Capitalism Lost: America goes broke because we forgot how to be capitalists

Summary:  To recapture our greatness we must first remember what we did right to become great.  Such as heavy investment in America by the government.  Instead we spent on projects like Apollo (expensive, but no gain) and our mad unprofitable empire.  It’s not too late to get back on the smart path.

{Apollo} had accomplished its original purpose, and the return {to the moon} was not seen as so valuable to be worth that kind of money by the political system. …. other endeavors were different. For example, the opening up of the New World.  There clearly was once people got over here, a reason to come back.
— Glynn S. Lunney (NASA flight engineer for the Apollo program), quoted in Before This Decade Is Out, edited by Glen E. Seanson (2002)

The great tragedy of the effort was that the best of American technology and billions of American dollars were devoted to a project of minuscule benefit to anyone. One can speculate endlessly on what might have happened had all that effort and money been devoted to an earthly reject of more obvious benefit to the world, such as medical research or the development of alternative energy sources. … Americans {went to the moon} but they arrived at parties to celebrate the lunar landing in Toyotas, Datsuns, Volkswagens, and Renaults.
Dark Side of the Moon – The Magnificent Madness of the American Lunar Quest by Gerald J. Degroot (2006)

Our reign as a superpower after WWII resulted from our peers’ devastation and slow rebuilding.  The combination of technology developed from 1928 – 1945 and little competition gave America an incredible surge of income. Properly invested it could have boosted our economy into the 21st century.  That’s the pattern of history.  Wise accumulation and investment of economic surpluses provide the foundation for national greatness, just as much for the irrigation systems of ancient Mesopotamia as today.

Unfortunately we decided instead to emulate ancient Egypt, investing in projects of national greatness generating little value:  NASA and DoD.  Apollo was our largest single civilian investment program since 1960, an operational success which produced almost no return in terms of national income or productivity.

Even Apollo is dwarfed by our primary vanity project:  the Department of Defense.  By comparison the Pharaohs look like star hedge fund managers (the pyramids still generate income for Egypt).  Even after the collapse of the Soviet Union due to its incompetent management (not the arms race or Reagan’s Star Wars), we continued to plow America’s capital surplus in an insanely large military.

‘What are you saving this superb military for if we can’t use it?”
— SecState Albright to Colin Powell (chairman of the Joint Chiefs) about Bosnia, in her book Madam Secretary (2003)

And so we did use it.  Ever more frequent interventions around the world, in effect building a mad unprofitable empire.  Much of which consisted of weak tyrannical satraps hated by their people for some combination of religious and ethnic animosity, corruption, and their reliance on support of the USA.

The savings of a great nation each year gets flushed away to little or no purpose.  As we grow weaker, we channel what little savings we have (or can borrow) into the military while our national infrastructure rots away.  Anyone who travels in China and America sees the result (for an example see Two pictures show an important difference between China and America).  Other nations build supertrains and fiber-to-the-home; we build F-22s and F-35s (when they’ve eventually working, they’ll be useful if Martians attack — but not useful in the 4GWs we actually fight).

There is a system for rationally allocating capital, whether done by the private or public sector.  It’s called capitalism.  Presidents from Jackson to Eisenhower understood the important of government infrastructure to boost national productivity (for examples see  “The Myth of Rugged American Individualism“, Charles A. Beard, Harper’s, December 1931).  We understood it, but forgot.

It’s not too late to remember this lost wisdom.  We have millions of unemployed workers in construction and manufacturing industries.  The government can borrow at record low real long-term interest rates.  We have a nation of infrastructure that must be rebuilt eventually.  Why not now?

This was what many people recommended early in this downturn (me too; see Stabilize the economy, 7 October 2008). It’s not too late to start.

The 21st century lies ahead of us.  Let’s build an America able to compete in it.

Spend now, while the economy remains depressed; save later, once it has recovered. How hard is that to understand?  Very hard, if the current state of political debate is any indication. All around the world, politicians seem determined to do the reverse. They’re eager to shortchange the economy when it needs help, even as they balk at dealing with long-run budget problems.

— “Now and Later“, Paul Krugman, op-ed in the New York Times, 20 June 2010

For more information about fiscal policy

This was bipartisan thinking before the GOP adopted Lenin’s insight that “the worse, the better”.  For details see Economists discuss the impact of the stimulus on our recession, 6 October 2009.

For a guide see Everything you need to know about government stimulus programs (read this – it’s about your money), 30 January 2009

Martians beware!

61 thoughts on “Capitalism Lost: America goes broke because we forgot how to be capitalists”

  1. Duncan Kinder

    While our Apollo project did, in retrospect, turn out to be a dog, I read too much Robert Heinlein in Junior High to concur that it was a vanity project. It was instead an effort to open up a new frontier, as a continuation of a tradition that dates back to Daniel Boone – if not to Miles Standish. However, the implosion of the NASA / Apollo project – with the resulting death of this frontiersman tradition – is the poorly understood root cause of many of the social ills that have plagued the past generation.

