(Interviewed by Louis James, Editor, International Speculator)
[Please note that going forward, we will be utilizing both video and text in bringing Conversations With Casey to you -- one week you may see a video report, one week a written interview.]
L: Hola, Doug! We’ve had a long break while our video crew has been busy, but I know your mind never stops. Care to share?
Doug: Well, the markets have been very interesting lately. Gold shooting up to $1,800 an ounce was a predictable consequence of the U.S. credit-rating downgrade, which was in turn a predictable consequence of out-of-control money printing and spending on the part of the government. And I’m back from my jaunt to the Middle East. We’ll have a lot to say about that and more in The Casey Report, but for now I want to bring readers’ attention to the recent, barely noticed sunset on the space shuttle program. Atlantis – the last of the four space shuttles – has just become a museum piece, and that’s rather historic. The U.S. space effort has basically ground to a halt.
L: Are you mourning that or celebrating it?
Doug: A little of both. It’s something to mourn because space is the final frontier, and we need that frontier. It’d be wonderful if we could get off this planet. For many reasons – sociological, political, technological, and more – I’m highly enthusiastic about the conquest of space. But it’s a mixed bag, because a government program is the stupidest way possible to go about it. So in a way, I’m glad the government is out of the game, and I’m glad the economic crisis makes it unlikely that the government will get back in it soon, at least not on anything like the scale we’ve seen in recent years. This is one bright side of the governments of the world going bankrupt.
L: Wow, Doug, I’ve got to say that I’m shocked to hear you call it a mixed bag. I’d have thought you – the International Man who never shrinks from strong statements – would have called NASA or any government space program an unalloyed evil. Since we agree that getting the state involved in this or any creative venture is the worst possible approach, what is there to see as “mixed?”
Doug: Perhaps I wasn’t clear – I should have fully separated the concepts of space exploration, which I wholeheartedly endorse, and government space programs, which I oppose on principle and in practice. Government in space is bad economics. It’s unethical to force those not interested in space to pay for its exploration through taxes. And though few people like to think about it, most of what the state now does in space has military intent, and that is very grave, very destructive, on multiple fronts.
L: This is an important distinction, because a lot of people who agree in general with our skepticism of state involvement in any economic activity make an exception as regards space. Their dream of going to the stars is important and exciting to them, and they see only governments active in space exploration, so they forget their principles and endorse government spending on space programs.
Doug: I agree completely. I’m sad to see less space exploration, but I’m very happy to see the government out of it. Even better, now that the government’s broke, space exploration will necessarily be privatized. That’ll throw it open to entrepreneurs, and they will give access to everyone, not just a few anointed astronauts. Moving space exploration from the government sector to the private sector will change its entire nature. All sorts of entrepreneurs and inventors will get involved, not just a few creative individuals like Burt Rutan, who’s already shown that access to space can be cheap and effective. It’s going to spread all over the planet – I think we’ll see rockets heading for orbit from all corners of the world soon. Space exploration will never get anywhere as long as the state is involved.
L: That’s right. “Space Ship One, Government Zero” – remember that sign? De-funding and entirely scrapping the government space program is the best thing that could happen for space exploration. It would release talent to the private sector. I’d pop a bottle of champagne if they padlocked the doors on NASA’s headquarters full of bureaucrats in downtown Washington.
Doug: [Chuckles] Yes, I do remember the pilot holding that sign up after Space Ship One landed. And not only would shutting NASA down release talent, it would also reduce bureaucratic resistance to private space exploration; if the government’s not doing it, the bureaucrats involved won’t have turf to defend. So of course NASA should be abolished, and its assets should be auctioned off. Many of those are uneconomic under current ownership but probably would be economic under new management. Or maybe they shouldn’t be auctioned – because I wouldn’t want to see the money go to the state.
One solution would be to put NASA into a corporation and distribute its shares to taxpayers. Then it would be just another aerospace company, competing with scores of others around the world. We’d then see if it can create capital, instead of just consuming it. The problem is that current management probably has such a bureaucratic, government-employee mindset that they’d run it into the ground before they could be replaced.
L: Perhaps an ethically superior idea might be to auction the assets and distribute the proceeds to taxpayers who were plundered to pay for NASA in the first place. A sort of delayed restitution. But that would never happen. Getting the government out of space is so important, I’d be willing to encourage them to disband NASA and sell the parts to pay down the national debt. That idea might actually gain some traction in D.C., and the proceeds wouldn’t be enough to really help the government much.
