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#76 2017-10-09 15:34:46

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

Re: Possible Martian Export Products?

Terraformer wrote:

It's kind of hard to see anything that Mars could produce that couldn't be better done either on Luna (manufacturing, tourism), asteroids (mining for metals/volatiles), or even in free space (food production? We need to recycle the air anyway...).

I am inclined to agree.  The best place to send factories and food production facilities would be high Earth orbit.  Here they are ideally positioned to manufacture solar power satellites, space hotels, food and interplanetary transport vessels.  Relatively small mining bases will be established on Lunar and NEAs, to supply the orbital facilities with raw materials.  This is the most sensible strategy because: (1) The mass ratio is much better shipping to GEO or L5 than to Mars; (2) Space manufacturing equipment is heavy; (3) The markets for manufactured goods are in Earth orbit.

With this in mind, and given that we are colonizing space as a permanent venture, how much sense does it make for Mars to be the first target for human colonisation?  Earth orbit would appear to be a much more sensible target.

Last edited by Antius (2017-10-09 15:36:57)

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#77 2017-10-09 15:42:42

louis
Member
From: UK
Registered: 2008-03-24
Posts: 5,089

Re: Possible Martian Export Products?

But part of its energy output is being used to create another one, so the previous one is being replaced by a new one...surely that's the whole point of EROI - that you are using part of your energy output to produce new energy in the future (whether it be through digging up and burning coal or making PV panels). I don't think we're going to agree! smile

JoshNH4H wrote:
louis wrote:

But it is correct because the system can produce the energy to replicate itself.
I agree the EROI  figure would be 10.  But the total energy output would be 1100 and 100 as a proportion of 1100 is about 9.09%, not 10%. You seem to be ignoring the original energy investment (100) when calculating the overall total energy ouput.  How can that be?

You ignore the energy used to manufacture the energy production system because it did not come from that particular energy system.


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

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#78 2017-10-09 16:04:55

Terraformer
Member
From: Lancashire
Registered: 2007-08-27
Posts: 3,132
Website

Re: Possible Martian Export Products?

louis, EROEI has a definition that is accepted by everyone - the total energy produced (for solar, the energy produced over it's lifetime) divided by the total energy required to produce that energy (for solar, which has no ongoing inputs, it's the energy required to manufacture the solar panel).

Or consider oil. If, for every 10 tonnes of oil produced, 1 tonne of oil has to be burned, then the EROEI is 10, meaning that the excess of oil produced, available for other work, is 9 tonnes. If we only got a single tonne of oil for every tonne we burned to get it, the EROEI would be 1, and there would be no point mining it.


"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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#79 2017-10-09 16:30:16

louis
Member
From: UK
Registered: 2008-03-24
Posts: 5,089

Re: Possible Martian Export Products?

That's not what the equation says. It says EROI = Energy Output/Energy Input.   You are counting the input as part of the ouput. How can that be?  To take your example, the input is 1 tonne and the output is 9, so the EROI is 9 not 10.  Inputs can never be part of their output.
Basically you're double counting, putting the input on both sides of the equation. 

Another way of seeing your mistake is to take a value of EROI below 1.  If for every one unit of energy expended deploying the energy system you only got 0.5, according to you that would be a 1.5 divided by 1 = 1.5 because you are including the input in the total output. It's only if you divide the 0.5 (ie the real output, not including the input) by 1 that you get the correct answer.




Terraformer wrote:

louis, EROEI has a definition that is accepted by everyone - the total energy produced (for solar, the energy produced over it's lifetime) divided by the total energy required to produce that energy (for solar, which has no ongoing inputs, it's the energy required to manufacture the solar panel).

Or consider oil. If, for every 10 tonnes of oil produced, 1 tonne of oil has to be burned, then the EROEI is 10, meaning that the excess of oil produced, available for other work, is 9 tonnes. If we only got a single tonne of oil for every tonne we burned to get it, the EROEI would be 1, and there would be no point mining it.


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

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#80 2017-10-09 16:35:24

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

Re: Possible Martian Export Products?

