Space Policy Edition: What does NASA need with an economist?

Casey Dreier: Welcome to the Space Policy edition of Planetary Radio. I'm Casey Dreier, the Chief of Space Policy here at The Planetary Society. We have a great guest this month, Akhil Rao, who was for a brief tenure, the Chief Economist at NASA, professor of Economics, and specialized in a variety of economic analyses for, I think some pretty interesting things in space. Akhil's insights, particularly with orbital debris as a similar analogy to how humans share limited and finite resources. His work has been connecting it to the idea of shared water resources, really helped spark this interesting discussion about the idea of analogy and how value can be gained by applying the right type of analogies to areas that are pretty strange space, but also I think a lot of the pitfalls possible with that.

We also talk about perhaps more relevantly, the fact that his prior role at NASA now no longer exists. It was one of the jobs that were ended by the incoming Trump administration along with a number of other people providing independent analysis and insight for the Administrator's office. We talk about, again, the role of economists at NASA, and ideally how they want to be used. This idea of saying, not know this can't happen, but how can something happen, maybe if. What NASA needs to do, if it really wants to rely on the private sector to provide key services, do you have a healthy market? And we also have a nice discussion about the idea of who is forecasting the economic futures of space and what some of those may have to gain from it.

Before we have that conversation, I want to first mention the fact that The Planetary Society, my organization, that is making the show you are listening to right now, is a member-supported independent organization. What does that mean? That means that we don't take government money. That means we don't take big corporate money. The Planetary Society relies on individuals to exist. That is a unique place to be, particularly these days where we don't have to be shy about voicing our concerns, but also voicing our passions for the things that we care about. Space science and exploration, planetary defense, the search for life. We get to say what we believe in, because we are enabled by you and supporters like you. I hope you become a member, if you are not already, at planetary.org/join.

And as you listen to this, if you're listening to this roughly when it came out, we're actually fundraising for my program, Space Policy, right now. You can donate. This program enables all the incredible data analysis this show, the work that we do, our government relations in Washington DC, representing an independent voice when it comes to space policy, that's at planetary.org/takeaction. You can find out how to support us. If you've already done so, thank you so much. Really appreciate it. And now, Dr. Akhil Rao. Dr. Akhil Rao, thank you so much for coming to the Space Policy edition this month. I'm happy to have you.

Akhil Rao: Thanks for having me and happy to be here.

Casey Dreier: In your last job, you were briefly the acting chief economist at NASA, and you had worked in the office of, what is it, strategy, technology and policy?

Akhil Rao: Technology, policy and strategy, very close.

Casey Dreier: Bhavya will, as I'm sure, will startle me for that, I always mix that one up, but you were part of this team working to analyze and provide expert policy and economic analysis working with the chief economist at NASA as well. Tell me what that job and the intent was behind having economists at NASA, and what were you trying to achieve there?

Akhil Rao: I think this is probably a question, like you mentioned, Bhavya will have perhaps a different view that we did not overlap at OTPS. So, Bhavya was the associate administrator before I joined OTPS. And then after I joined, I joined about the same time as Charity Weeden did. And so, I say that just to say that I am not going to speak to what the intent was at the creation of the role, but I think really the idea was that as NASA is engaging more and more with let's say the commercial sector, commercial markets more broadly, is trying to encourage the creation of a space economy outside of what NASA funds itself. It seemed like it would be useful to have people who study markets who think a lot about markets and economic efficiency involved in providing advice to the administrator.

And so Alex McDonald, my predecessor, as chief economist, was the administrator's senior most economic advisor. So when the administrator needs to understand how much our markets, I don't know, reacting to the latest event that happened but is relevant to space, Alex was the lead person in explaining what those impacts were and how that related to NASA's interests. So I started as a research economist at OTPS, and so I worked very closely with Alex. I was sort of one of his back office people, if you could think of it that way. So, as the administrator facing advisor, he would go and talk to people including the administrator about what they should be paying attention to and how they should be interpreting things. And I would be one of the people who was supporting him with analytical notes or work or things of that nature. So not just the chief economist because it's an OTPS position, and so others in OTPS as well, when they needed economic, let's say insight, I was the person who was there to provide that.

Casey Dreier: So you're a trained economist. What did you see were common, if you can even broadly say that, what were common misperceptions that you often had to correct or jump in or provide context for within the space agency broadly?

Akhil Rao: I would say there are many, but they all kind of vary in the details. The thing that I think is common across all of them is maybe philosophically, NASA is not an economics agency, right? Like NASA is a science and technology agency. It does R&D. It does missions, it sends people to space. It is not an agency that is known for hiring lots of economists for having lots of people who are, like you said, trained economists involved in the process. It's just not what it does. And so I would say that many of the misperceptions stemmed from what I would call a lay understanding of economics as opposed to a more sophisticated practitioners understanding or the understanding of someone who is in the field.

So let me give you a couple examples here. One is that when we talk about commercial space, and I think this is maybe the most common misperception, not just at NASA but elsewhere in the space sector, when we talk about commercial space, when we talk about the new space era, many people I think view that as an era in which there are non-government actors on both the supply side, so providing the services, providing the goods, whatever they are, and on the demand side, so purchasing those services and goods. And I would say that that's not entirely true, or at least not in a way that is useful to think about, right? There are people who are purely commercial entities, who purchase satellites or launches or whatever your preferred space service or good is, but for the most part, the new space era that we've seen in let's say the last 15, 20 years has more been about the commercialization of the supply side. So new commercial providers of launches, of satellites of what have you, than it has been about the demand side.

So that's I think the first kind of big piece, right? It's just thinking about what is even happening here, like very popular perception I think that both supply and demand are commercializing, and I would say that supply is commercializing much more than demand is commercialized. We're still seeing early indications of what demand commercialization might look like. The other big thing I think is in thinking about prices maybe more in terms of costs than in terms of market dynamics. And so what I mean by that is, if you look at launch costs for example, SpaceX has clearly driven the cost of launching a satellite or of launching a payload, much lower than it was let's say 30 years ago. As a result, they're able to launch many more things than people were launching 30 years ago.

But that doesn't mean that the prices that people pay have fallen commensurately. In fact, there's a recent article that Dr. Moon Kim at NASA published recently about how prices for NASA have not actually gone down in, I think his sample was starting in 2006... but so since about 2006, prices haven't really gone down. If anything, they've gone up by a little bit over inflation, so a little bit higher than the rate of inflation. And this, he argues in the article, this has to do with the market dynamics around launch services pricing. And so not about whether or not the provider can do it at a lower cost, the question is whether you can get the provider to offer you a better price.

