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Thursday, November 15, 2012

The Privatization of Space Exploration: by Lewis D Solomon

  This is a reply I made to a review of a book The Privatization of Space Exploration: by Lewis D Solomon on the von Mises website. As a group they are usually right but they do have a tendancy to be the Judean People's Liberation Front of  libertarianism nitpicking minor doctrinal points.

  My main message is underlined at the bottom. It is, as ever, fairly optimistic.
   The reviewer is being slightly pedantic in objecting to the writer using jobs and tax receipts as markers for growth. Space activity also generates economic growth and tax receipts" (p. 8). These supporting arguments ignore the important fact that jobs are not the goal of the economy. We want the output from jobs, not the jobs themselves. This distinction is important, because any policy that subsidizes an industry in the effort to make sure that the industry hires workers is inevitably promoting a misallocation of those workers' skills. Superseding market prices for labor means that the other industries that had a more productive use for those workers (maybe in space flight, maybe not) must forego those workers. This reduces economic growth. The tax-revenue argument has more serious problems. Taxes simply extract value from individuals and transfer that value to a government-determined purpose This is, after all a book aimed at everybody. In any case, at least until such time as flight to space is as cheap as flying to Australia (that day will come) it is going to be a more capital than jobs intensive industry.
He is on better ground complaining about the Moon & Space treaties. The inability to establish title to property in space is perhaps the greatest single brake on development. With water found on the Moon investing in getting there first should be an enormous driver of settlement. The comparison with railways in the US, made possible by the government giving title to those who first built them is obvious.
With Obama re-elected the last chance for big governments to control space may have gone. If commercial space is largely developed in the name of small low tax regimes (Singapore & Abu Dhabi are both working hard to be hubs) a libertarian future for humanity off planet may be near. If so the fact that humanity is at least 20 years behind where we could have been in space industrialisation, may be a blessing, at least for future generations.

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