It’s important to understand how SpaceX got to where it is, because it’s often reduced to a “commercial versus government” narrative that is not really accurate.[1] I say this not to take away from SpaceX’s very real entrepreneurial spirit, but simply to fill in the rest of the picture and make the point that “get government out of the way” is not the answer here.

SpaceX received government funding in its early days from DARPA, who hoped to spur the development of small launch vehicles. This money was essential in getting the company to the launch pad. SpaceX ultimately abandoned its small Falcon 1, but a DARPA official said much later that the government had more than gotten its money’s worth from helping jump-start SpaceX.[2]

In 2006, NASA started an innovative program to fund private contractors to develop systems to deliver cargo to ISS. This is sometimes looked at as a dramatic departure from past “government run” NASA programs, but the truth is that all those old programs like the Apollo CSM/LM and Saturn V were also contracted out to private companies. What NASA did differently with Commercial Cargo (and later Commercial Crew) was that it contracted on a fixed-price basis rather than the usual cost-plus system which more or less incentivized the contractors to make things cost more money and take more time (except in special cases like Apollo where there was serious political pressure on the companies to deliver on-time and on-budget). SpaceX ultimately won one of these development contracts, which allowed it to start developing the larger Falcon 9 and the Dragon capsule.

In 2008, after SpaceX first launched Falcon 1 successfully, the company actually still nearly ran out of money. It is not easy to find customers to fly their expensive satellites on a barely-proven new rocket. Fortunately, they won the contract to operate supply deliveries to the ISS (the follow-on to the 2006 development contract). This money saved the company. Even Elon Musk (who isn’t the biggest fan of sharing credit and who will happily call out the government when he’s mad) will tell you that SpaceX would not be here without NASA.

Since then, SpaceX has won the Commercial Crew contract in addition to Commercial Cargo. In addition, SpaceX has launched numerous satellites for NASA and the military.

It’s important to note, contrary to the company’s detractors, that this government money was not some kind of corrupt “giveaway” to SpaceX. NASA and DARPA paid SpaceX to develop and operate useful services for the government. We all benefit as taxpayers from the savings that SpaceX has delivered over the legacy contractors.

The lesson for Europe here is definitely not to stop letting the government plan anything. Commercial cargo and crew capabilities exist in the United States today because the government planned for it. And they also exist because the government was flexible with its plans and partnered with whoever had the most promising ideas instead of insisting on doing everything through the same legacy contractors with the same ineffectual contracting methods. That’s been a really hard lesson to learn, and Congress mostly still hasn’t learned it (larger NASA programs like SLS and Orion are still done the old cost-plus way with the same gravy-train lobbyist-heavy contractors; Commercial Cargo and Crew barely slipped through because they were small and not taken seriously by the space-industrial complex). It will be hard for Europe too, who has a symbiotic relationship with legacy job-machine contractors like ArianeGroup. I really hope they can learn it, because humanity will benefit when cheap reusable launch is common around the world.

[1] Eric Berger, the author of this article, does a good job of painting this full picture (in fact he just wrote a great book about the early days of SpaceX called “Liftoff”), but journalists who aren’t as familiar with the industry tend to miss the picture.

[2] Again see “Liftoff” by Berger.