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The bridge to “outer” nowhere?

| July 12, 2011


In his Washington Examiner column today, Cato’s Gene Healy calls the space program the “biggest bridge to nowhere.”

In light of the space shuttle program’s cancellation, Healy points out that the average American enjoys little benefit from a federally-funded space program and that space exploration should be the domain of private enterprise. In fact, in a 2010 Rasmussen poll, the majority of Americans agreed with that statement.

As Healy points out, defenders of the space program primarily point to the program’s value as one that provides national glory, calling it “spacecraft as soulcraft.”

Healy doesn’t get into the flawed basis of the standard rationale for a subsidized space industry – that the space industry leads to the development of new commercial technologies. This tired argument, however, is as flawed as any other argument for government to provide anything other than “pure public goods.” I could point out the standard Austrian criticism that value is subjective and, because of this, policymakers can never make an unambiguous claim to improve social welfare through any type of government spending.

However, without getting into a pedantic discussion of economic theory to prove the wastefulness of a government space program, I can simply highlight that every dollar spend (or credit used) by government is a dollar (or unit of credit) that must first be taken out of the private sector. This pilfering limits the capital formation that would otherwise finance private-sector research and development on technologies that consumers actually demand. Public-sector R&D spending is typically far less efficient than private-sector R&D precisely because each dollar spent does not have to be justified by an anticipated consumer demand. Hence, government is free to waste R&D money on projects that may have no ultimate value to most consumers, even if a relatively small proportion of technologies developed through public R&D spending are eventually adapted for commercial use.

The lesson here: R&D should always be the realm of private enterprise because individual entreprenuers are subject to market discipline over their expenditures whereas government bureaucrats are not.

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Geoffrey Lawrence is director of research at Nevada Policy. Lawrence has broad experience as a financial executive in the public and private sectors and as a think tank analyst. Lawrence has been Chief Financial Officer of several growth-stage and publicly traded manufacturing companies and managed all financial reporting, internal control, and external compliance efforts with regulatory agencies including the U.S. Securities and Exchange Commission.  Lawrence has also served as the senior appointee to the Nevada State Controller’s Office, where he oversaw the state’s external financial reporting, covering nearly $10 billion in annual transactions. During each year of Lawrence’s tenure, the state received the Certificate of Achievement for Excellence in Financial Reporting Award from the Government Finance Officers’ Association. From 2008 to 2014, Lawrence was director of research and legislative affairs at Nevada Policy and helped the institute develop its platform of ideas to advance and defend a free society.  Lawrence has also written for the Cato Institute and the Heritage Foundation, with particular expertise in state budgets and labor economics.  He was delighted at the opportunity to return to Nevada Policy in 2022 while concurrently serving as research director at the Reason Foundation. Lawrence holds an M.A. in international economics from American University in Washington, D.C., an M.S. and a B.S. in accounting from Western Governors University, and a B.A. in international relations from the University of North Carolina at Pembroke.  He lives in Las Vegas with his beautiful wife, Jenna, and their two kids, Carson Hayek and Sage Aynne.

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