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#1 2011-12-14 18:05:01

louis
Member
From: UK
Registered: 2008-03-24
Posts: 3,939

Mars Economic Activity

What sort of revenue earning activities might we see in the early colonial period on Mars - the first 20-30 years say?  Here are some ideas with indications of earning potential:


Basing my analysis on a figure of $20,000 per kg for transit from Mars to Earth, I think the following revenue earners could be pursued by early colonists -


1.  Sale of regolith- I think a figure of $100,000 per kg will be quite reasonable. Even ordinary Mars dust will be a very valuable commodity (as is ordinary lunar dust).  My analysis suggests several thousand institutes around the globe would be interested in acquiring Mars regolith (just as there is great interest in lunar regolith).  I think earnings of $200-$400 million per annum for the first ten years are possible.

2.  Sale of meteorites.  Meteorites on Earth are collected by both scientists and private collectors. Rare meteorites can be worth millions of dollars. Mars meteorites will be rare almost by definition.  I think we could be talking about $500,000 per kg for the right meteorites. Geology.com offers advice over the web on the pricing of meteorites. At the cheap end these can start at around 50 cents per gram. But rare Mars and lunar meteorites may sell for $1,000 per gram or more – much more in some cases.  So a kilogram meteorite could cost around a $1million or more.  For the first ten years, I think the value of meteorite exports could be in the region of $500 million per annum.

3.  Export of gold, platinum, diamonds and other precious metals and stones.  With gold currently trading at over 50,000 dollars a Kg, this could be a major source of revenue. Of course it does depend on the colonists discovering exposed gold sources on the surface – no reason why not as no one else is prospecting for gold. Similarly other precious metals and stones could produce huge amounts of revenue. Earnings of $50million per annum don't seem impossible.

4.  General commercial sponsorship. The sponsorship available for the initial landings should be on a par with the Olympics. But there will be opportunities for ongoing sponsorship e.g. of exploration missions to Olympus Mons or the Grand Canyon of Mars or to the polar region.  Commercial sponsorship of the Olympics amounts to about $1000 million in the Olympic year. I think we could assume the initial landing could attract sponsorship of about $500million at least.  Subsequent explorations should be able to clear at least $200million a time I would say.

5.    Sponsored colonists.  The “gap year” student.   There will in our view be no shortage of young suitably qualified personnel who would wish to be part of the experience of building the Mars colony as part of an interval between education and work. And, who can doubt that employees back on earth would be keen to employ young enterprising people who take part in this way and show determination, fortitude and a high level of skill acquisition?  Of course the gap year concept will be extended somewhat – it may be a round trip of 2.5 years, with perhaps 1.5 actually spent on Mars.
Earnings at $50m per person might give an average of $200million per annum in the first ten years.


4.  University of Mars franchise.  .  Establishment of a University on Mars. This could be the subject of competition between the best endowed seats of learning on Earth. Those with a strong planetary science and astronomy bias might be tempted to sink a lot of money into such a project, especially if they were being guaranteed a head start over their rivals. Mars University of Harvard?  Sorbonne Mars? Kyoto Mars University?  It might begin as a small postgraduate teaching and research facility.  A University, possibly with a benefactor’s backing might be prepared to sink several hundred million dollars into such a foundation and continue to fund at a significant rate.  Endowments of $100-500m are not uncommon on Earth. So, I think  a $500m endowment for this unique foundation is possible. 

5.  Sale of land and bonds.  As the economic potential of Mars becomes clear, so will the urge to invest.  If there is a legal framework backed by a group of Earth nations or the UN, this will allow the sale of land (perhaps on long leases) and investment bonds.  If a million square kilometres was sold off at $10,000 a square kilometre, that would raise $10 billion.  If the Mars Consortium can start earning say $1 billion per annum, then bonds of several billion dollars could be sold.

6.    Sale of Mars TV rights. Clearly exclusive TV rights to the initial Mars landings would have huge value.  I think we could be talking about $200-500 million – with the globe parcelled up into about 10 lots.

7.    But later exploration missions TV rights (e.g. to Olympus Mons) will also command high prices. So we can expect something like $10 million per annum (with no significant mass transfer)

8.    Once agriculture is up and running, there will be a significant market across Earth for luxury foods and wine from Mars. How about a bottle  of “Mars Champagne” at $200,000?  Any takers? 
Perhaps $1 million  per annum.

9.     Luxury goods – e.g. a Mars Rolex.  The mechanism might be made on Earth, but the watch is finished on Mars with Mars gold.  This could be really big I think.  Imagine watches selling at $100,000.  I see no reason why the Mars Rolex couldn't sell  5,000 of those per annum - $500million.

10.    Sale of “real time” interactive experience on Mars. If we can beam back 3D data from Mars, there would be scope I think for interactive facilities on Earth. 
Eg. on Earth you get to move replica rocks around with an automated digger, but the automated digger on Mars performs the same action.  And perhaps drills into the rock to analyse it. This could be linked in with Mars museums or theme centres.  Global visitors at $20 per person per annum?? - maybe generating  $80 million per annum.

11.    Mars tourism.  If we can develop direct shot rocket technology, I think there will be scope for development of Mars tourism – people coming to Mars for perhaps 2 month stays and going on treks to the major tourist sites (e.g. Olympus Mons).  Of course, initially, this will be the province of the super-rich but if the colonists can master home grown  rocketry prices could come down significantly. By year 20 tourism might be taking off and it could generate several hundred million of dollars per annum.


Let's Go to Mars...Google on: Fast Track to Mars blogspot.com

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#2 2011-12-15 17:48:52

louis
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From: UK
Registered: 2008-03-24
Posts: 3,939

Re: Mars Economic Activity

I should have added luxury jewellery as an obvious money spinner.  Very lightweight jewellery - polished minerals of various types could be produced on Mars and shipped back to Earth. They will  I think be able to earn about $200 per gram. With proper marketing, they will be seen as a romantic gift from another planet: Mars communicating with Venus, so to speak.


Let's Go to Mars...Google on: Fast Track to Mars blogspot.com

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#3 2011-12-17 18:05:18

louis
Member
From: UK
Registered: 2008-03-24
Posts: 3,939

Re: Mars Economic Activity

To add some more ideas:

- Of course the artefacts used by the first mission on Mars will be v. valuable to collectors, museums and so on.  There is no reason why many of the lighter weight objects shouldn't be brought back for auctioning. 

- The first colonists should write and sign statements about their arrival on the planet, dated.  First day statements would be worth a huge amount I would suggest - several million dollars. but later ones also would be worth large amounts - certainly more than $20,000 a gram.

- Setting up a space-postal service to Mars with stamps and franking  would I think generate significant income.  Rare stamps can sell for millions of dollars.  I think the Mars service would start with a v. rare celebratory issue of maybe ten stamps to celebrate the arrival - perhaps containing letters from notables such as the President of the United States.  I think income from the Space Postal Service could easily exceed $2 million per annum.

- Projecting people's photographs on to the surface of Mars. The photos would be despatched digitally to Mars, perhaps in an on board computer. Photos would be taken of the projections and returned to the people concerned so they have a record of their photo on Mars.  This could be a very cheap way of generating income. Perhaps at a £100 a time it would be a novel type of birthday present appealing in particular to people interested in space and Mars.


Let's Go to Mars...Google on: Fast Track to Mars blogspot.com

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#4 2012-01-05 20:09:09

JoshNH4H
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From: Pullman, WA
Registered: 2007-07-15
Posts: 2,378
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Re: Mars Economic Activity

Louis-

I know I said I would reply to this topic, and it's been a while since I said that.  Nevertheless, here is my reply.  Before I respond to particular points of your post, general point to keep in mind:  I think that the first few science missions will be concentrated a lot more on exploration and prospecting than generating money.  I don't necessarily rule out that kind of thing to try to defray costs, but I believe that because the science and the prospecting associated with the first few missions is really important for the future development of the colonies, if something to generate revenue for the colonies cuts into science and exploration time, it's not worth it.  Further, I'm in general going to be saying that your numbers are on the optimistic side.  I am also of the opinion that initial missions should worry a lot more about doing science than selling themselves out to corporations, especially when doing so IMO will not generate sufficient revenue to significantly impact mission cost.  For a colony, of course some amount of time will have to be spent in looking for things which will generate income in terran dollars for the colony, and it's a simple matter of which ones to choose.  Are you familiar with my exchange rate vs. profitability argument for a colony?  It would appear to be very relevant to this discussion.

Please keep in mind that I am putting a lot of time in this post.  I am liable to be offended if you reject a point without citations and without specifically addressing the sub-points I made in support of my counter-claims.

