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G H Stine, 1996, "Historical Analogies Potentially Applicable To The Commercialization Of Space Activities", Space Energy and Transportation, Volume 1, Number 1 - 1996.
Also downloadable from analogies potentially applicable to the commercialization of space activities.shtml

References and Referring Papers    Printable Version 
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Historical Analogies Potentially Applicable To The Commercialization Of Space Activities
G Harry Stine

Historical precursors and analogs are often invoked in an attempt to forecast or justify commercial space endeavors. This is especially true when space advocates attempt to make the case of getting government out of space and letting private enterprise take over.

However, history reveals that government participation in a technologically-based activity has benefits as well as disadvantages. Therefore, it may be well to proceed with caution when invoking historical examples as justifications. This calls for occasional sanity checks, particularly with regard to the current attempt to commercialize space activities. A cursory look at some of the historic precursors may be of value to those involved in commercializing space activities. Keep in mind that the record shows that once a system is put into practice it rarely changed and then only with great difficulty, travail, and often negative consequences.

The Railroads

In the United States, governments at various levels have been involved with the railroads since their very inception. During the 1830-1850 period, state and local governments invested heavily in the early railway companies. The motivation was to improve land values and provide access to markets for local products. Much of this was due to pressure from farmers and industrialists. In the 1830s, the Ohio legislature adopted a law committing the state to furnish one-third of the capital required by any railroad company in the state. In 1852, two-thirds of the $10-million capitalization of the Pennsylvania Railroad had come from local governments. State governments often granted railroad companies the power of eminent domain, monopoly privileges, charters, exemptions from taxes, subsidies, and loans.

The federal government began doing much the same sorts of things starting in the 1850s. This government assistance, particularly in the case of the transcontinental railroads, amounted to low-interest or interest-free loans, land grants, and federal guarantees for private loans. Although the federal government thus subsidized the Union Pacific and Central Pacific railroads, all of the government loans and guaranteed loans had been retired by 1895. However, the checkerboard pattern of pubic lands and private lands, a consequence of the land grants, is still evident today in states such as Arizona.

The period of extensive railroad building peaked in the 1870s. A period of intense competition followed. Railroads attempted to restrict competition by means of various agreements with governments, industries, and other railroads. These did not prove to be workable in the long run. Therefore, railroad officials lobbied for federal regulation. The result was the 1887 Interstate Commerce Act that, in effect, created a cartel of the railroad industry with the federal Interstate Commerce Commission (ICC) as its administrator.

With the ICC regulating prices and services, the railroads did reasonably well between 1887 and 1920. During that period, however, the ICC added new bureaucratic regulations and amendments to regulations that gradually increased the ICC's control over the ways that railroads ran their businesses. The Transportation Act of 1920 imposed even more stringent restrictions on railroad finances, pricing, and services. All key railroad operating decisions became subject to ICC approval. In effect, the U.S. railroads were nationalized in all but name.

The collapse of the American railroad industry began in the 1950s but was not apparent until the 1960s. "Deferred maintenance" began to take its toll. Railroad companies either merged to stay alive or went through bankruptcy. Long-distance passenger services, never profitable, were slowly dropped. Branch lines were closed. Services were suspended. The grand "union stations" in many cities became deserted shells or were demolished to make way for high-rise office buildings or auto parking lots.

The government take-over of the bankrupt Penn-Central extended to more than a dozen railroads. Even the government couldn't make money running the railroads, as Conrail clearly showed and as Amtrak continues to prove, except for its Washington-New York City-Boston service.

What has happened in more than 150 years of government involvement? Would the railroads exist today if they had not received government subsidies and protection? Yes, but the rate of initial construction undoubtedly would have been slower because investors would have to have been convinced of the economic and financial soundness of each venture. Indeed, much of this finally took place. However, the initial subsidies, loans, and land grants resulted in substantial overbuilding, leading to numerous financial debacles as uneconomical companies and routes came into being and then were merged into larger and more complex route structures without improving the profitability of those systems. Initially, government regulation helped the profit pictures of railroads by halting the downward trend of rates that were of dubious benefit to customers because of increased shipping restrictions and decreased services. The creation of the ICC and its bureaucratic controls froze the then-existing pattern of uneconomical, randomly organized systems and prevented the emergence of more efficient ones. It led to the technological creation of a competing transportation mode that has turned out to be no basic improvement in transportation save for its flexibility brought about because of smaller unit vehicles.

