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#1 2012-01-14 11:32:19

hannah
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Registered: 2012-01-14
Posts: 2

Possible Martian Export Products?

I am wondering, how likely is it that some element is discovered on Mars, that would be valuable enough to ship to Earth in a situation where space travel i still complex and unusual.

I mean, could there be some new valuable mineral or similar, that could turn out to revolutionize science in some way....?
I mean solve critical issues in fields like energy, water, computing, transport, medicine...

What might that be, and how valuable would a product have to be to be worth shipping from Mars to Earth?

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#2 2012-01-14 12:17:00

Terraformer
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From: Lancashire
Registered: 2007-08-27
Posts: 3,108
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Re: Possible Martian Export Products?

Well, as far as we know there's no kind of unobtainium on Mars. What there might be are very rich deposits that can be mined easily and cheaply. The question is, will they prove economical to export to Terra, and if so, will asteroids prove more economical (this is very similar to the Lunar/Martian moons volatiles issue)?


"I guarantee you that at some point, everything's going to go south on you, and you're going to say, 'This is it, this is how I end.' Now you can either accept that, or you can get to work." - Mark Watney

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#3 2012-01-14 15:31:52

louis
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From: UK
Registered: 2008-03-24
Posts: 4,924

Re: Possible Martian Export Products?

hannah wrote:

I am wondering, how likely is it that some element is discovered on Mars, that would be valuable enough to ship to Earth in a situation where space travel i still complex and unusual.

I mean, could there be some new valuable mineral or similar, that could turn out to revolutionize science in some way....?
I mean solve critical issues in fields like energy, water, computing, transport, medicine...

What might that be, and how valuable would a product have to be to be worth shipping from Mars to Earth?

There is no doubt that in the first few decades at least the ordinary Mars regolith and meteorites on Mars will be highly valuable - they will easily make $100,000 per kg as universities, research institutes , space agencies and individuals view with each other to purchase the first tranches of material to be returned.

As to whether there might be unusual minerals that we might not know on Earth,that's certainly possible though I think it unlikely they will revolutionise science. 

Of course there may be a fossil record on Mars - that would be tremendously exciting,and any such fossils would be extremely valuable.

Last edited by louis (2012-01-15 07:15:50)


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

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#4 2012-01-14 23:43:07

JoshNH4H
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Re: Possible Martian Export Products?

Hannah-

This is a topic which we often speak about ourselves.  It is unlikely that there will be any new (or old) element on Mars which will have such a high concentration relative to Earth that it will be viable to export it.  However, there may be a market for the production of products like watches and jewelry.  These are not specific to Mars, but could be used to help make balance sheets work in an ongoing colonization enterprise.

By the way, louis, did you perhaps mean $100,000 per kilo, or have you changed your mind and started agreeing with me in terms of meteorite pricing?  wink


-Josh

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#5 2012-01-15 07:17:58

louis
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From: UK
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Posts: 4,924

Re: Possible Martian Export Products?

JoshNH4H wrote:

Hannah-

This is a topic which we often speak about ourselves.  It is unlikely that there will be any new (or old) element on Mars which will have such a high concentration relative to Earth that it will be viable to export it.  However, there may be a market for the production of products like watches and jewelry.  These are not specific to Mars, but could be used to help make balance sheets work in an ongoing colonization enterprise.

By the way, louis, did you perhaps mean $100,000 per kilo, or have you changed your mind and started agreeing with me in terms of meteorite pricing?  wink

Yes it was  $100,000 I meant. smile

I think there may be some v. unusual or rare minerals to be found. I base that on having read that some meteorites contain very or unusual combination of elements or molecules. I guess they might have some practical use in theory.


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#6 2015-01-27 17:40:27

JCO
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Registered: 2015-01-22
Posts: 35

Re: Possible Martian Export Products?

Mars actually does posses a kind of 'unobtainium'. The minerals on Mars are chemically unique from those on Earth. This is interesting to scientist but it will be much more interesting to someone producing any number of luxury goods. It is likely that finding interesting semiprecious stones will not be excessively difficult on Mars. Any such stone that can be identifiable as martian will be worth at least a couple of order of magnitude more valuable. For example high quality of jade is worth about $100 K per kg. Almost identical jade from Mars will likely be worth $10 million per kg. Another benefit of luxury goods is that it tends to have a dependable high demand market. If it is rare and looks pretty it will almost always be in very high demand no matter what the cost is.

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#7 2015-01-27 18:08:38

SpaceNut
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From: New Hampshire
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Posts: 16,180

Re: Possible Martian Export Products?

Even mars glass would have a different apperance that many might want..

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#8 2015-10-27 19:08:16

Tom Kalbfus
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Posts: 4,401

Re: Possible Martian Export Products?

I think one possible use is as building materials for free space colonies. You know that Mars has more material than the entire asteroid belt, and it has more of the types of material for building space colonies, later on we can mine Jupiter's Moons, that also has more materials than the Asteroid Belt. Everyone talks about the asteroid build, but the amount of material orbiting Jupiter and Saturn dwarfs the amount of material in the asteroid belt, but Mars is closer and would be a good place to start.