    As for the Pentagon, there was a minor problem known as the Soviet Union that prevents my concurring that the early post-WWII DOD spending was vanity. After its collapse, however, the American military should have demobilized. Such demobilization is part of a tradition that actually dates to Cromwell, when it was determined that a large standing military was inherently inconsistent with a representative government. Such had been the American tradition for every war up to WWII. The failure over the past 20 odd years has actually been profoundly unAmerican for all the “patriotism” mouthed by the militarists.

    Finally, the United States has failed to address the energy crisis in any serious matter. I note that our stalwart Republicans apparently want to force the Pentagon to consume fossil fuels.

    1. (1) “As for the Pentagon, there was a minor problem known as the Soviet Union that prevents my concurring that the early post-WWII DOD spending was vanity.”

      I suggest reading about the bomber gap and the missile gap. And the Team B exercise which drove Reagan-era defense spending — despite its analysis being totally bogus. While there was a necessary element of defense spending (there is always some necessary level), we went far beyond that. In fact, Apollo was funded as a cold war defense project.

      (2) “I read too much Robert Heinlein in Junior High to concur that it was a vanity project.”

      I said it was a project that produced little of value (DoD was the vanity project). And if you’re citing sci fi as justification for the vast sums spent on Apollo, then there’s little more to say. Why not cite Aesop’s Fables?

      Also, I strongly suggest you read Dark Side of the Moon – The Magnificent Madness of the American Lunar Quest by Gerald J. Degroot (2006) to see the real story of Apollo. You might see it differently afterwards.

      (3) “Finally, the United States has failed to address the energy crisis in any serious matter.”

      We’re not made of money. DoD sucked up much of the available funding; Reagan’s tax cuts blasted away the rest.

  2. Haven’t you seen the latest Avengers movie? The martians are attacking. That’s doubtless why we need the F-35, the hafnium bomb, and other wacky gizmos like the Osprey tilt-rotor airplane, the Boeing YAL-1 airborne test laser death ray, et al.

    Duncan Kinder remarks that “After [the USSR’s] collapse, however, the American military should have demobilized,” and indeed it should have done — but this leaves out of the picture the remarkably important fact that in 1950 America embarked upon a deliberate policy of “military Keynesianism” courtesy of NSC 68.

    Once military Keyesianism became our official industrial policy, it bound America’s economy intimately to the military-industrial complex in ways no one foresaw (except perhaps Eisenhower, whose warning speech fell on deaf ears). Today, R&D is so massively funded in America by our military that demobilizing would devastate U.S. industrial research. So many American jobs now depend on military contracting + active military + reserves that demobilizing would raise an already alarmingly high unemployment rate by (at a rough guess) at least 2 percentage points (according to economist Robert Reich), possibly more, just going by back-of-the-envelope known fiscal multiplier values.

    The wrenching economy-wide multidecade transition from a militarized economy to civilian spending would create enormous hardship in the short term (well, if you consider a generation to be the “short term”!). I’m sure every member of congress is well aware of this, as is any president who wants to get re-elected. In some sense, a transition to a civilian economy from our current mixed economic model of military Keyesianism presents the same dilemma as our transition from petroleum/coal/natural gas energy to renewables. In both cases the end result is desirable, but the incredible economic disruptions and the consequent massive job losses and huge rise in long-term unemployment, and the economic devastation of whole regions of the country, make it politicaly very hard to put these wise policies into practice.

    It’s much the same situation as with a chronic heroin addict. The addict knows that getting off the drug will help in the long term, but the extreme pain of withdrawal makes the process unbearable.

    I would argue, also, that contra Duncan Kinder’s claim that “the United States has failed to address the energy crisis in any serious manner,” the U.S. has indeed addressed the energy crisis — we did it by sending massive numbers of troops into the middle east repeatedly. The problem is that this method of addressing the energy crisis worked for a while — a good long while, actually — but now that we’re facing Peak Oil, it no longer works. No matter how formidable our weaponry, that can’t force the Saudis to pump more oil if they’ve hit the limit.

    1. Re: military Keynesianism: Good point. I obviously was covering a lot of ground with a few words.
      Re US as heroin addict: The USA needs to enroll in a 12-step program badly.

  3. Can we at least partially cost-justify the Apollo missions indirectly through spin-off technologies? I believe the computer industry gain quite a lot of free research, for example. It has been said that the Star Wars program paid for itself by revolutionizing laser technology.

    1. No, the spin-offs do not remotely justify the cost of the program. Yes, they created valued, but they are in total (and usually grossly exaggerated) not even remotely proportional to the cost. This is in effect another of the “military keynesian” justifications. We have little to show for the money, but we created jobs!

