These days, Amazon is the fourth biggest company in the world by market cap – behind Apple, Alphabet/Google and Microsoft. And that has made Jeff Bezos rather wealthy, worth around $88 billion, taking him to just a smidgeon behind Bill Gates in the richest man stakes – the Microsoft founder is worth around $92 billion.
In the case of Bezos, the wealth accumulation of the last five years had gone a tad crazy – shares have increased more than four-fold during this period, during the last year they have risen by around a third.
So, what do you do with all that money? Is creating the world’s richest retailer enough?
How about exploring space? That seems like a worthy ambition for the man who may well end 2017 as the richest man on earth – after-all, as was once stated in a James Bond movie, sometimes ‘the world is not enough.’
Mr Bezos was speaking at an event hosted by Buzz Aldrin commemorating the Apollo 11 landing on the moon. After winning the Buzz Aldrin award for innovation, the Amazon boss said that it was time for “America to go back to the moon” and added: “We should build a permanent settlement on one of the poles of the moon.”
Mr Bezos is already in this game, with his company Blue Origin. https://en.wikipedia.org/wiki/Blue_Origin. Mr Bezos has said that he wants the company “to build space hotels, amusement parks and colonies for 2 million or 3 million people who would be in orbit. The whole idea is to preserve the earth.... The goal was to be able to evacuate humans. The planet would become a park.”
Of course, during the Apollo landings, space flights were about a kind of human vanity. Why do people climb a mountain? ‘Because it is there’. For much the same reason, we landed on the moon – true, as a side benefit, we saw a surge in innovation that made many of the technologies we use today possible, but that is not why we did it.
And the space programme ceased because it was hugely expensive and provided no obvious commercial benefit, and more pertinently, the Soviets pretty much conceded defeat in that area.
The difference this time around is that it looks as if space exploration is set to become much cheaper, and provide many commercial benefits.
Mr Bezos said: “If we have reusable rockets, we can do it so much more affordably than we have ever done before. We have the tools. We have the young people with a passion to do it. We can get that done today.”
So, what’s stopping us? Mr Bezos said: “What’s holding us back from taking the next step is that space travel is too darned expensive.”
And this takes us to the crux of this matter.
As a general rule of thumb, the bigger the scale we apply to a challenge, the more effectively we can do it. When PCs fell in price to less than £1,000 a go, demand exploded, investment in R&D rose, and Moore’s Law was given a shot in the arm, pushing down on the cost of computers, making them more relevant to the mass market. It is well known and often stated that there is more processing power in an iPhone than was available to the whole of NASA during the moon landings. But just because this is often said, it does not detract from its relevance. Once a mass market opens up for a product, its cost per feature falls rapidly. But what can often hold new products back is finding a market for them before this has occurred. This is the challenge facing Tesla trying to create cost effective batteries. So, it finds a market for these batteries which is viable at a high price – namely a luxury car which people are willing to pay through the teeth for because they like the idea of doing something for the environment.
The moon landings of 40 years or so ago could never have happened without the government backing the propaganda war that formed such a key part of the cold war.
The difference today is that commercial benefits from space travel are beginning to emerge – whether it is mining, or tourism for very rich people.
But this does not mean that space will only ever be the preserve of the filthy rich – indeed for it to become truly viable, it will have to appeal to a wider market, just as happened with PCs and what Musk wants to do with Tesla.
A movie like Elysium, staring Matt Damon, in which the human race is divided between the super-rich, living on a kind playground for the rich in the sky, where they benefit from state of the art technology – curing all diseases, for example, while everyone else lives in abject poverty, may make good entertainment, but does not make economic sense. Technological wonders can only develop if there is a mass market for them, and that means wealth has to trickle down in no small way.
Mr Bezos has a dream that many would love to see realised but the key to it coming true, on the scale the Amazon supremo desires, lies in ensuring that there is a mass market, and for that to happen, the winner takes it all society, which seems to be evolving and for which Mr Bezos has benefited so handsomely, must turn into an ‘everyone is a winner society.” That is not an idealistic point, it is an economic one.