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#9 2017-03-13 13:42:02

Oldfart1939
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Registered: 2016-11-26
Posts: 1,719

Re: Possible Martian Export Products?

Martian Mist, the original, made and triple distilled from synthesis of ethylene followed by addition of water across the double bond. Right from the Martian atmosphere! One of the first colonial products anywhere & everywhere: Booze!

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#10 2017-03-13 14:00:30

JohnX
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From: Thunder Bay
Registered: 2017-03-10
Posts: 76
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Re: Possible Martian Export Products?

Tom Kalbfus wrote:

I think one possible use is as building materials for free space colonies. You know that Mars has more material than the entire asteroid belt, and it has more of the types of material for building space colonies, later on we can mine Jupiter's Moons, that also has more materials than the Asteroid Belt. Everyone talks about the asteroid build, but the amount of material orbiting Jupiter and Saturn dwarfs the amount of material in the asteroid belt, but Mars is closer and would be a good place to start.

There may well be more NiFe and other ores on Mars, I believe that, but food for thought -
- how easy to extract them if most of them are underground?
- once they have been refined, they need boosting to orbit and to wherever a space colony is to be built. Given that Mars's escape velocity is lower than Earth's, it's also much higher than zero. Which is more economical: that, or mining asteroids (some of which wil have orbits close to Mars and closer to Earth) with effectively zero escape velocity?
- At least on Mars it would be easier to support a mining base. There are life support materials, some gravity and a little atmosphere.

Is anyone planning to build these space colonies yet in a practical way? I mean on the scale of readiness where asteroid mining & SpaceX's ITS are at? just interested. Obviously it would be a huge undertaking.


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#11 2017-03-13 17:49:05

SpaceNut
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Re: Possible Martian Export Products?

NiFe would be a mars building material and not one that we would be exporting as it would not have the value after the cost of shipping it back.

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#12 2017-03-13 19:50:16

JohnX
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From: Thunder Bay
Registered: 2017-03-10
Posts: 76
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Re: Possible Martian Export Products?

SpaceNut wrote:

NiFe would be a mars building material and not one that we would be exporting as it would not have the value after the cost of shipping it back.

Quite right. Someone was talking about finding materials for building space habs though, and some kind of steel would come in handy. And it proves my point that materials or products would have to have a very high value to make them exportable.


-- Because it's there! --

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#13 2017-03-14 17:31:55

louis
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From: UK
Registered: 2008-03-24
Posts: 4,924

Re: Possible Martian Export Products?

If the Mars Consortium want to create a high value export industry I think one of the best options would be to create the Mars Rolex Watch in co-operation with Rolex.  Rolex parts could be taken to Mars to be assembled there with some small Mars element being incorporated e.g. precious jewels or metals.

Luxury watches on Earth  can be priced at over $100,000 for something that weighs around 150 grams - so about $700,000 per Kg. But I think you could probably sell a Mars Rolex for $250,000. So the value would be more like $1.75million per Kg.

The watches could be assembled by a modest sized robot on Mars with minimal human intervention. One might have a tiny aperture incorporate where the owner could see some Mars dust or a precious stone.


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

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#14 2017-09-26 16:37:12

SpaceNut
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From: New Hampshire
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Posts: 16,180

Re: Possible Martian Export Products?

Hello ButattainG and welcome to newmars,

Gut feeling on what mars can export in any quantity will be less likely to be water as its going to be greatly needed on mars. Sure there will be collected samples for engineering and science analysis but beyond that probably not a whole lot of water will see a shelf here on earth.

Vitazin to PH stablisers, Ph stabilizers for soil will be something mars will use

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#15 2017-09-27 05:45:53

elderflower
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Registered: 2016-06-19
Posts: 1,122

Re: Possible Martian Export Products?

Deuterium is abundant as a fraction of Mars water (much more so than on earth). If fusion reactors are developed for space use, Mars might be the source of their fuel.

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#16 2017-10-05 05:40:52

Antius
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From: Cumbria, UK
Registered: 2007-05-22
Posts: 1,003

Re: Possible Martian Export Products?

Regolith samples would be valuable initially, but as more are accumulated and scientific questions are answered, the value would decline rapidly.

To successfully export a product to Earth, it's sale price on Earth must be competitive with equivalent products made on Earth.  If transport costs are upwards of $1000/kg, that does severely limit what a Mars colony could make and sell.  As Louis has pointed out, high value novelty items could have a competitive niche.  Some precious elements might have export potential, but then again the cost of operating on Mars will be much higher as well.  The problem with high-end manufactured goods is that they also tend to require high-capital investments in equipment.  A Mars colony would have difficulty affording those sorts of infrastructure investments.  Deuterium would be problematic for the same reason.  The small cost advantage of a factor 8 increase in concentration relative to Earth, would likely be swallowed by the much greater cost of operating on Mars.

Food might be something a Mars colony could export.  If space tourism gets going in a big way, it may be cheaper to grow food on Mars and ship it to LEO than to launch from Earth.  The same could be said of water, radiation shielding and maybe some basic manufactured products.  Earth orbit would be a much more competitive export market than the Earth itself.

