Tuesday, July 16, 2013

How America Won the Space Race and Entered the Nuclear Age

On this day in economic and business history...

"HERE MEN FROM THE PLANET EARTH FIRST SET FOOT UPON THE MOON JULY 1969, A.D. WE CAME IN PEACE FOR ALL MANKIND."
--Inscription on the Apollo 11 lunar module plaque.


Apollo 11 takes off on a Saturn V booster rocket. Source: NASA.

Houston, Texas, July 16, 1969, according to Marvin Miles of the Los Angeles Times:

Apollo 11 vaulted toward the Moon to make a dream come true -- to land men on Earth's satellite, unlock the secrets of its origin, and perhaps explain the mystery of Earth itself.

The incredible quest began from Cape Kennedy at 6:32 a.m. Pacific Daylight Time [9:32 Eastern] when a gleaming, 36-story Saturn V launch rocket thundered skyward to hurl aloft three astronaut-explorers.

They were Apollo 11 commander Neil A. Armstrong, Edwin E. Aldrin Jr., lunar module pilot, and Michael Collins, command module pilot. Theirs is the most audacious space mission yet, with a glittering role in history if they succeed.

The moment of truth in the daring drama should be played before a television audience of millions late Sunday night when Armstrong first steps from the landing craft onto the desolate lunar Sea of Tranquility.

Four days later, on July 20, Armstrong and Aldrin's lunar module, bearing its iconic plaque and stiffened flag, touched down on the Sea of Tranquility. It completed the monumental goal first set by President John F. Kennedy in 1961, of "landing a man on the moon and returning him safely to the earth" by the end of the 1960s. The success of Apollo 11 capped off a frenetic burst of space progress -- Apollo 8, the first craft ever to orbit the Moon (but not touch down), had launched only seven months earlier.

The Apollo program, beyond providing an incredible boost to national confidence, also advanced the frontiers of technology in a number of worthwhile ways. Here's a list of some of the program's key innovations that have filtered down to our lives:

The space suits used to explore the Moon led to advances in gas masks, new fabrics for blimps and other lighter-than-air aircraft, and a drug-production containment system currently in use by co-developer Eli Lilly (NYSE: LLY  ) . Suit technology was also adapted to improve athletic shoes in the 1990s and to develop roofing systems for major sports stadiums, including Houston's own Reliant Stadium. Filtration systems used to ensure supplies of safe drinking water on the Apollo missions have been adapted for kidney dialysis, Earth-bound water filtration, and the industrial HVAC (heating, ventilation, and air conditioning) industry. Other medical systems derived from or improved by Apollo technology include pacemakers, heart monitors, CAT scans, and MRIs.

Neither solar panels nor semiconductors were invented for Apollo, but both technologies were pushed forward by the need for advanced power and control systems. Both technologies actually improved in tandem during the Apollo program's lifetime, as the cost of solar cells was largely tied to reductions in integrated-circuit transistor sizes through the 1960s. The Apollo Guidance Computer, or AGC, built by Raytheon (NYSE: RTN  ) for Moon-bound missions, was the first computer of its kind to use integrated circuits, which were designed by chip-making pioneer Fairchild Semiconductor.

The AGC was extremely advanced for its era, sporting a clock speed of roughly 1 megahertz and 2 kilobytes of memory. The PC, which launched in 1981, had a 4 MHz processor and 16 KB of memory, but the AGC made up for weaker hardware with the ability to multitask eight programs at the same time, whereas early PCs were limited to one program -- and even today we rarely run eight different programs at the same time. The AGC was actually smaller than the early PCs; with space at a premium, its designers packed everything, display included, into a package barely larger than today's tablets.

We've come a long way in terms of computing power, but it's not always put to good use, as comedian Bill Murray will tell you:

My iPhone has 2 million times the storage of the 1969 Apollo 11 spacecraft computer. They went to the moon. I throw birds at pig houses.

— Bill Murray (@BiIIMurray) April 5, 2013

The ultimate power to destroy
The first successful nuclear-bomb test, codenamed Trinity, took place at the Alamogordo, N.M. bombing range on July 16, 1945. A squat-looking contraption, a.k.a. "The Gadget," went off with the force of nearly 20 kilotons (20,000 tons) of TNT, validating the work of the Manhattan Project and setting the stage for the American bombing of Hiroshima less than a month later to end World War II. Upon witnessing the fireball and the mushroom cloud, project director J. Robert Oppenheimer thought of a line from the sacred Hindu text Bhagavad Gita: "Now I am become Death, the destroyer of worlds."

A diamond in the rough
The South African diamond rush, a sparkly carbon equivalent of California's Gold Rush, began on July 16, 1871 with the discovery of a massive 83.5-carat diamond in Colesburg Kopje, which is today known as Kimberly. The most important outcome of that discovery wasn't an economic explosion in South Africa as had been seen in California. Rather, South Africa's diamond excavations soon gave rise to the De Beers diamond cartel, founded by Cecil Rhodes with funding from the infamous Rothschild banking dynasty. Before the turn of the century De Beers had evolved into the monopolistic cartel that has in recent decades attracted its fair share of bad press.

Ever wondered why a diamond ring is now the standard way to propose to your future marriage partner? You can thank De Beers. Its legendary "A Diamond is Forever" ad campaign, one of the most successful such campaigns of all time, is all but single-handedly credited with sparking the boom in diamond engagement ring sales that began after it launched in the late 1940s. Until that time, it seemed the not-all-that-uncommon rock (go ahead and try to sell a diamond ring for anything close to its retail price) would soon be on its way out, a symbol of glitzy excess made unfashionable by the lingering Great Depression. Eventually, De Beers got even pushier about the diamond ring, urging husbands-to-be to pony up two months of their salary for that piece of "forever."

The Dow's legacy of Apollo
The Dow Jones Industrial Average (DJINDICES: ^DJI  ) first broke through the 8,000-point level on July 16, 1997. The reason for the Dow's massive bull run, according to The New York Times, was simple: "America is in the midst of a stunning, seven-year-long economic expansion. Corporate profits are soaring, unemployment is at a 24-year low, and yet inflation remains benign." The Dow had doubled in less than three years. However, even then some analysts warned that stocks were starting to look a little overvalued, and a growing number believed the Dow would end the year back below 8,000.

It didn't. By the time the Dow topped out in early 2000, it had gained another 45%. However, the decade that followed offered little relief for long-term shareholders. The Dow did wind up falling below 8,000 points again, but it wasn't until near the end of the 2007-2009 financial crisis.

If you think the era of American technological leadership is over and the lessons of Apollo forgotten, we'd like to change your mind, because the future is made in America. Domestic manufacturing is poised to once again become the investment driver of the world, and all because of one disruptive technology. You can uncover the three companies that will help drive a whole new wave of innovation in The Motley Fool's new free report. Just click here to read more.

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