An economist and historian Alexander MacDonald wrote his doctorate on the economic history of American space exploration and is the author of the book The Long Space Age published in 2017. He is an expert on private enterprises involvements in space exploration from the early days of astronomical observation in the 18th century, through to the private public partnership of the Apollo program and the evolving relationship between NASA and the private sector in the last decade.
In this interview, Alexander explains how business has always had a place in America's efforts in exploring and understanding the cosmos, and gives us an insight into how NASA's relationship with commercial partners such as SpaceX and Blue Origin will advance our exploration of the solar system.
Chris Wright
Welcome to this bonus episode of money in the moonshot. Over the course of producing this series we recorded over seven hours of interviews. choosing what to select for the story we wanted to tell was tough. So as a special bonus, here is the full interview with NASA's chief economist Alexander MacDonald. Please subscribe if you want to hear more of the interviews we recorded for this series. An economist and historian Alexander MacDonald wrote his doctorate on the economic history of American space exploration and is the author of the book for long Space Age published in 2017. He is an expert on private enterprises involvements in space exploration from the early days of astronomical observation in the 18th century, through to the private public partnership of the Apollo program and the evolving relationship between NASA and the private sector in the last decade. He has written and edited numerous NASA reports including emerging space and public private partnerships for space capability development, both of which evaluate the nature and importance of public Private cooperation and for 21st century from his early work at NASA's Jet Propulsion Laboratory through his current involvement with the International Space Station National Laboratory, where he recently took on the role of NASA's Program Executive. Alexander MacDonald is one of the world's leading experts on NASA's efforts to produce scientific breakthroughs that will create economic growth and hopefully improve lives on Earth. In this interview, Alexander explains how these private enterprises have always had a place in America's efforts in exploring and understanding the cosmos, and gives us an insight into how NASA's relationship with commercial partners such as SpaceX and Blue Origin will advance our exploration of the solar system.
Alexandra McDonald, thank you very much for joining me today. delighted to have a chance to speak with you. I wanted to ask you first about the history of public private partnerships in space exploration. If you go back to Mercury, Gemini and onto Apollo, how did the partnerships between NASA and the private sector work and develop in those early days?
Alexander MacDonald
Sure. So NASA has worked with private sector in the American industry. Since the beginning of the agency in 1958. We had prime contractors for those vehicles. McDonnell Douglas for the mercury capsules, we had North American aviation for Apollo. And we continue to have prime contractors through the space shuttle, and Rockwell. Some of those companies have now kind of been acquired and part of existing companies like Boeing, and now of course, working with new companies that have kind of started up like SpaceX and in many respects, it's really a continuation from the beginning, NASA has spent the majority of If it's funding outside of the agency to the American industry, and that's a trend that continues. It's a process that requires some trust, you're not completely in control of the ability of a private contractor to do the job and to meet deadlines.
Chris Wright
So in practice, how has that worked over the years? How have you got through the challenges involved?
Alexander MacDonald
Well, I mean, as incredibly strong engineering culture. So NASA and through the Apollo program, and through the US missile programs, the 1960s, invented the discipline of system engineering. And so what NASA really does is conducts that system engineering of all of the different parts that have to come together for a spacecraft, right? The engines, the avionics, the computer systems, the aerodynamics testing, all of this is still managed at NASA. And NASA still conducts the, you know, the reviews of our private sector partners to make sure that they meet the standards for for safety of flight for our astronauts. But what we've done now over time, is delegate more of that technical responsibility to the contractors so that we can streamline our processes effectively and ultimately be able to reduce the amount of expenditure that we have to have, you know, get a better deal for the taxpayer.
Chris Wright
Jim bridenstine spoke about it as an evolution from a buyer of hardware of owning everything to a purchaser of services. Can you you talk me through that evolution?
Alexander MacDonald
Yeah, I think the most important thing about the shift to being a purchaser of services is that back when NASA was the owner of the spacecraft, so to speak, you couldn't really pay a company to go and use that spacecraft from flying to space yourself, is NASA own that NASA's federal government and you know, NASA is not in the business, nor is the federal government in the business of selling commercial services. So what was really important with the shift to purchasing services is that it allows individuals or other companies or even other nations to be able to contract with American companies and purchase those human spaceflight services as well. In addition to NASA, NASA is the primary customer. For these systems. NASA is the primary customer for human spaceflight, private activities at this time, certainly to orbit. But the hope is that other people will also be buying those services, which will mean more revenue into US companies from abroad and also to generate new private activity as well. So that's really the core behind why that shift is important and what why we think it's going to help open up economic growth and new ways.
