4 July 2023

Our New Space Race


The current space race extends far beyond Elon Musk, Jeff Bezos, and Richard Branson. There’s a New Zealand tinkerer without a college degree who built a billion-dollar rocket company. A Ukrainian multimillionaire who made his fortune off sketchy dating websites. A soothsaying IT executive who attracted millions in investment through relentless optimism, all while blowing up rocket after rocket.

Ashlee Vance’s latest book, When the Heavens Went on Sale: The Misfits and Geniuses Racing to Put Space Within Reach, is an ode to capitalism, risk, and innovation. As Vance relays, the private sector has created the new rockets and satellites that are spreading the benefits of space commerce across the planet. Though still an important partner, the government lacks the mindset or motive to discard old habits and embrace new technologies. Vance’s book should give pause to anyone who would expunge the profit motive from space, overregulate space or any other tech sector, or rely solely on the government to innovate.

Vance traces the origins of several space companies, starting with the most successful of the new breed, SpaceX. Musk “willed SpaceX into existence” by investing $100 million of his own money and rejecting “the ‘truths’ held evident by the old, government-backed aerospace industry.” Instead, SpaceX created reusable rockets, such as the Falcon 9, that have now launched hundreds of times. Musk’s endeavor was not without risk. After multiple launch failures, Musk “was burning through his personal fortune at an alarming rate” and at one point had to launch his last rocket within eight weeks to survive.

Other companies endured by raising prodigious amounts of money via US capital markets. Rocket Labs had developed smaller rockets that reliably ferry satellites into orbit at a low cost. The company started in New Zealand, of all places, and took off in part because the government was “trying to run a pro-business government and quickly embraced the idea of New Zealand being at the forefront of such exciting technology.” Within a few months, in fact, New Zealand created a pro-market regulatory framework and negotiated bilateral treaties with the United States. Eventually, Rocket Labs set up a second headquarters in Los Angeles to help secure talent and capital. As its founder, Peter Beck, noted, “Goddammit, America gets s— done. There is no other place on Earth where a Kiwi could come into town and walk away with enough money to start a rocket company.”

All this competition is, per the book’s title, putting space within reach. Satellite and launch costs have plummeted. The cost of a satellite has fallen from around a billion dollars to as little as one hundred thousand dollars. With lower launch costs, the number of satellites has doubled (to around 5,000) in the last two years and could rise to 100,000 in the next decade. These new satellites will allow companies to provide new and cheaper services and to provide reliable internet connectivity around the globe. Already, private satellites have detected illegal deforestation in the Amazon, Russian military buildups, and Chinese missile sites. In what Vance calls “the first true Space War,” commercial space companies “gave Ukraine advantages that humbled the Russian military and altered the course of the conflict.”

For many of their employees, these space companies are infused with an almost religious sense of purpose. Musk, famously, argues that humans must become a multi-planet species to survive. Another company’s senior executive, a NASA alumnus, believes himself on a mission from God to spread human intelligence throughout the universe. Planet Labs, which started in an actual garage, pioneered the development of inexpensive shoebox-size satellites; prior to a launch from India, the company bought 88 statues of the Hindu deity Ganesh because it “felt sure that the idols would bring good luck.” These entrepreneurs view access to space “as a noble, necessary quest that would fulfill humankind’s destiny.”

At times, Heavens reads like a novel by Andy Weir, author of The Martian and Project Hail Mary. Enterprising engineers must tackle complex aerospace problems but here in real life, they must keep costs as low as possible. Should they make the rocket’s body of standard aluminum or carbon fiber, which is lighter but harder to shape? Should they use solid or liquid fuel, or some sort of hybrid? How many satellites can one rocket launch at once and how long should the satellites last? Different companies approach these questions with a view toward different customers and price points, but the answers help drive innovation.

These sorts of challenges also help to clarify why the private sector has taken the lead in space. Through numerous interviews with both entrepreneurs and civil servants, Vance explains why the government has been unable to overcome challenges, or to innovate generally, as quickly or successfully as private companies. In three words, mission, mindset, and motive.