And so that I think is another big sort of misperception that when you have commercial actors involved, they will necessarily drive prices down because they also drive costs down. And that's not true. They may drive costs down. But whether prices go down or not, depends a lot on how they interact with other providers and with customers in the market.

Casey Dreier: Is that a function just on the supply side? I think that's really a fascinating way to put this. The cost is still a lot. It's cheaper, but it's still a lot of money. Like a cheap rocket from SpaceX I guess is $60 million, which most people can't afford. But it's interesting to me because also that this point that companies won't lower the price to the monopsonistic. Is that the right word to say purchaser? And that if they don't have to, there's not enough competition, is it a function of not having enough competition? Is it just a limited pool? If you're only having a reform on the supply side and not on the demand and that you have a government purchaser of this, overall, you don't seem to have a bigger market necessarily. You're kind of competing for roughly the same share. Is that kind of why you get this lack of price savings being passed along to the purchaser?

Akhil Rao: I think you're on the right track there. I think-

Casey Dreier: You'll be able to correct me lots on my poor understanding of economics. So feel free to do do.

Akhil Rao: So you raise, I think exactly the right points. I would maybe combine them a bit differently. And so maybe taking a step back and thinking about high level. So monopoly, everyone's familiar with this, I think from the board game, right? There's a single seller. The other side of that coin is a monopsony, which is a single buyer. And so monopsony show up in all kinds of places. They're, I would say probably one of the more popular areas of research and labor economics, let's say over the last 10 years, is in the effect of monopsony and how in different labor markets, you may only have essentially one firm that is employing people. Because when you're in a labor market, workers are the supply side and people hiring workers are the demand side.

So monopsony is, I would say fairly well studied in general. But in general, what's weird about monopsony is, I think relative to the space case, is that monopsony get cheaper prices. They are able to exploit their power as the sole purchaser in whatever the notion of the relevant market is, to their advantage. And so when we look at some of the research that's been coming out over the last decade about monopsony in labor markets, the thinking there, the weight of the evidence, is that monopsonistic firms pay their employees less than a competitive market would result in them getting paid. That, I think is very at odds with the experience that we have had in space, especially NASA's experience there.

And I think that this is a function of, like you said, the lack of competition. I think that that's huge. That is, I would say, if you had to pick one thing at zeroth order that you would like, I don't know, put on a sticker that you're plastering around town, it's lack of competition, right? Like you don't get competitive prices when you don't have competitive markets. You can't have competitive markets when you don't have competitors, plural. So that is a big part. I think the mystery here is why NASA, if you take Mooncamp's article as it is, then why has NASA not been able to get those benefits? And I think that this is because the US Government Space Enterprise, NASA included, is also in this weird position of doing industrial policy and of trying to maintain a certain number of providers, of trying to not squeeze providers for every possible dollar that they can get out of them.

There's also this notion that perhaps you want to maybe pay a little more than you otherwise would because you want to make sure that these providers don't go bankrupt. But my suspicion is that there's some interaction of these things, of the number of competitors in the market, of the sort of standing goal to preserve a capability domestically, and perhaps the way that government contractors negotiate, government folks negotiate contracts. Perhaps there is something at the intersection of those things that is not generating the price benefits. But again, if you had to pin me down on pick one thing, what is the one thing that you would point to, I would say it's competition.

Casey Dreier: You point out something that I think I always go back to it, this idea that let's just keep it focused on NASA for this, but you could argue same thing with Department of Defense and their procurement of launch in particular, that there is a bifurcation of their goals, that there a pretty explicit policy saying that the role of these agencies is to foster and sustain the commercial and industrial base in the United States for these, which means you can't squeeze people at the same time. But then there's just this common expectation.

This idea, efficiency and lower cost generally translates to fewer people being employed and that tends to be at odds with a lot of the political dynamics behind the support for NASA activities and so forth. So you can't have a perfectly rational... at least you can't optimize and feel like on that one thing of being cost, yet that's kind of always pitched as the main idea, which is why I think there's this idea that beyond this, well then there's this whole private market that I'll just handle it and be more efficient. But there's no one really buying this. So this whole idea of markets in space has been, I'd say, again, I'm not an economist, but it seems like there's a lot of faith-based projection into that sphere.

Akhil Rao: Indeed.

Casey Dreier: Okay, good. A real economist can say that-

Akhil Rao: I am an economist and I agree.

Casey Dreier: And I always tend to, my framing of this, the way I think about it, is that there was a lot of people who may have been sold a vision of the future or embraced a vision of the future that hasn't happened. And the way that they can now project it forward is this new yet unproven that hasn't disappointed them yet development that will just be better and more efficient and more able to do all the things about bringing humanity into space and so forth and so on, despite the fact that there seems to be literally no obvious economic motivation or market to do so. And as a consequence, it seems like this gets translated into policy then at the same time, which may then ultimately, as we kind of talked about, undermine the very initiative behind it. Where do you see the level of discourse, let's start with this, in terms of how people talk more broadly about the space economy such that it is at this point?

Akhil Rao: That's a very large question, so I'll try to cut it up into chunks and answer it hopefully reasonably well. So, I think one of the big things that I see in the discourse that I have seen for some time, and I expect to continue seeing for some time yet, is what I would call a hangover of the 2010s. So in the 2010s, interest rates were very low for macroeconomic factors that have nothing to do with space. And there was a lot of investment money chasing the potential of outsize returns. There was also, in the 2010s, this interesting sort of narrative that I think didn't hit space quite as hard, but was very popular elsewhere, and maybe affected some space oriented investors. And this is the narrative around network effects.

So if you remember, in the 2010s, what the sort of startup and venture investing landscape was like in the 2010s, I joined a startup that was doing machine learning things, AI before we were calling it AI, and we were trying to raise money and do all the things that startups started to do. There was, I think a real belief that you would be able to spend a lot of money upfront, and then you'd get all these different users into your service, and then they would be really sticky there and they wouldn't want to leave, and they would stay. And so that's great and all. But if you translate that into investment, it meant that you were constantly going back to your investors, and telling them that you needed more money so that you could scale up more. And that if you did scale up, then you would be in this super dominant, let's not say monopolist, but rarefied market position.

Casey Dreier: This is like the Facebook or Uber or-

Akhil Rao: Exactly.

Casey Dreier: ... what [inaudible 00:18:47] tried to do, right?

Akhil Rao: Exactly. Exactly. Right. And some of them succeeded better than others, fine, whatever. That's neither here nor there. But I think what that meant for investors thinking about space, was they were already, I would say in the mindset that yes, of course we will have to spend a lot of money upfront. There will be some scale, the scale will come on the back end. It is okay if we don't see returns for the immediate future, we'll keep pouring money into it. And eventually as a function of how much money we pour into it, we will receive outsized returns. And I would say that that is part of what explains some of the types of companies that you saw very active in the discourse in the 2010s. So like startups whose goal was to mine an asteroid. You can see all the elements of this story there, where there's these big upfront costs. And once you've eaten these big upfront costs, on the other end, there will be a massive payoff.

