This paper concerns a serious, long-standing error in government policies concerning the funding of space activities. These policies have achieved far less economic value than would have been possible if higher priority had been given to economic rather than political and bureaucratic objectives. Measured in conventional terms, the return on public investment in space activities has been heavily negative to date, with benefits only a small fraction of the usual rate of return on commercial investment. The explanation for this poor result given by those responsible for "space policy" (ie the allocation of government funds for space-related activities, notably development of technology) is that "space development" is very difficult, and several more decades of government-funded technology development will be required before commercial space activities can grow significantly. However, this is incorrect: the very high net cost of government space agencies' activities to date is due to policy-makers having chosen – persistently for decades – not to develop the services for which there is known to be the highest potential demand. As a result there is little commercial demand for the services and technologies which government space agencies have developed, thereby ensuring their poor economic performance.

An event which helped to clarify this policy failure was Dennis Tito's orbital flight in 2001. He chose to ride on the Russian-made "Soyuz" rocket, since this is the cheapest and safest way to reach orbit. The Soyuz is based closely on the "R7" inter-continental missile, which in 1957 became the first rocket to ever launch a satellite, "Sputnik 1". Thus Tito's flight proved a most important and striking fact: the real cost of traveling to space did not fall at all from 1961 to 2001. That is, due to amortisation of development costs and to learning (through more than 1,500 launches) the cash cost of launch fell. However, the real cost, measured in terms of the actual hardware and propellants used, has not changed at all. European, American and Japanese rockets are substantially more costly than Soyuz.

During the 40 year period from Gagarin to Tito, space agencies in members of the Organisation for Economic Cooperation and Developjent (OECD) spent the equivalent of 1 trillion USD - that is, approximately 20 billion USD/year for 40 years, plus growth in real terms due to inflation. However, despite this large figure, the resulting commercial space industry has a turnover of only about 1-2% of this, or just a few percent of what commercial investment typically achieves. Indeed, as conventionally measured, the profitability of this investment is close to minus 100%, since the capital invested has never been returned.

In recent years, business and government leaders have spent much time explaining to the public that we live at a time of rapid technological change, and that we must adapt to this in many ways. Competition-driven costs are falling continually, so companies facing global competition have to race to survive; consequently staff have to accept the need to change jobs periodically, and so on. The phrase "labour flexibility" favoured by economists who support market liberalisation has become infamous as a euphemism for salary reductions, longer work hours, worsening labour conditions, welfare and pension benefit reductions, dismissals, and other reductions in standards of living. However, the same policy-makers do not seem surprised when elements of the space community tell them that "Space is different". That is, despite the literally uncountable technological advances in every field, including materials, computing, combustion engineering, manufacturing, electronics, robotics, simulation and many others, no-one can make rockets cheaper than the R7/Soyuz, designed 50 years ago. They add that this will not be possible for several more decades - if then. Economic policy-makers do not complain even when this is followed by the request to continue giving space agencies 20 billion USD of taxpayers' money every year in order to develop various machines for which there is little or no commercial demand.

At a time when almost no other area of government spending seems to be safe from cut-backs - education, health, pensions, environmental protection - what is the reason for this leniency towards "space policy"? Could the explanation be that the designer of the Soyuz rocket was a "Soviet Leonardo da Vinci" whose work still cannot be matched even half-a-century later? Or maybe even a century later, if we are to believe space agency leaders' projections?

Developments in 2004 suggest that, excellent though the R7 designers surely were, their outstanding genius is not the explanation for the stagnation in launch costs. The successful sub-orbital flights by "SpaceShipOne" in June, September and October showed that it is possible to reduce the cost of getting to space today very sharply - to about 1% of the cost of Alan Shepard's 1961 sub-orbital flight using an expendable rocket. That is, the SpaceShipOne project does not represent a "magic solution" to the costs of spaceflight, but it demonstrates that, if a focused effort is made to use existing technology to reduce the cost of traveling to space, specifically by using a piloted, reusable vehicle – something which space agencies have not done since the X-15 in the 1960s – a very small investment can reduce it dramatically below space agencies' costs.

As another point of comparison, the total cost of the SpaceShipOne project was 20-25 million USD. By comparison, the US government's space agency, Nasa, spends some 16 billion USD/year, or some 44 million USD/day; consequently the SpaceShipOne project cost the same amount as Nasa spends every day before lunch. Thus, it would have been a minimal burden for Nasa, Esa or even Jaxa to have developed a similar vehicle during recent decades, but they all chose not to do so - and they continue not to today. The reason for this is not because space agencies have any justification for believing that it is better not to develop such services for the public, but because they do not want to.

There are of course different opinions about SpaceShipOne. It seems reasonable to take the view of space experts as being represented by Ex-Nasa historian Roger Launius, who stated:

"SpaceShipOne is insignificant in the overall scheme of space flight" [1].

