what we really need to go into space

>Date: Thu, 04 Mar 2004 22:24:21 -0000
>
>--- 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.

I have to disagree with the RIAA analogy. Much of their boom profit with the
advent of digital media was derived from making people re-buy the music they
had already purchased the right to again at a higher price, as in my case
when replacing my vinyl Who with digital Who. Along with many other business
pratices that should have drawn anit-trust legislation far in advance of
MicroSoft. Cleary intellectual property rights are a valid concern in this
day of the internet, but the RIAA is the last place one should look for a
paradigm. A good friend of mine, a professional musician who ran the
marketing department of a famous school of music for several years said:
"Val, everybody I've worked with hat is into the music has been good, but
the industry is evil." And he's the guy that the RIAA is suppossedly
defending...

>
>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.

Appropriate analogy. Speaks volumes about personal property rights.

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

And they keep adding more! This directly affects me, so I understand the
necessity despite the many times head-aches :-).

>
>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.

Agreed. This falls in with why socialism is a failure. Doen't survive
contact with the real world.

>
>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.

The highway is a great example of good gov't involvement (at least in
principle), but I am not so sure about the Hoover Dam. Such products would
be profitable endeavors if done correctly, and would probably be managed
better. Living in the west, water supply is a constant and looming issue...
Gov't efforts so far to manage the situation haven't done much to make me
confident in the outcome.

Your statement saying that gov't shouldn't be involved in producing or
distibuting value hit the nail on the head, in my opinion.

>
>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.

These are excellent ideas. Using taxing controls as means to stimulate
motivation and ability are excellent ways of encouraging business, and are
used as such on a routine basis. Perhaps these things should be on the
agenda?

>
>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.

While there is no question that the US economy may falter, I think that the
current potential energy is huge. If the stewardship of our economy is
handled correctly, there should be no reason for this to change, as far as
the US having a robust economy. Look at the amount of liquidity being held
right now as investors ponder the market... After a really bad couple of
years, we're not doing too shabby at all. We all know that there is a large
deficit to be handled, and myriad other concerns, but they can be manged, I
believe. The big thing, of course, is the motivation level for space
endeavors. More power to China - competition does seem to spur the American
spirit (American includes those south of the US!). This could be a very good
thing.

>
>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.

Well, demographics will be presenting similar challenges but to a far
greater extent in Europe and Japan. China has a diffrerent issue with the
lack of young females and a rigid birth control policy in effect for several
decades. India has massive potential, but many cultural and social obstacles
that will delay their big entry for at least another decade. South America
has its share of difficulties to work on, and the MidEast is a foregone
conclusion. It looks like these level the playing field a bit.

>
>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.

2nd Law of Thermodynamics acting on capital... We need an open system to
thwart the inevitable effects of entropy :-)

>
> > 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.

Interesting... Seems plausible. The end effect will be to raise oil prices
quite a bit through increased demand. And more rapid depletion... Maybe will
all see Mad Max at this point :)

>
>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.

It will even out. My parents are from Ireland, and of course have many
stories to tell about great great uncles and such that had that prolblem
when arriving in the US many years ago, but none of us are having problems
now. In the end, the American worker is one of the most flexible in the
world, capable of switching career fields at the drop of a hat. Europe
cannot or will not match this ability due to their strong efforts to
preserve the status quo (with the notable exception of the Brits).This will
serve them well in the future, and certainly gives them a leg up in the
world economic picture.

>
>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.

Hopefully, when Castro dies and his meddling fades, this will change.

>
>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.

Agreed. I still hope it's a western democracy, though. China has many, many
human rights issues to address before I'd be comfortable with them at the
steering wheel of the world.

Val