And in the short run, there probably won't be many revenues, but you're doing something very ambitious and large. And so even though network effects aren't there, you're still kind of in the same mindset of like, "Ah, we got to scale up. And so it's okay to do that and it's okay to not see returns in the short." That changed quite a bit in the 2020s. And so now, what I see more of from space companies, is more pressure, for one, to get near term returns, near term revenues, and less interest from investors, I think, in pitches that are, how should I say this, distant future returns. Like it's great that you want to mine an asteroid. But unless you're going to be bringing it back and earning money off of it in the next five to 10 years, that is not as investible as for example, a hypersonic weapons testbed that is also a launch vehicle, because the testbed function will start generating DOD revenues very quickly.

And so I've seen, in the space sector, this shift from focusing on these outsize returns, distant future type stuff, to nearer returns often with a defense or national security angle. And that's partly because defense and national security customers actually do pay the bills, right? You will invoice them and they will pay you, and that is very good, whereas hypothetical future people who may or may not want platinum from an asteroid, I guess we don't know yet whether they will pay you.

Casey Dreier: Can you basically say that any startup space company will inevitably optimize towards DOD revenue stream? Is that kind of like the inevitable outcome of it despite their rhetoric or ambition?

Akhil Rao: I think unless we see money get much cheaper with very low interest rates again, and I do not anticipate seeing that at least for the next decade, I would say that yes, for many space companies, they will find themselves subject to pressures that make them optimize for a DOD customer. Maybe not their only customer, but they will almost surely begin to take the DOD much more seriously as a customer as they start looking for revenues.

Casey Dreier: Well, it's also the only part of government that's growing. It seems to be, at the current moment that we're talking, right? Like nearing $1 trillion of annual spending. So yeah, your money-

Akhil Rao: That's exactly right.

Casey Dreier: ,,, that's where you go. You go where you're sure.

Akhil Rao: That's exactly right. That's right. It's the sector that's growing. It's the sector where you can have an ambitious hardware project and there is some customer at the other end who will pay even for intermediate progress who is interested in seeing the technology advanced for its own sake. Just many, many of these factors, I think align quite nicely for national security customers.

Casey Dreier: Is this where NASA could step in and provide an alternative pathway? And is this, in a sense, what the ideal representation of this effort that you were part of and within NASA, of trying to create and foster a commercial space industry, that you're trying to create that specific incentive to also have things that are optimized towards civil space needs?

Akhil Rao: Yeah, I think the short answer is yes. I think it could. Whether it does or not is a higher question-

Casey Dreier: Separate part of the question.

Akhil Rao: Yeah, exactly. Exactly.

Casey Dreier: [Inaudible 00:23:01] part of the question.

Akhil Rao: But it can, right? And I think that this is like, so maybe I'll take two markets to give you an example, study and contrast here. So one is in-space data relay. NASA does of course work in this market of relaying data between some space-based origin point for the traffic and some ground-based destination for the traffic. And so this is what the TDRS satellites do. They're satellites in the geostationary belt, and the ISS is one of their users. So space-based origin point, the ISS sends a signal with the astronauts, whatever messages for example, bounces off the TDRS satellites, back to wherever it needs to go on earth to get the message from origin to destination. That is also a market where the DoD has many interests. So the space development agency, the SDA's, various satellite layers, are also meant to provide some of this type of functionality.

Now, they are optimizing for a different type of mission and they have a different type of customer, but it's the same, I guess, type of service at some level. Like, is it LEO, is it GEO? Put that to one side. It is relay of messages sent from a space-based endpoint to a ground-based endpoint. That is very different from the commercial LEO destinations market. CLD is not really a defense pursuit. Space Force may or may not ultimately place guardians in space. That is, I think again a separate question, but the space force is not, to my knowledge, no part of the military has in the past and is currently planning to, to my knowledge, fund a full station with a cruise station of people-

Casey Dreier: I think it was like the 1960s, there was the manned orbiting laboratory I think was going to host Air Force.

Akhil Rao: Yeah.

Casey Dreier: That was... But it was canceled really before it got going. And that was pretty much... And I guess we added some military on space shuttle flights when that was the only launch vehicle for all national security stuff.

Akhil Rao: Exactly. Exactly. And that was very much again-

Casey Dreier: But it really, in any other way that you're talking about. Yeah.

Akhil Rao: Exactly. And the space shuttle is really interesting, right? Because it was a point of national policy that you're going to use the shuttle. Like, I don't know that left to their own devices, the DOD customer would have settled on the space shuttle as their preferred mode of transport.

Casey Dreier: Right, and [inaudible 00:25:29] really didn't. They basically created our modern, or at least a handful of our rocket companies that we have now, that's in the EELV program. This goes back to this idea though of how then... where do these programs come from if there's no market? This is, the charge of NASA's to develop the commercial space industry. This is where I kind of go back to this idea of a faith-based, like commercial LEO destinations. I remember reading the STPI Reports from 2017 saying that this literally makes no financial sense, there's no market for this, yet we have a program now. And you must have worked on things like that. And it's not necessarily wrong, I guess is what I'm trying to say, but it's not what we tend to think of as a private market. It's almost the opposite. Are there historical analogs you can think about for this as like where has government gone in and basically pulled a new market out of the ether, and established it and said, "This is going to be because we want it so," that's not necessarily just national defense?

Akhil Rao: Yeah. So I guess maybe putting things in context for listeners here, so the report that you're alluding to, the STPI report, [inaudible 00:26:39] who created OTPS was one of the authors of that report, and this was a report that looked into the prospects for a privately sustained space station. And indeed as you mentioned, found that the prospects were not that bright. Now, granted perhaps this has changed since 2017, but that is at least where things were in 2017, and STPI also did similar reports. So Tom Colvin, who was also with me at OTPS, led a study on the drivers of cislunar... of demand for cislunar goods and services, and assessed whether there is indeed a profitable lunar market just around the corner. And again, the prospects were not as bright, I think as many would hope.

So, can I think of historical analogies? Maybe. I can, I don't know. I think that this is kind of an academic stock and trade, right? Before I went to NASA, I was an econ professor at Middlebury College, and we can torture analogies to fit depending on how much work we're willing to do there. I think that NASA finds itself in a rather unique position for a federal agency for a couple of reasons. And to understand what's unique, let's think about what the market actually is. So, cut the market into maybe three segments. One segment is the super off the shelf, very commercial, very cots stuff where maybe you've got a new thing, a new element of that, but you're not doing something fundamentally new. So when the space force needs uniforms, yes, they have a new pattern. Yes, they're order size may be weird. However, making a uniform is not a new thing. Humanity has made uniform before clothing exists. These are not new things. The market can fix this and you just have to be willing to buy.

