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Indybay Feature
Rigged-How SpaceX launch makes the rich richer & the poor poorer by taking publlic goods
by Kanoh Nishizawa
Sunday May 31st, 2020 11:24 AM
SpaceX launch represents the latest transfer of public goods into private hands. A vital, enduring, feature of state capitalism.
The System is Rigged. If not readily prove it, we can feel it. While many facets of the unfair game are quite obvious, and even highlighted and scrutinized in elite media, like tax cuts for the rich, bailouts of largest corporations and the stock market, huge discrepancy of pay of CEO’s and workers, etc. Some of the structural features of state capitalism slip by without mention, and even receive praise. Perhaps because they’re so large and important for the continuation of pillaging of the public? One of such facets is transfer of decades of publicly funded knowledge for private gain once it’s marketable.

In the past few days the news is rife with coverage of the amazing achievement of efficiency of private enterprise, which is to help the wasteful state control costs; and, in the words of New York Times’ Kenneth Chang, the laudable “philosophy and policy” of the US government that recognizes this fact of nature. Namely the launch of SpaceX’s Crew Dragon capsule carrying two NASA astronauts to the International Space Station in what is to mark the beginning of a new amazing era – the state becoming a customer to private space travel firms, and commercialization of human space travel. At last, Elon Musk’s genius is to aid the rest of us mortals with our clumsy space program, and elevate us to, literal, new heights, for a modest fee, of course (expected to start at $55 million per seat).

A scenario reminiscent of Tony Stark from the Iron Man movie series.

Then there’s reality. This is, in a nutshell, how public gets plundered, and the rich get richer with massive state help, all the while ideologues berate state intervention in private enterprise and the “free markets”. In simplest possible terms this is what the ruse is about: The taxpayers are paying for all sorts of Research and Development programs under many national laboratories and state agencies such as DARPA, NASA, and others. There, the most expensive, and most fundamental aspects of innovation are developed. If a project fails, we bare the cost. On the other hand, once achievements are marketable, they get handed over to the private sector for profit. This was the case with the internet, microchips, touch-screens, GPS, etc., etc. The latest is space technology.

The public should be furious, not celebrating.

Privatization of as much as NASA can handle go back to its founding in 1958. Immediately, private contractors were used for minor tasks, ones not vital to actual missions. The calls to privatize actual spaceflight began in the 1980’s and Reagan. Despite the burning desire, these weren’t yet realistic. 90s didn’t fare much better and can only boast a botched partnership with Lockheed Martin. Then came the 2000’s. The story of the latest batch of handover efforts (of which SpaceX is a part) begin in 2003 with the Columbia disaster, and the subsequent decision in 2004 by the Bush Administration to retire the Space Shuttle and commercialize ferrying cargo to space via Commercial Orbital Transportation Services program. The Shuttle crew program was to be replaced with a new one called Constellation which was to initially be fully under NASA’s auspices, then slowly privatized. However, new administration brought new ideas. Obama decided to commercialize faster. Started in 2009, Commercial Crew Program awarded billions of taxpayer dollars, vital expertise that only NASA has, infrastructure only NASA can provide, and guaranteed contracts to a select few private firms. In other words, an absolute guarantee to succeed if you were picked as a winner.

Reading the recent coverage of the gimmick in the New York Times and other media, you would be excused for imagining Elon Stark mercifully deciding to share his Iron Man (Crew Dragon) advanced technology with the lowly, incompetent NASA. And not a handout of public knowledge, infrastructure, and resources flowing in exactly the opposite direction. What it really is.

To illustrate the contrast between the facts, ideology, and what could be done, let’s put them side by side and go over “How NASA’s astronauts became customers of SpaceX”. The title of a recent New York Times piece by Kenneth Chang, from May 26, 2020:


“The United States sent astronauts to the moon in the 1960s and 1970s and then built the world’s only space shuttle fleet for trips into and out of orbit. But the destruction of the shuttle Columbia in a 2003 accident eventually left NASA dependent on costly Russian spacecraft to ferry astronauts to and from the International Space Station.” Since we only care about money, this was a good place for Mr. Chang to start selling privatization. You’d think we were paying astronomical price to the Russians since retiring the Shuttle, and are about to save tremendous sums. In the period 2006-2018, NASA’s tab with Roscosmos was roughly $3.4 billion, at a cost of between $21.3 and $81.9 million per seat. Total in grants to private companies excluding the free use of NASA knowledge, personnel, and facilities, is $8.2 billion. Starting cost per seat at SpaceX is expected to be $55 million. Additionally, there is the giveaway of untold billions in expected commercial space travel. These are only the STARTING figures. Is it surprising Mr. Musk, Mr. Bezos, Boeing, Mr. Branson all want in?
“It took work across three presidencies, those of George W. Bush, Barack Obama and Donald J. Trump, but the United States is at last prepared once again, after nearly a decade, to launch American astronauts into orbit from American soil on an American-built rocket… The replacement that the American space program finally settled on is an innovation not of technology, but philosophy and policy. Instead of building its own replacement for the shuttle, NASA is handing over responsibility for carrying astronauts to a private company, SpaceX, one of the obsessions of the serial entrepreneur Elon Musk. If Mr. Musk’s engineers succeed on Wednesday in sending Douglas G. Hurley and Robert L. Behnken to orbit, it will forever change how the world thinks about getting people to space… If a private company can loft humans to orbit today, why not the moon next or Mars some years in the future? A successful launch could ignite a future long imagined by science fiction writers in which space is a destination for more and more people.” A question instantly arises: Why not NASA doing this themselves? If Elon Musk expects massive profits from the endeavor, couldn’t NASA commercially fly people itself and keep the profits, perhaps even self-financing after a certain point? There was such a plan in 2006 called Constellation. It was supposed to do exactly what SpaceX is now doing. With little modification it could’ve “lofted humans” into orbit. Instead, in 2009, Obama decided to help private firms develop the needed capabilities with NASA’s money ($8.2 billion), NASA’s experts, and NASA’s facilities. The newly minted private space cargo/human carriers also received a state guaranteed market. Reminder, Hurley and Behnken are NASA astronauts, not SpaceX’s.
“The launchpad at the Kennedy Space Center in Florida where the mission will blast off — the same one used by the last shuttle mission in 2011 — has been rebuilt to handle Mr. Musk’s Falcon 9 rocket.” Another giveaway. Who built Kennedy Space Center and has been paying to maintain it?
“Instead of riding to the spacecraft in Astrovan, a modified Airstream motor home that NASA used to transport shuttle crews, Mr. Hurley and Mr. Behnken will take a trip in a gull-winged Model X S.U.V., manufactured by Mr. Musk’s other major company, Tesla.” Free advertising for Tesla, and boost to Musk’s image of Iron Man, for good measure.
“This launch will be the first time a private company and not a governmental space agency will be in charge of sending astronauts to orbit. Even though the passengers are still NASA astronauts, and the agency’s officials certainly could call off the launch if they saw something concerning, it is a SpaceX control room with SpaceX employees scanning the monitors who will be directing the launch.” Grudging admission that NASA is still the one running the show, and a convenient omission that many of the “SpaceX employees”, used to work for NASA…
“We’re really looking to be a customer to SpaceX, and to other companies, in the future,” said James Morhard, NASA’s deputy administrator. “That’s what we’re trying to do is to create an expanse, really expand the economy in low-Earth orbit. That’s really what this is about.” Finally, a little honesty about what’s really happening. “Expand the economy”, but for all of us? Let’s commercialize space travel in a way where we, the taxpayers, pay for the technology we paid to develop while we hand it over to private ownership of Musk and SpaceX stockholders on Wall Street. Sure James, let’s celebrate that!
“Already, two companies have announced plans to buy launches in SpaceX’s capsule, the Crew Dragon, to take non-NASA passengers to space. Those missions might fly as soon as a year from now. One would take space tourists on a visit to the International Space Station; the other would be a trip on an elliptical orbit around Earth that might view the planet from an altitude two to three times as high as the space station’s orbit. Tom Cruise has even expressed interest in using the space station for a film.” More great news! There’s additional market for this handout besides the guaranteed government provided one.
“SpaceX routinely launches and lands reusable rockets for numerous customers, and it has captured about 70 percent of the market. A decade ago, United States aerospace companies had lost almost all of the business of launching commercial satellites to competitors in countries such as Russia and China.” So, let’s take back the market share but for private profit, still more reasons to celebrate capitalist entrepreneurship.
“SpaceX is also in the process of deploying hundreds, if not thousands of satellites, to create Starlink, a space-based network to provide high-speed internet service to almost anyone anywhere in the world.” What can possibly go wrong with a private corporation, in collusion with the government, expanding their control over our data, control the world’s internet, and potentially being able to scan every inch of the globe? Booz Allen Hamilton, the NSA, Edward Snowden – anyone?
“But before the company got involved with NASA, it nearly went out of business after failures of its first three attempts to launch its first rocket. The cargo contract it won in 2006 helped finance development of the Falcon 9, the rocket now used for launches, and Dragon, the cargo container that became the basis for the capsule that will carry NASA’s astronauts.” Perhaps a good measure of how necessary Mr. Musk’s contributions to space industry were, and how far SpaceX would have made it before the much-reviled state ensured its survival and profitability.
“When the Obama administration took over in 2009, it liked the commercial cargo program but was wary of Constellation, which it feared was turning into a financial and technical quagmire. It shifted course, canceling the moon program started in the Bush administration. For transportation to the space station, NASA started giving money to companies to start developing spacecraft that could carry astronauts to orbit. The program was called commercial crew.” So, for Obama it wasn’t enough that lifting cargo was being privatized, getting humans into orbit needed to get commercialized as well. God forbid NASA potentially make any profit for the taxpayer. Pet on the head Barrack.
“The Obama White House actually wanted to push faster and harder on commercial crew, and considered stashing a provision in the economic stimulus package that passed in 2009 that would have provided funding for it. But it was left out because of opposition from Congress and some top NASA officials. “This would have been the place because, like now, those bills go through so fast and they’re so big, and nobody is looking,” Ms. Garver said. “I think we would have started the effort,” and that would have shortened the gap between the retirement of the shuttles and the advent of a replacement. Instead, it took years of work… “This is a program that demonstrates success when you have continuity of purpose going from one administration to the next.” Translation: If nobody paid attention, as they normally don’t, privatization would have been achieved much earlier, and privateers would have had their profits several years earlier. Thankfully, capitalists persevered in being motivated by progit across multiple administrations and finally got what they wanted. Stupid democracy.
“Today, nearly everyone in the space world backs the idea of private companies transporting astronauts to orbit. SpaceX, no longer a scrappy upstart outsider, is a behemoth in the rocket business and a core contributor to NASA.” Today, we not only have succeeded with our gimmick, but have virtually no opposition to it. Party time!

