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> You might benefit from learning a bit from the HN Guidelines regarding discourse. Yes, I might :) . Just went with existing practice, not with guidelines. Wi

by avmich 4y ago

> You might benefit from learning a bit from the HN Guidelines regarding discourse. Yes, I might :) . Just went with existing practice, not with guidelines. Will try to do better next time :) . > Except Musk himself has said they were hours away from bankruptcy before NASA's contract had come through after that fourth launch. That's exactly what I'm talking about. I think you're proving my point - your "Unless you're Musk, who gets the taxpayers to fund his risk. What's the saying? It's socialism for the rich and capitalism for the poor?" says that Musk didn't risk his own money developing Falcon-1, and almost lost. Remember Falcon-5? That was SpaceX approach to relatively slowly conquering the market in case NASA won't give them contracts. But NASA did, and Falcon-5 went to history, and Falcon-9 got full steam ahead. > Also, when they lose govt payloads, the govt (i.e. taxpayers) shoulder most of the risk because they are self-insured. That means SpaceX gets to take bigger risks because they don't have to pay for them through the typical privatized mechanisms of risk mitigation like insurance. SpaceX happily serves commercial customers. And commercial customers are happily served by SpaceX. And US government wants its own share of cheap and reliable - comparatively - launches, so SpaceX gets their orders too. Will you say anybody dealing with US government rides on the backs of taxpayers? Do you understand that you're wrong with your socialism and capitalism?

bumby 4y ago
I think we agree on the points but disagree on what they mean in the larger scope. I have no qualms with the hybrid govt/contractor approach. I've said elsewhere on this thread that I think both sides can benefit from it. But, to a certain extent, I'm saying that limits Musk's claims to great business acumen, at least outside of relying on large govt contracts. To a certain extent, many on this thread have said that constitutes a type of grift. A grift that requires taxpayer money. I'm playing a little loose with the socialism definition, for sure, but that's what I mean in the larger point. To that point, there would be no SpaceX without govt funding. One of the reasons they now have commercial customers is because the NASA contracts allowed them to get better to a point where private customers saw them as a viable option. If they didn't have that opportunity with NASA, I don't think they'd have private customers. For one, they likely wouldn't have enough early private customers to be economically viable. And two, those early flights would be much more expensive because they were unproven and that uncertainty makes insuring those flights much more expensive if not impossible. To that extent, a viable SpaceX business model is completely predicated on government contracts and not on private sector capitalism. The govt split the CCP contract to try and spread risk across multiple vendors and essentially fund an upstart in the hope that it pays off. It's paying off so far, so I'm not saying that's all bad. But it does make their model divorced from a purely capitalistic endeavor. I'm not saying Musk had no skin in the game, but I am saying he had almost nil chance of winning that game without taxpayer support. Other people on this thread have pointed out how that distinction matters when comparing to better examples of business leaders. >Will you say anybody dealing with US government rides on the backs of taxpayers? I would say if the business model is only viable with government contracts and is particularly viable because it forces taxpayers to shoulder the early risk, yes. If your business only works by being propped up by the govt, it's a bastardized form of socialism. I'm glad SpaceX is able to move away from that, but let's not revise history to ignore those early facts because they don't fit our preferred narrative of Musk being a clever paragon of capitalism. The simplest way of framing it is saying, "If they required taxpayer money in order to become/remain viable, it's a form of socialist intervention." I would put a lot of other companies in that list, from automotive to finance, so I'm not just picking on SpaceX.
- avmich 4y ago
  I'm glad you're moving away from blunt accusations, but let's look into details deeper. > there would be no SpaceX without govt funding Strictly speaking, historically things evolved one particular way, and we don't know exactly what would happen if something have changed in the past. Here you state your opinion, and I'd say yes, SpaceX used US govt money, but that doesn't mean they couldn't grow without them. They already had an orbital launch on private money - a significant achievement by itself - and there were plans to grow without NASA, which - in my opinion - were reasonable. So I'm skeptical about their guaranteed death without support from US govt money. > But it does make their model divorced from a purely capitalistic endeavor. Maybe you mean some rather theoretical, simple pure market model. In reality US govt supports growing industries - Internet is an example - so this is at least rather traditional. > I am saying he had almost nil chance of winning that game without taxpayer support This is an opinion. Here is what I know: there is a community, called alt-space (from a Usenet section), or New Space, which basically talked about what SpaceX was doing about a decade before SpaceX. It was a matter of time who'd get this done successfully first. An example of this New Space approach would be Northrop Grumman Lunal Lander Challenge, where John Carmack's Armadillo Aerospace showed a lot of impressive technology, and which was eventually won by Masten Space - all of that with reusable rocket technology, landing under power, years before SpaceX made first stages of Falcon-9 reusable. Because of this I think that Elon's stated approach of developing more modest, but cheaper rockets - like Falcon-5 (while continuing flying Falcon-1) - or partnering with Virgin Galactic on droppable launcher - relying only on private market could actually work. > but I am saying he had almost nil chance of winning that game without taxpayer support. Beal Aerospace "folded" a few years before SpaceX; now people have doubt if he did the right thing, given that his technology was perhaps even cheaper than SpaceX. NASA also learned a lesson from Beal closing the doors, and was more careful to the next entrant. The final result, by today, is rather good, by popular opinion, I would say - NASA got a good launch supplier, SpaceX got a good anchor customer, so US govt would likely lose if it didn't support SpaceX, and relying on that support was a good approach. Yet even without that support there is no guarantee SpaceX wouldn't succeed; there are some arguments for that. > if the business model is only viable with government contracts and is particularly viable because it forces taxpayers to shoulder the early risk, yes. SpaceX brought significant savings to US govt, so that risk - from US point of view - was rather justified. Remember, US govt can't work with only zero-risk schemes, and in such a complex area as space access it has to tolerate some risk, even with existing providers. > If your business only works by being propped up by the govt There is no proof that SpaceX couldn't work without govt help. Also govt help brought taxpayers savings - in exchange for some risk, which is not obviously comparable to existing non-zero risk elsewhere. > it's a bastardized form of socialism. I doubt many on HN will agree with you. > but let's not revise history to ignore those early facts I want to emphasize - if the history would repeat, those choices made would better be repeated. Even if SpaceX lost, US govt would be better keeping betting on new companies for the launch services, because alternatives are likely worse. In this sense SpaceX is a lucky opportunity for US. > because they don't fit our preferred narrative of Musk being a clever paragon of capitalism. For long time rocket startups assumed one of their customers - perhaps biggest, or the only one - would be US govt, because the US govt doesn't historically have that much of a choice. If we'd have many SpaceX-es, then, yes, a new company could worry that they could not be chosen by US govt for contracts, because their competitors are that much better - but even now it's not the case. In this sense, because Musk knew all too well US govt will need his resources he doesn't stop being "a clever paragon of capitalism". > The simplest way of framing it is saying, "If they required taxpayer money in order to become/remain viable, it's a form of socialist intervention." I would put a lot of other companies in that list, from automotive to finance, so I'm not just picking on SpaceX. Since this is how things work, I wouldn't even argue. I'd just say that's how things work. If you wish they'd better work differently, you'll have to provide arguments why that different way will actually be better.

