Constructing a cislunar infrastructure will drive renewed investment in education and training, and it will re-direct investment back into the historical drivers of job creation and economic growth. (credit: Anna Nesterova Art)
A powerful school of economic thought today, led by economists such as Robert Gordon, suggests that, during the 1970s, the focus of technological innovation changed and, as a result, economic growth started to decline and wealth inequality began to rise. While there are many factors involved, it is interesting to note that this coincides with the end of the Apollo era. Along with severe budget cuts, this limited scope of innovation certainly took its toll on the space program. However, it also seems to have short-circuited our economy as well.
To be clear, I am not suggesting that there is a direct, causal link between the crippling of our country’s post-Apollo space program and the overall decline of growth in our nation’s economy, but there does appear to be a correlation. Following this pivot of innovation, not only did economic growth decrease, but “the land of opportunity” that once beckoned to all people became the land of opportunity for the wealthy, giving none but the rich a chance at the “American Dream.”
Gordon has extensively studied economic growth in the United States. In his book The Rise and Fall of American Growth, he explains why, after a hundred years of sustained economic expansion (1870–1970), growth declined. Gordon’s research shows that the bulk of technological innovation since the ’70s shifted away from industrial areas like transportation and manufacturing to information and communications (ICT). Unfortunately, over the last 30 years, the ICT sector has demonstrated that it cannot grow our economy alone and may even have contributed to the rise of wealth inequality as well.
Despite the amazing growth of the ICT industry and the presence of several companies—Microsoft, Amazon, Apple, and Google—that grew into corporations with valuations sometimes exceeding a trillion dollars, that sector contributes less than 7% to US Gross Domestic Product (GDP). Further, strong economic growth requires jobs—good jobs. But these corporations are not the job creators you might think. While Microsoft, Apple, and Google offer jobs with high median incomes, they have barely 400,000 employees among them; yet, they are global companies and make trillions of dollars. And while Amazon has a large workforce (840,000) the median income is only $35,000 a year, which is less than $10,000 above the poverty line for a family of four (and if that family has two children older than eight years old, they are at the poverty line.)
Contrast this to what Gordon calls the “Great Inventions,” concentrated largely in transportation, energy, and manufacturing. These sectors helped drive an incredible percentage of growth, as measured by productivity and per-capita GDP, for a hundred years. In fact, the standard of living more than tripled in that time. Such growth benefited our entire society during what Gordon calls that “Special Century.” He hit the nail squarely on the head when he said, “Some inventions are more important than others.”
World Bank GDP data from 1990 to 2019 provides further evidence of Gordon’s findings. Among economists, GDP growth of at least 3% per year is the accepted barometer of a strong economy. The US achieved such growth only 9 times during the last 30 years and has been under that mark for the last 13 consecutive years. Yet, this is the time in which the “digital economy” exploded in growth and trillion-dollar companies. Now, compare this with the prior 30 years (1960–1989), where we hit this benchmark or better 21 times.
History suggests that space enterprise would drive innovation in the same areas of technology that Gordon points to in his research. If we could duplicate that circumstance alone, we would realize strong economic growth again. America needs a joint government/private industry space program on the level of Apollo during the 1960s. Such a program would be tasked with building a “cislunar” infrastructure—a space transportation network that connects commercial and scientific platforms in Earth orbit and on the Moon—and would generate hundreds of new markets, thousands of new jobs and re-energize our underperforming and inequitable economy.
However, if we are going to convince our government and business leaders to invest in a very different kind of future, we must first recognize that Gordon’s thesis—that some kinds of innovation have greater impact on society than others—still applies. America’s space program had exactly that kind of profoundly positive economic, educational, and social impact on our nation in the 1960s, which went far beyond the program itself. As pointed out in a paper, The Economic Impacts of the U.S. Space Program by Dr. Jerome Schnee, economists have long understood that technological innovation drives advances in “industrial related knowledge.” And that is what our economy needs: revitalized industry.
During the 1960s, NASA knowhow played a huge part in revolutionizing American industry, affecting methods of manufacturing and production and spurring the development of new products and services. NASA research and development became, according to Schnee, one of the “determinants of the shape and direction of the U.S. economy,” driving increased funding of R&D across business, which then drove significant innovation, economic growth, and the creation of many new markets and industries. We are seeing glimpses of this again today with the success of companies like Blue Origin, SpaceX and Virgin Galactic, but they have only scratched the surface.