On the other side are things that are super advanced. There is no market for this, there is no demand for this. If you want the thing, you are going to have to pay for it and you are going to have to pay for all of it because you are perhaps the only person who wants it. So missions to the moons of Saturn to send autonomous rovers and sample the atmosphere, there is just no market for that. If NASA wants to send Dragonfly somewhere, like NASA's got to build Dragonfly. NASA's got to get Dragonfly from point A to point B. Like there is no one else stepping in to purchase that. So those are fairly standard, I'd say categories. And DoD plays a lot in both of those. You have DoD building exquisite new systems to do all kinds of things, and you have DoD buying, I don't cell phones in bulk.

This middle section, I think is sort of unique to NASA. And that's what I call the cultivation phase of the market. So kind of a gardening analogy, in that middle phase, you are not doing something that is totally technologically new. There are perhaps examples before. It's not totally new in terms of market either. There are other people who want to buy it too. They're just maybe not as willing to pay as you are, and it's also not developed enough that you can just go and buy it. So CLD I think is exactly in this fate, with the ISS and all of the other stations that we've had and have. We kind of know what a station is, we know how a station works, that has been done before, that is not new. At the same time, it is not like you can go out and find a person relatively quickly who has been to space and has been to a station or who is planning to go in the next three years. It is still very much a new market.

And so in this phase, you have to be very, I would say flexible, and mindful of what is happening and how to... in order to keep the market from collapsing. So, if you want to have many people competing for something for say, station services to provide test racks, then you need to think very carefully about what are the conditions under which more than one entity can provide those test racks. What are the prices they can offer? Who is in the market to buy those things? Is what's being offered likely to attract that demand or not? Even if you want to see the market develop and get government out of the way very quickly, as the government actor who is buying most of the stuff and is going to send the signals to the market participants as to what stuff they should be building, you've got to think very hard about markets here.

And so I'd say that that middle layer is relatively unique. I think NASA is one of the few, if not the only federal agencies that plays a very large role there with things that are totally new and that have no... from a demand perspective. And I think that's just a challenging place for NASA to be. It's not an agency that has the same kind of deep pockets as, for example, DoD. It is also not an agency that has the same kind of clear economic function, for example, as DoE might, right? Department of Energy has loan programs, department of Energy has all kinds of economic programs to build out various advanced technology, let's say products. NASA is a bit more limited in its flexibility there.

Casey Dreier: In your role then as a working economist at NASA, how would you try to guide some of these programs? Can we talk about like CLD? What were some of the ways that you tried to engage or some of the issues that came up to try to direct it to make it useful? Because you can't just sit there and say like, "Ah, numbers say this won't work." You have to [inaudible 00:32:12] how are you productive and how are you trying to steer or provide some helpful guidance to programs like that?

Akhil Rao: Yeah. So I'm happy to talk about this. I'll maybe be a little bit vague here just because I know that on the CLD side, the folks there are very much, as far as I understand it, still in the thick of things and trying to make things work.

Casey Dreier: Yeah, we can talk about it in a broader sense, but just you can use general examples. It doesn't have to just be CLD, but where would this expertise, where would your expertise kind of come in, and what would you try to do in big terms for these things?

Akhil Rao: Yeah. So the high-level, two types of things that economists do at NASA, one is outward-facing functions, so like the economic impact report that I know you all have are very familiar with, right?

Casey Dreier: Yep. Indeed. Yes.

Akhil Rao: So that-

Casey Dreier: The value, that's the multipliers, inputs, outputs, how much economic impact. Yes, that is a very valuable maybe past tense at this point.

Akhil Rao: Yeah. So that type of thing is one of the places where economists are involved at NASA. And so Alex McDonald led sort of that function for most of my time there. And when I stepped into the acting role, I picked up some of those responsibilities. So that's one thing, but that's not what you're, I think asking after here. The second thing is more internally focused on what the agency is doing and how to think about markets where the agency wants to engage. That was where I spent most of my time working. And so as background, most of my academic research was about orbital debris. And so at OTPS, I did also have some orbital debris related work. OTPS, as many know, had been at the very leading edge of cost benefit analysis for space sustainability. So, when I got there, because that was where a lot of my research was, and that was an active area of interest, I did that. But that was not, I would say in general necessarily a role for an economist. That was just a happy confluence of factors.

What I did, I would say more in the sort of economist role, was market estimates. And so that was about estimating the sources of demand for various goods that the agency had an interest in goods and services. So CLD for example, who is going to demand accommodations? How much money would they be willing to pay for accommodations, and how much revenue does that translate to for the station provider? And if we know how much revenue the station can earn from let's say five different lines of business, what does that tell us about how many stations might be sustainable at pick a time point, pick a set of conditions that you want to assume.

And so that was the type of thing that I did, was a lot of just building up estimates, working with a team to build up the estimates to make sure that we had kicked the tires on all the sources of uncertainty, that any particular item of interest for decision makers in the agency was something that we could speak to and provide insight on so that when those decision makers had to sit down and assess, okay, this plan that we want to do requires that there be at least this much revenue to prevent us from paying the full cost, we could provide some inputs as to how likely that was.

Casey Dreier: You're kind of like a gut check, right?

Akhil Rao: Exactly.

Casey Dreier: Like, yeah, is this a real thing or what can we [inaudible 00:35:44]

Akhil Rao: Is this a real thing? Does this make sense? And what are the moving pieces that make this what it is and not something else that it is not. The second piece though was in designing or coming up with concepts for architectures that would be economically sustainable. And so there were some programs where we did our market estimates, we assessed that the way that things are shaped right now may not make sense for the ambitions that the agency has. And so what do you do about that? Like you said, it's not enough to just be like, "It doesn't make sense." So we would go, my team and I would go a step further and say, okay, so here is the shape of an architecture that would make economic sense. Here is where government needs to be involved and providing capital, and here is where you let multiple providers compete, and here is what the budget implications of these are. And in general, we would always do these things in sort of a budget neutral sense. So whatever money has already been set out, let's work within that money to achieve the objective, assume that there is nothing else.

Casey Dreier: How can you work... It strikes me that you don't have a lot of data to work with in something like this. And maybe that's also, I would say, if I could try to summon a critique of these types of surveys and estimates, well, it only takes one transformative technology, reusable rockets, starship, let's say, right? I see this a lot that it's, "Oh, or just one visionary will show that all these kind of estimates were wrong, and actually it was possible the whole time. So why do we even waste our time thinking about this," and that kind of framing of it. And I don't necessarily want to frame it that way obviously, but just this idea that space as you kind of pointed out, is such an unusual domain, both in terms of economics and just physically.

