Doug Casey on the Modern Space Race

Via Casey Research

Justin’s note: Jeff Bezos is selling nearly $1 billion worth of Amazon stock.

Bezos, who founded Amazon, isn’t doing this because he’s short on cash (he’s worth more than $80 billion)…or bearish on Amazon’s share price.

He’s doing this to fund his aerospace company, Blue Origin. As if that weren’t crazy enough, Bezos plans to put about $1 billion of his money into Blue Origin every year until the company can sustain itself.

Bezos isn’t the only billionaire who’s set their sights on space, either. Tesla founder Elon Musk has his own aerospace company called SpaceX.

In short, a modern space race has broken out between two of the world’s richest men.

It’s an exciting trend to say the least. So, a few days ago, I called up Doug Casey to get his take. Below is a transcript of our conversation…

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Justin Spittler: Doug, what do you think of this modern-day space race? Are you happy to see billionaires spearheading it instead of governments?

Doug Casey: Absolutely. I don’t know if I’d support Bezos’ political views—he appears to be more or less in the Soros camp—but the guy’s obviously a business genius. He and Musk and others that are getting into the space race are absolutely doing the right thing. Certainly from an intellectual and psychological standpoint. But also from a purely economic one. It’s true that pioneers are the ones who might get arrows in their backs. But the risk/reward ratio here is at least as good as it was when Europeans struck out for the New World 500 years ago.

Space is where the future lies from just about every point of view. And I’d much, much rather have private entrepreneurs like them doing this than having NASA do it. Why? Because NASA is a bureaucracy. It doesn’t react to profit and loss. They don’t either know or care whether they’re creating capital or destroying capital.

A bureaucracy follows rules and regulations in an attempt to fulfill the mission. Bureaucracies are necessarily robotic. They’re necessarily rigid, unresponsive, and not just non-innovative, but anti innovative. They’re all structured like, and act like, the Post Office or your local DMV. It doesn’t matter if the bureaucracy is full of high IQ people, as NASA surely is. The institution itself tends to act stupidly. That’s because there are never real incentives for doing a great job, or penalties for a bad job.

That’s largely because “cost” and “profit” are alien concepts to bureaucracies. They aren’t elements in its decision making. Bureaucracies aren’t economic, they’re political in the way they calculate their success. But cost and profit are critically important for effectiveness. Something can only be “sustainable”—a very popular buzzword today—if it’s profitable. Profit is evidence that you’re creating more capital than you’re consuming. It’s paradoxical that the types who say they’re most concerned about sustainability seem most antiprofit in outlook.

Business is going to be much better than NASA ever was in conquering space, for about every reason possible.

It’s got to be said that, in its early days, when it was an adventure, NASA wasn’t the bureaucracy that it’s evolved into today. The concrete hadn’t set. But the nature of bureaucracy is such that, as I said, it’s built to follow rules, not to create new capital, or innovate. And if something’s going to be sustainable, it has to create new capital. It has to produce more wealth than it consumes. So, business is the way that space is going to be conquered, not government.

Justin: I completely agree. It seems conquering people is about the only thing governments do well.

Doug: The State is a coercive entity by its very nature. As Randolph Bourne said 100 years ago, war is the health of the State. So inevitably, they’re going to look for military applications of anything that happens with space. And the military applications of space are going to be devastating, potentially much worse than ICBMs with nuclear warheads. It’s a question of controlling the high ground. If you’re in space and want to launch an attack on another entity, you don’t need nuclear weapons. All you need is rocks, which are readily available on the moon or in the asteroid belt, to be dropped down on a country. That can be far more devastating, as the dinosaurs learned.

On a more mundane level, the world increasingly relies on satellites for all kinds of communications. All the major governments are poised to destroy each other’s satellites. But, in the meantime, they use most of their own satellites for spying.

So space should be kept out of the hands of governments for just that reason, not to mention the others.

