Transterrestrial Musings

Defend Free Speech!

Amazon Honor System Click Here to Pay

Site designed by

Powered by
Movable Type 4.0
Biting Commentary about Infinity, and Beyond!

« More Thoughts On Link Requests | Main | The Coming Counterrevolution »

An End To Redundant Inefficiency

John Jurist writes (or at least implies) that there's just too much competition in the suborbital market:

An approach I favor is forming a university consortium analogous to those that design, build, and operate large cooperative research assets, such as telescopes and particle colliders. That consortium could develop a suborbital RLV or even a nanosat launcher to be used by consortium members for academic projects. Since the consortium would design and develop the vehicles, participating universities would be more likely to use them for student research under some type of cost-sharing arrangement with federal granting agencies.

Dr. Steve Harrington proposed something a bit different recently:

If you took all the money invested in projects in the last 20 years, and invested in one project, it could succeed. More underfunded projects are not what we need. The solution is for an investment and industry group to develop a business plan and get a consortium to build a vehicle. There is a lot of talent, and many people willing to work for reduced wages and invest some of their own company's capital. Whether it is a sounding rocket, suborbital tourist vehicle or an orbit capable rocket, the final concept and go/no go decision should be made by accountants, not engineers or dreamers (Ref. 8).

I would concur with Dr. Harrington's final remark except I would expand the decision making group to include management and business experts nominated by the consortium members with whatever technical input they needed.

Yes, good idea. After all, we all know that it's a waste of resources to have (for example) two grocery stores within a few blocks of each other. They could dramatically reduce overhead and reduce costs and prices if they would just close one of the stores and combine forces. In order to assure continued premium customer service, they could just assemble a board of accountants, and finest management and business experts to ensure that the needs of the people are met.

In the case of the RLV development, the consortium could hire the best technical experts, and spend the appropriate amount of money up front, on trade studies and analyses, to make sure that they are designing just the right vehicle for the market, since it will be a significant investment, and the consortium will only have enough money to do one vehicle development. They will also have to make sure that it satisfies the requirements of all the users, since it will be the only available vehicle. This will further increase the up-front analysis and development costs, and it may possibly result in higher operational costs as well, but what can be done? It's too inefficient to have more than one competing system. As John's analysis points out, we simply can't afford it.


0 TrackBacks

Listed below are links to blogs that reference this entry: An End To Redundant Inefficiency.

TrackBack URL for this entry:


Gary C Hudson wrote:

This approach was, in fact, the very one David Gump and I designed for t/Space. We proposed this concept to NASA in 2004 and it was enthusiastically funded by them as a CE&R contract and was even in the process of being implemented in a much larger scale (to eventually become the distorted COTS program), but the ascendancy of the Emperor to the throne put paid to the notion.

kayawanee wrote:

Ha ha! Well done, Rand, very nice. Excuse me Mr. Nail head--meet Mr. Hammer. What they described was NASA and the Space Shuttle--or more generally a centralized economic system, complete with commisars.

Jon A. wrote:

"For every complex problem there is a solution that is simple, neat and wrong." -- H.L. Mencken

The whole point is, nobody knows what is going to succeed, and a lot of these ideas will never fly. At that point, putting all the eggs in one basket only lowers the chances of hitting on one of the workable approaches.

Gary C. Hudson wrote:

I should add that I realize you are being satiric and I agree in the commercial world we all prefer a hundred flowers bloom (with private dollars) but the point of the t/Space proposal we made to NASA was designed to overcome the perception that smaller or start-up firms couldn't deliver human spaceflight. By employing a consortium approach, every member would be able to claim part of the success (if success would have been delivered). They each could then make appropriate commercial decisions and reform as separate teams or individual players, and seek investment dollars. The key idea was to share the glory and end the "can't be done" mentality, that has in large part flowed from NASA's grip on the industry for forty years. I figured that it would take those gov't dollars to undo what NASA had wrought.

On the subject of COTS, by the way, Griffin distorted it by adding in the "skin in the game" requirement and the requirement of ISS rendezvous. The former puts three people at the table (contractor, NASA and the financier) and the latter means the project has to satisfy Visiting Vehicles rules. The impact of the ISS rules on COTS has not yet been felt, in my view. And the "skin" demand meant only those folks with cash in hand (SpaceX, Orbital) could possibly win COTS; anyone who needed to raise money didn't have a chance.

Rand Simberg wrote:

I have no problem with consortia per se. I just object the notion that our objectives will be met through a monopoly.

And we can all eat at Taco Bell forever. Since it's the only restaurant to survive the Franchise Wars of 2032.

Ric Locke wrote:

Bah. Regardless of the milieu, you can always find somebody prepared to argue persuasively that the most efficient way to do it is One Big Project (or One Big Factory, One Big Bureaucracy, etc.).

This is the difference between an "accountant" and a "bean-counter".


ken anthony wrote:

Nothing prevents cooperation. So that's a red herring. What is really being talked about is who gets the money. Doesn't it always seem so reasonable that those putting forward the idea should get public funding to make it so?

Socialism, no matter how often it fails, some moron thinks they are the reason it didn't work before.

Go Elon, et al.

David Summers wrote:

Um, some comments on his accounting (or lack thereof) in the section "RLV flight costs at 100 per year":

1. Federal Corporate Taxes: 12,300 - note, if you are operating at a loss, there are no taxes...
2. R&D for Future Development: 1,000 - future development is charged against future profits, not current operations. Treat future stuff like the separate investment that it is.
3. Catchall (Including Margin): 28,810 - um, look, if half your numbers are in the "other" category, you aren't presenting any data.

