On October 20, SpaceX told shareholders it had flown its first paying Starship mission. It’s been about seven years since the first prototype test. What’s happened with government-owned launch vehicles over the same period?

NASA’s Moon rocket, the Space Launch System (SLS), was created by Congress in 2010. It was projected to cost $6 billion and fly in 2016. It flew in November 2022, after more than $23 billion spent.

Paul Martin, formerly NASA’s inspector general, put the cost of each of the first Artemis launches at $4.1 billion, before development costs. In the seven years SpaceX needed to go from a prototype hop to a paying orbital flight, SLS went from three years late to six years late and flew only twice.

The dysfunction shows up in the ground equipment, too. At Kennedy Space Center, crews are stripping for parts an SLS launch tower that never launched anything. Mobile Launcher 2 was contracted in June 2019, the same summer as that first Starship test, for $383 million, with delivery by March 2023. It reached $1.4 billion before NASA stopped work in March.

Starship will make SLS obsolete. Apparently, NASA is starting to realize it.

Importantly, SLS hasn’t been cancelled. Three more flights are funded. The last two of them are Moon landings. NASA is stacking the next rocket at Kennedy right now. However, planned upgrades and missions past Artemis V are gone.

While SLS may finally be on its way out, the political incentives that created it remain. We need to confront an uncomfortable question: Why did it take so long to wind down an obviously inefficient program?

In truth, SLS was never about the rocket. It was about money, jobs, and other forms of political patronage.

Cost-plus contracting explains much of the mischief. Under a cost-plus contract, the government reimburses the contractor for whatever it spends and adds a percentage on top. Overruns cost the contractor nothing. In fact, they may be rewarded, since delays are often billable. The 2010 law that created SLS went further: It told NASA to reuse the Space Shuttle’s contracts and contractors, so the supplier base was chosen before the rocket was even designed. Hence the customer can’t walk away and the seller can’t lose money—a recipe for bloat. The overruns are a feature of the program, not a bug.

None of this is news to NASA’s own watchdog. Martin told Congress in 2022 that NASA’s cost-plus contracts “work to the contractors rather than NASA’s advantage.” Meanwhile, NASA’s own 2011 cost model estimated that developing SpaceX’s Falcon 9 the traditional way would run $4 billion. SpaceX did it for about $390 million under a contract that paid for outputs rather than inputs.

SLS’s upper stage is a microcosm of waste. Boeing was allocated $962 million for the Exploration Upper Stage. By 2019, it had spent $516 million and finished about half of it. Its own estimate at completion climbed to $2.9 billion; the inspector general’s office projected $3.7 billion and a November 2028 delivery. That’s seven and a half years late. NASA pulled the plug in March of this year. It is the third NASA upper stage cancelled in fifteen years. From Artemis IV onwards, the Moon rocket will fly on an upper stage bought from United Launch Alliance, sole-source.

About the only nice thing one can say about SLS is that it works, engineering-wise. Artemis II used it to fly around the Moon in April. But that’s setting an awfully low bar. Of course a cost-plus rocket can reach orbit. That’s happened many times. The real goals were resiliency and cost-effectiveness. If we had that time and money back, imagine what we could do!

Economists know a thing or two about the source of government cost overruns. We call it the “concentrated benefits, dispersed costs” problem: A few thousand people in a few key districts gain a great deal, whereas 330 million taxpayers each lose a little. Only the insiders show up to the Congressional hearings, so policy persists despite the inefficiency. SLS and Orion contractors operate in all 50 states and Puerto Rico, and NASA credited the two programs with 69,000 jobs. The senators who wrote the 2010 law represented Alabama, Texas, and Florida, which is why the epithet “Senate Launch System” stuck.

SLS was uncancellable by design, at least by legislators. In March 2019, NASA Administrator Jim Bridenstine told the Senate he was studying whether commercial rockets could launch Orion’s first lunar test flight on time, since SLS could not. Then-Senator Richard Shelby of Alabama, chairman of the Appropriations Committee, killed the idea: “I firmly believe that SLS should launch the Orion.” It ultimately took a conjunction of unlikely circumstances to stop pouring money into this rocket’s future: an outsider NASA administrator, Jared Isaacman, who founded a payments company and twice commanded private SpaceX missions before taking the job, and an inspector general’s office that finally had the information, in the form of SpaceX’s success, about feasible alternatives.

Economics teaches us the issue is the contract, not the product. The incentives were all wrong. To be clear, fixed-price contracts are not a panacea. Boeing has lost over $2 billion on Starliner, its crewed space vehicle, and the first lunar landing got bumped to 2028 because Starship wasn’t ready. But under fixed-price, the contractor internalizes cost overruns, and NASA pays only for milestones met. When Rocketplane Kistler missed its milestones in 2007, NASA ended the agreement, kept the $175 million it hadn’t yet paid, and recompeted it. Try that with a cost-plus rocket spread across fifty states.

SLS has outlived its justification. On May 2, 2025, the White House proposed that SLS and Orion “be retired after Artemis III,” to be replaced by “more cost-effective, next-generation commercial systems.” Yet two months later, Congress bought two more flights. The July 2025 reconciliation bill, with its NASA provisions written by the Senate Commerce Committee under Chairman Ted Cruz of Texas, added $10 billion for the agency, including $4.1 billion to fly SLS on Artemis IV and V. So NASA will fly the rocket Congress paid for, while the White House’s 2027 budget request “continues development of commercial replacements for SLS and Orion.” Hopefully, the Trump administration will prevail over the patron-client network of legacy contractors and legislative enablers.

On September 14, Air Force Secretary Troy Meink told a conference in Maryland that the United States “now has on-orbit space control weapons capable of defending the joint force against hostile adversary action.” The next day the Space Force’s new chief, Gen. Douglas Schiess, confirmed it. A service statement described “kinetic and non-kinetic means to affect adversary capabilities through disruption, degradation and even destruction, if necessary.” After decades of deliberate ambiguity, Washington has admitted that it keeps weapons in orbit.

Now we need to think about what happens next, including how near-peer adversaries like China will respond. Ten years ago, I wrote a scholarly paper about the economics of orbital activities. In “Space Debris: A Law and Economics Analysis of the Orbital Commons,” published in the Stanford Technology Law Review, I treated cluttered orbits as a common-pool resource problem and worked through why neither markets nor governments had solved it.

In a footnote I wrote that militaries can destroy spacecraft, but that the reputational cost was high enough that the scenario “can safely be ignored in most circumstances.” Five years later Russia blew up one of its own satellites at 485 kilometers, scattering more than 1,500 trackable fragments and sending the space station crew into their capsules for two hours. The United States responded in 2022 with a unilateral pledge never to conduct destructive anti-satellite missile tests, and 155 countries voted at the UN to follow suit. China and Russia voted no. Now we have acknowledged weapons in orbit too.

Time has only made the difficulties more acute. When I wrote, about 1,400 working satellites orbited Earth. Today roughly 15,900 do. SpaceX’s Starlink alone accounts for about 11,000 of them. Last year 4,492 spacecraft reached orbit, up 62 percent from 2024.

For this issue of Space Economics, as I did last month with my first space paper, I want to revisit the paper’s argument, update the figures, and say where the analysis needs to go next.

