Harrison Schmitt told the BBC governments are "too inefficient" to make successful efforts at returning humans to the moon.
A new space race -- driven by the commercial possibilities of lunar mining -- could see private companies financing missions to the moon, he said.
One possible lunar resource, he said, is helium-3 -- similar to the gas used to inflate balloons, but with properties some scientists say could make it an attractive fuel for future nuclear fusion reactors.
"The economy of space and economy of settlements of the moon will be supported by helium-3," Schmitt said. "When you have a reason to build rockets and spacecraft and mining machines, costs will come down.
"Government is too inefficient to make the costs come down where it would be economic. It will be an entrepreneurial effort."
Schmitt, a geologist, went to the moon in 1972 on Apollo 17, the last U.S. mission to the lunar surface.