How Space Tourists Will Benefit From No Government Regulation
By Jennifer Lade - March 29, 2017

Space tourism industry has a chance to show benefits of less regulation

If space truly is the final frontier, then it won’t be long until the first pioneers are making the journey, as several companies race to take paying passengers out of the Earth’s atmosphere and beyond. And true to form, right on its heels will be the regulators, red tape lassos in hand.

But like any brand new industry, the slight head start of the businesses will give them the opportunity to show the high standards that can be accomplished absent government control — and with any luck, they can do it in a way compelling enough to cast doubt on the “necessity” of regulation.

A March 20 article in Quartz about space tourism details the thus-far minimal regulatory burden on the burgeoning industry and questions how passengers will be protected without the “benefit” of tight regulations.

The first spaceflight participants will be guinea pigs in an experiment that asks: Just what does it mean to be safe in space when the government isn’t in charge?

The obvious answer, to those who believe in the power of market-driven incentives, is that space tourism will likely be safer with minimal government intervention than it would be with tight regulations and oversight, since the companies will police themselves, as Blue Origin Executive Erika Wagner says in the article.

Wagner recently told an audience at the Massachusetts Institute of Technology, ‘ . . . in terms of us having a safe place in the market, we take that seriously, we want to put our own families on board, we take that very seriously. So we are holding ourselves to internal standards.’

The case for strict government regulation is built on some faulty beliefs about humanity and behavior. It assumes that people in business are at their core unconcerned about other people and are motivated solely by profit. It assumes in contrast, that those people in government are the complete opposite, motivated only by altruism and never by self-interest. On this questionable foundation is built the assertion that the people in government must regulate the people in business so that the interests of customers and the public at large are protected.

It is easy enough to strike down these arguments. First, this stark divide between the values of businessmen and politicians does not exist. Good or bad personality traits can be found within any group, and I would argue that you’ll actually find disproportionately more politicians on the self-interested end of the spectrum than in other career paths, because politics either attracts or creates those kinds of people.

In any event, there is not a neutral ruling elite that can sit above the fray, benevolently handing down edicts to keep the otherwise-evil businesses in check. Politicians and regulatory agencies have a dog in the fight too, be it money, connections, political pressure, or desire for power.

But for argument’s sake, let’s assume the worst of businesses and the best of government. Even in this case, the goal for both parties is the same: safe space travel. At their most altruistic, regulators want it because they don’t want people to die. At their worst, space travel businesses want it because death and injury is bad for business.

Any company, whether they are building and flying rockets or simply selling sandwiches, needs to have customers to stay in business. Blue Origin, SpaceX, Boeing and Virgin Galactic — all companies planning to fly people out into space — won’t be able to keep customers if people aren’t flying back to Earth intact.

And unlike the mistakes of a sandwich shop, which might never make the front page news, in a pioneering industry like commercial space flight, you can bet every potential customer on earth would hear about the company’s missteps. As safety risks increase, customers will decrease, and if that balance gets out of whack, the company will fail.

Not all customers desire the same level of safety. And that’s OK. When regulations are minimal, companies can cater to whatever customer base they want. Riskier or more expensive products or services will  have a smaller customer base than those that are safer or cheaper.

Perhaps each space tourism company will use this formula to choose a different niche; companies could advertise that they tested their spacecraft the most, or offer the least expensive weightlessness experience, or orbit the earth the fastest.  In this way, less regulation gives the consumer more choices, while regulation would restrict some of these options, eliminating the preferences of some customers while simultaneously crippling those niche businesses.

“Minimal” Regulation

What does “minimal” regulation look like in the space tourism industry? Right now, it’s governed by the Commercial Space Act, which establishes the Secretary of Transportation as the governing authority. The Secretary has the power to grant launch licenses to rockets, which can include requirements on crew training and medical standards.

The license holder must inform crew and passengers in writing about the risks involved in space travel, and let them know that the United States Government has not certified the launch vehicle as safe for carrying crew or space flight participants. The Secretary can also restrict rocket design features or operating practices that have resulted in serious or fatal injury or a high risk thereof.

By many standards, that amount of regulation is already too much. It’s not that these rules are especially onerous or illogical; it’s just that they are unnecessary. Crew members and paying customers are voluntarily participating in space flight — a non-essential service, moreover — through the company. Therefore, customers and employees should work directly with the company to ensure a satisfactory experience. The company can then meet those demands or lose those customers and workers. They can cut out the middleman of regulation because there is no one to protect; all parties are already satisfied, and customers are signing up in droves. According to the article, Virgin Galactic has accrued 700 paid passengers since 2005.

The article cites Uber as a close example of how the space travel industry could expect to pave its own way:

Because the slate is still blank for how the federal government will treat the space business, the earliest companies will be in a position to set the tone, much as Uber’s regulatory battles laid the groundwork for the still tetchy relationship between cities and ride-hailing apps.

