Subject: Re: International Space Agency
From: Henry Spencer <henry@zoo.toronto.edu> 
Date: Apr 14 1996
Newsgroups: sci.space.tech

In article <4kjvkf$mug@mycroft.westnet.com> Thomas Kalbfus <tkalbfus@westnet.com> writes:
>Has there been any proposals to replace NASA, ESA, Russian 
>Space Agency, Japan's space program, and China's with a single 
>world wide space program with the funding and resources of all 
>of them combined? ...

The idea has been brought up a number of times.  Quite apart from its
political impossibility, it's a lousy idea to begin with.

The political impossibility stems from a number of reasons, differing
objectives among them.  For example, how can you possibly combine the US
space program, with its strong military ties and extensive use of military
facilities, with the Japanese program, which goes out of its way to avoid
even the slightest military involvement (e.g., refusing to sell McDD the
rights to use the H-1 second stage because McDD sells launches to the US
military)?

It's a lousy idea because our strengths are diversity and competition.
Even as it is, there is too little diversity, too little exploration of
alternatives to the Consensus Of Expert Opinion.  We need more space
programs, not fewer. 

>...wouldn't it make more sense to have one world agency funded by 
>the legislators of all the governments involved, since NASA and 
>the others seem unable to obtain decent funding levels on their 
>own...

Uh, you might want to look at the funding of international ventures,
and their track record, before you say that.  Typically it costs more
and takes longer when done as a joint venture, and the individual
governments are much more reluctant to cough up reasonable funding.

>I honestly think that its better for all the countries in the 
>world to have scramjets than for none of them to have any.

It's probably better for none of the countries in the world to have
scramjets than for the One Big Space Agency to decree that all funding for
cheap Earth-to-orbit transport will go into scramjet research.  Scramjets
are for sustained flight within the atmosphere -- they just don't work
very well as a propulsion system for a space launcher.  Rockets are used
for launcher propulsion because they are *better*.  The US government
wasted several billion dollars, and set cheap space transport back at 
least a decade, before figuring this out.

One of the biggest problems with socialist bureaucracies is that they are
so intent on avoiding "waste" that they always want to pick winners and
losers in advance, to avoid spending any money on the losers... and you
just can't convince them that this doesn't work, that they *can't* *tell*
which ones are going to be winners without trying them.  (Even the more
celebrated socialist successes tend to have skeletons in their closets,
as witness Japan's MITI telling Honda to stick to motorcycles, that it
had no chance of becoming a competitor in the car business...)

When the One Big Space Agency starts telling you that (for example) the
Space Shuttle is going to make all expendable launchers obsolete, it's
just as well to have independent competitors who can say:  "We don't
believe it, and we're going to go on developing Ariane."
-- 
Americans proved to be more bureaucratic           |       Henry Spencer
than I ever thought.  --Valery Ryumin, RKK Energia |   henry@zoo.toronto.edu

Newsgroups: sci.space.policy,sci.space.history
From: henry@spsystems.net (Henry Spencer)
Subject: Re: Predictions on Space Exploration in 2050
Date: Sun, 18 Apr 1999 04:20:54 GMT

In article <ant1719030b0M+4%@gnelson.demon.co.uk>,
Graham Nelson  <graham@gnelson.demon.co.uk> wrote:
>> ...governments will always be less efficient.
>
>This is often so, but it isn't a God-given law.  Provision of
>health care, or tap water, to a medium-sized town is a case where
>there are clear economies of scale in running a single operation.

That's true... but economies of scale don't always translate to lower
price to the customer, in a monopoly situation where there is little
incentive to be efficient.

I once saw a very interesting comment on this sort of thing.  In most
urban areas in North America, one cable-TV company has monopoly rights to
serve the area.  However, there are a few where, by historical accident or
some other oddity, there are two which compete.  That means two complete
sets of infrastructure, double the wiring, double the overhead, etc... but
despite the requirement for twice the investment, apparently the cable
prices in those areas are usually *lower* than in single-supplier areas.

Another example, particularly well-documented, is the way airline ticket
prices for a route plummet when another airline starts flying the same
route, especially if the new arrival is somebody like Southwest.  And if
the new arrival abandons the route again, giving all the traffic back to
the original incumbent, it's funny how those economies of scale make the
ticket prices rise.

"Economies of scale" can also mean that everybody gets the same service,
when in fact what's wanted is more varied and more customized service,
which can best be provided by smaller organizations.  There's a reason why
independent restaurants have not been made extinct by the chains, and why
small local breweries are making a comeback.
--
The good old days                   |  Henry Spencer   henry@spsystems.net
weren't.                            |      (aka henry@zoo.toronto.edu)

Newsgroups: sci.space.policy,sci.space.history
From: henry@spsystems.net (Henry Spencer)
Subject: Re: Predictions on Space Exploration in 2050
Date: Sun, 18 Apr 1999 21:43:53 GMT

In article <7fc8hl$1mi$3@inf6serv.rug.ac.be>,
Filip De Vos <fidevos@eduserv1.rug.ac.be> wrote:
>: But the fact is that it isn't as efficient as private health care,
>: simply because _governments do not have to show a profit_...
>
>You can make the reverse argument, by observing that in a private system,
>the patient has not only have to pay for the care, but also for the profit
>margin of the provider.