      As for “star wars” and lasers, can you give a citation for the “revolutionizing laser technology”? There were advances, such as the adaptive tech now used to improve ground-based telescope resolution. But again, nothing proportional to the cost — and esp so compared to alternative uses.

    2. the Star Wars program paid for itself by revolutionizing laser technology.

      Not really. What had a bigger effect (by far) on laser technology was the drive for inexpensive laser-disc readers with different frequencies (a blue-spectrum laser was a big big deal!) and fiber-optic networking. Also, microprocessor manufacturing helped push photoptics in all kinds of useful directions. Star Wars was trying to make hyper-powerful lasers in spite of the fact that physicists know that as the power of the laser increases, so does its tendency to disperse. What I think you meant to say was “a lot of money was spent on Star Wars, confirming what physicists already knew.”

      The computers used in the Apollo program were practically nonexistent and were pathetic things that have nothing to do with computing nowadays. The big innovations in the 1970s and 1980s were supercomputers for simulating nuclear explosions and cracking encryption. NASA’s computing has never been state-of-the-art; they always pushed the envelope of doing what they could with what they had, while the bomb-makers and spies pushed hard for what did not exist.

  4. I’ve been looking at the book “The Dark Side of the Moon” and on a superficial level, it’s pretty awful. There are quite a number of little factual errors that can be easily checked that make me wonder about the validity of the rest of the book.

    1. You could throw away the entire text and just read the quotes and the message would be identical. It’s like debating if Germany won WWII.

      Citing fantasy (including its sci fi branch) as contra-evidence IMO re-enforces the point that Apollo had a low return on investment. Esp in comparison with alternative uses of the money.

      1. A fun story, but substantially incorrect on several levels.

        (a) While DARPA funded early work on what became the Internet, and several teams in the US and Europe were working on such systems. It was “in the air” and would have come anyway. For details see the Wikipedia entry on History of the Internet. The first large-scale internet-like system (ie, videotext) was Minitel in France, started in 1982 (see Wikipedia). It had 9 million terminals (including PCs) and 25 million users.

        (b) It’s daft to say that the development of the internet justified the bomber gap, the missile gap, the legions of useless (often malfunctioning) weapons systems, and the foreign wars. Consider the opportunity cost if a fraction of that funding had been rationally invested in infrastructure, civilian F&D, or basic science.

      1. I don’t care about such trivial as spelling and html.

        You may have found it irresistable, but it was incorrect. Although understandable. Americans are soaked over their eyes in a broth of propaganda, so loss of contact with reality is almost unavoidable.

    2. To your pair of points:
      (a) I agree completely; the real point of my post was to point out how Pluto could have accessed a copy of Dark Side of the Moon” instantly (though I don’t know he actually did so, of course).
      (b) I agree again, but plead that I never said this, and didn’t mean to imply Apollo and ARPANET were related beyond being funded by the same government.
      I’ll continue to season my serving of propaganda broth with this blog, and see if my contact with reality is improved. In any case, I enjoy the service you generously provide, and thank you for it.

  5. If all anybody cared about was counting beans nobody would ever do anything great. I bet when the first caveman took down the first wooly mammoth there were a bunch of his “sensible” cousins sitting around saying “yeah, you look pretty cool holding your bloody spear, but was it really worth it? Don’t you know that beans have a much higher return per calorie invested? I mean, two of your brothers got gored to death by the first mammoth you went after, and now Ed looks like he’ll be crippled for life. Do you have any idea how many beans you’d have right now if you’d taken all that energy you spent freezing out on the tundra and put it into planting beans? There’s so much unused arable land you could use. Lots of beans! Enough beans for you and your neighbors and your descendants for five generations! A beanucopia! What do you have now? Some grissly meat that will run out after a couple of weeks.”

    I think it’s completely pointless to wring our hands about what we might have done with all that money if we’d decided to trash to Apollo program. At least we didn’t all get carpal tunnel and myopia from counting all our flipping beans. We went to the moon, it was awesome, it had no long-term negative repercussions, enough said. Now we can focus on other priorities as we slip into the decline that is the unavoidable fate of all nations.

    1. Matt gives us the perfect formula for national decline. It both guarantees it and provides a basis for lazy acceptance.

      (1) Learn nothing from past mistakes. Indeed exhult in them! We’re great!

      (2) Give up. “Decline is the unavoidable fate of all nations”, even if our moment of brightness was a few decades — compared to the centuries of Rome and the UK.

    2. Give up? Hardly! But decline is inevitable, especially when our dominance was (as all dominance always is) based on temporary circumstances, as you have repeatedly emphasized. One thing that will surely not be profitable in our new reality or any reality is second-guessing our greatest triumphs. Timidity is also a symptom of decay. America did not get great by being p*ssies, and we can’t save ourselves with excessive self-doubt.

