Tag: capitalism

Soyuz rocket builder proposes major upgrade

8:30 am

The competition heats up: The head of the Russian company that builds the Soyuz rocket said today that a new upgrade of that rocket could be built and flying by 2022.

Russia’s future Soyuz-5 carrier rocket will be equipped with advanced new engines using ecology-friendly fuel, according to Alexander Kirilin. “One of the distinguishing features of the Soyuz-5 is the use of liquefied natural gas as fuel,” Kirilin said in an interview with RIA Novosti published on Tuesday. “The engines will be developed from scratch, which would allow us to apply a variety of advanced technological and economic characteristics that would make Soyuz-5 competitive on global markets,” Kirilin said. “The design of Soyuz-5 allows the addition of extra side blocks to make it a heavy-class rocket, but we are focusing now on a prototype with operational payload of 9 metric tons,” he added.

At the same time, Kirillin stressed that the Soyuz-5 will not compete with the ongoing development of the Angara family of carrier rockets. [emphasis mine]

Kirillin is doing a political dance with this interview. On one hand he is trying to sell to the Putin government the idea of developing a new version of the Soyuz rocket — thereby giving his company work for decades hence — in order to increase Russia’s ability to compete in the international launch market. On the other hand, he has to convince that same government that this new Soyuz will not compete with Russia’s new Angara rocket.

The two ideas are contradictory, especially if the upgrade allows the Soyuz to be modular and scalable so it can launch larger payloads, like Angara.

Kirillin’s problem is that the only investment capital available to him comes from the government, which now controls the entire Russian aerospace industry. Under this Soviet-style monolithic set-up, he is not allowed to compete with other Russian companies. However, if he doesn’t convince the government to build something, his company will no longer have a reason for existing.

In other words, creating a single government organization to run all of Russia’s space industry, as Putin’s government has done, was very counter-productive in the long run. It discourages competition while naturally causing the industry to shrink.

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Orbital ATK cargo contract extended

4:56 pm

The competition heats up: NASA has ordered two more cargo flights from Orbital ATK.

Orbital ATK, Dulles, Virginia, will fly two more missions under its 2008 contract for a total of 10 flights, according to Orbital ATK spokeswoman Vicki Cox. The company designated the missions OA-9e and OA-10e, Cox said. She declined to say when those flights will occur, although the company has said it plans to launch any new CRS missions it gets from NASA on Antares once it completes two deliveries using United Launch Alliance’s Atlas 5 rocket. The Atlas 5 launches are slated for December and early 2016 from Cape Canaveral, Florida.

NASA may also order additional cargo flights from its other CRS contractor, SpaceX of Hawthorne, California. “A modification is in work with both [CRS] providers,” NASA spokeswoman Stephanie Schierholz wrote in an Aug. 13 email. “Additional missions for SpaceX are still under discussion.”

That this contract extension occurs about the same time NASA decided to delay its decision on the second round of cargo contracts is probably not a coincidence. It suggests to me that the agency is probably seriously considering awarding one of the next contracts to a more risky proposal, such as Sierra Nevada’s Dream Chaser. In that case, extending the present contracts gives them some additional margin should the new contractors have problems.

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NASA postpones decision again for 2nd ISS cargo contracts

8:44 am

In the heat of competition: NASA has again delayed its decision on awarding its second round of contracts for providing cargo to ISS, delaying the decision from September until November 5.

The launch failures this year is the major reason NASA has held off making a decision. They need to see how both SpaceX and Orbital ATK react to the failures, as both have also bid for second round contracts.

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Lumbering the Redwoods

6:01 pm

An evening pause: Tonight’s pause is a challenge. Can you watch this 1940s industrial, describing the lumbering and milling of California redwoods, without feeling outrage or indignation against the work being described? Can you watch it with an open mind, recognizing that trees are renewable?

Or will the environmental brainwashing that our society has undergone since the 1960s cause you to shut your mind and refuse to consider the other side of this story?