Chris Wright
So it's not just a question of NASA being okay with the private sector partners having other customers it's actually desirable.
Alexander MacDonald
Absolutely. The more customers the more iteration you have, as an economist, right, it moves up the learning by doing curve quicker. The more we learn how to do this is a function of how often we do it. And so we want to be doing as much spaceflight as possible the more spaceflight we and the world does and the private sector does, the more capable our spaceflight civilization is going to be so positive.
Chris Wright
The theory if I understand it is if you get the private sector to do the mundane jobs in space, payload delivery and so forth. It frees NASA to do the things that we've historically associated with the organization, such as exploration and endeavors, is basically how it works.
Alexander MacDonald
That's certainly part of it. It's also about which of the parts of spaceflight and spacecraft production are the most repeated and repeatable. So one of the things that's harder to think about kind of becoming a commercial service are things like sending unique scientific probes as close to the sun as possible. And the reason is, because we don't do that very often. It's very hard and you're sending new scientific instruments there every time because you want to ask new questions about the sun and want to answer new science questions for launching cargo to the National Space Station that is essentially the same problem every time. And so that is exactly the kind of thing that is amenable to the private sector taking over figuring out how to turn that into a regular process. And human spaceflight is actually not entirely different, at least to low Earth orbit. That is something that we want to keep doing on a regular basis. US policy to always maintain continuous human presence in low Earth orbit at this point, which is a really important concept. That means that the US government has decided that we're always going to have Americans in low Earth orbit. And maybe some of those Americans will be private citizens, not just NASA astronauts, but that that's going to be what we're planning for going forward. So what does that mean? That means that we're going to be able to recognize and make regular human spaceflight. And so that's the kind of thing that private sector is going to do it. However, those problems that require kind of first off frontier expansion, new adventures, those are the kind of things that we're going to have to really stay involved with at NASA in the kind of engineering manner in an operational manner, because they're incredibly challenging. No one's ever done them. By definition, you know, that you can only go to Mars for the first time once and that's something that NASA still is taking the lead in, but even then, we're gonna be working with a private sector partners, just like we did back in the Apollo days.
Chris Wright
How important is it but there is a commercial case for space and moreover, that the public perceive that it's not just a burning of tax dollars, but something that will benefit Fit the economy?
Alexander MacDonald
Yeah, so for that I actually tend to put it more in terms of solo growth model. It's not just about commercialization, it's about economic growth for the nation as a whole. When Robert Solow did the economic growth models trying to figure out what the contributions to overall 20th century American economic growth were from capital, labor, land, adding all those things up in a production function, there turned out to be a residual that was not explained by the growth of those other factors of production. That residual was 50% of all the growth and has traditionally been kind of grouped and considered as technology improvement, productivity improvement. And so what NASA does, and what NASA represents is an investment and technological improvement and capacity of the entire nation. And it's been doing that program. It's been doing that since before it was NASA when it was the National Advisory Committee and aeronautics from which NASA emerged, it is really important that we invest in technology because that is actually the basis of most of the modern economic growth that we've seen in this country and around the World, NASA continues to push the frontier in a number of areas that are directly relevant to national economic growth.
Chris Wright
But we've also seen an evolution in the private sector itself. Traditionally, we used to think of the titans of American industry in aerospace, such as Lockheed Martin and Boeing, and then more recently, obviously, many new entrants, most obviously, SpaceX and Blue Origin, but dozens of others besides So how has that affected NASA and what do you make of this evolution that we're seeing?
Alexander MacDonald
Well, NASA has actually encouraged it throughout NASA's investments in the COTS program. The Commercial Orbital Transportation Services Program was the core investment that allowed SpaceX to start expanding and it was the Commercial Resupply Services that allowed SpaceX to routinize its launch vehicles. So NASA has long seen itself as an active encourager of new entrants, and an active encourager of private individuals who want to spend their own capital in a manner that advances the nation's space exploration capacity. That's going to have to be our mentality for as long as we have Space Program which hopefully is an infinite process, there are intrinsic motivations that individuals have that mean that some people really want to spend the resources going into space. NASA as a federal government agencies and constantly looking to encourage that tendency amongst individuals, whether they have a lot of money or whether they're just individuals who want to contribute through engineering or through whatever manner they think that they can contribute. What NASA has done is actively encourage new entrance through a variety of programs, from everything from our major human spaceflight programs down to the Small Business innovative research grants that we preferentially give to small businesses to encourage new companies that is actively part of how NASA thinks about growing the overall space industry in this country.