Different people carrying out EROI analysis do use slightly different methodologies, which complicates matters.  For this reason, if you cannot trace the logic behind an analysis, it isn't worth spit.  There is always difficulty in knowing where to set the boundaries of the analysis.  Some institutions, when calculating the EROI of renewable energy sources, will multiply the EROI value by 3, on the basis that three times as much 'primary energy' would need to be burned to produce the same amount of power in a thermodynamic power plant.  But this is really a dishonest practice, designed to big up something that they advocate.  Also EROI calcs don't usually account for the energy losses and embodied energy in storage for intermittent energy.  So EROI analyses often end up comparing completely different things and pretending that they are the same.  To really compare solar power with nuclear power say, one has to assume that solar is equipped with enough storage to provide exactly the same product as the nuclear power reactor.

When erroneous claims are removed and the true energy cost of storage is accounted for, intermittent renewable energy sources tend to do badly in EROI studies.  This is well reflected in economic studies.  In this study produced for Euan Mearn's website, the strike price of offshore wind was found to be six times higher when sufficient energy storage was in place to remove the effects of intermittency.

http://euanmearns.com/the-real-strike-p … hore-wind/

This is why places like Germany and Denmark, for all their talk of a 100% renewable energy economy, are actually nowhere near it.  Both meet about a third of electricity demand using renewables (in Germany, a big chunk of which is hydro).  In terms of total energy, renewables are about 10%.  Not very impressive, when you consider the efforts that go into making it work.  But both are able to maintain an approximate 30% production of electricity from renewables, because relatively cheap coal and gas power plants are used as back up.  If this didn't exist and storage was required on a massive scale, the costs would rapidly become unaffordable.

Last edited by Antius (2017-10-09 16:46:10)

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#81 2017-10-09 16:54:16

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

Re: Possible Martian Export Products?

Mearns gives a good introduction to EROI and the net energy cliff.

http://euanmearns.com/eroei-for-beginners/

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#82 2017-10-11 20:35:08

JoshNH4H
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From: Pullman, WA
Registered: 2007-07-15
Posts: 2,513
Website

Re: Possible Martian Export Products?

Getting the topic back to exports, I have a mental model of a space colony's economy that helps me think about what the place for exports is.

To start, you create two lists: A production list and a consumption list.  Each list is a complete list, including quantity, of everything produced/consumed in the colony (for the sake of description, over the course of the Martian year).  For the purposes of making these lists, investments in the colony are a type of consumption. I would also include labor (not in the abstract of total hours, but labor doing X, Y, and Z) on both the lists of production and consumption.  I would not count immigration on either list because people aren't bought and sold, but it's economically sort of similar to an import of physical capital.

For a completely self-sufficient colony, the production list would have strictly as much or more of each item (and potentially also some amount of other items) than the consumption list.

In the real world, we know that won't be the case.  In year 0 of Martian civilization, there will be no people and no capital on-planet.  But it goes further than that.  The first steps towards colonization are going to be completely or almost completely reliant on supplies from Earth, because they will be there to determine (to quote GW) "what all is there, and where exactly is it?".  Before you have good knowledge of the resources available you won't have a resource base on which to support yourself.

Goods on the consumption list can come from one of two sources: Local production or imports.  I would subdivide the consumption list as follows:

  • Immediate consumption in manufacturing process

  • Consumption by way of investment

  • Consumption of goods necessary for human life (Food, air, housing, heating, healthcare, etc.  Some people call these "Super Goods")

  • Consumption beyond basic necessities of life (Possessions, entertainment, good food, leisure, etc.)

Goods on the production list can go to any of three places: Local consumption, exports, and waste/storage.  I would subdivide the production list as follows:

  • Primary Sector: Resource extraction and refinement.  This would the the mining sector.  On Earth farming is also included here but on Mars I think that's more secondary sector

  • Secondary Sector: Basically, manufacturing.  Turning resources into usable objects.  On Mars, I would also include farming in this sector because it will be highly mechanized and there's no "open air" farming on Mars.

  • Tertiary Sector: Also called the service sector.  This is an amorphous sector that includes most jobs that are not making objects and mining.  Drivers and spaceship captains are in this sector, as are doctors, teachers, most computer programmers, etc.  My job (fixing 3D printers) would also be considered to be a tertiary profession.  It is my understanding that many of the people in this forum work in tertiary fields.

