back to article Trickle-down economics works: SpaceShipTwo is a prime example

For the sake of my expenditure on blood pressure pills I really ought to stop reading those attempts The Guardian sometimes makes at making sense of matters economic. The latest cause of choler is Zoe Williams telling us all how Brit billionaire Richard Branson's space tourism (triggered, obviously, by the story of the very …

  1. Dave 126 Silver badge

    Bicycles were originally the playthings of the rich.

    After a while, they became affordable and allowed people who could never have afforded a horse to make trips to the next neighbouring towns and back in a day. This led to marriages between people who otherwise would have never have met, with effects on the British gene-pool. Decades later, the image of thousands of workers commuting by bicycle became almost a big a symbol of communist China as Chairman Mao.

    Okay, there are some big gaps in my analogy, but attacking private space travel merely on the grounds of 'rich man's playthings' doesn't hold.

    1. Stuart 22

      Bicycles are good. Yes, they like most things rely on the economies of volume and technological advances to make them useful to non-billionaires. Cars went down the same cycle. Becoming, arguably, too successful but that's another argument. The same could claimed for aeroplanes.

      They were all *NEW* methods of transportation that needed time and money to perfect. SS2 is not. I mean I'm having difficulty seeing it as much more than a slightly scaled up version of the X-planes being dropped by B-29s over 50 years ago.

      There is much to do in making space travel and research cheaper and more accessible. That is good for society (well those who enjoyed Star Trek ;-) Which is why I draw a deep divide between what Elon Musk is doing and Richard Branson. Isn't Elon doing it as part payback on the internet fortune he gathered whilst Richard largely spends other people's money to promote his brand and himself?

      One is interested in the future of mankind, the other only in himself (allegedly). I 'll make my bets on who will leave the greater legacy.

      1. Gordon 10 Silver badge
        FAIL

        I would argue that they are 2 different ways of contributing to the same goal - getting our race off of this planet so we can further continue the species. Only history will be able to judge to what degree each effort contributed.

        For instance its possible that the shuttlecock device on SS2 might be re-used in the future on higher orbiting craft - we just don't know.

      2. I ain't Spartacus Gold badge

        Stuart 22,

        I don't think you're correct at all. And I don't think you have any basis to make assumptions about other people's motives, just because you may happen to like one of them more than the other.

        Elon Musk is taking a design that's barely changed for decades, and an industry that's got fat and lazy on government pork, and giving it a mighty kick up the arse. This is great for the rocket industry, as the cosy old one wasn't using newer technology to make things cheaper. Now they'll have to.

        But rocketry has its limitations. Even with viable re-usable first stages.

        Another way to get to orbit would be to use aerodynamics to get you as high as possible, and only rely on rockets for the last stage. That's what Reaction Engines are doing with Skylon and Virgin Galactic / Scaled Composites are doing with Spaceship 2. In the case of Skylon they're trying to solve the problem with one vehicle, whereas Scaled/Virgin are using a carrier plane to get to 40,000 feet.

        This may turn out to be the most efficient. The heavy wings and engines you need for lower atmosphere work can be the most efficient possible, as that's all they do. Then the spaceship component only needs the bits for the upper atmosphere, and space itself. In principle it also ought to be safer, as you're using proven (cheap) technology to get to 40,000 feet, rather than a giant barely controlled explosion rocket.

        That shuttlecock tale may be the invention that makes this technology work. Although I don't know if it's good enough for orbital speeds, or if it's possible to carry enough fuel to slow down in orbit enough that you can drop into the atmosphere at safe speed. After all, aeorbraking requires a huge heavy coating of ceramic, to cope with re-entry heating. So it may turn out more efficient to carry a less heavy amount of fuel, and do without the heat shield.

        So far as I'm aware none of these 3 options are technological dead-ends. There's loads of development still to do, and materials science is advancing still. It may be we use them all for different things. Rockets will win on heavy lift, but maybe they can never be made much safer, and so spaceplanes will be the way to get people to orbit. And may end up cheaper for small payloads.

        Plus there's also hypersonic travel. Concorde shaved 3 hours off the Atlantic crossing. That's nice, but not a game-changer. If you could shave 20 hours off the flight to Australia, that is an enormous difference. Paying £10,000 to fly there in 3 hours, rather than £1,000 to do it in a day, doesn't look like a ludicrous thing to do.

        1. Vladimir Plouzhnikov

          There are generally 2 ways to go about progress in commercialisation of a difficult and risky high-energy technology, such as space travel:

          1) making incremental steps from simple to more complex, risking an occasional disaster but keeping the commercial risks manageable; or

          2) sitting and waiting for the government to do all the development work and bring it to you wrapped up in gift paper and ready for use.

          If you choose No.2 you will wait for 100 years for it to become ready and when you get it you will realise that it's too heavy to fly, too expensive to operate and you can't actually use it because of health and safety and anti-money laundering regulations. In the meantime, your competitors will have been running their commercial operations for years and you'd stand no chance of competing with them in any case.

          If you choose No.1 - you have to do it like Branson unless you are Carlos Slim or Bill Gates and can afford to burn a few billion USD in the case it all goes kaput (technically or commercially).

          1. Death Boffin
            Boffin

            Government Tied up in Bow

            Chances are very good that right now you are using a technology that government developed and then had it all tied up in a bow for commercial use. That technology is Gallium Arsenide. It is in most cell phones and WiFi access points. In the 1980's it was a laboratory curiosity, then the military started to develop it for their needs, funding the development and infrastructure to produce it. They also realized that to keep their costs down the producers needed a commercial market to get volume up and prices down. So in the 1990's, it began to be commercialized and entered the cell phone market. By the 2000's the commercial market led production.

            1. Roadcrew
              Boffin

              Re: Government Tied up in Bow

              IIRC....

              When working in Dallas I was told that Bob Biard at TI was a GaAs pioneer in the early 60s - the IR LED specifically. They were around the industry in the late 70s, I'm sure.

              Think there may have been a GaAs front end to the TI GSM 'phone chipset in the '90s?

              The RF & IC development did come much later than the IR LEDs - wasn't there even a rad-hard CPU from someone?

              Original IR LED was allegedly a TI private venture....

        2. the spectacularly refined chap

          That shuttlecock tale may be the invention that makes this technology work. Although I don't know if it's good enough for orbital speeds, or if it's possible to carry enough fuel to slow down in orbit enough that you can drop into the atmosphere at safe speed. After all, aeorbraking requires a huge heavy coating of ceramic, to cope with re-entry heating. So it may turn out more efficient to carry a less heavy amount of fuel, and do without the heat shield.

          It's generally assumed the shuttlecock technology will never be any good for orbital flight where the energy levels are so much higher. For example simply lifting a 1 tonne mass to 100km requires (if I've got my sums right) giving it 1GJ of energy. To put it into orbit at that altitude requires moving it sideways at 7.8km/s. That means giving it another 61GJ.

          However, there are alternatives between the two, you don't need a Shuttle-style heat shield. Apollo or Soyuz style ablative heat shields are a lot simpler, cheaper and more robust but are essentially single use. A fully reusable heat shield a la the shuttle can still be a lot simpler and cheaper than that which was actually used: people were saying the design was madness even during development. That was because of the competing demands made of the shuttle, in particular the mix of manned spaceflight and heavy lift that in hindsight is utter folly. Remember just how heavy we are talking about for a moment - Hubble is the size of a double decker bus. That size and weight meant re-entry had to be slowed right down - from 2-3 minutes for Apollo to 10-15 for the shuttle. It was the need of a shield good for that greater duration that caused all the problems. In other words, the usual totally unrealistic constraint that design by committee imposes.

          Returning to the wider point comparing the approaches of Musk and Branson you do need an entrepreneurial approach and yes businesses need to make money in order to survive long term, without which the undertaking lasts either as long as the eccentric or his money. Without long term plans that end with profitability you get another Blackburn Rovers. Just how many millions did Jack Walker squander? Sure, that money made a brief impact, but what good has it done in the long term? Money without a route to viability is just that: whatever money you put in. Money with a plan for long term profits can create something that lasts far longer than the original creator.

          1. Tim Worstal

            Weirdly

            Something a little odd about heat shields. I was once contacted by Nasa and asked if I could supply them with some scandium (which many around here will know is my day job). They wanted to make some scandium aluminide to test as a heat shield. Thinking (v. long term of course) about the eventual Shuttle replacement.

            I've forgotten the exact words they used to describe ScAl3 but it was along the lines of "in theory the best material possible" to make such tiles/heat shield from. Very light, doesn't even deform until 1,400 oC and so on. We were supposed to get the purchase order from them on the Monday. Over the weekend that Shuttle came down in pieces and that was the last we heard about that project.

            ScAl3 would be mind garglingly expensive and I've no engineering knowledge at all, so don't know whether it would work. But maybe someone will try it some day.

          2. the spectacularly refined chap

            It's generally assumed the shuttlecock technology will never be any good for orbital flight where the energy levels are so much higher. For example simply lifting a 1 tonne mass to 100km requires (if I've got my sums right) giving it 1GJ of energy. To put it into orbit at that altitude requires moving it sideways at 7.8km/s. That means giving it another 61GJ.

            Ooops, I forgot to halve that. The second figure is of course 30GJ. The point still stands, it's over an order of magnitude more energy.

      3. ElectricRook

        open your eyes

        Someone has a very closed mind. Take off that cloth cap and realize that 175 lbs for $150k is also cheap satellite launches.