This is a fitting analogy, but frustrating if space tourism goes the way of ride-hailing apps. Because Uber and others like it are another example of a business in which regulators tried to fix problems that didn’t exist. Everyone involved was already happy. And yet because of pressure from the highly-regulated taxi companies, politicians implemented regulations to handcuff ride-sharing companies as well, under the guise of consumer protection.

In my home state of Massachusetts, for example, a bill regulating ride-sharing companies required Uber drivers to complete a two-part background check, carry insurance coverage of at least $1 million, and have their vehicles get a second safety inspection in addition to the annual inspection required of all registered cars. And—perhaps the biggest affront— the law required the companies to pay 20 cents per ride to the state, which will fund public transportation, including the taxi industry. The bill was signed into law last August, adding Massachusetts to the long list of states that punish and restrict the ride-sharing app companies while buoying their competitors.

Yet Uber and other ride-sharing app companies have largely survived the onslaught of regulations because the service they offer is so attractive, not only from a practical standpoint, but also a symbolic one. It gives both customers and drivers freedom and self-determination, the ability to set their own hours, choose their own route.

And that’s just ground transportation. It’s hard to imagine a more freeing experience than blasting off in a rocket to outer space, quite literally extricating oneself from earthly cares. So while we will likely see a shorter leash on space tourism companies as the industry matures and regulators catch up, these pioneering companies have a chance to demonstrate that they can be self policing. They can prove that private industry can safely, astonishingly, and beautifully launch people into the final frontier — and bring them home again.

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  • Kernel01

    Then what about this below. Remember what Ronald Reagan said: “If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

    The mission of the FAA Office of Commercial Space Transportation is to ensure protection of the public, property, and the national security and foreign policy interests of the United States during commercial launch or reentry activities, and to encourage, facilitate, and promote U.S. commercial space transportation

  • autonomous

    I can see the advertisement now: Leave government behind. Riding our rocket is like a great fart in the face of the police.

    • LawrenceNeal

      I wonder what lighting up will be like in space.

      • autonomous

        I think the flight itself would provide a great high. Lighting up in a high percentage oxygen environment might prove explosive. It might be worth a try, though.

  • Erik Garcés

    Railroading is a good example of what the Daily Bell is trying to illustrate. Having worked most of my adult life in that industry, in the NYC region where one may find both private and government railroad companies on the same tracks. All railroads are heavily regulated by government but not all are private businesses.

    My experience has been that the ones to be worried about were the state run railroad operators rather than the private corporations. Profit driven enterprise was far more concerned with hurting the bottom line in accidents while the state run agencies seemed mostly worried over public perception and negative media attention. There are generally more accidents involving state agencies than the private ones here.

    Bottom line, government serves itself, no matter what it may tell you.

    • Great point! No one is held accountable with government; no budget cuts, no job loss, just oops!

      • Kernel01

        That’s correct. NOBODY gets the blame or punishment for any wrongdoing in Government, for the most part. What I’d like to see with Hillary Clinton (National Security violations, Clinton Foundation corruption, …) is meeting the same judicial fate that the President of South Korea just had where she’s being carted off to prison. NOBODY in these United States is too big to fail, and too big to jail.

  • Safety at sea of ships travelling between countries is regulated by the International Maritime Organization, IMO, of the United Nations, UN, while safety of ships just trading locally coast wise inside national borders is regulated by a local, national agency, which can decide anything or nothing. There is a third version, i.e. USA: ships travelling to US must comply with US regulations in spite of what the IMO/UN decides and regulates and the USCG can stop foreign ships as they like. Reason is US national security.

    Safety at space is similar. If you intend to start and return in only one country, e.g. USA, the US FAA can decide anything, but if you intend to, e.g. land in another country, I assume you have to involve that country. However, coming back from space to land is simply not possible! You are travelling too fast and cannot possibly find the location in the upper atmosphere to start the landing on the rotating Earth and you will be vaporized during the attempt, as you cannot brake or slow down flying at hypersonic speed through the atmosphere. Spacecrafts simply have no means to brake and land on Earth.

    The US National Aeronautic and Space Administration, NASA, has fooled the public since 1958 about it and insists human space travel is possible and safe. It is in fact both impossible and unsafe. I explain more at http://heiwaco.com/moontravel.htm .

  • georgesilver

    Whenever possible it is your duty to ignore governments.

  • LawrenceNeal

    The real purpose of regulation is fees, taxes and control.

    • Jen Lade

      I think you hit the nail on the head.

    • Col. Edward H. R. Green

      Licensing and registration requirements, too.

      They have less than nothing to do with ensuring “public safety”, and everything to do with control via expropriation and coercion.

  • JohnnysZone

    “Space may be the final frontier, but it’s made in a Hollywood basement”, RHCP Californication