Chris Wright
Yeah, it was interesting when the first contracts were announced in the eclipse commercial lunar payload program, there were nine contractors invited to bid. And then I think of over 500 More recently, and it occurred to me that in some sense, NASA has become not exactly a venture capitalist because I suppose the return on capital to you is not essential, but certainly a catalyst in the way that you might think of venture capital as a forcing function. So is it right to think of it in that way?
Alexander MacDonald
That's interesting, CLIPS, those nine companies then the more recent five, what that represents is essentially as to saying, you are part of a catalogue that we can now choose from. And not just NASA that any proposers to NASA for missions that in the future, they can also propose to six. So that is available to NASA programs that could be you know, run out of the Space Technology Mission Directorate, it could be run out of the Science Mission Directorate. And so those companies now want to catalog what then matters are the task orders that are given and those task orders actually represent the missions that are funded. Right now there are two task orders out there for privately operated but NASA funded missions to take science payloads to the moon, the hope is that that model can grow again in terms of buying commercial services for lunar activities. And so in that case, We're not just such as venture capitalists, as we are opening up the aperture to any company that has a capability that seems relevant to achieving our goals of returning humans to the moon, building up a capacity on the moon and then using that knowledge of exploration go on to Mars, any company that can contribute to that in terms of cargo payloads we're interested in working with, and then we evaluate their capabilities, decide which task orders we want to go out with, and then that results and funded missions.
Chris Wright
Back in the Apollo days, it was simply NASA as an instrument of the state directly paying contractors now these days Virgin Galactic is listed on the New York Stock Exchange. SpaceX has venture capitalists on its board. So how is the nature of funding space exploration changed over time?
Alexander MacDonald
So I have to kind of step back to my old academic career for a second because I spent a non trivial portion of my life doing a PhD in the long run economic history in space exploration. What's interesting is that although we're seeing this change relative to Apollo, we're also actually seeing is actually returned to the model that existed before NASA. So When you go back to the 19th century 95% of the funding for us observatories, these are the Lick Observatory at the Palomar Observatory Mount Wilson Observatory, kind of world's largest observatories at their time in the late 19th century, early 20th century. They were funded by private individuals. Those telescopes were funded by James lik and Andrew Carnegie and Rockefeller Foundation, those investments were not trivial. They were billion dollar class investments or expenditures, put in GDP equivalent terms today, what we're really seeing is a reemergence of high net worth individuals who are interested in achieving well the legacy for themselves, and also to contribute to the human scientific process more generally, now married with the combination of private sector companies and using the markets and contracts to accelerate the development of these capabilities that align with the intrinsic motivations of the individual. So what I think we're going to See is a continued melding of government funding and private individuals and private companies who have their own objectives and space continuing to work together to accelerate our expansion of cosmos. And I think if you expand the timescale away from the 1960s to today, which is rather short period of time, instead look over the course of the last few hundred years, what you see is that it's always these different forces working together, sometimes some are more dominant than others. But there's always individuals intrinsic motivations, there are always governments and individuals looking to signal to the world, their capabilities and signals to the world, the leadership of the world, so to speak. And those forces I think, will continue to work in tandem and hopefully continue to push us out into the cosmos.
Chris Wright
So private funding in space is nothing new.
Alexander MacDonald
I mean, I can go on on this for probably too long for for any of your listeners, but but but I will add one more, because you mentioned the venture capitalists so before even the Apollo program, Right after very large observatories in the US are being built in the late 19th century, you have people like Robert Goddard who emerge. Well, Robert Goddard was the US pioneer for commercial rocketry. Well, where did he get most of his money? Well, he actually received 10s of millions of dollars in today's terms from Guggenheim family because they and their friend Charles Lindbergh, were very interested in advancing aeronautics and they were funding Robert daughter to advance that. So again, private funding people who are inspired by Robert Goddard's activities in his first lecture looking for rocket 1926 started forming private societies. What was initially called the American interplanetary society, which became the American rocket society and which continues on today as the AI double A the premier aerospace membership organization in the United States. And what happened after that? Well, some of those members of the American rock society formed the first private space company reaction motors Incorporated, which was funded by Laurance Rockefeller as a venture capitalist in the 1940s and 50s. All before NASA is even formed all before America even goes into space. And so again, I think it is really important to remember that the history of spaceflight doesn't begin at Apollo. And now we're seeing a new phase. History of spaceflight begins. In some respects, as soon as Galileo, Galileo looks through the telescope, and sees that the moon is a world. And all of a sudden people across Europe and across, you know, the planet to a certain extent, begin thinking about how we're going to construct machines to get there. And there's a long history of intellectual development and social development and economic development, that leads to the point where Apollo happens. And we're now thinking about the next phase, which is just a new iteration on this long cycle of humans thinking about how to explore the universe.
