A Capitalist Space Race

SpaceX Crew Dragon Docking to International Space Station. Image source: SpaceX

July the 20th 1969 marked the pinnacle of the space race between the United States and the USSR when Neil Armstrong delivered the momentous "One small step for man…" speech. Yet, perhaps the greatest achievement in human history encapsulates so much more than a triumph of technical achievement and the deliverance of an unforgettable quote. It was also the culmination of decades-long political strife, military build-up and unprecedented competition in all imaginable fields between two ideological adversaries.

Out of this era-defining struggle, one clear victor emerged – the United States and its capitalist system, while the Soviet Union disintegrated a few decades later. Without its adversary, the incentive for the US to continue participating in such expensive and time-consuming endeavours such as space exploration was diminished. The altered priorities for the US government after the collapse of the USSR underscore the minimal progress that has been made in the field of space exploration ever since. Regardless, there could be a silver lining in the currently uneventful situation, as the world is starting to cast an eye on the vastness of the cosmos once again.

Another momentous achievement in the history of space-faring was achieved yesterday. SpaceX, the aerospace company, founded and owned by Elon Musk, became the first private business to send two astronauts to the International Space Station. The endeavour is hailed as remarkable because of the massive prospects that it opens up for future business ventures in the field of space exploration and travel. The previously mentioned silver lining rests in the fact that SpaceX emerged from the legacy of the space race, and the company is proof that the conclusion of the race does not signify the end of space-faring. For better or for worse, SpaceX looks set to build upon the previous success of the capitalist system by opening a new chapter of space exploration, in which private interests could incentivise future missions to the ISS and beyond.

Private capital and entrepreneurship are the tools that under the right conditions could create the necessary competition, which is of crucial importance for driving progress, as it has already been proven in the 60s and 70s. For now, SpaceX has raised the bar for the private sector by leading the way in privatising space travel. The company is singlehandedly creating a new industry in a field that was previously available only to a handful of nations. And as it's well-known, where there is an opportunity, there is also interest.

Other companies are now likely to follow in the footsteps of SpaceX by using technological innovation to exploit the massive potential for profitmaking from space exploration and travel. For the time being, the prime contenders to Elon Musk's company appear to be Boeing and Jeff Bezos' Blue Origin.

Here on Earth, heightened competition in the private sector is a key determinant of innovation, which, in turn, fuels progress. With more competition amongst companies regardless of the industry, production becomes stable, and the price of the underlying good or service tends to fall. Economics 101 dictates that technological advance, coupled with healthy levels of competition in the private sector, are both significant incentives for entrepreneurship. So why is all of this so important?

While nowadays nation-states have little to no incentives to spend massive portions of their budgets for conducting, say, another manned mission to the moon, private companies have the capacity to make such a venture profitable. The opportunities are diverse. Obviously, the first major goal for the newly emerging private-sector industry would be finding a way to transport people and cargo in orbit in the most cost-efficient way. This, in turn, necessitates more technological research. SpaceX has already made progress in this field by working on Research and Development of rockets that can be used many times on multiple missions.

The first aerospace company to offer cost-efficient transportation to and beyond Earth's low orbit, could not only secure contracts for servicing international programs such as NASA-led missions to the ISS, but it could also expand the extraterrestrial tourism sector, which is still in its infancy. While hoteliers and other members of the hospitality industry fear that the coronavirus pandemic might have exerted a devastating toll on the tourism industry here on Earth, wealthy individuals might already be drawing out plans for space travel. We could be experiencing the early stages of a transformational change in the tourism industry as a whole.

There is another industrial niche that might attract the interests of private corporations such as SpaceX and Blue Origin. In addition to the prospects that are entailed by extraterrestrial tourism, mining in space represents the other major allure for earthly entrepreneurs. Asteroids orbiting Earth could become sources of colossal revenues for mining companies. Even relatively small asteroids are estimated to be worth trillions of dollars owing to the immense quantities of precious minerals and metals that comprise them. Needless to say, a company that manages to develop the technology needed for mining this virtually unlimited resource that is to be found almost everywhere in Earth's orbit, could take charge of an endless source of revenue.

Space mining is still a futuristic concept as more technological innovation is needed to make the task at hand feasible. Nevertheless, the prospects for the first company to tap into this previously unavailable resource could easily become the biggest corporation on Earth. In a historical context, this would be akin to the East India Company's significance, but on a cosmic scale, literally.

In the aftermath of the last space race, which solidified the position of the US as the sole superpower while it bankrupted the Soviet Union, emerged a capitalist system, which favours meritocracy. The latter fosters competition, which is a key driver of innovation and progress, as was stated earlier. At present, the underlying conditions are favourable for the emergence of a new kind of space race. A space race that is waged not between ideological rivals, but between private corporations that are incentivised by the prospects of massive profitmaking. All of these factors entail a very bright future for the new age of space exploration. If history can set up determinants for the future, then SpaceX just fired up its own version of a "Sputnik", marking the beginning of something new. The question now is who is going to respond to the challenge raised by Elon Musk and his SpaceX?