The problem

NASA defines space debris as all human-made objects in orbit that no longer serve a useful purpose: spent upper stages, slag from solid rocket motors, dead satellites, and the fragments produced when any of those collide or explode. The danger is velocity. Objects in low Earth orbit (LEO) move at seven to eight kilometers per second, so even a small piece can destroy a satellite.

Various space organizations have tried to estimate the number of debris pieces too small to track. For example, the European Space Agency estimates there are about 68,000 objects larger than ten centimeters, 1.5 million between one and ten centimeters, and 230 million smaller than that, totaling more than 17,000 metric tons.

Some space debris is large enough to track. Surveillance networks give us reliable data about approximately 47,000 of them. The hardest category to deal with is in the middle, between one and ten centimeters in size: too small to track but large enough to ruin your day in the event of a collision.

Two events account for a high fraction of debris. In January 2007 China destroyed its Fengyun-1C weather satellite in an anti-satellite test, producing 3,534 catalogued fragments, of which about 2,300 remain in orbit. That’s close to a fifth of all catalogued debris objects circling Earth. In February 2009 a dead Russian military satellite collided with an operating Iridium communications satellite. Russia’s 2021 anti-satellite test made things worse still.

Atmospheric drag eventually pulls debris down. Within 200 kilometers of the surface that takes days; at 800 kilometers, near the peak of the debris population, centuries; in geosynchronous orbit, essentially forever. And those rates assume nothing new is added. The nightmare scenario, called Kessler syndrome (after the NASA scientist Donald Kessler who described it in 1978), is a chain reaction in which collisions create debris and debris causes collisions until wide swaths of orbit become unusable.

An economic typology

Let’s dig into the economics. Many writers on space debris call orbit a public good. Economists mean something specific by that. Goods are classified by whether they are rivalrous, meaning one person’s use precludes another’s use of the good, and whether they are excludable, meaning it is feasible to prevent nonpayers from using the good. A good that is both rivalrous and excludable is a private good. Markets supply these just fine.

The two goods relevant here are not private goods. Access to orbit, the ability to get a spacecraft from the pad to its intended trajectory, is nonrivalrous and nonexcludable. One party’s launch doesn’t prevent another’s, and it’s costly to prevent others from launching. That is a public good. Particular orbits are nonexcludable for similar reasons, but once a spacecraft occupies a given orbit, another cannot occupy the same space at the same time. In the crowded LEO shells, orbits are rivalrous. The combination of nonexcludability and rivalry makes orbits a common-pool resource.

Nonexcludability is the bigger problem. When nobody can prevent others from enjoying a resource, nobody has an incentive to steward it. Nobody economizes on launches, and nobody bears the cost of the clutter they leave behind. The resulting “tragedy of the commons” is an instance of market failure: the privately beneficial strategy diverges from the socially optimal one.

The standard economic remedy is a tax set equal to the harm imposed on others. Attractive in theory, corrective taxes run into two problems in practice. The first is a knowledge problem. Setting the tax right requires regulators to know the gap between the market as it is and the market in its perfectly efficient state, which is a heroic informational burden. The second is an incentive problem. Even assuming regulators had that knowledge, they may not have a reason to act on it efficiently. Public-sector actors are not angels. They respond to incentives, just like the rest of us. Regulators oftentimes have incentives not to solve the problems the public charges them with solving. After all, fixing things removes the justification for their jobs. They might even have an incentive to make things worse. And remember, unlike with markets, there’s no profit-and-loss discipline.

Another way of thinking about common-pool resource problems is to take a property rights approach. Every disagreement about resource use ultimately hinges on property rights: who can do what with which resources. Once rights are clearly specified the parties can bargain their way to an efficient outcome. If “that which nobody owns, nobody will care for,” the obvious move is to assign ownership of launch trajectories and orbital slots. Here the property rights approach runs into trouble. How would a property right in an orbit be defined? A volume of space? How large, and moving at what speed? When the cost of defining and enforcing property rights exceeds the benefit, it is efficient for the rights not to exist. Orbital property rights seem like a case in point.

That does not make the property rights paradigm irrelevant. A legal authority that decides who bears the burden of adjusting to orbital collision risks can promote efficiency even without creating property rights, because total costs fall when the burden lands on the party who can bear it most cheaply. Announcing who is responsible for debris is worthwhile even if nobody will ever hold a deed to an orbital slot.

Could the private sector handle it alone?

Suppose the law placed the burden of coping with debris entirely on private parties. That sounds irresponsible. But economists have a long list of public goods that were supposed to be impossible to supply privately and were supplied privately anyway. Lighthouses are a famous example. Hence private solutions are a reasonable baseline hypothetical.

Debris is a problem only because it destroys useful spacecraft. There are two margins of response: uncluttering orbit and building more robust spacecraft. A clear rule dictating that operators eat the loss when their satellites are destroyed would push investment toward shielding and maneuverability. Importantly, insurance markets already exist to price the residual orbital risk.

Yet even in an ideal institutional environment, a purely private response probably falls short. Shielding and insurance reduce the cost of collisions, but they don’t prevent them. Every collision adds debris, so the population grows on net. And the more probable collisions become, the less useful insurance is. Events that happen with high certainty are difficult to insure. The market’s recent trajectory illustrates the point. When I wrote, underwriters were collecting $750 million to $1 billion a year in premiums across roughly fifty insured launches, and coverage was a routine part of a satellite program. Claims approached $1 billion in 2023, major underwriters have exited the market, and as of last year only about 300 active satellites carried in-orbit coverage. Constellation operators have decided it’s cheaper to self-insure and replace.

Some roles for public authority seem warranted. End-of-life deorbit requirements are defensible. So, in principle, is a user fee on launches, subject to the knowledge problem and to capture by whichever incumbents reach the regulator first. However, geopolitical considerations tilt the scale against deliberately raising the costs of launch. I don’t foresee the United States or China hampering their own launch capabilities to address a global commons problem.

Mitigation versus removal

Everything so far concerns slowing the growth of debris. A complementary strategy is removing it. There are many intriguing engineering proposals to do this. But legal difficulties present many constraints.

The 1967 Outer Space Treaty is the foundational document of public international space law. Article VIII, concerning ownership of launched objects, is the largest barrier to cleanup. A state retains jurisdiction and control over objects it launches, indefinitely. A dead Russian satellite is still Russia’s. An American firm cannot remove Chinese or Russian debris without permission, and permission will not be forthcoming.

One reason is that debris is valuable. Most of the cost of putting mass into orbit is escaping Earth’s gravity well, so material already up there is positionally valuable. Spent upper stages alone contain roughly 1,000 metric tons of aluminum, which would cost on the order of $5 billion to $10 billion to launch from scratch. A new NIST report on an in-space circular economy puts the total recoverable mass near 10,000 metric tons. When a liability can become an asset, the owner holds out for the best terms possible.

A second reason is that there is no legally binding international definition of debris, so a state can always insist that its dead satellite is a dormant asset. And the 1972 Liability Convention makes a launching state liable for damage its objects cause through fault in orbit. If an American company nudges a Russian hulk into a Chinese satellite, the United States is obliged to pay. That likely makes mission authorization harder to obtain, even assuming away regulatory uncertainty about whose permission you need.