Hat tip Phill Oltmann.

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DARPA awards phase 2 space plane contracts

9:05 am

The competition heats up: The second phase contracts in the development of a reusable space plane have been awarded by DARPA.

DARPA has awarded $6.5 million each to three companies for developmental design work, including Boeing (in partnership with Blue Origin), Northrop Grumman (in partnership with Scaled Composites and Virgin Galactic), and Masten Space Science Systems (in partnership with XCOR Aerospace).

The requirements are that the plane fly 10 times in 10 days, reach Mach 10+, put a 3,000 to 5000 pound payload in orbit, and cost less than $5 million per flight. In this new phase, the companies are to deliver finalized designs by 2016, with prototype development to follow.

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NASA considers using Bigelow module for deep space missions

8:56 am

The competition heats up: Rather than build something in-house for gobs of money and decades of work, NASA is considering using Bigelow Aerospace’s largest inflatable modules for its deep space missions.

What has happened is that NASA has signed a joint agreement with Bigelow to study the possibility of using Bigelow’s B330 module as a transport habitat on long flights. The agency really has no choice, as it doesn’t have the funding to develop the necessary large spacecraft for these missions, and Bigelow can provide them to it for much less.

This description of the background of Bigelow’s inflatable modules illustrates why NASA can’t build these itself:

The B330 evolved from the Genesis I and II modules that Bigelow Aerospace had launched into space. Those technology demonstrators were born out of the NASA project known as TransHab. The TransHab was an inflatable module designed for the ISS but was ultimately cancelled in 1999 due to budget constraints. The module would have provided a 4 level 27.5 feet (8.4 meter) diameter habitat for the astronauts.

After TransHab was cancelled, Bigelow worked with NASA on a technology transfer, giving Bigelow Aerospace exclusive rights to the technology. Using this technology, Bigelow designed, built and launched two technology demonstrators. They are still on orbit today. Genesis I was launched in 2006 with it’s sister ship launching in 2007. Both ships tested flight operations processes and on-board electronics and have performed above design specifications. [emphasis mine]

Unlike NASA, as a private company Bigelow was able to build this technology quickly and at a low cost. With the new agreement, the goal will be study the operation of a B330 in independent flight in low Earth orbit. Whether an actual B330 will be build and launched however is not yet clear.

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The Space Show modernization crowd-funding campaign

12:52 pm

For more than a decade David Livingston has been producing and hosting The Space Show, the aerospace industry’s most important outlet for telling the public what is happening in space.

Now David is starting a crowd-funding campaign to finance a major update to The Space Show archives, in order to make them fully searchable and thus accessible to historians and researchers. As he notes,

Our archives as of this morning contain 2, 524 interview programs. These interviews tell the story of the space industry as many guests were there when it started, when we went to the Moon, and even before SpaceX was started. But as it stands, nobody can search our archives for information, program content, breaking news, etc. The closest one can come to a search is the GuestSearch tool on our current website, but searches are not interactive and about two-thirds of our programs have no key words so a search using the GuestSearch tool is not very useful Space Show archives are a treasure of information and history. By making them fully searchable and of archival quality, everyone benefits, even the casual Space Show listener.

As a space historian, I think David’s effort here is essential. The data hidden in the Space Show archives is invaluable, describing the beginning of the commercial space industry better than any other source. Making it searchable would make this history available to future generations that otherwise would never see it.

Check out the campaign as well as the Space Show support site and contribute. Not only can you help future space historians you will help keep the Space Show on the air.

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Contract to build upgraded Vega rocket signed

9:58 am

The competition heats up: The European Space Agency today signed a contract to develop an upgraded version of its Vega rocket.