And the number of lessons or actual commercial actors in this, it's also small. How do you get anything... how do you even try to understand what's out there if the answer is basically some breakthrough technology will change everything? How do you model something like that in economics?

Akhil Rao: So this is, I think a very good question because that's it. That's the hard challenge here, it's like how do you deal with this level of not just uncertainty, but like ambiguity, right? We don't even know what the possibilities are to say how likely they are. So, let me maybe put this into three buckets. So one is, as you mentioned, I'm a trained economist. And so I have a very opinionated view for how you structure the models, how you set up the calculation before you even do it for these types of things. And so that was one piece of it, was an understanding just even conceptually, what are the things we're thinking about.

At a philosophical level, my team, we were not the no people, we were the yes if people. So even if we say it doesn't work now, that conclusion is something that we got to after figuring out what has to be true for it to work, and then assessing whether those conditions were currently true and also how those conditions seem to be evolving. Do they seem to be evolving towards becoming true? Are they not? Are kind of static? Are there other trends that are relevant here? And so at a philosophical level, very opinionated framework for how to put things together, but also philosophically committed to getting to yes and understanding very clearly what had to be true to make that yes, something that we could stand behind professionally. So that was the first piece.

The second piece I would say is, you're right, that data is limited, but there's a lot more than people think there is. And so we had very, very good team. I would say that it was the best action-oriented economics team that NASA has ever had. That is something that someone else said to me, it's very flattering. But we had people who genuinely would collect a lot of data, who would bring that data together and help us make sure that we had everything that could reasonably be gone. I've mentioned here, I think my colleague, Tom, who incredible work in being very imaginative and thinking about how the technologies might fit together and what is actually possible.

The third piece though was we talked with industry constantly. We talked with other government agencies constantly. We were much less of a desk research shop than I had kind of expected when I was in academia and looking at what the work might be, much more just out there talking to people, making sure that we understood details. So another person I'll mention, Adrian Mangiuca on my team at OTPS, very deep knowledge of industry, very, very say seasoned in that world, really helped us get a lot of interviews and interactions with folks. Renata Kommel, another analyst on the team also helped bring a lot of these insights together so that not only do we have the latest information from people who are actually in the arena trying to build these things, and how they think about their markets, how they think about their businesses, not only do we have a lot of data that we've collected from open source sources, and kind of an ability to see what the technologies would need to be and how they can fit together.

We kind of put that together with, like I said, a very opinionated framework for how do you get to profitability in this segment with whatever these technologies are. And so I feel fairly confident that even if we were wrong in some of our estimates in like the point estimate, the number, the range, the magnitude that we got to was right, and the drivers that we identified as, if you need a breakthrough technology, the breakthrough technology has to be able to do A, B, and C. But if it does D, then that's just not going to move the needle. You may think it will, but here's why it won't. Right? Those sorts of yes, if statements were where I put a lot of stock. Like those were where we were super diligent.

Casey Dreier: We'll be right back with the rest of our Space Policy edition of Planetary Radio after this short break.

Bill Nye: Greetings, Bill Nye here. The US Congress approves NASA's annual budget. And with your support, we promote missions to space by keeping every member of Congress and their staff informed about the benefits of a robust space program. We want Congress to know that space exploration ensures our nation's goals and workforce technology, international relations and space science. Unfortunately, important missions are being delayed, some indefinitely. That's where you come in. Join our mission as a space advocate by making a gift today. Right now, when you donate, your gift will be matched up to $75,000 thanks to a generous Planetary society member. With your support, we can make sure every representative and senator in DC understands why NASA is a critical part of US national policy. With the challenges NASA is facing, we need to make this investment today. So make your gift at planetary.org/take action. Thank you.

Casey Dreier: So, OTPS no longer exists.

Akhil Rao: Indeed.

Casey Dreier: That was one of the... you were introduced as the former acting, which implies that you were part of that, and that which was, it's nice to talk to you now, but obviously that's said, feel bad for you and your team and everyone else who has been suffering through these layoffs. What does it tell you then that this type of input is no longer deemed valuable? What does it tell you about the future of the types of decisions that will be made at NASA?

Akhil Rao: I don't know, I guess is maybe the short answer, right? And part of the reason I don't know is because we don't know whether this type of input will reemerge at NASA in a different form, or when it will reemerge. So taking a step back, Alex McDonald was the chief economist. He retired at the end of December last year, then I stepped in as the acting. And my sort understanding of that role had always been that I'm here as an interim figure to ensure that the work continues, and also that when the new administrator is in, there is someone who can articulate what this function is to support the administrator in making whatever decision they need to make about what the future looks like for that type of function. So that didn't happen, so it goes.

My hope is that someone at the administrators in their suite or in their orbit, will share with them, "Here are some of the inputs that we got from this function," and the agency will, at some point in the not too distant future, have that function once again, because I think it is necessary. I think it's super important to have a figure near the administrator who can give them sound advice about economic matters, and is not attached to any program, mission directorate or any other sort of interest there whose sole interest is in ensuring that the administrator has the best possible advice on what the truth is and where things are not going. So, that's very much my hope. But to your point, I do not know. Many of the things that have been floating around about what the future holds for NASA seem quite different from the agency as of even a month ago. And so I don't know, who knows.

Casey Dreier: It just strikes me as a strange choice, given the seeming direction, we'll be investing more in these types of private relationships or private development or commercial development. That's where I kind of brought up this idea. It's like a faith... it almost then becomes faith-based. And again, we don't know exactly what the type of inputs will be, but I think your point though of this, the conflicts of interest that can kind of exist, and this is... At Planetary Society, we have opinions about what we would like, but we don't make any money of giving commission to Europa, right? There's no financial interest of, we just get to see the pictures and learn the science and then come back.

And so, one of the things we try to do is just in our limited way, try to put out as much of our analysis and perspective knowing that we have a perspective, but also knowing that we don't get anything from it. And you talk about data and lots of data, and I've had this discussion at Jet Corps from Payload space research I had on a few months ago. There is data out there, but it's really hard, particularly for non-experts to see who's producing good data and who has a lot to gain by presenting a certain perspective. And so this is where a lot of this economic discussion is really interesting to me because we see this $3 trillion space economy projected by Merrill Lynch, and just so happens they have these financial packages, they're happy to sell you, so you're in on this team, right?

Akhil Rao: Mm-hmm.