Doug: Yes. But I fear NASA will never be abolished simply because it’s effectively an arm of the military. Anyway, you can never really reduce bureaucracy by trimming it back. It just grows again in subsequent appropriations rounds. The only way is to totally abolish the bureaucracy, cut it out by the roots, and ban the state from getting involved in its former functions.
That would create the space for a phoenix to rise from the ashes. That’s important, because a lot of people who should know better are still sympathetic to NASA. When it was a brand-new bureaucracy with a clearly defined and powerful mission, full of young, idealistic hotshots, it actually was an organization that got things done. That was before it became corrupt, stodgy, concrete-bound, and constipated. People remember the glory days and don’t see that NASA is just another bureaucracy today. It’s not quite like the post office playing with rockets, but it is unfocused and inefficient. I wonder if NASA even could put a man on the moon today, if it were given the green light to do so. It’s not a certainty, even though the technology has taken quantum leaps forward since 1969. Do you realize it’s been 39 years since a man last walked on the moon?
L: Yes – and if the government hadn’t been left in charge of space exploration, I think we’d be able to vacation there as easily as Argentina these days. The technology exists.
Doug: We should have colonies on the moon by now, and more: We should be mining the asteroids and developing real estate on Mars. There should be active homesteading going on out there right now. As you say, the technology for doing it is fairly mature – and would be far more so if the field had been left to the private sector, which always does things faster and more efficiently than the state.
L: Let’s talk about that for a moment. You and I see eye to eye on this, but some of our readers may not. At a time when people are worried about basic things like having a job tomorrow and food the week after, why should anyone care about exploring space? Why on earth – or off it – would anyone want to move out there? And how would one make money off it, justifying the R&D expenses?
Doug: Well, on the most fundamental level, getting out there makes the pie bigger for everyone. If it’s done economically, and for economic gain, we’re talking about whole new worlds to develop – that’s valuable real estate. There are vast new resources to make use of, ranging from metals in the asteroid belt to all that solar energy that’s just being radiated off into space right now. There’s the ability to manufacture in zero gravity, which has enormous efficiency implications, as well as other technical advantages. Space access is extremely valuable, and those who get there first are going to make fortunes. Mobilizing that wealth could and would create far more work than there are people to do it – not just in America, but even for the hungry masses in Africa and Asia. Simply put, adding to the net wealth in the world is good for everyone.
Just look at what China has done in the last 30 years; it’s gone from a backward, peasant economy to a modern, high-tech powerhouse, creating huge amounts of wealth for many people. I see the conquest of space as having similar effects, only orders of magnitude greater.
L: You are an optimist.
Doug: I am. The future can be not only better than we imagine, but better than we can imagine. But it’s critical to get the state out of the way.
L: I hadn’t really thought of it before, but opening up the final frontier is just the sort of thing that could revitalize a dispirited people. We’d still need sound money, which I think we’ll see after the sham of paper currencies is finally and fully exposed for the fraud it is, but to really get things going again in the global economy, we need the lure of huge profits that will pull frightened capital out of hibernation. The vast riches of new worlds could be just the ticket – maybe even the only thing that could get enough people to forget about their squabbling and fears and start thinking about reaching – literally – for the stars.
Doug: Indeed. I’d find it quite entertaining to see all that potential out there unleashed… What a show it would be to see how millions of entrepreneurs come up with new ways to make use of it! Space opens the possibility of thousands of different societies to live in. And with infinite power from the sun, materials from the asteroid belt, and room, it could provide a standard of living many orders of magnitude above anything on earth. Forget about space as surviving in a cramped tin can. And forget about the military overtones of Star Trek and Star Wars – although I’m a fan of Han Solo. Maybe think in terms of the excellent TV series Firefly, or its movie spinoff Serenity.
L: And we don’t even have to wipe out any beautiful blue aliens to achieve these things.
Doug: Hopefully not. Although it’s an excellent bet that we eventually will find aliens, I just hope it’s merchant adventurers who discover them, not space Marines; the military isn’t into trade, it’s into weaponry.
On a different, but equally fundamental level, another reason to get out there is the fact that right now humanity has all its eggs in one fragile basket. One big meteor hits the earth, and that’s it for our species. We need to spread out beyond this one little world.
L: That’s hard for most people to feel as a pressing need, not when they are two mortgage payments behind and just got laid off, but I agree.
