Five Myths About NASA

Most people agree that government programs are wasteful, and many are unnecessary.  But even small government advocates have a soft spot for NASA.  It’s pointed to as an example of a worthwhile government program because, after all, not only does it have a really cool mission, but it’s also resulted in microwaves and memory foam!  These are valuable contributions that justify it’s value, even if space exploration itself hasn’t proven enough.

Not so fast.  Let’s put on our economist lenses and look a little closer to expose five common myths about the value of NASA:

Myth #1: It’s worth it.  This is a claim without a test.  Without a profit and loss model, how can anyone know the value of NASA inventions and spin-offs products compared to the cost of the program?  Why not let a voluntarily funded outfit do space exploration work and pay for it by selling usable discoveries they make in the process?  That would reveal the value of such inventions to consumers over and above the cost of research.

It’s impossible to judge the value of big expenditures absent a market.  Imagine a company that picked an ambitious effort, like digging the worlds largest, deepest pit, and continued to fund it to the tune of billions a year.  I’m sure some interesting and useful stuff would be found down there, and some new technologies would result from all the efforts to dig deeper.  But it’s hard to imagine these side benefits being sufficient to draw an entrepreneur into such a venture.

It’s not enough to simply point to cool gizmos as proof of the value of a program.

Myth #2: We’d never have a bunch of cool tech without NASA.  This is of course impossible to know.  But what we do know is that the existence of NASA attracts many great technological and scientific minds.  These are not minds that would otherwise be sitting idle.  They would likely be doing much the same thing – inventing, solving problems, and creating stuff.  Many of the spin-off technologies from NASA would certainly have come from other organizations.  Maybe even better things would have resulted.

It is also worth remembering that none of the NASA technologies were created in a vacuum.  Invention is an incremental and messy process, full of simultaneous discovery, back and forth modification, and adaptation.  Because NASA gets the credit for something doesn’t mean it emerged from the secret NASA chambers untouched by any other researchers in the world.  This was stuff that was being tinkered with the world over.  If it has commercial value, there’s a good chance it will be discovered and put to use.  Who has more incentive to do so; an organization that doesn’t need to make widespread use of its technologies to survive, or a business that does?

We can’t know what would and would not have been invented without NASA, but it seems pretty odd to grant the assumption that a government agency is more likely than a market institution to innovate.

Myth #3: It’s doesn’t cost that much.  Maybe $18 billion a year is not that much compared to all the other stuff taxpayers are being forced to pay for.  But the costs of NASA are not just monetary; there’s opportunity cost.  In high-tech areas with highly skilled workers, the opportunity cost is very high.  What else might those people be doing to create value for the world if they weren’t there?  What projects are not happening because NASA is?  Opportunity cost is a big deal.

Not only is NASA an attractive option for a lot of really smart people because it sounds cool, but the fact that every other industry has become so heavily regulated and restricted makes other options artificially less attractive.  We all lose as a result.

Myth #4: They can spend our money better than we can.  Economic value is subjective.  As such, it’s impossible to know whether someone is happier with how you spent their money for them than they would be if they spent it themselves.  The best proxy is behavior.  What people freely choose to do with their money reveals what they value most at the time of choosing.  The mere fact that government programs can’t get by asking for voluntary contributions reveals that people value the uses to which they would put their money more highly than what government does with it.

When people spend their own money not only do they put it to their highest valued use, but their actions affect prices, which in turn send signals to producers and entrepreneurs indicating what kind of stuff people want more of.  More effort goes into producing more and better of that stuff, which creates even more value.  As preferences shift, so do production patterns.  This is an important process with complex feedback mechanisms that help to continually create real value for individuals in society.

You can’t create progress for all by taking money from everyone and giving it to a small group with no requirement that they respond to the demands of the many.  If you try, not only do you rob people of short term value by taking away their first-best spending option, you mess with the signals and incentives in the system ensuring that less of what people value will be produced in the long run.

Myth #5: Those smart scientists will innovate rather than waste money.  This may come as a revelation, but scientists are people too.  People respond to incentives.  When your lifeblood is determined by the political process, you will cater to the demands of that process.  Public Choice reminds us that the political process results in irrational, uninformed, biased and downright silly decisions.  It rewards all the wrong things, and punishes all the right things.  NASA faces the same calculation, knowledge, moral hazard, and incentive problems every other bureaucracy faces.  Explore the boundaries of the laws of physics though they may, they cannot break the laws of economics.

Conclusion: Relax, I don’t hate space exploration and neither must you to oppose taxpayer funding for it.  You may counter these myths by saying, forget spin-offs, space exploration is so important it trumps any other consideration.  You may say, sure, non-government space exploration is happening now, but without NASA we wouldn’t have had it for the past 60 years.  If we didn’t put a guy on the moon back then, would that be such a loss?  Maybe all those resources could have produced better things in that time.  Maybe the demand for space exploration wasn’t high enough, or the costs not low enough, until recently.  Maybe NASA was crowding out other space exploration alternatives.  Who knows.  What we do know is that free people have proven, throughout all of history, to be far better at generating progress for humanity than government schemes and programs.