Casey Dreier: But then it's just repeated, repeated, repeated, repeated, that this will be... that number sticks. And is there an issue, I guess, with the type of data that people are able to make this access? And I feel like that goes out so far. It loops back to the policymakers themselves to then say, "Well, why do we need a public space agency? There's going to be a $3 trillion space economy. Why do we need to pay for it? This will just happen on its own."

Akhil Rao: Absolutely. And just to expand on that a little bit, I think that that exact dynamic you've described, I have seen it, and I think it is incredibly harmful to the industry itself in a way that I worry not enough people appreciate. If you tell a government sponsor that there's no need for government spending, or if you tell them that there'll be this huge commercial market that is going to be buying all of this stuff, that'll be buying space station services for example, it's going to be worth hundreds of billions if not trillions of dollars. The thing that the procurement person or the contracting person or the person on the government side is going to hear is, "Oh, great. So then I don't have to spend as much money on this." And the thing that is going to happen then is that those companies that were hoping to do that thing, are going to see less in the way of government funding, which is very nice. It's non dilutive, so the government doesn't take an equity stake in your business, which other investors love to see that because it means that their stake is not diluted. It just has all of these not so great knock on effects that I really don't think it helps anyone in the industry to promote, let's say overly optimistic, or for that matter, overly pessimistic views of what the future is likely to be. And so I do think that that's a big problem for government decision making. And I think that if the government, if governments broadly want to build real durable economies around space exploration, it is better to do that with a more accurate picture than a less accurate one.

And so if... I don't know, I'll maybe make a brief plug here, so the chief econ team, we decided that we would keep doing this type of analysis and providing it to folks now a broader set of folks, industry as well as government, as our own firm. And so Rational Futures, you can look us up online, we are trying very hard to provide these types of realistic yes-if estimates to people in advanced technology sectors, not just space, who want to make better decisions. And so this includes governments, this includes private folks, broader set than what we were doing before. But I would really hope that within the government, they have this type of expertise in-house because I think it would really help them help all of us.

Casey Dreier: There's an issue, I think that I key on a lot and I'm curious to hear your take on it, particularly your undergraduate background. Was it in science or physics or anything, or was it all... did you start out in economics?

Akhil Rao: Business and finance.

Casey Dreier: Business and finance.

Akhil Rao: And then economics.

Casey Dreier: So I'd be curious about how you've gone through this because you specialize... Do I understand correctly, your PhD thesis was in orbital debris?

Akhil Rao: Correct, the economics of it.

Casey Dreier: The economics of it. And this is all tying back to this point, which is I think part of these, I'm not necessarily saying that some of these reports are intentionally misleading or anything, I think there's a tendency, particularly for people who don't have much grounding in what are orbital mechanics like, what are... that space, you mentioned this earlier, you can torture analogies out to say what will happen in the space domain. But I think we have to be so careful with that because spaces is alien, right? It is completely different. There's no air, you're moving it. You have to move at 17,000 miles an hour just to stay in orbit.

All of these kind of consequences of the fundamental physical requirements to do something in space that are so unusual that we don't engage in intuitively, that it's probably really easy for people to overlook them and then to say, "Oh, well it's just delivering commercial mail back in the 1920s or something, investment or just homesteading or whatever." And they take these analogies, plop them on without understanding that they just fundamentally cannot work in the same way because of these subtleties. Do you see that as a fundamental challenge? And how did you approach this as you entered this field? What did you find? Was there anything in particularly surprising or something you really figured out you had to learn in order to model and understand the economics correctly about the physical realities of working in space?

Akhil Rao: That's another really good question, because yeah, as you know, I do not have any kind of space science or technology background as a business and finance undergraduate at UC Riverside, and then worked in machine learning for a while and then went to graduate school. And so the closest I get, I guess is math and statistics. So I think that there's maybe two aspects to what you just described. One is that indeed space is quite different physically. And this does create, I think very interesting and unique effects. So in my dissertation, I studied the economics of orbital debris and orbit use broadly. That meant that I had to have at least a working understanding of orbital mechanics like how would you model an orbit? How would you calculate the expected number of collisions between objects in a volume?

And a lot of this stuff is like, okay, it's math. And so you do an econ PhD, you do a lot of math, and so I can handle that. But intuitively, you're right, it took me many years, I think to really internalize that changing inclination is very, very hard and not something that most operations are going to be doing very often, if at all. And that just, like in my head, I guess for a long time I had this picture of, yeah it's a speed boat, it's in space. You just, you speed up and then you slow down and then you turn around and you do all, right? So that's not how it really works. So that's I think, important if you're trying to do good work because both at the detailed quantitative level, it's super important, and also at a high level, it stops you from saying silly things like, "Oh yeah, why doesn't the CubeSat then just change the inclination and then have a very long life afterwards?"

Casey Dreier: Right. Why can't you just fly the space station to the moon or something instead?

Akhil Rao: Exactly. Exactly.

Casey Dreier: Right?

Akhil Rao: So I think that's super important for that. I think the other piece though that is really hard as well, but differently so, is in understanding the analogies and the kind of fundamental economic characteristics of space well enough to see where some things just don't work the way that you might expect them to work on earth. And so I think the railroad analogy is one of these really useful ones. People talk about the railroads as being like this huge economic driver both in the US and in the UK, and we built these transportation systems and treated them as infrastructure. We would have a lot more economic activity in space.

And the answer, I think is a definite maybe, but at a sort of very fundamental level, with a train to a different part of the UK, you are going from where people are to another place where people are. And that's kind of important because not a lot of folks get on train rides to nowhere. People want to go, places in general, where there are other people, they would like there to be restaurants, they would like there to be amenities, they would like there to be family members. And all of these very huge-

Casey Dreier: And air. Air is important too.

Akhil Rao: And air, air is, I think very important, I hear, but these are things that don't yet exist in space. And so when we talk about, "Ah, well we need to have a good transportation system and then we'll have people making trips to the moon more regularly," like I don't know, maybe. What are you going to do on the moon? What's there that is attractive for a consumer on the moon? And this is where, I think, it is not quite as technically challenging by far as orbital mechanics, but it is, I think equally or more important at sort of very first principles level of understanding to making useful statements about markets for space things.

Casey Dreier: I just want to dwell on that a little bit, because I think this is so interesting and this idea, it's such a human, we just take what we know and we kind of graft it onto something else. And as you point out on earth, that can work really well, because so many of these fundamental assumptions, you said there are people where you're going to go. Whether you knew it or not, there was probably going to be people around there. And that fundamentally changes the concept of an economic incentive because that's where trade comes from and that's where economic growth can come from. But moon rocks don't trade back with you, right? They're just going to sit there.

