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The Wealth of Space Colonies

17 Friday Jan 2020

Posted by pnoetx in Space Travel

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Mayflower, Native Americans, Plymouth Company, Rand Simberg, Terry L. Anderson

Pilgrim colonies in outer space will fare better under the liberal order of capitalism than socialism. Both forms of social organization require some form of governance: various rules regulating or prohibiting behavior and a system for adjudicating violations. Socialist pilgrims would be subject to central decision-making in all or most social affairs, as well as common property ownership and equally-shared rewards from effort of any kind. These are the classic conditions under which a tragedy of the commons can be expected, which would jeopardize the very survival of the colonists. In contrast, capitalist pilgrims would be subject to rules defining property rights; individuals would be free to make various production decisions and contract freely with one another, and perhaps only a portion of the rewards for effort would be shared equally via taxation. In other words, a great deal of the governance that takes place under capitalism would be of a private nature, just as it is on Earth in the advanced economies.

The authoritarian impulses of mission sponsors and planners might hold sway for a time, but they will ultimately clash with the long-term survival imperative. That might give way to a “discovery process” whereby authorities elect to conduct experiments to test various forms of social organization and degrees of individual autonomy. Rand Simberg has a pretty good idea about what those experiments would turn up. In “Socialists in Space“, he covers the history of the U.S. space program as a “command” model. A shift toward more private space activity is still underway, of course, but the power of competition and private enterprise to reduce costs is already evident. The subtitle to Simberg’s article extends that point: “Opening a frontier is hard. Its even harder when you’re a socialist“. He cites the cogent example of the pilgrim colony established by the passengers on the Mayflower:

“When the Plymouth Company adopted the settlement’s initial economic rules, it stated that “all profits & benefits that are got by trade, traffic, trucking, working, fishing, or any other means” were to be placed in the common stock of the colony, and that ‘all such persons as are of this colony, are to have their meat, drink, apparel, and all provisions out of the common stock.’ In other words, to use a phrase from a subsequent century: From each according to his ability, to each according to his needs.

About half the settlement died of starvation in the first winter. It was only after the colony changed its rules to allow people to keep the product of their own efforts, for their consumption or for sale, that they finally had the first bountiful harvest. This wasn’t a unique event; many of the early English settlements, including Jamestown a few years earlier, had to learn the lesson the hard way.”

Lest you object that many Native American civilizations lived for centuries under harsh conditions despite their collectivist forms of governance, it is something of a myth that those tribes always treated property as common. In fact, as Terry L. Anderson wrote in 1997:

“... while there were exceptions that led to the tragedy of the commons, generally American Indians understood the importance of incentives. Property rights, supplemented by customs and traditions where appropriate, often produced the incentives that were needed to husband resources in what was frequently a hostile environment.”

Simberg goes on to discuss the kinds of necessities, or actually opportunities, that are likely to arise in space. Entrepreneur-capitalists will exploit these more successfully than socialist workers ever could. That includes uses of extraterrestrial materials, agriculture, manufacturing, and terraforming solutions. There will be successes and failures, but the efforts will be diversified and the probability of success, and survival in an environment of extreme scarcity, will be improved by the superior structure of incentives for agents having ownership. There will be some dependency on the mission’s sponsoring organization for a considerable period of time, which might dictate certain “terms of trade”. Nonetheless, a liberal order is ultimately the surest way to make a colony prosper on any body or man-made structure in the universe.

We have seen repeatedly that the most effective means of achieving common objectives like ending privation, or indeed, survival, is individual liberty. Freedom and voluntary trade unlock growth in prosperity, thus providing the means for achieving broader social objectives (like the colony’s survival) and the provision of public goods.

