An “Industrial Policy” for Space?

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There is perhaps no public policy issue today that is moreimportant, more widely discussed, and yet more misunderstoodthan the commercialization of outer space. For an issue ofsuch enormous economic and national‐​security significance it isalso, oddly enough, relatively noncontroversial. Judging fromthe public debate, it would seem that everyone is “for” it andlooks with eager anticipation toward the technological innova‐​tions, jobs, and profits that space commercialization appears topromise. The rise of high technology, the commercial successof the satellite‐​communications business, the reelection in 1984of a president with seemingly unbounded confidence in Americaningenuity and a determination to make this nation “Number One” – all have aroused great expectations regarding the potential ofU.S. business in the far reaches of the Last Frontier. Theyhave also resulted in a commitment to the space program, in theform of continued space‐​shuttle flights – despite the Challengerdisaster – and the development of a manned orbiting space station.Finally, they have resulted in a national commitment to the“Star Wars” anti‐​missile defense system.

“The benefits our people will receive from the commercialuse of space literally dazzle the imagination,” President Reagandeclared in July 1984.

We can produce rare medicine with the potentialof saving thousands of lives and hundreds of millions of dollars; we can manufacture superchipsthat improve our competitive position in the worldcomputer market; we can build space observatoriesenabling scientists to see our way to the edge ofthe universe; and we can produce special alloysand biological materials that benefit greatly froma zero‐​based gravity environment.[1]

Not to be outdone, Milton R. Copulos of the Heritage Foundationhas proclaimed that space commercialization will herald an era ofeconomic growth and opportunity “unparalleled in our existence,“constituting a “revolution whose benefits could bring a new eraof prosperity and peace to mankind.”[2]

If the enthusiasm of the business community itself is anyindication, there is indeed reason for optimism. Space, afterall, is already big business – for companies receiving federalsubsidies. The federal government, which dispensed $11 billion to contractors involved in space‐​related activities in FY1984 alone, has amply demonstrated its willingness to subsidizefirms eager to work with the National Aeronautics and Space Administration and the Department of Defense to develop the expanses of outer space.[3] Much of the money for it comes directly from Washington or flows from companies that use theshuttle and pay below‐​market prices to NASA in return.

NASA, carrying out Reagan administration policy, is movingforward in its efforts to help favored private companies usethe space shuttle for space‐​based manufacturing and researchpurposes, and dozens of firms are eager to realize the profitsto be made in private rocket‐​launch services. Satellite communications, an industry brought into existence by federal subsidy, generates $3 billion a year. Remote sensing (the use ofsatellites to detect conditions on earth) and materials processing (in which drugs, alloys, and crystals are produced in weightlessness) will soon become moneymakers themselves. Moreover,construction of the “infrastructure” of space – outer‐​space industrial parks with energy‐​generating plants, inventories of spareparts, launch systems, and the like – also represents an enormouscommercial undertaking.

Space commercialization, in other words, is a reality.Even so, countless questions regarding the nature of its development – especially whether it should be directed by the federalgovernment or by the private sector – remain unanswered. As willbe shown, the intellectual and public policy environment inwhich these questions will be decided is not, at this time, apromising one for making progress toward a free market in space.Of the policy recommendations under consideration, almost allwould strengthen the federal government’s domination of spacecommercialization. Federal control represents a serious obstacleto true commercialization, if by that one means a business environment in which the forces of the market, not the whims of thefederal government, dominate. Complicating the picture stillfurther, patterns of government policy inimical to a private‐​sector space industry are already in place, and their removalis almost invariably opposed by the most articulate proponentsof the development of space as a center for commercial activity.

Alan Pell Crawford

Alan Pell Crawford is the author of Thunder on the Right: The New Right and the Politics of Resentment.