But it's also this, I think, and I've always thought about this when people talk about using the moon to create resources for, "We'll get the water and we'll make rocket fuel," it's like, well, is that like just building a gas station in the middle of Alaska and then you have to fly to it for 10 hours? What's the use of having a gas station there if no one is driving by, right? People put gas stations where people are traveling. And that's the inherent challenge of this, people want something to be true so bad, and we're pushing the limits, I think, of what we're able to do because by definition we're going into an alien environment that we don't know how things work there. And there isn't necessarily, and you can correct me on this, can we even expect with confidence that economics as we've understood them on earth, will work in space the same way?

A big part of early physics in the 20th century was realizing that physics and chemistry and geology now, they basically works the same out in the cosmos as it does here on earth, but we don't really know until we go and try it out. But those are all kind of natural forces. But what about human created systems? Is there any expectation those should work where there are not humans and are in completely different incentives and environments? Is this a domain error, I guess, to apply some of these principles to a place where we've never actually tested it?

Akhil Rao: So, my answer is yes, economics applies everywhere. At least it applies everywhere-

Casey Dreier: Do you think it's like a fundamental force, at least of humans, like the two humans, or what is it, require three people to have an economy or something like that?

Akhil Rao: Yes, but maybe not in the same way as physics, right? So I would say that at its core, think of economics in two layers. The most basic layer is what is true about transactions and activity that can be done gainfully, right? So this is the layer where you can say something like, "Listen, I don't care whether you are on Earth or Saturn or wherever else. If you have two entities where one... and two activities, and this is how much of each activity those two entities can do in unit time, then this is the maximum possible amount that they can produce individually, and here's what they can produce if they're willing to trade, right? Comparative advantage is not about humans, it's a more abstract statement, and so that gives it a bit more breadth.

Like you can look at fungal networks and roots, and you can see exchange of nutrients, and you can use market, the same mechanics of understanding trade and markets to understand nutrient exchange between those entities. Nothing human there, is just this is what is possible and subject to evolutionary and adaptive forces. This is just where you will go if you want to maximize exchange. So that's one layer, that's going to apply everywhere.

The second layer is just that people trade. People do that. And so if you want to have a lot of people in space, you have to think about how they're going to trade, what are they going to trade? And that's just kind of, I don't know, maybe not a domain error to apply economics in that sense, but it tells you something about what you want the domain to be, right? Like if I really want to have a lot of people, hundreds of thousands, billions, even of people living in space, then I should probably think about how those many, many people are going to interact with each other, exchange goods and services with each other. And yeah, economics helps you think about that.

Casey Dreier: I guess as long as someone covets something that someone else has-

Akhil Rao: Indeed.

Casey Dreier: ... or some arbitrage, like that's the essence, then it develops. So it requires humans to be... That's the thing. I guess someone has to be there or have access to it or something, right?

Akhil Rao: Or be exchanging goods and services on earth for it. Like Dragonfly, we can talk about the economics of Dragonfly, even if there are no people on Saturn, right?

Casey Dreier: It does feel like when people talk it, or some of the feedback that we see online to some of our posts or some of the questions that we try to answer talking about markets, and they can just do it for us, we don't need to do it ourselves, I tend to respond by saying the only market in space is when you put something up that turns back and points back down. To me, that's where the mark is, because that's where the people are. You're just bouncing-

Akhil Rao: Exactly.

Casey Dreier: You're bouncing other people's ideas down to other people, or you're looking at other people, or you're looking at your own weather. A lot of this is self-interest that beyond that, there's no really independent market. Everything is trying to be created.

Akhil Rao: That's right.

Casey Dreier: And I think though, that there's this idea that has taken hold as almost like this dream because then you just kind of freeze. It's like you're the taxpayers, then the procurement officer, that it frees us from having to do something else. But where I'm going with this is that I was thinking, when I was reading one of your papers in preparation for this interview, you mentioned your old boss's Alex MacDonald book, the Long Space Age, which I just loved. I think it's one of the most thoughtful and interesting books that I've read about this stuff. And this idea that there was kind of some space exploration was something different, but there were private efforts to do in the United States before this huge government investment that happened in the mid 20th century.

But also that there's this idea and there's a value that is maybe not what we classically think of as economic. And this is what I'm curious to hear about how you incorporate this into understanding the economic incentives and intentions and desires that people have, because maybe another way to put this, so I don't know if you've ever seen someone rolling coal or just-

Akhil Rao: Yeah, I have, yes.

Casey Dreier: ... to [inaudible 01:01:57] like, yeah, big, ugly truck, and they just burn a bunch of gas and they're like, "Ha ha." And it's like, "You're the sucker. How much are you spending on gas right now? What's your gas mileage? Like five miles to the gallon?" Like, "All right, you got me." And then, "How much do you..." I told that to an economist, a friend once, and he was like, "Well, maybe it's worth it and maybe they get enough value sticking it to you." It's like, "Oh, value comes in a lot of ways basically." And so I'm going to this idea in Alex's book, he talks about this like signaling as one of the benefits in a sense of investment. There's also, you could argue a variety of other second order or, we've talked a lot about these days at the Planetary Study values and curiosity, inspiration, all these kind of field, the big picture aspirational Carl Sagan-esque views. And those have value too, but they're hard to quantify. And so how do you, or economists in general or in this particular sphere, how do you try to capture or do you try to capture these types of clear benefits that are hard to quantify in a science that is essentially, you're doing math, how do you capture... what's the PSI value of signaling factor to your geopolitical rivals?

Akhil Rao: Yeah, so that's a really tough one. Let me split that out. Specifically the geopolitical signaling aspect that you mentioned, is I think one of the least well understood areas of economic theory. So, just at a theoretical level, you can use game theory and many of the tools that we have in economics to study all kinds of objectives. And a thing that many economists will say, that I have said as well in the past is like, I'm not here to tell you what you should or should not value. Tell me what you value. Tell me what you want. I will help you achieve that with minimal cost, with maximal, whatever the case is. Like I'm here to help you achieve what you value, I'm not here to tell you what you should or should not value.

And so many economists make that distinction. And so in that world, if you tell me that you want to do this mission, like the following three missions, and that one of them is really about geopolitical signaling and the other two are about making sure that you achieve some end state, then great, I will take the resources that you tell me you have, and I will tell you how to do all three of those as best as possible. But if you ask me a more fundamental question of like where will geopolitical signaling evolve going forward, or like how important will this particular notion of signaling remain compared to these other three notions of signaling like, "Give me a clear quantitative roadmap of how that looks," that is very hard and that is I think not really well done.