      1. (1) “t decline is inevitable, especially when our dominance was (as all dominance always is) based on temporary circumstances”

        Matt confuses two very different concepts. Our role as global hegemon, which resulted from special circumstances and will inevitably end. And national decline, which is a change in our economic and social circumstances either in absolute terms or relative to our peers. That is in no way inevitable. For deails see the many posts on the FM website that discuss this, such as Is America’s decline inevitable? No.

        (2) “second-guessing our greatest triumphs”

        There is no way to resolve these debates except wait for the judgement of history. I believe we squandered the money spent on Apollo, with which we could have done great things. We didn’t even open space as the next frontier. Apollo was a damp squib. Eventually somebody will return to space, probably with new technology and new goals. Historians will look at them (hopefully Americans) as the pioneers. Being first gets a footnote if the advance goes nowhere (eg, Admiral Zheng He and his fantastic explorations; see Wikipedia).

        These are harsh truths. But greatness is not soaking our heads in prideful delusions, but striving and learning. Cold evaluation of “lessons learned” is essential if we’re to self-correct our course. Otherwise only horrific shocks will tell us that we’ve gone down the wrong path.

        “Success is not final, failure is not fatal: it is the courage to continue that counts.”
        — Winston Churchill

    3. Flying Bathtub? I have a childhood memory of being told that the USAF had a viable, small, economic reentry vehicle that was tested and ready for use by two pilots. It could easily launch on existing military boosters, probably same or similar as used for ICBMs (?) $50,000 prototype (Wikipedia) When wing-dropped from a B52, and equipped with an existing small “experimental” rocket engine, it reached altitudes of 80,000+ feet (Wikipedia).

      1. And what would we have done with a module capable of re-entry? It was cancelled b/ it had no use after Apollo.

        The Shuttle was designed as the next step, a reliable space transportation system (freight & people) less expensive than one-shot rockets. It was premature technology, failing its most important design specs — cheap and reliable.

  6. To second FM’s remarks about the fallacy of “spin-off” claims:

    [1] The computer technology oft attributed as a spin-off of the NASA space missions actually predates NASA, and was originally developed for the Minuteman missile system. This is interesting, so worth a little detail. At the time, the Soviets built enormous multimegaton bombs atop large ICBMs. The idea was that the Soviet missiles didn’t need to be very accurate since the warheads were so large. American responded by developed digital guidance computers (at the time, the Soviet ballistic missile guidance computers were analog computers!) and miniaturizing ’em so they could be installed in multiple independently targeted much smaller warheads. With multiple highly accurate warheads in each missile, American ICBMs didn’t need to use multimegaton warheads, and they could still take out so many of the Soviet missile silos that a much smaller number of Minuteman missiles could serve as an effective deterrent.

    [2] By far the spinoffs with the biggest impact on everyday life, like the interstate highway system, may have been justified on military grounds (ostensiby the interstate highway system was built to allow U.S. tanks to rapidly traverse long distances in case of a Soviet invasion), but in reality that was a smokescreen to justify the introduction of large infrastructure projects that everyone knew we needed, but which required some political cover for the spending in the 1950s. “This expensive project will benefit our economy 20 years from now” wasn’t enough to justify large projects like the interstate highway system, but “it will keep us safe from Soviet invasions” was.

    [3] High-power lasers use an entirely different technology from low-power lasers. High-power lasers are chemical-based, while low-power lasers of the kind used now in DVD players, CD burners, and so on, are LED-based, using semiconductors. As a result, it’s completely disingenuous to claim that the high-power lasers developed for military and space use had any influence on the developed of the low-power semiconductor devices. Most of the rapid development in American semiconductors occurred in the 1950s as part of the push to miniaturize digital guidance computers in U.S. ICBMS. Integrated circuits were first developed in 1957 and had only military applications: without military cost-plus contracts for ICBMs and nuclear submarine inertial guidance computers, integrated circuits would have found no market in Americ ain the 1950s and would not have been developed as a viable technology. In fact, as late as 1964, silicon transistors languished without any real commercial use (they were sold almost exclusively to the military) until the founder of SONY in Japan used silicon transistors to build small cheap radios.

    [4] NASA is often cited as crucial in the development of robotics, but in reality the Soviets were the ones who developed advanced robotics, particularly in the 1968 Lunakhod project. The American space program made no use of such sophisticated remote-controlled robots until the Mars Pathfinder mission 30 years later.

    1. We can play these games all day, assigning specific point causes and sweeping long term effects but I think this is not informative or even accurate as none of these advancements occurred in a vacuum. The vast amount of money poured into Apollo was used to fund a lot of R&D and none of that new knowledge and technology gained was wasted. Its almost impossible to really account for all the benefits to science and engineering that were accrued. If any space program was a waste it would have to be the Space Shuttle whose operational costs suffocated funding for any new R&D and set back space system technology for decades. Only now with the shuttle gone and some explicit handing off is private industry picking up the ball and developing useful new technology and generating real value.