A comprehensive fix would require Washington, Moscow, and Beijing to overhaul the treaty. That, too, is a highly unlikely outcome. Because of a divergence of interests among the major spacefaring nations, the decision-making costs are exceptionally high: any major power can block a reform that doesn’t directly benefit it. Strategic bargaining would almost certainly spill over from celestial to terrestrial concerns. And ultimately, agreements among sovereigns must be self-enforcing. The best-sounding deal is rarely an incentive-compatible deal.

Fortunately, the goal isn’t a pristine orbit. We just need to stay below the Kessler tipping point. On some estimates, removing five large objects a year for a century would stabilize low Earth orbit, given compliance with deorbit guidelines and no new major collisions. That modest target is reachable unilaterally within existing law. A spacefaring nation could simply announce that maritime salvage law applies to its own debris: any party under its jurisdiction that removes a piece of national junk keeps whatever value it recovers.

The government could also contract for removal, as NASA contracts for cargo. But pricing a removal contract also has informational difficulties: too low a price and no supplier bids, too high a price and suppliers squander resources chasing it. One possible solution is to auction not the contract but the right to claim the debris. The market then prices the junk, and the public sector is relieved of the necessity of economic calculation, a responsibility that properly belongs to markets anyway.

My paper’s conclusion was that the rules of the game come first. No actor, public or private, will invest in cleanup until the rules are clarified where ambiguous. In some cases we need to create new rules from scratch. Commons problems are routinely solved by institutions that are neither markets nor governments. Whatever institutions emerge must begin with actors interacting within the existing rules while simultaneously bargaining to change them.

Looking ahead

Rereading my paper, I realize its biggest limitation is implied by its title. My argument was never really about debris. It was about congestion. Debris was simply the first form of congestion anyone worried about, because in 2015 the dead objects vastly outnumbered the live ones. The ratio has collapsed.

Starlink satellites performed 207,152 collision-avoidance maneuvers in the six months from December through May. Already in 2023, about half of the close approaches Starlink faced involved other working satellites rather than debris, and this week SpaceX itself called other operators’ undisclosed maneuvers the biggest collision risk in low Earth orbit, ahead of debris. Looking ahead, China’s Guowang constellation is planned at 12,992 satellites and Thousand Sails at 15,000. Orbit is rivalrous whether it is filled by a live satellite or a dead one. The common-pool resource analysis applies to the whole orbital population. The de facto property regime for that population is the ITU’s first-come, first-served filing system, which rewards whoever fills a shell first.

There’s a second important way my analysis was incomplete. I assumed states would be deterred from wrecking orbit by the reputational cost. Russia clearly wasn’t. The United States has now joined Russia and China in fielding counterspace weapons. The largest source of long-lived debris in the record is deliberate military action, and the most effective mitigation measure of the past decade was a unilateral American pledge not to repeat it, which most of the world then endorsed. But that promise seems less and less credible in our new era of great-power competition.

Insofar as preserving orbital integrity is in the national interest, it must overlap with national security considerations. The White House’s own National Security Science and Technology Strategy endorses the ban on orbital weapons of mass destruction, and lists “capabilities for orbital debris remediation” as a national-security priority. Perhaps we can enlist defense contractors to help address congestion and debris, keeping in mind that many technologies that can remove orbital liabilities can also be repurposed to neutralize orbital assets.

As a third point, the private sector has done more than I predicted on one margin and less on another. LeoLabs, Slingshot Aerospace, and ExoAnalytic have built businesses selling tracking data, which I doubted markets would adequately supply. But the insurance mechanism I emphasized has eroded. Operators have concluded it is cheaper to replace a satellite than to insure it, which is fine for the operator and bad for everyone sharing the shell.

Thankfully, my chief takeaway stands: Get the rules right, and the orbital commons becomes a governed resource with accountable users and clearly allocated costs and benefits. Get them wrong, and the first orbital conflict may degrade the operating environment for generations.

On August 20, the White House issued a new National Space Transportation Policy. Its headline goal is ambitious: By 2030, the nation’s spaceports “must grow to support more than 1,000 launches and reentries every year.” Last year the United States launched 193 rockets.

Can we achieve that many launches? Yes—but only if Congress lets spaceports charge for what they sell. Right now there are legal barriers to pricing scarce launch capacity.

From 2020 to 2025, launches at Cape Canaveral and Kennedy grew from 31 to 109. NASA’s inspector general projects 268 by 2030 and expects the Cape to approach capacity by late 2028. Commercial launches at federal spaceports have quadrupled since 2021. Gen. Chance Saltzman, then the Space Force’s chief of space operations, told Congress this summer that “our existing resources will fail if we don’t consider a cap” on launches. The spaceports are already crowded, yet policymakers want launches to quintuple.

Basic economics says that if there is excess demand for a scarce resource, its price will rise. The higher price does two jobs: rationing and signaling. Operators who can shift to an off-peak window or another site do so, and the slot goes to whoever values it most. And the premium on a prime Cape slot is the market’s estimate of what the marginal slot is worth. Economists call that premium a scarcity rent.

But the law prevents prices from doing their job. The Commercial Space Launch Act only permits federal agencies to charge commercial launch customers “direct costs,” meaning expenses the government “would not incur if there were no commercial launch or reentry effort.” The Pentagon got a narrow exception in the 2024 defense bill to recover some overhead, capped at 30 percent of direct costs and $5 million a year. That cap lapses on September 30. Afterward, it’s still cost recovery, just without the ceiling.

Cost to sellers is not the same thing as value to buyers. A cost-based fee doesn’t rise with demand, so it can’t ration, and it doesn’t reflect value, so it can’t signal. When the Space Force allocated pads in 2023, its launch chief described the challenge: “How can we cram them all in?” Instead of price adjustments, we get queueing. A payment moves money from buyer to seller; time spent waiting is simply consumed. Rationing by waiting is a pure social loss.

The obvious answer is to build more spaceports. Policymakers seem amenable. The new transportation policy orders a search for additional launch sites. The FAA has an open request for information on new spaceports, naming candidates from Georgia to Puerto Rico. The Space Force is courting Texas and Virginia and says it needs a third site for heavy rockets. This is a good start. But without prices to generate information and align incentives, we still don’t know how and where to expand capacity.

Some companies and states are trying to circumvent the federal bottlenecks by constructing spaceports themselves. Virginia has spent $176 million on its Wallops spaceport since 1995, Space Florida runs pads inside the Cape, and SpaceX built Starbase on private land. But the Florida and Virginia pads sit on federal property and depend on federal range services, so they wait for the same unpriced windows. Starbase is more promising. However, few companies have SpaceX’s deep pockets. And states that built with tax dollars instead of voluntary prices have little to show for it. New Mexico spent nearly $220 million on Spaceport America, yet its anchor tenant didn’t fly a paying customer until 2023. Camden County, Georgia, spent more than $11 million on a spaceport that never launched anything.

To its credit, the Trump administration recognizes the problem. Its new policy orders “fair and transparent cost recovery policies” and “range scheduling criteria to maximize efficient use of range resources for commercial users.” But different forms of cost recovery do not address high demand, and scheduling criteria are merely a rulebook for managing queues. (Worryingly, the rules for resolving a conflict between two customers aren’t published.) Non-price rationing almost always creates opaque, complex, and politicized decision processes. When a valuable asset is handed out at cost, the cheapest way to get it is to know someone, so the locus of competition moves from commercial to political margins.

