by Edward Hudgins, director of regulatory policy studies at the Cato Institute.

The Mir space station was born as a symbol of communist strength and died as a noble experiment in private space commerce. NASA officials helped kill it. It’s odyssey provides lessons concerning why so few individuals live and work in space today, and what must be done if space is to truly become a domain of human activity in the future.

Mir went into operation in 1986. When the Soviet Union collapsed, President
George Bush decided that a good peace gesture would be an
astronaut-cosmonaut exchange program with Americans living on Mir. During
the 1990s, with Americans onboard, Mir acquired the reputation of an
accident-prone orbiting antique. There were indeed problems with the
station, in part because Russia was out of money and trying to dig out of
the ruins of socialism.

Energia, the mostly privatized Russian space agency, had decided to scuttle
Mir and to accept NASA’s invitation to become a partner in the International
Space Station (ISS). But then private parties came to the rescue in the form
of MirCorp, a company 40 percent owned by private Western investors and 60
percent owned by Energia. It planned to make the station financially

As MirCorp CEO Jeffrey Manber said, “There is nothing wrong with Mir that a
little money can’t fix.” Mir would be a platform for commercial activities
such as in-orbit advertising, satellite construction and repair, and
telecommunications services. MirCorp footed the bill for the first privately
funded manned space flight — a re-supply mission to Mir. American Dennis
Tito planned to pay MirCorp a reported $20 million so he could be the first
private passenger in orbit. Mark Burnett, producer of the hit television
show “Survivor,” had an agreement with MirCorp to allow contestants to train
and compete at Russia’s Star City; the winner would go on a 10-day mission
to Mir.

But behind the scenes top NASA officials pressured Energia to abandon Mir,
threatening to cut Energia out of the ISS contract. Those officials claimed
that if Energia continued to provide services to Mir, the Russian company
would not have enough resources to meet commitments to the ISS. This was not
true. Several Russian “Progress” supply rockets were sitting unused. MirCorp
wanted to purchase them to support Mir. The money would have been used to
build more rockets. But under a treaty with the Russian government NASA had
the final say on the rockets, and it said “No.”

MirCorp also wanted to import from the United States a tether that would
have provided power to Mir, reducing the need for re-supply rockets and
saving the space station. But the U.S. State Department, under pressure from
NASA, delayed the export license for 10 months, until after Energia decided
to bring down the Mir. Top NASA officials did not want competition.
Energia is still fighting with NASA officials over commercialization.
Energia announced that it would allow Dennis Tito to pay to travel to the
ISS on a Russian rocket. Even though Tito has undergone training just like
the cosmonauts, NASA has protested that Tito’s presence could endanger the
station (but had had no qualms when it sent Sen. Jake Garn and Rep. Bill
Nelson into space to keep taxpayer dollars flowing into the NASA budget).

Energia has also struck a commercial deal allowing a module for television
and Internet services, produced by the private American company SpaceHab and
Russia’s Korolev, to be attached to its module on the ISS. NASA should
welcome that move as a way of providing needed funds and space. The
projected cost of the ISS has risen steadily since the 1980s, from $8
billion to at least $50 billion. All the while, the station’s capacities
have been shrinking. A recent budget-cutting move makes the ISS into a mere
three-person station. The principal job of ISS astronauts may be reduced to
merely maintaining the station, with little science or other work of value.
Now, ironically, NASA might be forced to rent sleeping quarters on the
SpaceHab module for a couple of extra astronauts.

MirCorp struggled heroically to convert a money-losing relic into a private,
moneymaking success. Its tragic failure was due in part to NASA officials
who seem more comfortable with a Soviet space model than a free market one.
So raise a final funeral toast to the noble, lost station, and let’s hope
Mir’s spirit will inspire future entrepreneurs to make space enterprise a
paying proposition.