what we really need to go into space

--- In ssi_list@... "Valens Agnitio"
>
> I am not sure that we agree on the amount of government
> involvement necessary for capitalism to flourish. It seems that,
> more often than not, the inefficiencies and failures of capitalism
> are the result of too much government fiddling, not too little.
> However, this uncertainty stems from the briefness of your
> statement. Based on your past writings, I think I would probably
> agree with this once it were fleshed out a bit.

OK, fleshing coming right up. :)

Try to protect your intellectual property without any IP copyright
or patent laws to back you up. Microsoft would sell at most 1,000
copies of Windows and everyone would simply copy from friends.
Microsoft's fortunes are due entirely to the *rules of the game*
that were set up by government. Enforcement of the rules is also
sought through the government, hence RIAA court actions. The courts
are the hammer of government.

Taking it beyond IP issues, there would be little appeal to
extensive oil exploration if as soon as you drilled a gusher a
competitor could set up a rig 10 meters away and drill into the same
pool of oil. The property rights are set by government.

Conductiing a stock trade also puts you under the rules set by
government.

Sure, there are liberatarian theorists who posit that government is
irrelevent and people could enforce their contracts through
voluntary exchanges and enforcement. I disagree with the real-world
applicability of such proposals. Also, have you noticed that
libertarian affinties seem to flourish in stable, regulated, and
prosperous societies. There aren't too many people looking to
implement liberatarian societies in thugocracies and anarchies.
Simply, I think that too many of the benefits of government are
taken for granted in such libertarian schemes. The complete absence
of government has people yearning for the order that comes with
government.

All that said, I recognize that there is a limit to *good
government* and many people do feel that the US gov't has crossed
the line. I think that such views certainly have merit and I also
strongly hold the opinion that gov't is *not an efficient means* of
producing or distributing value. That's why I don't think that gov't
or its agencies should be involved in creating the High Frontier.
Rather, gov't(s) should set the rules under which private enterprise
can flourish. Further, there are some endeavors that private
enterprise doesn't want to touch, such as the Hoover Dam, or the
interstate highway system. There is no profit in owning these
assets, although they both produce value for a society.

I think that the gov't should institute a 100% depreciation for
utility investment in SPS construction pools. Further, any
investment in SPS should get a pollution credit immediately even
though SPS going on-line may be a decade away. Here the gov't (IRS)
has set immediate incentive and rules for investment. Of course, the
gov't is paying for this indirectly, because of foregone tax
revenue. However, the gov't is directing the effort to move forward.

Now there is a growing pool of money that should attract other
companies that want to get their hands on it. A consortium comes
together and makes a deal with a group of utilities that it will
deliver X amount of GW via SPS for $Y. This consortium needs launch
services but they know jack about rockets. Other groups bid to
deliver Z tonnes to orbit. Once in orbit, there follows other
specializations that start trading with each other based on their
individual comparative advantages.

In the meantime, NASA sends mapping probes to the moon and makes the
selenogical and mineral data available to mining companies.

And so on.

Eventually, the SPS comes on line and starts delivering power. Now
there is infrasturcture in orbit that has different owners. There is
a market for CATS and different providers. The impetus for all of
this was given via gov't funding (only the time cost of the money
though because the SPS assets have already been depreciated so they
can't be depreciated again - IOW, the treasury would have lost the
money eventually, it just lost it sooner and all in one lump) but
the funding was allocated by the market, by utilities that had an
interest in paying the lowest dollar and an interest in dealing with
many different providers so that they wouldn't be held ransom to
oligopoly providers.

See, the gov't sets and enforces the rules, and provides the money,
but doesn't pick and choose who and how the goal is accomplished.

> Once China gets really started, and perhaps other countries, there
> will be much more stimulus, from both national pride and economic
> concerns, to propel the whole effort forward.

I wouldn't be surprised if China is the country that actually gets
SPS off the ground. China is now the world's second largest user and
importer of oil. As they continue their development they will face
pressure to build their infrastructure away from oil and towards
natural gas and other alternatives. Starting from scratch China will
have an easier decision than the US, Japan and Europe who will all
face massive transition costs away from oil. In light of this, SPS
might be a leap forward, just like the leap to cell phones that
bypasses the massive landline infrastructure of the West.

> However, the entity with the easiest access to resources
> (read 'robust economy'), will become the dominant one in the end.