Solar power satellites or orbital nuclear power plants are another possibility.  Could Gerard O'Neill's vision be made to work with Mars as the hub, instead of the moon?  The advantages Mars has are a much improved availability of material resources.  The disadvantages are an atmosphere (cannot easily use mass drivers); substantially greater gravity and distance from Earth.  The latter would make it much more expensive to establish a mining operation on Mars compared to the moon.  Launching components from the Martian surface to orbit will be more expensive and transporting finished satellites from Mars orbit to high-Earth orbit will take longer than simply assembling them in HEO.  So probably not.

Last edited by Antius (2017-10-05 05:46:51)

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#17 2017-10-05 06:38:03

louis
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From: UK
Registered: 2008-03-24
Posts: 4,924

Re: Possible Martian Export Products?

It is true that regolith will decline in value gradually, but that is not true of meteorites (or fossils, if they exist).  Their value will be much more sustainable. However, there are a lot of geology departments on Earth - maybe 10,000 (not including schools).  If they all wanted 50 kgs of Mars regolith material, that would be 500,000 kgs - so a lot of export potential there for the first few decades.

On cost, several points:

1. As this discussion shows, there is a lot of uncertainty on price but $1000 per kg seems very high.

https://www.reddit.com/r/SpaceXLounge/c … n_the_bfr/

I think for cargo, we could well be talking about $200 per kg from Mars to Earth in 20 or 30 years' time.

2. I think it is wrong to assume that the same costs as on Earth will apply on Mars.  On Mars, there will not necessarily be taxes, or rents or licensing costs and raw materials will be freely available for extraction.   

3. It is a well established principle in commerce that if A want to pay for regular transport of B from C to D in E, then on return from D to C you can load your vessel E  with different commodities at marginal rates because it's got to return in any case. In this case "A" are institutions such as universities, research bodies and space agencies that will want to bring equipment to Mars. They will effectively be paying for an empty vessel to return to Earth on its next journey, and so those basic costs are covered - you are only looking at the additional marginal costs of extra fuel and so on.

4. Energy costs may well be far lower on Mars than on Earth, once solar energy technology has further reduced in price, because there will be no rental costs and the PV panels will not require the same sort of strudy installation as found on Earth with its more severe weather.

5. The Mars community may take a decision to, in effect, subsidise export trade.  The Mars community will be in a much better situation do this than any community on Earth in my view because, in my judgement, their productivity is going to be multiples of any nation on Earth, thanks to their initial technological endowment, their lack of a welfare "burden" (old people, educating young people,  and their technical knowhow).  I am suggesting that 1000 people on Mars will be able to produce what 100,000 people on Earth can, or maybe even 1,000,000.  They can do that because they will be a small community accessing resources equivalent perhaps to 1/3 that available on the land mass of Earth.  So let's say a community of 100,000 may enjoy the same level of resources as currently enjoyed by 7 billion people on Earth a factor of 70,000 to 1 in terms of available resources, so every one person on Mars will have potentially 70,000 more available resources than one person on Earth. Of course, because there are so few of them, they can't easily harness all the resources, but they can, with advanced technology, harness far more than could the average 100,000 people on Earth.





Antius wrote:

Regolith samples would be valuable initially, but as more are accumulated and scientific questions are answered, the value would decline rapidly.

To successfully export a product to Earth, it's sale price on Earth must be competitive with equivalent products made on Earth.  If transport costs are upwards of $1000/kg, that does severely limit what a Mars colony could make and sell.  As Louis has pointed out, high value novelty items could have a competitive niche.  Some precious elements might have export potential, but then again the cost of operating on Mars will be much higher as well.  The problem with high-end manufactured goods is that they also tend to require high-capital investments in equipment.  A Mars colony would have difficulty affording those sorts of infrastructure investments.  Deuterium would be problematic for the same reason.  The small cost advantage of a factor 8 increase in concentration relative to Earth, would likely be swallowed by the much greater cost of operating on Mars.

Food might be something a Mars colony could export.  If space tourism gets going in a big way, it may be cheaper to grow food on Mars and ship it to LEO than to launch from Earth.  The same could be said of water, radiation shielding and maybe some basic manufactured products.  Earth orbit would be a much more competitive export market than the Earth itself.

Last edited by louis (2017-10-05 06:39:34)


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

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#18 2017-10-06 05:28:48

elderflower
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Registered: 2016-06-19
Posts: 1,122

Re: Possible Martian Export Products?

Yes Antius, you are right as far as landed products are concerned.
I don't expect Mars Deuterium to be used on Earth, though. Its use would be in space for vehicle fuel or for power generating satellites of Earth or other bodies. It doesn't have to be landed.

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#19 2017-10-06 12:43:56

JoshNH4H
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From: Pullman, WA
Registered: 2007-07-15
Posts: 2,513
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Re: Possible Martian Export Products?

