Why NASA Hired a Chief Economist

investment versus again, private capital. And so I'm very excited to talk space economics.

positions that are responsible for implementing programs. They are essentially independent technical advices to the head of NASA. NASA is a twenty five billion dollar agency. It has ten different centers across the US, it has international partnerships, and of course it has an extensive amount of contract for the private sector. And so the role of the chief Economist is essentially to advise the administrator of NASA on whatever

the administrator of NASA needs advice on. But it tends to be related to what are the markets that we're seeing, What level of investment can we expect in a given sector. Has this company actually raised money or are they perhaps maybe misrepresented? These are all questions that come up in procurement and in strategy. I started at NASA in two thousand and eight, so that was when the Space Shuttle was still flying. We were beginning to think about partner

with the private sector. SpaceX had received its first essentially contract from NASA, but it had not launched anything to space yet. So as you can imagine, over the last fifteen plus years, the role of the private sector has become very significant within NASA's portfolio, and as a result, economic analysis became one of the types of internal services that essentially the senior leadership at NASA decided they needed.

And I remember, as an economist kind of saying, that's unusual. How long have we been building our own spacecraft and doing that with private money. That started my PhD into the long run economic history of space exploration. That became my first book called the Long Space Age, essentially on the economic history of where the money came from for astronomical observatories. And when you look at that, one will find some very interesting parallels. For example, the people who

built the largest telescopes in the early twentieth century. These are the Mount Wilson and Mount Palamar observatories. They were funded by Andrew Carnegie and John D. Rockefeller, the two richest people in America at the time. Sound familiar. So this was a type of parallel that a number of us were starting to think about in terms of how are we going to get new money onto the table

to advance our objectives in space exploration. And then the second thing that happened in two thousand and five was essentially the announcement of what was then called the Vision for Space Exploration, and this was the George W. Bush Era plan to return to the Moon, build a moon base, and ultimately use the capabilities to autavirus. And that basically told me that eventually we're going to need economists in space because if you're building a permanent habitat somewhere else

outside of Earth, Yes, that's the technology problem. Yes it's an engineering problem. It is also an economic development problem. You're going to need to think about where the revenue source is going to come for this, Where might you see cost savings for new types of technologies? And so I had decided to go pursue space economics as a field.

Did my PhD in that. I used to joke that once you do a PhD in the economics of space exploration, there's nowhere else that can really employ you other than NASA. These days, that's not quite the case. These days, there's such a growth in venture capital and private equity investment in space that actually it's a bit of a booming field, to be honest. So I started my work at NASA

Ames's Research Center. So this is one of NASA's ten centers out in Silicon Valley, and I was brought out there to essentially start doing some of the economic analysis related to venture capital, how do we leverage these private companies? And essentially, as I did my work, I started managing some of the programs related to encouraging commercial space development.

Made my way to Washington, d C. With kind of these experiances that it had in Silicon Valley, working with some of the investors and some of the startup founders, found my way to the Office the Administrator and during the first up administration that was when the chief Economist position was created.

This is kind of how you know something about someone when they're driving a Lamborghini versus you know, say, a Ford Pinto. Right, you have some information about the individual even if you know nothing else. Similar with education. The classic signaling product that I can think of, though, is if you know that one country has launched something around Earth and another country has not, you know something about the technical capacities of that country. Very similar in terms

of astronomical observatories. These were very complex projects. They were about billion dollar projects if we do the kind of inflation adjusted metrics today, and so the wealthiest people did these things. Fast forward to the nineteen twenties and thirties when the technology for liquid fuel rocketry is being developed. This year is actually the one hundredth anniversary of the first flight of a liquid fuel rocket by Robert Goddard.

he's a teenager. He reads a War of the World's in his local newspaper, and then a sequel to it, an unauthorized sequel called Edison's Conquest of Mars, And he actually writes in his diary about a vision that he had while trimming a cherry tree on his aunt's farm, and he decides that he's going to dedicate the rest of his life to space expiation, and every year after

he celebrates what he calls his Cherry Tree Day. So he's going out into the world trying to figure out how's he going to get resources for this project, and it turns out that the largest funder for his early phases is in fact the Guggenheim family. He manages to

actually convince the Gudheim family to fund this work. But when the Second World War starts, which is really when the US government starts to get involved with Rocket Tree a very significant level he starts working with a number of the generals and essentially gets funding to develop a genesis to take off rocket to help planes take off

more quickly, and he starts get funding that way. So the Second World War is really when governments across the world really start to get involved with rocketry development, most famously, of course in Germany, but also in the Soviet Union. And so after that point, the technology for rocketry is essentially co evolving as a weapon system and as a technology for taking humans off of the Earth. That's really

when the US government gets involved. NASA gets created in nineteen fifty eight after the flight of Sputnik, and then you have the kind of dual development of essentially the civil program which is what NASA is, as well as a Department of Defense programs, and both of them are roughly kind of equivalently funded for quite some time.