One NASA executive, Pete Worden, explained that NASA’s mission is (or was) to provide jobs for the constituents of key members of Congress, rather than to explore space. As Worden put it, “A self-licking ice cream cone serves no other purpose than to keep itself alive.” Pork-barrel politics often led NASA’s congressional minders to kill innovative programs. In one instance, insurgent NASA interns were told to hide a program to send a smartphone into space, just to test how well consumer electronics could operate there, out of concern that NASA brass would bury the program in red tape. In contrast, as a NASA alumnus put it, a private company “can’t raise billions of dollars and spend infinite time” without launching anything.

When scholars write the history of this era of space commerce and exploration, they likely will write of the triumphs of the private sector in leading humanity to a brighter future—if we let them.

The government’s mindset also discourages innovation. Perhaps concerned about congressional reprimands, NASA and the Department of Defense developed an ethos that “every rocket and every satellite had to work and they would pay whatever it cost to ensure that happened.” An explosion would lead to hearings, oversight, and adverse publicity. This “zero-defects culture” led to endless testing and a reluctance to try new things, literally making the perfect the enemy of the good. Beck, the New Zealander, “thought that JPL [the Jet Propulsion Laboratory] would have the frenetic buzz of a start-up with some people running around trying to hit their deadlines and others sleeping in the corridors after pulling all-nighters. Instead, he found bureaucracy and malaise.”

This bureaucratic mentality also infused many of the government’s old-school contractors. After talking to a defense contractor, one space executive explained that “I was proposing some ideas. I can still hear [the contractor’s] words: ‘We don’t do anything unless the government tells us to and they pay for it.’” Among the new breed of space companies, on the other hand, the companies and their investors understand that some failures and explosions go with the territory of trying to innovate.

Finally, for the same reasons that capitalism works and collectivism fails, private companies have more of a motive to succeed. This is not to suggest that the excellent employees at NASA or any other agency lack ambition, drive, or skill. Given a clear mission and consistent funding, NASA has done and can do great things. Still, as Vance details, the profit motive, the prospect of a stock option paying off, incentivizes people to work for months on end for little pay, to travel to some desolate island or frozen tundra to try to launch a hunk of metal miles into the atmosphere, to risk their mortgages and sometimes their marriages, with no guarantee of success, for the chance to earn a hefty reward and to say to their friends and family that they helped to build something great and historic.

Different motives may drive those who are already wealthy. As Vance points out, the space billionaires could have spent their entire fortunes buying islands, setting up themselves and their heirs for generations, and enjoying every manner of Epicurean delight. No doubt the quest for personal glory plays a role (apparently, investors love to show off their rockets to friends). Still, these entrepreneurs are risking their reputations and fortunes to pursue a dream that could benefit all mankind. How many of us would choose the same path?

Many observers compare these still early days of the new space race to the early days of the tech boom several decades ago. If so, the new space companies should take a moment to examine how yesterday’s tech darlings are now under siege from regulators at home and abroad. How long before the progressives and anti-capitalists, those who proclaim that “you didn’t build that, somebody else built that,” come for these space companies? How long before the Federal Trade Commission, which has already taken an aggressive stance against aerospace mergers that don’t involve direct competitors, tries to declare SpaceX an illegal monopoly or Planet Labs guilty of unfair competition? Rocket Labs built a home abroad in part because New Zealand’s government welcomed it with open arms—will the United States remain a place where “s— gets done” or become a place where bureaucracy and red tape push companies overseas?

The administrative state presents a significant risk to the growth of the space economy. Regulators “cannot keep pace with the launches or the wills of the people leading the various companies” and competitors are already leaning on regulators to erect barriers to competition. As Vance describes, quoting a space historian, “Back in the day, the United States could spin up an entire missile program and the requisite launch infrastructure in eighteen months. ‘We couldn’t even write the environmental impact study in that amount of time now.’” Rest assured, if the United States hamstrings its space sector, other countries, including India and New Zealand, stand ready to welcome more operations to their shores. And if we truly abandon our leadership in space, there is little doubt that China and Russia will fill the void.

Historians describe an earlier era of exploration as motivated by gold, God, and glory. When scholars write the history of this era of space commerce and exploration, they likely will write that space capitalists led humanity to a brighter future—if we let them.

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