Transcript
Alyssa Hurst:
You're listening to RadioEd.
Nicole Militello:
A University of Denver podcast.
Lorne Fultonberg:
We're your hosts, Lorne Fultonberg.
Alyssa Hurst:
Alyssa Hurst.
Nicole Militello:
And I'm Nicole Militello. We've now entered a new chapter in space exploration, billionaires in space, where some of the world's wealthiest men are launching themselves in their private rockets to new heights. Amazon founder, Jeff Bezos, just took an 11 minute joy ride to space on a rocket from his private company, Blue Origin. The company has lofty goals to one day offer an option to leave this earth and have habitable space stations where people can live and work. But a trip to escape the confines of gravity comes with a hefty price tag, one winning bidder paid $28 million for their ticket to space, and Bezos says the company is nearing $100 million in sales for seats on future flights.
Nicole Militello:
So, what are the ethics of private space travel for billionaires? Bezos has received significant blowback after his trip for not using his vast wealth on the multitude of problems facing Earth, along with the jarring criticism of the reported grueling conditions for Amazon workers, while he turns his attention to the stars. Joining us to discuss it all is Michael Nalick. He's an assistant professor of management at the University of Denver who focuses on corporate misconduct and CEO activism.
Nicole Militello:
So, let's start with the optics of billionaires in space. Why do you think this strikes a chord with so many people?
Michael Nalick:
Well, I think it strikes a chord because of what space is. Space, the history of NASA and the space program — it's really seen as institutional civilization accomplishments, right? It's the United States, it's mankind, it's those sorts of accomplishments to go to space. And given that, and the fact that, we like to at least again, with the history of the space program, it's the best, it's the brightest that have made it to that caliber. It's the pilots, it's the engineers and then we've had... NASA certainly diversified to teachers and to other types of civilians that have gone to space. But now you have these people that are circumventing all of that and buying their way into an area that has really, in the past been reserved for just governments and the enhancing of science and civilization and society in general. And so the fact that's occurring, I think that's why it hurts so many people. It's kind of what space has represented in the past.
Nicole Militello:
Right. So a lot of people have criticized Bezos and Branson for just not reading the room, we have COVID cases rising, wildfires are burning. One Atlantic writer wrote, "The world is drowning and scorching and two of the wealthiest men decided to race in their private rocket ships to see who can get to space a few days before the other." What should go into making a decision like this for a business leader, and is there ever really a right time to do it?
Michael Nalick:
You know, if it's something that's going to be perceived negatively, like I said, due to the aforementioned reasons before, there's probably not a right time, right? I mean, it's always going to be perceived negatively due to the institutional environment, with that said, of course doing it during a pandemic at a time when there is a lot of world strife and all, you named, other things that are going on. Obviously it's not good optics as well. And so that, that does play with it. And that does factor into business decisions.
Michael Nalick:
However, they have consciously made the decision that this likely will not affect their reputation or their business's reputation. And they probably do have a good point. This is something where it's... People will perceive it negatively, but as far as their companies go, I doubt that many people will stop shopping at Amazon or stop flying Virgin Atlantic or one of his other enterprises. And so I seriously doubt there's a whole lot of blowback onto their organizations, but there is some negative publicity associated with it, especially given the time.
Nicole Militello:
Yeah, and another major criticism is just how frivolous space travel seems when that money could be going towards fighting some of the major challenges we're experiencing on Earth. So, I'm curious to hear what your thoughts are on when you have that much money, what is your ethical responsibility as a business leader?
Michael Nalick:
Well, and I think this has really magnified Jeff Bezos especially, because Jeff Bezos, not only is he one, if not the richest man in the world, it kind of depends, or person in the world, it kind of depends on the timing of that report. But he's also been criticized in the past for not being as charitable as others.
Michael Nalick:
Comparatively, if you look at Bill Gates and Warren Buffett, that he is not as charitable, and then you even have kind of this side by side comparison with his wife, his ex wife. Where his ex wife has given away a lot of her money, if not most of her money and he has really not risen to that occasion. And then now he's spending a lot of this money on, or at least a lot of money, what she attributed to Amazon and his customers, to fly to space. And so I do think it does represent something that is very, at this point in time can be seen as very frivolous and the whole venture, as far as I know, is catered towards the wealthy rather than any sort of, again, benefit to humanity like we have seen the space paradigm in the past.
