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The Mars Con

Mises Daily: Friday, February 06, 2004 by

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MarsSpace travel has been one center of interest of governments around the world for the last five decades. As a result of an unending interest in nationalized technological advancement, research and development, incomparable military capabilities, and scientific endeavors into the unknown, bureaucracies have conned entire governments, if not much of the nation they administrate, into believing that a space program is in the "public interest."

The puppet of the United States federal government recently announced the initial planning of the National Aeronautics and Space Administration's most ambitious, not to mention costliest idea as of late, the Mars Exploration Program. Sure, the proposal seems like the perfect ploy to unite the American people, an attempt to create some sense of national collectivism, and the possibility of logging a chapter in physical science textbooks in the years to come, but what is the purpose of such a statist endeavor? Moreover, what are the costs of implementing this new exploration of The Red Planet?  

The journey to the fourth rock from the sun, as is the case with all government spending, will no doubt smother both the domestic and global economies with numerous expenses and costs. Certainly, the questions surrounding how the project is to be financed are of immediate concern when weighing the quantitative monetary expenses of the program, but analysis of both this funding and the host of opportunity costs accompanying the entire mission are vitally important to understanding the economic implications of this particular space program.

According to spokesmen of both NASA and the federal government, the price tag of the mission to Mars currently sits at approximately $11 billion over the course of the multi-stage implementation of the program. Unfortunately, flipping this extraordinary bill is only a small portion of the whole sum of costs imposed by the Mars Exploration Program.

As is the case with any proper economic analysis, both the explicit out-of-pocket expenses and the unseen, foregone gains, or opportunity costs, are necessary for complete evaluation of a decision, in this case a publicly-funded space odyssey. In fact, the subjective opportunity costs associated with government spending and planning are arguably the most burdensome to the citizenry and the nexus of voluntarily interacting individuals, known as the market, given that they are indeed nonquantifiable and nonuniversal costs.

Therefore, the use of both the dollars and all of the uses and abuses of resources that the Mars mission needs to survive are actually the true sum of the price tag. Leading the list of costs that accompany the Mars Exploration Program are the taxes and inflation themselves, the drain on private research and development, the economic effects of government employment, the misallocation of resources, and the pollution that such research processes and procedures create. A brief analysis of each component of this much abridged compilation of opportunity costs will begin to delineate the true burdens of the new Mars program.

Obviously, there are only two ways in which the quantified, monetary tab can be paid, both of which are characteristic of the political means of financing—taxation and inflation. The people living within the borders of the United States, therefore, will incur the expenses of the intergalactic endeavors via either the direct larceny of overt taxation or the disguised theft of the "most insidious tax", inflation of the money supply.

Given that all monetary sums can be ordered into some cardinal ranking, it is quite easy to realize the costs associated with the $11 billion. The markets composed of the citizens who will be taxed or whose currency will be inflated will suffer some combination of a direct drain on available dollars and a latent devaluation of dollars not withdrawn. This essentially equates to less trade in time, either as a result of too little dollars, which would choke the short-run, or too many dollars, which would manifest in the long-run, but both resulting in more demands being left unmet.

Aside from the pure monetary expenses, and the subsequent opportunity costs associated with them, the state-headed research and development for the Mars Exploration Program will likewise be a burden to private innovation. Of course there would be less monetary resources to devote to such studies in the private sector, but the more disturbing outcome is that of the disincentive to private developers. One of the chief issues on this list of costs to private research and development, which includes the regulations on private research and NASA's access to monetary resources, given the government's monopoly on the money supply as well as its ability to tax, is the existence of the patent system.

NASA has long been praised for developing such wonderful inventions such as Velcro, but once it has formulated and patented such a design, the only way for the invention to make its way onto the market is for the design to be sold. Hence, given the legal regulations surrounding patents, and obviously the 'rent-seeking' competition among organizations seeking patents, the market is left with but a few if not a single monopoly producer of patented goods.

