Why Property Rights in Space Decide Everything
By Rainer Zitelmann, author of the book “New Space Capitalism, The Entrepreneurial Path to the Stars.
People do nothing without a reason – and if it costs a great deal, there must be a very strong reason. The reason the United States spent the equivalent of $300 billion in today’s dollars on the Moon landing was the Cold War, the race between the United States and the Soviet Union. The then U.S. President Lyndon B. Johnson put it this way: “One can predict with confidence that failure to master space means being second best in the crucial arena of our Cold War world. In the eyes of the world, first in space means first, period; second in space is second in everything.”
But after the United States had won that race, clear incentives were lacking. Following the Moon landing, Wernher von Braun, the mastermind of the Apollo program, was asked what the priorities for space travel should be in the years ahead. He replied: “We have to show that spaceflight is useful, and even profitable, for people on Earth, and in fact, space projects should begin to pay for themselves.”
This is precisely what did not happen. And in my view, a central reason is the Outer Space Treaty of 1967. The Outer Space Treaty (OST 1967) established the primary international legal framework for all activities conducted in outer space. The decisive factor in determining whether private property rights apply is Article II. Legal scholars have put forward differing viewpoints over its interpretation. The primary area of contention revolves around the “prohibition of appropriation” and whether this applies only to the states expressly mentioned in the Treaty or also to private individuals and companies not mentioned in Article II.
Those who argue that appropriation by private individuals is prohibited assert that private ownership would infringe upon the freedoms of access, exploration, and use guaranteed to all states in Article I. If private property rights existed, argues space law expert Marcus Schladebach, this would impinge upon the freedoms granted to all states, and the legal status of outer space as a “global commons” beyond territorial sovereignty would be jeopardized.
In contrast, other legal scholars argue the exact opposite: national sovereignty stops where outer space begins, which means that national appropriation of the Moon, other planets, and asteroids is forbidden – but not the private ownership of celestial bodies. This interpretation rests on the legal doctrine expressio unius est exclusio alterius: the explicit mention of one thing implies the exclusion of others. If, for example, a statute or treaty expressly mentions one or more things of a class, it is only reasonable to conclude that others of the same class remain unrestricted by that statute or treaty.
Other legal scholars, however, argue that while it is not forbidden for private individuals or companies to claim property, it is illegal for a nation to recognize such a claim publicly. This interpretation, however, confuses the terms “recognize” and “confer,” as the legal scholars Alan Wasser and Douglas Jobes explain: “‘To recognize’ means to ‘acknowledge the existence, validity, or legality of’ or ‘accept, acquiesce to, or decide not to contest.’ In contrast, ‘to confer’ means to ‘grant (a title, degree, benefit, or right).’”
They go on: “If a nation claims the right to confer, give, or grant title to lunar land, it could be violating the ban on national appropriation. But if a settlement is established and the settlers claim private ownership of land around their settlement, and a dozen of Earth’s nations recognize the settlers’ claim, it is not reasonable to say that all dozen nations are trying to appropriate the land and thus are violating the Outer Space Treaty.”
Still others argue based on various provisions of the Outer Space Treaty, which, for example, hold states liable if a rocket launched by a private company from their territory crashes in another country. Furthermore, they claim, states are obligated to authorize and supervise the activities of private companies located within their territories. From this, they conclude that, even if not explicitly stated, the Outer Space Treaty prohibits private appropriation.
Wasser and Jobes rightly object to this: “But the treaty clearly does not contain any language explicitly saying that states may not authorize their citizens to do anything that they themselves cannot do, contrary to what some authors appear to assume. The treaty does not say that what is prohibited to states is therefore prohibited to private entities nor that what is prohibited to the regulator is therefore always prohibited to the regulated. A baseball coach gives ‘authorization and continuing supervision’ to his players. Does the fact that the coach is not allowed to run onto the field to catch a fly ball mean the players he supervises cannot either?”
The wording of Article I of the Outer Space Treaty states that outer space is “the province of all mankind” and that celestial bodies should be “free for exploration and use by all States without discrimination of any kind on basis of equality” and “there shall be free access to all areas of celestial bodies.” Critics argue that this turns space into a public good whose owner is everybody and nobody.
This ambiguity of the OST stems from the priorities of the United States and the Soviet Union at the time of the OST’s drafting. Their primary focus was on preventing an arms race in space and the deployment of weapons of mass destruction there. The concept of private space companies, including business models that would allow private companies to engage in asteroid mining, was a distant prospect in 1967. Consequently, the issue of private ownership was secondary for both nations. So, they did what national governments sometimes do in joint international declarations or treaties: the language was kept vague and omitted contentious issues, which is what leads to the difficulties interpreting it today.
When we talk about the future of mankind in space, we should learn from history. Squatters played a crucial role in the settlement and economic development of the American West. Long before government institutions were firmly established, settlers moved onto unclaimed land, built homes, cultivated farms, and created entire communities without initially possessing formal legal title to the land they occupied.
In many cases, these settlers were the true pioneers of westward expansion. They established the foundations of economic life — farms, towns, trade networks, and local infrastructure — while the state often arrived only later. The expansion of the American frontier was driven less by central planning in Washington than by millions of individuals acting on their own initiative.
What made the squatters especially important was that they created facts before the law recognized them. They settled the land first and expected legalization afterward. Over time, American lawmakers accepted this reality and introduced legislation allowing settlers to obtain formal ownership of the land they had improved and cultivated.
The squatters embodied a distinctly American idea: that those who productively use land should have the right to own it. This belief stood in sharp contrast to the European tradition of aristocratic landownership and became deeply connected to the American ideal of the independent entrepreneur and pioneer.
Their activities transformed vast territories into economically productive regions. By cultivating land, building businesses, and creating communities, squatters helped turn the frontier into one of the most dynamic areas of economic growth in the nineteenth century.
Some economic historians view the squatters as an early example of how property rights emerge from below — through use, investment, and social recognition — before they are formally recognized by the state.
What we need in the future are space squatters. The crucial difference from the historical squatters of the American West is this: on other celestial bodies, there is currently no ownership at all. The land belongs to nobody. And unlike in the settlement of the American frontier, there is no indigenous population whose rights could be violated.
Rainer Zitelmann is the author of the book “New Space Capitalism.”
https://www.skyhorsepublishing.com/9781510788213/new-space-capitalism/
Rainer Zitelmann has doctorates in history and sociology. He has authored and edited thirty-one books that have been translated into thirty-five languages. His books include In Defense of Capitalism, The Power of Capitalism, and How Nations Escape Poverty. In recent years, he has written articles and been the subject of interviews in media such as Wall Street Journal, Fox News, Newsweek, Forbes, Washington Examiner, Washington Times, National Interest, Financial Times, City AM, The Daily Telegraph, The Times, Le Monde, Corriere della Sera, Neue Zürcher Zeitung, and numerous media outlets in Latin America and Asia. He regularly contributes specialist articles to Economic Affairs.