During the Cold War, it was not the U.S.’ superior weapons or soldiers that ultimately led to the Soviet Union’s capitulation. Historians record that the relative economic might of the U.S. ultimately brought the Cold War to a peaceful and conclusive end. Three decades later, the U.S. again finds itself at the dawn of what many have dubbed the “Second Space Race,” for which the U.S. ought to remain mindful of this lesson, lest it be used against us.

The West is once again threatened by a hegemonic national security rival. This time, America’s archnemesis is characterized by planning for a long contest that will feature fast-forward economics, global diplomacy, military muscle and information manipulation: China, it appears, is preparing to use its economic power to win. While maintaining its deep belief in Marx’s communist vision, the Chinese one-party government has fashioned a national economy that learned from the Soviet Union’s mistakes. Through friendly engagement with Western economies, China strengthens its own economy and weakens the West’s, nudging the world toward the worldview of the Chinese Communist Party. 

What then, are the best avenues for the U.S. to win this new near-peer space competition? They are the same ones that delivered victory in the last century: free markets, real economic growth and the productivity that often follows. This time, however, we must keep in mind that our rival is a keen student that has learned from our earlier successes—and Soviet failures.

The American response must not repeat the Cold War strategy of outspending our rival in government programs. Instead, the U.S. long game must put the commercial industry first: deliberately buy goods and services from our commercial domestic market, only providing government solutions when the commercial market cannot meet requirements. Unlike other military services, there are no real “weapons” in space. Much of what the government is developing for civil and national security space needs also exists as products or services in the commercial market. By encouraging the commercial industry to grow and not competing against it, the U.S. will secure a long-term strategy leading to unrivaled space leadership.

The U.S. economy has generated growth and prosperity unmatched in human history, with billions of dollars being invested every year into profitable commercial space companies. To outpace China militarily and economically, the new administration must double down on space privatization projects like NASA’s Commercial Crew and Commercial Resupply Programs started under the Obama administration. The Trump administration correctly reprioritized the importance of space for national security, but it directed too much government spending to legacy space projects and fell short in encouraging the next generation of commercial space companies.

An American “commercial first” policy for space technologies can solve government needs at the federal and state levels, which account for about half of commercial space company revenue. By prioritizing the highly competitive commercial sector, the government will bolster U.S. competitiveness without illegally subsidizing it. More important, it would reinforce the American values of free markets and open competition.

As the new administration settles in, national security political insiders are already hedging their bets on who and what will be the winners and losers of the new political cycle. This is especially true for the space sector, not only because it was an area of significant emphasis during the last administration but also because there continues to be significant private investment and anticipated growth in the area.

The unrelenting march of the knowledge economy and remarkable utility of the commercial space industry is limited only to our imaginations. The new U.S. Space Force and other civil space agencies will be better positioned if they leverage the burgeoning industry and do not overshadow it with government alternatives. If, however, the government decides to compete against the private sector with its top-down directed design methods and protocols, our commercial industry will be lost to China, much like the drone market was just a decade ago. 

Economic dominance in the space industry, not space weapons, will ultimately decide which side defines the 21st-century space domain and the national security implications that come with it. America must strategically rethink policies that will take advantage of, rather than compete against, its blossoming commercial space industry. Getting space policy right—commercial industry first and using government solutions only when necessary—will lead to explosive growth. Getting policy wrong? Well, just ask the Soviets.

Charles Beames is executive chairman and chief strategy officer of Colorado-based York Space Systems and chairman of the SmallSat Alliance.

The views expressed are not necessarily those of Aviation Week.