  • Quaternary Sector: So typically this type of model only has primary, secondary, and tertiary sectors, but I want to include a Quaternary Sector.  This is sort of a meta-service sector that is focused more on making the economy as a whole more efficient in the future.  This would include things like basic research, applied research, engineering, automation programming, advanced manufacturing development, etc.

The purpose of adequate economic planning is to match the production list to the consumption list as well as possible, now and in the future, given the resources, capital, and labor available at the present day.  However, there will inevitably be a mismatch between the two.  This is not inherently a bad thing.  The reason why there will be a mismatch is economies of scale.  Certain types of production and services require a huge capital investment to produce. Transistors and circuit boards generally fall under this category, as do various other items.  A colony's depth and breadth of manufacturing abilities will necessarily be large but probably cannot be infinite.  Some things it will actually make sense to import from Earth.

I will cover two scenarios: In the first, the Mars colony has its own currency that can be exchanged for an Earth currency at something like a market-value exchange rate (Even if it's pegged to an Earth currency such as the Dollar or Euro it can't get too far from the market exchange rate without black/gray markets and financial arbitrage starting to occur).  In the second, Mars will use a terran currency (For the sake of this post, the good ol' US dollar).

I think everyone on this board would agree that if it is a successful enterprise*, a Martian colony would be a boomtown with a severe labor shortage.  Because labor is a universal input to all processes, and particularly because it will be a limiting factor in what can be done.  For this reason, I believe that the fundamental basis for value in a Martian colony will be the labor-hour.  Not all labor is created equal, but (especially in this context) all labor is created equally enough that the differences between different peoples' labor can be ignored**.  Therefore the price of any good is in proportion to the number of labor-hours required, in total, to make it.  Let's say laborers are reimbursed at a rate of M$100/hour.

So: There are going to be some items for necessary consumption that are going to have to be imported.  Certain rare elements, for example, chemical catalysts that are hard to produce and/or involve millions of years of biological processes to make.

In a theoretical sense, the only thing Martians will have in their pockets is Mars money.  Countries on Earth do not use Mars money.  They have their own national currencies.  If I go to my corner store and try to pay with Euros, I will be turned away.  Likewise, if Martians need computing equipment, dysprosium, and medicine the various companies involved will not accept paper that is only money on Mars.  You need to acquire Terran money.  You do this in a currency exchange.

Let's say Mars wants to buy $4,000,000 in goods from Earth and $6,000,000 in transportation.  (In this model, transportation is not free because nothing is free.  Should space transportation companies want to give it to them for free, that would be a donation which can be accounted for later).  This is a total of $10,000,000 Earth dollars that they need.

Now let's also say that Earth wants to buy some quantity of goods from Mars which, in total, require 40,000 Martian labor-hours to produce and 10,000 Martian labor-hours to transport.  The total price is therefore M$5,000,000.  If Martians need $10,000,000 and Terrans need M$5,000,000, the exchange rate will be $2 to M$1.

In the real world it's somewhat more complex, because the demand for goods (in both directions) declines as their prices (the exchange rate) rises.  But basically, it will find an equilibrium.

As a thought experiment, I want to explore an extreme theoretical result of this model, which is the notion of an extremely low-value export.  For the purposes of discussion, let's say gravel.  Earth, naturally, has no shortage of gravel  We have trillions of tons of rock that could be crushed at our convenience.  Mars also has rock, but there would seem to be no logical reason why they would try exporting it to Earth.

But what if they did?  Well, let's say wholesale gravel goes for $0.02/kg (Based on a rough density estimate, $26 per cubic meter/$20 per cubic yard.  This is much less than Home Depot charges because there are transportation and vendor costs, plus markup).

Let's say transportation represents 3 Martian labor-hours per kilo delivered to Earth, and gravel production is 1 Martian labor hour (in total Martian production costs) per 1 tonne of gravel.  The total cost, therefore, is M$300.1 per kilo of gravel delivered to Earth.

Let's say (due to an extraordinarily questionable export policy) the colony has no other exports and also does not do any kind of branding or soft exports.  Let's also say that the costs scale linearly with volume.  What are the implications?