      4. DaLo

        If someone invests time, money and resources into trying something amazing that has sound theory then even if they fail it is still an advancement and good for society. That theory can be scrubbed out and we can move on (with their money at least being invested back in "the economy").

        This applies to all things like space flight, self driving cars and concept devices.

        However those that sit on a theory and don't proceed due to risk aversion, cost worries or general apathy don't really help anyone, they might even restrict anyone else from pursuing it.

        Maybe the risk will pay off and make a fortune, however it is better a private, rich individual take that risk than the government squandering billions.

        With Elon Musk , the jury is still out on whether electric cars can actually have as much market penetration as he hopes and become the primary vehicle power source of the near future. It is great that someone it ploughing lots of money into it to really try it out and try to prove the sceptics wrong. If he fails then most can be satisfied that it wasn't through a lack of trying.

    2. Marketing Hack Silver badge
      Happy

      @Dave126

      Don't forget, horses were once the playthings of the rich!!

      "Bow down to me, for I am Sir Puffery the Vainglorious! You peasant rabble don't stand a chance against my sword and lance!!....Hey, what are you doing with that longbow?....Hey! Hey!! Put that down!!!....AAAARRRGGHHHHH!!!!!!!!!"

  2. SDoradus

    Space isn't orbit

    I'd be a lot more impressed if the proposed space jaunts actually involved orbit and not simply a brief jaunt to the exosphere. But they don't, because the energy budget to orbit is simply prohibitive.

    That said, if it takes off as a tourist spectacle, I can see a lot of good science being done from a suborbital flight. And who knows, perhaps flights will gradually extend to intercontinental trips - a sort of super Concorde.

    1. Jon Egerton

      Re: Space isn't orbit

      I think that is where Branson is going with this - intercontinental trips at very high speed and sub-orbital altitudes. There's little point going into orbit in this case.

      The tourist thing is a nice prototype while things get ironed out, however turning it into a transit mechanism is where the money/business model will really come into its own.

    2. localzuk

      Re: Space isn't orbit

      Thing is, the technology is also a proving ground for things like truly reusable rocketry - it'll be no use to Virgin Galactic to have to strip their ships down to bare components, replace half and rebuild every time they launch (like the Shuttle did). So, in essence, even though it is sub-orbital, its a technological stepping stone to further advancements.

    3. Russell Hancock

      Re: Space isn't orbit

      I agree with a bit of what you are saying but I see it slightly differently...

      Beating the car analogy to death - as cars became a commodity the rich looked for faster, more comfortable, more enjoyable, larger, whatever versions of them so they can have the next thrill. This is the way I see this evolving, the suborbital trips will become common place but companies will look how to make them last longer, be cheaper, more comfortable, go further. this should (in theory at least) lead to advances in all of space travel - cheaper heat shielding (yes i know that full orbital flight generates a lot more heat) better slowing methods, etc.

      I had not thought of the "launch in London land in New York" idea but that could very well the way this evolves, who knows? we all have different ideas, could this not spawn soimething that none of us have thought of yet?

      1. DragonLord

        Re: Space isn't orbit

        Don't forget that the hard part of space travel is actually getting into orbit. If we can perfect that then we can then work on getting the rest of the journey working better. It could also lead to developments of orbital production platforms (orbital drydocks for example)

      2. Anonymous Coward
        Anonymous Coward

        "launch in London land in New York"

        A modern day take on the Laker "Skytrain" of the 70's

    4. gloucester
      Go

      Re: Space isn't orbit

      To extend ~Sparticus's argument, if SS2 works, could someone not triple-deck the piggy-backing concept?

      Normal flight -> upper atmos/sub-orbital -> hop to orbit

      To mangle a Pratchett line, it'd be pigs all the way, erm, up.

  3. Pete 2 Silver badge

    Reel 'em in

    > The Guardian sometimes makes at making sense of matters economic. ... The latest cause of choler is Zoe Williams

    With very few exceptions, Guardian columnists craft their copy primarily as click bait. Most have little idea whether what they are writing is true, sensible, practical or possible, And no-one in the editorial chain seems to bother with any sort of fact checking.They seem to have a clique that is engaged in some sort of competition to write stuff simply to get a reaction - which, judging by the percentage of comments that are pulled for not meeting their community standards, they then subject to one of the most censorious regulation systems in the UK's "free" press.

    1. OurManInX

      Re: Reel 'em in

      Funny, that's what I think of Worstall articles - that is why they are here on a technology site.

      1. James 51 Silver badge

        Re: Reel 'em in

        You beat me too it. As I was reading it all I could of was don't feed the trolls.

      2. Random Q Hacker

        Re: Reel 'em in

        Indeed. "Trickle down works" but only from Worstall's orifices to the comments section.

        1. asdf Silver badge

          Re: Reel 'em in

          Worstall is quite a piece of John Birch work ain't he?

    2. LucreLout Silver badge

      Re: Reel 'em in

      With very few exceptions, Guardian columnists craft their copy primarily as click bait. Most have little idea whether what they are writing is true, sensible, practical or possible, And no-one in the editorial chain seems to bother with any sort of fact checking.They seem to have a clique that is engaged in some sort of competition to write stuff simply to get a reaction

      Yep - it constantly amazes me how many Guardian readers poke fun at the Daily Mail, yet utterly fail to realise they subscribe to exactly the same thing, just with a lefty outlook. Two sides of the same coin.

      1. Androgynous Cupboard Silver badge

        Re: Reel 'em in

        Be fair. The Graun has it's issues (just don't read the opinion pieces) but in general is a pretty good rag in terms of investigative journalism and general news. Ben Goldacre's columns (on hold, he's a busy man), the Snowden thing and the fact they didn't swallow Assange's spin, the Trafigura story, plus let's not forget the demise of the News of the World and the scalp of Andy Coulson - all Guardian work.

        By contrast the only good thing the Mail has done in the last 20 years is chase down the Stephen Lawrence story, and that only because his dad had done some work for Paul Dacre - they originally went with their usual black-urban-hoodlum fear piece. "Making Britain a more Fearful Place" seems to be the unwritten Mail group motto. That or "Things that cause or cure Cancer".

    3. Anonymous Coward
      Anonymous Coward

      Re: Reel 'em in

      With very few exceptions, Guardian columnists craft their copy primarily as click bait.

      I think it's wrong to generalise (yes, I'm aware of the implicit irony in that statement :) ). Any publication has good writers and click bait, if the editor gets the mix right it's is overall still a reasonable read.

      This is why you have to read different papers instead of just one: you get a reasonable balance overall, and it never hurts to examine a different point of view. Even if you don't agree, it is worth examining another take on things because matters are rarely black and white (if you need that sort of view, read the tabloids who exclusively seem to live on things they can screech about).

      Having said that, I actually agree with Worstall. It reminds me of the saying that progress depends on unreasonable people. Reasonable people - actually, more people without a vision to execute - are content with the status quo and would just pile up money where it is of no use to anyone. What would bug me is if that money had been amassed by dodgy means because then it's not really beneficial, it's IMHO more like being heralded (and sometime knighted) for a sort of money laundering in public. Branson has managed to stay away from that side quite well (or has better media managers than, say, Bill Gates)...

      1. Cliff

        Re: Reel 'em in

        Newspapers - funnily enough the one with least political slant and celebrity tittle-tattle is the FT, and it's probably the best of the British papers. I recommend starting with the Weekend edition, it has a fantastic arts section and very good mag with real articles and no filler 'look at these dresses' articles. Best thing is the paper doesn't condescend nor does it try to show off/elitist snobbery, has good world outward-looking view, and the journalism is good.

        Seriously, give it a proper try if you're sick of the rest of the press.

    4. This post has been deleted by its author

  4. chrisf1

    Not just trickle down

    Funny isn't it how high risk disruptive innovation seems to take high levels of disposable income? Who'd have thought. Then that other unsung hero of competition policy comes into play, incremental innovation and its ill regarded sibling cross licencing. Fair to say its not just the invisible hand of capitalism, downstream its enabled by competition policy and good intellectual property rights.

  5. Steve the Cynic Silver badge

    Why supply-side / trickle-down failed...

    It's easy, really. The version of SSE/TD that is most often attempted by politicians - lower taxes for the rich in the belief/statement that they will spend that money, so everyone lower down the ladder will be better off - fails because of what they spend their money on. Generally (technological wizardry like rocket planes, Challenger Deep-grade submersibles, etc. aside(*)), they spend it on luxury goods *imported* from elsewhere, so when (e.g.) the US government tries this, the American rich buy Italian or German cars, fashion from Italy or France, and so on. Most of the money is *not* seen by those lower on the US ladder because it leaves the country.

    (*) Note also that the sort of rich man who finances the technological wizardry, whether from his own funds or via his company, will probably do it even if the government(s) is(are) on a no-SSE/TD schtick, so arguably these guys aren't an exception to the general failure of SSE/TD.

    1. Pete 2 Silver badge

      Re: Why supply-side / trickle-down failed...

      > lower taxes for the rich in the belief/statement that they will spend that money

      I think there's a little more to it than that.

      People don't get rich by spending money. They get rich by investing wisely (or exploiting the workers, if you're a Guardian columnist). So I think the motivation for reducing taxation on the wealthy - apart from the point that they can afford good accountants, so any tax they do pay is more like a voluntary donation - is that they will then invest their loot in promising enterprises which, when they succeed, will increase the wealth of the country (and hopefully pay a bit of tax, or employ lots of people).

      1. James 51 Silver badge

        Re: Why supply-side / trickle-down failed...

