Like a good capitalist company, Russia’s mostly privatized space agency, Energia, wants to make money by carrying a private paying passenger to the International Space Station (ISS). NASA, the U.S. government’s space agency, opposes this pro‐capitalist venture. How things have changed. It used to be that the United States and the Soviet Union debated the merits of their respective economic systems, with the former favoring free markets and the latter liking government‐owned and operated enterprises.
The passenger, American Dennis Tito, did not select the ISS as his destination of choice. Facing difficult economic adjustments, Energia had decided to scuttle its Mir space station and to accept NASA’s invitation to become an ISS partner. Fortunately, in December 1999 MirCorp, a company 40‐percent owned by private Western investors and 60‐percent owned by Energia, was formed to make Mir financially self‐supporting. To that end MirCorp accepted Tito’s offer of a reported $20 million for a flight to Mir. Unfortunately, NASA helped block MirCorp’s efforts and in the end the Russians could not keep the station in orbit. The 15‐year‐old station was allowed to burn up in the atmosphere.
Tito and Energia figured it would be an easy matter to simply switch stations. After all, Russia is a partner with NASA on the ISS and has supplied the modules that constitute the core of that station.
But NASA objects to Tito’s trip, calling him a “tourist” and suggesting that he might endanger the station and his fellow station dwellers. But “tourist” is a misleading term. Tito is not some camera‐toting joyrider. To pursue his dream of flying in space, he has been undergoing training since August 2000 in Russia with cosmonauts who don’t feel endangered by his presence. Indeed, they briefly refused to train in America for a joint mission with NASA when that space agency announced it would not let Tito fly.
This situation is ironic. NASA objects to a private Russian company selling a trip into space to a private individual in exchange for private funding. But NASA itself saw no problems when it gave trips into space to Sen. Jake Garn and Rep. Bill Nelson, neither a professional astronaut, in order to secure taxpayers’ funds for its programs. (Let’s grant that Sen. John Glenn was qualified to fly, though his shuttle mission was more PR than cutting edge science.)
Concerning Tito, NASA administrator Daniel Goldin asks, “Just because someone says they have that money to fly, is that reasonable?” The answer is, “Yes!” The people with money are called “customers.” They pay for goods and services. In a free market, eager entrepreneurs meet their demands.
Goldin says, “The shuttle costs so much a flight” and implies that $20 million might not be the right price. But since the Russians are supplying the transportation, it is for them to determine the price of the journey. Because a NASA shuttle flight costs at least $500 million, Goldin probably finds it unbelievable that the Russians’ costs could be significantly lower. Goldin might also argue that the price of an actual stay on the station is not covered by the $20 million. But the problem is that a government station is not subject to market pricing based on demand. In any case, the $50 billion space station construction costs are high because the government is building it.
No matter what the outcome, the lesson of NASA’s fight with Tito is clear. Top NASA officials will run the space station like old Soviet apparatchiks run their factories. The station’s costs will be far higher than the goods and services it produces. And those officials will have no clue or care about whether the station meets real market demands.
The solution to the problem is the same as for the old Soviet factories. When the station is complete it should be spun off as a private entity or at least be operated on a commercial basis by private companies. The Russians are rediscovering the benefits of free markets. It’s about time NASA did the same.