Non-price rationing is discretionary by construction, and discretion in Washington tends to get captured by special interests. In contrast, a market price is visible and uniform. It doesn’t care who knows whom.

So what must be done? Congress should amend the Commercial Space Launch Act to allow spaceports to charge competitive rates for launch windows, instead of just costs. The simplest mechanism is an auction, similar to how we allocate spectrum. The law should require launch sites to publish what they charge and let them keep what they collect. Government spaceports won’t respond to profit the way private owners do, but revenue kept on site, rather than diverted to the Treasury, at least supplies the means to expand. Most importantly, policymakers must resist the urge to treat scarcity rents as a scandal demanding that they “do something.” The rent is how the next pad gets built.

The thousand-launch target will become a reality if we price our spaceports. Every congested window can pay for its own replacement. But keeping prices stuck at cost will needlessly delay launches. Long queues and lobbyists are not the path to space superiority.

In 2014, I published my first scholarly article on the law and economics of outer space policy. It’s titled “Celestial Anarchy: A Threat to Outer Space Commerce?” and it’s coauthored with Peter Leeson. We entered the debate on one of the most important space policy questions: what will the property rights system for celestial resources look like?

There have been massive developments in space since 2014. SpaceX continued its rocketry innovations and accomplished reusable launch. Asteroid mining companies have come and gone and come again. The US and China introduced the Artemis Accords and the International Lunar Research Station initiatives, respectively, which set up competing geopolitical paradigms for lunar governance and resource use.

Nevertheless, the basic “anarchic” character of outer space remains the same. For this issue of Space Economics, I wanted to revisit the key claims from my 2014 paper and see how new international competition changes how I interpret them. Here we go.

Many Sovereigns, No Sovereignty

In outer space, much as in the international arena, no government has sovereignty. This fact is enshrined in the 1967 Outer Space Treaty. Article II of the treaty prohibits signatory nations from extending territorial jurisdiction to celestial bodies.

The same Article may also prevent private citizens from asking their sovereigns to define or enforce privately held property rights in celestial bodies. Private parties who have property disputes when operating in outer space need to settle their disputes in courts of law. But such courts are within the legal domains of national sovereigns. Enforcing private parties’ property rights in outer space may therefore require a de facto concession of national sovereignty, running afoul of Article II. Some space lawyers argue this interpretation only applies to real property, i.e., land on the Moon or Mars. Others think it also applies to resources such as water and minerals. Recent developments, such as the 2015 Commercial Space Launch Competitiveness Act and the Artemis Accords, seem to preclude the stricter interpretation, at least as far as the US is concerned, and the US remains the world’s leading space power.

That still leaves the question of what a property rights regime in space would look like. Economists have long highlighted the necessity of private property rights for thriving commercial activity. Without some means of enforcing claims to mine and thine, individuals have little incentive to risk investing in and growing commercial enterprises. Celestial anarchy apparently poses a serious obstacle to the development of outer space commerce.

But what if private parties sidestepped the problem by enforcing such rights privately, that is, without reliance on any government? The conventional view is that appropriation can exist outside the sphere of sovereignty, but its survival depends on endorsement from a sovereign entity. In other words, it is widely believed that a purely private celestial property rights regime is not possible.

But there are good reasons to doubt the conventional wisdom. Celestial anarchy is genuine, but the ostensible problem it poses for the development of outer space commerce is not. Private property rights can and do survive without the endorsement or involvement of any sovereign entity. This suggests that private parties can, if given the chance, enforce property rights in outer space. Economically, at least, celestial anarchy poses no obstacle to the flourishing and full development of celestial enterprise.

Enforcing Property Rights Without a Sovereign in Theory

According to conventional wisdom, a sovereign state, a monopoly authority that all parties must submit to as the final arbiter of property disputes, is necessary to enforce a property rights regime. Suppose two parties, operating where no sovereign exists, are deciding how to interact in terms of resource use. Each can respect the property rights the other claims to have, say by trading with the other honestly. Or each can violate those rights, by stealing what the other claims as his own or trading fraudulently. If the two will deal with each other only once, each does best by cheating no matter what the other does. Both parties therefore cheat, and both forgo the gains from trade they could have captured by respecting each other’s rights.

This is a stylized version of what conventional wisdom suggests must be the outcome under celestial anarchy. Consider what happens, however, if I modify the situation to more closely resemble reality. Suppose the two parties interact not just once, but an indefinite number of times. Suppose each will refuse to deal with the other ever again if he or she cheats even once, and both parties credibly commit to the other as much. Now how will they behave without a sovereign to keep them in line?

Unless one or the other is extremely impatient, both will cooperate. The reason is what economists call the “discipline of continuous dealings.” Both know that if they violate the other’s property rights today, the other will refuse to cooperate tomorrow, and every day after that. Since the gain from defecting is a one-time gain but the gains lost from defecting even once are forever, each party earns more by cooperating than by defecting. Property rights become self-enforcing. And because outer space commerce requires large up-front investments before net benefits can be secured, and even then only after repeated periods of cooperative interaction with fellow space entrepreneurs, the space environment selects for individuals who are quite patient.

The logic is the same if there are more than two parties. Indeed, when there are more than two, reputations become possible, strengthening self-enforcing property rights still further. If one trader violates a second trader’s property rights, not only may the victim refuse to deal with the cheater in the future, but the victim may tell a third trader, who then cuts the cheater off as well. This makes the punishment for defecting even stronger, which in turn strengthens the incentive to respect everyone’s property rights.

Private parties have leveraged the discipline of continuous dealings in many settings, from medieval Iceland to eighteenth-century pirate ships to the American frontier. I focus on one in particular because of its similarity in several important respects to celestial anarchy: international anarchy.

Enforcing Property Rights Without a Sovereign in Practice

International anarchy refers to the fact that, although many sovereigns exist to define and enforce property rights in their domestic domains, no supranational sovereign exists to define and enforce property rights among persons engaged in international commerce. Nor has such a sovereign ever existed. In this sense the property rights situation that parties to international commerce confront is similar to the situation that prospective parties to outer space commerce confront.

Yet international anarchy hasn’t prevented international commerce from flourishing. International traders have developed a private regime of self-enforcing property rights instead. The result has been booming international commerce that generates nearly a quarter of the world’s wealth annually.

The property rights and arbitration regime used in international commerce evolved over more than a millennium. In the ninth and tenth centuries a professional class of merchants emerged across Europe. These merchants confronted the central obstacle of international anarchy: the absence of a supranational sovereign that could protect international traders’ property rights. If a trader from Italy entered a commercial contract with a trader from Spain, how could their contract, and thus the property rights embodied in that agreement, be enforced?

A trader who believed his counterparty had violated their agreement might attempt to seek enforcement in his nation’s courts. But such courts typically refused to adjudicate international cases on the grounds that they involved citizens from other nations, over whom they had no jurisdiction.

In response, medieval merchants resolved international commercial disputes privately, on the basis of merchant-developed law, in private, merchant-developed courts. This system of self-enforcing property rights was called the lex mercatoria, or law merchant. Commerce and commercial law developed together, without the backing of coercive sovereign power.

