A wise man once said “The answer to any question starting, ‘Why don’t they-’ is almost always, ‘Money.’” As with all wise answers, it requires a little work to understand. You see, most people don’t know what money is, much less how it is used or why it can stop a project dead in its tracks. As a result, they don’t know how their world actually works nor why it is easier to make $1,000,000 into $2,000,000 than it is to turn $1 into $2.
Let’s start with the obvious: What is money? Ask that question of a person without a background in finance, and they will likely point to some physical thing (e.g, a dollar bill or a piece of gold) and say that it is money. But those are not money; they are things that can be used as money in much the same way that a dime can be used as a screwdriver. Ask the question of an economist, and they will say that money is a medium of exchange that stores value and forms a unit of account [1, 2]. Translated from the geek-speak, that means that money is anything that two or more people agree to use for trade in a regular, formalized way in specific amounts.
Thus, gold is only “money” if a group of people agree that you can trade the gold for something else (say, bread) at a specific rate (say, one loaf per ten grams) for a specific period of time (say, the next month). If they do not agree on that, then gold is worthless as money. If they do, then it doesn’t matter what they choose to use for money as long as they all agree. It could be shells, beads, hours of work, stones, cattle, salt , or even tea.
Of course, once you realize that money is an abstract concept and not a specific thing , then the curious case of impoverished Spain and rich England starts to make sense. You see, during the 1500s, Spain (and, to a lesser extent, Portugal) established colonies in South America in order to bring back gold and silver. Which they did, by the ton. As a result, the gold supply suddenly increased. Now, a naïve person would think that this would make Spain rich. Instead, it made them poor because the increase in the money supply led to high inflation rates; where it took one ounce of gold to buy a horse, suddenly it took four. Thus, even though Spain was on a gold standard, they were destroyed by inflation when the money supply increased uncontrollably .
During the same period, England established a number of colonies in North America. There weren’t large gold deposits in the region, so those colonies weren’t able to send money back home. Instead, they sent back raw and finished goods, which led to trade between England and the colonies, which led to increased wealth . Thus, even though England didn’t get much gold from the colonies, they were able to parlay the natural resources and industriousness of the colonists into a wealthier and stronger nation.
So we shouldn’t confuse the standard (gold, shells, figmen of the imagination ) with the idea. But we also shouldn’t expect the idea to be static. A dollar today is not the same as a dollar tomorrow – and that is a good thing. You see, inflation acts as a spur to the economy right up to the point that it acts as a brake. Because inflation makes future money less valuable than current money, it encourages spending as you will spend less money on something that you buy now than if you buy it later . But if inflation gets to be too high, then money can become worthless before you have a chance to spend it . When this happens, people get rid of the inflating money as quickly as they can while saving up money that doesn’t inflate ; this then leads to more inflation of the bad money and less spending of the good, creating what wonks refer to as a hyperinflationary spiral. These are very bad for both local and global economies, and are one of the reasons that the Fed has tread so carefully over the past few years. Unfortunately, a hyperinflationary spiral is very hard to get out of once it starts [11, 12]. So economists would rather have stagnation than too much inflation.
And that brings us back to the original question: “Why don’t they?” Our answer is money. But we need to count the money to understand the why. To do so, let’s take as our example the ever-popular idea of building a space elevator . These heavenly funiculars would allow you to ride a car up into space over a few days. And, though the cost to build the structure would be large (between $7 billion and $100 billion, depending on whom you ask) the cost to send a load up the elevator would be very small (between $10 and $100 per pound, depending on how it is powered). So why won’t they build space elevators?  Let’s follow the money to see what the answer is.
But before we do, we need a standard of comparison. If we want to say a space elevator will be expensive, then we need to answer the question “Compared to what?”. So let’s look at what we are spending now to do what a space elevator would. So we’ll look at how much it costs to get a pound of stuff into orbit using current technology .
For the Space Shuttle program, the total program cost was $192 billion (2010 dollars), and the total mass put into orbit was less than 7,182,400 lb (based on maximum payload to LEO). So the Space Shuttle had a minimum cost/lb of $26,732.
