Brad Miller

Archive for the ‘Free Market Miracles’ Category

Brand Differentiation – Red Bull vs. NASA

In Free Market Miracles, Liberty, True nature of the State on October 18, 2012 at 6:14 pm

On Sunday Oct 14th, “Fearless” Felix Baumgartner set world records for skydiving when he leaped from an altitude of 128,000 ft. What makes this even more amazing than him becoming the world’s fastest unassisted human being, traveling at over 884 mph at one point in his free fall, is that the endeavor was a completely private enterprise. It was a Red Bull energy drink publicity stunt to the edge of space. The entire purpose of the event was to further differentiate the brand of Red Bull from the other energy drinks on the market.

Red Bull has a history of these kind of “stunts” but this one by far is the most impressive. It got me to thinking about how NASA and the entire “Space Race”, which was really one big PR stunt The two competing brands for world Market Share were NASA and the Soviet Space Program who were selling their country’s brand of Statism around the world.

NASA and the equivalent Soviet Space program were trying to “Sell” their government’s ideology through “publicity stunts” in Space. When we look at the Space program in this manner it clarifies the difference between what Red Bull accomplished this week and what NASA has done in the past. One of them is a champion of Privately owned capital and profit seeking while the other is an inevitable example of what happens when Government steals from the productive and collectivizes that property.

Red Bull has made its founders Billionaires. NASA has had its budget cut repeatedly and is being relegated to the history books. Red Bull’s founder’s created an entire market for energy drinks that will soon be worth 52 billion dollars. NASA is relying on the Russians to ferry astronauts to the ISS. The founders of Red Bull were told by a research firm that the product would fail, they now sell 4 billion cans a year.  Because of privately held capital and Mateschitz’s vision Red Bull now owns an F1 team, two soccer teams, a NASCAR team and a hangar full of restored vintage planes. While NASA has retired its costly and deadly Space Shuttle and which are now  collecting dust in museums.

That is appropriate if you think about it. That is where Government programs should go, to the dust bin of history. They are inefficient and waste valuable resources. Socialism, as Mises wrote will always fails because it lacks the pricing mechanism, stated differently Socialist systems lack the ability to calculate economically. That is the difference between the success of Red Bull and the failure of NASA and all other government programs.

Today we hear so much about how the Free Market and Profit seeking is destroying the “Economy”. But those love Liberty know that is false. As the United States Federal Government Collectivizes more and more individual wealth in this country it is destroying the Free Market. There are some bright spots still and that is why I love the story of Red Bull and the other private companies that are charting a new Era of Freedom in Space.

A perfect example of this is the LunarX prize. That is a prize offered to the first private non-governmental entity that can successfully launch, land, and operate a robot on the Lunar Surface. When the prize was first conceived NASA was going to be the sponsor. But due to budget cut backs they backed out. Google became the main sponsor and upped the prize money from 20 million to 30 million. It also opened the competion to all individuals regardless of what country they lived in and created bonus challenges. The most intersting bonus challengs awards an extra million dollars to the compnay that whose robot takes pictures of the Apollo 11 site and beams them back to earth. Private Enterprise always trumps State Enterprise.

The private space industry is growing everyday while the Space programs of the world are faltering or completely failed. There will be in the next five years an explosion of private space travel, while Government space programs will have to buy time like anyone else on the privately owned rockets and space stations.  Armadillo Aerospace, Bigelow Aerospace and Virgin Atlantic all see Space as a huge opportunity that government planners could never fathom. In other words some of the richest men in the world are investing billions of dollars into Privately owned Space travel and Space Stations. Why? Because just like Red Bull they are doing so for profit. Now their business models are very different from Red Bull but upshot is the same, going to Space makes economic sense to them. They see Profit in the Stars.

I hope that the amazing feat of Fearless Felix  and Red Bull will spark people to  ponder the difference between Privately owned vs. Collectively owned Capital. We can have more Red Bull,’s amazing Marketing trips to the Edge of Space,  Virgin Galactics Space Tours, Bigeolow Private Space Stations or we can have more mothballed Space Shuttles. The choice is ours. Diffusion of Knowledge within a society as Hayek wrote, can only be efficiently utilized if people are free to trade their knowledge and products and services which it creates, freely with each other.

