(Interviewed by Louis James, Editor, International Speculator)
This interview was first published on August 10, 2010.
Editor’s Note: Have you heard about the exciting things happening in space travel?
Elon Musk, founder of electric car maker Tesla Motors, also runs a company called SpaceX. Last month, SpaceX returned a rocket from deep space and landed it intact, making it the first “reusable” rocket in history. Musk wants to use this technology to colonize Mars.
Years ago, Casey Research founder Doug Casey predicted that private companies like SpaceX would be the future of space travel….
Louis James: Hola, Doug. 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. 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 six 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 worst 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: 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: “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: 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: 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. That would never happen, but 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 DC, 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 appropriation 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.
Doug Casey is a multimillionaire speculator and the founder of Casey Research. He literally wrote the book on profiting during economic turmoil. Doug’s book, Crisis Investing, spent multiple weeks as number one on The New York Times best sellers list and was the best-selling financial book of 1980. Doug has been a regular guest on national television, including spots on CNN, Merv Griffin, Charlie Rose, Regis Philbin, Phil Donahue, and NBC News.
Doug and his team of analysts write The Casey Report, one of the world’s most respected investment advisories. Each month, The Casey Report provides specific, actionable ideas to help subscribers make money in stocks, bonds, currencies, real estate, and commodities. You can try out The Casey Report risk-free by clicking here.