        "They get rich by investing wisely"

        So what do you call it when they 'invest' large sums of money in nominally politically incompatible parties and politicians?

        1. Allan George Dyer Silver badge
          Pirate

          Re: Why supply-side / trickle-down failed...

          @James 51 - That would be bribing the Government promoting your legitimate business concerns.

        2. Tom 13

          Re: So what do you call it when they 'invest' large sums

          Protection money.

    2. Tom 13

      Re: Why supply-side / trickle-down failed...

      Except it didn't fail. It did exactly what Reagan expected it would do: increased tax receipts received by the federal government, and more so from rich people than poor people. What didn't happen and what Progs improperly blame him for is control spending. Tip O'Neill (the ultimate Prog of the 1980s) insisted on spending twice as much as Reagan increased revenue. Meanwhile, an economy that had been cratered by Jimmie Carter to the point that it was the worst recession since the Great Depression rebounded and started a sustained 25 year expansion that Billie "Blue Dress" Clinton later took credit for. It took another Democratic regime in 2006 to crater the economy in 2008. Once again they shifted blame to George W. Bush.

      1. asdf Silver badge

        Re: Why supply-side / trickle-down failed...

        The saddest thing Tom 13 is I believe you sincerely believe your narrative and wrote it with a straight face.

    3. P. Lee Silver badge

      Re: Why supply-side / trickle-down failed...

      So, Americans are rubbish at making nice things! ;)

      I don't agree with the conflation of supply-side and trickle down, but closer to the point, trickle-down is normally used as an excuse for unfettered wealth creation policies. The problem with this is that wealth tends to concentrate. Branson's space plane program is no excuse to have a "we love branson" tax regime.

      Trickle-down in tech does work but the article seems to think that this therefore applies to economics. It doesn't. Left to its own, the rich get richer until the revolution.

      If you want to make people richer, you have to do it slowly. Give them a lump sum and they'll go on holiday with it. You need to reduce debt and encourage saving. That makes you unpopular with banks and business. Encouraging people to dissipate their accrued value (wealth) by spending it in order to increase aggregate accrued value seems like nonsense to me. I missed the bit in history when we went from realising economic policies of the 70's were disastrous to rehabilitating Keynes. I know inflation destroys debt, but eventually, interest rates have to rise to finance our stupid government borrowing which funds demand management (and war) and that means lots of repossessions and more recession.

      Far better to adopt policies which make production cheap. By "cheap" I don't mean profitable, just make sure barriers aren't set so high that only incumbents can afford to produce. Encourage competition - competition increases personal wealth at the expense of corporate profits.

      Government is an ideal target for open-source due to its vast size. How many billions are you spending on Word and Excel? Money which goes almost straight abroad? Make an investment (in the proper sense of the word) and pay your own local citizens and companies to improve / customise software for your purposes. That improves your nation's software production capacity and reduces future government spend. Yes other people will benefit, but as long as the value is right for the government, stop being mean-spirited.

  6. DrXym Silver badge

    A far better example

    Would be Tesla motorcars with sports cars and luxury saloons paving the way to more mainstream vehicles.

    Branson's effort was very unlikely to lead to either space tourism or something with a more practical or mass market use.

    1. maffski

      Re: A far better example

      "Branson's effort was very unlikely to lead to either space tourism or something with a more practical or mass market use."

      Not directly, but it's a step on the journey. In the same way the first Daimler Benz was never going to lead directly onto the Ford Fiesta, but give it a few generations of refinement and that's what happens.

      1. DrXym Silver badge

        Re: A far better example

        "Not directly, but it's a step on the journey. "

        There are far more viable options for space tourism / colonisation / utility loading than a craft which bungs people into a high altitude trajectory.

        1. The Axe

          Re: A far better example

          @ DrXym

          That's your opinion, Branson thinks he knows better than you. And considering that he actually has paid people to look into this, he's probably more right than you (unless you're a secret rocket inventor).

          The point is that the free market allows lots of different methods of space travel to be tried out. Some might work, some might fail, but over time the best will win. The other way of doing it, via big government and lots of planning or one person's view of what is the most viable way, has no guarantee that it is the best way, it's just one way - but until other ways have been tried no one will know.

          1. DrXym Silver badge

            Re: A far better example

            "That's your opinion, Branson thinks he knows better than you. And considering that he actually has paid people to look into this, he's probably more right than you (unless you're a secret rocket inventor)."

            That argument only works if you think Branson is infallible or should be immune from skepticism. Read Tom Bower's book about Branson for a different perspective of him and the project.

            Secondly yourself and others appear to be taking affront at a simple (and obvious) observation that there are better examples of trickle down economics than this. This project, even it succeeds has very little practical use - it's a suborbital joy ride, not a viable vehicle for launching satellites, or people into space. The ticket price might drop but it's never going to result in a huge number of jobs or manufacturing or anything else. There is very little trickle down at all in fact.

            1. Anonymous Coward
              Anonymous Coward

              Re: A far better example

              You will probably find that Satellite deployment will be very high on the designers thoughts when they were designing the platform.

              Imagine a SpaceShipTwo with no passengers, but a set of doors that could open like the American's space shuttle. As the SpaceShipTwo vehicle nears it's apogee, it deploys the satellite which has it's own booster to take it up to low earth orbit.

              Scale SpaceShipTwo and other components up and there is no reason why you can't launch large satellites into geostationary orbit. The only "wasted" component is the satellite booster.

              I find some people's lack of vision unfathomable, anything is possible if you are prepared to use your imagination (and a lot of cash)

              1. DrXym Silver badge

                Re: A far better example

                "Imagine a SpaceShipTwo with no passengers, but a set of doors that could open like the American's space shuttle. As the SpaceShipTwo vehicle nears it's apogee, it deploys the satellite which has it's own booster to take it up to low earth orbit."

                So a plane that carries a rocket plane that carries a rocket with at least 3 humans inside. You only have to multiply the failure modes of each vehicle together to see how disastrous this is.

                And all to launch teeny tiny satellites into a very low earth orbit.

            2. Anonymous Coward
              Anonymous Coward

              Re: A far better example

              "That argument only works if you think Branson is infallible or should be immune from skepticism"

              I would say that argument works even if you think Richard Branson is a bit of an idiot.

              Quoting Tom Bower's work in any serious context really undermines any argument.

              1. DrXym Silver badge

                Re: A far better example

                "I would say that argument works even if you think Richard Branson is a bit of an idiot."

                I wouldn't say he is an idiot but that doesn't mean he is infallible or impervious to criticism. This particular project has been a money pit and has already killed 4 people thanks to some questionable choices which might have made sense when chasing the X prize but not when trying to commercialize space travel.

                "Quoting Tom Bower's work in any serious context really undermines any argument."

                Again, only if you believe Branson is impervious to criticism.

            3. Anonymous Coward
              Anonymous Coward

              Re: A far better example

              "That argument only works if you think Branson is infallible or should be immune from skepticism. Read Tom Bower's book about Branson for a different perspective of him and the project."

              The same Tom Bower who was all over the media crowing about SpaceShipTwo's rocket "exploding", before the true nature of the accident had emerged?

              That little incident told me all I need to know about the guy's integrity and accuracy in reporting, so I think I'll pass thanks.

              1. DrXym Silver badge

                Re: A far better example

                "The same Tom Bower who was all over the media crowing about SpaceShipTwo's rocket "exploding", before the true nature of the accident had emerged?"

                It would be the same Tom Bower who has been critical of this project for a long time and not the only one. And regardless of the cause there is no denying this project has turned into a boondoggle.

                It is not hard to find critical articles about the bad choices and broken promises surrounding this project. People just don't want to listen because hey it's cuddly Richard Branson.

  7. Fat Freddie's Cat

    Can we just agree...

    ...that the Grauniad shouldn't do economics and the BBC shouldn't do science?

    1. Stuart 22

      Re: Can we just agree...

      Actually BBC Radio 4 does very good science programmes. Just not enough of 'em. BBC TV science programming, on the other hand, has little to do with science and more with presenters and story line. Bit like BBC TV History except their presenters are bit better at it.

      Bring back OU Science 101 ;-)

      1. Anonymous Coward
        Anonymous Coward

        Re: Can we just agree...

        @Stuart, you mean 'they did good science programs'. Since they have been banging the drum for CAGW all pretence of real science has gone out of the window to appease the Green Blob.

      2. squigbobble

        Re: Can we just agree...

        Mmmmm... Dr. Czerski.*

        *I suspect that was the effect that the Director of Programming intended.

  8. Naselus

    "And those early attempts to develop something new are often (possibly even are always) funded by selling the first instances to a few rich eccentrics."

    Funny, I seem to recall the first attempts to develop space vehicles being down to governments. Kind like how the first electrical computers weren't developed to be sold as playthings for the rich either... Guess we're ignoring any tech that doesn't fit the free-market-is-always-best narrative, and working on the assumption that since trickle-down can work, there's no alternative.

    1. James 51 Silver badge

      I've lost count of the number of times I've heard stories about technology being invented by someone at a company but it's sat on to increase ROI on existing product lines. The market doesn't exist to push new technologies, it exists to accumulate money.

      Didn't Regan try trickle down in the 80's? How did that work out?

      1. Mage Silver badge

        sat on to increase ROI on existing product

        That would be when the innovative, entrepreneurial founder is gone / lost control and the company is run by an Accountant or other desk jockey.

      2. Tom 13

        Re: Didn't Regan try trickle down in the 80's? How did that work out?