With respect to the VEGA configuration currently in operation, VEGA C aims to increase the load capacity of the orbital launcher up to 50%. Together with a further increase in operational flexibility, while maintaining its unrivalled orbital precision, it is expected to expand the capability to transport in the same flight a larger number of small satellites, in different orbital planes, or larger satellites. The new version of VEGA will be flight qualified in late 2018 for an entry into service as early as 2019. The group of countries which already participated in the development of VEGA, with Italy playing a major role with a 65% participation, welcomes now the entry of Germany.

I get the impression from this article that Vega is being used by ESA to spread the pork around, since to get Ariane 6 built they had to agree to not do so and give the work and control entirely to Airbus Safran. I thus wonder how competitive Vega will truly be.

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Orbital ATK orders second Atlas 5 for launching cargo to ISS

9:43 am

In the heat of competition: Even as it has accepted delivery of two new Russian engines to power its Antares rocket, Orbital ATK has ordered a second Atlas 5 rocket to launch its Cygnus cargo capsule to ISS.

I suspect they want to give themselves some cushion time to test and install these new Russian engines prior to an actual launch. In order to fulfill their contract with NASA, however, they have to launch several times next year, thus requiring more replacements for Antares.

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Update on Boeing’s CST-100

8:55 am

This article provides an update on the status of the construction of Boeing’s CST-100 manned capsule.

It also describes NASA’s lobbying effort with Congress to get the full budget it had proposed for the construction of the commercial crew spacecraft.

I note instead the apparent bureaucratic focus of all the work Boeing seems to be doing.

Following the CBR [Certification Baseline Review], Boeing successfully completed the Ground Segment CDR (Critical Design Review) on 4 December 2014 before moving onto the Phase 2 Safety Review (Part B) in early January 2015. By mid-March, Boeing completed the Phase 2 Safety Review (Safety Technical Review Board Readiness) and moved on to the Delta Integrated CDR, which took place on 27 March 2015.

Since then, Boeing has spent the summer months conducting the Phase 2 Safety review (STRB 80%) as well as producing the CDR for the launch elements of the program and the Qualification Test Article Production Readiness Review.

Moreover, in late July, teams at the Kennedy Space Center began building the Structural Test Article (STA) for the CST-100 capsule inside former Orbiter Processing Facility bay 3 (OPF-3).

Lots of reviews, but notice in the last paragraph they have only begun building the first capsule. As much as these reviews might help them make sure they are doing things right, they seem to create a situation where the company is able to slow-walk construction to help NASA with its congressional lobbying effort, while simultaneously making it sound like they are accomplishing a lot.

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The mobile launch building at Vostochny

8:27 am

At their new spaceport at Vostochny, the Russians are building a moveable launch building that will enclose their Soyuz rockets prior to launch.

Painted in elegant blue and white and standing almost 50 meters high, the Mobile Service Tower, MBO (for Mobilnaya Bashnya Obsluzhivaniya), is designed to provide personnel access to the Soyuz rocket during the countdown to liftoff from its launch pad in Vostochny. The structure can be also used to service the pad after launch and to process the rocket in case of an aborted liftoff.

With the tower in place, technicians can easily reach practically any part of the rocket as high as 37 meters above the surface of the launch pad. Internal access bridges of the tower surround the upper portion of the first and second stage, the third stage and the payload fairing.

The article also notes that “for decades, Soviet soldiers and officers and later their Russian civilian successors had to brave winter cold and summer heat preparing Soyuz rockets for launch on open-air gantries in Baikonur and Plesetsk. But in a sign how times have changed, the new generation of rocketeers will be protected from snow and rain with a climate-controlled tower completely enclosing the Soyuz rocket before liftoff from its newest launch pad at Russia’s Vostochny Cosmodrome.”

The irony here is profound. Big moveable buildings is how NASA has been doing it since Apollo. It is also what Boeing’s Delta family of rockets uses at Vandenberg in California. It is also why the Saturn 5 was and the Delta is so expensive to launch.

SpaceX abandoned such complicated structures in designing its Falcon 9, and instead decided to copy the old Soviet method of simple buildings for horizontal assembly and the simple horizontal transport to the launchpad. This appears to save a lot of money while simplifying rocket assembly.

