On the Race to Mars and the Economics of Colonizing Space

It is at least a little exciting to see that NASA wants to put a human on an asteroid by 2025 and on Mars by 2030.

Why not very exciting? Because NASA — unlike with the Moon — is not on track to be the first one there. Yes, governments — the largest of which are capable of borrowing, spending and taxing trillions — still have the most economic power of any agency at their disposal. Yet if their plans for space exploration are anything to go by, they no longer have anything like the most ambition.

Elon Musk, by contrast, plans to be on Mars by 2020, and establish a colony he wants to grow to a million humans by 2100. Mars One plans to establish a colony by 2024. Overambitious? Nobody really knows. Sending flesh-and-bone humans to Mars is a pioneering act, not just on par with but considerably more ambitious than the pioneering explorations of Magellan and Columbus. Scurvy, foreign diseases, unpredictable weather at sea and geomagnetic anomalies are one thing. But nobody knows how the human body will respond to multi-year space travel trips across the vast void of space that separates Earth and Mars, nor to life in a metal box on the Martian surface.

Of course, if the private colonists fail — as many are expecting them to do — it is nice to know that the U.S. government will try and get the job done instead. After all, as Stephen Hawking has argued, space colonization is absolutely central to humanity’s future. In our current state as a one-planet species, one stray asteroid, one nearby gamma ray burst, one large scale industrial accident, one explosive supervolcano, or one stray genetic mutation — not to mention climate change, and all the cataclysmic risks we don’t know about — could send us to the edge of extinction. As a two-planet or ten-planet or two-solar system species those risks progressively diminish further.

Simply, we face a choice as a species. Turn inward and remain an earthbound species and face inevitable extinction in the next few thousand years, or possibly even the next few hundred years. Or turn upward, colonize other worlds and human beings — like us, and descended from us — have a chance of still being around one million or even one billion years from now.

Of course, the ultimate viability of all this really comes down to economics. If Musk, Bezos, Branson and the other stargazing private space interests can make space technology profitable, they can fund their way (and our way) to the stars. If not, then humanity’s hopes of colonizing space are tied up with the inward-looking, climate change-denying, and stupefied reality of scientifically and economically illiterate politicians who care more about their 19th century ideologies, election campaigns, and parliamentary champagne than the state of humanity 10 or 1,000 generations from now.

In theory, the resources floating up in space may be the economic fuel necessary to take us to the stars. As I noted last year: “An asteroid less than a mile in diameter could hold more than $20 trillion in industrial and precious metals” at 1997 prices. And that’s in addition to the massive potential of tapping into the sun’s rays as a self-perpetuating energy source. And while abundance may bring down the price of such commodities (including energy) early asteroid miners may reap massive enough rewards to turn themselves into the next Google, Apple, or Facebook, capable of pumping billions or trillions of dollars into research into further technologies.

As I argued last year, those who believe that the global economy may be entering an era of so-called “secular stagnation” clearly have either not thought very much about the potential economic growth possible from growing into space, or they think it a very unlikely possibility. Do you know how much one interstellar spacecraft or large-scale space station could add to GDP? Not just in its construction, but in the huge amount of research and development needed to develop and deploy such a thing? This is a whole new economy.

And while robots may mean that this spending does not create many jobs, and while off-planet tax havens are likely to become a thing, at the very least the technologies will trickle down to the wider public. Already, the widespread availability of the internet is creating a widely accessible and levelled playing field in the dissemination of information, news and ideas. Distributed solar energy and 3-D printers have the potential to create similar effects in energy markets, and in manufacturing and lift billions out of poverty.

But none of this is guaranteed. Even with the recent upsurge in interest in private space industry from titans of industry like Musk and Bezos, uncleared technical hurdles may stymie the development of large scale space industry for decades to come. NASA may still beat the privateers to Mars. But NASA is no longer the tip of the spear. Hopefully, NASA’s exploits will begin to look like afterthoughts.

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Why We Should Build The Death Star

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In January 2012, Zero Hedge made a sarcastic proposal to boost US GDP by $852 quadrillion — building the Death Star, a fictional moon-sized space station from the Star Wars film series:

Building a massive space weapon is all very well, but you have to find the materials to build it with. It’s easy to say that “sure, the Death Star would be expensive” but is there actually enough iron in the Earth to make the first Death Star? Centives decided to find out.

We began by loo king at how big the Death Star is. The first one is reported to be 140km in diameter and it sure looks like it’s made of steel. But how much steel? We decided to model the Death Star as having a similar density in steel as a modern warship. After all, they’re both essentially floating weapons platforms so that seems reasonable.

Scaling up to the Death Star, this is about 1.08×1015 tonnes of steel. 1 with fifteen zeros.

Which seems like a colossal mass but we’ve calculated that from the iron in the earth, you could make just over 2 billion Death Stars. You see the Earth’s crust may have a limited amount of iron, but the core is mostly our favourite metal and is both very big and very dense, and it’s from here that most of our death-star iron would come.