I know that many of us have an unquestioned faith that the US is
that robust economy, but there is certainly data that questions the
*trends* on this matter. US GDP is increasing but the GNP is falling
behind. This means that a growing portion of the wealth that the US
creates is being shipped offshore. The US propensity to consume is
being financed by the savings of the rest fo the world. The fact
that there is US dollar hegemony is certainly a lucky break for the
US because the world's need for oil, which is priced in dollars,
insures that others will always seek to have dollars.

The US isn't as great of a wealth producer as we like to think.
Definitely it benefits from great scale and productive
infrastructure, but the off-shoring issues we're hearing so much
about are really symptoms of larger structural problems with our
economic policies, and most foreboding, social policies that are
wealth draining, i.e. medicare is only 10% funded for the future,
and with increasing longevity the expense of medical and
pharmacological treatments is only going to grow. The present value
of future medicare expenditures is calculated to be $45 trillion
which far exceeds the national wealth of the US. The US is bankrupt
right now if we expect to honor future medicare obligations on
current terms. Note that I'm not talking about Social Security,
which is a drop in the bucket compared to medicare. Social Security
is also in surplus (depending on your faith in the Gov't to honor
its borrowings from the Trust Fund.) The dedication of so much
wealth to economically non-productive citizens at the expense of
educating and training the taxpayers of the future that will have to
generate the wealth is an issue that will lead to competitive
disadvantage for the US.

We're already seeing some of these structural weaknesses playing
out. Consider:

Here are the top 10 Countries with which the US has a trade deficit
on November 2003 and the year-to-date deficit amounts to $387.6
Billion.
http://www.census.gov/foreign-trade/top/dst/2003/11/deficit.html

Here are the top 10 Countries with which the US has a trade surplus
on November 2003 and the year-to-date surplus amounts to $29.9
Billion.
http://www.census.gov/foreign-trade/top/dst/2003/11/surplus.html

Here are the top 10 trade partners of the US and the total value of
both imports and exports.
http://www.census.gov/foreign-trade/top/dst/2003/11/balance.html

The national wealth is seeping away in order for people to consume
more. Simply, in order to buy more pedicures, vacations, clothes,
and to afford eating-out, we're refinancing our national wealth.
Last year US owned assets abroad decreased by $179 Billion and
foreign owned US assets increased by $707 Billion.

> I would very much prefer to see a western democracy fill this role
> than a country that is still mired in a draconian system of
> control issues.

China is an experiment in progress and there is no telling where
they will go. I expect them to soon become the patron for Saudia
Arabia as the US is distancing itself from the House of Saud. Such
patronage will give them assured access to oil and may in turn be
used as a lever against the US.

Also, the Chinese have a more uniform racial composition and do not
have to contend with the problems of Europe, Japan and the US.
Europe is dying off and counting on an unassimilated younger Muslim
generation to finance the retirement benefits for the native
Europeans. There is ample evidence that the performance of these two
groups within Europe is not identical. How well will the cultural
and generational transition occur? That's the key. Japan is in an
even more precarious position because they have an even older median
age and for cultural reasons are less prone to allow immigration.
The US is in the process of blending its cultures and there are
scores of studies that show that most minorities are having
difficulty achieving the success that many feel they should achieve.
Thus much of the national wealth is spent on trying to insure such
outcomes.

China doesn't share these handicaps to the same degree, has a large
population that isn't yet urbanized and thus serves as a brake on
wages and expenses, seems less prone to social spending and more
prone to spending on infrastructure investment (note that investment
here is used to mean an allocation that will yield future returns
through compounding.) China does face some unique problems though.
It's one child policy has generated a surplus of about 40 million
marriageable age men. The care for aging parents will fall on only
children. These burdens are serving a mechanisms to delay childbirth
and this is causing a demographic profile to develop that will see
China aging faster than the US (because the US will keep accepting a
flood of young Latin American immigrants.) On the plus side, China
is already negotiating bi-lateral trade treaties with many
neighboring countries and is viewed by these countries as more
friendly than the US.

Unless the US addresses its structural problems, its momentum won't
carry it forward forever, and China may find itself the Power of the
late 21st Century. In the last 30 years, more people have moved into
Chinese cities than live in all of the US! There is much power to be
unleashed in China.

They may be the ones to get SPS done.

TangoMan