Despite the publication of this opinion in the prestigious journal Nature, photographs and articles about SpaceShipOne were published on the front page of almost every newspaper in the world on June 22, 2004. In 2005 the vehicle was hung in the Smithsonian Museum between the Spirit of St Louis and the X-1 rocket-plane - surely a sign of a historically outstanding achievement - at least in the opinion of the non-expert general public.

The opinion that space activities are not significant unless they involve new technology is characteristic of space agencies, and as a criterion of value is entirely different from economic value. Perhaps the SpaceShipOne project was "insignificant" from space agencies' point-of-view because it required only a very small team to operate, in contrast to the many thousands employed by space agencies to operate their much more expensive vehicles? The economic point-of-view is that, for this very reason, SpaceShipOne's achievement was a historic blow against a false picture of the potential for commercial developments in space that has been built up and maintained by governments' space agencies over the past 50 years.

When asked their opinion about the feasibility of space travel services becoming available to the general public like air travel services, many people are sceptical. A typical explanation for this view that the author has heard many times is:

"If space tourism was really feasible, Nasa would surely have already developed it."

However, this is a serious misunderstanding. The truth is that Nasa and other space agencies, and the policy-makers who decide their budgets and oversee them, have no interest in making space accessible to the public.

In addition to the evident fact that space agencies have never spared even the tiny fraction of their annual budgets needed to develop a sub-orbital passenger vehicle, further evidence is the fact that, over forty years, they have never paid for a feasibility study of passenger space travel. Moreover, even today they have no plans to reduce the cost of space travel; as of 2006 Nasa is planning another largely expendable rocket system to send a few astronauts to the Moon again around 2019, as it did 50 years earlier. If this project was realised, taxpayers would pay a further 1/2 trillion USD, and space travel would still be no cheaper.

If space agencies' activities could be judged as being economically successful, their failure to reduce the cost of space travel could perhaps be considered unimportant. However, they have not been successful. Table 1, from a 2003 report by the US Federal Aviation Administration, shows that the US space industry is in an extremely unhealthy state:

Moreover, recent European data tell a similar story: European space industry employment reportedly fell by 20% from 1995 to 2005; the major space engineering company Astrium has cut 3,300 staff since 2003; and in 2005 alone, prime contractors cut 2,400 staff or 13.5% of their total [3].

The OECD also published a report on the space industry in 2004, clearly showing its poor economic performance due to very weak commercial demand for systems developed at great public expense: annual commercial sales of satellite launches and surveillance satellite services are not 1% of space agencies' cumulative investment in developing them [4]. Despite these implications of their figures, the OECD report's authors nevertheless wrote a rosy report, referring to growing government and military demand for surveillance satellite data as proof of commercial success. However, from the point of view of contributing to economic growth, government and private sector sales are of very different value: the self-sustaining growth of commercial demand, whether for space-related or for other services is, in itself, economic growth, while increased government expenditure is not.

Probably the most important contributing factor to space agencies' economically poor performance is that they are effectively monopolies. As is well-understood, both in economic theory and in business "common sense", monopolies have very damaging effects - so damaging, indeed, that they have been illegal for centuries. Two particularly well-recognised problems of monopolies are that they raise costs and suppress innovation. They also create interest-groups with an economic interest in prolonging the monopoly. Self-serving policy discussions and reports such as [4] are then produced by members of these interest-groups, effectively preventing or delaying change, in a process that is well-documented by social scientists [5].

The truth would appear to be that the investment of even 10% of space agencies' budgets in developing passenger space travel would have greater economic value than space agencies' existing expenditure [6]. Indeed, the spending of even 1 million Euros on a feasibility study could "let the cat out of the bag" about the great promise of passenger travel. Hence space agencies not only do not fund research, but they also strongly resist public discussion of space tourism. As an example, it is an "open secret" that the highly successful International Symposium on Space Tourism held in Bremen in 1997 – the first in the world, followed by the second in 1999 – was unable to continue in 2001 because of criticism from senior European space industry staff. A similar case occurred in Japan where, under the chairmanship of Susumu Toda (previously head of the Japanese government's National Aerospace Laboratory) the session on Space Tourism at the biennial International Symposium on Space Technology and Science ( ISTS) was removed from the 2004 programme, despite its having been successfully built up over the previous 10 years into one of the most popular sessions.

In the author's experience, some space policy-makers and senior staff at space agencies accept the case made above that space agencies' use of public money achieves much less economic benefit for the general public than it might. However they dismiss the importance of this on the grounds that the resources wasted by space agencies are small compared to waste by other government departments. For example, Nasa's waste has been said to be small compared to that of the US Department of Defence, and Jaxa's waste has been said to be small compared to that in Japanese public construction projects. Both of these claims are surely true, but that is of course no excuse for condoning waste; this is an argument used by young children as a last resort when caught in the wrong. Moreover, there is a unique additional cost to society from space agencies' wasteful spending, which even much greater waste in defence or public works projects does not impose on society, but which space agencies and government space policy makers do not discuss.