        Very well thank-you very much. Inflation was reduced, unemployment fell, interest rates dropped. Oil production increased and the economy boomed. In fact it was the start of 25 years of sustained economic growth.

        But haters don't like admitting to the truth, so they like to credit it to Bill Clinton instead.

    2. I ain't Spartacus Gold badge

      Naselus,

      Sure the government is responsible for loads of stuff. Including innovation. War (for example) is a real spur to get your thinking cap on...

      But remember that in our current 'Western' economic model (since WWII), government is taxing and spending something like 40% of the economy. Varying over time and country between say 30% and 50%.

      So you'd expect the government to be involved in lots of innovation. It's doing lots of stuff. Especially as peacetime military spending has been much more of a driver, due to the complication of modern weapons systems, and the fact we had a Cold War.

      Railways, mass steel production, mass clothing production and mass car production all stated in the 19th Century with much less government involvement. Innovators went out and did stuff, made money and more of that stuff happened. Since then we've decided we don't want 19th Century levels of poverty, government has got much more involved in areas like science, and we've remodelled our economies.

      But even where you might argue government investment has given us new technologies, you need to remember that there's more than one way to do technology. There's basic R&D to give us the shiny new frontier. Then there's boring development to get something that actually works 99.999% of the time, and doesn't blow up so often. Then there's manufacturing development to make things cheaper, so the mass market can have them. And there's cross-pollination where you take innovations in one field, and use them in another.

      Very rich people, wanting to communicate mostly for business, drove a demand for mobile phones in the 80s. That's become a mass market technology that almost everyone in rich economies can afford. But because of us relatively rich (in global terms) masses buying into mobiles, they can now be had for a few quid, so even the very poorest in the developing world can afford them. So this continuing development has trickled even further down, so farmers/fishermen in remote places in Africa can now get their stuff to the right market, to get the most money, so they get richer and waste less. This has allowed and is allowing whole swathes of the developing world to leap-frog a developmental stage that we had to go through in order to get national communications. And is getting them the internet too. All of which may allow them to kickstart their economic, social and educational development in a way no plausible amount of aid money could.

      Or take solar panels. In order to make them cheap enough to put on our houses, we're pushing development of this technology. Now my feeling is that this is a mistake, at least in Northern Europe. And we'd be better investing our renewables money into nuclear. But for Southern Europe or US, it could be a brilliant technology to use. Possibly both at local and grid scale. But again our relatively rich market may drive down the price to commodity levels. Then people in the poorest bits of the developing world may be able to skip the step of national power infrastructure, and go for local renewable solar electricity, and bootstrap their economies.

      1. Tom 13

        Re: But for Southern Europe or US, it could be a brilliant technology

        Cali may get all the attention for population, but take a good look at the US. The real population density is east of the Mississippi river (in fact, mostly east of the Ohio river) and for the most part north of the Mason-Dixon line. In fact if you look at electoral vote counts at less than 65% the land mass they have 8 more electoral votes after deducting for the Senate variance. And that's after 30 years of people migrating from the Northeast to the South and West.

        We get the same weather as Northern Europe, only perhaps a bit colder; well, except for the Scandinavian countries. But I'll bet Maine would be willing to go toe to toe with them.

    3. Squander Two

      > Funny, I seem to recall the first attempts to develop space vehicles being down to governments. Kind like how the first electrical computers weren't developed to be sold as playthings for the rich either

      Both were developed as parts of major war efforts. I don't think anyone claims that war isn't a great motivating factor. In the absence of war, spending by rich people works pretty well. Safer, too.

      It is perhaps worth pointing out that both free markets and wartime are manifestations of the same thing: competition. Most of the time, nations compete a bit. During war, that competition is ramped up to insane levels, and we see all sorts of wonderful new inventions. But no-one is interested in non-military applications of those inventions. Look at how NASA's funding has been slashed since the end of the Cold War. Famously, after WW2, a British government committee was formed to look into non-military uses of this new computer thing Turing had developed, and they concluded that, over the next fifty years, British industry would need three of them. Outside wartime, we need rich people spending money on toys if we want development not to be driven by those sorts of short-sighted dunces.

  9. Neil Barnes Silver badge

    The anti-space spending brigade

    Seem - as a group - to think that the space guys are parcelling up that money in great bales and shipping it off the planet.

    Not one of them seems to realise that each and every penny of that money is *spent on earth*. It pays the salaries of the folk who build it and the folk who design it and the guard that stands on the gate and keeps the undesirables off the spaceport and the folk that clean the toilets and run the payroll and paint the roof. And it pays the folk who fill the shelves in the supermarket and the folk who mow the lawns and the doctors and the dentists and the folk who lay the roads and grow the corn and herd the cows...

    It doesn't really matter where money is spent, as long as it is - and anything that gets us off the planet is such an obviously good thing for one simple reason: we have all our basques in one exit.

    Idiots.

    1. James 51 Silver badge

      Re: The anti-space spending brigade

      I largely agree. It's the cult of the greed is king style economics that I question.

  10. Anonymous Coward
    Anonymous Coward

    There are cars and there are cars

    How many of you own a Bugatti Veyron?....oh wait we all do don't we.

    1. LucreLout Silver badge
      Childcatcher

      Re: There are cars and there are cars

      How many of you own a Bugatti Veyron?....oh wait we all do don't we.

      We can all afford to buy a Ford Fiesta that is quicker 0-60 than a 1960/70s/80s rich mans Ferrari was [1]. So while I can't afford a Veyron, at the cutting edge of pace, it's likely that by the time my child is my age, they'll be able to buy something every bit as fast. It trickles down, you see.

      [1] 2013 Ford Fiesta with Mountune pack Vs anything up to and including a Ferrari 308.

  11. Allan George Dyer Silver badge

    Not Trickle-down economics...

    The money sloshes around the top-end, among high-paid managers and consultants, but doesn't increase the number of toilet-cleaners required, or their wages.

    However, trickle-down technology can work. Throw enough money at developing fancy devices with bright screens and long battery life, and you've developed a lighting system efficient enough to be run off a solar panel in some third-world village schoolhouse. But trickle-down technology can also fail, usually when someone insists on deploying the shiniest new tech, without considering how it will work at the delivery point... "With SpaceShipTwo, these villagers can deliver their chickens to market much faster, via SPAAACE!"

    1. I ain't Spartacus Gold badge

      Re: Not Trickle-down economics...

      And yet how do these villagers know which market to get their goods to? By checking their mobile phones.

      And how do they get hurricane/typhoon/tsunami warnings? Again from their phones (once the fripperies of braces-wearing London stockbrokers), using data from satellites (once the province of Cold Warriors).

      Who the hell knows what Spaceship 2 will lead to? It's not a technology we've explored yet. Maybe the current Space industry boom will peter out again. Or maybe we'll have orbital platforms making weird crystals in micro-gravity that start another computing boom. Or give us exotic drugs to erradicate malaria. I've read in several places that one of the benefits of microgravity manufacturing may be improvements in our ability to create difficult molecules for drugs, but I'm not enough a chemist to know if that's still true (or even if it ever was).

      Or indeed maybe Virgin will give up, Scaled Composites will be starved of cash, and it'll be Elon Musk who gets us into space, with his technological leap. Who'd have thought ten years ago that a guy could start from scratch and build a space capability that can already sent several tons to LEO and (probably) also land the 1st stage rocket to re-use it? In 2-3 more years he says he'll have a man-rated re-usable capsule that can land on the moon (if it could get there). He's building capabiliites at an amzing rate, and lowering costs while doing it.

      1. Allan George Dyer Silver badge
        Facepalm

        Re: Not Trickle-down economics...

        You've missed my point. It's the technology trickle-down that brings the benefits, not the (supposed) economic trickle-down. Then I confused things with chicken-devliery because I didn't want to suggest that every technology is appropriate everywhere.

        1. Squander Two

          Re: Not Trickle-down economics...

          > You've missed my point. It's the technology trickle-down that brings the benefits, not the (supposed) economic trickle-down.

          They're the same thing. What do you think the economy is?

          1. Allan George Dyer Silver badge

            Re: Not Trickle-down economics...

            @Squander Two - Well, I thought economics was about movement of goods and services through society, which does not have to involve any movement of technology. Technology can move without direct economic exchange - e.g. when a patent expires. Economics is abstract, you can redefine any activity as economics, but there is a certain quality about, for example, "my breakfast" that is not interchangeable with "a drug patent" or "a performance of Beethoven's 5th". You can say that a billionaire eating breakfast and a billionaire launching a spaceship both have an economic trickle-down effect, but only one of them has a technology trickle-down effect.

            1. Tom 13

              @ Allan George Dyer

              I think I found your problem:

              ...but there is a certain quality about, for example, "my breakfast" that is not interchangeable with "a drug patent" or "a performance of Beethoven's 5th".

              You don't understand anything about economics, because comparing those equally and making them interchangeable is EXACTLY what economics is all about.

              1. Allan George Dyer Silver badge

                Re: @ Allan George Dyer

                @Tom 13 - which was my point: economics says those things are interchangeable, but I still want my bloody breakfast! Economics is a useful model, but, like all models, it is not a complete, perfect explanation of the world. And the word I was missing last night was "externalities" - isn't trickle-down technology happening outside the economic considerations of those concerned?