For the foreseeable future, it is likely that missions into space, from launch to arrival and initial encampment, will be central planned, but the planning need not be the responsibility of any national government. Again, private space missions are a reality and are growing as a share of launches and payload. After all, the Mayflower itself was a private merchant vessel. The transit itself involves a singular overriding goal: to reach the destination safely, which is subject to high risks of catastrophe and thinly-tested technologies. Thus, it’s reasonable to expect a command structure to be more effective in transit than a crew of autonomous decision makers. Like the Mayflower, passengers will have limited freedoms while on board and during the initial stages of their settlement.

That may differ for more extended the missions. Just as there are likely to be greater benefits from personal autonomy in permanent settlements on moons and planets, the same would be true on multi-generational journeys to other star systems.

International treaties regarding activities and claims on resources in outer space are an area of controversy, according to Simberg. Some hope to use treaties to collectivize space, demanding “collective property rights” and equity in the use of extraterrestrial resources. I wrote about related topics last year in “Space, Property Rights, and Scarcity“, quoting a few uninformed comments by purported experts on space law about scarcity, capitalism, and the “global commons” theory of rights in outer space. Fortunately, there is considerable resistance to their socialist designs. Harvesting resources from outer space will be greatly encouraged by private incentives, much to the benefit of all mankind. And successful colonization of other worlds demands liberalized social arrangements that rely on private incentives. Fortunately, as Simberg says, the “current administration has repeatedly stated that space is not in fact a commons“.

 

 

Space, Property Rights and Scarcity

14 Thursday Mar 2019

Posted by pnoetx in Property Rights, Scarcity, Space Travel

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Asteroid Mining, Barrack Obama, Capitalism, Central Economic Planning, Extraction Rights, Outer Space Treaty, Planetary Science Institute, Property Rights, Rivalrous Consumption, Roy Balleste, Susan J Buck, Terraforming, The Economic Problem, Tragedy of the Commons, William Hartmann

Rights in outer space are an area of unsettled international law, particularly the topic of exploiting resources in outer space. Today there is some consensus that assignment of mineral extraction rights to private firms will enhance the promise of these resources for mankind and expedite future space exploration. However, I happened upon two strikingly misinformed comments from otherwise learned individuals who might have known better had they ever taken a basic course in economics, or had they applied a little basic logic to the subject matter. Both comments were made in defense of a strict interpretation of the “global commons” theory embodied in the 1967 Outer Space Treaty. Under that dubious interpretation, the establishment of private property rights on celestial bodies would be prohibited.

I first stumbled across the following from Roy Balleste, a law professor at St. Thomas University, in “Interstellar Travel and the Mission for Outer Space: A Human Rights Perspective“:

“Any policy designed to explore future possibilities in outer space should avoid the plundering of resources through excessive claims of property rights, which causes scarcity and all its failings. If the focus of space exploration is on resource acquisition, i.e., property rights, then resource management will become as important as the exploration itself. The scarcity of resources is also known as the ‘tragedy of the commons.’” [my emphasis]

This poor guy is mixed up! He footnotes Susan J. Buck as a source for these ideas, but I won’t even bother to research Ms. Buck’s work. Belleste did quite enough to raise my pique. Before I say anything else, I’ll first note that the tragedy of the commons occurs only in the absence of defined property rights to scarce resources. “The commons” means that a resource is owned in common. When use of that resource is at all rivalrous and unpriced, common ownership leads to competition for use and ultimately to overuse. Contrary to Balleste’s implication, assignment of property- or use-rights helps to resolve this difficulty.

As a first approximation, it’s probably fair to say that Belleste, in his gut, thinks of scarcity as want of things belonging to others, or perhaps things that are beyond the reach of the state. Surely he knows that scarcity is fundamental to the nature of mankind’s existence. That’s the reality that gives rise to “the economic problem”: how can society allocate scarce resources to best meet the needs and unbounded wants of its people.