That the Russians are now copying NASA’s more expensive but fancy mobile building approach means that, once again, their government is making decisions not based on efficiency but the prestige their political decisions can give them. From a competitive perspective, this is not going to benefit the Russia space effort, in the slightest.

But their workers will be more comfortable while they assembly those rockets!

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Stratolaunch shifts to the small sat market

5:07 pm

The competition heats up: Even as Vulcan Aerospace, the company building the Stratolaunch air-launch system, considers its options for the second stage rocket that it will use, it has decided to shift its focus towards the small satellite market, including cubesats.

In a sense, they are now aiming at the same cubesat/smallsat market that Virgin Galactic wants with its LauncherOne air-launched rocket. Whether they can build a system cheap enough for these small satellites to afford, however, remains the big question. Their shifting focus, like Virgin Galactic’s, does not bode well for them.

Stratolaunch of Huntsville, Alabama, has already gone through two earlier iterations of its launch vehicle. When Stratolaunch unveiled its plans in December 2011, it planned on using a variant of SpaceX’s Falcon 9 rocket. Less than a year later, though, Stratolaunch announced it was ending that agreement because SpaceX wanted to focus on the standard version of its Falcon 9.

Stratolaunch then teamed with Orbital Sciences Corp., now Orbital ATK, to develop a launch vehicle. That rocket, called Thunderbolt, featured two solid-fuel stages provided by ATK and an upper stage powered by RL-10 engines from Aerojet Rocketdyne. Like the earlier SpaceX design, Thunderbolt was designed to launch medium-class payloads.
Chuck BeamesChuck Beames. Credit: Vulcan Aerospace

Stratolaunch, though, has set that design aside as it seeks to launch smaller satellites, where the company sees a burgeoning market.

One wonders if the cost of building Stratolaunch will be more than this smallsat market can bear.

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Russia delivers to Orbital ATK the first two new Antares engines

9:15 am

Even as Orbital ATK begins to wrap up their investigation into the October launch failure of their Antares rocket, Russia delivered on July 16 the first two new replacement engines.

The RD-181 motors will be used in the first stage of the rocket. They will replace aging AJ-26 engines the company decided to stop using after one of them exploded during a launch last October. The AJ-26s are revamped NK-33 engines left over from the Soviet Union’s manned lunar program.

The first launch of the revamped Antares booster is set for next March. The rocket will carry a Cygnus cargo ship bound for the International Space Station.

Though these Russian new engines will allow Orbital to get Antares back into operation, they do limit that rocket’s marketability in the U.S.

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Airbus patents design for a supersonic ramjet airplane

8:55 am

The competition heats up: Two Airbus engineers have gotten a patent for a supersonic jet that would use suborbital space engineering, including hydrogen-oxygen engines as well as a ramjet, to fly at 20 to 30 miles elevation.

On a typical flight, it would take off like a conventional plane using ordinary turbojet engines, but once in the air, an open door in the stern of the plane reveals a rocket motor. When this fires, it sends the aircraft into a near vertical trajectory, accelerating it to supersonic speeds.

As the airplane approaches Mach one, the turbojets shut down and retract into the fuselage. On completion of the acceleration phase the plane is now flying at anywhere from Mach 4 to Mach 4.5 at an altitude of 30,000 to 35,000 m (100,000 to 150,000 ft). The rocket motor shuts down and is again concealed as the aft door slides shut to reduce drag. A ramjet now kicks in and the aircraft cruises along its flight path and can cover a range of 9,000 km (5,600 mi) in three hours – the equivalent of Tokyo to Los Angeles or Paris to San Francisco. Meanwhile, the wing fuselage design dissipates the sonic shock wave over 110 to 175 km (68 to 109 mi) and angles it at 11 to 15 degrees so it doesn’t reach the ground. At the end of the journey, split flaps reduce speed and the turbojets take over for approach and landing.