When the State steps in and its central planners tell you that they know how best to spend your money, think of Red Bull and Fearless Felix. And think about the harmony that the Spontaneous Order of the Free Market facilitates versus the limitations and failures of Government Space Programs.

The Red Bull Stratos jump is a victory for not only Felix Baumgartner and Red Bull but also for the Free Market. It is an amazing story that an energy drink company from Austria can mount a manned mission to the edge of space and land him safely home. That is incredible. In twenty years from now instead of the NASA Logo or any other Government logo on the side of rockets there will be logos of Companies and even individuals. It will be Private Companies like Chevy, Ford, and Toyota do now in NASCAR, with all their associated sponsorships competing to take people and cargo into Space.  And I have a feeling Red Bull will continue to be a key player in getting people to the stars. And it will not be for the reason of  “National Pride” or “Collective Security” but for “Brand Differentiation and Profit”

Capital in the hands of Private individuals is the superior way to live as human beings. Being able to trade and keep the profits from the products and services created by Private Capital Leads to amazing inventions and betters everyone’s life. This is demonstrated by the successful track records of the entrepreneurs who are leading the privatization of space travel. Men like Dietrech Mateschitz co- founder of Red Bull and the Stratos jump , Robert Bigelow a hotel chain owner now designer and manufacturer of Private Space stations with his Bigelow AeroSpace company who currently has two prototypes orbiting earth, Richard Branson Aviation and telecom mogul with his Virgin Galactic and private space tours,  Peter Thiel founder of Pay Pal and investor in Space X which recently delivered cargo to the ISS, Paul Allen co-founder of Microsoft and StratoLaunch which won the Ansari X Prize in 2004, and John Carmack Founder of id Games and Armadillo Aerospace who is building lower cost reusable rockets; all prove that privately Owned Space flight is another example of how Individual Liberty is always superior to Collective Coercion.

Ayn Rand would have been very proud of Felix Baumgartner and Dietrich Mateschitz of Red Bull. This is her summation of her philosophy circa 1936:

” To make my life a reason unto itself. I know what I want up to the age of two hundred. Know what you want in life and go after it. I worship individuals for their highest possibilities as individuals and I loathe humanity, for its failure to live up these possibilities…”

Brad Miller

AdvocateofLiberty and Privately Owned Capital

If you want to learn more about the men and women who are living up the the highest possibilities in private space travel check out these sites.

http://www.redbullstratos.com/

http://www.googlelunarxprize.org/

http://armadilloaerospace.com/n.x/Armadillo/Home

http://www.virgingalactic.com/

http://bigelowaerospace.com/

http://bigelowaerospace.com/genesis-2-tracking.php Track in real-time the position of the Genesis II prototype Private Space Station launched by Bigelow Areospace in 2010.

Leonard Read’s “I, Pencil”: Still relevant 53 years later

In Advocates of Liberty, Free Market Miracles on August 29, 2011 at 1:28 pm

Leonard Read the founder of FEE and a champion of the Freedom Philosophy published his most famous work “I, Pencil” in 1958.

http://fee.org/wp-content/uploads/2009/09/I-Pencil-2006-edition.pdf

   “I, Pencil” is a short, succinct story that dispels at once the “know-it-all-ness” of central planners by illustrating how not a single man on Earth knows how to make a simple wooden pencil.

    By tracing the manufacture of himself, the “pencil” reveals that millions of individuals had their hand at helping him come into being. The story brings to life the  miraculous “spontaneous order” that the “invisible hand” brings about when individuals free of coercion exchange upon the Free Market.

“I, Pencil, am a complex combination of miracles: a tree, zinc, copper, graphite, and so on. But to these miracles which manifest themselves in Nature an even more extraordinary miracle has been added: the configuration of creative human energies— millions of tiny know-hows configurating naturally and spontaneously in response to human necessity and desire and in the absence of any human masterminding!” 

