October PFD Analysis

Is posted in the forums and below the fold! Resolved: Private sector investment in human space exploration is preferable to public sector investment.

The cornerstone of United States space policy is termed the “National Space Policy” (NSP). When Obama released his NSP, he focused heavily on incentivizing commercial development of spaceflight. That goal is described in the following passage:

A robust and competitive commercial space sector is vital to continued progress in space. The United States is committed to encouraging and facilitating the growth of a U.S. commercial space sector that supports U.S. needs, is globally competitive, and advances U.S. leadership in the generation of new markets and innovation-driven entrepreneurship.[1]

Currently, NASA and the private sector work side-by-side. NASA announces a project and private companies compete to develop the best technology in order to win the contract to perform the work. Increasingly, space policy is contracted to private industry.

Many have warned that this threatens NASA’s ultimate demise. SpaceMart, a popular space news website, noted that the loss of federal investment has resulted in “uncertainty, layoffs and program delays [that] have a decaying and destabilizing effect on our continued ability to lead in space exploration.”[2]

This resolution is interesting, in that it both resembles and radically differs from this year’s current policy debate resolution; Resolved: that the United States Federal Government should substantially increase its space exploration and/or space development beyond the Earth’s mesosphere. It is similar because both discuss government space policy. It is different because the core of that topic deals with the desirability of space travel. The Public Forum resolution assumes space travel to be desirable but asks who should carry it out.

This paper will explore the current debate and outline the major arguments each side can be expected to advance.

Pro: Private sector space exploration is preferable.

First set of questions: how to improve the private sector?

Some suggest tax credits be offered to private investors and corporations to develop space exploration technology.[3] Others, such as the President’s Commission on the Implementation of United States Space Exploration Policy, recommend a series of prizes to be awarded.[4]

Second set of questions: is it feasiable?

Many argue it is. Robert Garmong, a writer for the Ayn Rand Institute, believes that the free market will demand space travel and it will be profitable:

The free market works to produce whatever there is demand for, just as it now does with traditional aircraft. Commercial satellite launches are now routine, and could easily be fully privatized.[5]

Third set of questions: why prefer the private sector?

Long story short: proponents claim that privatizing space exploration is cheaper, more innovative and more competitive.

1. Lowering costs. The Cato Institute argues that if NASA was privatized years ago the price of space exploration would have decreased due to market competition

Civilian space efforts have been dominated by NASA, a government agency that for all its good intentions has retarded as much as facilitated activities in space. By contrast, during that same period entrepreneurs in the commercial market gave birth to the computer, telecommunications, and Internet revolutions. In fact, it is free markets that have commercialized and offered to all people everything from cars to televisions to affordable air travel and virtually every product and service imaginable. If, in the 1970s, NASA had begun to turn over space activities to the private sector, space stations and Moon bases might be a reality today. Market competition usually brings down the real price of goods and services.

2. Increasing innovation. Garmong, previously cited, argues that “problems can only be fixed by the kind of bold innovation possible only to minds left free to pursue the best of their thinking and judgment.” Many note that government innovation has lagged in the absence of another major superpower. Garmong states that since the government is only attempting to please constituents, it ends up producing an “over-sized, over-complicated, over-budget, overly dangerous vehicle that does everything poorly and nothing well.”

3. Increasing competition. The basic principle of free-market economics is that an empowered private sector can create competition that drives exploration further. While the government might be necessary for areas like the military, it is wholly unnecessary for human space exploration. Letting the civil sector create commercial competition would drive new technology and advantages in development.

Con: Public sector approach (NASA) is preferable.

First set of questions: How much government?

The resolution doesn’t have to be answered in a sweeping way. If you win the public sector is on balance more desirable for more projects than the private sector, you should vote negative.

For instance, Obama’s NSP cited above said that NASA and the private sector should work together. I believe the negative should argue this creates the right balance while maintaining NASA.

Second set of questions: Why use the government?

1. It is the only way. The private sector cannot be mandated to act. It only acts when it sees a financial incentive to do so.

If the negative wins that tax credits, prizes and other mechanisms don’t spur private investment, it can effectively win that (flawed as it is) NASA is the best available approach.An article from the Space Review makes the case that it isn’t particularly easy to get investors on board:

Credits or not, space transportation and related companies just aren’t that attractive from the standpoint of typical investors, particularly large institutional investors. … [Long] timelines would try the patience of most investors, given the plethora of other opportunities that could pay off in a much shorter time period. [6]

2. Lack of a mandate. As noted above, there’s no legal consequence for failing to complete a project. Even if the Affirmative can win that the financial incentives for space exploration are strong, it doesn’t necessarily mean they’re out of the woods. Dr. Molly K. Macauley, a Senior Fellow Resources for the Future, argued in her Congressional testimony:

[T]he effect of tax incentives for these businesses could be something like leading a horse to water but failing to make him drink, even if in your opinion he is really thirsty. In other words, the proposed tax credits, loan guarantees, and tax and bond exemptions may have little effect if the barrier is not financial as much as it is interest.[7]

The impact to this argument is rather large. If private companies exit the market then billions would have been lost on projects that were never completed. NASA is thus willing to take risks the private sector isn’t because it can survive the loss.

3. National security. Contracting out national security is not without its critics. Much like past topics that focused on private military corporations (PMCs), this topic raises important questions about the desirability of devolving government authority on an issue as important as space. Many argue this gap will be filled by our competitors:

The Chinese, especially, are gleefully jumping in on the act to fill the gap that American private corporations cannot possibly fill in any reasonable time in competition with state-controlled Chinese (and Russian) enterprises.[8]

Conclusion:

Each side has a major strength. If you’re Pro, you will have TONS of great literature to pour through discussing free market principles and the unbelievable promise of the American commercial space industry. On the Con, you don’t have to be TOTALLY anti-privatization but instead get to defend a more balanced approach.

Debate Central has tons of resources available on this topic and posts incredibly frequently on the issue. Keep an eye out for exciting new information in the forums and on Twitter!