Individual property rights establish the basis for voluntary trade, pricing, and incentives for production and conservation, providing for a decentralized and efficient solution to the economic problem. The prices established under such a regime are an accurate reflection of the true scarcity of resources because they balance demands and available supplies. When valuable resources are difficult or risky to exploit, it is secure property rights that provide the incentives for entrepreneurs to go to work, unlocking the benefits of those resources only to the extent that they are “economic”. Risks are taken in exchange for the possibility of future profit that might be earned through trade with willing buyers. This is true whether the raw resources exist deep in the ground, in outer space, or in the fertile minds of entrepreneurs. Far from causing scarcity, property rights are actually necessary to manage efficiently in a world of scarcity. As already noted, a further implication is that property rights encourage conservation: only those quantities are extracted as needed to satisfy demands and minimize waste, and through market prices, those demands are themselves tempered by the physical limits and costs of extraction.

Attempts to solve the economic problem in the absence of individual property rights require a central decision-making authority. How can such an authority hope to know or keep abreast of changes in individual needs and wants? And how can that authority maintain adequate information on the requirements of productive endeavors? Without individual agency, incentives become inoperative and prices don’t correctly signal the degree of scarcity across innumerable resources, including each individual’s time. Thus, these centrally-made decisions take on an arbitrary and coercive nature. It’s no wonder that central economic planning meets with such consistent failure.

Belleste undoubtedly resents inequality, and whether you believe that redistribution of wealth is just or an unjust violation of property rights, the real damage is how it erodes prospective returns to talent, hard work, and risk-taking. Indeed, the exercise of confiscatory power creates risk, for then the rewards of any productive endeavor are subject to the winds of politics and the whims of politicians.

The second quote that caught my attention was this doozy, courtesy of William Hartmann of the Planetary Science Institute:

“The capitalist system works as advertised only when the resources are effectively infinite…”

Um… no. There can be no question of what “works best” in the absence of scarcity, for then there is absolutely no economic problem to solve. Why bother? Infinite resources imply that prices are zero, and that talent, effort, and risk-taking are unnecessary. As we know already, conditions of scarcity are what gives rise to the economic problem for which capitalism provides a benchmark solution: an efficient allocation of resources that does not rely on coercion by the state.

I still plan to address the topic of rights in outer space in a future post. For now, suffice it to say that exploiting resources that can be extracted from asteroids, the moon, or other planets for the benefit of mankind is likely to require private incentives. In fact, President Obama signed a bill authorizing rights to resources extracted in outer space, yet there is still some debate as to whether that is permissible under the Outer Space Treaty. Even stronger incentives, however, would be established by granting permanent rights to mine or terraform particular tracts on celestial bodies, presumably as an incentive to those who reach them first.

Will ET Be a Socialist?

19 Wednesday Aug 2015

Posted by pnoetx in Capitalism, Socialism, Space Travel

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B.K. Marcus, Capitalism, Carl Sagan, central planning, Colonizing Mars, Elon Musk, Enrico Fermi, Extraterrestrials, F.A. Hayek, Fermi Paradox, Huffington Post, Interstellar Travel, io9, Large Hadron Collider, NASA, Neil deGrasse Tyson, Planned Society, Private Space Exploration, Public goods, Self-Replicating Machines, SETI, Socialism, SpaceX, The Freeman, The Great Filter, Tim Urban

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If we are ever visited or contacted by agents from an extraterrestrial civilization, what kind of society will they come from? The issue is given scant attention, if any, in discussions of extraterrestrial life, at least according to this interesting piece in The Freeman by B.K. Marcus. The popular view, and that of many scientists, seems to be that the alien society will be dominated by an authoritarian central government. Must that be the case? Marcus notes the negative views taken by such scientific authorities as Neil deGrasse Tyson toward laissez faire capitalism, and even Carl Sagan “… could only imagine science funded by government.” Of course, Tyson and Sagan cannot be regarded as authorities on economic affairs. However, I admit that I have fallen into the same trap regarding extraterrestrial visitors: that they will come from a socialist society with strong central command. On reflection, like Marcus, I do not think this view is justified.