To enforce merchant court decisions, members of the international commercial community leveraged the discipline of continuous dealings. Although these courts had no formal enforcement power, most traders complied with their decisions. Refusing to do so resulted in the members of the international trading community blacklisting the uncooperative traders, cutting them off from the benefits of future trading opportunities with members of that community.

The Modern Law Merchant

In the absence of a supranational sovereign to enforce property rights between contemporary international traders, modern international trade is similarly governed privately, by a modern law merchant. Given the difficulties, and for many years the impossibility, of using national sovereigns to enforce international commercial disputes, contemporary international traders rely on private international arbitration associations instead. At least 90 percent of modern international commercial contracts contain clauses stipulating the resolution of contractual disputes via private arbitration.

Like those of their medieval counterparts, the decisions of private international arbitration associations are overwhelmingly respected by the international traders who rely on them. In a survey of corporate counsel, respondents reported that more than 90 percent of arbitral awards were honored by the losing party without any court involvement. A trader who refuses to comply with the decision that one of these private courts has handed down to him faces losing his reputation among the community of international traders, and with it, the prospect for future commerce.

In 1958 the first multinational treaty aimed at facilitating the enforcement of private international arbitral decisions in the national courts of sovereigns emerged: the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Under its terms, a trader who wins an arbitral award against a counterparty who refuses to pay can call on the counterparty’s government, if it has signed the Convention, to enforce the award. Because of the Convention, at least in principle, post-1958 international traders have been able to rely on the support of sovereigns to enforce their property rights.

But it would be mistaken to conclude that the Convention has removed international traders from international anarchy. In the absence of a supranational sovereign, the Convention, which is a contract between sovereigns, itself has no sovereign that could enforce its terms. To the extent that signatories fulfill their promises under the treaty, they do so under the threat of being ostracized by the Convention’s other signatories, who may refuse to enter into future treaties with a sovereign that goes back on its word. Thus, even in the case of the New York Convention, the discipline of continuous dealings, ultimately a mechanism of self-enforcement, drives compliance.

Law Merchants in Space?

The economic theory of self-enforcing property rights, and the economic reality that illustrates this theory’s application under international anarchy, suggest that a private and voluntary property rights regime under celestial anarchy is possible. If there are special features of the celestial environment that preclude my analysis’ relevance for this environment, I can’t think of them.

Of course, the uniqueness of the space environment will shape how privately created governance emerges. Perhaps commercial space pioneers would use already existing arbitration associations, such as the ICC, to enforce celestial property rights. Or perhaps a body of private outer space law might progress to the point that space-specific arbitration agencies would serve as the primary dispute resolution mechanism and the process by which precedent is set.

Alternatively, the first space pioneers might hold a voluntary convention in which their representatives form a kind of outer space “social contract,” setting the rules for original appropriation of unowned resources, property rights enforcement, and the proper bounds of behavior when one party’s conduct imposes uncompensated burdens on others.

The specific arrangements that might develop under celestial anarchy can’t be established with any certainty. What can be established is that some system of self-enforcing property rights would develop if given the chance, and that such a system would reflect the problems space entrepreneurs confront in their efforts to secure the substantial gains that cooperative celestial commercialization offers.

Importantly, this argument denies the economic problem of celestial anarchy, not the political one. Political elites in one country might object that a citizen of another country, establishing property rights in the manner I’ve described, violates the “genuine intent” of OST Article II. Such objections could escalate into tensions between nations. The realization that the economic problem of celestial anarchy can be overcome may help to defuse such a situation. To the extent that political elites want private property rights in space so that commercial space activity can flourish, but worry that this must involve violating the sovereignty restrictions in the Outer Space Treaty, the above analysis suggests their concern is misplaced.

Looking Ahead

The biggest change since 2014 isn’t legal or technological. It’s that space now has two rival geopolitical camps. The US-led Artemis Accords and the China-led International Lunar Research Station represent alternative (and, for most countries, mutually exclusive) frameworks for lunar activity, and each is recruiting partners. Whatever the Outer Space Treaty says de jure, the de facto norms for using celestial resources will be shaped by the competition between them.

The Accords already affirm that “the extraction of space resources does not inherently constitute national appropriation under Article II.” They go further: Signatories commit to “respect reasonable safety zones to avoid harmful interference,” defined as “the area in which nominal operations of a relevant activity or an anomalous event could reasonably cause harmful interference,” and to notify and coordinate with one another before operating inside one. A zone around a mission site that others cannot enter without coordinating first certainly looks like de facto ownership of celestial real estate.

That changes the relevance of the argument Peter Leeson and I made. The economics still holds. Private, self-enforcing property rights can and do survive without a sovereign. Nothing about the celestial environment defeats the mechanism. But sovereigns aren’t standing aside. They are writing the rules of resource use and territorial deconfliction through bloc politics. The space law merchant is less likely to be a meaningful development in the immediate future than it appeared a decade ago. The argument may not be wrong so much as premature. Private commercial law in space may have to wait for autonomous, self-sustaining communities whose disputes no terrestrial government can adjudicate. That is still a possibility. It is hard to see how Earth-bound sovereigns could actively govern Martian communities when even a radio signal, traveling at the speed of light, can take more than twenty minutes to pass between them.

The space law merchant still deserves a place in our thinking. While the sovereign struggle is real (and I’ve written plenty about how America should win it), a peaceful, open, and prosperous space domain is still the goal. Let’s not get so absorbed in the international contest that we forget that space is about human flourishing.

In early 2023, China’s combined satellite factories could build about 500 satellites a year. Chinese industry can now produce an estimated 4,100 to 5,000 satellites annually across seventeen major facilities. Compare that to SpaceX’s Starlink factory, which can produce about 3,600 a year. China is clearly making rapid progress.

Those figures come from Blurred Orbits: Inside China’s Commercial Space Expansion, published July 29 by the Aerospace Security Project at the Center for Strategic and International Studies (CSIS). The authors are Kari Bingen, who directs the project and previously served as Deputy Under Secretary of Defense for Intelligence and Security, Aidan Powers-Riggs, and Chantal Li. I strongly recommend it for anyone interested in space policy and strategic competition with China.

The growth of Chinese space capacity is startling. In 2014, when Beijing allowed private investment in space, China had fewer than a dozen commercial space firms. Now it has roughly 600. It conducted 92 orbital launches in 2025, its highest on record. And its plans for broadband satellite megaconstellations are ambitious. Guowang, developed and operated by a state entity, is planned for nearly 13,000 satellites. Thousand Sails, its nominally commercial counterpart, is planned for 15,000.

According to Bingen, Powers-Riggs, and Li, Beijing views its commercial space firms “as instruments of national power, expected to contribute to national strategic objectives, including PLA [People’s Liberation Army] modernization.” A full section on military-civil fusion, the doctrine spearheaded by Xi Jinping that blurs the boundary between the civilian and defense sectors, traces state investment funds into launch startups like CAS Space and ExPace, itself a registered PLA defense supplier.

China’s newfound capabilities are obviously concerning for diplomats, military strategists, and space policymakers. As an economist, I focus on a related yet distinct question: What does “commercial” mean in the context of a political system controlled by an authoritarian party?

The report discusses commercial entities. Some are subsidiaries of state-owned conglomerates. However, many have shareholders, boards of directors, venture funding, and public offerings. On the surface, this looks similar to the norms of private ownership in the US. But in practice China’s political-economic system, which might more accurately be characterized as a form of state capitalism, makes the informational content of property rights, prices, and profits very different from that of liberal market economies.

