The Space Reviewin association with SpaceNews

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A “Second Space Race” may be emerging between the US and China regarding economic benefits derived from space. (credit: SpaceX)

Reflecting core American values in the competition for the final economic frontier

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One motif of space futurism, from some of the earliest examples in the 1860s to the modern day, is the expected timeline for the developments and blossoming space culture that is envisioned. Virtually every one of those predictions has been, in retrospect, too aggressive and unrealized. Bruce Cahan and Dr. Mir Sadat, in “U.S. Space Policy for the New Space Age: Competing on the Final Frontier”, address the missing element that threw those predictions off: economics. While we may have the technology to do most, if not all, of the things described, it is the economic impetus drives civilizations to act and achieve.

This economic element is what makes the Second Space Race different than the first. The first was a race for achievement. The second is about economic benefits derived from space.

With the change of presidential administration prompting a reexamination of the America’s scientific and technological leadership to keep pace with global competitors in tomorrow’s economy, Cahan and Sadat provide the right strategy and policy for national investments, research and development, structures, infrastructures, and marketplace. In short, they argue that the United States is still in a position to retain strategic leadership in space and drawn on partner and allied spacefaring nations to leverage space activities for economic, environmental, human rights, and security benefits.

While space, especially Earth orbit, is profitable for some companies, that promise of return on investment disappears in cislunar space and beyond. This economic element is what makes the Second Space Race different than the first. The first was a race for achievement: the first to orbit the Earth, the first man in space, the first to the Moon and back. The second is about economic benefits derived from space: positioning systems, launch services, economic development of the cislunar and lunar zones, and space-based solar power. It is this, the promise of economic returns in cislunar and beyond, as well as a bolstering of economic benefit in Earth orbit, that is the goal of this new report.

Cahan and Sadat have captured the problem admirably from several perspectives and proposed direct, no-nonsense solutions to the current challenges to economic development of space, and do so in the finest tradition of the Air Force. Last century, as the United States was faced with a rising Germany, Charles Lindbergh wrote urgently to the new chief of the Army Air Force, Maj. Gen. Hap Arnold. “Germany is undoubtedly the most powerful nation in the world in military aviation, and her margin of leadership is increasing with each month that passes,” Lindbergh wrote. “In a number of fields the Germans are already ahead of us and they are rapidly cutting down whatever lead we now hold in many others.” In response to this alarming declaration, Hap Arnold embarked on a civil-military fusion, pulling in university professors and other “longhairs” in a move that alarmed the establishment military. Hap, when questioned, explained simply that he was “using their brains to help us develop gadgets and devices for our airplanes that are far too difficult for the air force engineers to develop themselves.” Like that moment many years ago, Cahan and Sadat emphasize the importance of joining government resources and direction to commercial capacity and scholarly intellectual prowess.

A China dominating space will not suddenly become generous; like a toxic leader getting promoted, it will simply magnify their current behavior that puts human rights at risk.

In their report, Cahan and Sadat have four key findings that certainly address the majority of the issue at hand. First, that the United States must have economic policies that will help it win in space. Second, that it must be an interagency and whole-of-government approach. Third, that space must be considered “critical infrastructure.” Fourth, that there must be a sense of urgency as the 2020s will prove pivotal in the Second Space Race. This urgency is driven by China, which is the major competitor to the United States across all economic concerns and projections of power. The two Space Races have many differences, but both of them are against the background of geopolitical competition: The first, by the Soviet Union, and this second by a rising authoritarian China.

On the whole, their report addresses the profound significance of space, including its economic aspects. They take consideration of all relevant sides of it, presenting and incorporating both governmental and commercial perspectives. If the economic concerns are resolved and cislunar and lunar zones become vibrant markets that are highly profitable for the United States and its allies, then US Space Command will almost certainly be tasked to protect them, like the US Navy is tasked to protect and defend the sea lanes of our oceans. While this would likely be good for the world in general, global adoption of American economic principles for space commerce is not a given, as China seeks to develop and control those same areas as the dominant partner. China has proven their different economic intentions: miring “allies” in debt, occupying disputed islands in the South China Sea and flouting UN court findings, and breaking multilateral agreements as soon as it suited them. A China dominating space will not suddenly become generous; like a toxic leader getting promoted, it will simply magnify their current behavior that puts human rights at risk.

How can the United States and its allies avoid a bleak future where adversaries’ economic and social principles and practices dominate in 2060 and beyond? The United States must project its transparent and rules-based market principles beyond the contested and congested terrestrial markets and into the cislunar and lunar zones. To do so beneficially and as an example for allies to join, 2020s space commerce must be an economic expansion, and one that benefits the nation both economically and internationally. To lead by our economic principles, we must make investments. If the United States wants to lead the space economy and have the soft power of doing so, “financial engineering” of space must be a priority, like the United States did in the 1960s, but updated with all the tools in our warehouse for funding space as critical infrastructure. China is pouring money into its space sector, and is actively seeking to steal complimentary technology to assist its continued growth.

This report outlines many recommendations aimed at achieving success through rule-based commercial market innovations, including better protection of American intellectual property, the formation of a space commodities exchange, and financing and subsidies for American space companies. China finances its emerging commercial companies, providing between $600 million and $900 million from 2014 to 2018, according to a recent report, because China takes their strategic investment in this area seriously. If the United States wants to retain its position in the international system, it needs to ensure it provides sufficient assistance to its critical economic elements, especially space. As the report says, “Terrestrial history… compelled federal financial engineering to support and grow and support the nation’s key industries.” The time has come to lead, and Cahan and Sadat sound the call for the United States to have the foresight to take the steps now to be dominant tomorrow.

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