One explanation for the default view that extraterrestrial visitors will be socialists is that people uncritically accept the notion that an advanced society is a planned society.  This runs counter to mankind’s experience over the past few centuries: individual freedom, unfettered trade, capitalism and a spontaneous social order have created wealth and advancement beyond the wildest dreams of earlier monarchs. Anyone with a passing familiarity with data on world economic growth, or with F.A. Hayek, should know this, but it Is often overlooked. Central planners cannot know the infinitely detailed and dynamic information on technologies, resource availability, costs and preferences needed to plan a society with anything close to the success of one arranged through the voluntary cooperation of individual actors.

Many of us have a strong memory of government domination of space exploration, so we tend to think of such efforts as the natural province of government. Private contractors were heavily involved in those efforts, but the funding and high-level management of space missions (NASA in the U.S.) was dominated by government. Today, private space exploration is a growth industry, and it is likely that some of the greatest innovations and future space endeavors will originate in the private sector.

Another explanation for the popular view is the daunting social challenges that would be faced by crews in interstellar travel (IST). Given a relatively short life span, a colonizing mission would have to involve families and perhaps take multiple generations to reach its destination. There is a view that the mini-society on such a ship would require a command and control structure. Perhaps, but private property rights and a certain level of democratization would be advantageous. In any case, that carries no implication about the society on the home planet nor the eventual structure of a colony.

A better rationale for the default view of socialist ETs involves a public goods argument. The earth and mankind face infrequent but potentially catastrophic hazards, such as rogue asteroids and regions of strong radiation as the sun orbits the center of the Milky Way galaxy. These risks are shared, which implies that technological efforts to avert such hazards, or to perpetuate mankind by colonizing other worlds, are pure public goods. That means government has a classic role in providing for such efforts, as long as the expected benefits outweigh the costs. The standard production tradeoff discussed in introductory economics classes is “guns versus butter”, or national defense (a pure public good) versus private consumption. IST by an alien civilization could well require such a massive diversion of resources to the public sector that only an economically dominant central government could manage it. Or so it might seem.

As already noted, private entrepreneurs have debunked the presumed necessity that government must dominate space exploration. In fact, Elon Musk and his company SpaceX hope to colonize Mars. His motives sound altruistic, and in some sense the project sounds like the private provision of a public good. Here is an interpretation by Tim Urban quoted at the link (where I have inserted a substitute for the small time-scale analog used by the author):

“Now—if you owned a hard drive with an extraordinarily important Excel doc on it, and you knew that the hard drive pretty reliably tended to crash [from time to time] … what’s the very obvious thing you’d do?
You’d copy the document onto a second hard drive.
That’s why Elon Musk wants to put a million people on Mars.”

Musk has other incentives, however. The technology needed to colonize Mars will also pay handsome dividends in space mining applications. Moreover, if they are successful, there will come a time when Mars is a destination commanding a fare. Granted, this is not IST, but as technology advances through inter-planetary travel and colonization, there is a strong likelihood that future Elon Musks will be involved in the first steps outside of our solar system.

While SpaceX has raised its capital from private sources, it receives significant revenue from government contracts, so there is a level of dependence on public space initiatives. However, the argument made by Marcus at the first link above, that IST by ETs is less likely (or impossible) if they live under a socialist regime, is not based primarily on recent experience with private entrepreneurial efforts like Musk’s. Instead, it has to do with the inability of socialist regimes to generate wealth, especially the massive wealth necessary to accomplish IST.

Discussions of ETs (or the lack thereof) often center around a question known as the  Fermi Paradox, after the physicist Enrico Fermi. He basically asked: if the billions and billions of star systems, even in our own galaxy, are likely to harbor a respectable number of advanced civilizations, where are they? Why haven’t we heard from them? My friend John Crawford objects that this is no paradox at all, given the vastness of space and the difficulty and likely expense of IST. There may be advanced civilizations in the cosmos that simply have not been able to tackle the problem, at least beyond their own stellar neighborhood. No doubt about it, IST is hard!