The question of exports is a really deeply vital one, and is a subject about which I have a lot to say.  However, before I launch into my long-winded discussion of the economics of Martian settlements, I want to address point #5 in Louis's post above.

louis wrote:

The Mars community may take a decision to, in effect, subsidise export trade.  The Mars community will be in a much better situation do this than any community on Earth in my view because, in my judgement, their productivity is going to be multiples of any nation on Earth, thanks to their initial technological endowment, their lack of a welfare "burden" (old people, educating young people,  and their technical knowhow).  I am suggesting that 1000 people on Mars will be able to produce what 100,000 people on Earth can, or maybe even 1,000,000.  They can do that because they will be a small community accessing resources equivalent perhaps to 1/3 that available on the land mass of Earth.  So let's say a community of 100,000 may enjoy the same level of resources as currently enjoyed by 7 billion people on Earth a factor of 70,000 to 1 in terms of available resources, so every one person on Mars will have potentially 70,000 more available resources than one person on Earth. Of course, because there are so few of them, they can't easily harness all the resources, but they can, with advanced technology, harness far more than could the average 100,000 people on Earth.

Emphasis mine.  I will address the supporting arguments later, but first, just for comparison, I want to discuss what that means.  Louis is suggesting that economic productivity on Mars will be 100-1000 times higher than it is in countries on Earth.  What this means depends what your reference is.  GDP per capita for the entire world (using PPP rather than the nominal exchange rates) is $17,000 per person per year.  100-1000 times that would be $1.7 million-$17 million per person per year.  If his point of comparison is wealthy, developed nations the figures are roughly $6 million-$60 million per person per year.  GDP per capita tracks pretty closely with income (especially in a society with universal workforce participation, as he has suggested).  Louis is suggesting that this society on Mars will be about as rich as a gathering of Fortune 500 CEOs, only without all of the millions of people working underneath those CEOs producing the value that ends up in their salary.  Louis is arguing that a combination of factors will allow single people to do the work of hundreds and thousands.

Now what factors are those? He has done me the convenience of providing details.  I do appreciate this, as detailed claims can be evaluated.  Blanket claims (while often just as wrong, if not moreso) can be difficult to falsify.

I will be using statistics on the United States as a baseline because the US is a rich, advanced nation with reliable statistics available on its population.  It is also not really unusual in any particular way for an OECD country.  For reference, our GDP per capita as of 2016 was $57,436 per person per year.  The definition of GDP is "the total value of all goods and services produced by an economy"--in other words, the exact quantity which we are interested in measuring.

I will focus first on what Louis describes as "their lack of a welfare 'burden' (old people, educating young people,  and their technical knowhow)".  What this means, in macroeconomic terms, is that a substantial portion of the population of any demographically balanced country will not work, and therefore (in the terms of macroeconomic statistics only, as these people are often children enrolled in school or parents who are not working in order to take care of their children) do not contribute to the economy.  Louis is making the valid claim that if you only permitted working age people to move to Mars that the economy would have a higher GDP per resident.  But how much can this improve things?

The United States is currently considered to be at full employment, with an unemployment rate of 4.2%.  Workforce participation is lower than it has been at the past, standing at 63.1%.  Given that 4.2% of the workforce is currently unemployed, 60.4% of the American population is currently working.  Reaching a workforce participation rate (let alone an employment rate) of 100% is probably impossible, but let's say that by demographic selection we can improve both by 50%, raising the employment rate to 90.6% of the total population and the workforce participation rate to 94.7% of the total population. 

Taking into account workforce participation, this brings us from a GDP per capita of $57,436 per person per year to $86,154 per person per year.

The next thing louis suggests is that advanced technology (as he puts it, their "initial technological endowment") will increase productivity by multiples.  And to a certain extent, he is correct.  Technology is one of the most dependable ways to increase a worker's productivity.  A representative example is the use of tractors for farming.  Before tractors, land was tilled using animal power.  While a horse is able to till soil at a certain rate, a tractor (having much more power available to it than a horse does) can do it much faster.  Therefore with a tractor, one farmer can farm more land than she otherwise could with animal power alone.

Where louis goes wrong, I think, is in the magnitude of this increase.  I will attempt to come to a better estimate using workers' wages.  In an ideal model of the labor market with symmetric information and equal bargaining power, workers will be paid in accordance with the value of what they produce.  Therefore, labor wages are a good approximation of labor productivity in this ideal model.

In order to apply this model to Mars, I will compare the average income of the top 10% of laborers and divide it by the average income of all Americans.  I will then multiply the above number, $86,154 per person per year, by that multiplier.  This is not a perfect proxy, for a number of reasons:

  • Some people also get income from nonlabor sources, e.g. investments.  This is proof that workers are not compensated the total value of the things they produce and also accrues primarily to the top 10%

  • There is an inherent information asymmetry between workers and employers, especially for low-skilled workers and employers

  • Some workers have more bargaining power than others, particularly high-skilled workers but also unionized workers.

  • This model is completely blind to the occupations of the laborers it looks at.  For example, mining and manufacturing will both be important activities on Mars, while being a CEO will not be a very important or common occupation.  However, CEOs will be overrepresented in that top 10% while miners and manufacturers mostly not represented at all.