For specific points that you made:

1.  I think that your figure of $100,000/kg is at the very best completely baseless.  [Even so, you're talking about bringing back 2-4 tonnes of stuff per year.  How exactly do you propose to do this?  That's a lot for one mission, especially when you're only actually talking about a mission every 26 months.  So you want to bring back 4-8 tonnes of regolith per mission?  Sounds like that will really push your mass budget.]  Further, it really undermines your argument when you make outrageous claims (regardless of what you think of your claim, I have yet to see anyone agree with you, which is a hint that you're going to want to provide some evidence if you want to legitimize it).  This website says that lunar and martian meteorites currently go for $1,000/gram.  This does not support your statement.  To put it another way, the tiny, tiny fraction of all meteorites (themselves a pretty limited bunch) which make it to Earth from Mars went for $1,000,000 per kilogram.  I can't imagine there were more than a few kilograms out there.  There are 103 Martian Meteorites known.  The total mass of all of theses meteorites is 101.8 kg.  This gives a total theoretical market value of 101.8 million dollars.  But that's not the real value.  Only a small proportion of these are sold in any given year.  I think 10% would be putting it very much on the high side.  You're talking about, in one single mission, bringing back at least 40 times as much mass of Mars stuff as is known to exist on the planet Earth, with a promise of more every two years.  Now, this market is definitely not tapped out.  But seeing as the amount of Martian meteorites which are actually available for sale (keeping in mind that the vast majority of Martian meteorites known are probably sitting in university labs) would increase by a factor of a thousand times or more, and the rate of increase by a million times or more (interestingly, the rate at which martian meteorites seem to have been found seems to have peaked in the early 2000s), to posit a fall in price of merely 10 times is simply ludicrous.  I think we are looking at more like $25,000/kg, at best.  This is still a hell of a lot of money for a terrestrial commodity, right up there with a confirmed scientific meteorite which people saw falling to Earth.  Remember, it's not just a matter of existing supply but also of promised supply.  If you plan to bring back 4-8 tonnes every year forever, the rarity value is going to plummet.

2. Simply ridiculous, for many of the same reasons as above.  As you will see on the same website I gave for the price of lunar and martian meteorites, the most pricey of meteorites from unknown sources (such as an asteroid, or whatever, the kind of thing you would find on the Moon), are worth up to $25,000.  That's the ones that people saw falling from the sky and then collected and they were found to be of a rare type.  Having been on Mars would increase the value somewhat compared to Earth, but it's important to keep in mind that nobody has seen meteorites falling from the sky on Mars.  Given the added novelty value of it being a meteorite vs. just regolith, I would project a value of about $30,000/kg, also at best, slightly more than simply regolith (remember, Martian rocks or regolith have already been in space; being in different space doesn't really up the value all that much.  Something else to keep in mind, because Mars' atmosphere is so much thinner than Earth's, meteorites won't have that same charred look as Earth ones do.

3. I don't know of any known concentrations of Gold.  For a mission, it's silly to try to make a profit in this way given the cost of sending over transportation.  It's a bit optimistic IMO to expect the gold to be near enough a place where it makes sense to place a colony (e.g., near water and Iron and silica and perhaps a few other things needed for production of things that the colony needs, which IMO are more important than finding gold to export to Earth.  Obviously a colony needs to have a launch infrastructure to launch the gold back to Earth if it wants to make a profit from it, but that will be fairly necessary for a lot of profit-making strategies, as well as interaction with Earth.  Assuming you can get a rocket engine working, a pressure-fed methlox rocket from Mars Surface to phobos isn't totally unthinkable.  On the other hand in the context of an early colony it's probably beyond the manufacturing capability there.  I think exporting physical materials is something that's going to have to wait a few years.  Also, the first rockets will almost certainly be solid fueled because that does not necessitate a complex engine (think of how far back solid rockets go; a medieval chinese firework won't get to Mars orbit anymore than it'll get to LEO but it's a much simpler technology).

4. I would like a citation for your number on olympic sponsorship.  I googled and could not corroborate the number of a billion dollars.  $500 million won't cover any significant proportion of the cost of the initial mission.  Remember, NASA isn't in it for a profit and if you want to write off development you have to be talking about NASA.  I don't know what role sponsorship has for the colony but it might be possible to generate some revenue based on using the Mars Colony as a brand.

5. Unrealistic and a bit silly.  No person or institution has that kind of money just lying around.  I challenge you to find even one example of anything even remotely similar in magnitude.

Second 4. Also unrealistic.  These universities have no reason to have a mars branch, the costs of transportation being what they are.  Further, I don't see how this would lead to any additional revenue.  Universities might be big, but that does not mean that they have unlimited cash.  Also, you don't seem to know what an endowment is, it is not money that can be spent but rather money from which one generates interest.  A 500 million dollar endowment does not mean that someone just gave you 500 million dollars to spend however you want to.

Second 5. There is no way to enforce land claims in land which you do not actually control.  I strongly doubt any Earth nation would really get behind such claims to the extent you would need to to make them enforced.  Further, I don't believe that there will be much demand at all for land which it'll cost you many millions of dollars, at the least, to actually use.  Rather, these unsubstantiated land claims will probably just cause an organizational problem for Mars in the long term, when people actually start using the land.  Further, the colony will have a problem if they accidentally sell off the land of an orebody/other resource that they later realize they intend to use.

6. Meh, maybe.  How much do networks pay to air the Olympics?  Once again unlikely to contribute significantly to total mission cost, regardless.

7. Also a maybe.  Depends how you do it, I guess, and what you market it as.

8.  Fortunately, the wine market is one on which we can obtain substantial information because high-quality wine is a relatively large market.  The Huffington post has compiled a slideshow of the most expensive bottles of wine ever.  If you were to sell a bottle of wine for $200,000, it would be the fourth most expensive bottle of wine ever sold.  Let's be realistic: Mars wine is not going to be some super-high quality thing.  It's going to be average at best.  It is not going to garner $200,000/bottle (very similar to the per-kilo price).  I think we're looking more at a thousand dollars per bottle and per kilo, maximum.  Probably not worth producing.

9. While it's not unheard of to have watches of a hundred thousand dollars or more, I can't imagine that there is a market for 5,000 watches which will likely be of inferior quality (We don't have all these fancy bells and whistles on Mars that we can make on Earth.  I suppose the frame could be made on Mars and the fancy gizmos added later, though at a significantly reduced profit.  That said, according to this article it's not completely beyond the scope of possibility if a good product can truly be made.  I don't know if the profit would be as much as you suggest, and of course you also need a launch infrastructure, though we've commented on that before.  I don't know how resource intensive it would be to make the watches.  This is however a venue where martian watches may be able to raise some good money.

10. Erm.... what?  I don't quite understand what you're talking about, but you don't need reality for a VR experience and it would be quite difficult to actually extract a profit from that.

11. By year 20 it might be first starting, maybe.  Several hundred million dollars per year is simply ludicrous.  Nobody has that kind of money.

Last edited by JoshNH4H (2012-01-06 00:15:15)


-Josh

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#5 2012-01-05 23:45:59

Mark Friedenbach
Member
From: Mountain View, CA
Registered: 2003-01-31
Posts: 304

Re: Mars Economic Activity

Don't mean to be a downer butLunar regolith is valuable because of its incredible scarcity. Some of it was given out as gifts or smuggled out as momentos during and shortly after the Apollo programme. Now the U.S. government claims ownership of all non-meteoric (non-Soviet) lunar samples. About every other month there's a story on NASAWatch about the inspector general kicking in the door of some old widower trying to get retirement money by selling a resin-encased lunar sample given to her late husband by Shepard or Scott. The reality is that once there is regular, reliable return of materials, the entire collectable market will disappear.

You can make money off of luxury goods for sure. But if you want to make a realistic guess, don't look at a the size of the whole luxury goods market, or even a category of products. Look at how a single luxury product does. I would expect numbers closer to the tens of millions, but I'm open to a convincing argument either way.

Some of the other ideas are very workable, although the revenue estimates are very ambitious. What means did you use to come by them?

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#6 2012-01-06 08:19:52

louis
Member
From: UK
Registered: 2008-03-24
Posts: 3,939

Re: Mars Economic Activity

Mark Friedenbach wrote:

Don't mean to be a downer butLunar regolith is valuable because of its incredible scarcity. Some of it was given out as gifts or smuggled out as momentos during and shortly after the Apollo programme. Now the U.S. government claims ownership of all non-meteoric (non-Soviet) lunar samples. About every other month there's a story on NASAWatch about the inspector general kicking in the door of some old widower trying to get retirement money by selling a resin-encased lunar sample given to her late husband by Shepard or Scott. The reality is that once there is regular, reliable return of materials, the entire collectable market will disappear.

You can make money off of luxury goods for sure. But if you want to make a realistic guess, don't look at a the size of the whole luxury goods market, or even a category of products. Look at how a single luxury product does. I would expect numbers closer to the tens of millions, but I'm open to a convincing argument either way.

Some of the other ideas are very workable, although the revenue estimates are very ambitious. What means did you use to come by them?

The whole premise of this thread is that sales are permitted. The price of the Soviet lunar samples was way beyond waht I have assigned here.   Any Mars Consortium can control release of material on to the market as long as there are no competitors.  I would accept there will be a decline in value, but I don't accept it will go down below $20,000 per kg for even ordinary regolith.- unless commerce expands dramatically (in which case this thread is redundant anyway - the problem of funding contact will have been solved). 

My estimates are all extrapolations from actual values on earth on related products (e.g. Russian space tourism; university endowments; Rolex price list etc) . They are obviously open to dispute and have not been conservative. This is an enthusiast for colonisation speaking,not an accountant! smile But on the other hand, I am only one person, and no doubt if you put 1000 business and creative people together they could come up with lots more ideas.


Let's Go to Mars...Google on: Fast Track to Mars blogspot.com

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#7 2012-01-06 12:03:01

Mark Friedenbach
Member
From: Mountain View, CA
Registered: 2003-01-31
Posts: 304

Re: Mars Economic Activity

No, I mean how do you figure you could clear 5,000 watches per year, and how did you figure that availability would effect its actual price?

The Apollo/Soviet samples were being sold on the open market, to collectors at the going rate of lunar material. It's entirely relevant.