But, before you go off to start building your apocalyptic weapon, do bear in mind two things. Firstly, the two billion death stars is mostly from the Earth’s core which we would all really rather you didn’t remove. And secondly, at today’s rate of steel production (1.3 billion tonnes annually), it would take 833,315 years to produce enough steel to begin work. So once someone notices what you’re up to, you have to fend them off for 800 millennia before you have a chance to fight back. In context, it takes under an hour to get the steel for HMS Illustrious.

Oh, and the cost of the steel alone? At 2012 prices, about $852,000,000,000,000,000. Or roughly 13,000 times the world’s GDP.

The point was one against fiscal stimulus — while it may be possible to boost GDP by any amount through government spending, there is no guarantee whatever that that government spending will do anything productive. After all the toil and effort of building a Death Star what is an economy left with? On the surface of things, a giant metallic orb in space and very little else. In Misesian terms, this would be seen as a massive misallocation of capital, resources, labour and technology, building something that nobody in the market demanded and which could be ostensibly used to oppress people (“do what we say or we’ll fire our laser cannon at you!”).

Yet, I am going to try to defend it. I think that building the Death Star, or something similar is a very good idea and would have massive beneficial economic effects for employment, output, science, technology and so forth. And furthermore, I think it is possible in the very, very long run for a government to build the Death Star or something similar of a smaller scale without misallocating any capital, labour, technology or resources whatever.

First, I think that right now humanity is sitting in dangerous territory. There are over seven billion of us, yet we are all concentrated on one ecosystem — the Earth, with one tiny totally-dependent off-planet colony (the International Space Station) that houses less than ten people at a time. Simply, in our current predicament we are incredibly exposed. A single mass viral pandemic, asteroid strike or other cataclysm could completely wipe our species out. With humanity spread throughout the solar system (and preferably, the galaxy and the universe) our species is far less fragile to random extinction events. The Death Star itself — a giant space weapon — would be a safeguard against a particular kind of cataclysmic risk, that of hostile alien attack. If there are other advanced lifeforms populating our universe, they may see life on Earth and especially humans as an existential threat. Having a large, powerful weapon like a Death Star could be a strong safeguard against our own destruction by other species.

Zero Hedge’s mock proposal is actually quite thin, only taking into account the resource cost of the steel, and not the cost of getting the steel into space, building a moon-sized steel satellite in space, presumably including the development of laser cannon technology, some kind of propulsion system, the feeding and housing of a large permanent crew including oxygen and water recycling facilities, hydroponics and artificial food technologies, a transport system to get people and things between the Earth and the Death Star, etc. Nor does it take into account the cost of the labour in employing scientists and technologists to develop and prototype the technologies, employing engineers to deploy the technology, and employing labourers or automated robots to produce components and parts and to assemble the finished article. Simply, the cost would far exceed even what Zero Hedge projects, possibly by many times over.

So why the hell would I think that committing to spend vastly more than global GDP on a single project that nobody in the market is demanding is a good idea? Have I completely lost my mind, and any concept of sound economics that I once had? Well, on a potentially infinite timeline, such a huge figure (let’s say the necessary figure is ten times what Zero Hedge estimated, which could still be rather low in my honest opinion) pales into insignificance as we go further along the timeline. Building the Death Star is not currently a short term project that could be done to boost GDP in a single year to make up an output gap, deploy idle capital or reduce unemployment. In fact even if we committed to building the Death Star today, it is highly unlikely that we would actually even begin work on it in the next 100 or even 200 years. There would be vast technological, social and organisational challenges ahead before we could even begin to think seriously about commencing production. What we would begin work on are challenges far more modest and far closer to our present capabilities — sending a human to Mars, setting up a permanent base on the moon, setting up a permanent base on Mars, and developing technologies for those purposes — specifically multi-use lifters, a space elevator, improved solar energy collection and storage, improved nuclear batteries, improved 3-D printing technologies, higher energy particle accelerators, space mining technologies, robots, machine learning, computing, life support systems and things as mundane as increased science and science education spending.

Those kinds of tasks are much, much, much lower cost than actually committing to building the Death Star in one go, and can relatively easily be funded from presently idle resources (thus not misallocating any resources) as measured by the output gap which currently sits at around $856 billion (5.8% of potential GDP). The United States (alongside like-minded countries with similarly large output gaps) could fund a manned mission to Mars ($6 billion), build a new high energy particle accelerator ($12 billion), give ten-thousand million-dollar basic research grants ($10 billion), build a base on the Moon ($35 billion) and invest $20 billion more in science education for less than 10% of the current output gap. Better still, NASA and space-related spending historically has a relatively high multiplier of at least $2 (and possibly as much as $14 for certain projects, as well as a multiplier of 2.8 jobs for every job directly created) of extra economic activity generated per dollar spent. Given that space-spending yields new technologies like global positioning systems, satellite broadcasting, 3-D printers and memory foam that lead to new products, this is unsurprising. It also means that such spending is likely to get the economy back to full employment more quickly. Once this round of projects is completed, we will have a better idea of where we need to go technologically to be able to build a Death Star. The next time the economy has a negative output gap and unemployment, a new series of large-scale projects can commence. Eventually, with the growth of technology, automation and knowledge, a project on the scale of the Death Star may become not only economically viable but a valuable contribution to human capacity.