Well, first of all it means that the exchange rate is M$15005/USD (Compare to the 1:2 ratio before!).  But it also means that there's a limit to the dollar value of imports per person that the colony can afford.  If you work under labor camp conditions and force everyone to work in gravel production for 16 hours out of every 23.6 hour sol, you get 9,360.4 hours of work per Martian year.  This person will be paid M$936,040, do an amount of work equivalent to shipping a hair over 3 tonnes of gravel to Earth, and generate $62.38 US in revenue for Mars.

In terms of USD, this works out to a wage of just $0.007 US per hour, less than nearly any worker anywhere.  But this isn't--necessarily--a killer for the project.

What it does mean is that the colony needs to be very productive and almost entirely self-sufficient.  In this case, the Purchasing Power Parity and Nominal exchange rates between Mars and Earth will be very divergent.  It will tend to hinder the growth of the colony if it needs to procure things (or wants to subsidize peoples' tickets) from Earth.  If the situation is such that it can't provide for its basic needs via production and also can't spare the labor to work on exports, the colony will fail and the colonists will either die or require emergency assistance from Earth (Read: Food/air aid.  Effectively, famine conditions).

The equivalent without a native martian currency is that local wages and prices will fall until exports are profitable.

The basic, important heuristic for good export products is that they should require as little martian labor per USD as possible.

In my mind, I think of two categories of exports: Hard and soft.  Hard exports are objects you can hold and soft ones are ideas and ways of doing things and IP.  Basically, hard exports are a product of the primary and secondary sectors while soft exports are a product of the tertiary and quaternary sectors.

I'm going to leave things here for now.  But I'm going to spend some time talking about what good export products would be, and judging them by the model I've set forth in this post, soon.

*Success is not a given.  It's up to us to make it happen.  That's the goal here.
**So far, I've declared as assumptions that unemployment will be 0% and everyone will make the same wage.  I realize these tend not to accord with the real world in developed, capitalist societies, but in a mostly-planned (or somewhat-planned) boomtown economy they might not be far off.


-Josh

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#83 2017-10-12 01:22:06

louis
Member
From: UK
Registered: 2008-03-24
Posts: 5,089

Re: Possible Martian Export Products?

I think your post exemplifies the limits of conventional economics, particularly when applied to the very early Mars colony.

Labour pricing is not, in my view, going to be a very useful concept in this early stage.  The situation on Mars will be more like the Kibbutz period of Israel, when people often pooled their labour into a community and engaged in a range of tasks.  Mars pioneers will be operating in a number of different sectors - one person may well be a farmer, a plumber, an IT technician, a writer and a documentary film maker, all during their sojourn on Mars, switching between these roles by the hour, day or month.

Where will the payment for labour be made? In the very early colony, I think it quite likely pay will be made directly to bank accounts on Earth, in Earth currencies, while the pioneers have all their needs met on Mars, in similar fashion to the way people on Antarctica get paid (there not being any Antarctic banks or currency). That said, as the colony grows there may be a "proto currency" - some kind of ration points system  administered digitally.

I think globalisation has a lesson for us re the Mars economy. It's very difficult these days to say where money is being earned by large corporations.  Their head office has a tendency to move around, always looking for the lowest corporate tax rate! Much - perhaps most of the early Mars colony's earnings will come from sales on Earth or revenue from Earth e.g. sales of meteorites or sales of life support services to researchers, coming from Earthbound institutions.  The Mars Corporation (if Space X or someone sets up a separate financial organisation) will likely have a head office on Earth. Money will start flowing in well before colonisation formally begins. So before Year 0 there will be a Year 0 minus 5 or whatever.

The initial capital investments being made on Mars will, from the Mars point of view, be more like "endowments" a transfer of wealth between generations rather than something that gets entered on a spreadsheet.

I never find tertiary sector definitions very helpful.  A management consultant to manufacturers will be counted as part of the service sector but if they were directly employed in the same role within a manufacturing firm they would be counted as part of manufacturing. This goes for a whole range of "services". Equally people like plumbers and  electricians can to my mind be seen as final assembly manufacturers. They manipulate matter, just as people do in factories, to achieve an end product: they cut, they heat, they smooth, they join...just as people do in factories, it's just the activity is happening in non-specialist buildings.  And what do you say about IT "Services" - so vital to manufacturing these days?  You service 3D printers which, I presume could well form part of the manufacturing process.