In an open market, profit is a rough but real signal that customers valued a firm’s output above what its inputs could have earned elsewhere. The link between profit and value creation, although always imperfect, tightens as competition and rivalry in the market test producers’ judgment about what consumers want and what they are willing to pay. But when entry, exit, and capital allocation are themselves the results of political rather than economic decisions, the profit signal tells us something else.

Last December, the Shanghai Stock Exchange opened a fast lane for reusable-rocket companies listing on the STAR Market, Shanghai’s technology board, waiving the usual profitability and revenue requirements. In their place it set a technical test: at least one successful orbital launch using reusable technology. Access to public capital now turns on hitting an engineering milestone the state selected, and not on whether anyone wants to buy what the company sells.

Prices and profits still exist in Chinese commercial space. Consumer valuation is still partly determinative. But ultimately prices reflect and profit hinges on how closely firms track political priorities.

We cannot interpret commercial success as evidence of economic viability. The Blurred Orbits authors note that many firms “struggle with profitability and limited commercial demand outside China.” Do not confuse using markets with passing the market test. The Chinese Communist Party is skilled at using financial incentives to advance geopolitical goals.

In addition to scale, those incentives create redundancy. Bingen, Powers-Riggs, and Li note that Chinese commentators have counted 51 production sites among just seven launch firms. Beijing “appears willing to tolerate inefficiency, duplication, and excess capacity.” This is a predictable cost that the ruling authorities have willingly absorbed to maintain a strategically valuable reserve of capabilities.

What should US policymakers take from this? Most importantly, they must resist the urge to out-plan the central planners. Often after a revelation of an adversary’s capabilities, the reflex is to demand a national program. But we won’t prevail by hampering the dynamism of America’s commercial space sector. China’s system has an important drawback: it sacrifices genuine market feedback about what is worth building for political feedback about what is worth controlling. Important information about inefficiencies and bottlenecks, which real prices and profits can reveal quickly, may stay suppressed for a long time in systems that merely play at markets.

There’s a better alternative: Focus on areas where the government has a comparative advantage, including public goods and research with large positive spillovers. Basic scientific research is the clearest example. Fund materials science studies and broadly disseminate the results. Fund space situational awareness and orbital traffic data. Fund exploration and settlement infrastructure. Where the private return is too small to justify socially valuable investment, government can help finance precommercial research without choosing which firms or products should ultimately win.

China is going to build an enormous amount of space capacity. But its political-economic system suppresses the feedback that tells builders about sustainable value. If your goal is power rather than wealth, that might be a defensible trade. American policymakers shouldn’t copy China’s strategy, but it’s imperative that they understand it.

In November 2023, Chinese and Russian defense researchers secretly gathered in Guangzhou to plot the destruction of American commercial satellites.

Documents from those meetings, revealed this July by a joint investigation from The Insider, Der Spiegel, and Le Monde, describe a partnership to build weapons to counter Elon Musk’s Starlink constellation. The goal is to combine Russian battlefield experience with Chinese industrial might to jam, hack, and even physically kill a major satellite network. One Chinese presentation called the constellation’s hundreds of satellites a “space blockade” and proposed cheap “one-against-many” weapons to shoot them down faster than SpaceX could launch replacements.

There’s an almost flattering admission in the Russia-China plan: America’s commercial dynamism outpaces anything they can produce. Our rivals can’t build what we have built. Instead, they intend to break it. An honest recognition of hostile intent must shape American space strategy over the next few decades.

But what is our strategy for? Space superiority is certainly desirable. But it is a means to an end, not an end in itself. The point of developing orbital assets, building a Moon base, and journeying onto Mars is human flourishing. Space can make our lives longer, richer, happier, and more humane. That includes the pure thrill of discovery, which needs no economic justification, alongside the obvious scientific, commercial, and military gains.

The moral case for American space leadership is simple: The character of the leader determines whether space becomes a frontier for human excellence or merely the newest site of coercive domination.

Four principles underpin a humane space agenda:

Proactive rule-making. The first task of leadership is writing the rules of the game. Happily, America is doing pretty well on this front. The Artemis Accords, launched in 2020 with eight nations, reached 70 signatories this July when Mauritius signed on. The Accords commit members to the peaceful use of space, transparency in missions, orbital debris mitigation, and avoiding harmful interference. Importantly, the Accords are not a treaty. They are a coalition of like-minded nations, committed to lawful and mutually beneficial interactions beyond the Earth.

Unsurprisingly, both China and Russia have declined to sign. They are building an alternative lunar framework of their own, the International Lunar Research Station (ILRS). Non-binding principles like the Artemis Accords might seem like poor protection against determined adversaries. It’s a valid concern, but this framing undersells the importance of what the Accords can achieve.

Treaties, including the 1967 Outer Space Treaty, are the foundation of public international space law. Changes in the formal rules require agreement among sovereigns. But our rivals would never consent to developing a shared governance framework that respects human freedom and innovation. That’s our comparative advantage, not theirs. The solution is to flesh out the often-unclear legal principles with both domestic legislation, such as the 2015 Space Launch Competitiveness Act, and further international agreements, such as the Accords.

Rules shape expectations, and expectations shape behavior. Leadership of a spacefaring coalition offers the United States the chance to establish practices and norms where formal rules are ambiguous. Space superiority empowers us to serve the ends of peace, wealth, and general human prosperity. When Mauritius signed the Accords, its representative said the country joined to help ensure that space “serves humanity by protecting our oceans and coastlines.” A small island nation understood the point better than several great powers: The rules we write today determine whose interests space development serves tomorrow. Leaving the rules to Moscow and Beijing is a dereliction of both our national interests and our duty to human flourishing.

Real interests and accountability. American space activity should serve Americans’ legitimate interests. This sounds obvious. But it is regularly denied in practice, with public dollars diverted to projects that cost taxpayers far more than they gain. Space policy, like all policy, must create benefits that accrue to its ultimate beneficiaries: We, the People.

Notice I said legitimate interests. Our commercial, scientific, and military objectives do not entitle us to violate the rights of non-citizens. In fact, we best secure our interests by cooperating with other nations to advance a shared vision—one in which space’s bounty is widely available to free nations of goodwill.

Pursuing American interests means resisting the temptation for bureaucracies and legacy contractors to conflate the means of space exploration with the ends. To cite one example, a $4 billion-per-launch rocket has no legitimate claim to ongoing taxpayer support. Parochial interests in “old space” make-work are no substitute for real human achievement.

Sovereignty, rightly understood, means the people are the principals and the government their agent. NASA spends roughly $24 billion per year. The White House recently requested a $71 billion budget for the Space Force. That money has major opportunity costs. It carries an obligation to deliver value back to the citizens who provided it. It also requires us to consider the interests of future citizens. Long time horizons naturally characterize space policy. Opening the final frontier will greatly benefit our descendants. That also means missteps will greatly burden them.