And if there are economists who are looking for space-related topics to study that are also kind of a fundamental economic theoretical interest, I would say this is one of them. But coming maybe one step back to your point of how do you provide useful advice and useful insight, like again, I think this is a thing that our team at NASA did very well and that now we continue to do just outside NASA, right, which is, this is why you talk to lots of people and you understand what they're about, and you look at the documents and you look at the priorities that have been stated explicitly and revealed through choices so that you understand how important those are. And then you think about budgets and whether it actually happens.

Casey Dreier: Well, that's how it's kind of... I mean, that always seems to be the rub. I guess, I mean, just to go a little deeper into the question for me is, is there a theoretical structure that economists have to try to quantify hard to quantify things in that sense? Is there a strategy? Again, it doesn't have to be necessarily geopolitical signaling, which I can see like variable based on very hard to predict what the overall geopolitical situation in the future of the world will be. But even then something like, does it make you feel proud or is it a nice scientific curiosity? Yeah, sure, that's great, or fundamental research. How do you try to capture something like that that you can't... there's no like quanta of curiosity value that is exchanged on some market that you can have an efficient market hypothesis for? Are there ways to try to capture that or is it so fundamentally insignificant to reveal desires that it tends to just wash out in the data?

Akhil Rao: So what you're asking after, how do you quantify hard to quantify things? Absolutely. Economists, we do this quite a bit. So my field in economics is not actually space economics. That is not a field of economics that is recognized by the professional associations. I'm considered an environmental economist by many economists. And this is a field in which we are constantly trying to quantify things that have no markets. So when you think about people's willingness to pay for environmental amenities, right? So yes, clean air, clean water, but more than that, like access to a particular fishing site for recreational purposes. There are no markets for this, right?

Like some fishing sites, yes, you know what people are willing to pay to go there because there's tickets and so forth, but many, many are not like that. And so if you are thinking about how to cite a plant that is likely to pollute some fishing, some water body, some fishing sites, and you've got a choice of three different locations, each with a different number of sites, a thing that environmental economists would help you with there is an understanding the damages that people are going to experience because they like going to these different sites, but they can substitute between the sites so that you understand what are you potentially on the hook for? What are you doing and how do you minimize the damages that are experienced?

And so this type of thing, this type of valuation, I would say it's standard enough that you are taught it in graduate school in economics for how to conduct that type of exercise or how to think about that type of exercise, whether or not you actually do it, right? And to your point, indeed, while there is no market there, you can ask people very carefully constructed hypotheticals to get at the money that they would be willing to pay or willing to accept, whichever it is that you're after, to either receive that non-market good or service or to lose that non-market good or service, receive for willingness to pay, lose for willingness to accept. So you can quantify these things. And it's not perfect, but all the evidence that we have, this is a many decades old approach. All the evidence we have suggests that it works reasonably well if you do it well, if you do a good job of it.

That's a different type of quantification of things that are difficult to quantify though, than we often did for space things. And so my then colleague, now business partner Tom Colvin, has been kind of a real mentor here for me and for others on how do you quantify things that people say cannot be quantified, right? And this can be things like, for example, the damages in dollar units from a particular piece of debris persisting in orbit for many more years. That's a difficult thing to quantify, so many moving pieces to that. But Tom did a great job of it in the cost-benefit analysis work that he did for OTPS. So that I would say is more bespoke and that is much more technology-specific, that type of exercise, but it is something that we did much more of at NASA.

So NASA, as a government agency, is constrained in what materials it can send out to the public, something called the Paperwork Reduction Act. And so we never did a contingent valuation study of how much do people actually value the night sky, for example, or debris removal. Although OTPS did fund some researchers who did a study like that, I believe Patrice Cole was the PI on that research, and I hope that they have been able to publish it well.

Anyway, all this, just to say, maybe to wrap this up, that if you're thinking about what people are willing to pay, yes, there's a standard methodology in economics, contingent valuation. There's journals about it, conferences about it. It's a whole thing. If you're thinking about something much more bespoke and what is the risk? What is the expected risk of this outcome? Again, there are many different ways to do this, actuarial approaches and forth, but really there, you want to think very hard about what is the problem you're actually trying to solve, and what do you actually need to quantify to solve the problem.

Casey Dreier: Yeah, even the definition of my question was like, how do you measure things that are hard to measure? That's a tough one to answer. Before we wrap up, do you think we need more people? It sounds like I'd say yes, but do you think we need more people doing rigorous economics studies in space? And what would you say to people considering this as a career of what you need to do and how to get into this career?

Akhil Rao: I would say, yes, I think we do. I think that that is super useful, super important. I think we need those types of folks in the private sector. We need them in government. Yes. So that is my first answer to that. But to the second piece of how you get there, my path was super, I guess idiosyncratic. I don't know that that's the path that other people should take, but you probably could do much worse than training in economics and then learning a lot about the space world and trying to contribute there. Like, I'd say the short answer is I don't really know. But I think that what we probably do need more of is really, really good applied economic theory.

Much of the economics profession, I think right now is really focused on what we call causal inference and statistical analysis. And I think that that's useful. But as you know, there's not a lot of data compared to say, I don't know, mortgages. There's not a lot of data on space-related markets. And so if your toolkit is one in which you are waiting for a large amount of data that you can then statistically analyze, I think in the space sector, you're going to find yourself waiting in general quite a while. And so I think it would be quite useful for folks who are interested in this type of thing to get reasonably tooled up with how to build your own theoretical models and how to integrate various kinds of engineering and scientific objectives and constraints into such efforts.

Casey Dreier: Okay. You all heard it. Take your charge for your future economics PhDs. Dr. Akhil Rao, thank you so much for joining us. Really enjoyed talking with you this month.

Akhil Rao: Thank you very much for having me.

Casey Dreier: We've reached the end of this month's episode of the Space Policy Edition of Planetary Radio. But we will be back next month with more discussions on the politics and philosophies and ideas that power space, science and exploration. Help others, in the meantime, learn more about Space Policy and The Planetary Society by leaving a review and rating this show on platforms like Apple Podcast or Spotify or wherever you listen to this show. Your input and interactions really help us be discovered by other curious minds, and that will help them find their place in space through Planetary Radio.

You can also send us, including me, your thoughts and questions at [email protected], or if you're a Planetary Society member, and I hope you are, leave me a comment in the Planetary Radio space in our online member community. Mark Hilverda and Rae Paoletta are our associate producers of the show. Andrew Lucas is our audio editor, me, Casey Dreier and Merc Boyan, my colleague, composed and performed our Space Policy Edition theme. The Space Policy Edition is a production of The Planetary Society, an independent nonprofit space outreach organization based in Pasadena, California. We are membership-based, and anybody even you can become a member. They start at just $4 a month. That's nothing these days. Find out more at planetary.org/join. Until next month, ad astra.