While being the first to recognize the market for, and successfully commercialize the concept of electric cars, by being able to navigate business and official waters of state capitalism, surely elicits some kudos. The fact that both your companies, Tesla and SpaceX, survived only because (when the private capital abandoned you) the government had the genius to step in, should perhaps render you more humble when they want to prevent spread of a deadly virus by keeping one of your factories shut for a few weeks?

Everyone who was a kid knows, it takes no genius to have a dream of space travel. The more surprising part to those not paying attention may be that you don’t need to be a rocket scientist neither to build a rocket and realize the dream. The main ingredients for that are: be rich, have right connections that mean your dream will enrich the other rich, and a whole lot of gifts from a state with the right mixture of “philosophy and policy”.

Beware though. Too much government help in becoming a billionaire has been linked to desire to call your kid XAEA-12.

“For years, advocates of commercial spaceflight had observed that government investment has been used throughout history to promote industry and exploration, reaching as far back as 15th-century monarchs funding voyages across the Atlantic ocean.45 In a 1999 commercial spaceflight policy seminar, James M. “Jim” Beggs, former NASA Administrator and General Dynamics Corp. Executive Vice President and Director, pointed out that “this country has subsidized transportation for everything over its history. We’ve subsidized the railroads. We’ve subsidized the aviation industry. Now, we’ve got to spend some money and subsidize the space transportation business.”46 The parallels of the transcontinental railroad and Kelly Air Act would become mantras of commercial space supporters. Also inherent in this idea was that government would be providing a financial investment for the express purpose of advancing the U.S. industry and economy.” As NASA’s report on commercialization efforts honestly describes the privatization of public goods in capitalism.

Pillage continues.


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SPACEX RUSEBelleSunday May 31st, 2020 1:44 PM
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