Chris Wright
I want to bring you back to Apollo in light of something you said earlier about the importance of space exploration, among other things as an investment in technology with greater knock on effects throughout the economy and society. And I think it's commonplace to try to make an argument for Apollo that beyond the enormous human achievements, it also made a great great contribution to the consumer. world and the technologies that are gradually brought into the mainstream. So maybe talk to me a little bit about that and how that's played out.
Alexander MacDonald
I'll just highlight two major technological achievements that had kind of direct to consumer applications, so to speak, right, so, the 1960s, the Apollo program, and other associated missile programs represented 75% of all global demand for semiconductors. NASA did not invent the semiconductor, but it was space programs that created the demand to scale all semiconductors, which provides the basis for all of the computer and internet enabled world that we all enjoy or derive depending on how you think about it all today. In addition, the term software engineering directly emerges from the Apollo program, because through the processing, but the calculations of what is required to get to the moon to monitor all the systems had to essentially invent the discipline of software engineering. And of course, the Apollo Guidance Computer was the first digital computer that was used and flown to the moon and back in order to help guide the astronauts on that journey. And so that's a great example of how setting these ambitious goals and then challenging people and funding people to figure out how to achieve them results in technologies that have broad application. It's not because people decided we need the digital computer. It's because we set an ambitious goal that we had no idea how we were going to achieve it, that resulted in a flow of funding to brilliant innovators that then solve problems that then led to these types of applications that we all know have in our life.
Chris Wright
Among other things, what strikes me as a great example of partnership between disparate groups, that was you had NASA you had academia and you had I think Raytheon told you actually have people literally weaving the computers. And it strikes me as a great achievement in its own right, bringing a group like that to work collectively, against the tightest of deadlines that you have. It's quite something.
Alexander MacDonald
It is, and it's important to remember, NASA does that every day to this day, and all Science Mission Directorate missions particularly many of them were actually led by university professors. They are the leads of the mission. They define the science requirements of the mission. They manage the teams and the teams include a combination of NASA engineers and centers, and the companies that often have the lead for various parts of the spacecraft. So next time you see a picture from Mars, or pictures that we took, when we flew by Pluto for the first time, or the most recent images around Jupiter, all of these come from a combination of academia and government and energy work together. There was a report that you were the principal author on, but I particularly enjoyed It's from 2014. And it spoke specifically about potential public private partnerships. And it looked at a range of areas including robotic mining, liquid rocket engines, wireless power, and so forth. So six years on from that, where do you think the progress has been made? And where does it lag? It's really good question. You know, that was an acid report that we did a big team that did it and co author with Andrea Riley, who was my co lead on that project. We identified those Areas of technology because we thought they were ones that both would be able to contribute to NASA's long term goals for exploration, development, and directly contribute to economic growth. Robotic mining, for example, is one of those areas where as we think about utilizing resources in situ and other worlds in order to save the amount of mass that we have to send to these other worlds, those technologies would be applicable to making mining more autonomous here. So we identified those kind of areas. What's interesting, though, is that in the process of creating that report, we had actually identified a bunch of other areas, like public partnerships for delivering cargo out to around the moon or public partnerships, even delivering crew to them. But at the time, NASA and our other stakeholders in the space community wasn't sure that we were ready to really go there. Yeah. And so what's changed in the last five years is that now that those are actually the exact kind of partnerships that we're going after. And so what's really changed is that the success of industry and demonstrating various capability, such as launch and landing accelerating the development of things like suborbital, human spaceflight, the success of private companies in deploying large constellations of small satellites. All of these activities have given NASA and US government more broadly, the confidence that we're able to engage in ever greater levels of public private partnership. What's interesting is that the success of the private sector in the time that has elapsed between the writing of that report and where we are today, has meant that now that we're actually looking at even more ambitious goals and we were prepared to identify the time.
Chris Wright
So where does the line fall between what NASA will always do? What they will always subcontract?