    2. Most of the advances in computing were motivated by nuclear weapons development, not space travel or missile control systems. Alan Turing was working on encryption when he was thinking about computers, but Von Neumann was working for the Manhattan Project. Supercomputing was bomb-making until the mid 1980s – now it’s surveillance and code-breaking.

  7. So how else you going to employ all those persons currently in the military and in support services ? How you going to keep happy all those clever-techs you educated ? It doesnt take many personel , nowadays , to build a bridge, a railroad ;there is some market for high tech gadgets , but only really in the mobile telephone market . So without the Military or Space projects , you leave these people on the dole ? Employ them litter picking or walking in concentric circles ? Have a Cultural Revolution and send them hoeing cabbages ? Make cars and scrap them , build houses and pull them down ?

    1. This addresses an important point (not going down the Apollo rabbit hole). I think there would be a superior outcome if the military was significantly downsized, we should be able to get rid of the majority of our military/industrial/security complex and all the people put out of work by that were paid unemployment benefits. That would probably be cheaper, even in the short term, instead of finding new ways to keep the everyone busy by military adventure. I’m sure we could find non-military tasks at home to keep all the unemployed busy, Fabius mentioned FTTH (a massive but necessary undertaking) and high-speed rail, even if some of it is make-work projects ala the CCCs. At the end of the day we should be able to get some capital improvements that will pay off over time using the labor and credit surplus we currently enjoy, there is no benefit to paying people to sit at home idly sending out resumes that will never get a response.

    2. I often wonder if people making comments like annanic read the post? How can we get them to reply to actual quotes, so their comment has some connection, however tiny, with the post?

      “So how else you going to employ all those persons currently in the military and in support services? … So without the Military or Space projects , you leave these people on the dole?”

      (1) We don’t need to worry about what to do with the people we fire from the Apollo program. Almost all are retired since itt ended 40 years ago in 1972. The remaining tiny NASA does useful work, and is less than 0.5% of federal spending (at its 1966 peak NASA spent 4.4% of GDP

      (2) Who proposed firing “all those persons currently in the military”. Nothing in this post said that, or anything remotely like that.

    3. Annanic asks: “So how else you going to employ all those persons currently in the military and in support services?”

      This is a problem we’re going to face anyway with the enormous growth of robotics and automation in the economy, so we might as well face it now rather than deny or ignore it and put it off until later.

      Marshall Brain and Martin Ford have written extensively about this. Check out Ford’s book The Lights In the Tunnel. And then take a gander at this chart showing that for the first time, the majority of unemployed Americans attended college.

    4. The State of California’s Franchise Tax Board has been running a “paperless office” system for several years, and it works fine. According to the Cal-FTB’s CIO, they have been required to cost-justify the system on an annual basis (personal conversation after a public forum).

      The Forum’s purpose was to explore increased efficiencies in public university systems. I also saw a $1 million RFP for consulting, planning, etc., on setting up an “Online State University”. The public employee unions are alarmed.

  8. It is absurd to characterize one of the most magnificent achievements in human history as a boondoggle. “One small step for a man, one giant leap for mankind.” FM places no value on the cultural or historical significance of placing men on another planetary body. It is still ia source of inspiration for people today. Exploring the “final frontier” for its own sake was worth it. Exploring the unknown is a worthy endeavor for humanity. Just thinkning about it gives me chills.

    The FM website is about “how to reignite the spirit of a nation grown cold.” I would submit that Apollo, in the midst of Vietnman and racial and social unrest, brought people together and ignited that spirit.

    A few choice quotes from legacy heading:

    “An estimated one-fifth of the population of the world watched the live transmission of the first Apollo moonwalk.” You cannot buy that kind of good press.

    “The Apollo program, specifically the lunar landings, has been called the greatest technological achievement in human history.”

    “Computer-controlled machining (CNC) was pioneered in fabricating Apollo structural components.”

    “One legacy of the Apollo program is the now-common view of Earth as a fragile, small planet, captured in photographs taken by the astronauts during the lunar missions. The most famous, taken by the Apollo 17 astronauts, is The Blue Marble (right). These photographs have also motivated some people toward environmentalism.”

    “As I stand out here in the wonders of the unknown at Hadley, I sort of realize there’s a fundamental truth to our nature, Man must explore . . . and this is exploration at its greatest.”

    — Dave Scott, Commander Apollo 15, upon becoming the 7th man to walk on the Moon, 31 July 1971.

    Not everything can be measured in dollars and cents or nuts and bolts.

    The sad thing is that such feats are not being exceeded, or even replicated, today.