Last edited by Mark Friedenbach (2012-01-06 12:03:57)

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#8 2012-01-06 14:29:21

Hop
Member
From: Ajo
Registered: 2004-04-19
Posts: 146
Website

Re: Mars Economic Activity

Mark Friedenbach wrote:

No, I mean how do you figure you could clear 5,000 watches per year, and how did you figure that availability would effect its actual price?

The Apollo/Soviet samples were being sold on the open market, to collectors at the going rate of lunar material. It's entirely relevant.

I been over this a 100 times with Louis. Supply and Demand. Once rare objects becoming abundant. A niche market spending millions suddenly becoming wealthy enough to spend many billions.

He is deaf to all these arguments.


Hop's Orbital Mechanics Coloring Book - For kids from kindergarten to college.

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#9 2012-01-06 14:48:14

louis
Member
From: UK
Registered: 2008-03-24
Posts: 3,939

Re: Mars Economic Activity

Mark Friedenbach wrote:

No, I mean how do you figure you could clear 5,000 watches per year, and how did you figure that availability would effect its actual price?

The Apollo/Soviet samples were being sold on the open market, to collectors at the going rate of lunar material. It's entirely relevant.

Mark,

I didn't keep a record of my Rolex research , but take a look at this:

http://reviews.ebay.com/It-does-not-tak … 0000017874

The comment there suggests something like 1 million Rolexes are produced each year (but there are other very expensive watches produced by competitors in the market - so we are probably talking about several million worldwide).  The idea that Mars could not corner 5,000 in a market for interplanetary watches out of this huges volume of luxury watches is frankly not a runner.  I can see the adverts now and there is no doubt that the watches would be at the highend - and imagine if they came with a digital pic card where people could see the watch making process and where the gold or diamonds or iron in their watch came from.

I don't recall about the American examples but yes the Soviet examples are relevant in the sense that you could get a much higher price per gram than I reference  if you restricted supply. But I think the point with standard regolith is that universities will want to get their hands on a reasonable amount for research purposes. 

This link shows that the two oldest US universities have a combined endowment of $55billion.

http://www.nytimes.com/2008/01/08/education/08yale.html

The idea that - when you extrapolate that across the globe - there won't be billions available for Mars related purchases, I can't accept.   Imagine if you are at one of the top ten US universities and you discover three tranches of Mars regolith are going to be available for purchase in a sealed bid process. Are you really going to allow one of your competitors to steal the prestige of having
the first Mars regolith? Where are the brightest students going to go  - to the university with Mars regolith or the one without. And think of what it can do in terms of your general public image as a centre of science. How much free publicity goes with that purchase ? Huge and ongoing amounts.


Let's Go to Mars...Google on: Fast Track to Mars blogspot.com

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#10 2012-01-06 15:33:02

louis
Member
From: UK
Registered: 2008-03-24
Posts: 3,939

Re: Mars Economic Activity

Hop wrote:
Mark Friedenbach wrote:

No, I mean how do you figure you could clear 5,000 watches per year, and how did you figure that availability would effect its actual price?

The Apollo/Soviet samples were being sold on the open market, to collectors at the going rate of lunar material. It's entirely relevant.

I been over this a 100 times with Louis. Supply and Demand. Once rare objects becoming abundant. A niche market spending millions suddenly becoming wealthy enough to spend many billions.

He is deaf to all these arguments.


Hop, I don't appreciate the dismissive tone - especially when it's you who are deaf to argument.

Look at the facts of what has happened here on Earth. The argument is quite clear: professional methods of meteorite collection have led to the supply of meteorites on Earth increasing hugely. If you are right, the value of meteorites will have been steadily falling since the supply increased.  Has that happened? No.

So you are wrong, I am afraid. Why? Because there are many more universities and individuals interested in buying them and because the search for meteorites has brought forward lots of new types that have their own rarity value. 

No one can predict how things will go with Mars meteorites and regolith,but there are lots of universities,museums and collectors out there and we are bound to come up with some new examples of meteorites that will surprise us.  The idea that they will fall below $20,000 per kg I don't accept. Universities will be competing to have the most complete range of Mars material available. They won't stop at their first kg.

There may be some falling away of value but as along as value remains well above $20,000 per kg, a profit can be made.


Let's Go to Mars...Google on: Fast Track to Mars blogspot.com

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#11 2012-01-06 18:26:12

louis
Member
From: UK
Registered: 2008-03-24
Posts: 3,939

Re: Mars Economic Activity

JoshNH4H wrote:

Louis-

I know I said I would reply to this topic, and it's been a while since I said that.  Nevertheless, here is my reply.  Before I respond to particular points of your post, general point to keep in mind:  I think that the first few science missions will be concentrated a lot more on exploration and prospecting than generating money.  I don't necessarily rule out that kind of thing to try to defray costs, but I believe that because the science and the prospecting associated with the first few missions is really important for the future development of the colonies, if something to generate revenue for the colonies cuts into science and exploration time, it's not worth it.  Further, I'm in general going to be saying that your numbers are on the optimistic side.  I am also of the opinion that initial missions should worry a lot more about doing science than selling themselves out to corporations, especially when doing so IMO will not generate sufficient revenue to significantly impact mission cost.  For a colony, of course some amount of time will have to be spent in looking for things which will generate income in terran dollars for the colony, and it's a simple matter of which ones to choose.  Are you familiar with my exchange rate vs. profitability argument for a colony?  It would appear to be very relevant to this discussion.

Please keep in mind that I am putting a lot of time in this post.  I am liable to be offended if you reject a point without citations and without specifically addressing the sub-points I made in support of my counter-claims..

I've already put a lot of time into replying - lost a long post. Please bear in mind I have a job, a family and many other interests. So I am not going to be your citation slave.

Your point about exploration being the priority is poorly made. Exploring and prospecting means collecting material. What are you going to do with it - throw it back on the Mars surface like throwing a fish back in the water after catching it? Or are you going to bring some of it at least back to Earth . And then what are you going to do?  Give it away free? Why? - if you need billions of dollars to keep up the colonisation effort?  The sensible thing to do is to sell it. And that is from mission one onwards.

I may answer your post in stages to prevent another lost post situation.


JoshNH4H wrote:

1.  I think that your figure of $100,000/kg is at the very best completely baseless.  [Even so, you're talking about bringing back 2-4 tonnes of stuff per year.  How exactly do you propose to do this?  That's a lot for one mission, especially when you're only actually talking about a mission every 26 months.  So you want to bring back 4-8 tonnes of regolith per mission?  Sounds like that will really push your mass budget.]  Further, it really undermines your argument when you make outrageous claims (regardless of what you think of your claim, I have yet to see anyone agree with you, which is a hint that you're going to want to provide some evidence if you want to legitimize it).  This website says that lunar and martian meteorites currently go for $1,000/gram.  This does not support your statement.  To put it another way, the tiny, tiny fraction of all meteorites (themselves a pretty limited bunch) which make it to Earth from Mars went for $1,000,000 per kilogram.  I can't imagine there were more than a few kilograms out there.  There are 103 Martian Meteorites known.  The total mass of all of theses meteorites is 101.8 kg.  This gives a total theoretical market value of 101.8 million dollars.  But that's not the real value.  Only a small proportion of these are sold in any given year.  I think 10% would be putting it very much on the high side.  You're talking about, in one single mission, bringing back at least 40 times as much mass of Mars stuff as is known to exist on the planet Earth, with a promise of more every two years.  Now, this market is definitely not tapped out.  But seeing as the amount of Martian meteorites which are actually available for sale (keeping in mind that the vast majority of Martian meteorites known are probably sitting in university labs) would increase by a factor of a thousand times or more, and the rate of increase by a million times or more (interestingly, the rate at which martian meteorites seem to have been found seems to have peaked in the early 2000s), to posit a fall in price of merely 10 times is simply ludicrous.  I think we are looking at more like $25,000/kg, at best.  This is still a hell of a lot of money for a terrestrial commodity, right up there with a confirmed scientific meteorite which people saw falling to Earth.  Remember, it's not just a matter of existing supply but also of promised supply.  If you plan to bring back 4-8 tonnes every year forever, the rarity value is going to plummet...

See my replies to Mark and Hop above.  Also - Harvard and Yale have a combined endowment of $55billion. Extrapolate that across the globe - there must be $100s of billions of endowments on Planet Earth.  The idea that a few billions of those over ten years couldn't be made available for Mars-related purchases seems naive to me. I keep thinking you are like one of those Native Americans ready to sell Manhattan Island for a handful of beads.


JoshNH4H wrote:

2. Simply ridiculous, for many of the same reasons as above.  As you will see on the same website I gave for the price of lunar and martian meteorites, the most pricey of meteorites from unknown sources (such as an asteroid, or whatever, the kind of thing you would find on the Moon), are worth up to $25,000.  That's the ones that people saw falling from the sky and then collected and they were found to be of a rare type.  Having been on Mars would increase the value somewhat compared to Earth, but it's important to keep in mind that nobody has seen meteorites falling from the sky on Mars.  Given the added novelty value of it being a meteorite vs. just regolith, I would project a value of about $30,000/kg, also at best, slightly more than simply regolith (remember, Martian rocks or regolith have already been in space; being in different space doesn't really up the value all that much.  Something else to keep in mind, because Mars' atmosphere is so much thinner than Earth's, meteorites won't have that same charred look as Earth ones do.

No charring? So we can forget the heatshields for Mars? Ha-ha.

Take a look at this:

http://geology.com/meteorites/value-of-meteorites.shtml

"At the high end of the pricing scale are unusual types such as the diogenite Tatahouine (fell June 27, 1931, Foum Tatahouine, Tunisia). A prime specimen will easily fetch $50/gram while rare examples of lunar and Martian meteorites may sell for $1,000/gram or more — almost forty times the current price of gold! "

You're saying you know better than geology.com?