As the article notes, it is unlikely this jet will ever be built, as patented. The patent however illustrates the growing interest by commercial operators of these radical aerospace designs. While this specific design might never fly, many aspects of it are going to start appearing in flying ships in the next few decades.

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NASA considers offering SLS for commercial payloads

9:13 am

Squelching the competition: NASA is pushing to redesign its expensive and giant Space Launch System (SLS) rocket so that it can be used to launch commercial, military, and scientific payloads as well as proposed manned exploration missions.

At the moment, SLS has no planned payloads or funded flights past its second test flight in 2021. The system is very expensive, however, and the only way other customers could afford it would be if NASA charges them far less than the actual cost to fly. In such circumstances, NASA would essentially be subsidizing SLS so that it could compete, even undercut, private commercial rockets that actually cost far less.

If NASA does this, they could very well squelch the emerging private commercial launch industry.

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Kazakhstan gets a cut rate deal from Russia

8:42 am

It’s who you know: Russia has sold Kazakhstan Sarah Brightman’s space tourist seat at a price more than a third less than it charges NASA.

Kazakhstan will pay a mere $20 million to send an astronaut to the International Space Station on a Russian rocket — less than half the sum reportedly asked of a British passenger to make the same trip and less than one-third of the price routinely paid by NASA for U.S. astronauts, news agency RIA Novosti reported Wednesday, citing a Kazakh space agency official.

Tourists pay somewhere around $35 million while NASA pays $75 million. Kazakhstan, however, owns Russia’s spaceport Baikonur, so they have some leverage in the negotiations. Moreover, there are hints that it won’t have to lay out any cash at all, and that the fee will simply be deducted from the $115 million annual rent that Russia pays.

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Proton failure investigation finds quality control the root problem

8:32 am

In the heat of competition: The Russian investigation into the most recent Proton rocket launch failure has now found that the cause of the turbo pump failure was because of significant management failures.

The investigation into the MexSat-1 failure established that a fast spinning shaft inside a turbine of the RD-0212 engine propelling the third stage can break easily due to excessive vibrations. (The turbine is designed to pump propellant into four thrusters which steer the rocket in flight.) Yet, despite the problem lingering in the engine’s design for decades, the fact that two of these three accidents had happened in the past 15 months was itself is not an accident!

In an interview with the Russian business web site BFM.ru, the head of Roskosmos Igor Komarov disclosed that due to recent easing of requirements for the quality of metal that had gone into the production of the shaft, the turbine became more vulnerable to vibrations. Additional fascinating details on the same issue had surfaced on the online forum of the Novosti Kosmonavtiki magazine.

As it turned out, dangerously low requirements for the turbine shaft were set in the design documentation during the development of the rocket. However the issue was identified early during testing and the production team self-imposed extra margins for the affected components to remedy the problem. However in 2013, the new management began questioning why so much manufactured parts had been disqualified during production, even when they had met lowest requirements set in the design documentation. By that time, the new generation of workers and mid-level production managers no longer saw a reason to fight for more stringent requirements, which were actually making their own work more difficult. As a result, the hardware which was barely making through the quality control was certified for the installation on the engine, thus giving the old design flaw more chances to surface. [emphasis mine]

The description above reminds me strongly of the circumstances that took place prior to the Challenger failure in 1986: Engineers trying to fix a problem that managers don’t want to see.

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India’s space agency calls for more hiring

9:18 am

The competition heats up: India’s space agency ISRO says it is facing a manpower shortage caused by its recent successes and increased demand for more space achievements.

ISRO Satellite Centre (ISAC) director M Annadurai – who is also considered one of the heroes of the India’s Chandrayaan-1 mission to the moon (October 2008-August 2009) and the November 2013-launched MOM – has said after a steep increase in ISRO’s workforce expansion between 1982 and 1992 there has been no significant growth in ISRO’s workforce, which has remained in the region of 16,500 over several years. “There is a crunch,” he admitted on the sidelines of the Aerospace & Defence Manufacturing Summit 2015, although adding that it was relative in nature. “The requirements have increased but the workforce has remained more or less the same.”