I have argued to Crawford that there should be civilizations covering a wide range of development at any point in time. In only the past hundred years, humans have increased the speed at which they travel from less than 50 miles per hour (mph) to at least 9,600 mph. The speed of light is approximately 270,000 times faster that that! At our current top speed, it would take almost 50% longer to reach our nearest neighboring star, Alpha Centauri, than the entire span of human existence to-date. With that kind of limitation, there is no paradox at all! But I would not be surprised if, over the next 1,000 years, advances in propulsion technology bring our top speed to within one-tenth of the speed of light, and perhaps much more, making IST a more reasonable proposition, at least in our “neighborhood”. There may be civilizations that have already done so.

Answers to the Fermi Paradox often involve a concept called the Great Filter. This excellent HuffPo article by Tim Urban on the Fermi Paradox provides a good survey of theories on the Great Filter. The idea is that there are significant factors that prevent civilizations from advancing beyond certain points. Some of these are of natural origin, such as asteroids and radiation exposure. Others might be self-inflicted, such as a thermonuclear catastrophe or some other kind of technology gone bad. Some have suggested that the Large Hadron Collider in Switzerland could be a major hazard to our existence, though physicists insist otherwise. Another example is the singularity, when artificial intelligence overtakes human intelligence, creating a possibility that evil machines will do us in. The point of these examples is that some sudden or gradual development could prevent a civilization from surviving indefinitely. These kinds of filters provide an explanation for the Fermi Paradox.

More broadly, there could be less cataclysmic impediments to development that prevent a society from ever reaching an advanced stage. These would also qualify as filters of a sort. Perhaps the smart ETs lack, or failed to evolve, certain physical characteristics that are crucial for advancement or IST. Or their home planet might be light on certain kinds of resources. Or perhaps an inferior form of social organization has limited development, with inadequate wealth creation and technologies to transcend the physical limitations imposed by their world. On a smaller than planetary scale, we have witnessed such an impediment in action many times over: socialism. The inefficiencies of central planning place limits on economic growth, and while high authorities might dictate a massive dedication of resources toward science, technology and capital-intensive space initiatives, the shift away from personal consumption would come at a greater and greater cost. The end game may involve a collapse of production and a primitive existence. So the effort may be unsustainable and could lead to social upheaval; a more enlightened regime would attempt to move the society toward a more benign allocation of resources. Whether they can ever accomplish IST is at least contingent on their ability to create wealth.

Socialism is a filter on the advancement of societies. ETs capable of interstellar travel could not be spawned by a society dominated by socialism and central planning. While government might play a significant role in a successful ET civilization, one capable of IST, only a heavy reliance on free-market capitalism can improve the odds of advancing beyond a certain primitive state. Capitalism is a relatively easy ticket to the wealth required for an advanced and durable civilization, and conceivably to the reaches of the firmament.

Unfortunately, there is absolutely no guarantee that capitalistic ETs will be friendly  toward competing species, or that they will respect our property rights. They might be big, smart cats and find us mouse-like and quite tasty. Their children might make us perform circuses, like fleas. In any case, if ETs get this far, it’s probably because they want our world and our resources. My friend Crawford says that they won’t get here in any case. He believes that the difficulty of IST will force them to focus on their own neighborhood. Maybe, but on long enough time scales, who knows?

I would add a caveat to conclusions about the strength of the filters discussed above. A capitalistic society might reach a point at which it could send artificially intelligent, self-replicating machines into space to harvest resources. Those machines might well survive beyond the end of the civilization that created them. Conceivably, those machines could act autonomously or they could take coordinated action. But we haven’t heard from them either!

For a little more reading, here is SETI‘s description of the Fermi Paradox, and here is a post from io9 on the Great Filter.

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