Science & Tech

Let’s Make Outer Space the Free-Market Frontier

The Earth rising above the Moon’s horizon in July 1969, as seen from Apollo 11 (NASA)
With the help of private businesses, the U.S. can get to the moon in less time at a lower cost.

NASA’s plan to send the “first woman and next man” to the moon is taking shape. The recently released update to its ambitious Artemis Program renews NASA’s commitment to a manned lunar mission in 2024. Even more exciting is the international support for Artemis. Seven other nations have signed the Artemis Accords, a set of principles for future space missions, including lunar missions. If everything goes according to plan, 2024 will be the first time humans set foot on the lunar surface since the end of the Apollo program in 1972. Now, it will be a concert of nations leading the charge, not just the United States.

We have a unique opportunity to become a permanent spacefaring civilization. While NASA is making impressive progress, it could go farther and faster by outsourcing more of the intermediate steps, especially the rocketry, to the private sector. Guided by public-sector vision, the private sector can get us back to the moon, and deliver enormous wealth once we get there.

Currently, the Space Launch System (SLS), billed as NASA’s next-generation rocket, is scheduled to propel the Artemis missions. Artemis I, an unmanned mission scheduled for late 2021, plans to use SLS to deliver the Orion spacecraft into lunar orbit. This important step paves the way for eventual manned missions. But there’s one problem. According to Loren Gush in The Verge, “The entire SLS program is over budget and behind schedule by more than 33 percent, compared to the baseline figures NASA gave Congress for 2019.”

Delays and cost overruns are not uncommon with public-sector programs. And to be fair, developing a new super-heavy lift launch vehicle like SLS is no small feat. But there’s a promising way to get costs down: Rely more on the private sector. Led by companies such as Elon Musk’s SpaceX, for-profit corporations have delivered steadily falling launch costs over the decades. From 1970 to 2000, the cost of accessing low-earth orbit was about $18,500 per kilogram. Thanks to SpaceX’s innovations in reusable rocket stages, this number has come down significantly, to about $2,720 per kilogram. And industry experts think costs lower than $1,000 per kilogram could be achieved in as little as five years.

The true game-changer is SpaceX’s Starship rocket. In development since 2012, Starship is designed to be fully reusable, and to deliver more than 100,000 kg to low-earth orbit. This puts it in the same category as NASA’s SLS. Yet Starship looks like it will be much cheaper. Musk says Starship launches could eventually cost as little as $2 million. Even if Musk is off by a factor of ten, this would lower launch costs below even the most optimistic analyst projections for NASA

Why has the private sector been so successful at reducing launch costs? The short answer is that SpaceX’s profits accrue to its owners. This gives them strong incentives to cut costs: For given revenue, lower costs means more profits. What’s not often appreciated is that this is good for the rest of society, too. In market economies, prices track opportunity cost, meaning the next best thing that could be done with the priced resources. When firms cut costs, they give consumers valuable outputs while using up fewer valuable inputs. Hence there are more resources left over, which can be used to do other desirable things. What’s true on earth is true in space: When private launch providers cut costs, they propel us to the stars while giving up ever less to get there.

Even those who believe a strong space sector requires heavy government involvement think it makes sense to let businesses handle the transportation into space. Charles Bolden, the head of NASA from 2008 to 2017, was once a staunch defender of SLS. But now he believes the comparative advantage of for-profit businesses is simply too big to ignore. America can best advance its spacefaring ambitions by embracing what Bolden’s already recognized: Commerce should be our orbital engine.

We are on the verge of a new space age. This time, economic considerations rank among the most crucial issues. NASA recently established an important precedent for the use and transfer of celestial resources by offering to pay for moon rocks. The prospects for outer-space property rights are bright. These developments portend the rise of private commercial law in space. In each of these cases, the logic of markets and trade will help us get more for less. We should apply this to launches, too. The public sector should focus on what it does best: science and exploration. Let’s make room for the private sector to get us back to space, cheaply and sustainably.

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