In July 1850, in the bustling heart of Paris, Frédéric Bastiat published a work that would soon become a cornerstone of economic thought. Titled What Is Seen and What Is Not Seen, the book introduced a simple yet powerful parable—the broken window fallacy. Bastiat argued that while a shattered window might seem to stimulate economic activity through its repair, the truth is that the money spent merely returns the world to its previous state, erasing the potential for genuine growth and innovation.
Skipping the Mirage of Disruption…
Fast forward nearly two centuries, and Bastiat’s insights feel more urgent than ever. Today, we witness technological promises that dazzle headlines but often fall short in delivering real value. Consider the case of Elizabeth Holmes, once celebrated as a visionary in the tech world. In November 2022, she was sentenced to over 11 years in prison for defrauding investors of $1.2 billion through Theranos—a company built on technology that, as it turned out, simply did not work. Holmes’s downfall is a stark reminder that capital invested in ventures without true utility can lead not only to financial loss but also to shattered reputations.
… and Cultivating Disciplined Investment in Space Ventures
This cautionary tale resonates deeply with emerging sectors, particularly in the space industry. While space has long been regarded as the final frontier—a realm of boundless potential and discovery—today’s investments should be increasingly scrutinized. Questions abound: Is storing DNA in a CubeSat useful? Does drop-shipping keepsakes to the Moon justify the costs? What about space tourism or asteroid mining—are these ventures truly advancing human progress, or are they modern incarnations of the broken window fallacy, where capital is expended without yielding tangible benefits?
The argument is straightforward. If capital growth is to contribute meaningfully to society, it must be directed toward initiatives that create lasting value. This means looking beyond immediate financial returns and considering broader externalities—such as preserving our environment, advancing scientific knowledge, and ensuring that technological progress translates into real improvements for humanity.
Critics point out that many entrepreneurs in the space sector are not deceitful frauds but idealists, genuinely believing their innovations will change the world. Yet, history teaches us that hubris can cloud judgment on both sides of the capitalist system. Investors, fund managers, and even governments must therefore resist the temptation to chase trends and glittering promises. Instead, a more disciplined approach is needed—one that rigorously assesses the depth of a project’s utility before committing capital.
Investing with Purpose
The stakes are high. The space industry, with its potential to reshape our understanding of Earth and the cosmos, should contribute to our survival on this planet rather than become a graveyard of wasted investments. Large banks and funds have already integrated environmental, social, and governance (ESG) principles into their decision-making. It is time for specialized space investors to adopt similar criteria, ensuring that every dollar invested serves a higher purpose.
Some advocate for a form of thoughtful oversight—not to stifle innovation, but to safeguard against capital being funneled into projects that promise much but deliver little. Soft regulation, akin to managing radio frequency interference through bodies like the ITU and WARC, could provide a necessary filter, ensuring that the market does not alone shoulder the burden of determining what constitutes genuine utility.
Forging a More Sustainable Space Future
As uncertainty is an inherent part of any venture into the unknown, a collective commitment to substance and credibility is essential. The goal should be to transform space from an arena of speculative ventures into a robust field that supports sustainable progress—one that protects not only human life but also the ecosystems that sustain us.
In the words of Bastiat, “The worst thing that can happen to a good cause is not to be skillfully attacked, but to be ineptly defended.”
As we set our sights on the stars, let us ensure that our investments are as visionary as they are grounded in reality. Only by defending the cause of sustainable, useful space applications with wisdom and integrity can we hope to secure a future where capital growth truly advances human flourishing.
Further reading
« The lunar economy is not a myth » – François Dubrulle (Interview)
SMRs are the key to Europe’s climate goals and energy independence
« Yes to the AI Act, but with moderation » – Thierry Berthier (interview)
“If you don’t have metabolic health, you don’t have anything” Robert Lustig (Interview)