  The pencil traces its genealogy  from a single tree to all the other natural resources and human energy needed to bring about its existence. He explains that it’s not just the person who fells the tree, mines the graphite or runs the machines in the pencil factory that are responsible for his creation.  What is unseen in the creation of the pencil is the millions of individuals who mined the ore for the steel to make the saws and machinery and the ships and trucks. Then there are the men who are unseen who are involved in getting oil out of the ground, refined and transported. Taken a step further there are the other individuals who go unseen who produce the food, clothing and housing for the workers who build the saws and machines, drives the trucks, mines the ore, fell the trees, produce the lacquer and finally runs the pencil making machines.

   The revelation that millions of people are needed to produce a single pencil changed the way I viewed the world. Sir Isaac Newton is credited with saying that “We stand upon the shoulder of giants” when he referred to his accomplishments . “I, Pencil” illustrates a similar truth that we all are dependent upon on the millions of people around the world who everyday  have a hand in making the things we buy.

   Stressing the need for “faith in Free People” the pencil implores the reader to contemplate that these millions of exchanges that must occur for him, a simple pencil, to come into being are not directed by anyone in government. They are the result of free individuals using their small amount of knowledge to produce their small piece of a product that others want in exchange for products and services they want.

   This story is similar to what Bastiat wrote a hundred years before “I, Pencil”. In Natural and artificial Organization Bastiat uses a humble carpenter  instead of the manufacturing of a pencil as a means to illustrate the complexity of relationships in the Free Market. He writes that the humble carpenter enjoys in one day goods and services that he in a life time could never come close to producing.  And all the individuals produce the goods and services he consumes not out of altruism or societal good but out of self-interest. They act because they know that Production must proceed Consumption. 

http://mises.org/daily/5473/Natural-and-Artificial-Organization

  Bastiat quoted Rousseau in his Natural and artificial Organization : “Much Philosophy is needed for the correct observation of things which are in front of our eyes.” Throughout their stories Bastiat and Leonard Read help us see the “Unseen” efforts that create the abundance and variety of physical goods we are able to buy on the Free Market. They stress that they exists because individuals are free to act and enjoy their  Natural Right to their Life, Liberty andPproperty without interference from the State.

“I, Pencil” is the shortest most concise explanation of the Free Market that I’ve found. It takes less than fifteen minutes to read and it could change the way you view the world for the rest of your life.

And that’s my Take

bastiat1776

AdvocateofLiberty

MakerBot 3D at home printer -Another Miracle of the Free Market

In Free Market Miracles on August 1, 2011 at 1:15 pm

Another Reason to love the Free Marke: 3D at home printers

Home manufacturing using 3D priners  is here. The company MakerBot is manufacturing and selling a 3D printer for the home. They are selling their Thing-O-Matic for only $1299.  It extrudes plastic and prints 3D objects layer by layer from plans you can download or that you create with a 3D scanner.

At home manufacturing could revolutionize the world on a scale similar to how cell phones and the internet has.  Just think about making anything out of plastic at home. Eventually metal objects could also be “printed” using metal powder heated and injected out of the 3D printer. Even though the current technology is limited today it is rapidly advancing. Just think about the quantum leap from the apple IIe to the Ipad today.

This is another awesome  illustration of the how Free Market works. These entrepreneurs wanted for their own use a 3D printer and designed one. They built a few more thinking they might be able to sell them in a couple of months. To their surprise they sold them almost immediately. Now over 4000 of these at home manufacturing devices are being used around the world.

In the not too distant future instead of going to the toy store to buy your son a Matchbox car,  you would go to their website, download the plans and could “print”  out the actual toy at home.  Kid’s tv commercials would emphasize, download, “print” and play today.

This is another reason why Central Planners are always wrong. They can never foresee or plan for technological innovations. Just as they were hopeless to predict the explosion of home computing ,the internet and cell phone use so will they be unable to plan for how at home manufacturing will change the world.

Leave people free and they will do amazing things.

Bastiat1776

AdvocateofLiberty