Even in space, competition brings out the best

Author: Al Downs - November 27, 2017 - Updated: November 27, 2017

Al Downs
Al Downs

Congress was considering giving billionaire Elon Musk’s SpaceX a monopoly over military space launches. Luckily, the language was stripped before the bill’s final passage, offering an important reminder that, in a society that values economic prosperity and opportunity, a legally sanctioned monopoly is more than counterproductive; it is cheating.

Buried in the over-600-page National Defense Authorization Act of 2018 (NDAA), Section 1615 would have prevented Air Force “research, development, test, and evaluation” of space launch vehicles not explicitly outlined by the legislation. This may look innocuous at first glance, but there are only three options on the market — and two of them soon won’t be available to the Air Force. The United Launch Alliance (ULA) Atlas 5 will be banned beginning in 2022 for national security reasons and the ULA Delta 4 is being phased out for cost reasons, which would have left the SpaceX Falcon 9 as the only choice authorized for procurement.

Air Force leadership formally expressed its objection to the proposal, pointing out that it would increase costs and limit the ability to accomplish the objectives Congress has established. Both of these outcomes are what any student of economics will know are the natural effects of monopoly. Even if this type of provision were meant for something less vital than national defense, any restriction on economic competition should be forcefully challenged on principle.

Not only do monopolies hurt consumers by hindering innovation, limiting variety, lowering quality, and increasing prices, but anti-competitive sentiment also runs against the grain of American culture.

Intrinsic to the American character, our respect for competition is based on the fundamental understanding that everyone is better off when success is dependent on merit and not connections. Elon Musk may be able to afford lobbyists, but for anyone with a lighter wallet, a society that closes opportunities by law is dangerously unfair.

If the ability of the Air Force — or any government agency — to competitively source goods and services is limited, the ultimate burden will fall on American taxpayers. This was recognized by a bipartisan group of 20 members of Congress who formally outlined their opposition to Section 1615 earlier this year. Among the 20 signatories of the letter that stated “allowing competition…will result in a better, more capable launch vehicle that will best serve national security, and ultimately yield better value and services for taxpayers,” were five members of the Colorado delegation: Rep. Diana DeGette, D-Denver; Rep. Ken Buck, R-Windsor; Rep. Doug Lamborn, R-Colorado Springs; Rep. Mike Coffman, R-Aurora, and Rep. Ed Perlmutter, D-Arvada.

In finalizing the 2018 NDAA, Rep. Coffman (on whose congressional staff I formerly served) was well-positioned as both a member of the conference committee designated to finalize the language and a longtime critic of wasteful and improper spending relating to America’s military. Coffman has a record of working for more open and fair competition in defense contracts. He also has made a top priority of accountability at the U.S. Department of Veterans Affairs for the delayed and over-budget Aurora veterans hospital, which, among many scandals, has illegally spent billions of taxpayer dollars without using competitive bidding and contracts.

Sometimes, participation in free enterprise is limited by natural forces and it takes time — and freedom — for entrepreneurs to find new ways to compete. Other times, competition is intentionally limited by government acting on behalf of powerful special interests. While neither situation is desirable, the latter offers no route to remedy itself, as the power of the law is final, while the former can be disrupted by a single innovative idea.

Al Downs

Al Downs

Al Downs is a Young Voices Advocate residing in Boulder County, Colorado. Downs holds an bachelor's degree in economics and mathematics from the University of Colorado, master's degree in economic policy from Georgetown University, and has completed graduate studies in economics at Stanford University.