What was the sort of economic logic or national security logic or whatever such that from the perspective of the government, we don't need to keep launching shuttles, and maybe we can begin the handoff for some of this more directly into the private sector.

Columbia accident. So essentially the decision was made after the Columbia accident that there was no way to make the vehicle sufficiently safe at a regular rate of flight that would be economical, and that it was time to move on to a safer, more economical form of human spaceflight.

What's interesting in many ways with the development of vehicles like Starship is that the idea originally behind the Space Shuttle, it was very much the same idea that is now motivating the development of Starship at SpaceX, low cost, refully reusable aircraft like operations. You know, that was not ultimately

achieved in the Space Shuttle. You can look back at the original economic estimates for what NASA thought they would be able to fly the spatial app and they turned out to be rather optimistic relative to what was delivered. We'll see where we get to on Starship, but I think it's just important to recognize that that it's really part of the same engineering and economic capability thrust Shuttle

to Starship. It's the same idea, we want low cost, reusable aircraft like operations so that we can do more in space. Ultimately, the Shuttle was deemed to be no longer safe after the Columbia accident. Blue Urban Commission was kind of fielded, and they decided that it was time to move on to what then became the commercial crew program, and that came around at the beginning of the first

Obama administration. At the time, it was very controversial. You can certainly go back and watch some of the hearings where you've got people like Neil Armstrong who were arguing that this is not a good idea for the nation. At the same time, there was essentially a need within NASA to figure out how to offload some of the operational responsibilities for human spaceflight because NASA was seeking to go back to the Moon and ultimately on to Mars.

One of the things that's defining for NASA's strategic landscape is its budget history. Budget history is very easy to describe. It starts in nineteen fifty eight at a relatively low level. It peaks massively in nineteen sixty five sixty six at the peak of the PALL program, and then it declines very significantly until nineteen seventy two, and it has basically been inflation flat ever since. Our ambitions, however, have not

been inflation flat. Our ambitions continue to increase, and so as the agency has been figuring out how do we achieve our ambitions, we figured that we would basically partner and figure out how to leverage commercial capabilities and private investment.

to take. A staggering level of the federal government spending was at one point through NASA and then, of course it's sort of declined into relative oblivion, but it's kind of extraordinary.

seem to have done in the nineteen sixties. But if you say that we actually want some sort of return on investment in terms of jobs or i don't know, some sort of multiplier effect on the economy, then you're kind of thinking about different things.

sector investment. You can, however, calculate the economic impact. And so every two years I would be responsible for the release of our Economic impact report, and for those curious, that is the highest level resolution data that NASA releases publicly about where it spends its money, and it spends its money across all the fifty states.

consistent requests by Congress and presidents to NASA? Well over the last forty years, let's take the post Apollo era and even the post Shuttle era. We are now on the third attempt to return to the Moon and build a permanent habitation there. The first was called the Space Expiration Initiative under George HW.

you can plausibly land on, that is Mars. I happen to personally be a big fan of flybys of Venus, but that's actually kind of pouter intuitively, because it is so.

our robotic missions there. There's starting to be some very interesting indications that there may have been a life there in the past. It's a very interesting world, and of course NASA also does robotic missions out to the outer planets. The moons of Saturn and Jupiter are truly some of the most incredible objects in the night sky. In our Solar System. You have moons like Io that have volcanoes, few lava, hundreds thousands of kilometers above the surface of

these planets. You have worlds that are actually ocean worlds underneath these massive ice caps, like Europa and Enceladus. Enceladus has water geysers, so it's actually possible to imagine building a probe that could just kind of land under one of these water geysers, open up an aperture, and then assess what might be in that water. And then one of my favorites, of course is the moon of Saturn, Titan. Titan is the only moon that we have that has

an atmosphere. It's actually I can't really see through it, but it does have lakes, except the lakes are not water, they're made of methane. And we now have a mission on the books Dragonfly, which is for me one of the most exciting missions that NASA is doing, to send a robotic helicopter to this moon of Saturn and explore it to learn about this different type of liquid cycle based on methane rather than water. You know, it's a fascinating solar system and one of NASA's cormanate is to

explore that. And I could keep going. You've also got the largest number of Earth scientists employed by one agency in the world. Huge amount of the climate data that the world relies on comes from NASA and also responsible

for aeronautics basically search. A lot of the basic research for fundamental green aviation electric aviation is funded through NASA, so it has a huge mandate, which is why at the end of the day, NASA is always looking for ways to make that tax dollar go farther, leverage partnerships, leverage private sector investment.

