Space: the final frontier for the planet’s wealthiest?
Space travel was once about collective efforts to go beyond the limits of one’s imagination. Now it’s an exhibition of extreme entitlement
On 20 July, Amazon founder Jeff Bezos became the second billionaire in a matter of weeks to take a flashy joyride into space. The date was significant, marking 52 years since the first moon landing in 1969.
Nine days previously, another billionaire, British business mogul Richard Branson, had also taken off for the edge of space. A third billionaire, Tesla and SpaceX founder Elon Musk, has reportedly reserved a seat to visit space with Virgin Galactic, Branson’s company.
What’s the point of these intergalactic endeavors? The three billionaires claim it’s a necessary, almost philanthropic, investment in the future of humanity.
Bezos, who founded his Blue Origin rocket company more than 20 years ago, ultimately wants to build space pods, in which “trillions” of people would live and work – an idea thought to have been influenced by one of his Princeton professors, Gerard K O’Neill.
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“The solar system can easily support a trillion humans,” Bezos said. “If we had a trillion humans, we would have a thousand Einsteins and a thousand Mozarts and unlimited, for all practical purposes, resources and solar power.”
Branson, who first announced his intention to make a space plane in 2004, to ferry hundreds of thousands of ordinary people into space, argues that trips to space will help preserve Earth. “I want people to be able to look back at our beautiful Earth and come home and work very hard to try to do magic to look after it.”
Musk, meanwhile, has an even more outrageous plan. He says human beings should be a “multi-planet species” and prepare to settle on Mars.
But as well as an obsession with space travel, the three men have something else in common: all have track records of avoiding or minimizing their tax bills.
Amazon, Bezos’s company, finally paid some federal tax in 2019 after two years of paying $0 in US federal income tax. In fact, in both 2017 and 2018, Amazon actually received a federal tax refund of $137m and $129m respectively. In 2020, corporate filings by Amazon EU Sarl – the company’s Luxembourg unit, through which it handles sales for its European operations – showed record-high income for 2019, but it still managed to pay zero corporation tax.
As for Bezos himself, according to an investigation published by ProPublica in June, his wealth increased by $127bn between 2006 and 2018. During that period, he paid a ‘true tax rate’ of just 1.1%.
The billionaire space race comes at a time when 712 million people live in extreme poverty
Branson, meanwhile, has paid no income tax in his home country since moving to Necker, a tax-free island in the Caribbean, 15 years ago. The billionaire, whose fortune is estimated at $6.6bn, has dismissed the resulting criticism and claimed that he and his wife “did not leave Britain for tax reasons but for our love of the beautiful British Virgin Islands and in particular Necker Island”.
According to ProPublica, Musk is one of thousands of America’s wealthiest people who has managed to avoid paying much tax. Musk, whose estimated net worth is $178bn, paid less than $70,000 in US federal income taxes between 2015 and 2017 and nothing at all in 2018. He simply borrowed money from Tesla and didn’t take a salary from the company.
Behind all the big talk of saving humanity, critics fear the billionaire space race is really about something else entirely: ego and commercial ventures.
Virgin Galactic’s ultimate goal is to deliver at least one flight of tourists into space every day, and Branson’s flagship launch is thought to have had huge propaganda value for the company. It is expected to take paying passengers in its rocket-planes from next year.
Blue Origin is already pursuing several business opportunities in space, including contracts for a NASA moon lander and US defense department satellites. According to Blue Origin CEO Bob Smith, it is also planning half a dozen human spaceflights next year, “getting to an every-two-weeks kind of cadence… [and] tens of millions of dollars of sales”. Meanwhile, SpaceX is building an enormous rocket called Starship for its planned Mars missions, to add to its already lucrative space business, even as Musk sanctimoniously declares, “space represents hope for so many people”.
The billionaire space race comes at a time when upwards of 712 million people worldwide live in extreme poverty – defined as subsisting on less than $1.90 a day – and more than 34 million are one step away from starvation, while 4.2 billion people do not have basic sanitation and three billion lack basic hand-washing facilities.
In the US, which Bezos credits as the reason for Amazon’s success, hundreds of schools have lead in their drinking water, the poverty rate stands at 10.5%, and decades of under-investment in infrastructure raises the specter of catastrophic collapses of aging bridges and rail lines, dam breaches, and failing water and electricity supplies. President Joe Biden’s Democratic Party wants to raise taxes on the rich to pay for badly needed infrastructure upgrades and to combat climate change.
The world’s ten richest billionaires saw a $540bn wealth increase between March and December 2020
Some years ago, lovemoney.com, a personal finance site, compiled a rundown on what it would take to fix the world’s biggest problems. It found it would take $1bn to eliminate trachoma, a disease that causes blindness; $1.5bn to eradicate polio; $6.3bn to wipe out canine rabies; $8.5bn for malaria; $30bn a year to end hunger; $150bn to provide safe drinking water and decent sanitation to everyone, everywhere; and $175bn to lift hundreds of millions of people out of extreme poverty.
The figures were much larger than the $75bn considered by Bjorn Lomborg, head of the Copenhagen Consensus Center think tank and former director of the Danish government's Environmental Assessment Institute. Lomborg’s 2013 book, ‘How to Spend $75 Billion to Make the World a Better Place’, took advice from 50 of the world’s leading economists on how to spend money smartly and do the greatest possible good.
The biggest priority, the panel of experts said, was to fight malnutrition with an investment of $3bn annually. The second priority – at a mere $300m, according to those experts – was preventing child deaths from malaria. Other priorities included investments in tuberculosis treatment, childhood immunization, an HIV/AIDS vaccine, and low-cost drugs for heart attacks, as well as research and development to increase agricultural output.
These are all good ideas. And clearly possible for the very wealthy to fund on their own, should they be so minded. But here’s a better idea: let’s ensure the wealthiest on the planet pay higher taxes. Rather than offering charity at whim from the proceeds of millions in tax avoidance, billionaires should be made to pay their fair share.
In January, the UK charity Oxfam issued a report titled ‘The Inequality Virus’. It said that billionaires’ wealth worldwide increased by nearly $4trn between 18 March 2020, when the pandemic began, and 31 December 2020. The world’s ten richest billionaires – with Bezos and Musk leading the pack – have collectively seen their wealth increase by $540bn over this period. That amount “is more than enough to prevent anyone on Earth from falling into poverty because of the virus, and to pay for a COVID-19 vaccine for everyone”, the report added.
No one really expects such a dramatic redistribution of wealth to occur. But were the richest to pay higher amounts in tax, at least in democracies, it would provide the essential resources governments need to fix roads, improve schools, give nurses and teachers their due, and set up social care facilities.
Once upon a time, space travel was about a collective effort by a country to go beyond the frontiers of imagination. Now, it is an exhibition of extreme entitlement.
There is no particular reason to stop the rich from spending their own money to indulge their dreams of space exploration, so long as they also pay their dues.
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