In addition to their direct cost of some 1 trillion USD to date, space agencies' behaviour has imposed a unique additional burden on taxpayers and on the economic system. This is the "invisible" cost of having prevented developments that could have occurred if public investment in space technology had been planned to earn an economic return for taxpayers. In particular, if even a few percent of the 1 trillion USD that space agencies have used had been invested in making space accessible to the public, there could already be a large and vigorously growing commercial space industry, comprising a space travel industry employing millions of people, as well as a range of other economically and environmentally valuable activities in space, as discussed further below.

The theories of both democracy and capitalism recognise the informed decisions of the general public as the best judge as to how societies' economic resources should be allocated. From both points of view, that is for both a healthy democracy and for a healthy capitalist system, there is therefore no more important objective for government space spending than to enable the public themselves to travel to space - when the public will decide for themselves what they wish to do there, and how they wish to use this new environment filled with unique resources of great potential value. The policy of having kept space as inaccessible today as it was 45 years ago is therefore both undemocratic and uncapitalistic.

In order to understand the size of this "invisible" cost of having kept space inaccessible for 45 years, it is necessary to estimate the scale to which economically valuable uses of space could have grown if the cost of access to space had instead been reduced, so it was not still limited to government staff. For this it is necessary to recognise first that just traveling to and from space is extremely interesting; everyone who has been to space says it was one of the best experiences of their life. This is presumably related to the fact that in market surveys most people say they would like to have the experience if it was safe and affordable. Hence the strong desire of the general public to experience space travel would appear to create a very promising initial business opportunity for aerospace engineers and business managers, which is finally beginning to be addressed.

The first item of "invisible cost" is the cost of having delayed the development of sub-orbital space tourism services. In 2003 Nasa published its Analysis of Space Concepts Enabled by New Transportation (ASCENT) Study which included an estimate (quoted in the OECD's report [4]) that sub-orbital travel alone could reach a turnover of 4 billion USD/year, or about 5 times the current turnover of the commercial satellite launch industry. (NB the ASCENT study was not a feasibility study, but a study of potential markets for reusable launch vehicles.) It hardly needs to be pointed out that, on these grounds alone, space agencies are clearly not fulfilling their legal responsibility to encourage the maximum possible commercial use of space, so long as they continue not to encourage the development of passenger travel.

The market research funded by Nasa, performed in the USA by Zogby Inc, assumed high service prices. However, due to expected competition and low barriers to entry, it seems unlikely that initial prices of 100,000 - 200,000 USD/passenger will last very long. Nevertheless, the estimate of a potential market of billions of USD/year is probably right: due to the elasticity of demand, at a price of some 5,000 USD/passenger, demand might well grow to one million passengers/year. As an example, the "Uchu-maru" project in Japan is aiming at a price of 1/2 million Yen/passenger [7]. This price is expected to take a few years of operations to achieve, but once operating like airlines, with vehicles re-flying every hour, such prices are considered to be achievable if 50 or more vehicles are produced and operated. Contrary to its stated aim to aid the growth of the space industry, the OECD report did not mention this failure of space agencies, which were major sponsors of the report. (Indeed, after being pointed out by the author, the offending data was removed from a follow-up report [8].)

Some commentators, notably staff from space agencies, belittle sub-orbital tourism on the grounds that it is much easier than orbital travel. However the report " Suborbital Reusable Launch Vehicles and Applicable Markets" published by the US Department of Commerce in 2002 explains its importance clearly:

"Understanding the full significance of sub-orbital RLV (Reusable Launch Vehicle) development requires recognition not only of what sub-orbital RLVs may accomplish in their own right, but also of their significance as a transitional step towards orbital RLV development. ..an operational sub-orbital RLV .. will provide a technology "stepping stone" towards orbital RLV development.. ..and will pave the roadway for appropriate RLV regulatory, insurance, and financial policies and strategies" [9].

Thus, an important benefit of developing sub-orbital passenger flight services is that doing so will generate a wealth of data, experience and know-how of value for the development of orbital passenger flight services, thereby greatly reducing its difficulty and expense.

Inspired by the success of the 10 million USD "Ansari X-Prize" in stimulating the development of reusable sub-orbital passenger vehicles, real estate developer and hotel operator Robert Bigelow established a 50 million USD prize for the first team to fly a reusable vehicle carrying 5 people to orbit by January 2010. He also established Bigelow Aerospace Inc to develop orbiting hotels [10].

As an example of ongoing efforts towards orbital travel, SpaceShipOne designer Burt Rutan teamed up with t/Space Inc to propose the "CXV" partly reusable passenger launch vehicle. For an investment of just a few percent of a single year of Nasa's budget, the CXV could reduce the cost of orbital travel to 25% that of Soyuz [11], (which would be the first reduction in 50 years).