Having said that, the inequitable distribution of wages and the decline of unionization in the US means that these factors will generally tend to give a higher multiplier than will actually be the case.  Consider this, therefore, to be an upper bound to what is reasonable.

By definition, 100% of income goes to 100% of people, for an average of 1% per percentile.  However, in 2014 47.2% of total income went to the top 10% of earners in the US, which is 4.72% per percentile.  Our multiplier is therefore 4.72.  Please do not mistake the precision of this number for accuracy.  Actual productivity of workers on Mars could be anything from 20% of Earth levels (unforeseen challenges make everything much harder) to 5x (this very optimistic estimate is basically accurate).

I am therefore making the unrealistically generous assumption that technological investment can increase the productivity of the average worker by a factor of 4.72.  Multiplying $86,154 by 4.72, we get get $406,647 per person per year.  Once again, do not mistake precision for accuracy.  This is an upper bound with large error bars.

Finally, you have suggested that the available land area on Mars will have a huge multiplicative effect on the GDP on Mars.  But let's look at this claim a bit as, on Earth, it's generally not the case.  As evidence, I submit the following scatter plot:

euo8kg.jpg

This is a scatter plot showing the relation between GDP per capita at PPP (X-axis) and population density (Y-axis) of all 34 OECD countries.    As you can see, there is virtually no relationship between economic productivity and population density in modern economies.  The reason for this is that things like farming and resource extraction represent a very small part of the economy of a modern, rich country.

Due to Mars's large land area and high costs of living (food production and housing will be naturally more expensive than Earth due to the inhospitable environmental conditions), things like resource extraction and manufacturing will probably take up a larger share of the economy and service sector stuff will be less prevalent.  This will result in a combination of less free time for workers, fewer hours worked (cleaning your own house because you don't pay someone else to do it for you) and outsourcing where possible to Earth in exchange for the products of heavy industry.  This tends to have a neutral-ish effect on GDP as long as your trade is balanced.

Therefore, a high-end estimate of the productivity of the Martian economy is that it will be 7 times more productive per person than Earth.  100 or 1000 times?  I think not--and I require analysis based on facts and evidence, rather than fabricated numbers, to change my mind.


-Josh

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#20 2017-10-06 13:55:09

Terraformer
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From: Lancashire
Registered: 2007-08-27
Posts: 3,108
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Re: Possible Martian Export Products?

Plus, if technology was such a great multiplier, we'd apply it here on Terra and get those benefits. After which we'd terraform Mars for a lark, because that's what powerful post-scarcity societies do to stave off boredom.


"I guarantee you that at some point, everything's going to go south on you, and you're going to say, 'This is it, this is how I end.' Now you can either accept that, or you can get to work." - Mark Watney

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#21 2017-10-06 14:10:58

JoshNH4H
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Re: Possible Martian Export Products?

Yeah, exactly.  Mars needs to have some kind of comparative competitive advantage for its society to be viable.


-Josh

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#22 2017-10-06 15:40:12

SpaceNut
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From: New Hampshire
Registered: 2004-07-22
Posts: 16,180

Re: Possible Martian Export Products?

Which brings up mining on the moon, mars moons, asteroid belt as the competition to provide a mined product....

Here's how much American men earn at every age

The median household income in the United States is $59,039, according to new data from the U.S. Census.

Here's the median income American men are earning at every age, according to data from the Bureau of Labor Statistics for the second quarter of 2017:

    16 to 19 years: $440 weekly/$22,880 annually
    20 to 24 years: $549 weekly/$28,548 annually
    25 to 34 years: $828 weekly/$43,056 annually
    35 to 44 years: $1,065 weekly/$55,380 annually
    45 to 54 years: $1,094 weekly/$56,888 annually
    55 to 64 years: $1,058 weekly/$55,016 annually
    65 years and older: $1,005 weekly/$52,260 annually

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#23 2017-10-06 18:04:43

louis
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From: UK
Registered: 2008-03-24
Posts: 4,924

Re: Possible Martian Export Products?

I would make a number of points in response:

1.  You made adjustments for the % of the economically active population in the US.  However, you did not:

(a) Establish how many people work full time in the US - or better what is the population % as a full time equivalent. About a third of UK workers work part time.  All people on Mars, unless they are ill, will be working full time (in fact probably more like 72 hours a week rather than 40 hours, which we may take to be a reasonable average in western countries like the UK).  You probably get an immediate tripling of productivity purely in terms of work hours in the Mars community compared with the US. - or

(b) Note that a very large proportion of the workforce in the USA are doing things that aren't required on Mars e.g. providing hospital care, caring for the elderly, working in airports, teaching young people, working in the armed forces, working in insurance,  administering a very complex tax system, supervising the prison population, policing neighbourhoods,  driving trucks, operating taxis, working in lap dancing clubs, serving alcohol in bars or coffee in Starbucks...the list goes on and on. The Mars community will be narrowly focussed on the really productive stuff - energy production, mining, metal bashing, chemical processing, plastics making, product manufacture, growing food, food processing, textiles etc. In the US, those productive activities support all the non productive ones in health, criminal justice, legal work, entertainment and so. Probably a good half of the US workforce are not engaged in directly productive work.  If the USA were to replicate what will happen on Mars, their industrial ouput would be through the roof. 