                1. I ain't Spartacus Gold badge

                  Re: @ Allan George Dyer

                  Economics does explain your breakfast. It's called price inelasticity. This suggests that even though you might value your breakfast at 1/100th of an iPhone, when you're really hungry you'd be willing to pay up to maybe 3/100ths of an iPhone in order to get it. On the other hand your marginal propensity to consume breakfasts is quite low. That first brekkie really hits the spot. Yummy! You'd pay extra just to get it. But if I offered you a second breakfast 5 minutes later, you might not even be willing to pay 1/1000th of an iPhone to get it. Unless you're very greedy.

                  So breakfast is price inelastic. Apparently so are iPhones. People will apparently pay whatever Apple are charging (within reason). Sadly for other manufacturers, people are much more willing to take the cheaper models. Of course this is all very well, but how the hell do you determine the price elasticity of every good, given that every consumer is different?

                  Externalities are a bit more complicated though. If some company has taken a new tech at a high price, and made it affordable by working out a way to make it cheaper - that's not an externality to them. They've deliberately spent cash to do the work. We may even grant them a patent to protect their IP, so that other companies can't freeload on their research.

                  Tech development can be an externality. However it's often deliberately funded. When the government funds something, and we all pay tax in order to get it, it's a public good instead.

            2. Squander Two

              Re: Not Trickle-down economics...

              > Well, I thought economics was about movement of goods and services through society, which does not have to involve any movement of technology.

              Well, no. Other than eating berries straight off the bush or killing wild animals with our bare hands or giving birth, almost everything humans do that increases our wealth involves technology -- it's just that most of our tech inventions are so old and established we no longer think of them as tech. Pottery, baskets, clothing, flint-tipped spears, mattresses: all tech. Money: very definitely major revolutionary tech. Exchanging goods and services at any more advanced stage than person A giving person B a pretty stone they found in exchange for sex is impossible without technology.

              > Technology can move without direct economic exchange - e.g. when a patent expires.

              When a patent expires, the price of the tech drops, the number of people able to use the tech and the extent to which they can use it increase. That obviously has an effect on the economy -- if the tech is particularly useful, it can have a massive revolutionary effect.

              You appear to be saying that it doesn't count because no-one actually pays for the patent to expire, so people effectively gain some technology for free. But that doesn't mean it's not part of the economy. Whether someone gives me enough food to buy a meal or just gives me a meal, that's obviously part of the economy either way.

              1. Vladimir Plouzhnikov

                Re: Not Trickle-down economics...

                "it doesn't count because no-one actually pays for the patent to expire, so people effectively gain some technology for free."

                LOL, this is simply because by then we will have already paid for it as until the patent expired the technology was being provided at a premium.

                All a patent does (or at least what it's supposed to do if not abused) is it brings some of the future cashflow from implementation of the technology forward and concentrate it for the benefit of the patent holder as an incentive for investors and inventors to innovate and take risk.

        2. I ain't Spartacus Gold badge

          Re: Not Trickle-down economics...

          You've missed my point.

          ...

          Then I confused things with chicken-devliery because I didn't want to suggest that every technology is appropriate everywhere.

          My argument was addressing this. The point about free market capitalism, and why it beats command economies, is as much about failure as success. In command economies, the people in cahrge are risk averse. As they often become in big companies. They do the safe thing. And often that works.

          But the great thing about free economies is that people can try weird stuff. They might go bust, but it's their own cash at risk, or stuff they've borrowed off investors. So different things will get tried with technologies, and some might work.

          Actually I'd be happy to argue the merits of trickle down economics too. But Tim Worstall chooses to ignore that in his article, and only talk about technology. And that was your point too.

          Take Twitter for example. They weren't competing with anyone before they existed. They probably pay high salaries, and don't really exploit anyone. You might argue about personal data, but it's not like they're even grabbing much of that. But lots of people get value from what they do, so they're apparently worth loadsa money. So it's very hard to argue that anyone's actually got poorer, while Twitter has created a couple of billionaires, and some millionaires. So that's growth, that's cost society very little, but given us something many people use. And made some people rich. If those people then go on a spending spree with their filthy lucre, then so much the better. The economy grows, and some poorer people get paid for providing them services.

          Obviously Twitter may be over-valued, crash and burn. Then there has been a cost to society. But they're just an example I picked out of the air. There have been lots of tech companies who've created value, got some people insanely rich, and even if they only spend some of their cash, that's growing the economy for everyone.

          1. Allan George Dyer Silver badge

            Re: Not Trickle-down economics...

            @ I ain't Spartacus - I wasn't trying to make a point about free market economies, and I certainly didn't suggest a command economy was a good idea, but is there really such a thing as a free market, anywhere? Trickle-down advocates oppose progressive taxation because they think it limits the ability of the meg-rich to start the trickle, but I'm suggesting that the trickle tends to pool at the top end, and dries up before reaching the bottom.

            1. I ain't Spartacus Gold badge

              Re: Not Trickle-down economics...

              but is there really such a thing as a free market, anywhere?

              Allan George Dyer,

              Probably not. Perfect markets, perfect knowledge and perfect consumers are strictly for economic models... Also free markets require government intervention. To stop monopolies, and require legal fair play for example. Not everyone opposes progressive taxation. Although it does depend what you mean by progressive. Can a 70% tax rate be progressive? A standard maxim is that if you tax something, you get less of it though. So if you tax income, overall there'll be less income than if you didn't. Hence taxing land being a popular idea (no-one makes that anyway).

              As to mentioning command economies, I was still talking about technology. The whole point of the article was that even if there's an argument about trickle down economics (if anyone can even decide what that means), it's demonstrably true that technology often works where richer people do the early adopting that pays for everyone else to get it at commodity prices.

              I decided to mention that one of the good things about having relatively free markets and allowing people to earn big rewards for taking risks is that some of those risks pay off. Even if big corporations sit on an idea, it's hard to stop an interloper coming in and disrupting them with something new. Unless they can gang-up with government to regulate their industry to stop outside competition coming in. Command economies, and governments in mixed ones, tend to get things wrong a lot. The difference is that they just ignore their failures and carry on regardless. A more open economic system gives you more chances to succeed, by trying many different things.

              1. Allan George Dyer Silver badge

                Re: Not Trickle-down economics...

                @I ain't Spartacus - Have an up vote. Maybe I want to phrase things differently, and I wouldn't say an economy dominated by the mega-rich is "more open".

    2. nijam

      Re: Not Trickle-down economics...

      Maybe not trickle-down economics, but perhaps "splash it all over economics" would be a better description. After all, the money spent buying trips in space doesn't vanish, it goes back into the economy via whatever Virgin Galactic (or whoever) spends it on. The point about money that the Grauniad and its ilk miss is that it only really functions when it's moving.

    3. The Axe

      Re: Not Trickle-down economics...

      You don't understand economics. It doesn't involve just money and cash, it also covers society, humanity, technology, and loads of other things. Economics is a study of how humans live, work, and play.

    4. ecofeco Silver badge

      Re: Not Trickle-down economics...

      Exactly Allan.

      Or to put it another way, if the average person can't afford the technology no matter how cheap it gets, it's all moot.

  12. Mage Silver badge
    Thumb Up

    Great article

    Yes I too 100% support the money spent on Spaceship2, even though it's a rich toy, no use for putting stuff in Orbit or into deep space. It's an excellent use of Branson's money. We all will be 'richer' by what is learned. I don't resent the Rich having joyrides on it.

    No doubt many aspects will benefit other Terrestrial and Space projects. Only rich people with a whim can benefit us like this. Governmental sponsored research is too bureaucratic. Most big company research is too safe or never sees the light of day when the innovative founders are gone and "beancounters" and "IP Lawyers" are in control.

    Now if Google, Microsoft, Apple etc would "waste" some large percentage of their dragon hordes in a similar fashion it would be wonderful. Branston's "waste" of money is much more sensible than most of what is printed in the Guardian. But I suppose it's a nice wrapper for the fish n chips?

    1. Anonymous Coward
      Anonymous Coward

      Re: Great article

      How much 'beneficial' technology, do you think, is hoarded away by Governments and Corporations? The British Government hid their advancement in computer technology (WW2) from the world, and as such, as a civilization we're 25yrs, minimum, from where we should be. Similar advancements in space technology could also have been impacted on in a similar way.

      Who knows, with different people in charge, maybe we would be living on the Moon by now?

    2. Squander Two

      Re: Great article

      > it's a rich toy, no use for putting stuff in Orbit or into deep space.

      I heard a British space industry expert on the radio on Monday morning (sorry, forget his name) saying that, actually, they're all very keen on getting satellites into orbit with spaceplanes, and certainly believe it's doable. That may not be Branson's aim, but still a lot of the discoveries his team make will contribute to this goal.

      1. graeme leggett

        Re: Great article

        "they're all very keen on getting satellites into orbit with spaceplanes, and certainly believe it's doable"

        Skylon or SpaceShipTwo (or Three), or A N Other.

  13. James Micallef Silver badge

    @Tim - Trickle-down economics

    "There are various definitions of what “trickle down” economics actually means"

    This is the first time I've ever heard the phrase "Trickle-down economics" used in this way*. This type of "technology" trickle-down definitely works, as many things that used to be rich people's playthings are now commonplace for 'normal' people. However this trickle-down worked equally as well in the industrial revolution where the levels of inequality between rich and poor were stratospheric, the 1920s (eg cars) where the levels of inequality between rich and poor were extremely high, as well as the 1960s (plane travel) where the levels of inequality were much lower. Currently inequality** levels are climbing back towards what they were in the 1920s, but that does not mean that more inequality now is better because it allows ventures such as Virgin Galactic.