Figure 1: Spacebus and Kankoh-maru

For several years during the 1990s, searching the Nasa website for "space tourism" led to pages showing Bristol Spaceplanes Ltd's "Spacebus" and the " Kankoh-maru" vehicle designed by the Japanese Rocket Society ( JRS). Each of these vehicles would cost of the order of 10 billion Euros to develop and certify for passenger flights to low Earth orbit, and could carry passengers at a price of some 20,000 USD, at which annual demand could exceed 1 million people [12, 13]. These costs are similar to the cost of developing a new airliner, and would represent approximately 6 months of OECD space agencies' current budgets.

	2 STAGE RLV	SINGLE-STAGE RLV
	20 passengers	20 passengers	60 passengers	180 passengers
Max. no. passengers per year	2,000	120,000	360,000	1,000,000
No. Launch sites	2	18	18	18
Max. no. launches / site / year	50	355	355	355
No. flights before replace	250 veh. 50 eng.	500 veh. 100 eng.	500 veh. 100 eng.	500 veh. 100 eng.
R&D costs	$1.5 B	$3.0 B	$3.9 B	$4.6 B
Infrastructure costs	$0.4 B	$2.0 B	$2.2 B	$3.0 B
Total costs	$1.9 B	$5.0 B	$6.1 B	$7.6 B
Min. operating costs / flight	$1.38 M	$1.25 M	$0.97 M	$3.3 M

Table 2 was published in 1998 by the then Head of Nasa's Office of Advanced Space Projects [14]. This estimate of the development costs of fully reusable passenger vehicles, ranging from 2 billion to 10 billion USD, are in line with the studies discussed above. Even if these cost estimates were too low by a factor of 2 or even 4 times, this investment would be a far more economically valuable investment than space agencies' existing plans to develop another generation of expendable launchers which will do nothing to reduce the cost of space travel over coming decades.

The scenario shown in Figure 2, originally published by the author in 1999 [15], is based on the Japanese Rocket Society's Space Tourism Study Programme, which continued from 1993 to 2002. Since funding for the development of an orbital passenger vehicle has yet to start, the target date has slipped 7 years at time of writing. However, the author maintains that it would be possible to achieve within 30 years if public funding equal to just 10% of space agencies' budgets was provided to develop reusable orbital passenger vehicles [6]. The great majority of the investment involved in realising Figure 2 could be expected to come from private companies, in the same way that airline and hotel companies pay for their own facilities and equipment today. However, also as in other industries, the public provision of "seed funding" to reduce the initial risks facing investors could save further decades of delay.

In order to understand the scale of the invisible cost of not having even started to realise the scenario shown in Figure 2, it should be noted that sub-orbital passenger flights could have started more than 30 years ago, during the early 1970s, if space agencies had given more weight to achieving economic benefits from space development. For example, the SR.53 rocket-plane flew during the 1950s, and the reusable X-15 rocket-plane exceeded the capability needed for sub-orbital space flights in the mid-1960s. Consequently, if sub-orbital flight services had started in the early 1970s, orbital flight services could have started in the 1980s, and the space tourism industry would be well on the way towards achieving Figure 2 by now.

The development of space tourism activities over the past thirty years to the condition shown in Figure 2 would have created a wide range of new business opportunities, and generated large scale employment. This would have been very beneficial for world economic growth, since the world economy is in an unusually poor condition: in particular, unemployment is unusually high more-or-less throughout the world. This includes the USA where the "jobless recovery" since 2000 has created 10 million fewer jobs than previous recoveries [16]; in Europe where France , Germany and Italy have been suffering double-digit unemployment for more than a decade; in Japan where unemployment has been at record levels for much of the past 15 years – as well as in Russia, China, India, and in the countries of South America, Africa and the Middle-East [17]. High unemployment has well-known social consequences - including increasing poverty, social friction, crime, public disorder (exemplified by the riots in France in 2005 and 2006), racial intolerance and eventually political instability and international friction.

In addition to suffering high unemployment, the world economic system is unstable, as General Secretary of the International Confederation of Trade Unions, Guy Rider has emphasised:

"The global economy is dangerously volatile: extreme currency swings and the risk of stock market collapse are a recurrent feature, bearing an extreme cost in terms of poverty and unemployment" [18].

Although there are multiple contributing causes, both the high level of unemployment worldwide and the volatility of financial flows can be seen as being due in large part to the lack of new industries, as discussed in more detail in [19]. That is, for several centuries humans have been making systematic efforts, on ever large-scale, to make work easier – in other words, to increase labour productivity and so raise incomes. Among other beneficial effects, this has made the lives of those living in richer countries much more comfortable than for most of humanity for most of history. It has also cumulatively reduced the need for labour in each industry thus mechanised and modernised. As a simple example, agriculture used to employ most of the population, but now just a few percent of the population in rich countries can produce more than enough food for everyone; indeed in all the rich countries governments actually pay farmers not to produce more food.

