In a discussion of Peter Diamandis’ recommendations to NASA (most of which I broadly agree with), Ferris Valyn makes the classical error in discussing government spending:
As for your other point:
You’re contradicting your statement that there is no guaranteed ROI. Money spent on NASA is money NOT spent on everything/anything else. You are assuming your conclusion is true and using that in your argument to prove your conclusion [otherwise known as “begging the question” — rs]. That’s not allowed.
Money spent, whether wisely or not, always grows the economy. Whether its the 60 cents I spent to buy gum, or government buying a new power plants, that money always grows the economy. The fundemental question is, whether it grows the economy in a way that we want to grow it. And while I will agree that we haven’t proven that space development grows the economy 100% in the way we want, I would argue that space development has a large preponderance of evidence supporting it.
No, it is quite possible to spend money and shrink the economy (and few entities are better at doing this than governments — see, for example, Soviet Socialist Republics, Union of). For instance (to use the classical example), we could institute a government program to pay half of the populace to dig holes, and the other half to fill them. How fast does Ferris think that the economy will “grow” under such a program?
This is also one of the classic lousy arguments that space advocates use to advocate. I discussed it in a column a few years ago. Space spending has to be justified on its merits, in terms of the return we get for it in terms of actual space activity. It can’t be justified simply as “spending” that “always grows the economy,” because there are potentially many other means of “spending” (such as simply letting the taxpayers keep their own money) that are much more effective at doing so.
I agree with you, government can spend money that works against growth. They can pump money into sunset industries that can lead to actual economic stagnation.
Dismandis did lay out some good points, as you mention:
“NASA should proactively seek to benefit from incentive prizes, both by offering prizes of its own and by seeking to actively engage in commerce with the teams who compete for and win prizes offered by others. To do so, NASA should supplement the prize purse funds available to Centennial Challenges, and should allow for the creation of larger value prizes such as competitions for suborbital point-to-point spaceflight, asteroid detection, end beamed power launching systems.”
I would have liked to seen him suggest some actual numbers for these prizes. He talks about larger prize purses, didn’t Dr. Griffin make a point in mentioning this in a speech a week or two ago and how that would somehow have a negative or non effect?
Well, this happens when you indulge in the usual modern fantasy of thinking that government gets its money from the Magic Money Tree in the sub-basement of the Dirksen Building. In that case, sure, if the government spends it instead of letting it pile up in vast subterranean drifts, then it always grows the economy.
On the other hand, if you use your head for something other than keeping your ears apart, you understand that government cannot spend money without stealing it from people who have actually earned it, by working. From that point of view, it’s not a choice of the money being spent or not, it’s a question of whether it is more productive for the government to spend it or for the person who earned it to spend it. History has already answered that question, of course.
Heinlein’s old analogy of cooks with apples and the utility theory of labor most certainly applies here.
Why is opportunity cost such a hard concept for many people to understand?
Everyone (OK, nearly everyone) accepts that certain aspects of government activity could not realistically be done by anything else; national defense, control of the currency, maintenance of safety-related quality standards. And the people doing those jobs are extremely valuable and most of them work extremely hard. I doubt, for example, that anyone thinks an air accident investigator is a useless drone.
However, that leaves the vast majority of government employees; those employed solely in processing forms. Every one of those has the same sort of impact on society as someone on welfare, and the effect is greater if only because they are paid more; useless consumers, draining money out of the pockets of the productive. It doesn’t help, either, that a large proportion of that money (these days) ends up in China – or the Middle East.
Everyone (OK, nearly everyone) accepts that certain aspects of government activity could not realistically be done by anything else; national defense, control of the currency, maintenance of safety-related quality standards.
What evidence do you have that Underwriters Laboratories, the National Sanitation Foundation, the National Fire Protection Association, etc. cannot realistically maintain safety standards? I doubt that “nearly everyone” accepts that.
I was probably a little over the top with that comment, I’ll admit. In my defense, however, I was getting rather annoyed that, in a post about space, quite quickly, it descended to non-space issues, thanks in large part to the person who that was a response to