Moon 2.0

Yesterday, Google announced the creation of a new prize dedicated to the development of space, The Google X-Prize (a.k.a. "Moon 2.0"). This is $30 million to be awarded to whomever can put a lander on the moon, travel 500 meters, broadcast about 1 gigabyte of images back to Earth, and accomplish some other feats.

The prize is $25 million to the first who can fulfill the primary objectives as long as they do so before the end of the year 2012; $15 million if it takes them until $2014. There is a $5 million second place prize and a $5 million set aside for other accomplishments.

I consider the prize to be substantially a sham.

The reason is because of the expiration date.

Any business man knows that the value of any potential income is to be discounted by the amount of risk involved. If I have a 50% chance of making $100 – then that is only ‘worth’ $50 in current value. I would be wise to collect a guaranteed $51 now over making this gamble.

This due date substantially increases the risks involved for any team that decides to go for the prize, thus significantly decreasing its value. This is not a $20 million prize. It is significantly less than that.

Robert Bigalow performed the same stunt with his “America’s Prize”. This is a $50 million prize to the first private organization that can put a person in orbit. It has an expiration date of 2010. As far as I know, this prize has almost no effect on the space development industry, simply because the ‘risk’ of failing to meet the deadline is so high that the prize itself is virtually worthless.

I suspect that what Google is really after is about 5 years worth of free publicity from people reporting on the prize. Reporters will come to them to talk about the prize, or invite its members to speak at their organizations, or put up banners, or simply look up information on the prize because they are interested. Google’s name will be all over these displays, of course. Yet, ultimately, Google will be able to put the $30 million back in the bank, because nothing will happen to it.

It is simply difficult to square the decision to put on an expiration date with the idea that these individuals are truly interested in space development. Is it the case that, if we do not have lunar landers by the end of 2012, that it is no longer important (or less important) that we have lunar landers at all? People who are truly interested in the development of space would want to find ways to increase the incentive to develop space, not decrease it.

There is an important similarity here. The factors that make this prize much less valuable to those who would consider trying to earn it are the same factors that argue that Google is not making the contribution to space development they may want us to think that they are making.

From a business point of view, it all makes perfectly good sense. From a space development point of view, it’s a lot of noise for nothing.

I am a serious supporter of prizes for promoting space development. I think that the system is orders of magnitude better than our current system – where NASA spends billions of dollars on its own projects.

Imagine that you have two proposals in front of you. Proposal 1 (the George Bush plan) is for NASA to spend an average of $7 billion per year for the next 14 years to land astronauts on the South Pole. Of course, this is supposed to be the first step in an ongoing government lunar base, but that will require billions more every year. Besides, I strongly suspect that those plans will go the same way as Apollo 18, 19, and 20 – particularly as the government’s burden from war, deficit spending, and social security obligations picks up.

Compare this to a second plan, where the government will spend $3 billion per year on space prizes.

The X-Prize, that resulted in several private companies competing to develop the capacity to put 3 people onto the edge of space twice in two weeks, cost $10 million in prize money. They result is a new space industry that is already attracting around $1 billion per year in non-taxpayer-funded space development.

So, let’s say that the government were banking $3 billion per year and simply adding the money to a list of space prizes. First team to land an astronaut on the moon and return him safely to Earth. First team to land an astronaut on the moon and have him live there through 1 month. First team to bring back and process 1 tonne of material from an asteroid. First team to manufacture 100 kg of oxygen from lunar material.

The reason that this is a justifiable use of government money is because space development provides some extremely valuable goods that suffer from ‘free rider’ complications. The benefits that we get from space development (e.g., the use of a huge supply of natural resources from energy to iron, harvesting those resources without doing environmental damage to Earth, the potential survival of the human race in the event of a global catastrophe) are mostly benefits that everybody gets whether they pay or not.

This means that a lot of people will sit back and attempt to be ‘free riders’ – attempting to obtain the benefits without paying. However, somebody has to pay or we will never obtain the benefits. The smart way to proceed is to have the government collect the money so that everybody pays.

However, the government should use this money in the most efficient way possible. $100 billion government space projects do not fit that criterion. Government funded prizes for those who accomplish certain significant goals does fit that criterion.

However, the government will not use this system, because the $100 billion is a pork-barrel project that goes to people who contribute to political campaigns. NASA’s job is not to explore and develop space for the development of humanity. NASA’s job is to transfer money from people who pay taxes to corporations that collect government handouts. This $100 billion project is a poorly designed project for carrying out NASA’s alleged objective, but it is very well designed for carrying out NASA’s real objective.

The problem with government space prizes is that the politicians lose the ability to channel the money to their favorite campaign contributors. The money will go to the people who complete the task first. That might very well be people who contribute money to their opponents. That is simply not an acceptable outcome.

In fact, the government had a ‘prize’ system established for a couple of years – the Centennial Challenges. It was very modestly funded – only a few million dollars. However, it has since been killed. There are a few prizes still available, and we can see some of them competing in New Mexico next month. However, the program is all but dead.

Private organizations can take up some of this slack. We see what the Astari X-Prize accomplished. However, what we are starting to see on the private size of space prize industry are stunts like Google’s X-Prize – an attempt to offer a prize and to gather publicity under conditions where the prize merely appears valuable to those who neglect the relevance of risk and the effect of expiration dates on risk.

What would I like to see?

(1) I would like to see Bigelow and Google commit to the development of space by removing their time limits, substantially increasing the net present value of their prizes by decreasing the risks involved in collecting them. Space missions are risky enough already.

(2) I would like to see the government in the business of offering space prizes, shifting hundreds of millions of dollars currently used on government-run missions. This implies restoring the Centennial Challenge and significantly increasing its funding and the list of activities that people can perform to earn prizes.

(3) I would like to see the creation of an international organization (such as the United Nations) to sell property in space to private individuals and use the money to fund projects on Earth that would be particularly useful to underdeveloped countries. I would nominate using the money to educate orphaned children from these countries. Once people get their hands on deeds they can trust saying that they own a piece of the moon or an asteroid, we can trust that they will have a stronger interest in seeing that land put to good use.

(4) I would like to see the establishment of a system where people, governments, and business can contribute to a pot that will grow increasingly large over time, with the money going to whomever can fulfill the objectives to the prize. The money on deposit would simply continue to grow until it was collected.

Yes, I consider these things to be very important. They are among a very small list of things where the fate of the human race might actually hang in the balance.