The reason why this process has not to date caused massive unemployment has been the successive creation of new industries, supplying new services and products that are popular with large numbers of people, thereby creating new forms of employment on a large scale. Examples of new industries that grew into major employers during the 20th century include the motor industry and its many related industries such as construction and petroleum, and air travel and its many related industries such as airports, hotel accommodation and tourism.

In recent years this pattern of increasing productivity reducing employment in old industries has taken on a global aspect with the rapid spread of industry to countries with much lower wages. The ease of international communication and transport has led to the process of "off-shoring" whereby more and more work that used to be performed in the rich countries is now done at much lower cost in these countries. An important new factor is that the unusually large populations, low wages and rapid economic growth in India and China are accelerating the displacement of employees from older industries in the richer countries. This makes the need for new industries to re-employ those displaced increasingly urgent.

As an earlier example of this process, the rapid growth of exports from Japan during the 1980s caused considerable trade friction with Europe and America, where employment in many manufacturing industries shrank considerably as a result (and never recovered). French prime minister Cresson famously called Japan "France's number one enemy". By comparison, the combined populations of India and China alone are twenty times that of Japan, and their average wages less than one tenth.　The scale of structural change which the world economy faces in coming years is thus about two orders of magnitude greater than that experienced during the 1980s!

In this situation, it would follow the precedent of governments' having invested to aid the growth of many promising new industries over the past century if they were to provide support for the development of passenger space travel – as they have successively invested in shipping, railways, road and air transport, among many other industries. That is, passenger space travel is a new service which is technologically feasible with modest investment, as discussed above, and for which the potential demand is known to be very large – possibly even capable of growing to the scale and importance of air travel. It could also lead to the development of other new industries in space. It would therefore seem a logical candidate for government investment at a time of unusually high unemployment and costly lack of new industries.

It is therefore very striking that OECD governments not only provide no funding at all for this purpose, but, following the advice of their monopoly space agencies, they decline to even discuss the possibility! This situation is illustrated in Figure 3: the 1 trillion USD that governments have invested in space activities to date have generated little economic benefit precisely because those responsible for allocating this expenditure have chosen not to invest in the activity for which there is known to be the greatest popular demand. Governments' supposed "investment" in space development is thereby converted into an economic burden on taxpayers - taxation without corresponding economic benefits, and expensive waste of many highly-educated engineers' work. This unsatisfactory condition will continue until the knowledge which this expenditure has generated is applied to supplying services which large numbers of the general public wish to purchase, thereby earning profits with which to repay the capital invested to date. The only space activity which is a candidate for this role is passenger travel, for which there is known to be potentially great demand if popular services can be offered at attractive prices.

In view of the poor state of the world economy today, the creation of a major new industry of passenger space travel would be highly beneficial. Moreover, catching up nearly half a century of technological development that has yet to be used commercially could lead to a vigorous space-based "boom" creating many new business activities. However, very valuable though such a development promises to be, it may not be the most important benefit of space tourism. This is that, in growing to large scale, space tourism has the unique potential, which other smaller-scale space activities do not, to reduce the cost of space travel by two orders of magnitude below space agencies' expendable launch vehicles. Such low costs will in turn make many other activities in space profitable. The most important among these would appear to be to eliminate any concern about possible future shortages of resources, both environmentally benign energy and raw materials, for use on Earth.

To understand how important to humans' future this may be, we need only recall the ominous phrase used by Jacques Delors when he was President of the EU: "..the coming 21st century resource wars" [20]. Since that time, the concept of "resource wars" has become a common topic of articles and even books [21]. What may be called the "cold war generation" of political leaders seem to have the basic outlook that humans are trapped on a small planet which is running out of natural resources, and so with ever-growing population, we are inevitably going to fight over the remaining resources.

Hard-nosed "realpolitik" is rarely stated openly, but it seems to lead to the following viewpoint: "Yes, it's tough on the weak - but human life has always been harsh. Indeed it's going to be hellish. But of course the powerful countries will win against the weak, hundreds of millions of whom will die." This is surely the thinking that underlies the plethora of articles, reports and books published in OECD countries about the threat to the rich countries from China, India, "militant Islam" and others, and the need to control future supplies of oil and other natural resources.

However, there is another, very different view of the future: this is that humans live in a cornucopia, where unlimited resources are available to us in space if we make the small effort required to access them – clean energy, raw materials, living space, waste sink and others. In this view, making the modest effort required to realise low-cost space travel - which space agencies have never done - offers a clear prospect of limitless resources which will enable rising living standards for everyone forever.

This idea of extending economic activities out into space has been called "The Space Option" [22, 23, 24]. The prospect which it offers is the exact opposite of the previous view: Humans' future can be heaven rather than hell on Earth.