Of course, many space activities plausibly create nonrivalrous and nonexcludable benefits. GPS satellites, solar storm monitoring, and planetary asteroid defense all transcend narrow interests. Accordingly, framing space strategy in national terms may seem inappropriate. Yet somebody must build the infrastructure and bear the risks of operation. Absent fundamental changes in public international space law (an unlikely outcome), that “somebody” will be the public authority of a sovereign nation, accountable to its citizens. General benefits to mankind are real, but they are downstream of concentrated investments by spacefaring leaders like the US. “For all mankind” is a worthy moral aspiration. But it is not a coherent responsibility mechanism. Pretending otherwise is how public resources get squandered with no accountability.

Commercial and non-commercial values. America’s decisive advantage in space is its commercial sector. The Starlink plot illustrates it. Two authoritarian governments, soberly assessing the physical, financial, and human capital at their disposal, concluded they needed a plan to neutralize commercial satellites, or else remain at a perpetual disadvantage. Their fears speak volumes.

Space is creating exciting new avenues for commerce. The global space economy reached $686 billion in 2025, with commercial activity making up $544 billion of it—nearly 80 percent. Some of the fastest growth came from novel business opportunities, including manufacturing, resource extraction, and lunar infrastructure. America is uniquely positioned to thrive in this environment. We are the capitalist power par excellence. Policy must adapt to the new reality of space operations. We can’t afford to tax ourselves with regulatory delays.

Consider the regulatory approval process, which forces new missions through a maze of agencies where anyone can say no, or simply say nothing. On July 30, the FAA proposed a rule to streamline environmental review for commercial launches, so that routine, well-understood launch profiles are not forced through the most expensive tier of assessment. “We will not keep pace with this rapid growth,” the FAA’s administrator said, “unless we streamline, modernize, and strengthen our regulatory approach.” He’s right.

And yet, commercial value is not the only consideration. Rocket launches and satellite reentries have environmental costs. Peer-reviewed research finds that satellites burning up on reentry deposit aluminum oxide and other metals into the stratosphere, where they may catalyze the chemical process that thins the ozone layer. The effects currently appear small. But they accumulate. As megaconstellations grow, modeling suggests the metal burden could climb into the tens of thousands of tonnes per year. This is a genuine problem. Anyone who cares about human flourishing should take it seriously.

But notice how poorly our current regulatory system deals with this problem. It forces a company through the costliest environmental review over the local effects of a launch site (effects on marshes and wetlands, for example) while the genuinely global problem goes unaddressed, because nobody assesses what reentries do to the upper atmosphere. The process is simultaneously too strict for the familiar case and too lenient for the unfamiliar one. Meanwhile, the lack of clear, predictable rules creates needless uncertainty.

We can’t stay grounded while China seizes a launch advantage, but neither can we dismiss environmental concerns out of hand. The answer is to match the review to the harm: Streamline the overly burdensome local assessments while building a serious, science-based framework for the atmospheric effects that may imperil our homeworld. Regulatory certainty can do both. We can create predictability, which commercial space firms need, while also incentivizing responsible use of the atmospheric commons.

What does this have to do with commerce? Just as a private company revolutionized launch to meet public goals, an expansive definition of space business should include the ecosystem of commercial entities that can make a profit by stewarding Earth’s natural resources. The nation that leads in business is also the nation best positioned to spearhead conservation efforts. We have the data, the engineers, and the infrastructure. It’s time to dispel the myth that financial sustainability and environmental sustainability are inherently at odds.

Embrace the mess. In harnessing private enterprise for public purposes, we must respect the independence of the businesses and researchers who make the whole enterprise work. Resisting the temptation of hierarchical control is crucial. We can’t overcome Russian and Chinese space ambitions by adopting Russian and Chinese methods.

Our rivals operate in a top-down manner, directing resources from the center toward state objectives. China’s commercial space sector, for example, is best understood as a government dispensation that makes limited use of profit-and-loss incentives to serve the ends of the Chinese Communist Party. When facing a serious threat, it seems natural to nationalize, direct, and control. But this regimentation would suppress our greatest strength. The experimental, often messy character of America’s commercial space sector is the source of our asymmetric advantage. Our adversaries fear it because they can’t replicate it. Furthermore, it is the economic foundation that supports our scientific, commercial, and military interests.

This makes it even more important to define the state’s proper role. Some tasks have inherently public components. National-security launch, deep space science and exploration, and the basic “rules of the road” for orbital integrity all require public activity. Businesses can help achieve these goals as contractors, of course. Where private enterprise can do the work, the government’s job is to empower it and clear the way. Public-private relations in space should be cooperative and coordinative, with the state maintaining a guiding rather than a controlling role.

Our promise to lead. American space leadership is worth pursuing without reservation or apology. Our rivals would use space as an instrument of terrestrial domination. We must use it to preserve freedom, an essential precondition for humane living. Space superiority is not a martial boast but a moral duty. Let’s keep the final frontier open, lawful, and free for all those who will come after us.

The space economy is booming. The Space Foundation reported this month that global space activity reached $686 billion in 2025, a 12% jump in a single year. Commercial revenue, at $544 billion, made up nearly four-fifths of the total. More exciting still, the fastest growth came from the newest lines of business. In-space servicing and manufacturing grew 23% last year. Lunar activities grew 43%. Combined with the recent blockbuster SpaceX IPO, the verdict of markets is clear: space is open for business.

But there’s a danger that regulatory problems could hinder future growth. The sectors growing fastest today are precisely the ones where regulatory ambiguity would be costly tomorrow. Can the boom continue? Yes, but only if Washington completes the work it started last summer. The right place to start is the new Space Commerce Certification program from the Office of Space Commerce (OSC).

Fragmented and opaque regulatory authority is a major problem for today’s space companies. The Federal Aviation Administration (FAA) licenses launch and reentry and runs an interagency review of every payload. The Federal Communications Commission (FCC) licenses radio spectrum and has used that hook to impose orbital-debris rules. OSC licenses remote sensing by private operators. New space activities often cross multiple jurisdictions, leading to red-tape holdups, or even total stoppage. And for the newest activities, such as satellite servicing, orbital data centers, and lunar resource extraction, no agency has clear jurisdiction at all.

Yet under the 1967 Outer Space Treaty, the U.S. government must authorize and supervise its citizens’ activities in space. A mission nobody can approve is a mission that can’t proceed without risk of violating treaty obligations. OSC’s director, Taylor Jordan, told Congress this month that U.S. regulations do not offer a “clear path to ‘yes’” for novel activities and instead “risk trapping our industry in an endless interagency maze.”

Economists will immediately identify this as an anticommons problem. It’s the mirror image of the better-known commons problem. When nobody can exclude anyone from a valuable resource, it gets overused. That’s the tragedy of the commons, and it’s the reason Earth orbit is getting cluttered: every operator enjoys the benefits of a launch while spreading the collision risk across everybody else. But too many excluders can be just as bad as too few. When several parties have an independent veto, a valuable resource goes unused. The result is economic gridlock and foregone wealth. Each agency can say no, or simply say nothing. Meanwhile, valuable assets sit idle, grounded by policy rather than gravity.

President Trump’s Executive Order 14335, signed last August, told the Commerce Department to design an authorization process to avoid orphaned space missions. In March, OSC delivered its proposal, the Space Commerce Certification. A company would file one application and undergo one coordinated interagency review, with a presumption of approval and a decision required within 120 days (180 in hard cases). Any agency that objects must put its concern in writing, link it to an enumerated ground such as national security or treaty compliance, and show that nothing less restrictive would work. The proposal is music to space capitalists’ ears: generalized concerns “shall not, standing alone, prevent certification.” While there’s no such thing as permissionless innovation in space, clarifying and streamlining the permission structure is clearly beneficial.

