A World Without NASA

October 4, 2007 4:24 AM by Tim Swanson | Other posts by Tim Swanson | Comments (3)

Perhaps my favorite myth of NASA is that it is directly responsible for creating and designing a slew of whiz-bang gadgets, including the cell phone.

Wrong, Martin Cooper did, while working for Motorola in 1973. And while this and other myths abound it misses the bigger picture.

What would modern life be without NASA? Is it possible?

It is impossible to predict the opportunity costs that were foregone with the redistribution of billions of dollars confiscated from taxpayers. Not only did individuals have less money to invest in alternative methods of space-based aviation and research, but entrepreneurs had to compete against a well-financed monopoly.

It is this same monopoly that diverted and devoured natural resources. This has the unseen effect of raising the costs of these scarce goods and services, which again, throws yet another artificial kink in the allocation process (it is the same phenomenon that creates agflation due to ethanol subsidies).

With these regulatory and institutional hurdles in place, why is it unfathomable to believe that the private sector could not have produced the same productive services that NASA is credited for spearheading? Does the utility of a good diminish or disappear because the private market crafted it instead?

If anything, the profit incentive would arguably have enticed private firms into this area. It is this reason (and others like "knowledge") that NASA and every government agency will always be inferior entrepreneurs, they have no incentive not to blow up their customers -- their revenue stream is guaranteed without the need to satisfy customer desires.

And this is one of the many points that Declan McCullagh tackles in a controversial piece at CNet -- controversial for two reasons.

First, based on the comments section, it would appear that the fallacious NASA-is-god myth continues to reside in the minds of geeks (see these Digg comments as well). The other are the results from the three-choice poll connected to his piece, one of which advocates axing the "bureaucratic behemoth."

You'll never guess which one is the least popular.

See also: How much should companies spend on research and development?