The Automobile

The various levels of government in the United States aided the automotive industry not by technology development or risk reduction but by providing a substantial subsidy in the form of a nationwide network of paved roads. The early government support was motivated by the same reasons as the subsidization of the early railroads: low-cost access throughout the continent for agricultural and industrial interests.

Before the development of the automobile, roads were simple and inexpensive. Although brick paving was used on some city streets, most roads in America had graded dirt surfaces that became muddy morasses in wet weather. These roads were privately constructed and built by clearing the right of way and filling in holes. In the period 1800-1850, most American roads were privately-owned turnpikes (toll roads).

The development of the automobile and the truck changed all that. Automotive technology wasn't yet up to the four-wheel-drive all-terrain vehicles of today that could have used those old roads (and, in fact, often do). The automobile manufacturers, the truckers, and automobile owners' associations lobbied and promoted the concept that the state and federal governments should build paved roads accessible to all, a nationwide system of "free public roads" and later freeways as opposed to turnpikes. The word "free" meant "without user charges."

In fact, the use of the public roads isn't free. Various user taxes are levied by local, state, and federal governments in the form of fuel taxes and vehicle license fees. The users thus pay indirectly for much of the road construction and maintenance. However, psychologically, the American roads and highways became and remain "free" for public use.

At the end of World War II, U.S. Army officers saw the German autobahns. They applied the analogy that the railroads had served an extremely useful role in military operations for nearly 100 years and came to the conclusion that autobahns would do the same. Therefore, the United State should have such a system, too. Actually, a high-speed limited-access interstate highway system had been studied and designed in the 1920-1940 period. It was highly touted as a potential 1960 achievement in the General Motors' "Futurama" designed by Norman Bel Geddes for the 1939 New York World's Fair. Using the justification of national defense and citing the autobahns that, in reality, hadn't contributed to the defense of the Third Reich nearly as much as to its invasion and defeat, Congress passed the Highway Revenue Act of 1956. This established the highway trust fund to be used for the construction of the Interstate Highway System, a planned 42,500-mile network of limited-access high-speed multi-laned highways that was expected to carry 25% of the automotive traffic in the United States at the time of its planned completion in 1980. It missed the mark on both counts.

What have been the results?

Many economists have stated that separation of road use from direct payment has led to a massive overuse of roads. A perceived use price of zero leads to an enormous demand on the urban freeway system during rush-hours. It has led to an increase in air pollution in urban environments, which in turn has created a major revolution in automotive technology. The 1970 automobile is far different from its 1995 counterpart in terms of size, weight, engine design and size, emissions, fuel chemistry, and acquisition cost. In addition, except for 4WD and all-terrain vehicles, the 1995 auto is almost totally married to the paved free public road system.

Most freight and cargo that now moves by long-distance truck could be moved more economically and just as rapidly by rail. This would also have its beneficial effects upon air pollution because of the lower total exhaust emissions from Diesel locomotives versus the number of Diesel-powered trucks required to transport the same amount of freight. Indeed, this is beginning to take place as more and more drive-on-drive-off trains come into use, each car carrying one or more box-like truck trailers.

However, the automotive industry also used its financial power to help destroy the competing rail system.

Direct involvement of General Motors and Standard Oil in the 1930s caused the dismantling of the 1,164-mile Pacific Electric System, the world's largest interurban electric railway system in and around Los Angeles, California. GM purchased the system and substituted their Detroit-made street-operable autobuses for the "big red cars" that ran on dedicated rail rights of way everywhere in the LA Basin on frequent and convenient schedules. The electric "light rail" system that then existed was gradually replaced in the 1950-1980 period by the present-day LA freeway system. The question must be asked, of course, whether the population growth of the Los Angeles area would have overloaded the Pacific Electric System, creating the need for a freeway system anyway. However, another question follows: Should the "freeway" system have been built as a "turnpike" system for which use tolls were levied?