    1. It is absurd to characterize one of the most magnificent achievements in human history as a boondoggle.

      No, it’s not. As we’ve learned from the Mars rovers and the Galileo probe and the Hubble, we can learn a great deal without hauling primates-in-a-can out of Earth orbit. Going to the moon and back got us a fantastic collection of extremely expensive rocks and some awesome photographs but it was showmanship and a great deal of R&D work and money down the sink. I do think there was a lot of interesting collateral inventions – inventions that would have also been invented if we’d had a robotic space program.

      What we’re learning is that, for all intents and purposes, the “final frontier” is not worth exploring. We can see around us to a distance of everything that might possibly affect us, thanks to the Hubble – and, well, there’s noplace we can send a primate-in-a-can to that’s worth sending. Unless the idea was to bankrupt the planet by giving a few humans the most expensive “burial at sea” ever. Unless the physics boffins discover “hyperspace” (for which there is absolutely no evidence, not even a theoretical path to which is plausible…) “we” aren’t going anywhere outside of our solar system. Ever. Final frontier? Colonize the oort cloud, maybe. Evolve, then die out as a species when our sun goes into its expansion stage. The “final frontier” is time not space.

    2. I disagree. It is worth it just to do it. Why play a dangerous sport, study astronomy, go hunting, climb a mountain, or explore the deep sea or antartica? It is worth it to overcome the challenge, and to learn and know, and thereby to enrich the human experience. In extending ourselves to do these difficult things, we may learn things of benefit which were not expected.

      ““we” aren’t going anywhere outside of our solar system. Ever.” Pretty definitive statement. I am sure that you can predict the future. In any event, the solar system is a big place.

      1. “Why play a dangerous sport, study astronomy, go hunting, climb a mountain, or explore the deep sea or antartica? ”

        That’s a daft example. Those fun activities do not cost a significant fraction of GDP (aprox 4.4% peak in 1966). People would consider you insane to propose spending such sums on hunting or moutain climbing.

    3. Moreover, you ignore other types of value. Why does humanity laud Lindburgh for flying across the Atlantic, Columbus for sailing to America, Magellan for circumnavigation, Edmund Hillary for climbing everest? There is value in exploration and doing something new that has never been done before.

      1. “Columbus for sailing to America, Magellan for circumnavigation”

        Please read the post. The exploration of the world was done for pure commercial gain, and quickly proved vastly profitable.

    4. If I understand you correctly, then that’s exactly the point. Magellan’s voyage was spectacularly unprofitable. And it was probably an inefficient and completely unnecessary step in the exploration of global sea routes– why get stuck on sailing around the whole world, when you could just travel to known, profitable ports, and gradually work your way outward as your knowledge gradually advances? This incremental approach would have been more sensible, and any “spin-offs” in knowledge gained by Magellan’s expedition are probably greatly exagerrated.

      But if there weren’t any bold and reckless people like Magellan around, it’s hard to see how anything would have gotten explored at all.

      1. Matt,

        Your comment is completely wrong and a gross example of topic drift Magellan’s circumnavigation of the world was part of the European’s nations race to explore and colonize the world. This produced some of the most profitable Empires in human history. Your wild guesses about alternative paths of world conquest is irrelevant to the debate about the return to America from Apollo, as is your comment about bold and reckless people.

        Please stay on topic.

    5. With all due respect, I don’t think it’s off topic at all. Magellan was first, he’s famous, but his voyage made no commercial sense. There was and is no inherent commercial value in circumnavigation. We can say almost definitely that there were less costly ways to get whatever small amount of useful information was gained by his foolhardy expedition.

      Furthermore, the European nations engaged in maritime expansion were not politically or financially unified, even internally. Some investors probably lost a fortune betting on Magellan that they never fully recovered.

      Your dismissal of this analogy would be justified if and only if nothing significantly profitable ever comes of space exploration. At this early juncture, and given all of the theoretical possibilities, that’s a pretty big bet to make.

      1. Matt, You’re missing the point, and I don’t believe the situation can be stated more clearly.

        I suggest reading about the voyage of Zeng He, and pondering the difference between western and Chinese exploration. Or either of books about Apollo cited. I doubt if these will help, but that’s all I can think of.

      2. On re-reading the comments, I see I was wrong. Apologies to all! The results of Apollo are simple only with more background knowledge than most people have (or need to have) about history and economics. I’ll do a follow-up post attempting to state it more clearly.

    6. I am not a historian, nor an economist. I agree with Zemtar. I guess the context of spending 4.4% GDP for something so magnificent compared to other ‘adventures’ softens the monetary shock for me.

      Also, I like this recent quote from Razib Khan (about SpaceX’s Dragon): “Space & the beginning of summer”, Discover, 27 May 2012 — “This sort of crazy and irrational endeavor is part of who we are.”