I think on Mars in the early colony, the sector boundaries will be largely irrelevant.  This is about one voluntary community working together to strive for maximal self sufficiency.

The distinction between hard and soft products isn't very helpful. A Mars Corporation could have a publishing division on Earth (in fact that is very likely) to publish books based on photographs and other material gathered on Mars. The photographs, text and so on will be digitally exported from Mars but will find form at the point of sale on Earth as a hard object - a book - even though the book didn't have to be transported from Mars (thankfully, as it would otherwise be a very expensive book). 










JoshNH4H wrote:

Getting the topic back to exports, I have a mental model of a space colony's economy that helps me think about what the place for exports is.

To start, you create two lists: A production list and a consumption list.  Each list is a complete list, including quantity, of everything produced/consumed in the colony (for the sake of description, over the course of the Martian year).  For the purposes of making these lists, investments in the colony are a type of consumption. I would also include labor (not in the abstract of total hours, but labor doing X, Y, and Z) on both the lists of production and consumption.  I would not count immigration on either list because people aren't bought and sold, but it's economically sort of similar to an import of physical capital.

For a completely self-sufficient colony, the production list would have strictly as much or more of each item (and potentially also some amount of other items) than the consumption list.

In the real world, we know that won't be the case.  In year 0 of Martian civilization, there will be no people and no capital on-planet.  But it goes further than that.  The first steps towards colonization are going to be completely or almost completely reliant on supplies from Earth, because they will be there to determine (to quote GW) "what all is there, and where exactly is it?".  Before you have good knowledge of the resources available you won't have a resource base on which to support yourself.

Goods on the consumption list can come from one of two sources: Local production or imports.  I would subdivide the consumption list as follows:

  • Immediate consumption in manufacturing process

  • Consumption by way of investment

  • Consumption of goods necessary for human life (Food, air, housing, heating, healthcare, etc.  Some people call these "Super Goods")

  • Consumption beyond basic necessities of life (Possessions, entertainment, good food, leisure, etc.)

Goods on the production list can go to any of three places: Local consumption, exports, and waste/storage.  I would subdivide the production list as follows:

  • Primary Sector: Resource extraction and refinement.  This would the the mining sector.  On Earth farming is also included here but on Mars I think that's more secondary sector

  • Secondary Sector: Basically, manufacturing.  Turning resources into usable objects.  On Mars, I would also include farming in this sector because it will be highly mechanized and there's no "open air" farming on Mars.

  • Tertiary Sector: Also called the service sector.  This is an amorphous sector that includes most jobs that are not making objects and mining.  Drivers and spaceship captains are in this sector, as are doctors, teachers, most computer programmers, etc.  My job (fixing 3D printers) would also be considered to be a tertiary profession.  It is my understanding that many of the people in this forum work in tertiary fields.

  • Quaternary Sector: So typically this type of model only has primary, secondary, and tertiary sectors, but I want to include a Quaternary Sector.  This is sort of a meta-service sector that is focused more on making the economy as a whole more efficient in the future.  This would include things like basic research, applied research, engineering, automation programming, advanced manufacturing development, etc.

The purpose of adequate economic planning is to match the production list to the consumption list as well as possible, now and in the future, given the resources, capital, and labor available at the present day.  However, there will inevitably be a mismatch between the two.  This is not inherently a bad thing.  The reason why there will be a mismatch is economies of scale.  Certain types of production and services require a huge capital investment to produce. Transistors and circuit boards generally fall under this category, as do various other items.  A colony's depth and breadth of manufacturing abilities will necessarily be large but probably cannot be infinite.  Some things it will actually make sense to import from Earth.

I will cover two scenarios: In the first, the Mars colony has its own currency that can be exchanged for an Earth currency at something like a market-value exchange rate (Even if it's pegged to an Earth currency such as the Dollar or Euro it can't get too far from the market exchange rate without black/gray markets and financial arbitrage starting to occur).  In the second, Mars will use a terran currency (For the sake of this post, the good ol' US dollar).

