'Bubbles in Society' - The Example of the United States Apollo Program

Abstract:     
We present an analysis of the economic, political and social factors that underlay the Apollo program, one of the most exceptional and costly projects ever undertaken by the United States in peacetime that culminated in 1969 with the first human steps on the Moon. This study suggests that the Apollo program provides a vivid illustration of a societal bubble, defined as a collective over-enthusiasm as well as unreasonable investments and efforts, derived through excessive public and/or political expectations of positive outcomes associated with a general reduction of risk aversion. We show that economic, political and social factors weaved a network of reinforcing feedbacks that led to widespread over-enthusiasm and extraordinary commitment by individuals involved in the project as well as by politicians and by the public at large. We propose the general concept of pro-bubbles, according to which bubbles are an unavoidable development in technological and social enterprise that benefits society by allowing exceptional niches of innovation to be explored.

Keywords: Risk, bubble, Apollo-Program, United States

JEL Classifications: D71, D81, Z10

Working Paper Series