Alexander MacDonald
You know, I mean, we think about the agent future of the universe always is a very, you know, problematic word. But I think what NASA will always be doing is identifying and operating and integrating and architecting the missions to the frontier. What we're going to continue to experiment with and work with over time is the ways in which engage people in the various institutions that people tend to organize in order to achieve things and the kind of contractual relationships right? We've changed that over time. Again, NASA began as an advisory committee on aeronautics in the First World War, and it has evolved greatly ever since then we're going to continue to evolve. And so I think, actually, we try not to think about absolutes. What we try to think about is what do we need to do today to get the mission done, NASA is a mission oriented agency. And today we have a new mission, which is to return humans to the moon as rapidly as possible by 2024. And then use our knowledge on the moon of operating the moon for months at a time to then conduct the first mission to the surface of Mars. That is the mission and we are looking at all the tools in the toolbox to figure out how to get it done.
Chris Wright
It must be hard to think long term and one is necessarily subject to the vagaries of public opinion and political change. I mean, every government that comes in has a different idea. of what the space program should be. So how do you deal with that? How do you plan so far ahead, knowing that administration's will change along the way?
Alexander MacDonald
Well, thankfully, physics doesn't change all that often, at least to our knowledge. And so there are certain things that you know, you're going to need to do, you know that you're going to need to have certain types of heavy lift capability. In order to get all of the the mass and the propellant. For Journey to Mars into space, you know, you're going to need certain types of robotic precursors in order to identify your landing sites. And so what NASA does is, as you know, as a crucial surface, basically identifies these things that we're going to need, and tries to make the case for these different pieces for the goals that have been articulated by Congress. And by the, you know, by the White House over time, and say, well, in order to achieve these things, here's what our engineers and our scientists thinks we're going to need to do. We make the case for them and then we try to support the different objectives that we get through legislation. What also NASA really relies on is these general enduring purposes of exploration. From discovery and development, these things have not changed since the Space Act of 1958, as it continues to advance the frontiers of Aeronautics, which was one of the primary purposes of NASA before. And so let's say
Chris Wright
a question that arises is that human spaceflight perhaps isn't necessarily the best way of achieving the best return on investment for space exploration. So if I asked you as an economist thinking of risk and reward, where does human spaceflight fit into that equation?
Alexander MacDonald
Yes, it's an issue, I think, but I think that is a particular lens on the question that I don't really think is all that helpful. We do many different types of things. We play music, we dance, we go skiing, we do bungee jumping, we do all these things. Not because we do a risk reward calculation in our head beforehand of whether or not it's worth the risk to, you know, begin a marathon. If we feel it in ourselves that this is something that we wish to achieve. We decided we're going to go do it, we figure out how to go do it. human spaceflight is a version of that. One of my favorite quotes was by Harold Urie, who is Nobel Prize winner and the the experimenters behind the Euro Miller experiment. And he gave an interview in the early 60s to a newspaper basically saying he didn't think that it made sense to send humans into space. He was very negative on this process. And we were respected scientist and then in a congressional testimony, he then you know, recounts how he called back the newspaper The next day and asked him to tear up the interview, because he'd realized overnight, that anytime that humans have the opportunity to undertake a great new piece of adventure, a great new opportunity for discovery, all of human history shows that humans availed themselves of that opportunity. And whether he thought it was a good idea or not, some humans were going to go do it. And that is the reality of human spaceflight. It's not about cost benefit. Enough humans on this planet have decided that human spaceflight is a valuable endeavor. And as a result, we thankfully receive taxpayer funding in order to advance that process, and nothing about Popular culture, or general sentiment suggests to me that we're in the process of reducing that support. In fact, quite the opposite. We're seeing more interest than than ever before. In human spaceflight, our most recent class of astronaut candidates who were selected came from the largest number of submissions that NASA had ever received. So we're seeing a growing interest in spaceflight here in this country. And we're seeing it across the planet with the emergence of new spaceflight programs across the world. So for me, it's not about cost benefit analysis. Even though I am an economist, it's about the fact that people have decided that we're going into space, and more and more people are freaking about how they're gonna be part of it.
Chris Wright
Thank you. That was fascinating. Anything to add? In conclusion?
Alexander MacDonald
No, just my thanks for the great questions. And, you know, thanks to everyone listening, who is doing their bit to contribute to the growing space economy.
Chris Wright
Next episode will feature a complete interview with venture capitalists Steve jurvetson jurvetson was an early investor in SpaceX Tesla Planet Labs Memphis meats and Hotmail. He currently sits on the board of both SpaceX and Tesla. This has been the Euromoney audio production created by Chris Wright and Chris hunt.
Transcribed by https://otter.ai