Space Wars | Learning by Proxy

They want to go to the next frontier, but with public money!

Space was the ambition of the Nazis. Hitler had some really wild theories but the central amongst them was the Wunderwaffe. A wonder weapon, so powerful that it would put an end to all his enemies. From the Holy Grail to Incan treasures and spells, no theory was left to chance. Of the many real-world manifestations of the entire exercise, the most well known, was a weapon called the Vergeltungswaffe; also known as the V-weapon. The literal translation of the word means Retribution Weapon. Before retribution could be delivered, the world war came to an end.

In the psyche of people, the acronym for Vergeltungwaffe 2 would remain embedded as the V2 rocket.

The man who worked on the V2 rockets, Werner Von Braun was smuggled out of Germany, as a part of Operation Paperclip. He would have otherwise face trial at Nuremberg and would have most likely been hanged.

His first few years in the US were unpleasant. He was locked away with a few other fellow German scientists at a castle and the Americans were too suspicious to give him any real work. It was not until the mid-1950s when news of the Russian program came to America that Von Braun finally got his chance to work on the American rocket program.

His work culminated in the fateful launch in July 1970 that put a man on the moon.

During the second world war, America was only working on bombers and they had created the National Advisory Committee for Aeronautics (NACA). In 1958, this organisation was rebranded as NASA as space became a mandate.

Funding for NASA since 1959

Source: The Planetary Society

After the massive financing of the 1960s when John Kennedy committed to putting a man on the moon, NASA has had a stable budget of about USD 20 billion each year since the mid-1970s. Today NASA spends almost half that money on human spaceflight.

Allocation of NASA funds to various activities

Source: The Planetary Society

Companies like Boeing, Lockheed Martin, Northrop Grumman and others have built fortunes taking slices of that $10 Billion pie that NASA spends on human spaceflight. While NASA does the science, it depends on outside suppliers to manufacture and deliver the necessary parts. This has been true since the beginning. None of you would have ever heard of the factories that NASA has, because they do not.

The companies mentioned above are part of what is known as the Military-Industrial Complex in the US. Not only NASA but also the Department of Defence and others are customers to these companies and source planes, fighters, helicopters, etc. from them.

SpaceX was a new entrant into the space business in 2010 and Elon Musk had hoped that he would provide some cost-benefit calculations and walk away with the contract. He walked in with his Silicon Valley millionaire swag only to be completely turned down. This is a report from 2014.

In a no-bid process, United Launch Alliance (ULA), a joint venture of Lockheed Martin and Boeing, received a bulk contract worth billions of dollars for 36 rocket launches earlier this year, despite plans to introduce more competition and other cost-saving measures.

Musk’s tweets yesterday focused on what happened next: The man who awarded ULA the contract, defense official Roger “Scott” Correll, was hired soon after his retirement to handle government relations at Aerojet Rocketdyne, a company that builds rocket engines for ULA. Musk didn’t mince words online when offering his interpretation of events:

Source: Quartz

Elon Musk was at the receiving end of it. He needed the NASA contracts desperately to keep SpaceX from sinking. At the time, he had managed to fly and land a few rockets but there was no revenue. His ONLY revenue model was NASA.

Source: Wikipedia

He had already received several hundreds of Millions in grants and funding from NASA since 2012, but in the absence of proven technology, they were unwilling to award contracts. There was certainly some lobbying and wrangling involved as well.

And then the 2016 elections swept around. This guy called Peter Thiel, with whom Elon Musk had run PayPal; who also happened to be a major investor in SpaceX, openly supported Donald Trump. Not only that, the company that Peter Thiel runs, Palantir, was responsible for the data crunching that delivered Trump his victory.

But the company that brought the idea of commercial space travel to fore was once struggling to even stay afloat. Elon Musk-led SpaceX was almost broke, with no way to turn around. The helping hand that pulled the pioneering company from this debacle came from US space agency NASA in the form of a $1.5 billion contract.

Source: Mint

The change in Musk and SpaceX's fortunes are obvious to see from 2017. He just doubled the number of launches and money flowed like wine at a French party. NASA broke rank with their old trusted partners and SpaceX became part of the new Space Industrial Complex.

But Elon Musk - "look my whole body is a huge brain" - was not happy with sharing any of the money going to any other provider.

On August 7, the US Space Force announced two winners of a coveted agreement to launch dozens of spy satellites and other classified payloads into orbit.

United Launch Alliance won a 60% share of the future missions, planned for 2022 through 2027, while SpaceX scooped up the remaining 40%. Both companies beat out rivals Blue Origin, founded by Jeff Bezos, and Northrop Grumman for the multibillion-dollar spoils of the agreement, called National Security Space Launch Phase 2.

But in series of tweets by Elon Musk on Thursday, and following days of silence, the SpaceX founder appeared to be remarkably unhappy with how things turned out.

Source: Business Insider

Also, perhaps because by the end of 2020, he knew that Trump was not going to be re-elected.

Throughout 2020, Elon Musk and Jeff Bezos have been trading the title of the "richest person in the world". Since the beginning of this millennium, both of them have been working on space companies. Unlike Elon Musk, Jeff Bezos has complained that he has so much money that there is no other way that he can blow it away.

Even so, as Blue Origins continues to gobble USD 1 Billion each year, there is only so much charity that Jeff wants to make. He wants those NASA contracts as well. So he sued NASA.

Well, Bezos is now frustrated by NASA. Last week, Blue sued the space agency in federal court, arguing that it inappropriately awarded a multi-billion dollar contract for a lunar lander to Blue’s chief rival, Elon Musk’s SpaceX. Blue’s initial challenge to that decision was rejected by the Government Accountability Office, which found that NASA had not played favorites in choosing just one contractor due to lack of funding for two. The other members of its consortium, the companies Lockheed Martin, Northrop Grumman and Draper, declined to comment on the lawsuit their partner has brought.

Lawsuits between contractors and the government aren’t uncommon. In a way, they’ve helped define the rise of commercial space companies and SpaceX itself. But it’s worth looking at how this challenge diverges from others that arguably opened up low-earth orbit for business.

SpaceX sued NASA in 2005, before it even launched its first rocket. At the time, another nascent rocket maker, Kistler Aerospace, was on the verge of bankruptcy. It suddenly received a $227 million NASA contract to share its test data with the government. SpaceX challenged the case, arguing that if the government wants commercial rocket test data, it should accept competitive bids, not hand a contract to a company led by a former high-ranking NASA official. NASA withdrew the contract with Kistler.

Nine years later, in 2014, SpaceX sued the government again; this time challenging the US Air Force’s decision to award a multi-launch contract to United Launch Alliance (ULA), the Boeing and Lockheed Martin joint venture that held a monopoly on US government spaceflight. (SpaceX had also challenged the creation of that monopoly in 2006.)

Source: Quartz

Obviously, this is a well-worn tactic that seems to have been used very effectively especially in the opaque world of the Industrial complex. A person like Jeff Bezos is not used to hearing "No" and he is getting tired of hearing it over and over from NASA.

So which Billionaire is going to get to blow away public money in their pursuit of space?

This is playing out as we continue to take this planet - the only habitable one we know for our form of life - hurtling towards the point of no return in terms of climate. It is a shame that this is what the richest on the planet feel, is the appropriate utilisation of money.

Much like the theme of GDP that I had mentioned last time, the trouble is that these people are so rich because all they have ever learnt is the accumulation of wealth and believe that is the only purpose of life. They feel Space is the most virgin area to exploit to continue to accumulate wealth. Hence they are slugging it out for a piece of it.