Let's Go to Mars...Google on: Fast Track to Mars blogspot.com

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#12 2012-01-07 00:56:18

JoshNH4H
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From: Pullman, WA
Registered: 2007-07-15
Posts: 2,378
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Re: Mars Economic Activity

I don't expect you to be, as you say, "my citation slave."  Providing evidence for claims is a vital part of academic argument.  I will have you know that I tried to be quite thorough in evaluating your argument; I only asked for a citation when I could not find anything in support of your statements.  I am aware that you have priorities other than going back to redo research you've already done.  That's why, if you want to make a credible argument, you put them in there the first time!

With respect to endowments:  An endowment is not spending money for a university.  Actually, it is quite the opposite; it is a savings account, so to speak, from which the university will only withdraw interest.  If a university has an endowment of 1 billion dollars, and obtains an average of 3% per year on its investments, that 1 billion dollar endowment translates into 30 million dollars per year of cash, most of which will probably go towards running or improving the university.  I don't see what bearing this has on my statement of the potential value of Martian regolith.  What does the value of the endowments of Harvard and Yale have to do with the per-kilo price of martian regolith brought back to Earth?

With respect to meteorites- I actually addressed that exact point!  Please re-read my response to your point 1 a bit more carefully, as I directly address that factoid (In fact, our two sources give such similar numbers that I suspect they are both looking at the same primary source to get them!).  I explain why I believe that $1,000/g will not be representative of the market when you are bringing back samples from the red planet.  I do not believe that I know better than geology.com (though I would hardly call that an academic source).  I accept that geology.com is providing a fairly accurate number for the value it is actually giving.  I do not accept that this value will be the same when the market has been completely transformed.  For why it will be completely transformed, see my response to your number 1.

With respect to watches:  Rolex may make a million watches, but the vast majority of these do not sell for $100,000 or more.  This was, if you recall, the price range which you suggested for these 5,000 watches in your point 9.  The source which I offered in my response would seem to indicate a significantly smaller production of watches costing tens of thousands of dollars or more.  5,000 watches would be a significant share of this market.

It seems to me that you lose nearly every long post that you make; might I suggest writing up long ones in a word processor, and then just copy-pasting into the posting window to ensure that they're not lost?  Or, at the least, keep your links so you don't have to do the work again.


-Josh

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#13 2012-01-07 11:11:07

Hop
Member
From: Ajo
Registered: 2004-04-19
Posts: 146
Website

Re: Mars Economic Activity

JoshNH4H wrote:

Providing evidence for claims is a vital part of academic argument.

Very true. However in this regard you're in no position to criticize Louis.


Hop's Orbital Mechanics Coloring Book - For kids from kindergarten to college.

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#14 2012-01-07 14:20:34

louis
Member
From: UK
Registered: 2008-03-24
Posts: 3,939

Re: Mars Economic Activity

JoshNH4H wrote:

I don't expect you to be, as you say, "my citation slave."  Providing evidence for claims is a vital part of academic argument.  I will have you know that I tried to be quite thorough in evaluating your argument; I only asked for a citation when I could not find anything in support of your statements.  I am aware that you have priorities other than going back to redo research you've already done.  That's why, if you want to make a credible argument, you put them in there the first time!

With respect to endowments:  An endowment is not spending money for a university.  Actually, it is quite the opposite; it is a savings account, so to speak, from which the university will only withdraw interest.  If a university has an endowment of 1 billion dollars, and obtains an average of 3% per year on its investments, that 1 billion dollar endowment translates into 30 million dollars per year of cash, most of which will probably go towards running or improving the university.  I don't see what bearing this has on my statement of the potential value of Martian regolith.  What does the value of the endowments of Harvard and Yale have to do with the per-kilo price of martian regolith brought back to Earth?

With respect to meteorites- I actually addressed that exact point!  Please re-read my response to your point 1 a bit more carefully, as I directly address that factoid (In fact, our two sources give such similar numbers that I suspect they are both looking at the same primary source to get them!).  I explain why I believe that $1,000/g will not be representative of the market when you are bringing back samples from the red planet.  I do not believe that I know better than geology.com (though I would hardly call that an academic source).  I accept that geology.com is providing a fairly accurate number for the value it is actually giving.  I do not accept that this value will be the same when the market has been completely transformed.  For why it will be completely transformed, see my response to your number 1.

With respect to watches:  Rolex may make a million watches, but the vast majority of these do not sell for $100,000 or more.  This was, if you recall, the price range which you suggested for these 5,000 watches in your point 9.  The source which I offered in my response would seem to indicate a significantly smaller production of watches costing tens of thousands of dollars or more.  5,000 watches would be a significant share of this market.


Re meteorites I don't think you've addressed the point I made to Hop:

Why if increasing supply leads to reduced price haven't we seen that on Earth?  On Earth professional meteorite collection methods only really got started towards the end of the century. Supply has increased dramatically but everything I read suggests prices have been rising and rising. Why is that - and why doesn't that apply to Mars material.

You should look at it the right way round. Who will be in the market to buy this stuff? I say out of the perhaps 10,000 universities on Earth maybe half will be in the market (let's leave private collectors out).  Those are the ones with geology departments with mineral collections or astronomy departments. (This is an educated guess based on my experience in the UK) Even if they only average $20,000 each  that's  $100 million.  However, as indicated I believe there is good reason to think that the big players: Harvard, Yale, Oxford, Cambridge, Bologna, Paris etc will be prepared to stump up much larger amounts.   They can probably do so from their existing resources but these unis do attract large donations:-
http://harvardmagazine.com/breaking-news/a-giants-gift

The link you gave re watches shows that companies like Piaget with an average selling price of $25,000 sell about 20,000 per annum. That's just one company.  There are lots of references in the article to watches costing over $100,000.  The global watch market is worth $29 billion. There is clearly a great marketing opprotunity for men's watches because Mars is associated with male warrior virtues which lots of rich successful men like to think of themselves as being. I see no reason why Mars Rolex couldn't generate $500 million in sales per annum - whether all of it would come to the
Consortium is debatable. But maybe half would.  On the other hand, if Musk is right and costs of transit are much lower then sales could be much greater and Mars could tap into the medium-priced luxury watch market.

I don't think 5,000 watches is unreasonable when one luxury watch company alone sells 20,000 a year. And I don't think the $100,000 price tag is unreasonable. The watch could incorporate some Mars mineral - just think of what a talking point that makes the watch.

I really think you are talking this down for no good reason.

You're wrong about endowment. Please see the following definition:

1. (Economics, Accounting & Finance / Banking & Finance)
a.  the source of income with which an institution, etc., is endowed
b.  the income itself

(free dictionary)

Endowments can be used in various ways.  An obvious one is the establishment of a new university or college. That happens on Earth very often. 

There is no reason why special endowments wouldn't be sought to establish Mars Geology Centres within established universities on Earth. My point about the $100billion plus universities endowments on the planet  was also that the interest/earnings on that - somewhere between $5 and $10 billion per annum (up to $100 billion  per decade) provide quite a pot for Mars-related purchasers. Can't you imagine the competition there will be set up these Mars Geology Centres?  I think you'd find a lot of universities will reduce their spending on earth based geological expeditions and put money into Mars.

Remember also how economics works. If I give $500 million to establish a university, the university doesn't appear out of thin air. What might be capital expenditure for me is someone else's revenue. In the case of establishing the University of Mars, the money will be revenue for the Consortium who will get paid for construction, transfer of materials, transport of people, and life support.


Let's Go to Mars...Google on: Fast Track to Mars blogspot.com

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#15 2012-01-07 14:23:18

louis
Member
From: UK
Registered: 2008-03-24
Posts: 3,939

Re: Mars Economic Activity

Hop wrote:
JoshNH4H wrote:

Providing evidence for claims is a vital part of academic argument.

Very true. However in this regard you're in no position to criticize Louis.

Hop - Why don't you give your explanation for why the price of meteorites on earth has risen as supply has also risen -rather than sniping.


Let's Go to Mars...Google on: Fast Track to Mars blogspot.com

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#16 2012-01-07 17:21:20

louis
Member
From: UK
Registered: 2008-03-24
Posts: 3,939

Re: Mars Economic Activity

JoshNH4H wrote:

3. I don't know of any known concentrations of Gold.  For a mission, it's silly to try to make a profit in this way given the cost of sending over transportation.  It's a bit optimistic IMO to expect the gold to be near enough a place where it makes sense to place a colony (e.g., near water and Iron and silica and perhaps a few other things needed for production of things that the colony needs, which IMO are more important than finding gold to export to Earth.  Obviously a colony needs to have a launch infrastructure to launch the gold back to Earth if it wants to make a profit from it, but that will be fairly necessary for a lot of profit-making strategies, as well as interaction with Earth.  Assuming you can get a rocket engine working, a pressure-fed methlox rocket from Mars Surface to phobos isn't totally unthinkable.  On the other hand in the context of an early colony it's probably beyond the manufacturing capability there.  I think exporting physical materials is something that's going to have to wait a few years.  Also, the first rockets will almost certainly be solid fueled because that does not necessitate a complex engine (think of how far back solid rockets go; a medieval chinese firework won't get to Mars orbit anymore than it'll get to LEO but it's a much simpler technology).


