Making Way For The Space Tycoons

GRC | 4 Min Read |24 March 17|by BLOG ADMIN

Until recently, missions to put humans into space were government-owned programs, funded by public coffers and the tax dollars of citizens. However, the recent proposal from Elon Musk for colonizing Mars highlights the role of the private sector and tycoon visionaries in the future of space. Much is made, and rightly so, of John F. Kennedy’s challenge in 1961 to send humans to the moon, and in just eight years, NASA accomplished that goal. It was a government funded and government led effort, though of course private sector contractors provided much of the expertise.

Musk’s Mars proposal though is one in which the private sector plays a leadership role. And it’s a much more audacious goal–technologically and culturally. Not only does Musk see humankind reaching Mars, but also he sees us staying there in a colony that grows to a city of as many as a million people. Musk is challenging national space policy, which has opened up to private sector entrepreneurship for near-earth orbit, but effectively has fenced off the moon, Mars and beyond with timid goals for NASA to return humans to the moon by 2025 and for humans to orbit Mars by 2030.

The role that tycoons like Musk are playing in space parallels that of the railroad tycoons in the 19th century. Visionaries like Cornelius Vanderbilt and Edward Harriman built a network of railroads that connected east, west, north and south, laying the rails that enabled the United States to become a commercial superpower. PayPal and Tesla founder Elon Musk with SpaceX, Virgin Group founder Richard Branson with Virgin Galactic and Amazon founder Jeff Bezos with Blue Origin are in the tradition of these 19th century railroad tycoons.

Although the railroad tycoons were often considered ruthless robber barons, a reputation not deserved by many, there are plenty of examples of fraud. For example, government largesse in the construction of the Transcontinental Railroad, payment by the mile, encouraged the lead investor of the Union Pacific Thomas Durant to build miles of railroad rambling through the Nebraska countryside. Notably, though the government was generous with land grants and financing that benefited investors in the Transcontinental Railroad, the government-issued railroad bonds were repaid with interest, and the government and the investors both benefited from development along the Transcontinental that increased the value of land grants. Durant spend the last 12 years of his life battling charges of corruption and lawsuits.

When the Transcontinental Railroad was completed in 1869, a passenger could travel from coast to coast for $65, about $1,000 in today’s currency. While expensive for new émigrés to the United States, the risks of travel as compared to stagecoaches and wagon trains were trivial. $1,000 is a far cry from the $200,000 that Musk expects for a trip to Mars, but the point is that once commercial travel is possible, many more people will be able to make the trip. Additionally, the idea of a permanent settlement becomes not so far-fetched, and with settlement, the seeds for a new space economy will be sown.

Realizing Musk’s vision requires a major shift in government space policy. Already the government has quickly made the shift to encourage private-sector leadership in access to near-earth orbit, but NASA effectively has reserved manned space flight to deep space for itself. Just three weeks after Musk’s Mars proposal, President Obama wrote an op-ed for CNN in which he proposed the goal of sending humans to Mars and bringing them back again by 2030. We did that with the moon in 1969, and no one has been back since.

Musk’s vision is much bigger, more audacious and much more in the spirit of the 19th century railroad tycoons. None of them would have thought of building a railroad west that would be used only a few times. The value in building the railroads was not in the railroad itself, but in the value of the land development and businesses that grew up along the railroads. The railroad tycoons created an entirely new economy.

NASA’s goal for humans to orbit Mars by 2030 is just too timid. Musk has it right: for there to be value from humans going to Mars, then we must go there, stay there and, through commercial success, create a new space economy. Realizing this vision is going to require a larger role for the private sector in space, perhaps letting the new space tycoons lead the way and moving NASA from a leadership role to a more traditional government oversight, financing and regulatory role that keeps an eye out for the emergence of a 21st century Durant.

When President Trump commissions a new national space policy review he should direct that the policy fully engages the leadership and entrepreneurialism of private sector space pioneers like Musk, Branson and Bezos. A new policy needs to be not just about roles and mission goals, but also must establish goals for the legal, financing and economic incentives that will encourage the rapid commercialization of deep space. Establishing audacious goals with strong incentives is the surest way to encourage the new space tycoons into a competitive race to Mars and beyond.

The original article was published by Forbes. You can view the full article here


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