Economics in Space

Before attempting to predict how commerce will occur in space or how government will be designed to regulate it, it is important to understand how the basic economic factors will be changed.

Comparison of Economic Elements
On Earth ELEMENT In Space
free AIR expensive
cheap WATER expensive
moderate FOOD moderate
expensive ENERGY cheap
expensive TERRITORY free
expensive BUILDING MATERIAL cheap
expensive SHELTER cheap
expensive TRANSPORT cheap
local-fast COMMUNICATIONS nonlocal-slow

Even though air and water may be available in abundant supply (in the asteroids and on moons) it seems likely that they will remain the most precious elements of a space economy. Early stages of a space economy would seem to have to center on these two resources.

Solar to electricity conversion technology continues to advance in efficiency, and will likely become the primary energy source for space based operations. Since it will be fairly simple to extend large collection areas, electrical energy will become extremely cheap and readily available.

As the mining of rocks in the asteroid belt begins to produce valuable minerals and raw materials for manufacturing, the foundation of the economy will expand to include new products and new opportunities for commerce. After the valuable minerals and elements have been extracted from rocks, there will be large amounts of leftover stone and dirt-like materials that can be used as raw materials for many forms of manufacturing and as building materials.

With empty space being free to claim, cheap building materials, and low-cost solar energy, building costs will be low and the result should be large habitats with far more square feet living space per capita than on Earth. Part of this is simply because on Earth, we take open public space for granted (not just parks, but streets, sidewalks, parking lots, shopping areas and more…) but in space any available public open space will be counted as square feet inside the habitat environment.

With raw manufacturing materials and energy being cheap, any manufacturing processes that can benefit from being in a zero-gravity vacuum environment will have an obvious advantage over earth-bound manufacturing. These may include nano-manufacturing, semiconductors and other electronics (basically anything that can benefit from a “clean-room” environment), some specialized pharmaceuticals and bio-genetic research and manufacturing. Any manufacturing or processing operation that can benefit from wide scale or operations that are spread out over a large area will provide an advantage because of the ease of creating large machines and processing plants in space.

Transportation costs space to space and space to earth will probably also be minimal. Dropping objects into a gravity well can be accomplished much easier than climbing out of the well. Once the cost of lifting people out of a gravity well is overcome, the other costs of living in space seem to offer tremendous advantages over living in a gravity well. As nanotechnology and science in general advance, some of these factors will no doubt change, but many of them will change equally for both location sets and there will be no real delta effect on the economic factors.

The first explorers and pioneers who venture out into space will be highly dependent on supply lines from Earth, but as time goes by and infrastructure is developed, the space dwellers will become more and more self-sufficient until eventually, the space communities will have an economic advantage over Earth based communities and enjoy controlling influence over commerce and trade.

SEE ALSO:
Commerce in Space

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