In essence, NASA, by developing and selling patents to high-bidders, is robbing private research and development of all incentive to produce and thus, its very purpose, namely to find better ways to satisfy the needs and wants of individuals in the market. Although patents seem to be the fundamental issue associated with these costs, and some of these costs could be alleviated by abolishing the patent system, NASA, being operated and privileged by the federal government alongside the patent offices, certainly has exclusive entitlement in all of its research and development. This goes without saying that NASA itself has a highly protected monopoly on domestic space travel and analogous research and development, and therefore faces little to no competition.

The third notable economic implication of NASA's quest to explore the desolate landscape of Mars is that it has been marketed to some constituencies for its employment opportunities. For instance, East New Orleans, in Louisiana, is home to a manufacturing facility that makes external fuel tanks for NASA. Accordingly, the local newspaper and television stations have begun to rally behind the Mars Exploration Program, as they do for most NASA projects, for the additional jobs it may create. Employment is indeed a necessity in any market, or pseudo-market, economy, but employment by the government, including manufacturing, service, and research jobs such as these are hazardous to any market.

There are numerous costs that the market is troubled by as a result of government employment, such as the necessary taxation or inflation that must take place to compensate workers, and the poor quality that any good or service inevitably withers to given the lack of competition, but the most arduous in the case of the space program is the misallocation of skilled labor and intellectual capital.

Surely, whenever an individual sells or devotes their labor or research time to a particular job or study, that sale precludes all other sales of that same labor or time. In the market, this sale of labor or research and development time contributes to satisfying a demand, however this does not hold true for labor sold to the government.

Every individual employed by NASA, therefore, be it a skilled laborer such as a machinist or technician, or a scientist such as an astrophysicist or chemist, is contributing not to the satisfying of needs and wants in the market, but rather to some arbitrary state function. Thus, the mission to Mars indeed creates employment opportunity costs of capabilities that would otherwise be valuable to some demand in the market.

Another throng of opportunity costs of the Mars Exploration Program consists of those pertaining to the use of resources. Scarcity is a natural phenomena, a fact of life, and the free market is the most just and efficient way to alleviate the paucity of resources and allocate them to satisfy their most pressing needs. Obviously, individuals will order their own desires, and hence demands, for these resources according to what they believe to be in their own best interest. Through the natural forces of the market, the Invisible Hand, these varying, diverse needs and wants of individuals are satisfied.

However, once government is inserted into the equation along with the capricious programs politicians wish to implement, the allocation of already scarce resources is much distorted and individual demands in the market become more difficult and expensive to satisfy. As far as the Mars project is concerned, every fluid ounce of fossil fuel, kilowatt of electricity, and gram of plastic and metal that NASA uses is that much less of that resource that can satisfy a need or want in the market. Similar to the opportunity costs the Mars Exploration Program imposes on employment, the allocation of scarce resources likewise drives up the economic costs of the program.  

The final entry on the list of the most onerous costs imposed by NASA's Mars Exploration Program is the pollution that manufacturing, testing, and launching will inevitably create. Pollution is no different from any other trespassing or defilement of an individual's property. However, governments around the world have issued easements and rights to both themselves and private entities for processes that allegedly contribute to the "public good" since the beginning of the Industrial Revolution.

Such is the case with NASA and its current projects. Although individual property owners incur the greatest costs, given the molestation of their property, the effects can indeed be felt market-wide in any segment or industry that utilizes the now polluted resources. There is a score of costs associated with carrying out contaminating processes ranging from the burden imposed on taxpayers should the state be required to compensate property owners to the possible strangulation of supply of or devaluation of said property in the market. All in all, pollution raises the economic costs of the Mars Exploration Program, as it does with any activity within or without the market, beyond what any polluter, in this case NASA, would like others to know.

Day-in and day-out, individuals make sacrifices and forego benefits such that they can choose the alternatives that they believe will bring about the most satisfactory ends. These expenses and costs are weighed into every decision every individual makes. Unfortunately, these simple a priori facts about individual human action cannot be fully realized and weighed in the realm of collective action, especially in that of government action. The opportunity costs associated with the implementation of NASA's Mars Exploration Program, specifically those as a result of taxation and inflation, state-sponsored research and development, government employment, misallocation of resources, and pollution are perfect examples of the true burdens such government programs impose on the citizenry.

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Erich Mattei is an economics major at Loyola University of New Orleans. ehmattei@loyno.eduSee his archive.