June 2, 2020 Reading Time: 5 minutes

Despite recent terrestrial tragedies, mankind can once again look to the stars for inspiration and hope.

On May 30th, 2020, 3:22 pm ET, two NASA astronauts launched into orbit from NASA’s Kennedy Space Center in Florida. It was the first time since the conclusion of the Space Shuttle program in 2011 that American astronauts launched from American soil. But what truly made the launch historic was the role of the private sector: the rocket that astronauts Robert Behnken and Douglas Hurley rode into space was SpaceX’s Falcon 9. It was the first time a commercially built and operated spacecraft brought human beings into space. From now on, NASA will purchase transport services from the private sector, making space corporations vital spacefaring partners.

After a 19-hour flight, the astronauts inside SpaceX’s Crew Dragon spacecraft reached their destination: the International Space Station. At 10:16 am ET, the spacecraft successfully docked. At 1:02 pm ET, the astronauts officially joined their colleagues on the ISS. In an homage to the Space Shuttle program, Behnken and Hurley named their spacecraft Endeavour. It’s a fitting name to describe the enormity of what took place. After a hiatus of nearly a decade, the United States is a fully capable space operator once again. The private sector was indispensable in making this happen.

May was a blue-ribbon month for space exploration and development. On May 15th, NASA announced the Artemis Accords, in partnership with major spacefaring nations. The accords include procedures and standards for new lunar missions. NASA already had plans to return to the moon as part of its Artemis Program, which will send a woman to the moon in 2024. In addition, the next round of lunar missions will serve as a foundation for an eventual manned mission to Mars. 

The vision set by the National Space Council and NASA will undoubtedly be propelled by the entrepreneurial spirit of the private sector. We may be at the dawn of a new space age, with the public sector’s perceived inclusivity and legitimacy complementing the private sector’s dynamism and efficiency. 

However, the increasing prominence of private actors in space does pose several economic and legal challenges. 

Simply put, the treaties at the heart of public international space law assume that states, rather than private actors, will be the main players in space. This paradigm is expressed in the 1967 Outer Space Treaty (hereafter OST), which remains the most important document in the governance framework for space. OST Article I reads (in part):

“The exploration and use of outer space, including the moon and other celestial bodies, shall be carried out for the benefit and in the interests of all countries, irrespective of their degree of economic or scientific development, and shall be the province of all mankind…Outer space, including the moon and other celestial bodies, shall be free for exploration and use by all States without discrimination of any kind, on a basis of equality and in accordance with international law, and there shall be free access to all areas of celestial bodies.”

OST Article II reads:

“Outer space, including the moon and other celestial bodies, is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means.”

Article I makes clear that states (governments) are the relevant parties for space activities; Article II restricts some activities of states in space, preventing a celestial land grab. Remember this treaty was written at the height of the Cold War. An important motivation in the development of public international space law was preventing the arms race between the US and the USSR from escalating into space.

On its surface, OST seems to tilt the playing field against the commercial development of space. It apparently puts up roadblocks to creating a legal system for adjudicating and enforcing property rights to celestial resources. Countries are beginning to look for ways to promote the commercial development of space while not running afoul of the “national appropriation” ban in Article II. For example, in 2015 the US passed the SPACE Act, which explicitly allows US citizens and businesses to “engage in the commercial exploration and exploitation of space resources.” And the Artemis Accords include provisions “that space resource extraction and utilization can and will be conducted under the auspices of the Outer Space Treaty.”

As it turns out, public international space law is not an insurmountable barrier to the commercialization of space. Even if there are legal or political difficulties with states enforcing their citizens’ claims to celestial resources, there is no reason private actors in space cannot reach their own agreements as to the ownership and control of those resources. These agreements can ground a private body of commercial space law, much like the law that governs international trade today.

Some worry that a new space race to control celestial resources will be bad for humanity. But we have nothing to fear. The commercialization of space promises to create wealth, not destroy it. The potential for wealth creation in space is truly enormous, and we should look forward to the day that private actors, under the authorization and oversight of public authorities as per OST, can bring that bounty to humanity. As with terrestrial wealth, commerce can and will deliver wondrous celestial wealth.

What about actual space settlements? As missions become longer, we will need to consider how humans can live for extended periods of time in space, perhaps on the lunar or Martian surface. Again, given the requirements of OST Article II, states cannot appropriate space real estate. But this does not preclude international cooperative arrangements for a limited range of governance activities. In addition, there is an intriguing private sector option: proprietary communities. Privately owned and operated settlements can supply good governance in the high-stakes environment of space. They can potentially serve as an attractive means of voluntary governance, as well as a way to avoid the predictable international power politics associated with long-term space habitats.

Of course, before we extend our reach to Mars, we should make sure things are in order in our own backyard. There is lots of space junk in orbit around the earth, and we have to deal with it to make sure we can continue to access space. Debris poses obvious problems to space operations, from safely operating communications satellites to propelling manned missions beyond orbit. And due to existing international law, cleaning it up will be difficult. 

Regardless, decluttering the orbital commons is a moral imperative. NASA has made “preserving a safe and sustainable environment in space” a key part of the Artemis Accords; along with increased technological competence, our growing awareness of the space debris problem is an important part of getting it under control. Here, too, the private sector has a crucial role to play.

The first space age brought with it some daunting economic and legal challenges. We overcame them and, culminating in the Apollo Program, inspired the world. Surely we can do it again. This time, the private sector will be indispensable in sustaining a spacefaring civilization. States will be the primary actors in space for the foreseeable future, if for no other reason than the existing legal framework requires it. But commerce will be the driving force behind the new space age. Production and trade will enable human flourishing in orbit and beyond, just as they have on earth. 

We now have the opportunity to make journeying to the stars a permanent human activity. It’s time to prepare for a new, commerce-fueled space age.

Alexander William Salter

Alexander W. Salter

Alexander William Salter is the Georgie G. Snyder Associate Professor of Economics in the Rawls College of Business and the Comparative Economics Research Fellow with the Free Market Institute, both at Texas Tech University. He is a co-author of Money and the Rule of Law: Generality and Predictability in Monetary Institutions, published by Cambridge University Press. In addition to his numerous scholarly articles, he has published nearly 300 opinion pieces in leading national outlets such as the Wall Street JournalNational ReviewFox News Opinion, and The Hill.

Salter earned his M.A. and Ph.D. in Economics at George Mason University and his B.A. in Economics at Occidental College. He was an AIER Summer Fellowship Program participant in 2011.

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