Keeping the “Dismal” in “The Dismal Science”

Sorry for another non-space blog post (space posts take time!)  I saw this link over on Arnold Kling’s blog, and thought it was worth sharing.  The article is reviewing a book that’s almost as old as I am: The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities, by Mancur Olson.

Basically, the book covers how democratic nations end up stagnating due to special interests, and the mismatch in incentives between special interests and the country as a whole. Greenspun gave an example of this mismatch:

There are a handful of automobile producers and millions of automobile consumers. It makes sense for an automobile company, acting individually, to lobby Congress for tariffs. The company will reap 20-40 percent of the benefits of the tariff. It doesn’t make sense for an individual consumer, however, to lobby Congress. It will cost him millions of dollars to lobby against Congress and preventing the tariff will save him only a few thousand dollars on his next car purchase. The economy suffers because some resources that would have been put to productive use are instead hanging around Washington and because cars are more expensive than they should be.

[As an aside, one could probably look at recent events in public-sector space programs, and find at least one or two similar examples.]

It’s eerie how prescient Olson’s work appears to have been. None of it seems to be particularly surprising, but it sure does explain a lot.

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Jonathan Goff

Jonathan Goff

President/CEO at Altius Space Machines
Jonathan Goff is a space technologist, inventor, and serial space entrepreneur who created the Selenian Boondocks blog. Jon was a co-founder of Masten Space Systems, and is the founder and CEO of Altius Space Machines, a space robotics startup in Broomfield, CO. His family includes his wife, Tiffany, and five boys: Jarom (deceased), Jonathan, James, Peter, and Andrew. Jon has a BS in Manufacturing Engineering (1999) and an MS in Mechanical Engineering (2007) from Brigham Young University, and served an LDS proselytizing mission in Olongapo, Philippines from 2000-2002.
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6 Responses to Keeping the “Dismal” in “The Dismal Science”

  1. While I can offer up no actual quotes at the moment, De Tocqueville alluded to this likely trend in American democracy. We Americans in particular have always been conflicted about what is and is not permissible or safe or dangerous to do in a free society.

    Our second President, John Adams — a founding father no less — instituted the “Aliens and Sedition Act,” which makes the stupidly-named Patriot Act look like an ACLU primer by comparison. That didn’t last, fortunately, but the sentiments behind it keep cropping up, don’t they? Oh, and the Whiskey Tax Act was a convoluted bureaucratic mess that didn’t conform to reality.

    As to economics, no American alive today has an adult memory of a true free market system.

  2. Vladislaw says:

    Good afternoon Jon,
    I am a native of North Dakota and went to college their for economics. ND was also were Olson was from. I had the rare treat of attending a mini-course offered on this very book. He was a guest lecturer for two days. The man was truely a great intellect that utilized the socratic method to pose question after question until you could find no more to ask.

    Great post.

  3. Vladislaw says:

    nothing like a their for a there.

    I forgot to add the quote of his:

    “the larger the group the farther it will fall short of providing an optimal supply of a collective good, and very large groups normally will not, in the absence of coercion or separate, outside incentives, provide themselves with even minimal amounts of a collective good”

    Basically this means for me, small space firms are better for pushing the boundries then big space.

  4. Jonathan Goff Jonathan Goff says:

    Vladislaw,
    That’s interesting. Isn’t it amusing how small the world sometimes seems?

    UND? I think Dr Livingstone (of the Space Show fame) teaches there. I did a guest lecture about two years ago (via phone) about RLV options, development, and markets. I wrote up the results on the first part, but am still struggling to get the remainder fleshed out and written up.

    ~Jon

  5. Bill White says:

    MirCorp is an obvious example, with that tether export license business.

    Archimedes famously said “Give me a place to stand and I shall move the world.” Moving NASA, BigAerospace and Senator Nelson may require finding a place to stand that is outside the United States.

    For the reasons Mancur Olson described, locations within the US probably do not offer sufficient leverage.

  6. Vladislaw says:

    Yes, UND is where I attended. As a backhanded compliment to Ronald Reagan, when he fired the air traffic controlers UND was given the airtraffic control school and ushered in UND’s drive for space. John Odegard was brought in and we now have the John D. Odegard School of Aerospace Sciences at UND.

    Recently a student that attended there discovered a new asteroid and is to be named after our State. new asteroid

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