Posted by: spacewritinguy | March 19, 2008

Conservatives in Space – Chapter 4

Policies Needed to Grow the Space Economy

Bottom Line: Government needs to support policies that foster capitalism and lay the groundwork for private development in space.

Cleaning house at NASA and Congress is only one part of growing the space economy. There are also things that must be done outside the United States and, eventually, above the Earth to start the new wheels turning. As I stated at the beginning of the last chapter, five basic ingredients are needed to ensure a growing, healthy economy: the rule of law, private property rights, low taxes, reduced regulations, and free trade. In this chapter, I will explain how our elected officials and, perhaps, the courts can work internationally to develop a new legal structure that ensures the expansion of freedom in space.

Private Property Rights in Space – To Own or Not to Own

While sending people into orbit, to the Moon, or on to Mars might seem like a straightforward matter politically, several treaties would actually block the way if we wanted to do anything more than plant “flags and footprints.” The bad news is that most of these treaties were signed under the authority of the United Nations, which isn’t friendly to American interests; the good news is that the other primary signatory of those treaties, the Soviet Union, no longer exists.

Present space treaties, such as the 1967 Outer Space Treaty and the 1979 Moon Treaty, were written to prevent nations from claiming sovereignty over celestial bodies. These treaties assert that space is the “Common heritage of mankind,” essentially making them community property, owned by everybody and nobody. However, I agree with the Citizens Advisory Council for a National Space Policy, which noted in a report to President Reagan that such “common heritage” practices have chilled investment in space activities and prevented the establishment of private property rights in space.

Private property is necessary to establishing ownership or at least limited control of territory (on the Moon, Mars, or an asteroid) for building factories or homes; mining rights; materials for sale or salvage; or intellectual property to protect any new technique or machine developed in space. Without the ability to claim these rights (under a system of law guaranteed to protect them), individuals and corporations could not be certain that anything they built would remain theirs.

The Moon Treaty was so blatant in its communal view of space that it decreed any profits made from outer space products had to be shared with the rest of the world. It also required any nation launching a vehicle to or from the Moon to report that activity to the U.N. Secretary General. The 1967 Outer Space Treaty specified only that nations could not claim an extraterrestrial body as territory, thus leaving the unspoken loophole that ownership by private individuals or corporations was possible. The future well-being of our world might hang on such semantic or legal details.

There are a couple of different approaches the United States could take to help encourage private property in space. One tactic, while it would not make us popular in the international community, has some precedence: we could simply drop out of the Outer Space Treaty, just as we dropped out of the 1972 Anti-Ballistic Missile [ABM] Treaty in 2002. And we outright refused to ratify the 1979 Moon Treaty, just as the Clinton and Bush administrations have done with the Kyoto Treaty.

There are a couple of problems with this approach. First, while it might feel good to stick a finger in the eye of the U.N., we might find ourselves blocked on some Earth-related matter later as a consequence. Ignoring international treaties signed by some of our allies might also hurt our efforts on other matters (e.g. the War on Terror). However, on the other hand, we suffered few consequences when we dropped out of the ABM Treaty, and the Kyoto Treaty itself is facing challenges of its own, as few signatories are able to comply with it.

Another way to overcome the problem of the anti-private property provisions of these space treaties is to simply form a new government exclusively for space. First proposed by United Societies in Space, a think tank for lawyers studying space law, the United States could join with other spacefaring nations to form a “meta-state,” essentially a caretaker government that would oversee civil, commercial, and criminal law for all activities in near-Earth space.

Such a state, based on English and U.S. Common Laws, could be a combination landlord, court system, and law enforcement agency, with the U.S. Air Force or others serving as the “beat cops,” if need be, to enforce the peace. Operating under the traditions and precedents of American and British common law, which we have inherited over 400 years, the meta-state would be the first example of “nation building” in space. Another example United Societies in Space suggested was the “port authority” model, such as the Port Authority of New York.

Or, finally, we could simply go it alone and let other nations catch up and settle as they see fit.

Private Property, Part II: Insuring Investments

The 1972 Liability Convention requires national governments to be responsible for any damage caused by spacecraft launched from their territory. Using a current analogy, if a Boeing 777 crashes in another country, the United States taxpayers would have to pick up the tab for any damage caused by the crash–not Boeing, the airline, or their insurers. Such taxpayer-funded liability inhibits the growth of a private insurance industry, which in turn inhibits investment in the private space industry. Space insurance costs, accompanied by “informed consent” laws for passengers aboard space vessels, would go far in making space insurance more rational and less risky.

And one place where the government could provide value-added services (without excess regulation) would be by providing “space traffic control” rules of the road, much as air traffic controls exist today–though hopefully with a more technologically advanced system than we have now.

Burt Rutan has suggested that the private sector needs to be more effective at explaining to Washington what laws it needs to pass before Congress or civil-service bureaucrats (many of whom are unlikely to be educated in the realities of space technology) make the laws for us. He is absolutely right.

The private sector has already formed the Personal Spaceflight Federation, a professional group akin the ISO or ANSI, which could set standards for air quality, crew and passenger safety, and control labeling in future spacefaring craft. By putting these rules into effect, PSF simultaneously heads off government regulation and provides a “seal of approval” to its members’ activities. All of these actions help reduce insurance costs and increase safety and reliability by ensuring consistency. The more the private sector does to set its own standards, the less chance the government will set those standards for them.

Tax Incentives for Space Settlement

Assuming it’s technically feasible to build colonies on the Moon or Mars, where will the money come from? The Citizen’s Advisory Council on National Space Policy offered a solution back in 1989: treat space as an economically underdeveloped area, much like an “enterprise zone” in the U.S., and give it tax-free status for 20 years.

Given how difficult it is to sell tax cuts on Earth, this might sound a bit far-fetched. However, just getting the space frontier established will be expensive enough. By making profits from products and services made and sold in space tax-free, we will ensure that this new economy has a chance to grow. Tax-free status will generate a lot of activity, interest, and people. The more people who are up in space earning salaries, the less likely they will be to accept high taxes when the moratorium ends.

Another way to manipulate the tax code (assuming we don’t pass a flat tax in the next 20 years) would be to offer tax incentives to non-profit organizations seeking to fund private space settlements, whether they are in space, on the Moon, or on Mars. Peter Diamandis, chairman of the X-Prize Foundation, has suggested raising $3 billion privately by getting 10,000 people to contribute $100,000 and 1,000 people to contribute $1 million each. This fund, properly managed, would grow at 15-17% per year, effectively doubling every five years. Such a fund, when matured, could fund two or more human Mars missions using the “Mars Direct” architecture. There would then have to be a competition or selection process of some kind to decide who among these 11,000 people would be selected to go on the trip.

Once selected and sent off to the Red Planet, these fortunate individuals (say, 12 per mission) would become citizens of Mars, as the trip would be one-way. Unlike the United Kingdom of the 18th or 19th centuries, it seems unlikely that our government would fund a one-way trip, even for willing immigrants. Again, private motivations have a better chance of succeeding than government simply because individuals are willing to take more risks.


  1. the idea,investment in space is very intresting and innovative.this gives brief introduction about the private property in space.this also tells us somethig about the tax incentives for space setlements.

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