Reason Foundation

Reason Foundation

The Wall Street Journal

The Final Frontier of Tourism

Entrepreneurs head to space

Robert Poole
May 4, 2001

It took Dennis Tito $20 million and Russia's newfound capitalist instincts to get into orbit as the world's first commercial space tourist. But what will it take for the rest of us to be able to book passage into space?

The National Aeronautic and Space Administration's incorrigible opposition to Mr. Tito's plan had little to do with its expressed concerns about safety and much to do with its central planning mindset. Since its creation by President Eisenhower in the post-Sputnik panic, NASA has been imbued with a we-know-best approach to space. That was evident from the early days of the Apollo program, when NASA leaders and President Kennedy opted for the brute-force, direct-to-lunar-orbit approach — against the advice of its scientific advisory commission, which recommended a slower and more evolutionary approach.

Modus Operandi

The latter would have involved successive upgrades of existing launch vehicles, to assemble the moon lander in earth orbit. The former required developing the massive Saturn V rocket, able to lift the entire mission in a single launch. It was riskier and more costly, but because it worked in that case, the gargantuan one-best-way approach became NASA's standard modus operandi.

Thus, once the moon landings wound down, instead of evolving the Saturn rockets and building on the early Skylab space station, NASA scrapped both and aimed for two massive new programs along the same lines: a reusable shuttle and an all-new space station.

Both have suffered massive delays and huge cost overruns. The cost per pound of lofting payloads into orbit on the shuttle is actually higher than on the 1960s-era Saturn rockets. This supposed all-purpose launch vehicle is so costly to refurbish and relaunch that it has never come close to its initial promise of being a "space truck," launching routinely once a week. Unfortunately, by attempting for many years to make the shuttle America's sole launch vehicle, NASA stifled what might have become, by now, a viable private-sector launch industry.

But NASA never seems to learn from experience. Its attempt to develop a shuttle replacement was Lockheed-Martin's X-33, another one-best-way attempt to develop "the" next generation reusable launch vehicle. After the X-33 ran several years behind schedule and well over budget, NASA pulled the plug in March — after having spent $1.3 billion. And now, instead of admitting the underlying mistake, NASA has embarked on a second attempt at a shuttle replacement, the $4.5 billion Space Launch Vehicle.

Thankfully, U.S. policy toward the fledgling aviation industry was never this single-mindedly wrong-headed — or else air transportation might still be a government monopoly with millionaires bidding for a seat on the first transcontinental flight in the National Jetliner, a $5 billion cargo/passenger/reconnaissance transport, for both military and civil uses.

Instead, government carried out basic aeronautical research and made the results available to the private sector. This role was played quite successfully by NASA's modest predecessor, the National Advisory Committee for Aeronautics. The result was an ongoing burst of private-sector creativity, as hundreds of firms tried out various combinations of structures, powerplants, and layouts to figure out what worked and what didn't in making aircraft suitable for different purposes.

That trial-and-error process led, eventually, to a progression from early barnstormers to the Ford Trimotor, the DC-3, the Constellation, the 707, and today's modern jetliners. And a dazzling array of planes specialized for sport, business, cargo, defense, and other purposes.

The other benign government policy was airmail contracts. At first the U.S. Postal Service attempted to get into the airmail business itself, buying planes and hiring pilots. A series of crashes led to the decision to purchase airmail services, at a set rate per pound between points A and B. That policy left entrepreneurs free to experiment and innovate, eventually creating the predecessors of many of America's leading airlines.

If President Bush wanted truly to revitalize U.S. space policy, he would seek a NASA director willing to make a fundamental paradigm shift. NASA would reinvent itself along the lines of its NACA ancestor, becoming the equivalent of the National Institutes of Health for aerospace research. For international political reasons, it might be forced to continue developing and operating the International Space Station, but it might be able to outsource its management to a consortium of research universities open to partnerships with commercial firms, to cover some of the costs.

To provide transportation to and from the station, NASA (or its successor as station operator) should contract for the required space transportation services — not seek to design a "shuttle replacement." As the Russians long ago figured out with respect to their Mir station, one does not need a hugely expensive man-rated shuttle to transport cargo. That can be done at far lower cost via expendable cargo rockets, competitively procured on the basis of dollars per pound of payload, delivered to low earth orbit.

A far smaller passenger carrier could likewise be developed on a competitive basis, with NASA indifferent to whether the winning vehicle was expendable or reusable. The only real criteria should be the outputs — highly reliable delivery of people to low earth orbit at an acceptable cost.

All the government's other space launch needs should be met the same way. Whether it's NASA or the Defense Department or the National Oceanic and Atmospheric Administration, the general principle should be the same. Don't spend years of effort defining reams of launch-vehicle requirements. Simply spell out the payload needs to particular orbits, the reliability target, and the acceptable cost/pound range, and let rip the forces of competition.

Trial and Error

What would such a policy mean for space tourism? Apart from an occasional Dennis Tito, there will be no real space tourism until launch costs come down by an order of magnitude or two. And the best way to get from here to there is not NASA's failed one-best-way approach. Rather, it's the competitive, trial-and-error model that has produced today's global air-transport industry.

Besides the government research and procurement policy changes outlined above, another factor that could help is a system of prizes for those who attain space-launch milestones. The X-Prize Foundation, based in St. Louis, is pursuing just such a model, offering $10 million for the first team to launch the same reusable vehicle into space twice in two weeks without government assistance. Over a dozen companies are currently pursuing this goal.

One can envision a commercial progression from low-risk suborbital (Los Angeles-to-Hong Kong?) same-day package delivery, followed by suborbital passenger trips (mostly business, but some tourism), to be followed eventually by the first orbital passenger trips.

That's how markets develop. Not by a central plan, managed by the best and the brightest, but by the messy, gritty, trial-and-error approach of entrepreneurs pursuing a dream.

Robert W. Poole Jr. is director of transportation studies and founder of the Reason Foundation.

Robert Poole is Searle Freedom Trust Transportation Fellow and Director of Transportation Policy

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