Opinion | Elon Musk, Mars and the Modern Economy

Elon Musk is clearly having a second; he’s attempting to again out of his deal to purchase Twitter, however he in all probability can’t with out paying billions in damages. Maybe that’s why he’s fascinated about zooming off to Mars?

OK, I’m being unfair. (Am I about to obtain a poop emoji?) Whereas Musk’s determination to discuss up a scheme to ship 1,000,000 colonists to Mars could replicate a want to alter the topic, his plan requires doing so by 2050 — and he has been speaking about that concept for years.

Nonetheless, the Mars discuss caught my consideration, largely due to the road about a million individuals (which I can’t assist however say in my finest Dr. Evil voice).

What’s your response to that quantity? Does it appear absurdly excessive? By way of the logistics of really getting individuals to Mars, it in all probability is. However my authentic dwelling subject in economics was worldwide commerce. And if you realize something about commerce, or for that matter the realities of trade, you understand that a million is definitely an absurdly low variety of individuals — far too few to assist a contemporary economic system.

Let’s as a substitute deal with the SpaceX chief’s Mars fantasies as a teachable second — an opportunity to speak in regards to the economics of globalization extra usually.

Musk’s feedback instantly known as to thoughts for me a nice essay by considered one of my favourite science fiction writers, Charlie Stross, that posed exactly this query: “What’s the minimal variety of individuals you want in an effort to keep (not essentially to increase) our present stage of technological civilization?”

Stross’s reply was that given the complexity of recent society, you’d want a lot of individuals. The truth is, writing again in 2010 — when Musk’s Tesla was nonetheless a struggling firm that had solely survived the Nice Recession due to an Obama administration bailout — he defined how Musk’s present plan is considering far too small: “Colonizing Mars would possibly properly be sensible, however provided that we are able to begin out by plonking 100 million individuals down there.” I agree — if something, that’s on the low aspect. To grasp why, you want to take into consideration why nations interact in worldwide commerce.

One cause is that international locations have completely different assets and climates: It’s onerous to develop pineapples in Norway. However another excuse is that within the trendy world there are sometimes big economies of scale in manufacturing. These economies of scale make it environment friendly to produce your complete world marketplace for some items from solely a handful of areas — generally only a single location — with worldwide commerce delivering these items to clients in different international locations.

For instance, a current scarcity of semiconductor chips — which appears, lastly, to be easing — has drawn consideration to the position of photolithography machines, which use mild to etch microscopic circuits on silicon wafers. (Any sufficiently superior know-how is indistinguishable from magic.) The world marketplace for these it seems, is dominated by a single agency within the Netherlands, ASML, which has a whole monopoly on the newest era of machines, which use excessive ultraviolet mild to make circuits much more microscopic.

So what number of factories does ASML have assembling these cutting-edge machines? One. (It has different factories producing subsystems.)

These economies of scale imply that nobody nation can moderately produce the total vary of products required to function a contemporary, high-technology economic system. Worldwide commerce is crucial, and extra important the smaller the economic system — which is why Canada is much extra depending on imports than the US, Belgium way more dependent than Germany, and so forth:

Now, given entry to world markets, even small international locations can have full entry to the advantages of recent know-how; life in Luxembourg is fairly good. However except we truly invent the Epstein Drive or one thing, the realities of transportation prices imply that Musk’s hypothetical Mars colony must be largely self-sufficient, reduce off from the remainder of the photo voltaic system economic system. And it wouldn’t have sufficient individuals to drag that off with something like a contemporary lifestyle.

As I mentioned, I see Musk on Mars as a teachable second, an unintended thought experiment that helps remind us of the optimistic facets of worldwide commerce. Sure, there are downsides to globalization, particularly to fast change that may disrupt entire communities. However you actually wouldn’t wish to stay in a world with out intensive worldwide commerce. And you actually, actually wouldn’t wish to stay on one other planet, reduce off from the globalization we’ve created on this one.

Fast Hits

Vaccine provide and worldwide commerce.

Concepts are getting costlier.

Distance is a serious barrier to commerce, even on Earth.

Simply to be honest, Musk is doing so much to create space journey cheaper.

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