# An Economic Strategy for American Space Supremacy  ## Metadata - Author: Alexander William Salter - Full Title: An Economic Strategy for American Space Supremacy - Category: #articles - Document Tags: #business & finance - Summary: The U.S. leads in commercial space but lacks a clear economic strategy to divide public and private responsibilities. We must pair market-driven innovation with smart contracts, shared insurance and deliberate redundancy so assets stay available in crises. Urgent, resilient policies and international cooperation are needed to keep America competitive and secure against China and Russia. - URL: https://spacenews.com/an-economic-strategy-for-american-space-supremacy/ ## Highlights - President Trump’s [recent executive order](https://www.whitehouse.gov/presidential-actions/2025/08/enabling-competition-in-the-commercial-space-industry/) promoting commercial space competition highlights America’s [unique advantage](https://www.nationalreview.com/2024/06/how-america-can-win-the-new-space-race/) in the final frontier: our dynamic commercial space sector. American companies such as SpaceX, Planet Labs and Sierra Space are rewriting the rules of space access and operations. But as we celebrate these achievements, we must acknowledge a difficult truth: the United States lacks a coherent, economically informed strategy for allocating responsibilities between the private and public sectors in space. ([View Highlight](https://read.readwise.io/read/01k4q2zc7c441nkva8zaepvzym)) - This is a high-stakes issue. Our commercial space dominance creates extraordinary opportunities for economic growth and bolsters national security. Yet this very success makes us comparatively more vulnerable to strategic rivals who understand that targeting our space capabilities could cripple our economy and military effectiveness. [China](https://www.defenseone.com/threats/2025/04/how-china-expanding-its-anti-satellite-arsenal/404283/) and [Russia](https://www.wsj.com/opinion/a-space-treaty-to-stop-debris-antisatellite-junk-orbit-kessler-syndrome-russia-weapon-11637074865#comments_sector) are actively developing counterspace weapons precisely because they recognize our dependence on space-based infrastructure. ([View Highlight](https://read.readwise.io/read/01k4q30agm555e1tz45m8tx9r0)) - The Space Force’s [Commercial Space Strategy](https://www.spaceforce.mil/Portals/2/Documents/Space%20Policy/USSF_Commercial_Space_Strategy.pdf) explicitly calls for integrating commercial partners into national security operations, recognizing companies like SpaceX as effective national champions. Up-and-coming firms like Firefly and Axiom Space represent the next wave of this commercial revolution. This partnership offers tremendous benefits: rapid innovation, cost reduction and an entrepreneurial vigor that rivals [simply cannot match](https://chinaspacemonitor.substack.com/p/51-rocket-production-sites). ([View Highlight](https://read.readwise.io/read/01k4q31cfprd511m4j9ppm4k2y)) - America remains the world’s premier space power, but that dominance is also a source of vulnerability. Our space-augmented strengths [necessarily imply](https://www.econlib.org/library/Topics/Details/comparativeadvantage.html#:~:text=A%20person%20has%20a%20comparative,comparative%20advantage%20at%20doing%20it!) space-deprived weaknesses. Rivals understand that undermining our space architecture represents their best chance to level the playing field. One response is proliferation: deploying so many commercial satellites and space assets that it becomes prohibitively expensive for adversaries to target our entire space infrastructure. ([View Highlight](https://read.readwise.io/read/01k4q34rbp4pv5r5998dhk599v)) - Conventional welfare economics, which emphasizes optimal taxes and subsidies, isn’t adequate for space policy. Nearly every space asset is dual-use: Civilian satellites can generate military intelligence and commercial communications networks can support defense operations. These overlaps make it extremely difficult to align private incentives with social or national security benefits using fiscal and regulatory tools. And even if we could, the implied goal — economic efficiency — is not the right one in a contest among nations. ([View Highlight](https://read.readwise.io/read/01k4q35tt1t2djt0t631m0qx55)) - We can do better by incorporating the economic concepts of robustness and