Annadurai said the requirements were from domestic as well as foreign origin. The ISRO on July 11 launched five British satellites in a single launch, which is considered a record as it was the Indian space agency’s heaviest commercial launch. On the domestic front, he said, there are plans to increase Indian satellite launches from the current four a year to ten in the near future – which requires manpower to meet the quality requirements.

Without doubt India’s recent successes demand a growth in its space industry. The danger here is that India will add jobs to its government space agency rather than hire private companies to do the work and let them do the hiring. If they do the latter, the companies will have flexibility and will be able to adjust quickly to changing conditions. If the former the government will instead be hiring employees who will be seen by politicians as a vested interest they must protect, whether or not it makes sense economically. The first option will allow the aerospace industry to grow naturally. The second will fossilize that industry around pork supporting inefficient political agendas.

Hopefully the new conservative Modi government in India will recognize the dangers of expanding its government agency and will go the private route. This quote from the article gives me hope:

“We need the same number of people (16,500) outside to support operations, which is why we are encouraging private partnerships,” he said. Senior ISRO scientists have also said they have been encouraging retiring space scientists to foster links with private firms to encourage them to work with ISRO in the future. This is with an aim to bring in an “outside manpower” to bolster the in-house activities by ISRO scientists.

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More problems at Virgin Galactic?

10:02 am

The story outlines what appear to significant problems at Virgin Galactic:

  • Some sources say the company has shelved LauncherOne in favor of a bigger launcher that would be deployed from the bottom of a 747, not WhiteKnightTwo.
  • The company however says LauncherOne is still under development.
  • The company admits that they recently had a LauncherOne test rocket engine explode during testing.

It appears that they have discovered that LauncherOne is not cost effective for meeting their contract with OneWeb to launch 39 satellites. It would only be able put up one satellite at a time. A more powerful launcher however would be too heavy for WhiteKnightTwo.

Thus, after 10 years of development, nothing they have built to date is useful for a profitable operation, and they apparently have to start over.

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Russians confirm their commitment to ISS through 2024

9:36 am

Even as a new crew arrived at ISS, the head of Roscosmos confirmed that the Russians are now committed to sticking with ISS through 2024, as requested by the U.S.

I’ll make a prediction: The station’s life will be extended beyond 2024, but not necessarily under the control of its present international partnership. If the governments involved consider backing out at that time, there will be private companies then capable of taking it over, and will demand that the U.S. transfer ownership to them. This will in turn act to pressure the governments to continue the station’s operation.

Either way, ISS will continue.

Meanwhile, quality control issues continue to pop up with the Russians. One of the solar panels on the Soyuz capsule that delivered crew to ISS yesterday had failed to open when commanded, then decided to pop open unannounced during the docking. They had enough power to get to the station with only one panel, and the panel opening at the wrong time fortunately did not cause any problems, but for the panel to open as it did is without doubt worrisome.

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SpaceX pinpoints likely cause of Falcon 9 failure

4:31 pm

The investigation into the failure of the Falcon 9 launch June 28 now thinks the cause was a failed strut in the upper stage.

The struts are 2 feet long and about an inch thick at its thickest. SpaceX does not make the struts, a supplier does. From now on, each one will be individually checked, Musk said, and the design and material may be altered for added strength. The struts are designed to handle 10,000 pounds of force at liftoff; at the time of the accident, they would have been seeing only 2,000 pounds of force. A failure at such a low threshold is “pretty crazy,” Musk said. The strut most likely failed at its attachment point, he added.

Another change: Beginning with its next launch, each Dragon cargo carrier will be equipped with software for deploying its parachutes. The Dragon destroyed last month, along with an estimated $110 million worth of NASA equipment and supplies, would have survived if the parachutes normally used for descent at mission’s end could have been activated, Musk said.