Many free market purists will wonder what the point of all of this is. Didn’t the Soviet economy collapse under the weight of huge misallocation of capital to large-scale grandiose projects that nobody wanted? What about all the projects that could have been undertaken by the free market in the absence of such a grandiose project?  My answer to this is twofold — first of all, I am only proposing deploying idle resources that the market has chosen to allow to sit idle and unproductive for a long time. Second, there are some projects that are actually important but which are not currently viable in the market. Space technology is probably the most obvious example. While I greatly admire the new generation of space entrepreneurs, and while I concede that long-term space colonisation will be undertaken be private individuals and groups (in the manner of the Pilgrim Fathers who colonised America — people seeking the ability to live by their own rules, instead of those of established Earth-based jurisdictions) the private space industry is still a long way behind where states were forty or fifty years ago. The Apollo program that put human beings on the Moon has still not been matched by private enterprise.

Ultimately, the Death Star itself is far beyond current human capacities, and far beyond the capacity of the idle capital, labour and resources that we have the option of using up through public initiatives. This I must concede. But, as a super-long-term goal, the capacity to build such things is what our civilisation ought to aspire to. And getting to such super-long-term objectives requires investment and investigation today.

Printing Food…

NASA is funding the development of a printer for food:

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Of course, its immediate application is as an experimental technology to feed hungry astronauts in space.

This is getting interestingly close to the fantasies of a Star Trek-style food replicator. Consumers go to the store, buy cartridges of nutrients and flavourings, load them into their printer, download some recipes from the internet, print, and eat.

It may be early to hypothesise about costs, but I hypothesise that 3-D printing foodstuffs may massively lower the costs — both in material inputs and in monetary inputs — of producing food.

For instance, today 70% of water usage is for food-related irrigation. Today it takes 1000 to 3000 litres of water to produce one kilo of rice, and it takes 13000 to 15000 litres of water to produce one kilo of grain-fed beef. So crops and animals take lots and lots of water to rear to the time they go onto human plates. Manufacturing food directly in a 3-D printer cuts out all the resources and energy involved in rearing animals and growing irrigating crops — so could massively cut down on water and resource usage.

Unfortunately, in this era of 2-D printing inks for inkjet printers are more expensive than fine wines. It has been jokingly said that the first thing many of those who experiment with 3-D printing will do is a print a 2-D printer that isn’t such an infuriating moneysucker. So printing at home is by no means guaranteed to lower costs or increase convenience. The technology is still in its nascency, and ultimately the results may be very poor, at least to begin with.

But in the long run, the cost-saving and resource-saving potential may win out. Perhaps 3-D food printing could be the innovation that does for human demand for agriculture what petrochemical fertilisers did in the 20th Century. At the time of Malthus, it was widely recognised that humans were oversaturating the land, that population was growing unsustainably and that it all had to end in starvation, cataclysm. This Malthusian fire and brimstone is once again popular today, with many true believers “doing the math” and declaring that human population growth is unsustainable, and some even suggesting forcible measures to prevent excessive population growth. But the first Malthusians failed to factor human innovation into their calculations. Fertilisers and other innovations in agriculture were black swans that derailed their predictions. In the long run, an innovation like food printing that massively reduces land use, water use and resource use could be the black swan that derails the predictions of modern Malthusians.

And with enough practice, recipes designed for 3-D food printers may turn into as much of an artform as recipes designed for regular ingredients and human labour. There will most likely aways be a niche for human-prepared and naturally-grown food. But music, video, books, etc, distributed via the internet are now of sufficient quality for widespread acceptance. With sufficient innovation, care, thought and experimentation it is possible that food (alongside various other 3-D printed goods) distributed digitally can reach acceptable standards.

The Shape of Regulatory Capture

Yesterday, I wrote about the problem of regulatory capture:

Ultimately, the people chosen as central planners have a track record of enacting policies that enrich themselves more than everybody else. The people lining up at Davos calling for a new system, i.e. more government, are the same elite who have ruined the old one. As Jonathan Weill writes: “It’s becoming hard not to suspect that the annual gathering in Davos has become a conclave for global elites to promote crony capitalism and state-backed enterprise, ensuring that national coffers remain available to be tapped for private gain.”

Here’s a chart that illustrates the shape of that:

Plenty of money for bureaucracy, welfare, warfare and weapons contractors. But for basic science?

Not so much.

And that’s sad — because basic science seems to be one of the few arenas where government investment really does pay for itself.

From Nature:

A report by Families USA, a Washington DC-based health-advocacy group, found that every US$1 spent by the NIH typically generates $2.21 in additional economic output within 12 months.

Not as good as the Apollo program, but much better than war spending, which not only yields less output, but then goes and destroys the things it produces.