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Well, yes and no. Let me start by saying generally I'm 100% with you. I'm a huge fan of capitalism and I think that to get the best of both worlds you need peo
by ericmay 6y ago
Well, yes and no.
Let me start by saying generally I'm 100% with you. I'm a huge fan of capitalism and I think that to get the best of both worlds you need people who demand accountability and action from their government. My view is usually capitalism isn't to blame, lack of the will of the people is.
With that being said, SpaceX is where it is today by partnering with the government for contracts, which helped it build out and develop. I view this as a good thing - government can and should bootstrap companies and industries like this. It's good! SpaceX wouldn't be where it is today if the path forward was just, uh, figure it out... being able to win contracts to deliver value for NASA and the government was/is instrumental to its success and from here it can go on to do additional work for other countries or in the private sector. This means employment for Americans and lots of money spent to push the frontiers of science and space development.
Unfortunately, it seems so much of this has become politicized to the point that it's nonsensical. Depending on who you ask, Elon is a capitalist pig, or a communist getting free hand-outs from the government. It's so stupid.
I think in this case it was a win-win all around.
- rm_-rf_slash 6y agoNASA also has an operational mandate that limits what they can and cannot do. Much of the science NASA produces is tremendous stuff, but they can’t just be given a budget - even with the friendliest administration - with permission to go nuts. For better or worse, private industry fills these gaps. Any well-capitalized space company could “go nuts”, and as long as the higher-ups (execs, board, shareholders, etc.) are happy then there is a wide open space (forgive the pun) to innovate in.
- lottin 6y agoOn the contrary, a business needs to turn a profit in order to survive, and this largely limits the activities it can do to those that are economically profitable.
- rm_-rf_slash 6y agoRight, and like I said, if the higher ups are happy to make big investments in long-shot projects, then that is what will be done, regardless of whether or not the result is profitable. This is not unlike biomedical engineering: invest in big expensive projects expecting several to fail and a few or one to recoup the costs for the rest and then some.
- astrange 6y agoThere are alternative approaches - for instance you can be Amazon/Uber/Tesla/GameStop, who aren't profitable but are simply so cool investors just keep them running forever. However, it's possible that their investors are the actual customers and their product is their coolness expressed as shares. (Amazon is kind of messing this up by starting AWS, which is actually profitable, but the retail side isn't.)
- SiempreViernes 6y agoIs GameStop cool? I though the point was that it is not and investing is just an ironic pose...
- bhupy 6y agoAmazon Retail has been profitable since 2018 https://www.npr.org/sections/coronavirus-live-updates/2020/07/30/897271729/amazon-doubles-profit-to-5-8-billion-as-online-shopping-spikes https://www.npr.org/sections/coronavirus-live-updates/2020/0... Tesla turned its first profit last year: https://www.macrotrends.net/stocks/charts/TSLA/tesla/net-income https://www.macrotrends.net/stocks/charts/TSLA/tesla/net-inc...
- astrange 6y agoTesla's P/E is over 1000. It's almost incidental that it's actually profitable now.
- bhupy 6y agoSure, but if its stock price plunged due to massive sellout, its profits wouldn’t really change. I’m directly refuting the claim that Tesla is unprofitable. It’s in fact a sustainable dividends-paying enterprise. Perhaps a comically over-priced enterprise, but sustainable and dividends-paying nonetheless.