I doubt the survey equipment we have now can find concentrations of gold.  But if there are surface concentrations then we will come across them. My perspective was over several years. Maybe we will be lucky and within the first decade we will come across some nice rich veins of gold in an area of vulcanism.

There is no doubt we will be bringing material back. The only questions are how much and how to do it - and will it be an additional cost or a source of surplus revenue.  Gold ticks a lot of the right boxes for me.

JoshNH4H wrote:

4. I would like a citation for your number on olympic sponsorship.  I googled and could not corroborate the number of a billion dollars.  $500 million won't cover any significant proportion of the cost of the initial mission.  Remember, NASA isn't in it for a profit and if you want to write off development you have to be talking about NASA.  I don't know what role sponsorship has for the colony but it might be possible to generate some revenue based on using the Mars Colony as a brand.

Beijing raised $886 million. That's just from the main sponsors - doesn't cover sponsorship of individual athletes and teams.
The target for 2012 is $1 billion.

http://www.sponsorship.com/About-IEG/IE … -Alte.aspx


JoshNH4H wrote:

5. Unrealistic and a bit silly.  No person or institution has that kind of money just lying around.  I challenge you to find even one example of anything even remotely similar in magnitude..

Warren Buffett disposes of $1.6 billion in a single charitable donation in one year and does the same more or less every year.

http://www.bloomberg.com/news/2010-07-0 … iving.html


Let's Go to Mars...Google on: Fast Track to Mars blogspot.com

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#17 2012-01-07 21:21:23

louis
Member
From: UK
Registered: 2008-03-24
Posts: 3,939

Re: Mars Economic Activity

JoshNH4H wrote:

Second 4. Also unrealistic.  These universities have no reason to have a mars branch, the costs of transportation being what they are.  Further, I don't see how this would lead to any additional revenue.  Universities might be big, but that does not mean that they have unlimited cash.  Also, you don't seem to know what an endowment is, it is not money that can be spent but rather money from which one generates interest.  A 500 million dollar endowment does not mean that someone just gave you 500 million dollars to spend however you want to.

Second 5. There is no way to enforce land claims in land which you do not actually control.  I strongly doubt any Earth nation would really get behind such claims to the extent you would need to to make them enforced.  Further, I don't believe that there will be much demand at all for land which it'll cost you many millions of dollars, at the least, to actually use.  Rather, these unsubstantiated land claims will probably just cause an organizational problem for Mars in the long term, when people actually start using the land.  Further, the colony will have a problem if they accidentally sell off the land of an orebody/other resource that they later realize they intend to use.

Re Second 4 -  Do you understand the concept here?  This wouldn't be an ordinary branch of the University. It would be a centre for astronomy, physics and planetary science (maybe even astrobiology).  It would be a post grad and research centre.  Perhaps after a few years it would have an enrolment of 20 post grads and professorial staff engaged in various research projects.  UNiversities are always hungry for prestige because that in turn brings in the donations and the brightest students and teaching staff who in turn maintain the university's reputation. 

See my previous comments on endowments and the fact that most of the $500 million will pass to the Consortium for construction, life support and transit.

Second 5 - I would agree this is problematical.  Ideally one would get the support of the UN and major states on Earth to support a system of long lease purchasing of land.  These would be special leases I think, with conditions attached about usage and bringing benefits to the whole of humankind. I would favour giving people 250 year leases on the land - so that people can feel that these could be good long term investments once they see the colonisation process is under way. The land would have a v. low value compared with Earth, but the leases should be tradable and should rise over time as people become more confident that the planet is being settled.


Let's Go to Mars...Google on: Fast Track to Mars blogspot.com

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#18 2012-01-08 00:51:17

JoshNH4H
Moderator
From: Pullman, WA
Registered: 2007-07-15
Posts: 2,378
Website

Re: Mars Economic Activity

Louis- First, a general statement of my position on your position on these various income streams:  Nearly all of them (with the exception of luxury watches and precious metals) depend on the colony or the mission's ability to market itself as a brand as opposed to the default, given the history of such megaprojects a collective endeavor of humanity.  Whether that can be done depends in part on external circumstance and in part on the competence of the people running the public relations section of the operation.  I view your numbers as the most optimistic possible case of this interaction (and even then sometimes overstated).  Of the ones you have mentioned thus far, I would suggest that watchmaking is the most practical as a method for the colony to make money.  I have a couple ideas of my own, which I'll mention at the end of this post, once I've finished commenting on yours.

With regards to meteorites- Do you have a citation for either the increase in supply beyond that which was occurring already or the historical prices of meteorites?  I am not aware of any such trends and they were not cited in your initial post.  Therefore, I cannot give an intelligible response to the phenomena of which you speak.  At the very least, you recognize that in microeconomics as it is generally accepted does not say that increasing supply increases price.  In fact, standard economics says exactly the opposite.  It's one of the few predictions of economics which can actually be regarded as fairly reliable, IMO.

The correct way to look at this is not to look at how much money is out there.  Because economics is not a science, this does not translate in any predictable manner into sales.  The best way to predict sales is to look at the closest analogue market in existence today.  I argue that this is the meteorite market, and gave prices in accordance.  If you have meteorite production figures, as you claim, then it will become clear whether this is an accurate comparison in terms of the similarity of the markets.

An endowment is money to be used by the university, but it is supposed to last essentially forever.  That means you can't just spend it all.  Further, if that money is going to pay to bring things up to Mars, it's not profit for the colony, it's an expense, and the university is a drain on the resources of the colony when a nontraditional education system will probably benefit the colony more in terms of efficiency and producing people able to contribute to the colonial economy in ways that are needed to generate expansion.

With respect to watches, I was actually agreeing with you, albeit in a somewhat lukewarm way.  I regard your figure of 5,000 watches for $100,000 each as a tapped out market, simply because there is competition and not everybody is going to want to buy a Martian watch.  Obviously if the watches are not quality products they're not going to sell, and there is obviously going to be a loss of profits.  However, even if only 5% of that can actually be obtained (This is not my best estimate, I know nothing about the profit margins of watchmakers), $25 million/year should be enough to sustain a fair sized colony.

I don't doubt that there is Gold on the planet.  I don't even doubt that there might be a couple places where it can be found in a relatively accessible place on the surface.  However, I do doubt that it will be possible to find these places easily (a planet is a big place, after all).  Keep in mind that Mars, being farther from the Sun, is relatively less enriched in heavy elements.  Further, having had water and vulcanism for a much shorter time than Earth, there is much less opportunity for really rich mineral veins to have formed. 

Material being brought back is not arbitrary.  The samples that are brought back will be chosen for prime scientific interest.  This is absolutely vital for the future of the colony, because a good understanding of the geology involved in the formation of Mars and local regions will provide a great basis for an understanding of what is and isn't likely to be there, as well as where to look for it and where to send the next few exploration missions to maximize science returns.

Wrt Olympic Sponsorship-  Given the numbers supplied, I accept that there is some scope for sponsorship in return for the privilege to use the "Mars" brand in the case that such a brand is successfully created.

Wrt Warren Buffet- He does not expect any return for the money he gives away.  If you're supplying a product and asking for money for it, it has to be worth the money.  I strongly doubt that that will be.  Like many of your other suggestions, this is essentially a gimmicky way of getting money that is essentially charity instead of a way to provide a firm economic foundation for the growth of the colony.  This applies to anything where you are trying to cash in on a supposed "Mars brand."  Keep in mind that Mars will eventually become common place ("Of course we have an outpost in Antarctica/Mars/North America"), and at that point if the colony does not have a good or service of actual economic value to provide, its growth will cease and the colony will fail economically. 

In terms of providing an actual good or service to people on Earth, I have a couple of suggestions: 

Firstly, of the ideas you mentioned I liked the watch idea the best; even if it is based partially on the idea of people buying things solely because they come from Mars, it does provide a good for which there is an established market.

Secondly, I once heard a newmars user (I don't remember who) suggest that Mars dust would be a very good catalyst for reactions involving ferric catalysts, because of its immense surface area per unit mass.  I can't comment on cost or profit, but I think it's at least an interesting idea.  This website suggests that we might get $1,000/tonne or so, so that's not a very practical way to make money for the colony.

Thirdly, I think there could be some market for a hosting backup service at the colony.  Obviously it's not practical to do primary hosting for data there, but Mars makes a phenomenal backup for people who want to keep their information absolutely hack-proof.  After all, it's awful hard to crack into any database on a delay of several minutes at the minimum.  This makes Mars's distance from Earth into a benefit instead of a liability.

Fourthly, capitalizing on a similar characteristic, Mars could offer a savings account for people who have money that other countries dispute.  This would be similar to swiss banks.  There are some potential ethical issues with this (The Swiss ended up holding a lot of Nazi money, and in the modern world this probably means you're holding the money of people like Saddam Hussein and Assad, or of smaller criminals who want to evade the law).  I don't know how practical this is, since they would probably not have the cash money held on Mars and thus they would not be entirely politically immune.

Fifthly, more in line with traditional aerospace thought, there is the supply of fuel for LEO infrastructure from phobos.  This would be in competition with similar lunar facilities, but Phobos could flood the fuel market at bi-yearly intervals with the raw materials from phobos, assuming that the correct materials can be found there out of which to make rocket fuel, for refueling satellites, for example, as well as whatever is going on in LEO at the time.