by avmich 4y ago

bumby 4y ago

I think we agree on the points but disagree on what they mean in the larger scope. I have no qualms with the hybrid govt/contractor approach. I've said elsewhere on this thread that I think both sides can benefit from it. But, to a certain extent, I'm saying that limits Musk's claims to great business acumen, at least outside of relying on large govt contracts. To a certain extent, many on this thread have said that constitutes a type of grift. A grift that requires taxpayer money. I'm playing a little loose with the socialism definition, for sure, but that's what I mean in the larger point. To that point, there would be no SpaceX without govt funding. One of the reasons they now have commercial customers is because the NASA contracts allowed them to get better to a point where private customers saw them as a viable option. If they didn't have that opportunity with NASA, I don't think they'd have private customers. For one, they likely wouldn't have enough early private customers to be economically viable. And two, those early flights would be much more expensive because they were unproven and that uncertainty makes insuring those flights much more expensive if not impossible. To that extent, a viable SpaceX business model is completely predicated on government contracts and not on private sector capitalism. The govt split the CCP contract to try and spread risk across multiple vendors and essentially fund an upstart in the hope that it pays off. It's paying off so far, so I'm not saying that's all bad. But it does make their model divorced from a purely capitalistic endeavor. I'm not saying Musk had no skin in the game, but I am saying he had almost nil chance of winning that game without taxpayer support. Other people on this thread have pointed out how that distinction matters when comparing to better examples of business leaders. >Will you say anybody dealing with US government rides on the backs of taxpayers? I would say if the business model is only viable with government contracts and is particularly viable because it forces taxpayers to shoulder the early risk, yes. If your business only works by being propped up by the govt, it's a bastardized form of socialism. I'm glad SpaceX is able to move away from that, but let's not revise history to ignore those early facts because they don't fit our preferred narrative of Musk being a clever paragon of capitalism. The simplest way of framing it is saying, "If they required taxpayer money in order to become/remain viable, it's a form of socialist intervention." I would put a lot of other companies in that list, from automotive to finance, so I'm not just picking on SpaceX.