    With a flatter inequality curve (ie where you don't have the top 0.01% who are many thousands of times richer than the top 1%), there will be even more rich people who could spend $insane on a new technology. Clearly The Guardian is wrong to miss that having some inequality allows more development, but that does not mean that more inequality is always better.

    So how much inequality is optimum for (a) continued development and growth and (b) generally higher standards for the masses? I appreciate the clarity you bring to some complex topics so I would be very interested in your take on this issue.

    *Typically it is used in the other contexts you mention, ie it is beneficial to poorer people to allow the rich to get even richer because their spending will end up with the less rich - Not being an economist myself I cannot convincingly refute this however intuitively this sounds like bollocks.

    **I'm talking about differences between average and median income in the developed world where such technologies are born and first used.

    1. I ain't Spartacus Gold badge

      Re: @Tim - Trickle-down economics

      Be careful with assuming cause and effect? How do we know that any level of inequality has an effect on technological growth? It could be that growth leads to inequality after all...

      Think about all the tech billionaires. It's rapid development that makes them so wealthy. If a founder creates a company, and by the time he dies it's worth billions, he'll be well off. But not insanely so. But if you can found a company in your early 20s, then sell it for billions by the time you're 30 - that's a recipe for massive extremes of wealth.

      Also remember that the poorest can't have any less wealth. You can't own less than zero houses. So there's always going to be a wealth-gap, It doesn't take that much extreme wealth at the top-end to start making large differences to this ratio. So any period of rapid technological growth not run by the government is likely to increase inequality in the short term at least.

      Also remember the point that Worstall makes in other places about measuring wealth inequality. In the 19th century the poorest got almost no government help. In the twenties there was some basic provision for universal primary education and some pensions. Now everyone in Britain can rely on free healthcare, free education to 18, a basic state pension until they die, housing support, sickness and unemployment benefits, as well as a lot of financial help with child rearing. Even free tertiary education so long as you don't earn over £20k a year afterwards). That's a suite of benefits that's worth many hundreds of thousands of pounds each - and we don't all pay that much tax in our lifetimes. Missing that out from any discussion of inequality is insane.

      Also remember to measure who the inequality is between. Globalisation has frozen the wages of ordinary people in the Western economies since the mid 2000s. If you include housing costs in the UK, or healthcare in the US, that's probably frozen since sometime in the 90s.

      But on the other hand, Africa is getting much richer. Quite quickly now in some places. China has taken hundreds of millions of people out of extreme poverty. As has the rest of Southern Asia. A lot of that's also down to globalisation. And technological development. We're in another uncomfortable period of social and economic change, but it's not bad for everyone.

  14. Anonymous Coward
    Anonymous Coward

    Ryan Air IN SPAAACE...

    For the rest of us who are classified as the"99%", its the only way we're getting up there.

    1. seansaysthis

      Re: Ryan Air IN SPAAACE...

      Yep, cos lets face it before budget airlines most of us couldn't afford to to much international travel. I may never be able to afford to go to the moon but perhaps my children or grandchildren will have a "grand day out".

  15. Anonymous Coward
    Anonymous Coward

    Give me strength....

    "However, when rich people start dropping sums that could rid whole villages of cholera – on a trip that extends humanity in no direction ... the picture changes."

    And how many villages, one wonders, could be rid of cholera if the Scott Trust [1] would only pay its taxes. Maybe Polly could contribute a little to the exchequer too, rather than spewing forth her bilge while hiding in France, away from the taxmans grasping claws.

    "This is what inequality actually looks like: rich people burning money on fun."

    I'm not a rich man but I too like burning a little money on fun. Money has one purpose - the purchase of goods & services. You have to spend a little time and money enjoying yourself before you die.

    The groans hopeless rhetoric falls even further down when you consider what it costs to fill its pages with predictable, fact light rubbish, when that purchase cost could be freeing villages of cholera, rather than giving Tarquin another dose of confirmation bias over his morning fat free skimmed soy latte.

    [1] - The abomination that funds the groan to peddle its swivvel eyed nonsense while cowering offshore away from the taxman. Hypocrisy much?

  16. Bruce Hoult

    To comment on a few messages at once...

    Before the bicycle, the average person married someone born within two miles of them. With the bicycle, it jumped suddenly to 10 miles. (just adding numbers to the point already made) To extend it, my parents were born 500 miles apart (thanks to summer work experience in a university course), while my fiancee and I were born 10250 miles apart (thanks to internet).

    The money spent by Branson and his rich customers is not burned. Or at least very very little of it is :-) 99% plus goes to pay the salaries of a lot of people, who in turn buy good and services from yet other people.

    The energy cost for a human to get to orbit is about same same as flying from Sydney to Los Angeles on a 1970's 747. Airliner efficiencies have improved since that calculation, but it's certainly still less than flying from Sydney to London, which probably half the population of Australia has done at some point. The main difference is that a 747 can be reused an hour after it lands. The second difference is that a 747 at takeoff is half plane, half fuel and passengers, while chemical rockets need to be 90% (staged) - 95% (single stage) fuel at takeoff. Put those together and there's no physics or economics reason for a ticket to orbit to cost more than a flight in 1st class from Sydney to London.

    Yes, what Branson did ten years ago with SpaceShipOne is pretty much what the USAF did in the early 1960s with the X15. The difference is Branson & Paul Allen spent $30 million, while the X15 program cost $300 million in 1960s money, which would be similar to about $2.4 billion today.

  17. Graham Marsden
    Thumb Down

    it's so unlike Tim Worstall to get the wrong end of the issue, isn't it?

    It's a shame that TW starts off by saying "that is the only part of trickle-down economics that undoubtedly and provably works" and then goes off to attack Zoe Williams instead of dealing with the elephant in the room that the majority of so-called Trickle Down economics *doesn't* work.

    Perhaps he could now write an article addressing the principle of Marginal Propensity to Consume, ie why tax breaks (including raising the income tax threshold) mean that the less well-off still spend pretty much all of their income on necessities and maybe the occasional luxury, whilst the more well-off already have enough income to cover their needs, so can afford to save and invest most of the extra money they get, making it grow even more, but taking it out of supply.

    The idea is that (like a champagne fountain) you put more in at the top and it trickles down to the bottom. The actual result is that the glass at the top just gets bigger and bigger, so virtually nothing trickles down.

    Of course that wouldn't make for a good excuse to bash the lefty Guardian, would it?

    1. The Axe
      Mushroom

      Re: it's so unlike Tim Worstall to get the wrong end of the issue, isn't it?

      I think Tim understand more about economics than you do.

      For instance you say rich people can invest their money, taking it out of supply. Have you not thought about where that money is put? Do you think rich people put it under their matresses?

      When rich people invest their money they put it into business or into a bank account to name two. In both cases, the money gets reused. When used directly in a business, it's used to grow it, and in a bank to fund loans to other businesses who want to grow too. And as a business grows, it spends more on employee's wages and services/goods from other companies.

      1. Graham Marsden

        @The Axe - Re: it's so unlike Tim Worstall to get the wrong end of the issue, isn't it?

        > For instance you say rich people can invest their money, taking it out of supply. Have you not thought about where that money is put?

        Yes, and so have the people at Positive Money who point out the fact that for the banks to create money, ie put it into the economy via loans, mortgages etc, they have to create *debt* which leads to such things as unaffordable housing and boom-and-bust economics.

        It seems that Parliament is finally starting to catch up with this idea as they are debating money creation for the first time in 170 years

    2. Squander Two

      Re: it's so unlike Tim Worstall to get the wrong end of the issue, isn't it?

      > It's a shame that TW starts off by saying "that is the only part of trickle-down economics that undoubtedly and provably works" and then goes off to attack Zoe Williams instead of dealing with the elephant in the room that the majority of so-called Trickle Down economics *doesn't* work.

      Well, since that's the part Williams was writing about, duh.

    3. Tim Worstal

      Re: it's so unlike Tim Worstall to get the wrong end of the issue, isn't it?

      It's not quite marginal propensity to consume (or its mirror and inverse, marginal prop to save) but about raising the income tax threshold. What looks like the second of my ideas to make it onto the statute books is that very thing: raising the personal allowance to something like the full year full time minimum wage.

      It's in the likely manifestos of three of the four major parties. It's in the Ukip one because I helped draft the last version and I put it there. It's in the Lib Dem one (a raise to 12.5k, which is what the min wage was when they started to think about it) because of some analysis I did about the Living Wage over at the Adam Smith Inst. I know which LibDem activist that convinced and which policy committees they took it through to get it into party policy. And Cameron of course is just copying Clegg and Danny Alexander.

      My point was, quite simply, that the Living Wage is a reasonable enough definition of poverty. It certainly constructs that measure the way Adam Smith would have approved of. But it's a pre-tax number. And the maths is that if the current minimum wage were entirely tax free (both income and NI) then the post-tax income from that minimum wage would be within pennies per hour of that Living Wage under the current tax system (this year it's 35p, in one calculation, or the min wage is actually higher if we include employers' NI).

      As I say, I can track that idea all the way from my scribblings to where it seems reasonably obvious that it'll make it into the statute books. Hurrah! and well done me, eh?

      That would be the second time I've managed this. The one already in law is shared parental leave. Again I can track it through the process and my initial point was that we don't have a gender pay gap in the UK, we have a motherhood pay gap. And one of the reasons that motherhood causes the pay gap is that women leave the workforce more often and for longer than fathers do. Shared leave wouldn't have been my solution but that is where it did come from.