-Josh

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#19 2012-01-08 08:39:14

louis
Member
From: UK
Registered: 2008-03-24
Posts: 3,939

Re: Mars Economic Activity

JoshNH4H wrote:

Louis- First, a general statement of my position on your position on these various income streams:  Nearly all of them (with the exception of luxury watches and precious metals) depend on the colony or the mission's ability to market itself as a brand as opposed to the default, given the history of such megaprojects a collective endeavor of humanity.  Whether that can be done depends in part on external circumstance and in part on the competence of the people running the public relations section of the operation.  I view your numbers as the most optimistic possible case of this interaction (and even then sometimes overstated).  Of the ones you have mentioned thus far, I would suggest that watchmaking is the most practical as a method for the colony to make money.  I have a couple ideas of my own, which I'll mention at the end of this post, once I've finished commenting on yours.

With regards to meteorites- Do you have a citation for either the increase in supply beyond that which was occurring already or the historical prices of meteorites?  I am not aware of any such trends and they were not cited in your initial post.  Therefore, I cannot give an intelligible response to the phenomena of which you speak.  At the very least, you recognize that in microeconomics as it is generally accepted does not say that increasing supply increases price.  In fact, standard economics says exactly the opposite.  It's one of the few predictions of economics which can actually be regarded as fairly reliable, IMO.

The correct way to look at this is not to look at how much money is out there.  Because economics is not a science, this does not translate in any predictable manner into sales.  The best way to predict sales is to look at the closest analogue market in existence today.  I argue that this is the meteorite market, and gave prices in accordance.  If you have meteorite production figures, as you claim, then it will become clear whether this is an accurate comparison in terms of the similarity of the markets.

An endowment is money to be used by the university, but it is supposed to last essentially forever.  That means you can't just spend it all.  Further, if that money is going to pay to bring things up to Mars, it's not profit for the colony, it's an expense, and the university is a drain on the resources of the colony when a nontraditional education system will probably benefit the colony more in terms of efficiency and producing people able to contribute to the colonial economy in ways that are needed to generate expansion.

With respect to watches, I was actually agreeing with you, albeit in a somewhat lukewarm way.  I regard your figure of 5,000 watches for $100,000 each as a tapped out market, simply because there is competition and not everybody is going to want to buy a Martian watch.  Obviously if the watches are not quality products they're not going to sell, and there is obviously going to be a loss of profits.  However, even if only 5% of that can actually be obtained (This is not my best estimate, I know nothing about the profit margins of watchmakers), $25 million/year should be enough to sustain a fair sized colony.

I don't doubt that there is Gold on the planet.  I don't even doubt that there might be a couple places where it can be found in a relatively accessible place on the surface.  However, I do doubt that it will be possible to find these places easily (a planet is a big place, after all).  Keep in mind that Mars, being farther from the Sun, is relatively less enriched in heavy elements.  Further, having had water and vulcanism for a much shorter time than Earth, there is much less opportunity for really rich mineral veins to have formed. 

Material being brought back is not arbitrary.  The samples that are brought back will be chosen for prime scientific interest.  This is absolutely vital for the future of the colony, because a good understanding of the geology involved in the formation of Mars and local regions will provide a great basis for an understanding of what is and isn't likely to be there, as well as where to look for it and where to send the next few exploration missions to maximize science returns.

Wrt Olympic Sponsorship-  Given the numbers supplied, I accept that there is some scope for sponsorship in return for the privilege to use the "Mars" brand in the case that such a brand is successfully created.

Wrt Warren Buffet- He does not expect any return for the money he gives away.  If you're supplying a product and asking for money for it, it has to be worth the money.  I strongly doubt that that will be.  Like many of your other suggestions, this is essentially a gimmicky way of getting money that is essentially charity instead of a way to provide a firm economic foundation for the growth of the colony.  This applies to anything where you are trying to cash in on a supposed "Mars brand."  Keep in mind that Mars will eventually become common place ("Of course we have an outpost in Antarctica/Mars/North America"), and at that point if the colony does not have a good or service of actual economic value to provide, its growth will cease and the colony will fail economically. 

In terms of providing an actual good or service to people on Earth, I have a couple of suggestions: 

Firstly, of the ideas you mentioned I liked the watch idea the best; even if it is based partially on the idea of people buying things solely because they come from Mars, it does provide a good for which there is an established market.

Secondly, I once heard a newmars user (I don't remember who) suggest that Mars dust would be a very good catalyst for reactions involving ferric catalysts, because of its immense surface area per unit mass.  I can't comment on cost or profit, but I think it's at least an interesting idea.  This website suggests that we might get $1,000/tonne or so, so that's not a very practical way to make money for the colony.

Thirdly, I think there could be some market for a hosting backup service at the colony.  Obviously it's not practical to do primary hosting for data there, but Mars makes a phenomenal backup for people who want to keep their information absolutely hack-proof.  After all, it's awful hard to crack into any database on a delay of several minutes at the minimum.  This makes Mars's distance from Earth into a benefit instead of a liability.

Fourthly, capitalizing on a similar characteristic, Mars could offer a savings account for people who have money that other countries dispute.  This would be similar to swiss banks.  There are some potential ethical issues with this (The Swiss ended up holding a lot of Nazi money, and in the modern world this probably means you're holding the money of people like Saddam Hussein and Assad, or of smaller criminals who want to evade the law).  I don't know how practical this is, since they would probably not have the cash money held on Mars and thus they would not be entirely politically immune.

Fifthly, more in line with traditional aerospace thought, there is the supply of fuel for LEO infrastructure from phobos.  This would be in competition with similar lunar facilities, but Phobos could flood the fuel market at bi-yearly intervals with the raw materials from phobos, assuming that the correct materials can be found there out of which to make rocket fuel, for refueling satellites, for example, as well as whatever is going on in LEO at the time.

Luxury watches are not the only luxury good that Mars could make. In fact Mars jewellery is probably a simpler process that could be worked on first and could pay huge dividends.

I can't find any firm figures for you on meteorite supply and price but this is the sort of thing (wikipedia) that led me to make the claim:


"In 1986–87, a German team installing a network of seismic stations while prospecting for oil discovered about 65 meteorites on a flat, desert plain about 100 km southeast of Dirj (Daraj), Libya. A few years later, a desert enthusiast saw photographs of meteorites being recovered by scientists in Antarctica, and thought that he had seen similar occurrences in northern Africa. In 1989, he recovered about 100 meteorites from several distinct locations in Libya and Algeria. Over the next several years, he and others who followed found at least 400 more meteorites. The find locations were generally in regions known as regs or hamadas: flat, featureless areas covered only by small pebbles and minor amounts of sand.[26] Dark-colored meteorites can be easily spotted in these places, where they have also been well-preserved due to the arid climate, and in the case of the Dal al Gani meteorite field, favorable geology consisting of basic rocks (clays, dolomites, and limestones) and lacking erosive quartz sand.[27]

Although meteorites had been sold commercially and collected by hobbyists for many decades, up to the time of the Saharan finds of the late 1980s and early 1990s, most meteorites were deposited in or purchased by museums and similar institutions where they were exhibited and made available for scientific research. The sudden availability of large numbers of meteorites that could be found with relative ease in places that were readily accessible (especially compared to Antarctica), led to a rapid rise in commercial collection of meteorites. This process was accelerated when, in 1997, meteorites coming from both the Moon and Mars were found in Libya. By the late 1990s, private meteorite-collecting expeditions had been launched throughout the Sahara. Specimens of the meteorites recovered in this way are still deposited in research collections, but most of the material is sold to private collectors. These expeditions have now brought the total number of well-described meteorites found in Algeria and Libya to over 2000.

As word spread in Saharan countries about the growing profitability of the meteorite trade, meteorite markets came into existence, especially in Morocco, fed by nomads and local people who combed the deserts looking for specimens to sell. Many thousands of meteorites have been distributed in this way, most of which lack any information about how, when, or where they were discovered. These are the so-called "Northwest Africa" meteorites."

I think you can agree that the picture here is of rising supply but also rising value and profitability. Markets rarely operate as dictated in text books. Demand is a completely theoretical concept until converted into a sale at a particular price. In a collectors' market there isn't necessarily resistance to price increases, since the collector stands to gain from a rising market. (That's why collecting can be subject to "bubble" behaviour as with the tulip price boom a few centuries ago.) 

I think you have to understand a lot of people collect them as well - even after the initial demand of the universities has been met I think there will be a healthy market of people prepared to pay $100 a gram for meteorites from Mars, to top off their collections with a spectacular from Mars. . 

Your claim about endowments lasting forever is plain wrong. It depends on the terms of the endowment.

The idea that the colonists need to bring back the material to determine what's there is  a bit daft. I think they will be able to identify the stuff they are interested in: iron ore, silica, aluminium, basalt etc back at base.  There will be rarer stuff that they can bring back. But there is no reason why it shouldn't be sold to a research institution rather than given away.

The idea that people won't be interested in the Mars brand can be dismissed I think.  I notice how on BBC  News Mars stories nearly always shoot straight to the top of the most visited poll. Companies like Rolex and Coca Cola get a huge impact through the association. They build up to it over several years and then go for a real publicity blitz around the time of the launch and landing. But the association can carry on afterwards...I think companies would get great value out of it. Nike and other footwear companies would be desperate to get the sponsorship - imagine shots of the colonists at the base in Nike footwear... My view is it could be much bigger than the Olympics. Maybe closer to 2 billion. I was being conservative there.

I've mentioned data transfer myself before and I agree that could be huge.  Essentially anything that can be transferred electronically or even on chips, could be a base for economic activity. I think longer term, that outfits like architects and designers, will want to work from Mars.  They may find it an inspiring environment. If the colony can subsidise the transfer of people, they may find it v. cheap to operate their businesses from Mars, with no taxation, no rent etc.

