space program to russia

Politico has an article about the US buying rocket engines from a sanctioned Russian government-owned company. Seems like a poor idea to outsource something this important to an adversary. Politico doesn’t really get at how this happened, though. In conversations with a number of people, I’ve found that they, like the Politico reporters, just accept that of course the government outsources as many functions as it can find buyers for. That’s not really a good idea, as we see in this case.

One of the things I do on Twitter is what some call tweetstreams. I don’t think there’s a standard name for them yet, and that’s the one I like. I did one this morning on this topic. Here it is. It’s an important part of my argument, so please read it.

I ¬†worked for a national laboratory before the privatization mania hit, so I can recall a time when it was thought right and proper for the government to maintain certain capabilities. Defense of the nation: the military was run by the government. Now we have the mercenaries called contractors as well as the regular military. Imprisonment was felt to be a government function; no more. Utilities like water and electricity are a more mixed bag, but the government’s ability to make sure they are available to all citizens has been curtailed. The purpose of the Post Office was to make sure communications were available to all citizens; the purpose of the USPS is now to make a profit, after the more profitable parts were¬†sold off to Federal Express and UPS. Those are some of the big ones.

The companies that do defense contracting, including Elon Musk’s SpaceX, have only one customer, the government. That is called a monopsony, and it leads to pathologies, as monopolies do. Those companies are captives of the government, and their profit is added on to what it would cost the government to do such things in-house, so the “logic” proferred thirty years ago, that companies can do it cheaper, is turned on its head. As it was thirty years ago, but ideology prevailed.

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  1. The Blog Fodder says:

    When it comes to contracting out government services, it is not quite as simple as whatever the government would have paid to do it themselves plus profit, though of course that is how government unions like to sell it. The rigidity of government process quite often adds to costs and to timeliness. Government unions also add to rigidity, as they do everywhere. Contracting out overcomes both difficulties.

  2. Cheryl Rofer says:

    That’s part of the theory, but from what I’ve seen, the companies can be just as rigid, or more so, than the government. Plus inordinate profits. No net benefit, and often something worse, like passing through stuff someone else has built just to make that profit, as here.

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