An audacious public space program can bring incalculable benefits—along with some benefits that are not only calculable but fully proven. NASA’s work with aeronautics and space has helped improve air transportation, jump-started global communications, boosted technologies in medicine and materials, and provided a jobs multiplier far beyond other sectors.
We rarely hear “audacious” and “public” in the same phrase, but I use them deliberately. Government can serve as more than a catalyst for the private space industry. It can also lend patience to long-term investments in space—a necessity for meeting the long timeframes of missions to other planets and beyond. With the backing of the American people, NASA can spread the risk of early investment in space across society, reducing the uncertainty that keeps wise investors from backing private ventures. Government can go where reasonable venture capitalists fear to tread.
In short, the public American aerospace program reflects our courage in pursuing the future.
“Courage” is yet another word rarely heard in connection with government, outside of the military. But America’s most far-reaching economic successes often start with courageous government investment. The twentieth century offers a retrospective map, along with powerful evidence for my argument. The first American century, a period of sustained growth, benefited from periodic structural changes in the economy—changes driven by new industries and new technology. These innovations were catalyzed by government research and development funding, sustained over time. More than that, Americans’ investments made through public government agencies have fostered whole new markets, industries, and areas of technology; such as nanotechnology, global positioning systems, and, not least, the Internet. These benevolently disruptive technologies did not arise by accident. They originated with Vannevar Bush’s vision, and came out of distinct missions, scientific, military, and economic, defined by agencies such as NASA. “Transformational public investments were often fruits of ‘mission-oriented’ policies, aimed at thinking big,” such as going to the Moon, writes Mariana Mazzucato in her recent book, The Entrepreneurial State.
Courage and patience. Risk-taking. Boldness. Thinking big. All of this language swims against the current political narrative on both the right and the left.
The political right sustains the belief in a direct relationship between small government and economic growth; the lower the taxes, the less active the government, the bigger the economy. In this view, Adam Smith’s “Invisible Hand” serves as an unerring self-correcting mechanism, balancing supply and demand, eliminating the lazy and inefficient, and rewarding the risk takers and innovators.
On the left, John Maynard Keynes remains the patron saint of economic theory. The economy is full of flaws, uncertainties and brutal cycles—thanks in part to the irrational behavior of private investors, whose “animal spirits” make them put money into ventures based on the zeitgeist, trends, or personal beliefs. “Market failures” result—including recessions, inequality, and inefficient distribution of resources. Keynesian theory holds that government must serve as a corrector and a counterbalance to animal spirits and market failures. The public sector can stimulate the private sector where needed and can step in where the economy simply doesn’t work, such as health care or policing.
Neither side alone shows why America’s technological know-how dominated the world’s economy during the last century. Can we credit low taxes? In the mid-century, at the peak of the good ol’ days often recalled by the more nostalgic members of the right, the top marginal tax rate exceeded 90%. And, as Mazzucato points out, before the 1980s the capital gains tax was more than double what it is today. In other words, the tax burden, especially for wealthy citizens, was far heavier during America’s greatest economic boom.
Was it the New Deal and its policies of redistributing wealth? While most economists agree that Franklin Roosevelt’s administration helped restart the economy, his more redistributionist policies essentially rearranged existing wealth. Ultimately, though, growth must come from new wealth; and most new wealth comes from technological innovation. Sustained new wealth grows out of new technology, particularly in agriculture and aerospace. These two sectors have provided the largest long-term positive trade balances over the past century. The growth in American agriculture and aerospace could not have happened without bold, strategic investments, through well-defined missions, by the American government.