I am not sure about the Mars bank providing a financial haven for dodgy operators...ethical issues in abundance.

Last edited by louis (2012-01-08 09:02:02)


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#20 2012-01-08 09:43:20

Grypd
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Re: Mars Economic Activity

On a financial services issue the ability to store records in a safe secure facility that would survive any catastrophe is a possible revenue source. Electronic copies of land deeds, bank records, share issues etc.

We already spend billions on companies storing such in disused nuclear bunkers but the ultimate safety not being on the same planet.

And of course when we open up Mars we will create a Martian Internet and we will have very qualified electronics and computer engineers available. So we create a data repository.


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#21 2012-01-08 11:52:52

louis
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Re: Mars Economic Activity

JoshNH4H wrote:

6. Meh, maybe.  How much do networks pay to air the Olympics?  Once again unlikely to contribute significantly to total mission cost, regardless.

7. Also a maybe.  Depends how you do it, I guess, and what you market it as.

8.  Fortunately, the wine market is one on which we can obtain substantial information because high-quality wine is a relatively large market.  The Huffington post has compiled a slideshow of the most expensive bottles of wine ever.  If you were to sell a bottle of wine for $200,000, it would be the fourth most expensive bottle of wine ever sold.  Let's be realistic: Mars wine is not going to be some super-high quality thing.  It's going to be average at best.  It is not going to garner $200,000/bottle (very similar to the per-kilo price).  I think we're looking more at a thousand dollars per bottle and per kilo, maximum.  Probably not worth producing.

9. While it's not unheard of to have watches of a hundred thousand dollars or more, I can't imagine that there is a market for 5,000 watches which will likely be of inferior quality (We don't have all these fancy bells and whistles on Mars that we can make on Earth.  I suppose the frame could be made on Mars and the fancy gizmos added later, though at a significantly reduced profit.  That said, according to this article it's not completely beyond the scope of possibility if a good product can truly be made.  I don't know if the profit would be as much as you suggest, and of course you also need a launch infrastructure, though we've commented on that before.  I don't know how resource intensive it would be to make the watches.  This is however a venue where martian watches may be able to raise some good money.

10. Erm.... what?  I don't quite understand what you're talking about, but you don't need reality for a VR experience and it would be quite difficult to actually extract a profit from that.

11. By year 20 it might be first starting, maybe.  Several hundred million dollars per year is simply ludicrous.  Nobody has that kind of money.

6 .  NBC (only one TV company - presumably others in different parts of the world buy into this) is paying about $1.3 billion per Olympic year over three Olympic.  So I think that would be a benchmark.  What other event might keep hundreds of millions of people glued to their seats over an extended period?  And there is lots of opportunity to steal a march on your network rivals with your exclusive news reports from Mars. "Tonight we go live to the Mars base to hear how the colonists are faring." The USA with its love of the founding fathers sort of stuff would lap it up I think.

http://www.cbc.ca/sports/olympics/story … ights.html

7.  An exploration of the Valles Marianensis (spelling) would be stunning... even robot air ships would supply valuable news footage as new discoveries are made.  I think there would be a big ongoing market for TV rights.

8. Well, I don't know if anyone has done experiments in the lab with perfect soil, perfect light and perfect water intake, as to whether you can then produce perfect grapes to make a perfect wine!  I doubt it would be tried much on Earth, since it would be very expensive.  But on Mars, we are going to have farm habs with such controlled conditions, and the wine doesn't have to be more than exceptionally good for it to command a high price because of the Mars connection. However, I would accept this is maybe not worth worrying about too much.

9.  We've discussed.

10.  Well I think this would be a big earner.  My conception is this: you transfer in high quality the visual  data for an area of the Mars surface - of course you have the 15 minute delay between Mars and Earth time.  Back on Earth you have a Mars Experience Centre. Kids get to dress up in space suits.  They enter the virtual reality room.  There is an  analogue for the surface - soil and rocks have been created,  The rocks are in the same position as on Mars. The visual data is used to create a virtual reality experience on 3D screens.  Or perhaps it's all done on 3D VR helmets. But anyway, we integrate the VR data with real rocks on the ground in the simlator area and a real (small) digger in the room which can be operated by the visitors.

The operations of the digger are recorded digitally and sent back to Mars where a similar robot digger actually performs the operations on Mars...perhaps people get to spell their names with big letters of something like that.  Or they can draw on a screen with a robot arm. 

So back on Mars the actions of the robot digger are recorded visually.  That visual record is then sent back to Earth and is a "take home" present for the participant.

Hope that's a bit clearer: it's a virtual reality experience but linked to actual movements on Mars that replicate those of the visitor on Earth.

11. Well it wasn't several hundred millions per person. It is a longer term thing, I would agree. But I think the demand will be there among the super-rich. You have no idea how bored they get!


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#22 2012-01-16 09:54:10

JoshNH4H
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Re: Mars Economic Activity

General comments, then a response to specific points:

I would say that ways to generate revenue in Earth money from Mars Missions will fall into three basic categories:

The first category is a good or service which has value only because of the emotional, historical, sentimental, or novelty value of having it come from Mars.  This is the least desirable kind of income because what classifies as a novelty is very variable and is subject to distraction by other new novelties.  It can be difficult to take something and transform it from a temporary novelty to a permanent one.  I presume everyone remembers beanie babies and Pokemon cards and 'Nsync.  Of the three categories, this is the least favorable one.  Louis' suggestions for the sale of regolith and asteroids, as well as his remotely operated digger proposal, and his general appeals to "sponsorship."  This category is also affected by far the most by the "Mars Brand," seeing as this is the primary (nearly the only) reason why people will buy.

The second category is goods and services for which there is real demand, largely irrespective of the place of origin.  For this class of goods and services, the product being sold has real value on Earth because it fulfills a legitimate need (or want) of people on Earth.  Perhaps the fact that it was made on Mars or by Martians will help to get the product out there, considered as a viable option seeing as the Martians are mostly going to be making high end products.  However, for this category the most important determinant of whether the good or service will sell is whether it is a quality good/service or not.  The best example which we have been talking about of this is high-end watches: Yes, maybe being made on Mars will be an effective marketing strategy, but building quality watches will determine whether or not these watches truly succeed on the market.  This is also the case for the idea of selling precious metals.  Thous definitely subject to competition, this is potentially a fairly reliable source of income, though it is somewhat less favorable than the third category.

Which brings me to the third category: Goods or services which attain their value primarily because their being provided by Martians or on Mars makes them cheaper or better than having them made by earthpeople or on Earth.  This seems to be the most self-explanatory.  The best example which was mentioned in this thread was the idea of using Mars to store sensitive or important data in a facility that is very difficult to access.  Revenue sources in this category are in my opinion the most important to develop because they are highly likely to turn into successful ventures and really give a strong foundation for the future growth of the colony.

With regards to specific points:

6 .  NBC (only one TV company - presumably others in different parts of the world buy into this) is paying about $1.3 billion per Olympic year over three Olympic.  So I think that would be a benchmark.  What other event might keep hundreds of millions of people glued to their seats over an extended period?  And there is lots of opportunity to steal a march on your network rivals with your exclusive news reports from Mars. "Tonight we go live to the Mars base to hear how the colonists are faring." The USA with its love of the founding fathers sort of stuff would lap it up I think.

I would first like to point out that according to your source, NBC offered 4.38 billion dollars for 4 games, amounting to $1.1 billion per game.  Despite this factual error I accept that the potential revenue from a Mars mission could potentially be of similar magnitude to the Olympics, and given that citation I am willing to accept that the first Mars mission will be able to garner at the least a few hundred million dollars from sale of rights.  Keep in mind, by the way, that NBC is paying in part for monopoly, and in some of the most valuable markets in the world.  I don't know who broadcasts the Olympics in Europe, but in the US at least it's NBC and nobody else.  The US is the most important market in the world.  This is a category 1 revenue source, by the way.

7.  An exploration of the Valles Marianensis (spelling) would be stunning... even robot air ships would supply valuable news footage as new discoveries are made.  I think there would be a big ongoing market for TV rights.

 
I suggest you take a look at the budgets of documentaries.  Perhaps you can find a more general source, but it looks like an individual documentary is under a million dollars.  Much of that goes into production and royalties; I don't know how much a producer would be willing to pay for images of Valles Marineris (By the way, fun fact:  The Valles most likely do not look like you're thinking of them looking from the inside- for the majority of the canyon, the walls are actually sloped at a fairly low grade, and in any case will probably be over the horizon.  Take a look at google Mars; At its deepest, the Valles is about 7 km below the surrounding terrain, and they are quite wide).  I don't contest that there are stunning views on the planet, though you would have to look around a bit to find one there.  I question much more how much money you can make from them.

8. Well, I don't know if anyone has done experiments in the lab with perfect soil, perfect light and perfect water intake, as to whether you can then produce perfect grapes to make a perfect wine!  I doubt it would be tried much on Earth, since it would be very expensive.  But on Mars, we are going to have farm habs with such controlled conditions, and the wine doesn't have to be more than exceptionally good for it to command a high price because of the Mars connection. However, I would accept this is maybe not worth worrying about too much.

This website talks about what makes a good wine.  I would note that "perfect" soil, "perfect" light, and "perfect" water intake are not mentioned; in fact, optimal levels to make these are not even known.  Farm hab conditions might make it favorable to make bigger grapes, or higher productivity, but will be no means necessarily make them taste better.  By your statement that the wine would need be no more than "exceptionally good" wine to command a high price "because of the Mars connection," you are turning a category 2 product more into a category 1 product; essentially, you are admitting that a Martian vineyard cannot compete in terms of actually producing wine of high enough quality to be sold at several thousand dollars per kilo on Earth.