In the New York City metropolitan area, the interurban rail system survived, but not in private hands. This is because an extensive freeway system could not be integrated into an urban complex that had grown up around the horse rather than, as in the Los Angeles case, around the automobile. Many roads and highway bridges around New York City charge tolls. However, tolls do not appear to have reduced road and highway overusage, especially on "the world's longest parking lot," the Long Island Expressway.

What would the highway system look like if it had been built, operated, and maintained by private enterprise instead of by government taxation? Indeed, many high-speed limited-access modern turnpikes were built. Some were converted into free roads as part of the Interstate Highway System when their construction costs were paid off but some remain toll roads today. Would we have separate truck turnpikes built to more robust standards than passenger car highways? Would long-haul auto travel be by something similar to the Auto-Train between New York and Miami? Would we have turnpikes on which tolls depended upon the hours of use, higher tolls being charged during rush hours to level out the peaking? Would highways thus resemble electric power utilities in organization, service costs, management, and funding?

Here the question must be asked, as it should be for all government funded or subsidized endeavors: How well has it worked and have the consequences created more problems than were initially solved by government subsidization, standardization, and control? An allied question: Would it have worked out as well without government subsidization and involvement, even though it might have taken a little longer? And what might happen if the government road system were sold, in whole or in part, at public auction to the highest bidder and thus de-nationalized and commercialized or privatized?

Can a government-empowered cartel successfully and economically be disbanded and privatized for the public good?

The Telephone

The early telephone industry was characterized by intense competition in spite of extensive patent protection obtained by the Bell Telephone Company. In the 30 years following Bell's introduction of his 1876 prototype, many firms entered the telephone business. Many succeeded. Some cities had two or more competing telephone companies, usually not connected with one another. By 1907, there were as many telephones provided by competitors - about 3 million as there were in the Bell System.

Most competing telephone systems were not compatible. No standards existed for matching the various electrical characteristics of the telephones or their lines and terminations.

John Pierpont Morgan became convinced that standardization would allow interconnection that would broaden the market and, through takeovers and buyouts, produce a nationwide telephone system. He decided he would create it because this would, in effect and in turn, create a monopoly under his control, something he had tried to do by forming U.S. Steel and General Electric Company for different purposes in the same time frame. His first move was to bring Bell System's pioneer Theodore Vail out of retirement to run J.P. Morgan's new company, American Telephone and Telegraph Company (AT&T).

Vail went to work to create "one policy, one system, universal service." Two key elements were required for AT&T's success: (1) creation of state public utility commissions that would grant telephone monopoly franchises and then regulate the user rates, and (2) creation of a similar federal regulatory agency and system to handle the interstate aspects of a single telephone system.

The philosophy of the Progressive Era was compatible with such financial movements because, while industry and finance could still be assured of all-powerful monopoly status, politicians and their bureaucrats got the feeling that they could exercise some populist control over these monster cartels. Within a decade, Public Utility Commissions (PUCs) were active in most states. In 1910, the federal government brought telephone and telegraph companies under the umbrella of the ICC. The passage of the Communications Act of 1934 gave the primitive communications industry - primitive because, by the standards of the 1 990s, it was barely at its beginning with voice telephone, telegraph, and teletype -its own regulatory agency, the Federal Communications Commission (FCC).

By 1964, 30 years after the passage of the Communications Act, it was becoming obvious that the system and its various franchised companies had fallen behind technologically in spite of the outstanding capabilities of AT&T's Bell Labs. The standards were too stiff and unyielding and there was no procedure for modifying and up-dating the standards to embrace new technology that would have offered more capability and lower rates to users. The government-enforced monopoly of AT&T was denying customers the technology that was available in the electronics and data processing areas. Land-based microwave transmission systems were beginning to blossom, driven by the higher band-width demands of television. Even the old, low-tech railroads were beginning to embrace microwave networking for rapid communications along their rail systems, creating additional capacity that the FCC would not allow AT&T to provide commercially to customers. And early satellite communications systems-services were just beginning to offer wire-free long distance worldwide communications.

