Hacker News Reader

Comment by rdtsc | Hacker News Reader

> Even, so, Charmeau rejects comparisons to SpaceX, because he maintains that the company is heavily subsidized by the US government.

Isn't ESA subsidized by the member governments? I'd understand if the criticism was coming from a private entity and they'd be complaining about SpaceX getting preferential treatment, but coming from a state sponsored agency it seems odd.

View on HN

> Isn't ESA subsidized by the member governments?

"ArianeGroup is subsidized by its member governments." Furthermore, "SpaceX does not have a monopoly on [American] launches, as Arianespace does in Europe" and "had to compete with the US-based United Launch Alliance from the beginning to break that company’s monopoly on military and civil space missions" [1].

[1] Ars Technica

Ariane 5's commercial launches are directly subsidized by the EU. But it's a muddled story all around: if SpaceX rents an unused launch pad from NASA instead of spending $1 billion to build a new one, is that a subsidy? Was NASA's competition for commercial cargo to the ISS a subsidy?

Agreed, if one could take into account all the subsidies, I am sure we would be at similar levels. The commercial cargo contract was on par with the ATV program, but the prospect is much bigger, with better financial stability.

And where should we stop counting subsidies? Are the government funded studies made by research institutes counted? They benefit a lot to the companies.

You can look at the Boeing vs Airbus trade case to see how far folks are willing to go when adding up "subsidies" -- into the weeds.

> if SpaceX rents an unused launch pad from NASA instead of spending $1 billion to build a new one, is that a subsidy

No, it's called renting. If it was unused then the presumably low price SpaceX pays for it is the right one. This is actually efficient capitalist allocation of resources. If SpaceX was not allowed to pay a rent for the launch pad, capital would be used inefficiently on building one, instead of being spent on R&D. Furthermore, the depreciation and abandonment of the launch pad itself would result in a waste of tax-payer money.

You'd be correct if aerospace companies from other countries had as much of a right to rent the pad as SpaceX, but that's not the case.

The US with ITAR and other "national security" restrictions sets up a lot of economic moats around their aerospace companies, and the government gets to pick domestic winners over foreign competition. That's a subsidy.

Everyone plays this game when it comes to aerospace, it's why there's constant lawsuits between the likes of Boeing and Airbus on at the WTO.

There is no underlying platonic reality here to be discovered around the concept of a subsidy. It's not entirely unreasonable to be careful about allowing foreign governments to launch large rockets on domestic soil.

The entire booster stage of the Antares rocket, which is only used for NASA payloads, comes from Ukraine. And Antares and Atlas V's main engines come from Russia.

ITAR works in the other direction, when you take US tech into other countries.

Liability for the launching company, now that's a separate issue from ITAR.

Rockets launched from the US are already considered to be malicious from a range safety perspective, since they might accidentally veer off course and turn into a ballistic missile.

Range safety officers already strap explosives to SpaceX's and other rockets and will detonate them in the event of an accident. This is how the SRBs on the Challenger space shuttle were detonated after the orbiter broke up.

So it's not because of range safety that foreign companies aren't allowed equal access to the US launch market. We could go into why that is. Briefly it's because rocketry is a core strategic military asset from both a proliferation and manufacturing perspective. Once you can launch a satellite into orbit you're really close to having an ICBM.

But that doesn't change the fact that this strategic advantage is partly maintained with subsidies to domestic companies, in a way that say doesn't happen when the US military needs to source some more basic technology (like nails, screws or lumber) from some outside provider.

SpaceX was "subsidized" by the govt even as they provided services to the govt in exchange for money. That's called business, and the customer here is the government. It's also in the best interest, long term financially, to have an American space launch company, so we don't have to give money to the Russians or Europeans to launch our astronauts or satellites. Language matters, subsidy vs. contract is an important distinction

In government contracts in the aerospace and defence, the semantic distinction blurs a little bit.

Government contracts are often inflated on purpose so that the work can leak towards other projects. Every country does that.

No doubt, contract bloat and missed deadlines are a hallmark of government contracting. Some combination of opportunism and lack of proper forecasting/planning lead to someone like ULA having much, much higher costs than a company like SpaceX.

ESA has much less money than NASA and the DoD, and is free to chose a launcher from another country as well.

Are the European space companies subsidized by ESA and the other European space agencies? Yes. Is it much different from the subsidies in the US? Not really. Is the US space market bigger than the European market? Definitely!

Reply on news.ycombinator.com