These two world-views would seem to be so far apart as to be exact opposites, as shown in Table 3. The belief that resources are so limited that it is impossible for most people to have a high standard of living leads logically to an ideology encouraging a rich elite to establish an undemocratic political system to preserve the status quo, using force as necessary to suppress the majority, controlling the news media to create a false picture of reality and prevent boradcasting of dissenting views, distracting the general public with trivial televisual entertainment, pursuing endless wars, and so on – very similar to the dystopia described by Orwell in his famous novel "1984" [25]. By contrast, the view that the resources available to humans in space are unlimited leads to an ideology aimed at rapidly developing economically valuable space engineering capabilities and profitable space activities on a wide international basis, and to open access to space resources, probably including supplying large-scale CO2-free energy, as is needed to enable peaceful economic growth world-wide.

Perhaps surprisingly, the extreme difference between these two opposing world-views can be reduced to just a single number, about which the two sides make a different assumption: namely the cost of traveling to Earth orbit. That is, the "closed world" viewpoint of the present generation of government leaders is based on the advice of their space policy experts: "Travel to orbit is close to impossible; it has cost about 20,000 USD/kg for the past 50 years; and it is going to stay at that price for at least several decades to come." It is a short step from this to conclude: "Space is an insuperable barrier; humans are trapped on this little planet - and so life is going to get nasty. There is not going to be room for luxuries like Habeas Corpus, freedom of speech, the rule of law, universal human rights, and so on." In this context it is very striking that the process of reducing historic civil liberties is already well under way in the USA, Britain, Australia and elsewhere - though not without controversy.

Advocates of the "Space Option" entirely disagree with this prospect, and claim that, on the contrary, we already have sufficient knowledge to reduce the cost of travel to orbit to 200 USD/kg. Space is not a barrier but a sea of opportunity which humans have simply not tried to exploit yet – because government monopoly space agencies refuse to aid the development of passenger space travel services, which alone can generate the large-scale traffic to orbit needed to achieve low-cost "airline operations".

Moreover, advocates of the "Space Option" go further, and maintain that the current "ruling paradigm" – that humans are running out of resources, and must prepare to fight over the remainder – is not merely wrong, it is patently absurd. Its advocates are as ridiculously mistaken as were "Flat-Earthers" in the past who believed that people who traveled too far would fall off the edge of the Earth. For indeed it does not require much knowledge of solar system astronomy to understand that the resources easily accessible in the Earth's crust are minuscule by comparison with those accessible in near-Earth space. These include continuous solar power, most minerals and volatiles, unlimited living space, and an infinite waste sink, among others. Space is in fact another environment into which humans are going to expand, as they have spread throughout the world to date (to inhabit mountains and forests, deserts and ice-flows, swamps, seashores and plains). Unfortunately mistaken policies have delayed this very promising development for the past 30 years by not reducing the cost of space travel - but this can be simply cured by correcting the policy errors.

Clearly, even if the probability of success of projects such as Spacebus and Kankoh-maru was estimated as only 1/100 (and it is surely at least 1/10) the potential benefits are so enormous that governments should logically invest substantial amounts to rapidly research the possibility. After all, is anything more important than investigating alternatives to the prospect of endless war?

What is the argument for not doing this research? It seems fair to summarise it in the following terms: "Based on decades of experience, government space agencies understand the technological possibilities of space flight so well that, without ever having performed a feasibility study of commercial space travel services, space policy makers are convinced that it is better for taxpayers that not even 1/10,000 of one year's budget should be used to study the subject."

Merely reading this statement shows its implausibility; yet it is the logic underlying space policy makers' refusal to even discuss the subject of passenger travel for decades. Despite spending 20 billion USD per year on a range of space activities, there is not a single country where the government is making a serious effort to reduce the cost of space travel. Yet most of their existing space activities have little or no economic value, in the conventional sense that they do not lead on to new business growth, and a fortiori do not generate profits to repay their investment cost, as normal business activities do. In view of the potential importance of the above considerations, and of democratic governments' most basic responsibility to contribute to public welfare, it is hard to imagine how their space policy could be worse than it is.

However, it is hardly a secret that relying exclusively on monopoly organisations for 50 years will lead to such a ruinous situation: Adam Smith explained it in detail in the 18th century, and monopolies have been illegal ever since, except for special cases. Of course most government activities are performed by monopoly organisations; however, implementation of suitable systems of institutional oversight can overcome these problems (as discussed below). Niskanen has described how government organisations which supply services to large numbers of the public are kept more-or-less efficient by popular criticism of their failings, but that this process does not occur where the public are unaware of or unable to assess the activity in question [26]. In particular, oversight by committees of politicians is not substitute; it rather tends to entrench special interests [26].

Spending 1 trillion USD of public funds over 50 years with no reduction at all in the cost of space travel, is in itself an extreme case of monopoly-driven mis-use of public funds. But in addition space policy makers have effectively kept the subject of low-cost space travel off the agenda. One means of doing this has been to ridicule the idea – through what Americans call "the giggle factor", using dismissive comments such as: "Reduce the cost of space travel? Why would you want to do that?"; "Maybe in the 22nd century"; "Not plausible; no evidence at all"; "Hare-brained"; "Leave it to the experts" and so on.

