Fraser Forum

William Watson: To boldly compete—space becomes a profit centre

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I think this is the most amazing thing I’ve ever seen, apart from my sons being born or my wife smiling. It’s a speeded-up video of the first stage of an almost-spent Falcon 9 rocket descending at very high speed from somewhere high in the stratosphere to stop its descent and land gently on a bull’s-eye painted on a barge floating in the middle of the Atlantic. (Then again, maybe it’s not that amazing. The other day at dinner a friend pulled out his telephone and asked it some questions. To which it responded. Correctly. That’s pretty neat, too. He and I are of an age where we remember the detective Dick Tracy doing that in a newspaper comic strip. And now here we are actually living the fantasy.)

Anyway, Falcon 9 is produced by SpaceX, which is owned and operated by Elon Musk, the South African/Canadian/American who made his first fortune with PayPal. Interesting fact: Elon Musk is probably the world’s wealthiest minimum wage earner. In April, the Wall Street Journal reported that Musk’s compensation from Tesla Motors, which he also founded, is $US37,584, so as to comply with minimum wage requirements in California, where Tesla is headquartered. Forbes Magazine lists Musk’s current net worth at $US10.7 billion, which puts him 94th on their list of billionaires—$10.7B in net worth but only $37K in salary.

SpaceX is not the only company to have accomplished this amazing technological feat. Blue Origin has also done it, did it first in fact, with, if anything, better production values. Blue Origin is the brainchild of Jeff Bezos, number five on Forbes’ list with $US45.2 billion. Bezos is more famous, for the time being, for having founded The goal of both Blue Origin and SpaceX is to re-use rockets and thus make space launches affordable and space economics sustainable. SpaceX’s website welcomes you as a potential customer for its launch services, complete with a price list and spec sheet.

I don’t have a lot to say about all this except that:

• The technology is very exciting. The video of some SpaceX launches shows hundreds of jubilant young people, many of them engineers presumably, going a little wild over the various successes, feeling the burn, as it were. It’s always best to resist Present-ism but we really are living in, as songwriter Paul Simon put it, “an age of miracle and wonder.”

• The space industry is becoming very competitive. National monopolies such as NASA may have been necessary in the 20th century. They seem less and less so in the 21st. Increasingly, space is taking on the characteristics of ordinary business, though as the spectacular videos attest it will be a long time before it’s that.

• There are winners and losers. Virgin Galactic, owned by Richard Branson, 286th on Forbes’ list at $US4.5 billion, was an early entrant into private space but seems to be lagging a bit.

• The industry is a great example of capitalist regeneration. The three men named, and several others in the industry, have taken the gobs of money they earned in other successful ventures and re-cycled them into what are so far productive, and they hope eventually will be profitable, enterprises. True, these “plutocrats,” members of the top one hundredth or maybe even one thousandth of one per cent of the world’s earners, are the ones who get to decide what their money is spent on. Personally, I don’t begrudge them that. It is their money, earned fair and square. Let them spend it, or not spend it, however they like (within legal limits). But if we do want to be judgmental, look what wondrous things they’re doing with it!

In space’s case, what I suppose we’re seeing is trickle-up economics. Or maybe thunder-up, given the noise liftoff generates.


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