      1. What is sadder?

        That we did the space program as part of the Cold War (the justifications were almost entirely part of the conflict with Russia). Or the retcon of Apollo into a sci-fi adventure (despite its near-total failure to produce significant scientific, commercial, or social results proportionate to the cost)? Or the fact that all that America will invest in on a large-scale are large mad projects with heavy militaristic overtones — and wars?

        Education, infrastructure, health care — all other government works are considered biz-as-usual at best, to be cut when inconvenient to fund tax cuts and massive prisons.

        Retcon: retroactive continuity, the alteration of previously established facts. Commonly used in fiction (TV) and reality (as politically convenient, esp to reduce cognitive dissonance between conflicting believe, or between belief and reality.

  9. The F-22 and JSF are sneaky American cyberwar strategies!! The idea is to trick the Chinese into stealing the JSF plans over the internet(*) and bankrupting their economy by building a fleet of expensive hangar queens.

    It’s a brilliant plan, as long as nobody spills the beans by posting it to a blog, or something. oops.

    (* actually, it’s more like that the data leaked. the idea of doing joint development among multiple nations, with so many people having access to the data – yet it not leaking – is absolutely absurd. only Apple and a very small handful of businesses that understand the value of intellectual property are willing to do what it takes to protect it)

  10. “It is worth it just to do it”
    By that reasoning, piling all the money up and having a great big bonfire is also “worth it.” The thesis of this posting is not that none of these things are worthwhile, but rather that they can be compared in terms of cost versus benefit.

    One of the problems with “the final frontier” is that the costs are clearly going to be very high and the benefit is unknown. Because it’s unknown some proponents place the benefit as what I’d consider to be impossibly high. Consider the possibility that one answer to Fermi’s paradox is that any alien species that’s intelligent enough to contemplate galactic exploration is also intelligent enough to realize it’s not worth it.

    1. There already is such a “Burning” ritual (at their website)

      Hilariously, at a recent “Burning Man” counterculture ceremony, some nonconformist actually lit thing thing on fire a day or so early, and was arrested! That is far better proof (IMO) of the idiocy of american culture than anything on the FM website, and that is saying A LOT.

    2. Marcus Ranum scoffed: “By that reasoning, piling all the money up and having a great big bonfire is also `worth it.'”

      You really shouldn’t post things like that. Word will get out and this will become Mitt Romney’s new job creation program.

  11. This addresses an important point (not going down the Apollo rabbit hole). I think there would be a superior outcome if the military was significantly downsized, we should be able to get rid of the majority of our military/industrial/security complex and all the people put out of work by that were paid unemployment benefits. That would probably be cheaper, even in the short term, instead of finding new ways to keep the everyone busy by military adventure.

    In other comments on this website I have offered my insane suggestion – what I’d do if I were Emperor Marcus I of the United States. I would:
    – Fire the DoD and have a firesale of its assets
    – Keep the national guard, under control of state governors
    – Maintain our ballistic missile systems and submarines
    – Close all US bases in foreign countries
    – Close all US embassies in foreign countries (if you want to come talk to us, you know where we are and you can pick up a telephone or get on a plane and come visit the Imperial Throne where it’s located in beautiful Clearfield Pennsylvania)
    – Use 33% of the money saved on infrastructure, education and health care
    – Use 33% of the money saved to pay down debt
    – Use the remaining 33% of the money saved to start a large number of Manhattan-style programs attempting to solve the problem of sustainable fusion power
    – Announce to the world: our only deterrent is now our huge nuclear arsenal – we strongly suggest you not attack us, OK? Because we’ve only got one option for how to respond.
    – Announce to the world: we’re working on this fusion thing and if we solve it, we’re going to buy the whole planet.

    Former DoD employees and defense contractors can look for work on the fusion energy project, or building infrastructure, or education, or healthcare. Destroying an inefficient system and replacing it with entrepreneurial project(s) competing to solve a problem of global importance – sounds like winning to me.

    1. Environmental Heresies, Stewart Brand, Technology Review, May 2005 — “The founder of The Whole Earth Catalog believes the environmental movement will soon reverse its position on four core issues.”

      Over the next ten years, I predict, the mainstream of the environmental movement will reverse its opinion and activism in four major areas: population growth, urbani­zation, genetically engineered organisms, and nuclear power.

      … The success of the environmental movement is driven by two powerful forces — romanticism and science — that are often in opposition. The romantics identify with natural systems; the scientists study natural systems. The romantics are moralistic, rebellious against the perceived dominant power, and combative against any who appear to stray from the true path. They hate to admit mistakes or change direction. The scientists are ethicalistic, rebellious against any perceived dominant paradigm, and combative against each other. For them, admitting mistakes is what science is.