This is the standard socialist argument -- it'll be cheaper without paying
profits to some greedy capitalist.  But the important feature of private
industry is not private ownership, but competition.  Not the existence of
a profit margin, that is, but the possible *non*existence of it if costs
to the producer and prices to the consumer are not controlled well enough
to stay competitive.

Nobody has yet come up with an effective substitute for competition in a
non-competitive environment.  Most attempts to do it through regulation
yield pitiful results, however noble their intent, because it's too hard
to assess what costs *should* be, and the result is stagnation and bloat.
(The problem is not verifying how much *was* spent, but figuring out how
far expenses *could* have been cut by making risky changes.  Regulated
industries have little incentive to innovate, since their profit margin is
guaranteed anyway.)

Bringing us back to spaceflight :-), what we have shaping up now, for both
shuttle operations and the still-hypothetical VentureStar, is the worst of
both worlds:  monopoly capitalism, combining the presence of a profit
margin with the absence of effective competition.  Fortunately, there are
signs that at least some people at NASA may have figured this out, and
there are also signs of competition for the Cold War design bureaus from
small innovators.
--
The good old days                   |  Henry Spencer   henry@spsystems.net
weren't.                            |      (aka henry@zoo.toronto.edu)

Newsgroups: sci.space.policy,sci.space.history
From: henry@spsystems.net (Henry Spencer)
Subject: Re: Predictions on Space Exploration in 2050
Date: Mon, 19 Apr 1999 00:36:27 GMT

In article <ant181517b49M+4%@gnelson.demon.co.uk>,
Graham Nelson  <graham@gnelson.demon.co.uk> wrote:
>> ...I think marketplace competition would quickly see a fall in cost
>> and a rise in quality.
>
>Certainly not in today's world, because the time scale needed for
>long-term investment (building a hospital or a network of water
>conduits) is vast and requires a very long-term contract -- which
>is exactly the reverse of competition.

Do bear in mind that in the past, such investments were often made by
private industry in a competitive environment.  (Indeed, Snow's final
proof that cholera was spread by contaminated water was possible precisely
because London had two competing water companies, in some areas competing
house by house, and one had just relocated its water intake upstream, away
from London's local pollution.)  Rather than resigning oneself to its
impossibility, one should ask whether it is truly impossible, and if so,
*why* it has become impossible.

(Hint:  policies requiring that would-be operators of such facilities
satisfy stringent qualifications, operate in compliance with long lists of
complex standards, demonstrate extensive relevant experience, and be
heavily insured often favor large, well-established companies, which tend
to have a conservative outlook.)

(Two more hints:  tax and regulatory policies have favored a short-term
attitude among investors of late, and flip-flops in government policy add
high "political risk" to long-term investments in such areas.)

And bringing us back to spaceflight once again, this is also what one sees
in RLVs and similar areas.  The big aerospace contractors -- who have
almost forgotten what competition is really like, with their cozy little
relationship with the government -- will authoritatively tell you that
building any sort of RLV must cost five billion, or ten billion, or twenty
billion, and take a decade or more, and reduce launch costs, well, maybe a
little bit.  Oddly enough, they are the only ones who ever do NASA studies
of these things, because they're the only "qualified" companies.  And it's
unthinkable that they would fund such a thing themselves, or get private
money for it; after all, it's well known that such huge long-term
investments are practical only with government help.  The idea that it
might be possible to build a much cheaper system quickly and cheaply is
obvious nonsense; LockMart says so.
--
The good old days                   |  Henry Spencer   henry@spsystems.net
weren't.                            |      (aka henry@zoo.toronto.edu)

From: "Jeff Greason" <jgreason@hughes.net>
Newsgroups: sci.space.policy
Subject: Re: Liquid sunshine allocations.
Date: Tue, 2 Jan 2001 19:25:42 -0800

JDWill68 <jdwill68@aol.com> wrote in message
news:20010102163610.10994.00000606@ng-bd1.aol.com...
> process for everyone else. In the 80's the US government became the only
> real customer for US shipyards.  As one industry analyst put it, "A
> monopsony (a market with a single buyer) will eventually become a
> monopoly (a market with a single producer)." Hence the rise of Trinity
> Marine and the fall of McDonnel Douglas.  This despite the government's
> policy of spreading contracts around to save smaller firms for
> competitive bidding purposes.

This is really the core of much that is wrong with the current world
aircraft and aerospace industry.  Note that in the "good old days", when
the industry was healthier and accomplished more, there wasn't a
monopsony.  While the U.S. government may have been the end user, the
U.S. government was by no means a monolithic entity.  The Army, Navy, and
Air Force all had competing programs trying to do similar things in
different ways, the NRO and CIA were off funding still different things
with overlapping capabilities.  For every NASA center that liked one
approach, there was another NASA center that liked a different approach.
If you were (for example) working on rocket technology, and couldn't
scrape up some funding between all these different agencies, each with a
dozen different labs with different project approval offices, it was
probably because it wasn't that great of an idea.

In these days of "jointness", where the AF/Army/Navy are supposed
to use the same thing, and centers of "excellence" with sole authority
to work in a given technology area, and the AF/NASA responsibilities
clearly defined so as to avoid "wasteful competition", we have a true
monopsony.  The results reflect it.

----------------------------------------------------------------
"Limited funds are a blessing, not         Jeff Greason
a curse.  Nothing encourages creative      President & Eng. Mgr.
thinking in quite the same way." --L. Yau  XCOR Aerospace
   <www.xcor-aerospace.com>                <jgreason@hughes.net>