Without the restrictive regulations and rigid standards of the FCC, microwave systems would very likely have been available sooner. But federal control over communications had created a single company - alongside many smaller "competing" companies such as General Telephone and Electronics (GTE) - possessing a virtual monopoly. This also created a corporate strategy that demanded it protect its enormous investment in its old long-distance cable facilities. Commercial investment in newer, better systems was therefore discouraged.

This became history with the federal anti-trust break-up of AT&T.

With all the technological progress and rapid compounding of capabilities, something had to give, and it wasn't the government that softened its control but expanded it while giving the impression that it hadn't.

Today, a far less rigid regulatory environment appears to exist although the FCC still wields tremendous power and influence. Competition has returned to the telephone industry, and the new AT&T bears scant resemblance to its ancestor. In retrospect, it is well to ask the question: Was the creation of a government regulatory environment and the resulting commercial monopoly really necessary in order to get standardization and interconnectability? Or did it really delay and restrict the commercialization of the technology?

It is widely believed that the government decision to support the transcontinental railroad produced the national track gauge standard of 4' 8-1/2" between rails. However, cognizant rail historians will point out that this gauge had been standardized long before because it made economic sense to have interchangability between the equipment of various railroad companies. Railroads also originated such standards as time zones and nationwide "standard time."

The machine tool industry voluntarily developed its own standards for screw threads.

The motion picture industry adopted its own standards for such things as film size, frame rates, screen width-height ratios, and sound tracks. As improved technologies made possible such things as Cinerama, Todd-AO, IMAX, and other wide screen formats, as well as multi-channel sound and Dolby, these were quickly adopted by the industry and put into standardized form. In modern times, the electronics industry developed numerous standards ranging from the rotational speed of disc recordings to the complex standards for the present-day CDs. While some "mavericks" such as the RCA 45-rpm discs with their large center holes, Sony Betamax videotape recordings, and Apple Macintosh computer operating systems appeared and flourished, the modern telecommunications and data processing industries have been quick and eager to convene their own national and international standards-making activities.

The reason is simple business logic: In a mass market economy, no one wants to be so unique that his product or service isn 't compatible with the rest of the market! Often, it wasn't the best possible technological standard that was adopted, especially if the standard had been established while the technology was still embryonic or emerging. However, successful long-term industry standards are those that can be and have been revised, modified, and up-dated to allow for the accelerated pace of technological development created by private enterprise operating within the free market place.

Radio and Television

Commercial radio broadcasting began in 1920. By 1922, some 564 broadcasting stations were on the air. In the absence of any laws or regulations relating to frequency assignments, the airwaves were a bedlam of interference. Under a 1912 law, broadcasters had only to register their transmission frequencies with the U.S. Department of Commerce. Radio frequency interference conflicts abounded, leading Commerce Secretary Herbert Hoover to convene a series of radio conferences between 1922 and 1925. The general findings of these conferences emphasized that the federal government should be empowered to allocate frequency use and to prevent any user from establishing property rights in any portion of the frequency spectrum. This is a technical extension of the philosophy that some things belong to the public. This basically means that they belong to no one and must therefore be controlled by a centralized government with people in charge who have no vested interest in the success of endeavors. In 1927, legislation brought into being the federal Radio Commission.

Instead of getting together and making private agreements, the radio broadcast industry conceded control over their property rights to radio frequencies and the essentials of their business to the federal government in order to achieve harmony. The federal Communications Commission was established in 1934 and added the telephone and telegraph industries to government regulatory control.

Protected by the FCC, the radio broadcast industry became a cartel that was cautious, conservative, monopolistic, and very profitable. The advent of television broadcasting perpetuated and increased the FCC's regulatory and standards setting roles. Three powerful national networks dominated the industry and grew extremely adept at manipulating the FCC to their advantage. Pay and cable television became possible and economical, but the application of these technologies were greatly retarded by the combined power of the FCC and the networks.

