A growing commercial role in space exploration and development has benefits that far outweigh maintaining the status quo. (Credit: LunaCorp)

Space privatization: road to freedom

by Sam Dinkin
Monday, July 26, 2004

In “Space Privatization: Road to Conflict”, Bruce Gagnon makes the case for defending the legal status quo. He first argues that privatization of space will lead to “more debris” and worries that, “Very soon we will reach the point of no return, where space pollution will be so great that an orbiting minefield will have been created that hinders all access to space.”

Space law and achievement as embodied in the 1967 Outer Space Treaty are stuck in the 1960s. Without amendment, the treaty is stuck without property rights for the Moon and the planets. Our achievement is stuck with an ISS that really does not improve much on Skylab or Mir. Our lift capability is backsliding. Our capability to get to the Moon has disappeared maybe to be reclaimed some day. So it may not be such a big deal to have to give up the ISS due to orbital debris because the public benefit from the station is so low.

Of course, there are many useful devices in space with GPS and telecom satellites providing excellent service to the global economy. Since these rarely fail due to orbital debris, it might be too soon to declare an emergency. But if there is an orbital debris problem, it is self limiting. The more debris there is, the less useful launches there will be so the less addition there will be to the debris problem.

There are also several ways to solve the debris problem. Satellite launchers can be taxed for cleanup, kind of like a bottle deposit. If the deposit money were sufficient to de-orbit a satellite, then private industry would be very keen on de-orbiting satellites after their useful life in order to get the money back. Another way to solve the debris problem is to begin to ablate or collect the orbiting debris.

In any case, there are two reasons that privatization will not substantially change the space debris situation. First, this debris problem will continue if space remains the preserve of big government even with business as usual. Second, regulations, such as the new FCC regulations for a minimum amount of propellant to continue broadcasting, allow the government to keep the debris situation under control.

Gagnon states, “As the privateers move into space...they hope to mine the sky. Gold has been discovered on asteroids, helium-3 on the moon, and magnesium, cobalt and uranium on Mars.” If only this were viable, I would have a much easier time arguing for colonization. There are not too many things worth $10,000/pound in propellant to get something back from the Moon or more from Mars. Gold weighs in at $6,250/pound. Even Helium-3 (3He) does not fit the bill. Let’s wait for someone to have a commercially viable reactor before we invest in going to the Moon to extract the 3He on a large scale.

Some things may be worth that transportation cost. Colonization in order to assure that our species outlasts the dinosaurs is priceless. Opening Mars to colonization will also create new opportunities for religious freedom and personal freedoms as the Pilgrims found when they immigrated to the New World. Space entertainment might pay its own way, as might suborbital tourism. Orbital hotels may be viable. Space science might be able to tag along, but science would have to be heavily subsidized. Maybe astronomical observing frequencies could be sold off on Earth to pay for a site on the far side of the Moon, but that would require much lower transport prices and higher spectrum prices than we’ve seen since the 3G crash. Suborbital point-to-point service from New York to Tokyo with a flight time less than the Concorde’s New York-to-London time may emerge some time.

There are some valuable military uses to space being explored by the Pentagon with its FALCON and RASCAL programs in addition to earth observing satellites. Further weaponization of space will probably be required to defend the US in the most economical manner and to defend the new civilian space assets. If no weaponization occurs by the US, we can definitely expect terrorists or other states to do so and for space to be stunted by lack of defensive protection.

With no privatization and no military protection, there will not be much colonization. Antarctica may be free of the intellectual pollution brought by property rights, but there are also no citizens, no development and very little in the way of commercial exports. Alaska, in contrast, hands out checks to its citizens rather than charging them taxes. Antarctica is also more inaccessible, so there may be another explanation for the disparity.

Texarkana offers a starker side-by-side comparison of different law leading to different levels of commerce. The city has a street running down the center of town where one side is governed by Arkansas law and the other is governed by Texas law. The main difference between the two jurisdictions is the ability to collect a high rate of interest (Arkansas caps their interest rate at 5% above the federal funds rate). This minor limitation on commerce means that there are many more stores on the Texas side of the street.

But suppose for a moment that we do have the opportunity to create a viable space economy. Gagnon continues, “Thus, after the taxpayers have paid all the R&D, private industry now intends to gorge itself on profits. Taxpayers won’t see any return on our ‘collective investment.’”

They are seeing little return now on their collective investment. Public returns will be great indeed if space development is successful. If privatization results in profits, those profits can be taxed. If private suborbital, orbital, point-to-point, lunar and planetary development lowers the price of access for public science, exploration and commerce, then that is a benefit. If colonization is successful, the public will have an insurance policy against extinction. Successful colonization will also energize the spirit of humanity. Colonizing Mars will double the amount of land available to the species and potentially more than double solar system GDP as a commerce of ideas and builds up between the growing Mars population and Earth.

Compare that to taxpayer return on public projects. What has the taxpayer return been on Social Security? It is as if the government mandated that everyone in the nation hold thousands of dollars in government bonds. Worse, the bonds pay below the market interest rate for federal savings bonds. While this is a boon to taxpayers because US borrowing is cheaper as a result, the elderly are getting a negative real return on their money. A privately-administered system with similar terms would surely have resulted in arrests and prosecutions.

I love listening to NPR and watching PBS. GPS is cool. I don’t like the Post Office. The Channel Tunnel was an excellent public-private partnership, but the private partner seems to be getting no return in that case. Central planning by the USSR failed dismally with their investment in collectives. Socialism is leaving many European countries with a money standard of living comparable to the poorest US states although their quality of life is quite high. To be charitable, I would say that the case for public returns from public management is mixed. In any case, there are few returns to give up in space’s public sphere to let private industry have a go.

Gagnon worries that, “Ultimately the taxpayers will be asked to pay the enormous cost incurred by creating a military space infrastructure that would control the ‘shipping lanes’ on and off the planet Earth.” I think the taxpayers should assess the costs and the benefits. If the shippers are going to be paying enough extra taxes with the extra commerce in safe and protected space to warrant the protection, pay for the protection from taxpayers. If not, I will be in the vanguard of those asking for corporations to arm themselves against would-be space pirates.

Gagnon implies that privatization of off-Earth development will prepare the way for the next “war system.” This is not a disadvantage of privatization even if true. First, terrorists and rogue states will take war to the heavens whether there is public or private management of space so at best public management postpones the new war system. Second, energizing the human spirit with new challenges in space may actually result in a solar system with less conflict. Third, the next war system may provide security for Earth more economically than the existing Earth-based military.

Gagnon finishes with, “Privatization also means that existing international space legal structures will be destroyed in order to bend the law toward private profit. Serious moral and ethical questions must be raised before another new “frontier” of conflict is created.”

If space attracts no investment and no colonists, I say “Down with the legal structures!” As for the serious moral and ethical questions, I say, “Bring ’em on!”

Sam Dinkin is a regular columnist for the Space Review. He can be reached at thespacereview@dinkin.com and 888-434-6546.

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