The Stark Politics of SpaceX’s Starship
How politicians can starve innovation
Just hours before the unveiling of SpaceX’s Starship rocket prototype, NASA administrator Jim Bridenstine took to Twitter and made a statement that shocked much of the space community, who were quick to point out the apparent hypocrisy of publicly shaming SpaceX while failing to call out its Commercial Crew rival Boeing, who faced far worse delays. Others noted that the SLS rocket program, also contracted to Boeing, was vastly further behind schedule and over-budget, with nary a peep from NASA.
The tweet underscored the continued battle between what many call “old-space,” or longstanding government contractor heavyweights, with “new-space,” nimble new competitors like SpaceX. But it is also a lesson in the dangers of government contracting and political interference in science, with huge ramifications for the future.
A Jobs Program
The SLS rocket, slated for flight in 2022, embodies everything that is wrong with “old space” and government contracting. The SLS is based on hardware developed in the 1970s with little innovation. The reason for using dated hardware is not technical, it’s political. The engines, fuel tanks, and avionics, made by established companies, have lobbied Congress to ensure that their legacy parts are used in the name of “saving jobs.” This is great for Senators who are tasked with “bringing home the bacon,” but it results in a rocket designed by politicians, not engineers. Engineers’ only role is stitching together a Frankenrocket that will ultimately satisfy no one.
Additionally, with typical government cost-plus contracting, contractors like Boeing can rest assured that no matter how badly delayed and over budget their product is, they will make their 15 percent profit on top. There is no incentive to execute on time or on budget. The consequence is a rocket that is seven years behind schedule, brings nothing new to the table, and costs have ballooned to an absurdly unsustainable $4 billion per launch.
By any objective evaluation, the SLS program merits more than a little criticism, it merits total cancellation with funds diverted elsewhere. SpaceX remains desperate for funding for its Starship rocket, which promises to be vastly cheaper and more capable than the SLS. But Congress continues to look the other way. This collective blind eye has enormous implications beyond the space industry.
In the seminal work, Why Nations Fail, the authors illustrate the reasons that some nations flourish while others flounder. The difference lies in whether that nation’s economic structure is primarily “extractive” or “inclusive.” An inclusive system is sustainable because it encourages broad participation and competition in the marketplace.
In an extractive system, on the other hand, the ruling elites seeks to extract as much wealth as possible from their subjects to preserve their incumbent power. The extractive system requires that the ruling elite place arbitrary barriers to change (read innovation) for the purpose of maintaining the status quo.
The quintessential example of extractive political thinking occurred in 1589 when William Lee, the inventor of the “stocking frame” knitting machine, demonstrated the machine to Queen Elizabeth in hopes of securing a patent from her.
The machine promised to greatly reduce the costs of textiles and increase textile output per worker, a boon to the economy. The Queen refused to grant him a patent, fearing that the machine would put many of her subjects out of work and threaten the stability of her regime. An extractive system seeks to inhibit the adoption of new technology because innovation threatens the socio-economic and political foundations upon which the regime stands.
So while SpaceX is promoting its Starship rocket as a better and cheaper alternative Congress, like Queen Elizabeth, prefers the status quo. SLS funnels money toward politically-connected corporate donors that maintain the power of ruling incumbents. In sum, Congress has chosen extraction over inclusion.
The SLS is not about innovation, and certainly not space exploration, or the long-term survival of humankind. Rather, SLS is an extractive enterprise that is starving funds from real innovation. But it saves jobs, right? Who can blame Congress for wanting to save good-paying American jobs. Since economic growth ultimately follows productivity growth, and productivity growth is driven by innovation, it stands to reason that arbitrarily inhibiting innovation is a leading indicator of reduced future economic growth.
So while Congressmen and women may claim that the SLS “saves jobs,” it does, but only in the short term. In the long term, the only jobs it truly saves are their own. Continued misallocation of capital actually reduces jobs and growth by starving those resources from more productive enterprises.
Better Paths Forward
SLS is not alone. The political systems of many countries risk becoming extractive regimes that inhibit innovation at the expense of supporting an entrenched ruling elite. Governments should be supporting groundbreaking research that complements and build upon innovation in the private sector. As I discussed here, it should be a symbiotic relationship, not a parasitic one.
We can ensure that our society remains inclusive by dropping many “cost plus” government contracts in favor of fixed-price contracts that force contractors to deliver on budget. We can also rethink the nature of patents and copyrights, as I discussed here. Together, these measures will promote positive externalities that will filter into the broader economy, generating jobs, growth, and innovation for the betterment of humankind.