Mitt Romney's finest debate moment in a while, I think we can agree, came when he laid the smack down on Newt Gingrich's bizarre idea that simply by incanting the word "private sector" he'd be able to induce a trillion-dollar investmentin Lunar mining. As Romney pointed out, a business executive who proposed doing that would deserve to get fired. There's no reason to believe there's anything of economic value on the Moon.
That said, it all made me wonder a bit about the social value of malinvestment. I'm really struck by the fact that Christopher Columbus sailed to the New World on the basis of a mathematical miscalculation about the size of the earth. It's particularly striking that the conventional wisdom of Columbus' time essentially had this question right—the earth, most scientists thought at the time, was much too large to make Columbus' proposed westward sailing voyage a viable way of getting to China. Columbus shopped his idea to various monarchs, most of whom were in possession of accurate geographical analysis and rejected his idea. But Ferdinand and Isabella signed on to the crank's erroneous ideas about where China was. For their trouble, they wound up in possession of a vast and wealthy empire and Spain became the leading Great Power of the 16th and 17th Century. Not bad for an unintended consequence of misguided idea based on an Italian navigator's megalomania and calculation errors.
Which of course is not to say that we should set about deliberately encouraging misguided schemes on the off-chance that we stumble onto something new. The set of misguided schemes is too large. But I think this relates to Steve Randy Waldman's points about "opaque finance" (see 1, 2, 3). Good judgment and solid understanding of the risks tends to produce a kind of paralysis. Romney is almost certainly correct about the prospects for private sector Lunar exploration, but the world might be a better place if Gingrich could dupe someone into thinking he's wrong.