The Law is Written on Our Hearts

(Originally posted here.  I’ve been thinking more on this topic and I felt the urge to re-post.)

A great many people believe that changing the law is the solution to social problems. This is a fiction.

If written law were some kind of unbreakable magic spell, the United States would not look as it now does. Nearly all of what the government does today is not by any stretch of the imagination “constitutional.” Written laws and documents do not hold the power to control individual behavior or government behavior.

It is true that when people believe the law to be important, they will obey it. But when they believe it to be unimportant they will just as easily disregard it. In the end it is people’s beliefs, not the law that determines behavior.

Perhaps we are seduced into the “Myth of the Rule of Law” because it is so hard to see what’s really regulating behavior and generating social order. The “Invisible Hand” that Adam Smith described as channeling self-interest in the marketplace to serve the diverse needs and wants of its participants is also at work in the marketplace of ideas, social norms and morality. The core beliefs we hold and the norms that emerge from centuries of social interaction are what restrain or fail to restrain behavior.

This is not merely academic. It is dangerous to persist in the belief that the law is the ultimate check on human behavior for two distinct reasons: First, law does not ultimately change the behavior of its intended targets; second, because it does change the behavior of others.

The first problem renders social reform efforts ineffective. The vast majority of attempts to restrain government, help the poor, make people healthier, more charitable, more equal, less intolerant, more responsible with natural resources, or better educated are really just attempts to change what’s written on pieces of government paper. A different combination of words in the Federal Register one day to the next cannot change human hearts one day to the next.

A powerful example is the brief experiment with alcohol prohibition in the United States. Many in the temperance movement genuinely wanted to prevent drunkenness, alcoholism and the irresponsible and even violent action that sometimes accompanies. They focused their attention mainly on what they incorrectly thought to be the source of power over human behavior—the law. They were successful in changing the law, but failed to sufficiently change hearts. A large number of people still wanted to consume alcohol because they did not believe it was immoral to do so. Because they believed in it, they did it despite the law. The main effect of making the activity illegal was to make the production and distribution of alcohol a violent business, where it had previously been much like any other beverage. There were not gang wars over the soda fountain.

Contrast the legal strategy with the strategy of an organization like Alcoholics Anonymous. AA aims for the heart. They work to change individual lives and behavior by developing a non-judgmental network of support and accountability. AA has been able to change countless lives and free people from the bondage of alcohol addiction. The law could never do that, and we should not ask it to.

I mentioned a second problem with believing the law to be the source of social order: It has a negative effect on unintended parties. This can also be illustrated by the prohibition example. Not only did the law fail to change the behavior of most drinkers, it succeeded in changing the behavior of criminals and government officials, leading to more corruption and violence. It also allowed those who wanted to lessen the damage done by alcohol addiction to feel like they’d “done something about it,” when in fact they’d not helped those that needed help at all.

The change in the average citizen’s moral sense is probably the gravest danger of belief in the power of law. It weakens our moral sense and lulls us into the belief that legality is a substitute for morality. We cease evaluating actions based on their merits as against the moral law and begin evaluating them against state-made law. We shirk responsibility to offer genuine aid because the law will do it, and at the same time we pronounce judgment on actions that are perfectly moral, just because they are illegal.

The issue of illegal immigration is illustrative. If we examine the idea without cloaking it in legal/illegal terms, we begin to see a different picture:

A friend of mine is desperately poor and wants to earn a better living for his family. He applies for a job with the local grocer. The grocer is impressed with his work ethic and is happy to offer him a job. This job means my friend can move his family out of their impoverished condition, afford a reasonable apartment and begin saving so his children and grandchildren can have a much better life. There is no trespass or harm committed in this story by any of the parties involved.

Would it be moral to hire armed men to stop my friend on the way to his first day on the job and physically remove his whole family and send them back to their old neighborhood and old life? Would you do this even if you knew it meant you were ensuring him a life of grinding poverty and very possibly death?

It is clearly immoral to interfere with another individual in this way, in particular when such interference condemns them to a much harsher life. But that is precisely what most Americans advocate when they cry for enforcement of immigration laws. The only thing that makes otherwise moral people advocate such immoral behavior is the word “illegal”—in other words a belief in the power of law.

People believe that breaking state-made law is in and of itself an immoral act that justifies the use of violence in retaliation. This absurd notion does not hold up under the slightest scrutiny, even for those who most strongly believe it. I have yet to find an American who says that those harboring Jews during the Holocaust were acting immorally and deserved punishment, or that the individuals who assisted escaped slaves along the Underground Railroad were deserving of incarceration for breaking the law.

Helping peaceful people who are destitute and persecuted is noble, and when done in defiance of the law can even be courageous. It is only a belief in the supremacy of manmade law over moral law that prevents most Americans from viewing as heroic those who assist immigrants hounded by armed border agents. I submit that looking out for the poor is better than locking them up when they have done nothing but seek a better life.

When we remove our awe for legislation we discover that genuine social change is hampered by a belief in the power of law. We also discover that good people will tolerate or even condone immoral acts when they believe that what is legal is more important than what is right. It is lazy to let the law be our agent of change and dangerous to let it be our moral compass.