By James Pethokoukis and Eric Berger

Having pioneered reusable rocketry, carried astronauts to the International Space Station, and dramatically reduced the costs of launching payloads to orbit, SpaceX is the biggest name in private spaceflight. In this episode, I’m joined by Eric Berger to discuss how a private company was able to do what only government agencies had ever done and what’s next for the rocket company.

Eric is the senior space editor at Ars Technica and the author of Liftoff: Elon Musk and the Desperate Early Days That Launched SpaceX.

Below is an abbreviated transcript of our conversation. You can read our full discussion here. You can also subscribe to my podcast on Apple Podcasts or Stitcher, or download the podcast on Ricochet.

Pethokoukis: What was the ecology that even made SpaceX possible?

Berger: So if you go back to 2002 and you think about how technology was exploding in our lives, you had the internet really entering widespread use. But if you looked at the aerospace industry, the United States was basically using rockets that were designed in the 1960s and 1970s, and the cost of launch of getting our satellites into space was going up, not coming down. Satellites were being launched in Europe and in Russia because those countries had much more robust commercial space launch industries.

And so this was the environment that Musk came into where there was really a dearth of entrepreneurial spirit in launch. You had NASA with its Space Shuttle, and then you had Lockheed Martin and you had Boeing, and those were the horses you had to get into space. And so if you were a commercial company and wanted to start a business, you were paying literally hundreds and hundreds of millions of dollars to get your product into space. And so he came into it at a time when the industry was ripe for disruption.

This is a completely different kind of business than what he did before. Why does that not really hamper him, not being a rocket engineer?

When he sets his mind to something, he very quickly takes that information and processes it. I think that sometimes he thinks he’s an expert in a lot of different things, but when he really puts his mind to it, he does gain expertise.

And actually, I think his software background gave him one really important advantage going into rockets. So, for a long time, the way this hardware was built was through a methodology called linear design. And so that’s maybe where you would spend two, three, four, five years looking at design schematics, and making the perfect design, then finally building the hardware. He brought his software mentality, which is where you write some code and then run the program and find the bugs, debug it, and run the code again. He brought that iterative design method to rockets. So this idea of iterative design and being willing to fail, I think, does come from that software background. And it’s been pretty advantageous for SpaceX coming into a much more traditional field.

Why is Mars his goal? Why is he doing what he’s doing?

His goal is Mars. When he does companies, they have a big mission. Tesla’s is clearly to make electric cars cool and reduce our planet’s dependence on fossil fuels. And I think SpaceX’s mission is very clear. He’s concerned about the long-term future of humanity, and he figures that sooner or later if we stay on Earth, something bad is going to happen. And that could be runaway climate change. That could be an asteroid hitting the planet. That could be like a much deadlier pandemic. That could be nuclear war. That could be global population stasis and then decline. And so he’s looking and saying, “We need to be a space-faring species,” and “We need to be a multi-planetary species.” And yeah, there aren’t any other planets in the solar system that are remotely as good as Earth. And we’re probably going to have to go to other stars to find them, but you’ve got to take the first step. And the first step for him is learning to live on Mars.

So what was the key thing he was able to do that NASA was not able to do?

He went for vertical integration. His goal was to build as much of the rocket as possible in house to cut down costs at every opportunity. NASA’s problem is that it answers to Congress for funding. And Congress is much more interested in the single NASA center or the single major aerospace center in that person’s state or that person’s district. And so their goal when they look at NASA’s budget is not efficiency, it’s “How do I maximize dollars that are going to my field center or my aerospace company?” It very proudly says, “We have suppliers in all 50 states,” right? “And thousands and thousands of suppliers. And isn’t that wonderful?” And SpaceX is like, “No, man, we’re trying to build as much of that rocket as we can. And we’re trying to build it out of the cheapest possible material and get it to orbit as quickly as possible.” And so you end up with a rocket, the Space Launch System, which is probably going to cost about $3 billion per launch.

What Elon Musk says they’re going to accomplish is always pretty big. It’s always pretty exciting. But what do you see happening over the next decade?

So the caveat, I think, on SpaceX is they’re now launching people for NASA, and that is a hugely important undertaking. And if there is some kind of accident, I think there will be a real pause in the United States on the idea of commercial space flight. And so assuming that SpaceX is able to safely get astronauts to and from the space station, I think really the sky is the limit.

He is no longer constrained, really, by funding. Musk has personal wealth if the company ever needs financing, but he can just go to the private capital market to get funding whenever he wants. And so with the caveat that they continue to safely fly humans for NASA, they probably will be getting fairly close to launching humans to Mars, which sounds crazy because if you gave NASA its current budget plus 50 percent, they would be nowhere near putting humans on Mars in the next 15 or 20 years.

James Pethokoukis is the Dewitt Wallace Fellow at the American Enterprise Institute, where he writes and edits the AEIdeas blog and hosts a weekly podcast, “Political Economy with James Pethokoukis.” Eric Berger is the senior space editor at Ars Technica and the author of Liftoff: Elon Musk and the Desperate Early Days That Launched SpaceX.

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