2.  What makes workers productive beyond their own muscle power and intelligence?  The answer is of course capital, in the form of energy, materials, machines, computers, communications and transport.  How much capital will the pioneers on Mars benefit from?  I believe they will be endowed with huge capital resources. It is this initial endowment that will launch them into this new level of super-productivity. It is  difficult to compare this capital endowment with that on Earth.  Whilst there are many things the Mars community do not have to do which have to be done on Earth, equally there are things on Mars that have to be done, which don't have to be done on Earth (e.g. life support, creating and maintaining pressurised environments, soil manufacture, artificial lighting for some if not all agriculture and so on). Also, I am putting forward my favoured model which has a strong drive to create a self-sufficient industrial and agricultural infrastructure on Mars as soon as possible - we don't know if Space X will have that same drive but I suspect they will.  However, I think it is reasonable to suppose that at the very least the first pioneers on Mars are going to land with huge amounts of "free" capital provided by Space X - hundreds of millions of dollars of productive equipment for a few people, way more than the average capital deployed per worker in the US or UK. One example will be the power system.  Musk clearly intends to use solar energy. I would be surprised if the power system doesn't deliver way more power per person than the average person uses on Earth - could well be generating 100 times...Average electricity usage in the UK is about 0.5 Kws average...it is very likely going to be more than 50 Kws on Mars from the get go.  If I was working on the development plan, I would be looking for at least 100 Kws per person from the first mission.

3.  It is very difficult to compare costs between Mars and Earth for reasons already stated. I think it would be more helpful to look at a range of indicators ie how much energy might be produced per person on Mars compared with on Earth, how much steel per person might be produced on Mars compared with on Earth, how much cement or bricks or glass per person will be produced per person on Mars compared with on Earth and how many calories of food might be produced per person on Mars compared with on Earth. It is those sorts of indicators where I think we will see factors of 100 or even 1000.  The early Mars economy is not going to be a consumerist society. It is going to be focussed on production and growing the colony. Key to maximising production will be automated processes and use of robots. My point is that with those sorts of levels of productivity it will be able to afford to subsidise transport links with Earth - probably more directly, rather than through cash subsidy.

4. The scatter graph isn't helpful.  The facts are that resources are limited on Earth and there is keen competition to acquire them either through price or political control. Raw materials on Mars will effectively be free, subject to mining and transport costs. But remember also, no one will be taxing the mining or the transporting. Absence of tax, rent, and licensing costs will actually be a huge price advantage to the Mars community.

5.  After the initial "capital endowment" and as its population grows, Mars will want to continue importing goods and services from Earth. It will need to pay for those.  It therefore needs to trade  or provide services to ensure it can import what it needs.  Transportation costs will be a drag on trade and I think the Mars community will therefore subsidise those costs - by devoting its own resources to producing propellant and constructing simple rockets that can take goods to LMO (docking with BFRs).  Not having to land on Mars will increase the life of BFRs and further reduce costs. Subsidising lifeline transport links is nothing new. Currently in Scotland 30 lifeline ferry connections are subsidised by government. It makes economic sense.

6.  Mars is going to be  a new type of economy and will certainly be very advanced.  You don't seem to grasp this point. For instance, you say on Mars you will end up "cleaning your own house because you don't pay someone else to do it for you".  Er no - robots will clean your house for you and all facilities will be designed to be self cleaning, especially hygiene ones.  Your sort of argument suggests we will be poorer once self driving vehicles come in and we don't have to pay taxi drivers to drive us to to places!

Robots and automated processes will replace labour to a huge degree.  I assume, Josh, that you aren't arguing it will have on Mars a backward economy with a low level of technology? 

Mars is a harsh environment but we sometimes forget how harsh Earth is. Liquid water is a menace on Earth! It has taken centuries on Earth for more advanced societies to drain marshes and control flooding in order to improve agricultural production.  But crops can still be wiped out by hurricanes, frosts and tsunamis.  On Earth you might not have to build a dome but you do have to build and maintain fences, walls, and ditches and apply huge amounts of pesticides to pursue agriculture successfully. It is interesting to note that on Earth it is a hi-tech nation - the Netherlands - that has been breaking records for agricultural productivity.

7.  All the above should be viewed also in line with the creation of a Mars currency which will encourage continuing investment from Earth  in Mars. Production on Mars is as valuable as production on Earth as long as it is consumed.

8. My conclusions are that it is not really possible to put precise figures on how much more productive Mars will be overall. However, in terms of particular comparable outputs like energy, steel, construction materials,  and so on, my view is that Mars will indeed be in the 100-1000 x range. 





