Dear Friends,
It seems to me, the difference in results between Space X and NASA’s Space Launch System, (SLS) illustrates the difference between the socialist system and a free enterprise system. SLS is the epitome of socialists creating an expendable orbital rocket from space rated hardware, versus a private company creating a totally reusable orbital rocket from a patch of dirt. In three years Space X is knocking at the door to launching the Superheavy and Starship into a suborbital test trajectory. Meanwhile, after almost twenty years of development and 20 billion spent, the SLS has been delayed again. Milton Friedman famously asked a boss, why the men were all using shovels instead of one backhoe? The foreman said, it’s a make work project. Friedman replied, “Then why not give them spoons?”
During the early years of flight there were government attempts to push the envelope of aviation technology. Most were boondoggles, a few gave some insight, and they all burned money like a furnace. This is because, when an “innovator” has no skin in the game, they need not be pragmatic. Why save money here and there when plenty is to be had? Never use off the shelf, when custom is much better, supplies a local market with demand, and kickbacks flow like water in a river. They were real innovators, who had skin in the game, that dragged aviation along. Wright, Bleriot, etc… created human flight, not any government program. Post WWI aviation received a generous dose of government funds, to figure out more efficient ways to kill people, what government is best at.
When nuclear power plants were being built, the first ones were built in less time and with fewer cost overruns than later plants. Today the cost of a new nuclear plant is prohibitive. MIT claims it is because they need to be better engineered to prevent “unanticipated delays.” Which is a Pollyannish attitude. Back in the day, there were rumors that the workers who built the Pilgrim nuclear plant worried it would be turned on. Its operating history suggests they knew what they were talking about. In the early years of nuclear plants, before the system became socialized by government intrusion, companies built a nuclear plant from the ground up in no time, today, setting a stake is a billion dollar affair. Because building a nuke plant is like milking a cow, you milk it for all it can produce, then sell it as a downer.
No matter how wise, smart and foresighted a central planner, and they are anything but that, the incentives to efficient implementation are simply not there. Making socialism the worst possible means of advancing anything close to innovation. When workers show up, and do nothing all day, progress is not rapid but costs are high. Bureaucracy, whether corporate or government, has the same nature. When you are the one paying the tab, you make sure they are working or unemployed. Boeing used to be an innovative company, now it is a milking parlor. Look at their recent “wins,” the Starliner, which still hasn’t made it to the ISS, SLS, and the 737. Spectacular successes, in that they milked the public for billions and delivered, nothing… yet. There is still hope though, all it will cost is a few billion more.
There is a saying, give two people the same assignment, one comes back with a valid reason why they didn’t get it done, and the other comes back after having done it… A capitalist will ask the one who got it done to do the next thing, while a socialist will ask the one who gave the best excuse why they didn’t. In both cases, they are acting in their self interests, the difference is the incentives. People will act in their self interests, to advance a project or undermine it, depending on the incentive structure. The incentive structure, as evidenced pragmatically by the results of socialism, is pernicious, counterproductive and egoistic. While the incentive structure of capitalism, is pragmatism, efficiency and customer oriented. Which is why SLS still hasn’t flown and Starship is about to.
Sincerely,
John Pepin
