Government missions actually work best in areas of high uncertainty, such as space. Failures not only get spread throughout society, where they can be absorbed without shock to a particular sector or system; those “failures” often turn into business successes.
The seeming wastefulness of NASA got encapsulated in an urban legend about the so-called space pen. As the story goes, the Americans spent millions to develop a pen that would work in zero gravity. Meanwhile, the Russians used a pencil. The truth is much more illustrative of the space program. Both the Americans and the Russians used pencils in the beginning of human space flight. But pencils are problematic in zero gravity; the graphite tips can break off and produce dangerous dust, and the wood in pencils can present a fire hazard. So NASA and the Soviets independently went to work developing a space pen. NASA gave up after the effort proved too costly—less than $1 million but a lot for a pen. Meanwhile, inspired by the NASA attempt, pen manufacturer Paul Fisher invented a pressurized ink cartridge and marketed an Astronaut Space Pen. NASA bought about 400 of them in 1967. The Soviets followed, and to this day both American astronauts and Russian cosmonauts use Fisher Space Pens in space. While the NASA failure didn’t directly lead to a spinoff, the agency didn’t waste millions. And the space program ended up doing one of the things it does best: inspiring inventors.