Such mockery has greatly declined since 2004 in face of SpaceShipOne's demonstration of the fact of low-cost space flight. However different criticisms, aimed at delaying rather than denying its possibility, take their place, such as: "Sub-orbital passenger flights may be possible within about 15 years"; "A few passengers may be able to travel to orbit within 25 years - but only multi-millionaires"; "Passenger travel is not appropriate for government support"; "Orbital flights are still many decades away" and so on.

For all the above reasons SpaceShipOne was not "insignificant"; it was arguably the most important event in space since Gagarin's flight, and one of the most economically important events of the 20th century. This is not because it represented a "technological breakthrough" in itself, but because it showed that no such breakthrough is needed to enable popular space travel. In doing so it also revealed the astonishing amounts of money, time and opportunity that OECD governments' monopolistic space policies have wasted to date.

That is, as described above, the growth of space tourism seems to have unique promise to break out of the decades of stagnation based on use of expendable rockets, and open a route to achieving low-cost access to the resources of space. It is therefore of the greatest potential importance for preserving peace in the coming decades, and hence for the future of human civilisation – and more immediately for the preservation of human rights which are being rapidly eroded in the first phase of "resource wars".

From this perspective it is clear that, byu focusing narrowly on their space agencies' own immediate interests and ignoring the far greater "invisible costs" of delaying the used of space resources, governments are drastically failing in their responsibility to try to save civilisation from fascism and war.

Some people respond to this argument by saying: "Surely the whole world leadership cannot be wrong over such an important issue." However, scholars such as Todd, Tuchman and Diamond have explained in detail how being collectively wrong about even the most important issues is in no way unusual government behaviour, especially where they are protecting corporate interests [27, 28, 29]. Several contemporary examples come to mind: the delay in reducing CO2 emissions, even where doing so is profitable; the claim that Iraq possessed nuclear weapons in 2003; and the world-wide rush to liberalise trade before appropriate international coordination of other policies, which is seriously aggravating unemployment world-wide [27].

A sadly prescient description of how life on Earth will inevitably become less civilised as humans' economic activities approach the Earth's "carrying capacity" was published in 1997 [24]. The authors explain in detail why, unless humans start to implement the "Space Option" very soon, the pressure to use the Earth's limited natural resources will lead to increasingly repressive government behaviour. That is, the trend away from 9democracy to fascism apparent today in the progressive reduction of civil liberties can be expected to accelerate unless humans start to use extra-terrestrial resources soon.

In this context it is worth noting that governments are always keen to reduce civil liberties. Adam Smith himself explained in 1776 that governments:

"..have generally an interest to deceive and even oppress the public, and ..accordingly have, upon many occasions, both deceived and oppressed it" [30].

Consequently Smith urged that this danger must be guarded against vigilantly.

The achievement of widespread civil liberties and democracy took generations of effort by tens of millions of citizens; once they are lost it takes equally strenuous, long-term efforts by the general public to recover them. The peaceful economic growth to which vigorous expansion of economic activities into space can lead should facilitate their recovery, but the longer this is delayed the longer and more costly the path to their return. This far-reaching social cost must be added to the cost of resources wars as further costs of having delayed the development of low-cost access to space by 30 years so far.

From the above it seems clear that the 36-year gap in space flights by piloted, reusable vehicles between the last X-15 flight in 1968 and SpaceShipOne's flights in 2004, and the use of 1 trillion USD of taxpayers' money on space activities using expendable and partly expendable launch vehicles, have imposed very large costs on society, both directly and indirectly. In addition to the direct cost, which has led to commercial space industry turnover of no more than a few percent of the money invested, this has also led to the present situation in which the cost of space travel is no lower today than 45 years ago. This in turn has prevented the development of a wide, indeed probably limitless, range of new space-based activities which could contribute greatly to creating new employment and sustainable economic growth, as well as protecting the Earth's environment and alleviating sources of conflict, notably including shortages of energy and other resources.

However, it is becoming clear that in order to avoid the growing stresses caused by human activities approaching the "carrying capacity" of the Earth's eco-system, and so to enable peaceful improvement in living standards for an ever-growing population, humans need to use every capability and resource at our disposal, including the resources of space [24]. Consequently the leisurely pace of space development, whereby space agencies are still using 50-year old launch vehicles (with 50-year old launch costs) and are now, in effect, planning a replay of the Apollo project to mark its half-centenary does not reflect the urgency of this need, nor the vital role that space activities should already be playing. Space research expenditure seems to be considered as a cultural activity like astronomy or archaeology, rather than as the development of a major new field of technology which is urgently needed for humans' peaceful survival.

Having invested 1 trillion USD in developing space engineering skills, but without making full efforts to apply them to earn economic and social benefits, has been not only costly but actually dangerous to human survival. It is therefore now urgent that governments should take steps to rectify this policy error as quickly as possible, in order to ensure that government space expenditure achieves maximum economic, social and environmental benefit. It is therefore necessary to consider what policy changes would be effective in aiding the growth of low-cost passenger space travel services. There are many issues about which detailed discussion might be interesting; however, here we consider two high-level policy initiatives that could very simply lead to rapid improvement.

