From: szabo@techbook.com (Nick Szabo)
Subject: Socialist myths about investment
Organization: TECHbooks --- Public Access UNIX --- (503) 220-0636
Date: Tue, 29 Sep 1992 01:35:19 GMT


>>[Chevron planning Siberian oil & gas field investments out to
>> 2030, debunking socialist myth about the market's "short-term
>> orientation]

In article <1992Sep28.124207.3862@ke4zv.uucp> gary@ke4zv.UUCP (Gary Coffman) writes:

>Chevron, and other utilities and quasi-utilities do make long range
>investments, but the overall risks are low and well understood.

They are well understood, for the most part.  They are not low, as
you yourself note the high rate of dry holes -- sometimest whole fields
end up dry.  There are also less-well understood risks, such as the
political climate in Russia.  (Or in the U.S.!)

This doesn't stop them when the product they are after is useful,
people will be it, and they'll make money.  It should stop
them when there is little desirable product or service, like the projects
you are promoting.

>When the risks of space exploitation reach similarly low and well understood 
>levels, there won't be a problem with investor owned utilities working 
>in space. Comsats have already reached that point.

Were comsats at that point in 1962, when AT&T had invested over $300
million ($92) of its own money, and Hughes a big chunk of its own
money, before NASA stepped in and claimed credit and Congress forced
AT&T out of the business?  One wonders why comsats reached that
point so quickly, while we've spent $100's of billions on astronaut
projects and space stations that never have.  It must be "short-term
thinking" to spend money wisely and do something useful.

>Nowhere has anyone yet hit a gusher in space that justifies
>a lot of dry holes.

In fact, we are learning about the Jupiter-family comets, which will
be the oilfields of the 21st century, fueling the cargo rockets
plying between the planets major and minor.  It's just that
NASA and most space fandom is living back in the 1960's,
when socialism was the utopia and the space program the epitomy of 
the glories of socialism, and who gave a damn if it was useful.
Too many still live under the delusion that NASA is providing a 
rational vision for space development.  It should be commerce, or at 
least an applications and business orientation, providing the leadership, 
not a washed-up "vision" of yesteryear that has already squandered 
$100's of billions from our treasury.

>Governments, though subject to year to year political infighting, can
>make long range high risk commitments since they aren't required to
>show a quarterly profit to their investors, the taxpayer.
And indeed, we have $100's of billions worth of failures, and practically
no commercial successes, to show for this risk-taking.  How is this
supposed to be good?

>Since most
>space exploitation projects don't have short timeframes on their returns, 
>venture capitalists tend to avoid them. 

This is nonsense.  VC's regularly invest in biotech companies where 
revenue doesn't start coming in until 10-15 years after the investment,
if the drug doesn't fail completely, eg to get FDA approval.


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