JoshNH4H wrote:

The question of exports is a really deeply vital one, and is a subject about which I have a lot to say.  However, before I launch into my long-winded discussion of the economics of Martian settlements, I want to address point #5 in Louis's post above.

louis wrote:

The Mars community may take a decision to, in effect, subsidise export trade.  The Mars community will be in a much better situation do this than any community on Earth in my view because, in my judgement, their productivity is going to be multiples of any nation on Earth, thanks to their initial technological endowment, their lack of a welfare "burden" (old people, educating young people,  and their technical knowhow).  I am suggesting that 1000 people on Mars will be able to produce what 100,000 people on Earth can, or maybe even 1,000,000.  They can do that because they will be a small community accessing resources equivalent perhaps to 1/3 that available on the land mass of Earth.  So let's say a community of 100,000 may enjoy the same level of resources as currently enjoyed by 7 billion people on Earth a factor of 70,000 to 1 in terms of available resources, so every one person on Mars will have potentially 70,000 more available resources than one person on Earth. Of course, because there are so few of them, they can't easily harness all the resources, but they can, with advanced technology, harness far more than could the average 100,000 people on Earth.

Emphasis mine.  I will address the supporting arguments later, but first, just for comparison, I want to discuss what that means.  Louis is suggesting that economic productivity on Mars will be 100-1000 times higher than it is in countries on Earth.  What this means depends what your reference is.  GDP per capita for the entire world (using PPP rather than the nominal exchange rates) is $17,000 per person per year.  100-1000 times that would be $1.7 million-$17 million per person per year.  If his point of comparison is wealthy, developed nations the figures are roughly $6 million-$60 million per person per year.  GDP per capita tracks pretty closely with income (especially in a society with universal workforce participation, as he has suggested).  Louis is suggesting that this society on Mars will be about as rich as a gathering of Fortune 500 CEOs, only without all of the millions of people working underneath those CEOs producing the value that ends up in their salary.  Louis is arguing that a combination of factors will allow single people to do the work of hundreds and thousands.

Now what factors are those? He has done me the convenience of providing details.  I do appreciate this, as detailed claims can be evaluated.  Blanket claims (while often just as wrong, if not moreso) can be difficult to falsify.

I will be using statistics on the United States as a baseline because the US is a rich, advanced nation with reliable statistics available on its population.  It is also not really unusual in any particular way for an OECD country.  For reference, our GDP per capita as of 2016 was $57,436 per person per year.  The definition of GDP is "the total value of all goods and services produced by an economy"--in other words, the exact quantity which we are interested in measuring.

I will focus first on what Louis describes as "their lack of a welfare 'burden' (old people, educating young people,  and their technical knowhow)".  What this means, in macroeconomic terms, is that a substantial portion of the population of any demographically balanced country will not work, and therefore (in the terms of macroeconomic statistics only, as these people are often children enrolled in school or parents who are not working in order to take care of their children) do not contribute to the economy.  Louis is making the valid claim that if you only permitted working age people to move to Mars that the economy would have a higher GDP per resident.  But how much can this improve things?

The United States is currently considered to be at full employment, with an unemployment rate of 4.2%.  Workforce participation is lower than it has been at the past, standing at 63.1%.  Given that 4.2% of the workforce is currently unemployed, 60.4% of the American population is currently working.  Reaching a workforce participation rate (let alone an employment rate) of 100% is probably impossible, but let's say that by demographic selection we can improve both by 50%, raising the employment rate to 90.6% of the total population and the workforce participation rate to 94.7% of the total population. 

Taking into account workforce participation, this brings us from a GDP per capita of $57,436 per person per year to $86,154 per person per year.

The next thing louis suggests is that advanced technology (as he puts it, their "initial technological endowment") will increase productivity by multiples.  And to a certain extent, he is correct.  Technology is one of the most dependable ways to increase a worker's productivity.  A representative example is the use of tractors for farming.  Before tractors, land was tilled using animal power.  While a horse is able to till soil at a certain rate, a tractor (having much more power available to it than a horse does) can do it much faster.  Therefore with a tractor, one farmer can farm more land than she otherwise could with animal power alone.

Where louis goes wrong, I think, is in the magnitude of this increase.  I will attempt to come to a better estimate using workers' wages.  In an ideal model of the labor market with symmetric information and equal bargaining power, workers will be paid in accordance with the value of what they produce.  Therefore, labor wages are a good approximation of labor productivity in this ideal model.

In order to apply this model to Mars, I will compare the average income of the top 10% of laborers and divide it by the average income of all Americans.  I will then multiply the above number, $86,154 per person per year, by that multiplier.  This is not a perfect proxy, for a number of reasons:

  • Some people also get income from nonlabor sources, e.g. investments.  This is proof that workers are not compensated the total value of the things they produce and also accrues primarily to the top 10%

  • There is an inherent information asymmetry between workers and employers, especially for low-skilled workers and employers

  • Some workers have more bargaining power than others, particularly high-skilled workers but also unionized workers.

  • This model is completely blind to the occupations of the laborers it looks at.  For example, mining and manufacturing will both be important activities on Mars, while being a CEO will not be a very important or common occupation.  However, CEOs will be overrepresented in that top 10% while miners and manufacturers mostly not represented at all.