      You're entirely right that I do tend to bash lefty economics whenever I get a chance. But this is not because I disagree with the aims of lefties, for the poor to become richer etc. Quite the opposite, I share that aim with a fervent adherence that would put even a Marxist to shame. It's just that that Great Experiment of the 20th century has convinced me that lefty *methods* don't get us there while broadly capitalist and free market ones, with a tad of judicious intervention, do.

      1. Graham Marsden

        @Tim Worstall - Re: it's so unlike Tim Worstall to get the wrong end of the issue, isn't it?

        > It's in the likely manifestos of three of the four major parties. It's in the Ukip one because I helped draft the last version and I put it there

        * * * * *

        Raising the tax allowance to £13,500 is a nice gesture and it’s going leave these people better off by around £50 per month but it isn’t nearly enough to cover the huge gap between pay and prices we pay. This particular policy was probably through up around the conference table as the cheapest, easiest way to attract minimum wage workers. ‘Tax cuts’ is a powerful peace of rhetoric to inspire those who need more money. In reality, it’s not going to make much of a difference. To be honest, it isn’t the minimum wage earns who will really benefit from this policy because what we always forget to take into account is how income based benefits, such as housing benefit or Tax Credits might change to reflect this extra money being available. Therefore, it is highly unlikely that minimum wage earners are going to be better off.

        * * * * *

        Bravo, Tim.

        Meanwhile, of course, UKIP's Manifesto (well, unless Nigel's changed his mind again) saying they're going to raise the threshold of the 40% tax rate to £45,000 which will give the comfortably well-off a double tax cut.

        And they're going to get rid of inheritance tax. How many people on minimum wage will that benefit?

        > It's just that that Great Experiment of the 20th century has convinced me that lefty *methods* don't get us there while broadly capitalist and free market ones, with a tad of judicious intervention, do.

        That would be the "Great Experiment" of the 21st Century known as Quantitative Easing, perhaps? The £375 *billion* which has been thrown into the financial markets whilst the Tories have been borrowing massively and created more debt than ever? Hmm...

        1. DragonLord

          Re: @Tim Worstall - it's so unlike Tim Worstall to get the wrong end of the issue, isn't it?

          From everything that I've seen about the tories trying to cut spending to below income is that the government is now in the same position millions of people in the UK are where their loans are taking up so much of their income that they've already stopped spending on anything they consider luxuries and are now having to cut into essentials which means that the amount they can cut is very limited.

  18. Boris the Cockroach Silver badge

    Trickle down

    does work

    But only if the person recieving the tax cut/funds goes out and disposes of all of that money into the economy

    Where it fails to work is when everyone who benefits from the tax cut , stuffs 1/2 the cash in an offshore bank account and hides the rest in the stock market, where it just drives up the value of shares

    Which is what actually happens

    1. Anonymous Coward
      Anonymous Coward

      Re: Trickle down

      "stuffs 1/2 the cash in an offshore bank account and hides the rest in the stock market,,,"

      or buys an island?

  19. anatak

    Formula 1

    Is probably also one of those rich men playground.

    I am pretty sure that most current car technology like ABS and assisted steering was pioneered in that game too.

    1. squigbobble

      Re: Formula 1

      ABS came from the aviation industry where the braking is almost always heavy, the runways are not always dry and, proportionally, you're stopping a car that's fitted with the wheels from a mini-moto.

      1. Tom 13

        Re: Formula 1

        Thanks Squig! I didn't know where ABS came from, but I knew it wasn't racing. Professional drivers HATE ABS. If you are skilled in what you are doing, you have more control without them. It's just the average punter who benefits. But I can see where even a skilled pilot would benefit from having them.

  20. Tom 35 Silver badge

    Trickle-down economics WORKS:

    No. Just no.

    It is like saying that if you want to get to the house next door to the east, walking west will get you there.

  21. Alistair Silver badge
    Coat

    notwithstanding the overall argument.

    There is merit in the TDE arguments. The larger point is that "the rich" tend to spend on things that require "the not rich" to work, and thus get paid, perhaps more than they would if "the rich" did not have the extra cash on hand. The depth, value and overall cost/benefit ratio arguements will go on for centuries AFTER we've disposed of this riduculous economic system. That is, if we survive long enough to evolve another economic system.

    Branson and Musk are both aiming to open up new frontiers so that we can get our collective butts off this rotating, orbiting single point of failure. They may not be doing this for altruistic motives (wont someone think of the species), but rather so that they can nick a penny off the top of the ticket, perhaps (figuratively), but it is an absolute requirement that we, as a species, get off the earth. Now, I certainly would be thrilled to be standing on a floating disk hovering over Venus harvesting (whatever) from the chemical soup that is its atmosphere, but I seriously doubt that I'll be around for that.

    Chemical access to orbit is ridiculously expensive, and will have to be outmoded at some time in the future, BUT in order to build those elevators, we have to get out there, and find the bits we need to build them in the asteroid belt or by catching very large, very fast footballs that go zinging by us once in a while. And the only way we're going to do that is by detonating large amounts of very dangerous chemicals underneath the butts of those going to do that job. Either from a rocket launch pad or from 40/50/60/70,000 feet up after being dropped from a carrier.

    I have to agree with "Space is hard", and the only way we get out there to do the work to make it happen is to make "Space is hard" read as "Space is doable with practice"... someone has to pay for the practice rounds. The governments around this planet are *ALL* (repeat after me ALL OF THEM) dead broke, and in debt to such an amount that its not feasable for them to rationally fund this. Therefor, Branson and Musk are doing what needs to be done.

    My sympathies, and most of my attention in this case lie with the family of the poor fellow that didn't make it, and my congratulations and support go to the fellow recovering from the crash. These two. BOTH of them deserve kudos, even if it was a manual screwup that brought it down, they have balls that damn few humans ever will have.

  22. FallenAngel

    Piffle using self selected evidence as proof

    What utter cobblers, many research projects over the decades have been state sponsored. I give you the Marine chronometer as an example, paid for by the British government and it revolutionised shipping in it's day, eventually trickling down to make goods cheaper for households worldwide. This wasn't done at the whim of what some rich lunatic fancied having a go at but on the opinion of a group of elected officials considering what would best benefit the country as a whole. According to Tim Worstall that should constitute PROOF that state sponsored research is the best way to go.

    Sadly this hoary old chestnut boils down to the same argument as the "charity is better than state benefits", they both essentially come down to let your betters do what they will and sometimes on a whim they'll give you some crumbs from their table.

  23. Anonymous Coward
    Anonymous Coward

    Perfect Analogy

    Using SpaceShipTwo as proof that trickle-down economics works:

    SpaceShipTwo "trickled down" back to Earth.

    Others would call that "crashed and burned".

  24. stu 4

    It's not the same thing at all

    You say yourself - some work some don't.

    Well what are the reasons for why some work some don't ?

    - popularity

    - ability to mass manufacture for buttons

    We've had aircraft now for over 100 years. We all want our flying cars a damn site more than a 5 minute trip on a rocket ship.... but we don't have em. why ?

    Because they can't be mass manufactured for buttons.

    I think it's great what Branson is doing. I think it's great what Audi did with the Veyron.

    But it's got FA to do with trickle down economics imho....

  25. yoganmahew

    Trickle where?

    It's quite a narrow definition of trickle-down you're using. For every billionaire spender, there are ten more accumulating property and other hard assets that in the long run reduce liquidity in what are already illiquid markets. There's not much trickle-down from these activities. Acquiring property may even have a negative wealth effect (cash pursuing illiquid assets pushes up prices of those assets beyond efficient levels).

    1. Brenda McViking

      Re: Trickle where?

      Even if they're acquiring illiquid assets - they're not doing it all on their tod, are they? Financiers, Estate agents, accountants, lawyers, all funding their own ostentacious lifestyles buying cars, food, triple-mark-up coffee and iPads, then making and maintaining them are the factory workers, the cleaners, the mechanics, the electricians and carpenters, the call-centre staff, and then, at the very very bottom, is the sysadmin who designed the entire infrastructure they all use. In his basement. and he's looking at the one plug socket which will bring the whole sorry state of affairs down.

      With a cattle prod in hand.

      KZZZRT!

  26. juice Bronze badge

    There's a difference between trickle-down technology and trickle-down economics, and this article seems to be confusing the two. It's also conflating "industrial" technological developments with "personal" technological developments, as well as the /purchase/ of luxury items versus the /creation/ of luxury items. Oh, and it's also completely omitted the role of government in technological developments.

    Overall, if it was a piece of GCSE homework, I'd give it a C-. Anyhow, to justify my marking...

    Trickle-down technology: yep, yesterday's high-end/luxury feature is today's mid-tier value-add and tomorrow's low-end commodity, whether it's something like car air-conditioning or a quad-core mobile phone with a HD-resolution screen. Though to counterpoint this, it's worth noting that companies often withhold technology trickle-down to avoid cannibilising the high-end market. This also means that the high-end market has higher profit margins: same equipment, different configuration, higher price. Microsoft and Adobe are key examples of this in the software world; AMD and Intel offer similar examples when it comes to CPU frequency/clock-speed locking.

    And whichever way you cut it, TDT is absolutely nothing to do with rich hobbyist tinkers, except for the fact that they're part of the initial "rich" group who can afford to buy thi

    ngs before they're commoditised.

