I don’t like monopolies, but why the sudden unease? The government buys all of its refueling tankers from Boeing, all of the main battle tanks from General Dynamics, all the aircraft carriers from Newport News shipbuilding, all of our air-to-air missiles from Raytheon. The government buys fighter jets from a duopoly that often provides reciprocal work-shares making them a monopoly. Historically, the government had no problem buying launch services from ULA and in fact had to be sued to prevent a continuation of that practice.
If SpaceX acts like a monopolist, then they will increase prices to levels that naturally stimulate more competition or risk antitrust actions. However, If SpaceX does not act like a monopolist and the government is getting the best product for the lowest price through open competitions, then what is the problem? As tax payers, we should want the best product/service for the lowest price and delivered as quickly as possible. We probably should not punish the few companies that are actually exceeding expectations.
I would love to see the government breaking up the monopolies that actually harm the competitiveness of the nation by failing to innovative and consistently come in over-budget and behind schedule and therefor have an allergy to fixed price contracting.
Yes, the US Government is locked into many monopolies, especially for highly specialized items.
That doesn’t make one more better at all though.
I disagree with his second point. We’ve seen for years now, that when companies act like monopolists, they become a successful monopoly. There is very little checks and balances here. Yeah, they risk antitrust actions, but those happen so incredibly rarely.
And in so far as competition, investment heavy industry like this needs billions in startup capital. Very few, if any, are going to get that.
It comes down to experience and actually being able to build what’s needed. There just simple are not that many companies that can reliably ships, missiles, tanks, and spacecraft.
The government is obviously going to go with companies that can do it.
Interesting comment from Jared Isaacman: https://x.com/rookisaacman/status/1815801469532266841
Yes, the US Government is locked into many monopolies, especially for highly specialized items.
That doesn’t make one more better at all though.
I disagree with his second point. We’ve seen for years now, that when companies act like monopolists, they become a successful monopoly. There is very little checks and balances here. Yeah, they risk antitrust actions, but those happen so incredibly rarely.
And in so far as competition, investment heavy industry like this needs billions in startup capital. Very few, if any, are going to get that.
It comes down to experience and actually being able to build what’s needed. There just simple are not that many companies that can reliably ships, missiles, tanks, and spacecraft.
The government is obviously going to go with companies that can do it.
I will never shed a tear for Northrop, Lockheed, Boeing, etc losing contracts.