Probably the simplest, most effective way for governments to accelerate the development of low-cost space travel is to work via the civil aviation industry rather than via space agencies as such. The "business model" of passenger space travel will be essentially identical to that of passenger air travel, about which space agency staff have essentially no knowledge or experience but which is the daily work of civil aviation. Consequently the world-spanning system of aerospace manufacturing companies, airlines, airports, service companies ranging from vehicle maintenance and staff training to travel agents, law, finance and insurance, and national and international regulatory authorities, which has been manifestly successful in creating a safe and productive global passenger air travel industry, can be extended rather straightforwardly to include travel outside the atmosphere.

A valuable guide in this is the way in which the Federal Aviation Administration (FAA) is starting to facilitate passenger space travel in the USA while it is ignored by Nasa. In the same way, the British Civil Aviation Authority (CAA) can be expected to welcome this new field of activity to expand into. The CAA's historical experience of certifying rocket-assisted Comet airliners for passenger carrying as long ago as 1952, among other related activities, well equip it to perform the task of growing the space travel industry. As mentioned above, if the responsible civil aviation bodies were given an initial budget of 10% of space agencies' funding, we could quickly see a range of competing sub-orbital vehicles certificated for passenger-carrying. This would lead on naturally to international collaboration in several projects to develop competing orbital passenger vehicles. These changes would bring about rapid reductions in the cost of space travel, which would have the range of benefits discussed above.

This "civil aviation approach" would have the further advantage that it could also avoid the conflicts of interest that would otherwise inevitably remain within space agencies if they were directed to start developing passenger space vehicles. For example, failures in the work of the "space travel development office" would be claimed to prove that past space policy had not been mistaken, and to argue for a return to decades more government-funded technology development, and so on. In addition, the competition from another centre of space activities, which would surely have strong popular support, especially among the young, would further encourage space agencies to perform activities that benefit the general public who have received so little return from 1 trillion USD of funding over 45 years.

In recent years the British government has established a series of regulatory offices to oversee the activities of a number of monopolistic companies which were created in privatising previously nationalised industries. For example, the organisation Ofgem is the independent regulator for Britain's gas and electricity industries [31]; Ofcom is the independent regulator and competition authority for the UK communications industries (television, radio and telecommunication services) [32]; and Ofwat is the economic regulator of the Water and Sewerage industry in England and Wales [33].

In common with other countries' space agencies, the British National Space Centre (BNSC) has shown very poor economic performance, specifically in preventing any funding being used to either investigate or invest in passenger space travel for more than 15 years. This includes having ignored pertinent and accurate criticism and suggestions on the subject in the 2000 Report of the UK Parliament Select Committee on Trade and Industry for six years to date [34]. Such a degree of failure to fulfill its stated objective of encouraging commercial space activities, combined with such total imperviousness to justified democratic criticism of this failure, are hallmarks of a monopoly in need of oversight; they strongly suggest the need to create an independent regulatory organisation "Ofspace" to monitor and critique its performance.

The establishment of Ofspace to monitor HMG space spending, with powers to demand information, to publicise matters of public interest, and to insist on corrective action where government activities were demonstrably failing to achieve policy objectives, could be effective in preventing continuation of the waste of recent decades. In order for Ofspace to perform this role satisfactorily, its terms of reference should include the space travel-related activities of the CAA proposed above, and it would need to be staffed by knowledgeable experts demonstrably independent of the agencies they are monitoring. Other potential pitfalls can be avoided through use of the insights into such matters as institutional design that are well understood in the fields of policy science and public choice economics.

Finally, in addition to its economic benefits, it should be noted that the development of a large passenger space travel industry would also have important cultural benefits, as discussed elsewhere [35]. Although it is difficult to make detailed predictions, the value of this should not be under-estimated. In an earlier age, the acceptance of new knowledge from Muslim scientists and scholars, which was strongly resisted by established authorities, triggered the centuries-long flowering of European culture known as Europe's "Renaissance", and propelled Europe to world leadership for centuries. Opening the new environment of space to the public offers so many economically promising possibilities and grounds for optimism about the future that it could easily lead to what will in future be referred to as the "World Renaissance".

Among these benefits, providing young people with a vision of a bright future, as described so excitingly by such engineer-writers as Clarke and Heinlein before governments established monopoly space agencies, is highly desirable. This is clearly greatly preferable to the cultural stagnation, the "dumbing down", that would be inevitable under governments which based their policies on the presently dominant but erroneous "closed world" philosophy. Among many other such benefits, growth of space tourism seems likely to lead to highly desirable growth in the numbers of young people choosing to study engineering and science [36]. In summary, it is hard to think of any policy measure that would have wider economic benefits at lower cost than implementing policies to ensure the rapid growth of low-cost passenger space travel services.

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