I think everyone on this board would agree that if it is a successful enterprise*, a Martian colony would be a boomtown with a severe labor shortage.  Because labor is a universal input to all processes, and particularly because it will be a limiting factor in what can be done.  For this reason, I believe that the fundamental basis for value in a Martian colony will be the labor-hour.  Not all labor is created equal, but (especially in this context) all labor is created equally enough that the differences between different peoples' labor can be ignored**.  Therefore the price of any good is in proportion to the number of labor-hours required, in total, to make it.  Let's say laborers are reimbursed at a rate of M$100/hour.

So: There are going to be some items for necessary consumption that are going to have to be imported.  Certain rare elements, for example, chemical catalysts that are hard to produce and/or involve millions of years of biological processes to make.

In a theoretical sense, the only thing Martians will have in their pockets is Mars money.  Countries on Earth do not use Mars money.  They have their own national currencies.  If I go to my corner store and try to pay with Euros, I will be turned away.  Likewise, if Martians need computing equipment, dysprosium, and medicine the various companies involved will not accept paper that is only money on Mars.  You need to acquire Terran money.  You do this in a currency exchange.

Let's say Mars wants to buy $4,000,000 in goods from Earth and $6,000,000 in transportation.  (In this model, transportation is not free because nothing is free.  Should space transportation companies want to give it to them for free, that would be a donation which can be accounted for later).  This is a total of $10,000,000 Earth dollars that they need.

Now let's also say that Earth wants to buy some quantity of goods from Mars which, in total, require 40,000 Martian labor-hours to produce and 10,000 Martian labor-hours to transport.  The total price is therefore M$5,000,000.  If Martians need $10,000,000 and Terrans need M$5,000,000, the exchange rate will be $2 to M$1.

In the real world it's somewhat more complex, because the demand for goods (in both directions) declines as their prices (the exchange rate) rises.  But basically, it will find an equilibrium.

As a thought experiment, I want to explore an extreme theoretical result of this model, which is the notion of an extremely low-value export.  For the purposes of discussion, let's say gravel.  Earth, naturally, has no shortage of gravel  We have trillions of tons of rock that could be crushed at our convenience.  Mars also has rock, but there would seem to be no logical reason why they would try exporting it to Earth.

But what if they did?  Well, let's say wholesale gravel goes for $0.02/kg (Based on a rough density estimate, $26 per cubic meter/$20 per cubic yard.  This is much less than Home Depot charges because there are transportation and vendor costs, plus markup).

Let's say transportation represents 3 Martian labor-hours per kilo delivered to Earth, and gravel production is 1 Martian labor hour (in total Martian production costs) per 1 tonne of gravel.  The total cost, therefore, is M$300.1 per kilo of gravel delivered to Earth.

Let's say (due to an extraordinarily questionable export policy) the colony has no other exports and also does not do any kind of branding or soft exports.  Let's also say that the costs scale linearly with volume.  What are the implications?

Well, first of all it means that the exchange rate is M$15005/USD (Compare to the 1:2 ratio before!).  But it also means that there's a limit to the dollar value of imports per person that the colony can afford.  If you work under labor camp conditions and force everyone to work in gravel production for 16 hours out of every 23.6 hour sol, you get 9,360.4 hours of work per Martian year.  This person will be paid M$936,040, do an amount of work equivalent to shipping a hair over 3 tonnes of gravel to Earth, and generate $62.38 US in revenue for Mars.

In terms of USD, this works out to a wage of just $0.007 US per hour, less than nearly any worker anywhere.  But this isn't--necessarily--a killer for the project.

What it does mean is that the colony needs to be very productive and almost entirely self-sufficient.  In this case, the Purchasing Power Parity and Nominal exchange rates between Mars and Earth will be very divergent.  It will tend to hinder the growth of the colony if it needs to procure things (or wants to subsidize peoples' tickets) from Earth.  If the situation is such that it can't provide for its basic needs via production and also can't spare the labor to work on exports, the colony will fail and the colonists will either die or require emergency assistance from Earth (Read: Food/air aid.  Effectively, famine conditions).