Having said that, the inequitable distribution of wages and the decline of unionization in the US means that these factors will generally tend to give a higher multiplier than will actually be the case.  Consider this, therefore, to be an upper bound to what is reasonable.

By definition, 100% of income goes to 100% of people, for an average of 1% per percentile.  However, in 2014 47.2% of total income went to the top 10% of earners in the US, which is 4.72% per percentile.  Our multiplier is therefore 4.72.  Please do not mistake the precision of this number for accuracy.  Actual productivity of workers on Mars could be anything from 20% of Earth levels (unforeseen challenges make everything much harder) to 5x (this very optimistic estimate is basically accurate).

I am therefore making the unrealistically generous assumption that technological investment can increase the productivity of the average worker by a factor of 4.72.  Multiplying $86,154 by 4.72, we get get $406,647 per person per year.  Once again, do not mistake precision for accuracy.  This is an upper bound with large error bars.

Finally, you have suggested that the available land area on Mars will have a huge multiplicative effect on the GDP on Mars.  But let's look at this claim a bit as, on Earth, it's generally not the case.  As evidence, I submit the following scatter plot:

http://oi67.tinypic.com/euo8kg.jpg

This is a scatter plot showing the relation between GDP per capita at PPP (X-axis) and population density (Y-axis) of all 34 OECD countries.    As you can see, there is virtually no relationship between economic productivity and population density in modern economies.  The reason for this is that things like farming and resource extraction represent a very small part of the economy of a modern, rich country.

Due to Mars's large land area and high costs of living (food production and housing will be naturally more expensive than Earth due to the inhospitable environmental conditions), things like resource extraction and manufacturing will probably take up a larger share of the economy and service sector stuff will be less prevalent.  This will result in a combination of less free time for workers, fewer hours worked (cleaning your own house because you don't pay someone else to do it for you) and outsourcing where possible to Earth in exchange for the products of heavy industry.  This tends to have a neutral-ish effect on GDP as long as your trade is balanced.

Therefore, a high-end estimate of the productivity of the Martian economy is that it will be 7 times more productive per person than Earth.  100 or 1000 times?  I think not--and I require analysis based on facts and evidence, rather than fabricated numbers, to change my mind.


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

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#24 2017-10-06 18:06:38

louis
Member
From: UK
Registered: 2008-03-24
Posts: 4,924

Re: Possible Martian Export Products?

Mars is not going to have a population in the billions. Achieving very high productivity and supertechnology in a small community is far more doable.

Terraformer wrote:

Plus, if technology was such a great multiplier, we'd apply it here on Terra and get those benefits. After which we'd terraform Mars for a lark, because that's what powerful post-scarcity societies do to stave off boredom.


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

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#25 2017-10-06 19:29:19

Antius
Member
From: Cumbria, UK
Registered: 2007-05-22
Posts: 1,003

Re: Possible Martian Export Products?

Josh,
I don't disagree that a close to 100% working age population will be a benefit to a Mars colony.  But I think there is a severe case of rose tinted glasses in Louis' analysis.  A few points:

1. The Mars colony will not have superior technology to an Earth based nation.  Its technology sets will be about the same.  Its research capabilities will lag those of any Earth nation until it achieves comparable population.  Why would we expect superior technology?

2. Capital is basically the stock of factories, machines and other infrastructure available to support mining,  manufacturing, services, transportation, etc.  These things have to be made or imported.  The US and other nations, didn't just materialize these things over night.  Capital investment in developed nations is an iterative process, with new investments building on older ones.  The high incomes of the developed world are the result of centuries of accumulated capital.  A Mars colony will not only need to start from scratch, but must import capital infrastructure at enormous cost.

3. One of the great historical advantages that the US had as an industrial power was economy of scale.  This allows higher productivity.  It is a big part of China's cost advantage today.  A Mars colony will be a relatively small affair for a long time to come.  Small nations can dominate individual industries if they have export markets.  But it is progressively more difficult for a nation to manufacture all of the goods it consumes if it is small and lacks scale economies in internal markets.

4. It is not at all true to say that material resources will be virtually free on Mars.  Mining will require substantial investments in heavy equipment, energy and labour, just as it does on Earth.  A sizable portion of this must be imported and this will be the case for a long time to come.  What's more, Mars is an altogether more difficult environment to work in.  It is colder, subject to large temperature swings and without air.  Expecting materials to be cheaper than they are on Earth would appear to be optimistic.

5. The assumption that energy will be cheap because colonists can make solar panels is unsupportable in my opinion.  There are some things we can turn to our advantage on Mars.  But overall, solar power on a planet with 2/5ths the sunlight intensity is not going to be any cheaper than it is on Earth.  In fact the energy return on investment for solar panels, will inevitability be weaker than on Earth.  The equipment used to manufacture the panels must of course be imported at enormous cost.  Problems relating to power storage will not be any easier.

All in all, it is important to remember that wanting something to be true will not make it so.  When one is enthused with an idea or concept, it is all too easy to bend facts to support the conclusions we want to hear.

Last edited by Antius (2017-10-06 19:36:51)

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