could do more. From the economists hat is there a rationale for some of these projects that you see beyond just this is very interesting and cool. Could it ever turn into return on an investment? Into classic sense?

that mean. It means that this was a technology that was pushing the boundaries of capability, of technical capability, and it needed this new thing, the semiconductor, in order to be effective. That meant that semiconductor manufacturing got to scale up at a level that it would not otherwise have probably been able to do based on consumer demand.

was providing the government with cargo to their national space station. Well, that's a pretty high mass demand. It's not a small payload to get Carverard with a space station. You've actually got to be able to launch a fair bit into orbit. Well, once you've already established a demand for something that is high mass, well, what other high mass things can you

launch up into space using your existing infrastructure. Turns out the principal demand for SpaceX's rockets are its own products right now, Starlink, and that's also part of the plan for Orbital Data Center. So these are things that emerge from pushing the technology from setting really difficult goals. So there's a real kind of economic truth to that whole Kennedy statement. We do these things not because they're easy,

because they're hard. When you do hard things, create new technology and new capabilities.

Agency astronauts and Canadian Space Agency astronauts. Actually the US is committed to landing to Japanese astronauts on the lunar surface, the first time the US has ever committed to an international partner landing on lunar surface with it, and we're now about less than a month away, depending on when the launch actually happens from Artemis two, the first time that we've returned to the Moon since nineteen seventy two, and the very first time ever that a non American

will be on BART for a mission that is leaving Earth orbit, Canadian astronaut Jeremy Hansen. And so the international element is a key part of it as well. I think the lunar economy is one of the ones that's going to be a little bit farther down the road. I think one of the ones that's coming up sooner is what's called the low Earth orbit economy, and this

refers more to commercial space stations. One of the biggest contractual competitions right now is the competition for who will get the contract for a private space station from NASA. So NASA already starting in twenty ten, as I mentioned, privatized commercial human spaceflight with a commercial crew program that resulted in the SpaceX Dragon capability and the Boeing star Liner capability. Right now, those vehicles are going to in

their national space station. The plan, however, is to retire their national space station, the latest state that's been thrown out being twenty thirty two. After that point there would be, in theory one or more fully commercially owned space stations. There are companies that are raising money. A couple of them have actually announced one hundreds of million dollars investments ters in the last couple of weeks. What are they going to be doing, Well, they'll be hosting NASA astronauts,

They're going to be hosting international astronauts. It's going to be training, but they're also going to be conducting fundamental research in microgravity. Microgravity is a very interesting phenomenon because not only do you have no gravity, but because you have no gravity in a pressurized environment, you also have no convection and that allows for different phenomena than you

see on Earth. So, for example, you're able to grow crystals larger, You're able to develop things like fiber optic cables more pure that may increase the transparency of them. We are still searching one product that we can actually make in space uficially profitably and make it again and again and again. We're still in the R and D phase and we've been working on it for a long time, so it may be a while before we see one

of these things. But there is a huge research effort going on across the world to figure out how do we leverage the removal of gravity in the production of many things, and semi conductors is one of the other areas that we're starting to see a lot of investment, and so I think that one, I think is easier

to understand. We are to maintain a zero gravity environment on Earth pretty close to the source of mass, but when you're flying around the Earth, you inherently have that property, and people are really exploring how we can make new use out of it and make new products.

course he would say. So, I can't tell is this like just thing that like people on podcasts and Twitter like to talk about, or from your perspective, from what you could tell, is there a real plausibility that given intense compute demands and I have to imagine it's like maybe the cooling bills a little lower up there, that maybe this could be like a real thing.

do you assume these GPUs are going to fail? How effective do you assume the radiators are going to be for getting rid of the excess heat. There's a lot of different variables, and given the fact that we don't have any orbital data centers of scale, it's hard to know exactly what their profitability is. Going to be I'll say one of the big obvious benefits is not a technological one. It is simply that you probably don't need to go for extensive permits.

are owned and operated by spaces. Ten thousand or so constellations have now been approved and submitted to the ITU, and various ones submitted to the FCC. At the million satellite scale, already a large amount of the night sky people are very familiar fly over revies satelites. A orbital data center would be significantly larger and potentially more reflective than a starlink. So if you've got hundreds of thousands of these up there, you might start really seeing them

a lot. How much do we care about that, right, These are these are kind of social you know, social public choice issues that you know, we're just starting to think.

