Economists & Apollo 11, et al.

My impression of business is that every project must have some return on investment. What was NASA’s return on investment by going to the moon? Actually, because I hate this kind of thinking…so why aren’t more projects done “just because”?

Imagine what could be accomplished if engineers and scientists were allowed to pull their resources and undertake projects “just because”?

Trying to start a new way of looking at things…

  • Jinx

The Apollo Program wasn’t done by a business; it was done by a government. Although people sometimes try to apply business principles to governments, there are very significant differences in their objectives and in how they operate which mean that business principles can’t just be imported into the political realm. Of course the Apollo Program was carried out in part by lots and lots of capitalist contractors and sub-contractors–Boeing and Lockheed and so on–and they all got paid, thus justifying their acceptance of government contracts in bottom-line terms. But from the point of view of the United States, Apollo’s justification was measured in terms of things like the quest for scientific knowledge for its own sake, the economic value of “spin offs”, and most of all national prestige.

NASA’s reward for all of the spinoffs it produced as a result of Apollo was a reduction in budget so severe that it apparently can no longer maintain its own website which trumpets that success story.

Just about the only two things they didn’t have a hand in was Tang and Velcro.

How should this pool of resources be allocated amongst a number of cool-sounding projects? And how big should the pool of resources be (presumably more than nothing and less than all human output in excess of subsistance)? Surely these questions should be answered on the basis of what you expect to get out of them.

Economists tend to measure what you get of things in terms of money, but that is just a way of measuring things. It is not the case that the only goal for investment is profit. Basic research (for example) has returns made up of ennobling the human race, indulging our sense of wonder, network benefits (“synergies”), understanding and profits from unexpected commercial applications. All of these things can in principle be measured in terms of money and implicitly are measured in terms of money when decisions about which projects to fund are made, since less than all our resources can be used to fund basic research.

I think you could look at the ROI as being the same as any other piece of Cold War spending. What was the ROI for all of those Minuteman missiles we never fired, anyway?

National prestige–namely, throwing the achievements of the West in the face of Communism (esp. after that late start we had)–was the major justification.

Plus, it was cool.

To expand on MEBruckner, what the U.S. Government got out of it was:

– the intangible but real profit in (internal AND external) Political Prestige of (a) having an American on the moon at all (b) demonstrating that when our Prez sez “do this preposterously complicated and expensive thing in 9 years”, he means it, and most specially © making the statement that no matter if some other country or system does something before or better than us at some point, WE in particular, and our capitalist-democratic system in general, will catch you and pass you even while at the same time fighting hot and cold wars, and driving fast cars listening to the Beach Boys, all of it w/o starving the populace.

– related to © above, the sheer satisfaction of saying to the Soviets, “Bury this, tovarich!”

– a civilian project to rush forward with a sense of urgency comparable to that of wartime all sorts of technologies in rocketry, aerodynamics, orbital navigation, communications, systems analysis, computing, medical monitoring, materials engineering, etc., that would be very useful to build a superior industrial/technological/knowledge base for the economy.

The Apollo moon program was not done “for its own sake”. The leaders of the USA figured that of all the possible projects to achieve great, history-making scientific and technological feats that would bring glory to whoever did it, this one was the one that would generate the bigger bang for the buck.

Once the objective was achieved, the program was rapidly and quite unceremoniously demobilized and dismantled. Just look at the last 30 years of NASA.