    The other point is that the industries mentioned in the article (cars, rockets, IT, etc) have pretty much all developed out of government investment - which in turn has been mostly driven by war - WW1, WW2, the cold war, etc. In fact, the technological underpinnings which have allowed Branson and others (e.g. John Carmack) to try and progress space travel can be traced directly back to when the German government took a bunch of amateurs tinkering with rockets and threw lots of money at them; when WW2 ended, the same people ended up working for the USA and USSR governments.

    Trickle-down economics. In the simplest form, the idea is that giving tax breaks to the rich will improve the overall economy. However, there's a few flaws in this, the biggest of which is the assumption that the rich will go out and spend the extra money. Given that the rich (pretty much by definition) already have everything money can buy, they're far more likely to invest the money in abstracted, minimal-tax financial schemes - and these schemes are likely to be offshore and hence deliver little or no benefit to the local economy.

    Similarly, if the rich do spend more money, it's likely to be on "luxury" brands and services and as highlighted above, a significant percentage of the cost for these items is likely to be for the "brand" rather than the resources needed to produce it. To use Apple as an example (as it's cited in the article), a 64GB iPod Touch currently costs £250 at PC World whereas a 32GB iPod touch is £180. That's an extra £70 for just 32GB of flash memory, which can be currently had elsewhere for £10 - £15 so (to grossly simplify things), Apple is getting £60 of additional profit from the "luxury" model. And that profit's going straight back to Apple at the high end of the economy; the low end of the economy isn't seeing a single penny of it.

    Industrial technologies vs "personal" technologies. In brief, a personal technology is one where the technology can be mass-produced, it offers a significant improvement over "muscle power" and the ongoing cost of use is low enough for an individual to fund it. Bicycles, cars, computers, mobile phones: each one in turn offered a quantum leap forward in terms of travelling times, carrying capacity, processing capacity and communication capabilities - and the ongoing costs for each are relatively low, thanks in no small part to the fact that (to a greater or lesser degree) they're built on infrastructure derived (again!) in no small part from government investment.

    Industrial developments however, carry too high a cost for most individuals to afford them or are simply impractical for the majority of individual uses, so tend to be used for mass-transit. And guess what: these are (again!!) usually funded or at least partially subsidised by the government - aviation fuel and train infrastructure being two good examples.

    In fact, to keep with the aviation example: it costs around £7,000 to get certified on a light plance. Then, there's also the cost of maintaining the plane and buying the fuel, not to mention storage. Even hiring a plane is expensive; the cheapest I found at a glance online was £350 an hour; conversely, a low-end hatchback car can be hired for 3 days for just £40 - or effectively around £0.55 per hour!

    It's therefore unsurprising that a lot of pilots get their certification through a stint in the military... which is funded (again!!!) by the government.

    It's not unreasonable to expect that even when "commoditised", space-flight will prove to have a similar cost ratio when compared to aviation. Whichever way you cut it, climbing out of a gravity well requires a lot of energy, puts an incredible strain on components during flight and requires a lot more technology (e.g. vacuum seals, etc). And as for the cost of getting certification, there's probably going to be at least one extra zero tacked onto that £7,000!

    So, to summarise: Branson's investment is a good thing: he's not wasting his cash on "luxury" items and there's likely to be trickle-down technology. But space-flight will never be a commodity technology, nor will it ever be something that the average individual can personally own, and the trickle-down effect is likely to take years - if not decades - to manifest. And the vast majority of the money which comes out of developing space tourism will be going straight back into the high end of the economy. And it's all only possible thanks to that bogeyman of Republicans and Conservatives: big government. And any further significant developments (e.g. space elevators) will almost certainly have to be backed by big government, in much the same way as the Chunnel and other similar infrastructure projects have been.

    To offer a final counterpoint to the article: if you want to boost the economy, then a better approach would be to increase spending power at the bottom end, where it's much more likely to be spent on physical and/or low-margin goods and services which need (relatively speaking) much higher levels of resource to produce - and in far higher volumes, to boot. For instance, if you give a multi-millionaire an extra £250,000, he might go out and buy a single high-end car. Give ten non-millionaires £25,000 apiece, and they'll go out and buy ten mid-level cars. And aside from the ten-fold increase in resources needed to produce those ten cars, where a luxury car is likely to involve significant levels of imported resources (ranging from engines up to the assembly of the entire car), a much higher percentage of the resources for a mid-range car will have been drawn from the local economy - as will the resources needed to maintain those ten cars (e.g. garages, mechanics, etc).

    To offer a final counterpoint to the article: if you want to boost the economy, then a better approach would be to increase spending power at the bottom end, where it's much more likely to be spent on physical and/or low-margin goods and services which need (relatively speaking) much higher levels of resource to produce - and in far higher volumes, to boot. For instance, if you give a multi-millionaire an extra £250,000, he might go out and buy a single high-end car. Give ten non-millionaires £25,000 apiece, and they'll go out and buy ten mid-level cars. And aside from the ten-fold increase in resources needed to produce those ten cars, where a luxury car is likely to involve significant levels of imported resources (ranging from engines up to the assembly of the entire car), a much higher percentage of the resources for a mid-range car will have been drawn from the local economy - as will the resources needed to maintain those ten cars (e.g. garages, mechanics, etc).

    In fact, there's evidence to suggest that giving people a guaranteed basic income actually has a major benefit to the economy as a whole; not only does it simplify administration and thereby /reduce/ government, but it also has significant social benefits: crime drops, child nutrition and school attendence improves, people save more and produce more startups. In fact, that's pretty much the key premise behind the article - but instead of a small handful of Bransons and a small number of indirect long-term economic benefits, we get major direct ongoing economic benefits, hundreds - if not thousands - of entrepeneurs *and* Branson will still be free to tinker with spaceships - in fact, he may even have more cash to do so, if tax revenues rise to the point where government can cut taxes.

    Admittedly, the above is simplified and there's plenty of other factors to take into account. But hey... tis the end of the day.

    1. Vic

      usually funded or at least partially subsidised by the government - aviation fuel and train infrastructure being two good examples.

      I don't believe aviation fuel is subsidised - it's just subject to less taxation. This is actually pragmatic; if there is too much disparity between two countries' policies, fuel would simply be tankered in and kept airside. This isn't good for anyone.

      Even hiring a plane is expensive; the cheapest I found at a glance online was £350 an hour

      I pay £144 per hour wet. And I only pay for flying time, not time on the ground; if I faff for half an hour checking out the plane, fly for half an hour to another airfield, have an hour's lunch, then fly half an hour back - that's one hour for which I pay, despite having been in posession of the aircraft for 2.5 hours.

      Flying is very far from cheap, but it's not quite as bad as is often rumoured.

      Vic.

  27. Tom 13

    To return to the car industry, just about everything that makes automobiles safer – disc brakes, ABS, crash protection boxes, you name it – all of that has trickled down over the years from the more expensive to the cheaper models.

    And to extend the metaphor a bit, with the exception of automatic transmissions and maybe ABS, even those started out in the ultimate playground of the rich, automobile racing.

    1. Tom 35 Silver badge

      Things like disc breaks and fuel injection came from auto racing, but moved quite quickly to mid price cars. It was not Race car -> luxury car that cost as much as your house -> cheaper car. The only real exceptions I can think of are the super charger that never reached mid price or cheap cars and power assisted brakes that first appeared in very heavy cars like Rolls and not cheaper cars until US cars started getting big and heavy. Auto racing is hardly the ultimate playground of the rich, there are loads of races that use near stock cars (add a roll bar, take out the extra crap like passenger seats and not much more, you could buy a factory race version of a Neon for under $30k, the Mini won lots of rallies.

      Ultimate playground of the rich? Maybe sea going yacht races, something that might develop a new material or two but that's about it.

      But non of this has anything to do with trickle down economics.

      1. Vic

        Things like disc breaks and fuel injection came from auto racing

        I have a sneaking suspicion that they came from aviation...

        Vic.

  28. ecofeco Silver badge

    Virgin Space helps, who?

    Maybe it's just me, but I don't see the connection between a $250,000, 5 minute ride and how this helps the average working person who would need 20 years to make that kind of money.

    Naw, I'm pretty sure there is no benefit.

    Unless it was satire so subtle I may have missed it. Yeah, that was probably it.

    And I even love all things space.

    1. Richard 12 Silver badge
      Facepalm

      Re: Virgin Space helps, who?

      Maybe it's just me, but I don't see the connection between a $200,000 motor car and how this helps the average working person who would need ten years to make that kind of money.

      The only possible connection I can see might just be that 100 years later, almost everybody reading these words can now afford to buy a motor car of their very own.

  29. Sebring

    Timmy up to his usual tricks, I see

    Use an unrelated tech topic to provide a sheen of respectability to discredited economic theories.

    Rinse and repeat.

    (Are Reg readers still falling for this medicine show?)

  30. Kepler
    Joke

    Galbraith's definition of "trickle-down"

    I once heard the late John Kenneth Galbraith define "trickle-down" as "the notion that by giving oats to the horse, we benefit the sparrows." Or something like that.

  31. PGTART

    Space is no good

    Well basically your burning 90% fuel and you do about 10% new science.

    I think it would be better to do big projects here on earth.

    They could push green energy for example (and even get a return in costs).

    Maybe just an idea we should stop making areas of the planet live-able, which are by climate definition not live-able for large populations. I think it would be better for those areas to invest in birth control, fixing those problems at the base.

    1. lucki bstard

      Re: Space is no good

      ' I think it would be better for those areas to invest in birth control, fixing those problems at the base' - And exactly which areas of the world are you going to get to agree to that?? Be realistic please.

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