Nationwide programming for a mass audience demanded program content targeted at the lowest common denominator type of audience. In the 1950s, even the FCC chairman himself derided television as being a "cultural wasteland." Free enterprise advocates failed to realize that this was not the result of federal regulations and control - although the FCC served as and still fills the role of censor of program material - but of a government sanctioned cartel that suppressed competition. In an attempt to enrich the "cultural wasteland," public radio and television was established and fostered by the federal government by means of direct subsidies of the Public Broadcasting System (PBS). While numerous memorable programs of high cultural value have been produced and aired by PBS, the ideological slant of this public programming has been, by and large, far more liberal than the often-criticized private broadcast media. As one critic remarked, the federal government's attempt to enrich the cultural wasteland amounted to spreading more fertilizer on it.

When the technologies of pay, cable, and satellite broadcasting finally matured to the point where they were economically viable, the existing network cartel could no longer fend off the demands that the FCC to open the gates. In 1995, the nation is still in the chaotic transition period that has resulted from liberalization of the FCC regulations and policies.

What might have happened had the federal government not stepped in at all in 1927? Some mechanism to prevent frequency interference was indeed necessary. But other similar conflicts have been privately resolved in other industries without invoking the government's help or abrogating the control and standardization of an industry to a bureaucracy. The normal mechanisms for preventing and resolving such conflicts already lies in a legal system that provides for the protection of property rights. If Congress had defined property rights in the electromagnetic spectrum, made them fully transferable in the market place, and established means to enforce them in the courts, there would have been no need for a federal regulatory bureaucracy with vast powers to administrate and control the shape of an industry. The broadcasting networks would not have become the dominating monolithic structure of the industry. Industry-developed standards would have been more flexible and responsive to changing technologies as they matured, making available high-definition TV that could effectively challenge the government-imposed 50-year-old analog TV standards, including the color standard finally determined by FCC edict in 1950.

Competition and market dynamics would have shaped the industry, not government bureaucrats.

Much the same sort of thing happened when the government dc-regulated the airline industry.

The Personal Computer and the Internet

The development of the personal computer (PC) has been totally in the hands of free enterprise capitalism. No government subsidies, regulations, or controls were placed upon the personal computer industry save those already in place and administered by the FCC (relating to radiation of radio frequencies from PCs) and SEC (relating to capital stock issuance and trading of computer companies).

It is true that the modern computer industry was stimulated by government requirements. The 1880 census revealed more than sixty million people in the United States. Given the population growth rate, the Census Office determined that it would require the efforts of hundreds of clerks over a period of nearly eight years to tabulate the anticipated 1890 census data into categories of sex, birthplace, and occupation alone. Therefore, the Census Office held a competition to select an efficient system for census tabulation.

The winner was the Electric Tabulating Company founded and owned by Herman Hollerith who proposed and demonstrated a revised business tabulating machine using punch cards and electrical counting. (Hollerith didn't invent the computer data storage device incorrectly called the "IBM card"; the punch card was developed a century before to control Jacquard looms, and even Charles Babbage proposed using them in his unfinished analytical engine fifty years earlier.) Hollerith stated that he got his idea from watching a railroad conductor punch tickets.

The federal government was an early user of electrical counting and tabulating machines, as computers were then tagged. Other governments followed suit. But this was the extent of early government involvement. All early computer development was for business accounting purposes.

The value of the primitive computer was, however, recognized by federal agencies as a valuable tool for complex computational problems. The U.S. Coast and Geodetic Survey began using early machines to calculate tidal prediction charts. But the computer wasn't extensively used until World War 1. Enormous numbers of people were involved, all industrial areas became important, and millions of soldiers were put into the field to fight. Tabulating and statistical analysis became an absolutely necessary tool of the warring governments. When the United States entered World War I, the federal government virtually nationalized the agricultural, transportation, and industrial bases of the country under the control of the War Industries Board. This involved a massive data processing job that was quickly intensified by the passage of the military conscription law. Draftees had to have uniforms and put into jobs they could do. These sound like trivial tasks today, but not even Sears, Roebuck and Company's mail order clothing capability had a set of clothing size standards; all mail order clothing was made by hand, to measurements sent in by customers. And there were no standardized psychological or aptitude tests and no data base for evaluating the potential skills of millions of drafted soldiers. These tools evolved out of World War I requirements.