This is the most promising solution yet to the tragedy of the anticommons in space. The goal isn’t abolishing regulatory oversight but concentrating it enough to give it coherence and predictability. Under the proposal, regulatory vetoes would be costly, specific, and time limited.

The chief drawback is a potential lack of durability. The executive order that launched this process can always be revoked by a subsequent administration. The FAA and FCC are invited, but not required, to accept certification in place of their own reviews. Legislation could overcome both shortcomings. Congress came close to enacting mission-authorization legislation nearly a decade ago and let it drop. It should finish the job now: codify the certification, the deadlines, and the presumption of approval.

But we shouldn’t let the perfect be the enemy of the good. This is an important step towards regulatory certainty, which helps companies raise capital, buy insurance, and sign customers for long-term space missions. Celestial investments are about as irreversible as investments get, and regulatory risk is just as big a tax as technical failure.

Commerce is now moving towards White House approval, with pilot applications expected afterwards. Get the regulation right and the space economy will continue to see double-digit growth rates. Get it wrong and the fastest-growing industries of the coming decade will idle on the pad, waiting for approval that will likely never come. Markets have done their part. It’s time for the regulators to do theirs.

SpaceX’s Super Heavy booster, twenty-three stories of steel that had just propelled its Starship vehicle toward space, guided itself back to the launch pad, relit its engines, and settled gently into the launch tower’s mechanical arms. Rocket enthusiasts fortunate enough to witness it whooped like they had seen a magic trick. But of course it wasn’t magic. It was a combination of an audacious vision and first-rate engineering.

Starship’s fifth test flight was the technical achievement of the decade. But when it comes to space, the technical aspects are (comparatively) the easy part. The hard part is us: the people who will someday produce, consume, and live there.

We’re just beginning to explore the institutional challenges of a spacefaring civilization. Who is allowed to own which space resources? When things go wrong, how are disputes settled? And how do we stop ambitious rivals, whether corporations or sovereigns, from destroying value in space faster than they create it? These are questions about social science, not physical science.

The premise of this newsletter is that the major constraints on humanity’s future in space are economic, not technical. Launch costs have plummeted. Space access, once the prerogative of large and powerful nations, will soon be within reach of mid-sized business firms. We can barely imagine how the new commercial space age will revolutionize life on Earth. But already there are a slew of problems. Orbital debris accumulates because nobody bears the cost of cluttering low earth orbit. Prospective asteroid miners worry about the security of their claims. Great power competition between the US and China intensifies, each racing deeper into space to claim the first-mover advantage of setting rules, building platforms, and controlling networks.

If you find those issues as fascinating as I do, welcome. You’re in the right place.

About me

My name is Alexander William Salter. I’m an economics professor at Texas Tech University’s Rawls College of Business, where I hold the Georgie G. Snyder chair, and a research fellow at TTU’s Free Market Institute. I did my Ph.D. at George Mason University, an intellectual home for the traditions I work in: market processes and entrepreneurship, law and economics, public choice, and the study of how institutions (property rights, contracts, constitutions, and even customs) shape human interaction.

For over a decade, I’ve applied those tools to space. I’ve written academic papers on the economics of orbital debris (a high-altitude tragedy of the commons), on whether property rights can exist even though the Outer Space Treaty forbids national sovereignty (spoiler alert: they can), on whether a commercial race to claim celestial resources will dissipate prospective wealth (probably not), and on how space settlements might govern themselves (contractual communities are underrated). My work pushes the logic of property rights, prices, and profits to the limit, while also acknowledging that political forces—especially international rivalries—will play a major role in space settlement and development.

Alongside the academic work, I’ve written on space commerce and strategy for the Wall Street Journal, National Review, SpaceNews, the Washington Post, and elsewhere. My goal with this newsletter is to blend the rigor and depth of research with the pace and accessibility of commentary.

Space economics themes

My writing has a few common threads. You’ll see them in this Substack, too.

Self-enforcing property rights. The 1967 Outer Space Treaty prohibits nations from claiming territory in space. Many people conclude that secure property rights are therefore impossible, and that commerce will stay grounded until diplomats renegotiate the treaty. I think that conclusion is wrong. The history of global trade is on my side. Long before modern nation-states, merchants developed functional commercial law across Europe without sovereign support. International traders today resolve billion-dollar disputes through private arbitration. As on Earth, so in space: don’t confuse “no government” for “no governance.”

The orbital commons. Earth orbit presents a fascinating governance challenge because it is a site of immense economic value, yet it cannot be owned. Hundreds of billions of dollars in satellite services flow through it every year, and it is filling up with junk. Each launcher captures the benefits of a launch while putting the costs, in the form of collision risk, on everyone else. How we handle that problem, from salvage law to liability rules to debris-removal markets, will create an important precedent for governing shared resources in space.

Cooperation, conflict, and the wealth of nations. The United States, China, Russia, and a growing field of smaller states and private companies are maneuvering for position on the Moon. Economics has a lot to say about the consequences of competition. The rules of the game will determine whether space jockeying creates wealth or destroys it.

How people will actually live out there. Settlement is the question that got many of us dreaming about space in the first place. Imagining a Mars mission, colony included, is a thrill. But there are plenty of governance questions we need to answer first. How do we promote cooperation and discourage predation in an environment where the “right of exit” means a nine-month trip back to Earth? I think some promising models come from the long human experience with voluntary, private governance. I’ll make the case here that these are complements to, not substitutes for, national space exploration efforts.

What you’ll get

Some details about what I’ll write about and how often you’ll get it:

Space news through an economic lens. I’ll explain the space headlines using the economic way of thinking. Expect lots of attention on incentives, information, and institutions.

Research made readable. I’ll translate the core ideas from my academic work, and the broader literature on space law, policy, and economics, for people who’d rather not wade through scholarly footnotes.

Policy and strategy commentary. I’ll give my opinions on what the United States and its rivals should (and shouldn’t) do to keep the peace in space. My own priors are clear. I like voluntary cooperation, bottom-up governance, and free enterprise. But there are many instances where markets alone aren’t an option. We need to discover, not assume, the right institutions to promote human flourishing in space.

Launch cadence. Expect two pieces per month: one longer thinkpiece and one shorter op-ed. Any time I land an external piece about space policy, I’ll also flag it here.

About the name

Every economics student knows about the production possibilities frontier: the limits of what an economy can produce with the inputs it has. Everything inside the curve is achievable. Everything outside it is not, unless we get more resources, develop better technology, or build better institutions. For most of history, Earth’s endowments defined that frontier for humankind.

Not anymore. Space opens a new horizon for production, specialization, and trade. The final frontier is itself a production possibilities frontier. Pushing deeper into space and harvesting its bounty can both enrich us and inspire us. But as with everything in economics, we need to pay close attention to the rules we write and the incentives we create. That’s what this newsletter is about.

If that sounds like your kind of thing, subscribe below. It’s zero-price (nothing is free; I’m an economist, remember?) to start. And if you know any fellow space or economics enthusiasts, please send this to them. We’ll have plenty to talk about.