10.  Well I think this would be a big earner.  My conception is this: [not quoted in full for readability]

I don't see how this would be a big earner.  A fascinating exhibit at a museum, yes, but not something that would pull in millions of dollars per year.  Have a citation to show otherwise?  Edit: I would say that this is somewhere between Category 2 and 3, I just doubt its ability to generate revenue.  I suppose, though, that depending on price-point it could also be Category 1.

11. Well it wasn't several hundred millions per person. It is a longer term thing, I would agree. But I think the demand will be there among the super-rich. You have no idea how bored they get!

That's correct, I do have no idea how bored they get, or if they get bored; having that much money I would imagine that they would manage to scare up something on Earth to interest them.  Seeing as it's a statistically safe bet that you are not one of the super-rich either (In this case, we are the 99.999%, or maybe even the 99.9999%), I question if you know how bored they get.  Also, if these people are getting bored with umpteen dollars and things everywhere to spend them on, what makes you think that they won't get bored over the course of a two year journey, with at least 6 months each way spent cooped up in a cramped spacecraft (remember, even the roomiest of the designs that we are talking about are actually quite cramped compared to Earth standards, possibly unbearably so compared to people used to living in mansions.)  Edit: I would say that this is Category 2, because there are many other places to go on vacation.

Last edited by JoshNH4H (2012-01-16 10:01:25)


-Josh

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#23 2012-01-16 18:49:17

louis
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From: UK
Registered: 2008-03-24
Posts: 3,939

Re: Mars Economic Activity

Josh -


Your categorisation is interesting and might be useful even.  As ever I think one has to define the timeframe. Some economic activity, although sustainable in the long term,  might be costly to set up.  I also think you misunderstand the Mars Rolex project I suggested - it is very much trading on the Mars brand. It would impractical to set up an actual watch mechanism manufacturing operation on Mars. It would be a finishing process I think - probably putting metal surround and glass on to the parts, and maybe incorporating some Mars gems. The Mars brand aspect would be enhanced with photos of the watch in situ on Mars, and other little add ons (e.g. perhaps an engraving of the location on the back or similar).

Your comments on the valley are interesting as well. I thought there was a point where the valley does narrow considerably, but you know Mt. Kilimanjaro is not that impressive really, it's just straight up but people keep making documentaries about it.

On documentaries, I think you are looking at the low end.

Planet Earth gets a £16million budget: http://en.wikipedia.org/wiki/Planet_Earth_(TV_series)   Frustratingly they don't give the take there but it's clear from the sales that there must have been a very substantial surplus.  A Mars TV documentary will play all around the world.

Glad you see from the Olympics just how much sponsorship could be available.

re grapes - I thought you were a scientist! All that it takes is the right light, temperature, humidity, wind. day-night cycle, water and soil chemicals to produce brilliant grapes.  I don't think it's impossible. The wine making process itself may be an issue of course. There are no doubt many "tricks of the trade".

ON the virtual reality experience we will have to just differ.

Re tourism and the super-rich I did get to know someone who had a £16million house many years ago...probably talking about £40million now. He did seem a pretty bored person, always looking for new things to interest himself in. Anyway I think the experience from both sale of Russian space flights and Virgin Galactic bookings is good and promising.

I think we do need to discuss those categories further.  Focussing on that is helpful I think.


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#24 2012-01-16 21:41:21

JoshNH4H
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Re: Mars Economic Activity

With regards to louis's other post (this being written, almost entirely, before he wrote his most recent one), and then Grypd's-

Luxury watches are not the only luxury good that Mars could make. In fact Mars jewellery is probably a simpler process that could be worked on first and could pay huge dividends.

I agree that there is some potential here, though in part as a Category 1 revenue source.  That is, unless we can find (make? I would think that would decrease the value, seeing as it does on Earth) gems that are just as good as the ones put into jewelry on Earth, in which case it is a potential Category 2 revenue earner, especially if it takes the form of an engagement ring.

On meteorite prices:

Interestingly, if you look at the quoted section of the wikipedia article, you will notice two things:  Firstly, in the part which actually talks about generalized finds and prices there is not a single reference or citation to be had.  Secondly, it is never even said that the price has gone up.  Actually, the quoted text is silent on the price.  It also doesn't give numbers for meteorite sales.  You're going to have to provide a much more authoritative and direct source if you want to throw out a basic, very well-established tenet of economics.

Your claim about endowments lasting forever is plain wrong. It depends on the terms of the endowment.

Having done a bit more research, I was not entirely correct.  But universities generally do seek to have their endowments for perpetuity.

The idea that the colonists need to bring back the material to determine what's there is  a bit daft. I think they will be able to identify the stuff they are interested in: iron ore, silica, aluminium, basalt etc back at base.  There will be rarer stuff that they can bring back. But there is no reason why it shouldn't be sold to a research institution rather than given away.

The idea that we will be able to squeeze orders of magnitude more information out of samples on Earth compared to the relatively meager amounts that can be gotten from whatever scientific instruments will be brought is a bit daft?  Initial exploration missions are investments in science which lay the foundation for a long-term, well-informed and capable presence on the red planet.  To sacrifice this capability in the name of trying to make money off the mission is not just to misunderstand the situation, but to actually cripple the future colony.

I don't doubt that there will be interest in a Mars colony.  What I do doubt is whether there will be billions upon billions of dollars of interest, as you seem to think.  You have a history of being far too optimistic in these matters.

I am not sure about the Mars bank providing a financial haven for dodgy operators...ethical issues in abundance.

Oh, I agree.  I just floated it as an option.  It is somewhat questionable how politically independent the Mars Bank could be anyway, seeing as it would be pretty easy for Earth governments to simply cut off its access.

For a final point, which makes a good segue into Grypd's post:

They may find it an inspiring environment. If the colony can subsidise the transfer of people, they may find it v. cheap to operate their businesses from Mars, with no taxation, no rent etc.

While I agree that intellectual property is a good category 2 revenue earner, this sentence is totally ridiculous.  Architects work where the things they're designing are, seeing as you can hardly design something without seeing the setting as well as talking to the actual people financing it to get a really good sense of what they want built. 

More importantly, the quoted text shows a fundamental lack of understanding of economics as well as failure to think through the implications of what you're saying.  Why would the colony subsidize transport?  I could see loaning money to prospective colonists which they can pay off over time, but a simple subsidy will encourage abuse of the system to the ultimate loss of the colony.  I hate to sound like an austrian (e.g., a member of the Austrian school of economics, the kind of things that Ron Paul likes to talk about.   I have nothing against the country of Austria), but a permanent subsidy will always distort the economy.  This is not particularly intuitive, but because a subsidy encourages an economic behavior with financial incentives, it makes that behavior more common than it would be in an equilibrium economy.  In this case, a subsidy will make it possible for companies to go over to Mars even if their doing so will not actually lead to a net profit for the Martian colony.  The lack of a subsidy will ensure that only the most guaranteed-profitable enterprises will move to Mars.  Something else to keep in mind is that the Martian economy will not be oriented to supporting a large number of enterprises which are not working towards physical enrichment for the colony.

The awful economics here is the statement of no taxes and no rent.  Why won't there be taxes?  Will there be no government?  If there's no government, who will co-ordinate the growth of the colony in the early stages, when capitalism is not feasible in the slightest?  Who will provide for utilities like air and water?  Who will allocate property and resource rights?  Or, if there is a government, as there must be, how will it get along without taxes?  Will it go soviet-style, and abolish taxation based on the profit made from operating state-owned enterprises?  Even that is kind of a form of taxation, in that the government is taking money from people.  The only difference is that it's done by raising prices instead of taking out of income.  Or will they mandate that people spend a certain amount of their time working for the government?  Is this not the same thing as taxation, except in the form of time?

Further, in this magical tax-free wonderland, how will these transport subsidies of which you speak be paid for?  Those won't be cheap.  A ticket to orbit is going to be several hundred thousand dollars at the least, and these dollars won't be easy to come by for a Mars colony. 

Further, why won't there be rent?  More subsidies?  Where will the government be getting money for these subsidies?  How will people recoup the investment needed to build structures?  Unless you're suggesting that Mars will be a utopian commune, which is fine up until about 500 people (at least, a small village), after which point you need to start paying people for their labor.  At some point, this becomes slave labor.  Government forced slave labor to incentivize businesses moving to Mars?  That's the logical outgrowth of what you're saying here.  That is immoral and a bad idea.

Grypd-

I think super-secure and accident-proof hosting is quite valuable, seeing as that is one of few Category 3 revenue earners which we can definitely count on.  I also think it might make sense to make CDs or DVDs and related players so that we don't have to import from Earth to store data.  I don't know specifically what kind of lasers would be used to burn and read the CDs and DVDs, but I would hope that something would be possible.  This would be of value to militaries, especially, who I would presume would pay top dollar to keep their data safe.


-Josh

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#25 2012-01-16 21:51:31

SpaceNut
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From: New Hampshire
Registered: 2004-07-22
Posts: 13,056

Re: Mars Economic Activity

I see a trend I all of the economy threads thus far and its all one way back to Earth bound investment and profits of those on Earth.
What about these other directions for investment or profit to be had....
What about the wages of the settlers?
What about the settlement of one place to another on the same destination(Mars or Moon)?
What about the Destination place Mars or Moon to another Mars or Moon settlement?

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