To start with, you never presented a “critique”, just a loaded argument based on your own forgone conclusion. A critique would be you going into detail explaining how the computer industry from the mid 80s was a resounding success and how it is similar to the space industry of today. You did nothing like that, instead all we got was:
“I’m sure if you had been writing in 1985 you would have portrayed the the wave of small computer manufacturers and software developers as a neoliberal cabal aiming to seize the country’s information processing sector using stolen government technology.”
But you aren’t really “sure” of that, because you couldn’t possibly be, and namely because this was just an insult designed to earn you some rhetorical points. Never mind, that the computer industry would soon become dominated by few players at which point any hope of “competition” began to rapidly evaporate in the establishing industry. One of these formerly small companies, turned into Microsoft, and we all know how that went. It took the invention of an entirely new market in mobile computing to finally make room for a few other players in the personal computer space. These days success for startups in the industry are measured by the size of the price tag they earn for themselves from the grotesquely oversized established player that swallows them up whole. Never mind the environment of hostile software patent warfare that was fostered by giants like Microsoft and that serves as an almost impossible hurdle for any new company interested in competing with them.
My point, in case it wasn’t clear, is that anyone who knows how the computer industry turned out should also know that this was not somehow a success for either the “democracy” of consumer “choice” or any idealistic notion of “competition”. While the point can at least be argued (not that I think it should) that we as consumers somehow benefited from this monopolistic industry, certainly the viability of a robust competitive market did not.
But hey, if you have an alternative history of that industry you would like to present, one that you believe contradicts my account and gives its support to the current efforts in the emerging space industry, then by all means share it. After all, that would be an actual argument from analogy.