After World War I, computers were still primarily used in business. However, the U.S. Army had an interest in computing "ballistic tables" for artillery gun use. The only way to build such tables was by means of hordes of mathematicians tediously making hand calculations by the thousands. The entry of the United States into World War II intensified the need for such military calculations. The war also saw the development of highly specialized analog gun-laying computers for anti-aircraft guns and aircraft bombsights. The development of both the electromechanical and vacuum tube "main frame" computers later exemplified by the ENIAC, EDVAC, and (an obvious acronym) the MANIAC came from these calculating demands that greatly overburdened human resources. A chance meeting between Captain Herman Goldstine who was the contract officer at the U.S. Army's Aberdeen Proving Ground for the development of the ENIAC at the University of Pennsylvania and Dr. John von Neumann who was working at Princeton on the Manhattan District project to build the atom bomb resulted in the use of these large main-frame computers for scientific calculations.

In the following three decades, the electronic computer was exemplified by the huge main-frame machine using vacuum tubes or discrete components such as transistors. Then came the microprocessor. It was not developed by or for the federal government. Marcian E. "Ted" Hoff and Dr. Robert Norton Noyce, both then at Intel Corporation, applied LSI (Large Scale Integrated) circuit technology in response to a requirement for a family of computer integrated circuits (IC) from a Japanese desktop business calculator company named Busicom. Out of this came not only the CPU chip but the RAM and ROM chips plus a simple shift register chip. Busicom later regretted the contract clause that allowed Intel to independently market these chips. Although in 1969 and 1970, Intel had negative cash flow and negative income, the Intel board of directors gave the go-ahead for the development of a microprocessor based on integrating the Busicom chips onto a single chip. They justified their decision on the basis of data that indicated a worldwide market of a few thousand units per year. Thus was born the Intel 4004 CPU.

Modern microchip technology does indeed have its roots in work done under contract by the Department of Defense in the Very Large Scale Integrated Circuit (VLSIC) programs. However, it rests upon the foundations of the work by Hoff and Noyce who produced the first high density integrated circuit chips in response to a Japanese requirement!

The personal computer (the PC) grew from the desire of amateurs to have their own computers. Since main frames were extremely expensive, these amateur experimenters concluded that, if they couldn't buy personal computers, they would make them themselves.

In 1976, Stephen P. Jobs and Stephen G. Wozniak raised $1,350 in start-up capital by selling Jobs's VW van and, on the basis of marketing research conducted by A.C. "Mike" Markkula, Jr., introduced the Apple PC shortly thereafter. There was no government subsidy or contract. There were no government regulations. There was no government agency that had to approve what Jobs, Wozniak, and Markkula did. In 1981, IBM (the modern incarnation of Hollerith's original company) woke up and introduced the first IBM PC with an operating system developed by Microsoft and an open architecture. The rest of the story is well-known contemporary history.

Again, standards were developed by the industry. In common with many other technological products that have appeared since 1960, several competing industry standards were developed so that today the computer world is divided into Apple and MS-DOS users, though other compatible standards were developed also. Nearly every computer guru knows what "ASCII" means.

Connecting all these PCs together into one massive, integrated, complex, super silicon brain did have its origins in the federal government. Indeed, a semi-subsidy was involved. In the 1970s, the Defense Advanced Research Projects Agency (DARPA, later shortened to ARPA) provided modest funding to establish an early computer network linking its contractors and many academic institutions. DARPAnet was funded by the Department of Defense. It was noticed early in this work that the DARPAnet was not being utilized to even a small percentage of its capability. Therefore, with little fanfare and certainly no specific approval from Congress or the administration, DARPA personnel invited individuals to join the network, believing that this would foster badly needed computer expertise and contribute to progress in this area. Over the years, standards were developed either among the users or by joint agreement between the users and DARPA/ARPA. As commercial computer on-line networks such as Compuserve, The Source, BIX, Delphi, and GEnie came on line and became profitable operations on their own, free enterprise companies providing hardware, software, and services to the growing network community joined in to help establish standards. The on-line community also set up its own self-policing methods and policies. The result is today's internet and e-mail services that link people and their organizations worldwide as never before in history.