Nicole Militello:
Yeah, and I want to get into some of that criticism of Bezos related to Amazon, but I want to hit on something that you just said about how this is kind of catered the wealthy. So the glaring divide with this is that Blue Origin's hope for life in space is really a ticket away from Earth's problems, but it's only an option for the ultra rich. So, what does that mean for the growing wealth gap?
Michael Nalick:
Yeah, I mean, we've kind of seen it in the movies, right? There's been several movies, I think Elysium was one of them where they had this planet full of these gigantic mansions and everything, and Earth was just rotting, decaying and falling apart. And people trying to go to this other civilization with the most advanced tech and science and space, and so it really paints a kind of a dire picture, right? That's the goal of this company. The goal of this company is to leave the home planet to establish civilizations for the wealthy, while not addressing the needs of everyone else.
Michael Nalick:
While I think that is the ultimate goal, obviously the most immediate goal was just to take wealthy people into space, to give them a thrill ride. I do think that has a bad connotation to it, it does leave a bad taste in people's mouths. Of course, it's a business and if there is a business need and a market for it, we do have rights in this country that allow individuals and entities and organizations to pursue whatever businesses they want, as long as it's within certain regulations and confines. And of course, if it's a market void, so you're filling some more sort of market void. Even if it, the optics don't look good.
Nicole Militello:
And we've seen people are willing to pay for it.
Michael Nalick:
Yeah, you know I just read an article today. It said Ashton Kutcher had a ticket on it and at the urging of his wife, after his daughter was born, sold the ticket. And so there's obviously a demand for it because it's a thrill sport, right? But we know, we like to think of billionaires and billionaires, especially if you talk about Richard Branson. Richard Branson has this persona attached to him that he's a thrill seeker. He goes bungee jumping and does all these... that he uses his wealth in a cool, sort of, kind of exotic means in a lot of ways. And this is just that next frontier for the billionaires. It's not safaris anymore, it's not mega yachts, it's not these huge mansions or islands. Now space is the latest trend.
Nicole Militello:
So, I want to talk a little bit about the criticism related to Amazon. So was this a good business move for somebody that has been so publicly criticized for not doing enough when it comes to his other ventures like Amazon?
Michael Nalick:
I don't think he cares that much, to be honest. He is honestly trying to detach himself from Amazon. That's why he stepped down as CEO, while he's still chairman and still very much runs the company, I think that this is all part of that move is he's trying to move away from, "I'm the guy that created Amazon." To doing other things. And this is part of the other things he wants to focus on, he has said that in the past. So I don't think he cares all that much whether this was a good business decision or not. I think he feels that Amazon is somewhat insulated due to its position in the market, from having a whole lot of reputational blowback from his decisions at this point. And at the same time, he is personally trying to distance himself from Amazon and detach while... By doing other things.
Nicole Militello:
Yeah. I was going to ask you if he's done anything to recover from that criticism, or if he even feels like he needs to do anything, but it sounds like you would say that he would say that he doesn't have to.
Michael Nalick:
I would say he would hire public relations people and maybe do some media stuff. But besides more symbolic things, strategically I'd feel like he doesn't at least believe that he needs to do something strategically.
Nicole Militello:
Yeah, and he got a lot of criticism because after his trip, he thanked every Amazon employee and every Amazon customer, because, "You guys paid for all this." What was your reaction when you heard that?
Michael Nalick:
Yeah, that was not his finest moments, of course. I think that statement does rub a lot of people the wrong way, as you've said, for the various reasons we have mentioned. And so I was kind of taken aback, I... He was in the moment, I think he was jubilant and he was just more free willing and not as handled as he normally is in his public statements. And oops, it came out and now it's not wrong, of course. It was his customers, it was his shareholders, it was his employees that all helped him get to that point, so he is not wrong. It's just not something you want to publicly say.
Nicole Militello:
Right. Do you see any upsides of this move from a business standpoint?
