Book review: “Space to Grow. Unlocking the Final Economic Frontier” by Matthew Weinzierl and Brendan Rosseau
What role is there for the state in space travel?
Reviewing “Space to Grow. Unlocking the Final Economic Frontier” by Matthew Weinzierl and Brendan Rosseau (Harvard Business Review Press, Boston, MA, 2025, 307 pages).
Last May, the IEA published my paper “Exploring the Space Economy: The present and future of capitalism beyond our planet”, which was a comprehensive review and analysis of the literature on the space economy. The book “Space to Grow” by Matthew Weinzierl and Brendan Rosseau (both of Harvard Business School) would have fit in perfectly, but it came out just a little bit too late to be included. I will review it here instead, as an addendum of sorts to “Exploring the Space Economy”.
14 November 2011 marked a low point in U.S. manned space exploration when the American astronaut Daniel Burbank had to be transported to the International Space Station (ISS) aboard a Russian Soyuz rocket because the United States was no longer able to send its own astronauts into orbit having discontinued the Space Shuttle program. In the years that followed, American astronauts made 30 such flights to the ISS using Russian Soyuz rockets – until a SpaceX Falcon 9 rocket took Americans astronauts to the ISS on May 30, 2020, marking the first time in almost a decade that the United States had launched its own crewed mission into space.
According to Weinzierl and Rosseau, the decline of government-led manned spaceflight following the success of the Apollo moon landing in 1969 can be attributed to structural issues inherent in central planning:
“The lack of the competition that you see in a free market means there are limited incentives for efficiency and innovation. Over time, price signals deteriorate, so determining the best way to allocate resources becomes nearly impossible, even for the most well-intentioned central planners. And all too often, when we place control in the hands of few public officials, there’s pressure to serve concentrated interests above those of society. These structural weaknesses, over time, began to undermine America’s space program. Ironically, they’re the very same ones that doomed the economy of the Soviet Union, the country’s space race rival.” (p.17).
In a lecture in 1992, S. Peter Worden, Deputy of Technology of the U.S. Department of Defense’s Strategic Defense Initiative Organization didn’t hold back his criticism:
“Since NASA effectively works for the most porkish part of Congress, it is not surprising that their programs are designed to maximize and perpetuate jobs programs in key Congressional districts. The Space Shuttle-Space Station is an outrageous example. Almost two thirds of NASA’s budget is tied up in this self-licking program. The Shuttle is an unbelievably costly way to get to space at $1 billion a pop ... Since there are tens of thousands of jobs tied up in these programs and most of NASA’s budget as well, there is not only no money to get out of this endless do-loop, there are positive political pressures to make sure we don’t get out. Witness the fact that not even $175 million could be found out of NASA’s $14 billion budget to develop a new, cost-effective launch system.” (pp. 25-26)
Aerospace companies have traditionally constructed their rockets using components sourced from a vast and complex network of suppliers. The authors of Space to Grow quote NASA researcher Harry Jones, who estimated that the ULA (United Launch Alliance, a joint venture founded in 2006 by Lockheed Martin Space Systems and Boeing Defense, Space and Security) had “hundreds of subcontractors that have dozens of facilities spread all over the country.” As Jones points out, this was “a political necessity for a government-funded jobs program.” (p. 73) Ultimately, the system became increasingly inefficient because politics – each federal state sought to secure its share of the program – and not objective criteria determined much of the decision-making. In contrast, SpaceX has been able to produce rockets at significantly lower costs, as it does not have to make political trade-offs and manufactures many components in-house. SpaceX estimates that “every dollar sent out of the company actually cost between $3 and $5 based on subcontractor overhead and profit.” (p. 73)
It is to NASA’s credit that it recognised the problems and changed the way it worked with private space companies such as SpaceX – thereby paving the way for large-scale private space exploration. The NASA Commercial Orbital Transportation Services (COTS) funding programme plays a pivotal role in advancing space exploration by facilitating the transport of essential equipment, supplies, and experiments to and from the ISS through partnerships with private companies. The programme was announced on 18 January 2006 and has been a complete success.
According to the authors, private competition and a move away from absurd “cost-plus” programs has enabled SpaceX to drive launch costs down by over 90 percent relative to the space shuttle (p. 55), and elsewhere a cost reduction of as much as 95 percent is even mentioned (p.35). The authors assert, however, that this is just the beginning, with SpaceX’s Starship potentially reducing launch costs to just a few million dollars.
“With a capacity of 150,000 kilograms, that means the actual cost of sending payload to LEO (where most satellites operate) could be around $200 per kilogram, an order of magnitude lower even than the Falcon 9. That would mean SpaceX brought launch costs down by 99 percent, relative to the shuttle, in just a few decades.” (pp.78-79)
It is also well worth comparing Starship with NASA’s Space Launch System, or SLS for short. The SLS, a heavy-duty rocket developed on behalf of NASA, completed its
inaugural unmanned launch on November 16, 2022, with a first manned mission scheduled for 2026. Each launch of the SLS and its space capsule, Orion, is forecast to cost $4.2 billion. By the time of its first flight, NASA had spent close to $24 billion on developing the SLS, including $6 billion in cost overruns and more than 6 years in delays beyond NASA’s original projections. SpaceX estimates that the cost of a Starship launch will be around $10 million. But even if this estimate proves to be overly optimistic and the costs end up being ten times higher, they would still be 42 times lower than for the SLS. (p. 149)
The authors are not opponents of NASA or government space travel in general. In fact, they stress that:
“Governments will always play essential roles in coordinating, subsidizing, and advising private companies pushing the space economy’s frontier forward.” (p. 52)
Elsewhere, they write:
“Just as taxing or regulating activities that create space debris can internalize a negative externality, subsidizing or otherwise supporting activities that are rich in positive spillovers can create value that would go unrealized in a pure market.” (p. 193)
I, too, believe that government space travel can be completely dispensed with – even if we have not yet reached that point yet – but I am more sceptical than the authors when it comes to subsidies. After decades of stagnation in manned spaceflight, it was only the involvement of private companies that drove genuine innovation, and there is nothing to suggest that government agencies or politicians are best placed to judge which emerging technologies and companies are likely to pay off in years to come. What does pay off, and the authors emphasise this repeatedly, is competition, which is the engine of innovation and cost reduction.
by Dr Rainer Zitelmann, author of “Exploring the Space Economy: The present and future of capitalism beyond our planet”
Recommended reading:
“Exploring the Space Economy: The present and future of capitalism beyond our planet” by Rainer Zitelmann
“Space to Grow. Unlocking the Final Economic Frontier” by Matthew Weinzierl and Brendan Rosseau