      There are a great many more environmental romantics than there are scientists. That’s fortunate, since their inspiration means that most people in developed socie­ties see themselves as environmentalists. But it also means that scientific perceptions are always a minority view, easily ignored, suppressed, or demonized if they don’t fit the consensus story line.

  12. “We have millions of unemployed workers in construction and manufacturing industries. The government can borrow at record low real long-term interest rates. We have a nation of infrastructure that must be rebuilt eventually. Why not now?”

    Rebuilding infrastructure will slow the rate of decay preventing future declines in output — but to create new growth, we need to find ‘the next big thing.’ What is the next new investment that then leads to the multiplier effect > 1.0? Should we build that oil pipeline to Canada? What about building that nuclear waste storage facility in Nevada, or High Speed Rail? Or something like Obama’s Green jobs? Solar energy plants? Talking about this in the abstract, that, “if we had some unspecified perfect growth creating investment to put money into, yes, this would be a good thing”, that this isn’t all that useful, because by definition if we avoid the details we can imagine an investment like this, but reality isn’t likely to cooperate Practically what has to be discussed is how exactly the stimulus money is put to use. What is the next logical place for public infrastructure spending?

    On the space program, there was a future that didn’t pan out. In the future we were supposed to be flying around in hypersonic jets to Europe and Asia, and we’d be taking vacations on space stations, like in that 2001 movie. This seems absurd now, but I think what people in the 60’s had experienced was the advancement in aviation from 1910 –> 1970, and aviation turned out great. Many many advances — this was their experience. Likely, they just presumed that space technology would advance from from 1970-> 2030 at the same rate. It didn’t, but they didn’t know that back then.

    1. “but to create new growth, we need to find ‘the next big thing.’ ”

      It’s a common view. I disagree, at least for government investment.

      The US went from hick backwater to great nation by (among other things) intensive government investment in core infrastructure. The very opposite of speculation about “the next big thing.”

      In the post-WWII hubris we abandoned the petty analysis of cost vs. benefits. We see this today when discussing defense spending — especially foreign wars. Advocates of “more” seldom even bother to weigh costs vs benefits, let alone risks. It’s hubris. It’s madness.

    2. I would nominate sustainable agriculture, forestry, etc., Unfortunately the establishment does not like independent farmers, they are the natural enemy of the industrial-nanny state.

    3. How many middle class jobs and small businesses would actually be created with a return to robust infrastructure investment? I would hope, and guess, many. Would this not be seen by the Plutocrats as a threat to their increasing power? Do they not want an impoverished and desperate workforce, as was common in England at the beginning of the Enlightenment?

      How extensively did the american ultrawealthy invest in Japanese and German industry, before WWII? If it had been easier to do so, would more have done it? How loyal are current ultrawealthy americans (or finance corps) to the USA’s infrastructure if they can easily invest their wealth elsewhere for better profits?

    4. Cathryn mataga chirps: “…to create new growth, we need to find ‘the next big thing.”

      No problem there. We’re weighed down with a mountain of “next big things,” the problem simply is that America does not bother funding ’em. Examples:

      America has infinite amounts of money to spend on endless unwinnable wars of choice fought for no reason in third-world hellholes, apparently, but nary a dime to spend on commercializing any of the pioneering breakthroughs that penniless grad students are cooking up in their underfunded labs.

  13. Roger Pielke Jr: "R&D does not buy Innovation"

    R&D does not buy Innovation“, Roger Pielke Jr, 18 June 2012 — Excerpt:

    During the 1950s and 1960s, advocates for government investments in science and technology (mainly basic research at universities) pulled off a remarkable coup. They successfully integrated conceptions of “basic research” with a linear model of innovation, making R&D a key variable in expectations for what led to national economic competitiveness.

    … But does R&D spending correlate with economic success? Not necessarily says John Bussey in the WSJ:

    Asia is spending so much on R&D that this year it will pull ahead of total spending in the Americas for the first time. Advantage Asia? Maybe not. In the world of R&D spending, more doesn’t necessarily mean better. And R&D may not describe all the innovation that matters.

    “I think the numbers are pretty useless,” says Michael Schrage, a research fellow at MIT’s Sloan School who has studied the subject. “What matters more is the kind of innovator you are. If it were really true that the people who spent the most on R&D were the most successful, we wouldn’t be subsidizing General Motors.””There’s no statistically significant relationship between how much a company spends on R&D and how they perform over time,” adds Barry Jaruzelski of Booz & Co.

  14. NASA’s positive historic contribution to the U.S. economy is very significant. NASA generated technological developments have increased U.S. GDP since 1957, at 1/20th the price of Great Society-style means-tested programs since 1964.

    1. Has NASA substantially boosted GDP after Apollo in the 40 years since 1972)? I would want some solid analysis before buying that.

      Also, the Great a Society was design to help the poor and reduce the legacy of racism. It was not designed to boost GDP. GDP is not God.

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