I get too excited, or the space linervator. In order for them to work, they would need to be about thirty six thousand kilometers in length, right, because your goal is to get them into a place where they are in GEO, somewhere stable. If it's not in GEO, then it's going to be continually moving around, and you know that doesn't really work. So it's got to be in an orbit that is basically staying above the same place on Earth. That's true synchronous orbit thirty six thousand kilometers away.

These are going to be very long carbonanotubes.

of different capabilities and skill sets. So you have people who are very familiar with systems engineering combined with people with experience in expertise and material sciences, throw in an economist, throw in a lawyer, and you all as a team evaluate you know, what is this, what would it take to make this thing real? You know what benefits would it have? And you know, you do these types of

grassroots engineering economics assessments of these projects. And part of the kind of you know, the joy is that you tend to do these things dedicated for days, weeks, depending on how long you know or how serious of a procurement it might be. But a lot of that kind of stays kind of behind the behind the door, so

to speak. So we don't put as much of that out, and when we do, it'll be in these kind of procurement announcements where you kind of will talk about the strengths and the weaknesses of a project if you really want to kind of get a sense of how the agency does these types of valuations. Next time, there's a very big procurement that is coming out of the agency, like we did for the human landing systems to return

humans lunar surface. Go look at the procurement assessment the agency does on the projects.

not the case right now for NASA's landing plans. The landers are owned and operated and managed as services by SpaceX and Blue Origin, and so there isn't quite the same level of insight and certainty, you know. And you might say, you know, there's some arbitrary certainty in kind of government timelines, which is absolutely true, but we don't

I don't quite know at the same level. For example, NASA has not clarified publicly how many refueling flights they expect to be needed for a first lander of Starship, in part because that depends on this performance of Starship and we don't quite yet know. We're still waiting on the Version three flight coming up here in the next month or two, so there's a lot of uncertainty around

when that landing would be. The NASA Administrator Jared Eisman just announced a change to the Artemis campaign, inserting a flight in between this next flight of Artemis two and the projected landing, and that would be equivalent to the old Apollo kind of nine mission where you're going to test docking the lander with the crew module in lower

th orbit. And the agency suggested actually that if both landers are ready, the Blue Origin and the SpaceX Lander, maybe a lower orbit or Ryan might dock with both of them. So long way of saying, there's still a number of technical steps that need to go. I think the Agency has targeted twenty eight for a landing, but we will see. The architecture for lunar landing this time is not as simple as it was in the Apollo program,

involves a lot more launches. The point where we don't get quite even know how.

I gotta read that. But like there's no oxygen up there must be pretty miserable, can Like, what's the idea behind actually living on Mars, and does that seem And you know, I have to say, just to back up for a second, like, I don't think we'll ever see a space elevator in our life, but I absolutely think there will be one eventually, and if it happens in a thousand years, that's a very short time in the

grand scheme of things for human history. So like, but like, Okay, so maybe we don't we never see Mars in my lifetime. But what is the idea generally beyond behind the idea that Mars is a theoreticly habitable location that maybe could be economically productive or useful to DeCamp to in some way.

and adventures out amongst the stars, or we don't. So part of the long run vision is that eventually humans will figure out how to leave not just our planet but our Solar system. However, we do not have a real good understanding of how we would at all make that possible today, and so heart of the thought is we're going to need to learn how to live out in space for extended periods of time. The longest that we live in space these days is about one year.

There have been Russian missions in the paths that have lasted longer in lower orbit, but our medical docs these days at NASA pretty much don't clear anyone beyond one year. So the idea of going to Mars is kind of developed over the centuries. For a long time, we thought that there would be it would be much more habitable, right,

We thought there might be oxygen there. There isn't. There's a really good book that's come out the last couple of years called City on Mars, which really kind of goes through some of these things that you're talking about, which is that really might not be that nice of a place to live. You know, when you ever get the question where do you want to go? I often say Venus because it's kind of a one year in back mission. Because Ultimately, I want to stay on Earth.

It's literally where all of the restaurants are, right There are restaurants anywhere else in the Solar System, And so there's a kind of sense of that frontier mentality that I think appeals to some people's narratives, even if they don't necessarily spend a lot of time on any frontiers themselves. And I think that idea of going out to a new world and learning from that world is also a different related motivator. Right there is a scientific interest of exploration.