What can be done in space? There are literally no limits. Infinite power from the sun. Infinite materials from the solar system. Zero gravity. No environmental concerns. The possibility exists to do absolutely anything, without the political and social constraints that burden us more than physical factors in many cases. Earth has become a very small place, thanks to technology. So we need technology to increase the human bailiwick. I wish Bezos, Musk and all the other budding space entrepreneurs well. I hope they succeed. And I’m sure they will, in fact, succeed.

Justin: I hope they succeed too, especially since so much seems to be at stake.

In fact, Musk himself has said interplanetary travel is necessary to ensure the continued existence of humanity. Do you think that’s true?

Doug: Yeah, absolutely.

It’s risky being on just one little ball of dirt in an obscure solar system in one of probably billions of galaxies, each of which contains billions of stars. Most of the stars, it’s turning out, have their own planets. It’s kind of a new territorial imperative to do this as a species. In a way we’re at the same stage the first humans were when they ventured out of Africa 100,000 years ago.

Right now the human race has all its genetic eggs in one basket. Which isn’t very smart. Although, looking at this from a philosophical point of view, I’m not sure how much difference it makes to you or me as individuals. And this gets us into the question of what happens after you die. It’s not something most people think is relevant to the subject of space migration—but it might be. Space migration is likely indispensable to the continued survival of the species. But how important is that really, on either a personal or a cosmic level?

There seem to be perhaps three logical possibilities. Let me hasten to say I don’t have a dog in this fight. I’m simply trying to anticipate some of the consequences of space technology.

One is that you disappear totally when you die. At which point absolutely nothing makes any difference to you. Many people, especially in advanced countries that have cultures of science, hold this view. I’ll hazard a wild guess this group is only about 10% of the world population.

A second view. Others, prominently including the Middle Eastern religions that worship Allah, Jesus and Yahweh, think you go to Heaven or Hell. Maybe they’re about 40% of world population. I expect they’ll suffer an ever-increasing existential crisis as mankind advances further into space, and technologies of all kinds develop.

A third group, including Buddhists and Hindus, believe you’re a spiritual entity that’s reincarnated. And the only way that it makes any difference what the species does, I think, is if they’re right. Only if you’re reincarnated do you have a genuine personal interest in what happens to the human race. Of course there are a myriad of theological speculations out there. For all I know, the largest part of humanity doesn’t even consider the problem. Be that as it may, the question has big philosophical implications, whether we go into space and get off the planet or not.

Justin: I’ve never thought about it like that. But that’s definitely something to contemplate.

I also have to ask, since you’re a betting man… Who do you like in this race: Musk or Bezos?

Doug: I really don’t know who’s going to win, because you’ve got to remember that in the aviation race, although Orville and Wilbur Wright were the first ones to fly, they never set up a truly successful aviation company that made planes. I don’t know who I’d bet on. And you know Warren Buffett’s famous saying about the best thing that could have happened for investors in the airline industry was that someone should have shot the Wrights down. It may be nobody makes money in space for decades…

But I’ve got to say, I really like Musk’s approach. And I love this quotation from him: “I hope to die on Mars, just not on impact.” I hope he succeeds in that goal.

Of course, huge advances are being made in life extension too. It’s quite likely that somebody that’s now alive is going to live for hundreds of years. Which means it’s likely many people alive at the turn of the 21^st century will see space evolve, the way people alive at the turn of the 20^th century saw aviation go from the Wright Brothers to a moon landing. The best part is that there are a half dozen important technologies that are advancing at the rate of Moore’s Law. I did an article on them all in the June 2016 issue of The Casey Report. [Editor’s note: Dispatch readers can read that essay here and here.] Timothy Leary will turn out to have been conservative in his optimism about what he called SMIILE—Space Migration, Intelligence Increase, Life Extension.

There are all kinds of possibilities that tie into the space race.

Justin: Absolutely. I can only imagine what Musk and Bezos will be working on 20 years from now.

Anyway, that’s all I got for today, Doug. Thank you for taking the time to speak with me.

Doug: You’re welcome.

Justin’s note: The Casey Report editor E.B. Tucker just released a brand-new video presentation that explains which type of companies will be the biggest winners of the modern space race. You’ll need to act before June 30 to set yourself up for historic gains. Click here to learn why.