The investigation is still not finalized, but is likely close to completion.

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Internet tycoon commits $100 million to alien life search

9:16 am

Russian internet entrepreneur Yuri Milner has given SETI $100 million for a ten year project to accelerate their effort to search for evidence of extraterrestrial life.

Understanding why SETI needs private funding is important:

SETI has been going on since 1960, when radio telescopes became sensitive enough to detect signals from another planet if it was broadcasting signals similar to those which our civilization does. Researchers developed devices that could monitor millions of frequencies at once for any signal that looked at all different from that produced by astronomical objects or the natural background. At first funded by universities and NASA, public funding for SETI was axed by Congress in the early 1990s. Since then, the nonprofit SETI League has received funding of a few million dollars a year from private donors.

Congress correctly cut the funds because it isn’t really the business of the federal government to search for alien life. Some taxpayers really don’t want their money used for that purpose, and they should have the right to say no. Instead, Congress essentially told SETI to do it right: Get private funding from people who want the research done. The work will be done more efficiently for less, and no one will be required to contribute who doesn’t want to.

Milner’s contribution now is the biggest donation yet, and suggests that interest in this research is building culturally.

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India engine test a success

9:55 am

The competition heats up: India has successfully completed a full duration engine test of its most powerful home-built rocket engine.

The Indian Space Research Organisation (ISRO) successfully conducted the much-awaited ‘full endurance test’ of the Geosynchronous Satellite Launch Vehicle Mk III’s indigenous cryogenic CE-20 engine at ISRO Propulsion Complex (IPRC) in Mahendragiri in the district on Thursday. The CE-20 was ignited and tested for 800 seconds from 5 p.m. to study the performance of the engine though the actual required duration was only 635 seconds.

This success puts them ever closer to creating their own rocket comparable to the Falcon 9 and capable of competing for commercial business in the international launch market.

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The government-run Russian space program trims its budget

9:27 am

In the heat of competition: Even as the Russians consolidate their entire aerospace industry into a single entity run by the government, the government has revealed that — due to the country’s recent economic troubles — the budget for space will have to be trimmed.

I found the juxtaposition of these two stories today quite revealing, and illustrates to me the fundamental problem with the Russian Soviet-style government-run approach. Under the competitive, capitalist system that the U.S. is finally beginning to adopt for its space program, when the economy forces budget cuts, competition naturally requires the different companies in the industry to lower costs and innovate. If they don’t, their competitors will get the business. This in turn keeps the industry vibrant, and actually acts to end the tough economic times.

In the Soviet-style system, there is no incentive to compete or innovate. There is only one company, no competition, and everything is decided by a single leadership on top. The government can demand innovation by command from above, but this is not the most effective way to make it happen. Some will obey the commands and try harder. Most however will simply hunker down during hard times, taking fewer risks to cover their asses so they won’t be a target for those budget cuts.

Moreover, with a single government entity running everything, if the economy goes sour the budget must be cut to the entire industry. And since the cuts are determined by a handful of powerful government officials at the top, using money they obtained by coercion (tax-dollars) and not from customers who voluntarily purchased the product, they have no guidance on what parts of the industry to cut. They are just as likely cut the best because it involves too much risk, or because their buddies in a poorly run agency bribed them more.

Capitalism, however, provides competing independent companies, some of which are going to have their own sources of income that might flow independent of a shrinking economy. And it is quality that determines who lives and who dies, not corrupt and powerful government officials. The better companies gain customers, while the less efficient companies naturally fall by the wayside. Thus, during hard economic times competitive capitalism actually works to increase an industry’s efficiency while simultaneously helping to reinvigorate the industry.

This all suggests to me once again that while the consolidation in Russia of its aerospace industry might provide them a short-term burst of success, in the long run they will find it difficult to keep up with America’s private companies.

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