resilience into our space strategy. [Robustness](https://www.peterleeson.com/robust_political_economy.pdf) means finding policies that work well despite imperfect information and weak incentives. Resilience means [deliberate redundancy](https://nationalinterest.org/feature/does-united-states-need-reserve-space-fleet-206519), which economists can model as an [option value](https://sloanreview.mit.edu/article/make-smarter-investments-in-resilient-supply-chains/). Maintaining multiple pathways to critical objectives is worthwhile even when some appear superfluous. ([View Highlight](https://read.readwise.io/read/01k4q377rpqx0sms632xh3zna0)) - Robustness and resilience require us to adopt a balanced strategy for the space supply chain. Here are three possibilities. First, the Space Force could implement systematic [diversified supplier requirements](https://media.defense.gov/2022/Feb/24/2002944158/-1/-1/1/DOD-EO-14017-REPORT-SECURING-DEFENSE-CRITICAL-SUPPLY-CHAINS.PDF), mandating that critical capabilities like satellite communications, Earth observation and space situational awareness come from at least three independent providers. Second, the Department of Commerce could spearhead the creation of government-backed insurance cooperatives that small and mid-sized space companies can join to share catastrophic loss risks. Third, the Space Development Agency could fund parallel technology pathways beyond their current [tranche](https://www.sda.mil/wp-content/uploads/2023/07/Tranche-0-Fact-Sheet_FINAL_UPDATED_real.pdf) programs, supporting both quantum-encrypted communications and traditional RF backups, multiple satellite manufacturing approaches and diverse orbital architectures simultaneously. ([View Highlight](https://read.readwise.io/read/01k4q38mw9kdxsttyvwprtr9nm)) - The ultimate goal is convincing our rivals that it’s in their interest to compete on our terms through innovation and economic development rather than destructive conflict. We have a short window of opportunity to set the stage to our liking. With China experimenting with [reusable rockets](https://spacenews.com/china-is-about-to-start-trying-to-land-and-reuse-its-rockets/) and planning to deploy [thousands of satellites](https://spacenews.com/china-enters-race-for-leo-broadband-dominance/) in the next decade, the competitive balance could shift before we are fully prepared. There is no time to lose. ([View Highlight](https://read.readwise.io/read/01k4q3dahak64ebtc57nq946gg)) - Second, we must resist the temptation to hamstring our commercial sector with pleasant-sounding yet burdensome regulation while rivals race ahead. Preserving the integrity of orbit is a worthy goal. We should pursue it. But in a multipolar world, we cannot afford to be the only nation concerned about sustainability if it means losing the next space race. ([View Highlight](https://read.readwise.io/read/01k4q3f2zj77xq4xr0y11da05z)) - An economically informed space strategy suggests several actionable policy steps. First, we need institutional arrangements that balance commercial efficiency with strategic reliability. This means expanding programs like CASR, developing new mechanisms for ensuring commercial availability during crises and embracing hybrid architectures that integrate government and commercial capabilities without blurring their respective functions. This requires capable management at the highest levels of government. Fortunately, it looks like policymakers are coming around. The recent elevation of the Office of Space Commerce within the Department of Commerce signals recognition that commercial space policy deserves cabinet-level attention. ([View Highlight](https://read.readwise.io/read/01k4q3f70rhmqy04t5m5t8bp5k)) - Third, and most immediately, the relevant agencies must implement Trump’s executive order in ways that streamline commercial access while maintaining strategic oversight. This requires understanding when markets or governments should take the lead — exactly the kind of economic analysis that should inform our space strategy. Means-ends thinking is indispensable. But policymakers must not fall into the trap of reducing ends to the common denominator of economic efficiency. Instead, economic reasoning guided by statesmanlike prudence recognizes that national priorities have value even if they can’t be priced. ([View Highlight](https://read.readwise.io/read/01k4q3f9wsxck5ycgysn7g0y8n))