What can we learn from this genuinely different alien world and what can we learn about ourselves by learning to live on it for decades centuries. There's a cultural argument that some of my friends kind of really like, which is this argument that goes back to earthsc clerk, which is that fundamentally it's about getting variation in humanity, variation in the cultures of humanity. What will we learn what kind of different humanity will emerge from life in other worlds?

We don't know, but that seems like an interesting question and interesting exploration.

on launch vehicles, there were private markets. Right, the US went from having essentially zero market share of global launches in two thousand and seven to now basically having seventy five percent or above because of the success of SpaceX. There are there is a global market to launch. It's also global market in satellite internet, right, So these are ones where it makes sense to have private companies in

the lead. There may be you know, kind of natural monopoly challenges, so you may think about how you're going to manage that in the future, but you know, we do that in other industries too. So for me, the reason we're experimenting in space stations is because, you know, we think that might be an area where there really might be some commercial more. We've actually seen multiple different

private missions that have been paid for. They're not yet at kind of a very significant share of the market for human spaceflight, but it's certainly a lot more than it was ten years ago when it was zero and now it's a few percentage. For me, some of the things that we need to make sure kind of stay within the public domain, within kind of NASA management operation includes things like operating the Moon base. It is going

to be a very expensive proposition. There may be some elements to that that it makes sense to have a

private sector experimentation and potentially even infrastructure ownership. For example, you can imagine a world where you might have a baseline power system on the lunar surface that is kind of owned by the government, but if there's kind of interest in expanding that, well, maybe you have some private sector kind of you know, take on some of the risks to see whether or not they have some other

infrastructure options there. If we don't have that privately owned, then I think there might be some challenges of kind of pushback, right to what extent do you want your tax dollars going to fund Jeff Bezos's Moon base versus, you know, the National Lunar Research Station. I think people's answers that are potentially different. And given the fact that it's essentially public tax hours they're paying for all these things,

I think that's something we need to consider. So, you know, the standard answer is that we have the government take on these higher risk activities where there really is no market demand. But I also think that we need to think about this as an infrastructure play. For a long period of time, we're going to be reliant on publicly funded resources for these things, and I think therefore there needs to be some some public management or that through agency like.

US based station on the Moon. Would we then say that that is American property that are what is international law established with regards to claims on the Moon or elsewhere.

So there was an agreement that essentially there will not be any assertion of national territory, and undernational law there are no private sector actors, so essentially there won't be any ownership of territory. However, there is ownership of the assets that you put there, so any Moon base that you put there, any physical infrastructure, would be American infrastructure. But just like an Antarctica, there are provisions within the unter Space Treaty to allow other countries to come and

visit these facilities. They can notify and say we'd like to come visit your facility to make sure that there isn't any underward military activity happening. There. So there's this principle of reciprocity of visitation that's established, and the idea that we can all so mine has already been established.

So what I always like to say is that no matter what business idea, that you have a lunar surface, you can probably engage on it right now if you can make the case, with the exception of property speculation, if you want to go build a hotel on the Moon, you can afford to do it, and you can just put it down. You'll get the get the license to do it. You don't own the territory, but you can

put it there. If you want to mine something. The Space Actor of twenty fifteen that was approved by Congress and signed into a law establish that if you mine it, essentially you own it, right So if you take something from a lunar surface, that's been established. The Artemis Accord signatories have all basically signed up to that. So that's now a very popular proposition around the world. And if

you think about it, we've already established that. When we brought back rocks from the Paul program, no one debated that the United States could essentially do what it wanted with that. And you asked, gave it out to countries around the world use it for scientific purposes. So we've

already established a lot of those principles. But the idea that there's going to be territory is one that currently the out of Space Treaty, I would argue, thankfully kind of established, is not one that we're going to be competing over.

thousand and eight. Yeah, when it was long before they had sort of proven that they could do reusable rockets at scale, and now we've all seen the videos and they still blow my mind every single time. That was a really good bet and it was like, you know, I'm sure a lot of people thought that was completely implausible or whatever very recently in history. So that's pretty extraordinary. I am also I'm still and I think that's right. I looked up this chart again and the Wikipedia page.

Four and a half percent of one point the entire federal budget was NASA, which just seems like so hard to believe right now that this was like a really big part of what the government is spending money out.

it's I think it's inspiring. If we saw some people land on the Moon and hang out there for a while, well, I mean, it'd be in such better video condition, you know what I'm saying, like those it wouldn't be those you know, we could see it in the high dev and they could do stuff insaid, those grainy things that maybe some people were thought shot on like a set.