Billionaires in Space is a Good Thing

Michael R. Strain, a senior fellow at the American Enterprise Institute (AEI), talks about Bezos and the space-flight billionaires.

The other week, I had Michael R. Strain, a senior fellow at the American Enterprise Institute (AEI), on the podcast to talk about Bezos and the space-flight billionaires.

Click here to listen to our full conversation.

The following excerpt has been edited for length and clarity:

Matt: There’s been a lot of criticism from progressives about all of these billionaires going into space. Why are they wrong?

Michael: Well, I think they're wrong for for several reasons, the first thing they're wrong about is [that taking] people in[to] the space is a hobby and diversion, kind of an expensive leisure activity that doesn't really benefit the rest of society. You see this in Senator Bernie Sanders’s response, which was, “Hey, we have homeless people and hungry people in the world who don't have don't have shelter, and who don't have food. We have sick people who don't have medicine, you know, but we have these billionaires going into space,” and Senator Sanders concludes that the lesson from this is that we need to tax the billionaires. I just think that that view is remarkably short sighted. I mean, yes, of course a space tourism company—at this stage—is going to cater to really wealthy people. But there is enormous potential for the commercialization of space companies, and not just those founded by tech billionaires. Companies are actively trying to figure out how they could manufacture things in space.

Matt: Give me some examples of how this could work out.

Michael: Are there are opportunities to do pharmaceutical research in space that can lead to new and better drugs? Are there opportunities to improve agricultural methods and processes by carrying out some tasks in space? Can we improve supply chains? We want to get broadband access to remote areas, can we use the ability to do things in space to assist with that? There are all these applications for things that can be done by developing space commerce. These will benefit everybody in society, if there're better medicines, better agricultural methods, better manufacturing methods, better supply chains, making use of satellite networks for communications and broadband and things of this nature. And so, you know, yes, like there is a space tourism component of this. Yes, these are wealthy people. Yes, it was extremely expensive for Jeff Bezos and Richard Branson to fly up into space and experience a few seconds of weightlessness. And yes, we have big problems here on planet Earth, there's no doubt about it. But to ignore the enormous potential for widespread social benefit from space commerce is pretty striking, and I think is the wrong way to understand what Jeff Bezos and Richard Branson and Elon Musk have done.

Matt: Jesus said “The poor will always be with you,” and it just strikes me that like any innovation that we've made—some of them look more frivolous than others—but you could have pretty much have always argued that money would be better spent on the poor. I mean, you could use that argument against funding any experiment or innovation.

Michael: Yeah, I think that's exactly right. There has to be a balance between kind of immediate spending on immediate consumption and spending on investment that doesn't have an immediate return, but that could have a very large return in the future. This is pretty basic stuff. I mean, you know, you could argue that a company that builds a factory should instead be taking the cost of that factory, and using it to help struggling people in the local community. The right way to understand what we're seeing in terms of space commerce is that this is an investment and the payoff hasn't happened yet. I mean, yes, you know, Jeff Bezos got to be weightless for a few seconds. And, obviously, that was a thrilling and important moment for him in his life. But the payoff to society hasn't hasn't happened yet. But, but it will, and when it does, it's not only going to be the billionaires who benefit. 

Matt: I don't even think it matters if Bezos has the best intentions. Maybe his motive is he just wants to do super cool things and have fun. That really doesn't even matter that much to me, because the externalities are going to be positive, regardless of his incentive. In fact, I would be willing to bet that throughout history, a lot of the best innovations have come from people who were greedy, or selfish, or whatever.

Michael: Yeah, that's exactly right. Jeff Bezos, his motivations, I think don't really matter. I mean, I do think that he is motivated by the long-term good of the human species, and I think that's also true of Elon Musk. They've both made very explicit statements about the need for our species to not be confined to the planet Earth. And I think that, agree or disagree, it's a very reasonable statement, and I trust that they're accurately describing their motives. But yes, it ultimately doesn't matter what their motives are, what matters is that they are taking the first steps toward developing a new commercial frontier. You know, NASA found that since these sorts of private sector reusable spacecraft have been developed, that the cost of entering low Earth orbit has fallen by 20 fold, as it gets cheaper and cheaper for people to go into low Earth orbit, and cheaper and cheaper for the private sector to send rockets into low Earth orbit, that is going to benefit the companies that are figuring out how to do it cheaply. But it's also going to open the door for the kinds of manufacturing and pharmaceutical research and supply chain and agricultural innovation that I mentioned earlier. And again, like any big wave of innovation, that's going to benefit everyone. I mean, I'm sure when the Wright brothers took off on their first flight there were a lot of people who thought that that was just a diversion. Look at the benefits that air travel has had for the United States and, you know, for people of all income levels, this is the same kind of thing.

Matt: What are we to make of the fact that this is a private sector project, as opposed to NASA?

Michael: Well, I think it's very good. NASA has played an indispensable role, obviously, in getting our species off this planet, and most memorably, in bringing human beings to the surface of the moon and back safely. But this no longer needs to be a government monopoly. And, in fact, NASA has been very clear over the past two decades or so that that model doesn't work anymore for a variety of reasons. Of course, there's an enormous role for public policy in the development of space commerce, and there are all sorts of really basic policy issues relating to space commerce that have yet to be resolved, and there will always be a role for a NASA-like organization as well. But the time really has come to turn this over to private sector actors and that's what we're seeing.

Click here to listen to our full conversation.