If we consider the impact NASA’s innovation had on our society, and combine that with Gordon’s findings, we can see how consistent and sustained economic growth is connected to investment in transportation, manufacturing, and energy infrastructure: areas of the economy that space enterprise can help drive. I agree with Gordon that growth has been weak and inconsistent since the 1970s because the focus of innovation moved away from these powerful industrial sectors. Further, no one sector can drive economic growth alone. Our economy needs an investment and innovation resurgence in the industrial sectors that have historically driven growth in addition to ICT. Space enterprise can do that.
For example, American manufacturing declined in large part because of this shift in technology (and not due to offshoring, as many complain.) However, in-space manufacturing (ISM) would have grown significantly by building a cislunar infrastructure. Not only would ISM have generated more jobs, it would also have had access to virtually unlimited resources on the Moon, near Earth asteroids, and beyond. Eventually, we could have provided raw materials and manufactured goods for our terrestrial as well as space economies, without polluting the Earth. As a result, space manufacturing certainly would have grown, creating wealth and jobs as capability and facilities expanded.
Building an alternative energy infrastructure to access unlimited solar energy from space could also have stimulated economic growth—and still can. Solar power satellites could have driven space development, while simultaneously giving our terrestrial civilization all the clean energy it required. Collecting solar energy on Earth pales in comparison to the ease, efficiency, and scalability of such power from space. Global energy companies, reeling from today’s drop in demand for oil, could restore their profitability, contribute to renewed economic growth and even help reverse global warming, all by collecting and selling solar power beamed down from space.
Finally, constructing space manufacturing facilities and solar power satellites would be far more possible if we had developed a transportation system that could carry humans into space consistently, inexpensively, and safely.
Solving weak economic growth can also address wealth inequality. This economic disease flies in the face of true capitalism and has combined with the limited focus of technological innovation to stifle growth and pervert our meritocracy. As Thomas Piketty explains in his book, Capitalism in the Twenty-First Century, anemic economic growth enables what he calls the forces of “divergence.” These forces push us away from wealth equality, while stifling the opposite forces of “convergence” that move us towards it. A weak economy nurtures inequality by limiting economic opportunities overall, which then enables top earners to monopolize those limited opportunities among themselves and their progeny.
Joseph Stiglitz, in his book The Price of Inequality, further explains how wealth inequality stifles investment in technology, infrastructure, and education. By transferring billions of dollars from the lower and middle classes to the top, not only does the lack of investment prevent any sort of leveling of the proverbial playing field, this transfer of wealth also disrupts the natural competitiveness of markets, and encourages the exploitive tendencies that exist in them to exorbitantly reward the few, while locking out the many.
Stiglitz believes that we need to invest far more in education so that we can increase access to colleges and vocational training for the many young people who cannot afford such. Second, we need substantial infrastructure investment to drive the kind of job creation that can employ a large, well-trained millennial workforce. Only more investment in education, training and infrastructure can restore equity to the wealth equation. Wealth is not the problem—the inability to pursue it is.
For many, it may seem contradictory to spend billions (even trillions) in space to help address economic growth and wealth inequality on Earth. My answer is we need to understand the potential of space development and the return on investment it has delivered in the past. Space enterprise will drive construction and investment in manufacturing, transportation, and energy infrastructure in space and on Earth. Constructing a cislunar infrastructure will drive renewed investment in education and training, and it will re-direct investment back into the historical drivers of job creation and economic growth. This would accomplish both of Stiglitz’s goals, as well as overcome the divergent forces that Piketty refers to.
As space advocates know, there is even an existing “roadmap” for doing this. In the mid-1980s, President Reagan put together the National Commission on Space with a stellar panel of scientists, economists, and business leaders. Their report, Pioneering the Space Frontier, is considered the definitive blueprint on how to construct the cislunar infrastructure I describe in an economically viable fashion. Unfortunately, the highly acclaimed report has been ignored.
As both a student and teacher of history, I believe that understanding history is vital at this moment. The American experience was built on four major pillars: government of and for the people, the rule of law enforced by informed and moral leaders, a competitive capitalism steeped in merit and opportunity, and a vast, resource rich frontier. This is the foundation of the American spirit. We need to restore that spirit and our future.
Finally, it is worth noting that NASA’s heyday occurred during the progressive eras of the New Frontier (JFK) and the Great Society (LBJ). This time is known for policies protecting the environment, regulating corporate greed, and defending the rights of minorities, combined with the concepts of meritocracy, justice, and the “American Dream.” Together, these policies and concepts reflected a nation moving in a positive, enlightened direction, while our technology pointed towards a hopeful future filled with the promise of economic growth, new knowledge, and scientific exploration.
A healthy space program may not bring all this back or address every one of our problems immediately. But it could help solve some of them right away, especially our rigged economy. Perhaps that would be enough to push our nation back in the direction it was moving. Space exploration and enterprise have greatly benefited our society before. It can certainly do so again.