And look - if you subtract out those numbers, the $50,000 cost per flight becomes closer to $8,000... which is pretty darn close to the "required" $9,000 per flight. And, duh, they should raise prices if the presented scenario was even close to correct.

But it isn't correct - to my knowledge, there is not a $100M market for suborbital flights right now. (see anything, there are a bunch of people willing to sink $1M of their money in order to fly there own rocket... so not only would this be a dumb idea because capitalism beats a command economy, but it wouldn't even address anyone's needs!

Andy O wrote:

"One Big Project (or One Big Factory, One Big Bureaucracy, etc.)"

Soviet Union anyone? Or China pre-capitalism(ish).

kert wrote:

There is obviously a place for technology incubator type of consortium, but not one for developing operational vehicles.

There are so many things in rocketry that are at very low technical readiness level that could be useful for all these companies developing RLVs ( various pump concepts, nozzle configurations, tankage materials, eventually heat shielding etc etc ) that would best be matured in technology testbed projects.
Which brings us back to NACA.

Adam Greenwood wrote:

Please, all my Great Depression warning lights are blinking anyway . . . and now we have folks talking about the inefficiencies of competition and the need to form industry wide trusts run by experts. AAAAH! What's next, anti-semitism? Oh, wait.

Jeff Mauldin wrote:

Can there actually be people who are reasonably intelligent who, looking at history, believe that centralized decision making is more efficient than a free market system for--well, for just about anything?

Okay--I guess lots of people somehow believe the government can do better at health care than the free market. The mind boggles. I spent a summer in England in 1990, and had a professor tell me about how wonderful their socialized health care was. I went there on business around 2000, and the workers at BP were buying private health insurance (on top of paying through the nose for the socialized care) so they could get the health care the government couldn't deliver.

I read a fun sci-fi short story years ago--translated from Russian, I think--wherein a wife was bragging to another wife about her husband's job at the government ministry of invention. Apparently his big career success was to develop a mechanized can opener. It was housed in a large building and weighed 5 tons. Each neighborhood was going to have a large can opener center, and people could come, leave their cans at the desk, take a number, and wait 15 minutes to have their cans opened. The wife continued to brag about her husbands next invention, but unfortunately I can't recall that one.

Alan Kellogg wrote:

The supermarket analogy? Not a good one. With a supermarket you're dealing with human psychology instead of technology. Psychology is a messy business.

A supermarket is established where somebody sees a need. Chain A has an older store in a community, so Chain B plops down a store a few blocks away. A larger store with more variety and more of the staples. Chain A can either close it's store, or build a larger one.

But, A will not lose all its customers. Even when they do have reliable transportation people prefer going to the closer store. Even when that store has higher prices. And it's not just when the cost of transportation negates the savings gained by going to the more distant establishment. People know and trust the near more than they do the far. Then you have times when it's just not worth getting the car out to get an item.

That's how convenience stores and ghetto grocers prosper. You need bananas for the Misses' banana and gherkin flambe (yep, in the 'family way' :) ) at 2:30 in the morning, and the GigaChomps is three miles away, that convenience store two blocks away becomes the preferred shopping destination.

Okay, so it's off-topic, but inappropriate analogies do damage one's point.

ken anthony wrote:

No analogy is ever perfect. That doesn't mean they can't be used to make a point. You can always choose to ignore or miss that point. It was a good and useful analogy.

Here's another for you. The Russian know that Stalin had purges. They don't hide the fact. Instead they explain it away as necessary for the survival of the nation.

Socialism, is an evil ideology, but very seductive. Sharing is a good thing. Socialism isn't about sharing, it's about taking. It's a fine point, but an important one.

kert wrote:

Can there actually be people who are reasonably intelligent who, looking at history, believe that centralized decision making is more efficient than a free market system for--well, for just about anything?

Absolutely, private enterprise would never be able to produce something like this. Only from governments.

Karl Hallowell wrote:

Alan, you wrote:

The supermarket analogy? Not a good one. With a supermarket you're dealing with human psychology instead of technology. Psychology is a messy business.

No. You're dealing with businesses that satisfy a need. And Rand asked a legitimate question. Why have two such businesses if one can satisfy? It doesn't matter if the need is technological or psychological.

Later on you discuss location (eg, using the nearby grocer rather than the 3 mile away supermarket). Location is not a psychological factor.

Sam Dinkin wrote:

I'm sure that EADS or someone will put together a consortium and we will get to see how a consortium fares vs. startups. My money's on the startups. I'm in favor of teaching evolution when it comes to businesses, not intelligent design.

Every so often there are persuasive arguments about how the laws of economics don't apply. Let me say that again. Every so often there are persuasive arguments about how the laws of economics don't apply.

Even command economies should multi-source rockets. Explain how a collective effort would spark more of a revolution than X-15 did.

Leave a comment

Note: The comment system is functional, but timing out when returning a response page. If you have submitted a comment, DON'T RESUBMIT IT IF/WHEN IT HANGS UP AND GIVES YOU A "500" PAGE. Simply click your browser "Back" button to the post page, and then refresh to see your comment.

About this Entry

This page contains a single entry by Rand Simberg published on October 13, 2008 7:49 AM.

More Thoughts On Link Requests was the previous entry in this blog.

The Coming Counterrevolution is the next entry in this blog.

Find recent content on the main index or look in the archives to find all content.

Powered by Movable Type 4.1