avmich 4y ago
I'm glad you're moving away from blunt accusations, but let's look into details deeper. > there would be no SpaceX without govt funding Strictly speaking, historically things evolved one particular way, and we don't know exactly what would happen if something have changed in the past. Here you state your opinion, and I'd say yes, SpaceX used US govt money, but that doesn't mean they couldn't grow without them. They already had an orbital launch on private money - a significant achievement by itself - and there were plans to grow without NASA, which - in my opinion - were reasonable. So I'm skeptical about their guaranteed death without support from US govt money. > But it does make their model divorced from a purely capitalistic endeavor. Maybe you mean some rather theoretical, simple pure market model. In reality US govt supports growing industries - Internet is an example - so this is at least rather traditional. > I am saying he had almost nil chance of winning that game without taxpayer support This is an opinion. Here is what I know: there is a community, called alt-space (from a Usenet section), or New Space, which basically talked about what SpaceX was doing about a decade before SpaceX. It was a matter of time who'd get this done successfully first. An example of this New Space approach would be Northrop Grumman Lunal Lander Challenge, where John Carmack's Armadillo Aerospace showed a lot of impressive technology, and which was eventually won by Masten Space - all of that with reusable rocket technology, landing under power, years before SpaceX made first stages of Falcon-9 reusable. Because of this I think that Elon's stated approach of developing more modest, but cheaper rockets - like Falcon-5 (while continuing flying Falcon-1) - or partnering with Virgin Galactic on droppable launcher - relying only on private market could actually work. > but I am saying he had almost nil chance of winning that game without taxpayer support. Beal Aerospace "folded" a few years before SpaceX; now people have doubt if he did the right thing, given that his technology was perhaps even cheaper than SpaceX. NASA also learned a lesson from Beal closing the doors, and was more careful to the next entrant. The final result, by today, is rather good, by popular opinion, I would say - NASA got a good launch supplier, SpaceX got a good anchor customer, so US govt would likely lose if it didn't support SpaceX, and relying on that support was a good approach. Yet even without that support there is no guarantee SpaceX wouldn't succeed; there are some arguments for that. > if the business model is only viable with government contracts and is particularly viable because it forces taxpayers to shoulder the early risk, yes. SpaceX brought significant savings to US govt, so that risk - from US point of view - was rather justified. Remember, US govt can't work with only zero-risk schemes, and in such a complex area as space access it has to tolerate some risk, even with existing providers. > If your business only works by being propped up by the govt There is no proof that SpaceX couldn't work without govt help. Also govt help brought taxpayers savings - in exchange for some risk, which is not obviously comparable to existing non-zero risk elsewhere. > it's a bastardized form of socialism. I doubt many on HN will agree with you. > but let's not revise history to ignore those early facts I want to emphasize - if the history would repeat, those choices made would better be repeated. Even if SpaceX lost, US govt would be better keeping betting on new companies for the launch services, because alternatives are likely worse. In this sense SpaceX is a lucky opportunity for US. > because they don't fit our preferred narrative of Musk being a clever paragon of capitalism. For long time rocket startups assumed one of their customers - perhaps biggest, or the only one - would be US govt, because the US govt doesn't historically have that much of a choice. If we'd have many SpaceX-es, then, yes, a new company could worry that they could not be chosen by US govt for contracts, because their competitors are that much better - but even now it's not the case. In this sense, because Musk knew all too well US govt will need his resources he doesn't stop being "a clever paragon of capitalism". > The simplest way of framing it is saying, "If they required taxpayer money in order to become/remain viable, it's a form of socialist intervention." I would put a lot of other companies in that list, from automotive to finance, so I'm not just picking on SpaceX. Since this is how things work, I wouldn't even argue. I'd just say that's how things work. If you wish they'd better work differently, you'll have to provide arguments why that different way will actually be better.