Similarly, the Saturn V had a cost of $47 billion (2010 dollars) for 13 launches, which put a total of 3,406,000 lbs into LEO. That gives it a cost/lb of $13,799.
The Soyuz ST costs about $50 million to launch and takes 17,100 lbs into LEO. If we assume that the construction costs are fully amortized in that price, and that it completely covers the running costs, then the Soyuz ST has a cost/lb of $2,924 or about 1/10th that of the Shuttle. (There is something to be said for keeping a standard design).
SpaceX’s Falcon 9 has a list price of $56 million per flight to LEO with a payload capacity of 23,000 lb. Again, assuming that the construction costs are fully amortized in that price, and that it completely covers the running costs, the cost/lb is $2,435. Of course, the Falcon 9 hasn’t yet achieved the safety record of the Soyuz craft, but that will take decades to match since it took decades to attain.
So our standard of comparison is somewhere between $26,732 and $2,435 per pound into LEO. If the space elevator costs more than this, it simply won’t get built. If it costs less, then it will. If it costs about the same amount, then it might if we can come up with something that it can do that current technology cannot. So how much would a space elevator cost?
Let’s add it up and see. The money it takes to build the space elevator itself is what economists call a fixed cost. It doesn’t matter how much is sent up the elevator, the building cost is the same. Similarly, the costs for maintenance, staffing, and security will all be fixed (or semi-variable at worst). But the money it takes to run the space elevator is what economists call a “variable cost“. Each pound sent into orbit will cost the same, but the total cost will depend on how much is sent up the beanstalk. So we get the following equation:
Total cost = Construction cost + running costs
Total cost = Construction cost + maintenance cost + security cost + lift cost
We’ll assume that it costs $100 billion to build a space elevator  and that maintenance and security costs are no more than 10% of the construction costs (fairly standard) and that it runs twenty years before becoming obsolete or so decrepit that it has to be torn down . We know that it will take about 50 MJ/lb (14 kwh) of the energy to go into LEO; if electricity costs $.08/kwh and the system is 20% efficient, then that works out to be (14*.08/.20=) $5.60/lb. If we run 500,000 lbs up each year, then the lift cost is ($5.6*500,000=) $2,800,000.
So, the first year that we run the system, it costs us $100 billion in construction costs plus $10 billion in maintenance and security plus $0.0028 billion in lift costs, for a total of $110 billion; at this point, the cost/lb is $110 billion/500,000 = $220,000. Yikes!
But the costs come down as we keep running more stuff up the beanstalk. The second year that we run it, it costs us another $10 billion in maintenance and security and another $0.0028 billion in lift costs for a total two year cost of $120 billion and a cost/lb of $120,000. Every year, the cost/lb comes down because the original cost of building the system is spread out over more cargo .
If you run 500,000 lbs per year into orbit on that system for twenty years, then the cost comes down to $29,232/lb (assuming inflation of 4%). If you run 1,000,000 lbs/year  into LEO then the cost drops even further to $14,617/lb. And if you could construct it for $10 billion and run 1,000,000 pounds per year into LEO, then the cost is $1,463/lb. So the cost to get a pound into LEO runs from being the equivalent of the Shuttle to the equivalent of an existing commercial rocket. And that is going to be the largest obstacle to getting such a program approved; it simply doesn’t have a good return on the investment when compared to existing methods.
And that is true of almost everything . If it costs the same as what we’ve already got, then it won’t be done unless it provides some other advantage. So the next time that you ask yourself “Why don’t they?” remember that the answer is probably sitting in your pocket.
 Scientists can be so wordy sometimes. But without the wordiness, you wouldn’t get the precision needed to accurately define the problem, much less solve it.
 Some also add the requirement that it be a standard of deferred payment; i.e., that you be able to pay back today’s debts in tomorrow’s money. But many modern economists insist that the deferred payment function is implied by the other three and so do not break it out.
 Indeed, the Latin word for salt (sal) is the base for our word “salary”.