With regard to both computers and networks, the government failed to recognize what was going on until it was too late for it to affect the technology or its use. When trial balloons relating to controls and regulations were sent aloft, these weren't shot down as much as they were simply ignored and left to drift elsewhere on the winds of time. No one approached the federal government from the computer and network domains asking for protection, subsidies, assistance, or policing. Indeed, the consensus among these groups is that such government intervention is neither needed or wanted for fear that it would stifle the free flow of information. To date, save for the FCC involvement in wireless computer technology and network systems regulations already in place within the FCC, the federal government seems to have suggested no role that is wanted by the makers, providers, or users. The computer and network spheres remain free and untrammeled. Some government involvement may be required for the definition and protection of property rights. This will require legal clarification and the power to decide conflicting issues in the courts rather than by the adoption and enforcement of government regulations.

Thus far, the computer and network areas provide remarkable examples of individual initiative and private enterprise working and succeeding over nearly a century without direct government subsidy, protection, or regulatory intervention. This has had its drawbacks in terms of extremely rapid obsolescence of hardware because of swift technological progress unhindered by the need to satisfy regulations or rigid standards based on old technology. An operable personal computer that is five years old is not only two generations obsolete but has practically zero junk value. The only reasons for up-grading seem to be the difficulty of getting parts, supplies, new peripherals, and better software for the older computers. Properly cared for with a modicum of attention to simple operation and maintenance procedures, a personal computer can remain useful for well over a decade.


The historic record seems to indicate that champions of given technologies often got the government involved when the specific technologies had not yet been developed to the point where they could support economical and moneymaking enterprises. In short, the entrepreneurs counted on government subsidization to bolster or allow "cartelization" of what otherwise would have been a losing business proposition. In numerous instances, this had the unforeseen result of eliminating free market competition. In other cases, government involvement drastically retarded the commercialization of new technologies.

However, a few cases can be cited in which a government-industry partnership resulted in a robust competitive and progressive business arena.

Free enterprise advocates will point out that, in nearly all cases, government involvement has tended toward over-regulation, government monopolization, or defacto government control of an industry.

People concerned about big business monopolies/cartels, market-based pricing, worker exploitation, predatory marketing/sales business practices, and "public-be-damned" policies make arguments that government oversight has eliminated or reduced such free-wheeling free enterprise abuses. Recent history provides an example of a totally government-controlled socialistic economy that failed. On the other side of the aisle, conservatives point out that they believe true free enterprise capitalism has never been tried at all.

Who's right? The answers are clear to conservatives and liberals alike, but these answers are rarely in agreement. Is a balance necessary? If so, where is the balance point? And is it a static balance point or a dynamic one that must be moved as technological, business, and social factors change and evolve?

What is clear is that the process of developing commercial space activities out of a former government monopoly is going to write yet another chapter in this continuing story. How it turns out will depend on how well we have studied and learned the lessons of history.

  1. Stewart H Holbrook, 'The Age of the Moguls', Garden City, New York, Doubleday & Company, Inc., 1953.
  2. Oliver Jensen, 'The American Heritage History of Railroads in America', New York, American Heritage Publishing Co., Inc., 1975, ISBN 0-07-032527-8.
  3. Agnes C Laut, 'The Romance of the Rails', New York, Tudor Publishing Company, 1936.
  4. Robert W Poole Jr., " Hidden Perils in Government Support of Space Activities", AAS Paper AA577-208, published in Advances in the Astronautical Sciences, Volume 36, Part 2, 1978.
  5. G Harry Stine, 'Bits, Bytes, Bauds & Brains: The Inside Story of the Computer Revolution', New York, Arbor House, 1984, ISBN 0-87795-574-3.
  6. G Harry Stine, 'The Corporate Survivors', New York, American Management Association, 1986, ISBN 0-8 144-583 1-9.
  7. Mitchell Wilson, 'American Science and Invention', New York, Simon and Schuster, 1954.
  8. The Encyclopedia Britannica, New York, Encyclopedia Britannica, Inc., 1968.
G H Stine, 1996, "Historical Analogies Potentially Applicable To The Commercialization Of Space Activities", Space Energy and Transportation, Volume 1, Number 1 - 1996.
Also downloadable from analogies potentially applicable to the commercialization of space activities.shtml

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