Michael Nalick:
No. I mean the only upsides could be if they use, if they lever the technology. And you never know, who knows in 50, 75, 100 years. But if they levered the technology from this endeavor, from Blue Origin's to the primary business of Amazon, or that would be the only long-term upside I would see. Of course, short term, I don't see much upside. Long-term? Of course, there could be some technological breakthroughs that help the primary business.
Nicole Militello:
Mm-hmm (affirmative). One of the counter-arguments that I've seen is that this should actually be viewed as a major leap forward for space travel in that companies like Elon Musk's SpaceX is essentially an essential contribution to our existing publicly sanctioned space program, and that's from an op-ed in Politico. So, what are your thoughts on that, kind of it being seen as a public service for our space exploration?
Michael Nalick:
You know, it's this kind of the same thing I said before. Well, SpaceX is a different thing, I don't think you can compare this to SpaceX because SpaceX is... Has contracts with the government and wants to develop government vehicles to space. This is not the same thing. At the same time though, it's not... these breakthroughs that these companies are developing, again, could be used in the future with more public means. What if there is a station that's developed on the moon, and instead of taking, again, the big rockets, they want to take these small sort of more personal spaceships up there.
Michael Nalick:
So, that could... In the future, it could serve some public benefit. So I don't want to say they're wrong. It's just in immediate term, it does not. But in the medium or long-term, it certainly could. And you do see that in other companies and other programs where the initial product is not the end product. The initial product at Amazon was certainly, was not what Amazon is today. And you can say that with 95% of the public companies out there. So, it could change at one point, and it's likely to change at what point where you could see a breakthrough public benefit that does cross into other areas.
Nicole Militello:
Mm-hmm (affirmative). And Bezos has talked a lot about how space has just been such a personal interest to him for a long time. And we were just curious how, when you're a business leader and you're also a celebrity, how do you manage the balance of focusing on building your brand and your interests versus what you need to do as a business leader?
Michael Nalick:
Well, research has shown there's... It's intertwined, to be honest. But being a celebrity or having personal feelings about something or thoughts or ideologies, does transcend into the outcomes and actions of the business. Whether that's right or wrong. But that's kind of what you get into when you know you're hiring someone and that's why you put checks and balances by the board of directors or the other stakeholders that are involved in the company or the shareholders. And so that's what they're supposed to serve, is the checks and balances, but it's inseparable, the persona of the individual, whether it is a CEO celebrity to the outcomes of the company, you do see that intertwined.
Nicole Militello:
And so right now we're seeing three of the most prominent billionaires kind of in this race for space. And another high level of concern is that with billionaires entering this area, now we have the wealthiest individuals getting to set the agenda and make decisions about how we're navigating space exploration. So, what values does a business leader like Bezos need to keep in mind when managing such an enormous responsibility?
Michael Nalick:
Well, I mean, Bezos can't get there without the government. I mean, that's just a fact at this point. And so, he always has to be mindful of what's going on within the government, what regulations are in place, what regulations are going to be in place. If this is an area in which there's a regulation gap, I can certainly guarantee you that U.S. Congress will take this up at some point. Now it might not be next year, it might not be five years, but at some point it will be taken up. And so, he needs just to be cognizant of what are the opportunities that this involves and what's the regulatory threats to him as well as a business leader. And he has to be proactive and responding to this.
Nicole Militello:
Is there anything that we haven't talked about on this topic that you think is just interesting or people might like learning about?
Michael Nalick:
Well, I think though, looking at the two individuals involved, Jeff Bezos and Richard Branson and comparing them. I also feel comparing their explorations is like apples and oranges, because Richard Branson, as I've mentioned before, has this persona of a thrill-seeker. He's done this in the past, he's done a lot of test flights, he does racing, he does these sort of things. So, this is kind of the next area, thrill-seeking for him. But if you look at Jeff Bezos, he doesn't have that track record. And so I actually think that Jeff Bezos, again, because of his persona and his background, has deviated more in his exploration than Richard Branson. And as such, I actually think he's getting more negative press as an individual than Richard Branson is.
Nicole Militello:
To read more of Michael Nalick's work, visit our show notes at du.edu/radioed. Alyssa Hurst is our executive producer, Tamar Chapman is our managing editor and James Swearingen arranged our theme. I'm Nicole Militello, and this is RadioEd
