the cost of the program would have been worth it had our government NOT given the technology away to other nations without a price
who funded the program? and who should have reaped the rewards from the r&d? On Jul 14, 11:23 am, MJ <[email protected]> wrote: > Was the Space Shuttle Worth It?Wednesday, July 13, 2011 > byTimothy D. Terrell > The final flight of the space-shuttle program, in progress as this is > written, has prompted a number of retrospectives on the program's costs and > benefits. Saturday'sWall Street Journalreportedthat the price tag on the US > space-shuttle program has been difficult to pin down. One NASA estimate on > the low end, because it does not account for inflation is $115.5 billion, or > around $860 million per launch. That's still far higher than NASA's original > projection of $7 million per launch, predicated as it was on far more > frequent launches. Two more recent estimates are $193 billion (in 2010 > dollars) and $211 billion. For the program's 135 launches, that's $1.43 > billion and $1.56 billion per launch, respectively. > Economists will find still other problems with these per-launch cost > estimates. Whether the average cost per launch is $0.86 billion or $1.56 > billion, those are stillaveragecosts, and not marginal costs. The additional > costs of any particular shuttle launch could have been larger or smaller than > the average, and were likely to have been smaller. Some significant portion > of the shuttle program's costs weresunkcosts, meaning that the costs of > developing the shuttle were up-front, irrecoverable costs and therefore > irrelevant to the decision to launch a particular mission. Marginal costs > would have included the cost of preparing an existing shuttle for a mission, > the fuel, the astronaut training and other scientist training specific to > that mission, the equipment to be deposited in orbit by the mission, and > similar costs. > But there is another sort of calculation problem that faces government-funded > science, beyond the questions of average versus marginal costs, or whether or > not to count inflation, or whether or not a particular expense is > shuttle-related. This calculation problem afflicts every form of government > spending: What is the opportunity cost of the government's spending? All > those resources used for the shuttle program had to come from somewhere. As > Ludwig von Misespointed outas early as 1920, it is impossible for a > government that is dispensing with the market process to make the vital > calculations of costs and benefits that would be necessary to make efficient > resource allocations for society. > An individual or a business operating in a market system has to consider the > potential alternative uses of resources employed in any particular action. > Prices of labor, capital, and raw materials provide a way to compare the > costs of the different methods of producing any given good, and consideration > of profits or losses give the entrepreneur critical information about whether > or not the product is as desirable as other things that could be produced > with the same resources. While a government agency such as NASA typically > does have to purchase resources such as a technician's labor or a shuttle > part from the private sector, it is operating without the information > provided with profit and loss. Is a shuttle mission a better use of the > resources than any alternative? We can't know, because a shuttle mission is > not sold at a market-determined price to a willing buyer. NASA did not have > to consider whether $200 billion dollars forcibly extracted from taxpayers > would produce something salable at a price of more than $200 billion. > We can make some comparison with other providers of similar services. The > Russian "Progress" vehicle currently appears to be the cost leader, with a > cost per pound to the International Space Station (ISS) of $18,149. The > private sector is gaining, though sometimes only as subcontractors to the > government, and not without a fight even there. In May of this year, in House > hearings on commercial cargo supply to the ISS, a subcommittee report > compared the private-sector alternative unfavorably to the space shuttle > ($26,770 vs. $21,268 per pound to the ISS).But some observers noted the > subcommittee's "fudging" of the numbers to favor the shuttle program.Robert > Zimmerman pointed outthat the numbers were based on an annual cost of $3 > billion to operate the shuttle, when in fact $4 billion per year is more > reasonable (though still low). According to Zimmerman, "the shuttle > operational budget has never,everbeen that low." Using the more reasonable > figure puts the shuttle per-pound cost at $28,357, higher than the $26,770 > private contractor's cost. Furthermore, as Zimmerman notes, the numbers do > not take into account the fact that private companies are likely to lower > their costs as their technology becomes less experimental, and as they enjoy > greater economies of scale. The space shuttle, however, was not going to get > any cheaper. > But even with competition from other governments, and even with NASA > subcontracting to the private sector, the calculation problem remains. What > was and is still being given up in order to build and maintain the ISS? What > has been the opportunity cost of the various exploratory and research > missions funded by the government? Without profit and loss, government space > flight is unable to provide a credible economic justification for its own > existence. > The problem of unknowable opportunity costs puts a dent in the idea that > government science programs create a "multiplier" that generates more than > their cost in private-sector advancements. The research, new technologies, > and discoveries that might have been products of the space-shuttle program > exist in the shadow of other research, technologies, and discoveries that > might have been produced with the resources had they remained in the private > sector. Any NASA "multiplier" exists because a private-sector multiplier has > been destroyed. There is, asFrederic Bastiatwould say, "what is seen and what > is unseen." Tim Swansonput it this way:In the end, regardless of what the > state did or did not fund or invent, the take-away principle is the unseen. > While everyone with a TV has been able to see the hordes of chemical rockets > dramatically blast into the cosmos over the past decades, they were similarly > unable to see the productive opportunities foregone and ignored via the > reallocation of scarce resources.The perceived benefits of a vain, > nationalized space program include, among others, the fallacious need to > fight themythical shortageof scientists and engineers. Whereas in reality, it > has stymied private tourism, exploration, and research for nearly half a > century.In fact, there is reason to doubt that the technologies said to > originate in the shuttle program and other parts of the space program are > really the results of government "investment." As William L. Andersonhas > noted, "we have no evidence that the space program has created on its own any > of the new technologies that make our material lives better; instead, the > program has utilized existing technologies." > Sadly, the memorable theatrical displays NASA has produced over the years > have distracted from the true costs of government enterprises. We are tempted > to regard the federal government's space program as a bright symbol of > American greatness, when in fact it has been a hindrance to American > ingenuity and prosperity.Timothy Terrellis associate professor of economics > at Wofford College in Spartanburg, SC, and an adjunct scholar with the Ludwig > von Mises > Institute.http://mises.org/daily/5454/Was-the-Space-Shuttle-Worth-Itu -- Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum * Visit our other community at http://www.PoliticalForum.com/ * It's active and moderated. 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