Solar System for Sale?
Free marketeers want a piece of outer space
Dennis Tito, the wealthy 60-year-old founder of a California investment firm, hopes to be the first tourist to visit outer space. At the end of April, in exchange for $20 million of his personal fortune, the cash-strapped Russian space agency has agreed to launch Tito in a Soyuz capsule for a 10-day stay at the new international space station.
If Tito doesn't get to go, it will probably be because of objections from his own country's space agency. The irony of NASA trying to squelch the now exuberantly capitalist impulses of a once-Communist country isn't lost on NASA's critics. For years they have blamed the United States' "central-planning" approach toward space exploration for the disappointing pace of progress since the 1969 Apollo moon landing. "If NASA had begun to turn over space activities to the private sector in the 1970s, bases on the moon might be a reality today," claims Edward Hudgins, policy analyst at the Cato Institute. Last week that libertarian think tank hosted a conference where proponents of private business pondered what it would take to jump-start investment beyond the successful commercial satellite industry.
When the United States first put its space program into high gear during the Cold War, national prestige and security were at stake--both convincing reasons for government to take the leading role. But NASA does have a history of stifling competition from the private sector. To protect the space shuttle from competition in the 1980s, for example, the government required all its satellites to be launched on that vehicle and even subsidized the costs for private satellites.
Today NASA says it's trying to encourage commercialization, and space entrepreneurs are hopeful that the Bush administration will push the agency in that direction. Pat Bahn, CEO of Bethesda, Md.-based TGV Rockets, is trying to raise $50 million to develop a reusable sub-orbital rocket that would go up 100 kilometers to take pictures of the Earth be-low. Such images are in demand by land planners, cellular phone companies, and even fast-food chains deciding where to locate a new restaurant. TGV believes it will be able to supply those images at a lower cost than current orbiting satellites.
It's just such experimentation that's needed, say space-industry fans. Aviation has developed at a much faster speed than space travel in large part because scores of companies were competing for a piece of the sky, says Gregg Maryniak, director of the Space Studies Institute. In 1912, for example, less than a decade after the Wright brothers' first flight, there were nearly 200 makes of airplane.
Markets deal out failure too, of course. The satellite launch industry is still reeling from the bankruptcy of Iridium, an ambitious, privately financed venture in satellite communication. Iridium woefully overestimated demand. And the only thing that's keeping its 73 satellites in orbit, under new owners, is a government contract. That's an irony even free-market fans should appreciate.
This story appears in the March 26, 2001 print edition of U.S. News & World Report.