current affairs technology

What to make of SpaceX in an age of inequality?

Last night after dinner I was talking to my  kids about SpaceX and the test of the Falcon Heavy rocket, which will one day carry people to Mars. I was hoping to watch the launch live with them, but it was pushed back past their bedtimes by the weather in Florida. I showed them the animation of Elon Musk’s Tesla roadster being launched into orbit instead – see below.

My wife’s reaction was to simply ask ‘why are you so excited about this?’ and that’s a response I’ve heard a few times when I express my enthusiasm for space. The implication is that as someone who cares about poverty, inequality and the environment, I should consider the very idea of space travel to be a massive and expensive distraction.

I get where those comments come from. Of course it’s frustrating that we can commit to twenty-year plans to put probes on distant planets, but can’t commit to looking after the only planet we’ve actually got. It’s outrageous that there are billions of dollars available for space missions, but never enough to properly fund education and healthcare. And of course it’s crazy that the world has managed to provide space tourism before it’s provided clean water for all the world’s population.

I get all of that. Does that mean SpaceX shouldn’t exist? No.

For a start, it isn’t as if there is a big global pot of money sitting there for humanity to allocate on an either/or basis – Mars mission or toilets? Even Elon Musk doesn’t have a big pot of money to allocate that way. Most of his wealth is on paper and he still has to raise funds for his ventures. Huge business projects like SpaceX generate the funding that they need in all sorts of ways that are closed to other causes, however worthwhile they may be. Maybe in an ideal world it would, but in this one stopping SpaceX would not free up money for more important things.

It’s also worth remembering that money can be understood as a flow as well as a stock. When I bought my house, the asking price I paid was not somehow locked into the walls. The previous owner got a bank transfer for that amount, and then maybe went and bought a car. And the person who sold their car celebrated by going to Nandos, and the money flows out into the economy. In the same way, if SpaceX spends a billion dollars on a project, that money is not lost or destroyed, despite the image of it being blasted into space. Where did the billion go? Out into the bank accounts of SpaceX employees and suppliers, and then out again to wherever they go shopping, or pay their rent, and so on. The billion still exists. It’s just not all in one place any more, if it ever was. And it’s already being spent again.

In other words, ending poverty and going to Mars aren’t mutually exclusive. There should be money enough for both.

That doesn’t mean we can ignore how money is spent entirely. There is such a thing as opportunity cost, and waste or negative consequences. In some situations, including a lot of government budgeting, there are either/or decisions being made. But when we see eye-watering sums of money being spent – whether it’s on rockets or sports or paintings – asking ‘why wasn’t that money spent on the poor’ isn’t a question that gets us very far. It’s more important to ask, if there is so much money available, why isn’t it flowing to where it’s most needed?

This, incidentally, is one of the many problems with inequality. It stops the flow. When too much wealth accrues to a few people at the top, they can end up with more money than they could possibly spend or give away in a lifetime. It ends up hoarded away, out of circulation. Hoarded wealth ceases to serve any useful function other than to continue bloating in a tax haven somewhere.

To return to space, even if we can square away the expense, we might still conclude that space exploration is a waste of time and attention. But we could say that about all exploration. Christopher Columbus’s mum probably wanted him to stay at home. Dissenting voices at the admiralty no doubt grumbled at the cost of the Beagle voyages. If you don’t go, you’ll never know what you might have found. Future generations will be the judge of whether our own exploration was worthwhile or not.

Personally, I’m excited that my children are growing up in a new space age. I like that this one is less nationalistic, and that prices are falling to the point that more countries are able to participate. Access to space is being democratized, and could play more of a role in poverty and development than we might assume. I like the way SpaceX and their rivals Blue Origin have pioneered re-useable boosters, and that because business is now taking the lead, there is a concern for using resources well that wasn’t there when space was government funded.

Perhaps most of all, big projects inspire big projects. Whether you like Elon Musk or not, you can’t help but admire his ambitions and his companies’ ability to get stuff done. Last night a man successfully sent his car into space. Over breakfast I showed my kids the live video feed from the car, as the earth rotated into view. In such a world, we can do anything – including stopping climate change, and ending poverty.


  1. You really don’t understand tax havens (I’ll use that term for offshore financial centres for simplicity). Bundles of bank notes and gold bars aren’t piled up like Smaug’s hoard never to see daylight again. The money that goes there isn’t out of circulation. Money goes in and money goes out. Perhaps some money is deposited as bullion or such in Swiss vaults but the vast majority is cash. Cash deposits that paid in are then lent out to the wider economy continuing to circulate. Otherwise how would the banks pay interest on it. The flow around the economy isn’t halted. Perhaps the element that would be taken as tax is avoided (but in most cases is not) but the principal keeps going, as indeed does the avoided tax. Tax havens are level playing fields where investors from different countries can come together to invest so that they pay the correct tax rather than double taxation or to avoid the gaze of corrupt officials back home. I would bet that at least some of the investment that Elon Musk mobilised for SpaceX came via tax havens one way or another.

    Elon Musk’s SpaceX is potentially freeing up vast amounts of government money. The US Air Force pays its existing suppliers over $400 million to launch a satellite. It is now paying SpaceX $90 million to do the same. The Falcon Heavy is 10 times cheaper in launch costs than the similar rocket NASA is developing. That’s money that can be freed up for more tanks, science or schools.

  2. Devonchap do you by any chance have offshore holdings? Because I make one throwaway mention of tax havens in a piece about space programmes, and that’s what you want to pick up on.

    1. I have no overseas holdings, just like sensible economics. Shame that the rubbish economics brought down an otherwise good article.

  3. A good article. Another similar project in some ways is the Bloodhound land speed record car (target of 1000mph). Not a waste of money as one of its main aims (some say THE aim) is to get more kids interested and participating in engineering…and it has done that very well indeed (in the UK anyway). Like a rocket it is big, noisy, fast and exciting; kids love it. And if it results in 100k more youngsters learning new skills that are in short supply, that makes up for the pollution etc.

  4. But the motivation, (or results), for doing anything in space is not the motivation, (or results), needed to end poverty, feed and water all on earth or end climate change (our real priorities). Motivation is not found in space. Perhaps this is what comments like the one from your wife really mean to question.

    1. Sure, but vast amounts of human activity don’t have that motivation – including all of art, sport or leisure. And yet we have to make room for those in our lives.

      As for Elon Musk himself, his Tesla and SolarCity companies are both geared at stopping climate change, so he does more than most, despite his interests in space.

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