 Something that too many of our politicians do not understand, unfortunately.
 Which is just one of the reasons that the gold standard is a foolish one for a modern economy. Sadly, Ron Paul and others do not understand that fundamental point, as they still conflate gold with money.
 Where wealth is an abundance of resources and possessions. Note that money is only tenuously related to wealth. Wealth can exist without money (e.g., in a barter economy), but money cannot exist without some level of wealth.
 All-purpose geek points for the reference!
 If that confuses you, don’t worry – you aren’t alone. Think of it this way: if there is a 5% inflation rate, then something that costs $100 today would cost $105 in a year. So by purchasing it now, you “save” $5. Of course, that ignores the questions of (i) will it actually cost more in a year [a], and (ii) what else can you do with that money [b]? Those questions are part of why economics is a complicated science with very few clear and obvious rules.
 Think of the hyper-inflationary periods of Weimar Germany or Argentina.
 This is known as Gresham’s Law: Bad money drives out the good. And remember that “money” can mean diamonds, gold, or even coffee. So inflating specie (the “bad money”) will be used to buy non-inflating commodities (the “good money”) that are stored.
 Germany got out of it by repudiating its debts. Argentina got out of it by having its debts forgiven. Neither is recommended.
 There is another alternative: deflation, in which a dollar today is worth less than a dollar tomorrow. When that happens across large swaths of the economy, people stop buying things and GDP drops significantly. Fortunately, deflationary spirals are rarer and easier to get out of than inflationary spirals.
 Space elevators are interesting structures. In essence, they are suspension bridges that provide a highway to orbit. They are ribbons made of an as-yet-unobtainable material [c], stretching from sea level out past geosynchronous orbit. The mass of the ribbon above geosynch orbit holds the entire structure in tension, much like a rock in a sling. And, “crawling on the ribbon’s face, some insects called the human race” [d] ride in sealed elevator cars that speed at a few hundred miles per hour into transfer stations scattered up and down the ribbon.
 Ignoring the obvious “Because we don’t have the materials to build it with yet”. The reason that we ignore this is because we almost have those materials.
 Yes, I know that pound is a weight, not a mass. But that’s the standard that has been set in the space field. Blame Goddard, not me.
 That’s a WAG based on the known costs of the material that comes closest to being strong enough for a space elevator (carbon nano-fibers).
 An obsolete space elevator would actually probably be reeled into space. If we allowed it to fall to Earth, then the resulting disaster would make Sumatra look like a picnic.
 This is part of why the Space Shuttle ended up being so darn expensive. Originally, there were supposed to be a lot more shuttles taking a lot more stuff into orbit. But Reagan stopped production of shuttles “until the system proved itself”, which was politician speak for “the end of time”. As a result, those high start up costs were never spread out over lots of launches and a potential game-changer became a boondoggle.
 Or the equivalent of everything that was put into orbit during the Apollo program. All in one year. Dang!
 Amusingly, one of the great exceptions to this rule is the movie trilogy for Atlas Shrugged. Though , the second part is currently filming simply because the producer is such a strong believer in Rand’s message (“Making money is good”) that he doesn’t mind losing money in order to spread it.
[a] Electronics are notorious for costing less as time goes on. A 30″ TV costs less today than a 12″ TV did in 1970. And, unless you have to have the best and newest in electronic toys, it always makes sense to wait a year before buying a new computer, as the next year’s models will be less expensive and have more memory than this year’s.
[b] This is known as the “Opportunity Cost” and helps to drive the use of debt to finance purchases. Debt allows you to use today’s money for other things (ideally for investment; typically for more spending) and so reduces the opportunity cost of purchases.
[c] The current strongest material known to man (carbon nanotubes) is about half as strong as it would need to be in order to build one of these critters. But they could be used to build a smaller version entirely in orbit that could propel probes from Earth to Mars and beyond in half the time it currently takes. And that is where space elevators will really prove their worth – in cutting down the costs for interplanetary travel.
[d] Transylvanian geek points for the reference!