Doug: Well, one thing even those behind on their mortgages should feel, deeply and personally, is the loss of freedom we’re all seeing from the cancerous growth of the police state in America and all around the world. When people can be arrested for quietly dancing in the Jefferson Memorial, or making a joke at an airport, or for tossing an aluminum can in the trash, or for not handing over half their income to the state, or for any of the myriad other things that can land peaceful, productive people in jail these days, you know this planet has too much government. And you know government is never going to get any smaller by choice. You could try to start a revolution, but that’s extremely dangerous, and won’t make things any better in a society full of people who don’t understand the nature of the problem.
It’s far better to settle the new frontier, just as Europeans did when abandoning Old World despotisms for New World risks and rewards, or as Americans did, settling the West. We need a new frontier, both for those of us who want to go out there and seek our own freedom and fortune, and as a safety valve for society’s discontents, who have had no place to go for the better part of a century.
L: Freedom in space – I like it. We ought to buy the Statue of Liberty when the U.S. government is really desperate for hard money, then strive to be among the first real-estate developers on Mars. We can set it up there and welcome the tired, the poor, the huddled masses yearning to breathe free – they sure aren’t welcome in what was America anymore.
Doug: That’s right – the Statue of Liberty belongs in a place that respects freedom and has open borders. A place on the frontier. The loss of freedom in the U.S. is going to accelerate hyperbolically, with the next real or imagined terrorist attack – or just on the back of deteriorating economic conditions. This is a clear and present danger that people should be thinking about.
What about you, Lobo: Can you think of other reasons why people should care about colonizing space?
L: I have long said that if you’re green, you have to be pro-space. Even if you’re of the anti-human persuasion – who’d just as soon see our species eliminated so the rest of earth’s species can live in a “natural” state – you have to understand that earth’s hungry billions are not going to lay down and die for your idea of paradise. On the contrary, they’ll fight you if your policies make their lives harder. Instead of fueling that conflict, it’s far better to move towards exploitation of space ASAP. After all, space is mostly… nothing. It’s empty – space. You build a factory in a far-off orbit, and nothing is disturbed. You move all heavy manufacturing off planet, where it would be cheaper and better, and you have no pollution to speak of on earth.
We should mine the asteroids. If they do indeed come from a smashed planet, they should have many, many, many times more metals, more easily available, than have ever been mined on earth – or ever need be.
It’s possible to increase prosperity for all of earth’s billions, and make the planet greener than it’s ever been in history, simply by pushing for economic access to space as fast as possible.
Doug: Good point. You’re an optimist too. Most anarcho-capitalists are optimists.
L: Yes, I’ve been accused of that many times. Okay, investment implications? Are there space exploration companies to buy? Other actions to take?
Doug: I said in Crisis Investing for the Rest of the ‘90s that I’d buy Scaled Composites, Burt Rutan’s company, or AeroVironment, which was run by my friend Paul MacReady before he died. Unfortunately, now that Paul’s dead most of what AeroVironment is doing seems increasingly geared towards the military. But there are other private space companies out there.
L: But these are private companies – would you really invest in them? It’s one thing to be a space enthusiast, it’s another to put cash into an illiquid investment in a highly challenged industry. I know you don’t invest with your heart …
Doug: I try not to. [Chuckles] I can’t help myself sometimes.
L: [Laughs] I’m glad to hear it’s not just me!
Doug: But you’re right – I don’t like investing in private companies, for many reasons, and that’s all that’s available in this field right now. I might invest in some of these companies with the sort of money other people give to charity – not because I think I’ll profit directly, but because I think their work is worth doing, regardless. That’s not an investment strategy I’d recommend to readers, but I am monitoring progress in this field because there will come a day when there’s big money to be made in it – just as with nanotechnology, 3D fax, biotech, quantum computers, and other fields that are developing rapidly now.
Space technology is like any of these fields. We’re right on the edge of it, and it could advance full-speed in this generation. There will be fortunes made, just as early investors in IBM, Apple or Microsoft made fortunes. Alex Daley, our technology guru, keeps an eye on these things for us in our Casey’s Extraordinary Technology monthly newsletter. This is one reason why I enjoy reading CET – I’m personally interested in the development of such technologies and delighted to find ways to make money doing so.
L: If I may be so bold, I should say that Alex has a great track record of picking stocks in CET – he certainly has helped a lot of readers make a lot of money.
Doug: Good place for a shameless plug. Seriously, though; I find reading CET uplifting. I like winning investments, but watching these unfolding technologies gives me more hope for the future. I actually feel better, knowing this work is going on. As I like to say, there are more scientists and engineers working right now than have ever lived before in human history – I think that’s fantastic.
L: Groovy – and a good, positive note to wrap up on.
Doug: Indeed. We’ll talk soon.
L: ‘Til next time.