50 Years After Moon Landing: A Call for Even Greater Privatization in the Global Space Market

"That's one small step for man, one giant leap for mankind." Those words were uttered by Neil Armstrong fifty years ago on July 20, 1969 when he became the first person to land on the Moon. It was a great day for the United States not only because of what it meant for technological innovation, but it also meant that the United States now had a considerable advantage in the Space Race with the former Soviet Union. This anniversary made me realize something else: we have not been on the Moon since. It is not as if NASA hasn't done anything for fifty years. NASA has had 111 manned missions between 1981 and 2011. There have been space stations since 1969. We even had a rover on the planet Mars. And I'm sure that NASA has conducted research that has resulted in the advancement of space travel and exploration. While there have been accomplishments at NASA since 1969, I would argue that none was as iconic as the Moon Landing. It got me to think of the space exploration market now.

Before I continue, I admit that I am not well-versed in the history or public policy behind aeronautics. I have friends who either work at NASA or have degrees in aerospace engineering, and when it comes to topical expertise on the subject, I would defer to them. At the same time, I would like to take my functional expertise in public policy and market research to examine the global space market to see how NASA and the private space exploration market have been faring.

NASA Budgetary Spending Since the 1960s
Below is a chart of NASA budgetary spending in inflation-adjusted dollars since its founding at the end of 1958. As part of the Space Race, NASA spending increased substantially in the early 1960s, peaked at $34B (in current dollars). It declined to $22.7B (in current dollars) by the year 1969, which is close to the amount that NASA currently has allotted for its budget.  I bring this up in the first place is that I anticipate a counterargument of "We haven't made it to the Moon since 1969 because we didn't invest in NASA like we did in the 1960s." I will address this point momentarily, but first....

Source: Center for Strategic and International Studies

Global Space Market
Looking at general spending on research and development, federal spending plateaued in 2008, whereas private research and development boomed (American Institute of Physics). More specific to space travel, I was surprised to see the market segmentation when it came to funding. In 2018, the global space market was worth $414.75B (Space Foundation). I was more interested to see that 79.3 percent was in the private sector.

Why Privatize the Global Space Market Further
For a number of years, NASA has acted as a de facto monopoly in the U.S. space market, particularly with space travel (not so much with satellites). Maybe it is not a bad thing that the market is shifting to the private sector.

When a single player dominates a market, whether in a strict market or simply has a high market share, there is little incentive to control costs or improve quality. This has been a motif in NASA's history. Let's take a look at the initial Apollo 11 mission that finally landed U.S. astronauts on the moon. As the Cato Institute points out, there were other Apollo missions that were cancelled, aborted, or simply did not make it to the Moon. The pattern continued with Skylab, a space station that only saw three missions before crashing to Earth in 1979.

If you need a more modern example, how about International Space Station? That Station was supposed to be completed in 2002 at the cost of $17B. It ended up costing $64B and was not complete until 2011. The Constellation Program and James Webb Space Telescope are two more examples. In terms of current debacles, the rockets that are supposed to get astronauts to the moon by 2024 are also dealing with delays and cost overruns, according to the Washington Post.

This is not to say that NASA has never succeeded at anything because the Apollo 11 Moon Landing is but one example of NASA's success. This is also not to say that the private sector is not prone to error. In a cost-benefit analysis, it would be about who does a better job. At the same time, NASA has a history of being over-budget and behind schedule.

In recent years, the private sector has made its way into the space marketplace, whether it is Amazon CEO Jeff Bezos, Tesla founder Elon Musk, or billionaire Richard Branson. While the U.S. government accounts for 11.6 percent of the market, its footprint is a shadow of its former self. The private sector has an incentive to invest in space travel on top of the incentive to create satellites (Embry-Riddle Aeronautical University). Moore's Law will only make barrier to entry lower and capital costs cheaper for those who wish to enter the space market.

In summation, NASA already recognized the importance of shifting space travel over to the private sector a while back. Experts in space travel also recognize this reality: that privatization is the wave of the future in this market, and that commercialization will be the way to see this market truly launch.