The equivalent without a native martian currency is that local wages and prices will fall until exports are profitable.

The basic, important heuristic for good export products is that they should require as little martian labor per USD as possible.

In my mind, I think of two categories of exports: Hard and soft.  Hard exports are objects you can hold and soft ones are ideas and ways of doing things and IP.  Basically, hard exports are a product of the primary and secondary sectors while soft exports are a product of the tertiary and quaternary sectors.

I'm going to leave things here for now.  But I'm going to spend some time talking about what good export products would be, and judging them by the model I've set forth in this post, soon.

*Success is not a given.  It's up to us to make it happen.  That's the goal here.
**So far, I've declared as assumptions that unemployment will be 0% and everyone will make the same wage.  I realize these tend not to accord with the real world in developed, capitalist societies, but in a mostly-planned (or somewhat-planned) boomtown economy they might not be far off.


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

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#84 2017-10-12 04:33:42

Terraformer
Member
From: Lancashire
Registered: 2007-08-27
Posts: 3,132
Website

Re: Possible Martian Export Products?

Labour pricing is not, in my view, going to be a very useful concept in this early stage.  The situation on Mars will be more like the Kibbutz period of Israel, when people often pooled their labour into a community and engaged in a range of tasks

Before, you were claiming that people on Mars would be so well paid, working for 5-6 years would set them up for life. Now you want them to work for free.


"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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#85 2017-10-12 05:32:09

louis
Member
From: UK
Registered: 2008-03-24
Posts: 5,089

Re: Possible Martian Export Products?

There's no contradiction in that.  We are talking about the early Mars colony period here, clearly from everything said on this thread. 

On Earth, in the capitalist market economies, people are free to leave their jobs, and move from one paid employment to another.  Furthermore, they are paid in money which they can spend on Earth.  These factors won't apply on Mars which is why I don't think labour pricing will be very relevant to how the Mars economy works. The people moving to Mars will be more like indentured labour, really. They are signing up to a particular experience. [I'm talking about the people working for the Mars corporation or equivalent - of course a lot of people will be there as employees of universities, space agencies or other companies.]

I do, however, think that they will be paid well back on Earth  i.e. while they are living on Mars they will be receiving a salary that goes into their bank account every month. If they are single with no outgoings such as rent or a mortgage, this money will simply accumulate back on Earth. So, yes, if you were being paid $200,000 a year while on Mars, you would accumulate $800k over 4 years or $1.2million over 6 years.

I think such salaries will probably be paid because Mars will want to attract people with pretty rare combinations of technical skills and personal attributes, so it will need to be made attractive.

It will be paid well but I don't think there will be an active specific labour market in the sense of people moving in an out of jobs because they get a better pay offer - it's really too small for that and people will initially just be working on Mars for short periods of 2-6 years.   For a colony of 1000 (which would include people not Mars Corporation personnel) you might only need say 600 employees and you might be replacing only 200 of those every two years on average, so your hiring rate might be only be 200 every year.









Terraformer wrote:

Labour pricing is not, in my view, going to be a very useful concept in this early stage.  The situation on Mars will be more like the Kibbutz period of Israel, when people often pooled their labour into a community and engaged in a range of tasks

Before, you were claiming that people on Mars would be so well paid, working for 5-6 years would set them up for life. Now you want them to work for free.


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

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#86 2017-10-12 07:07:36

JoshNH4H
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From: Pullman, WA
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Re: Possible Martian Export Products?

To respond quickly to your points about the fuzzy distinctions between the primary, secondary, tertiary, and quaternary sectors:  I agree that the distinctions are fuzzy and not always objective. Some occupations definitely straddle the boundaries, and any firm is part of all four sectors to some extent.  It helps a little bit to look at products rather than workers. For example, a 3D printer is a product of the secondary sector while a custom CAD file is a product of the tertiary sector. On the other hand, once you print that CAD file and cast it into metal (this generally works better than printing metal in the first place, depending on application) you're back in the secondary sector.

I think as far as plumbers and electricians go, those are service sector jobs to the extent that no two jobs are quite the same (especially for electricians) and therefore it takes skill and thought to do their jobs correctly. This would be contrasted against a stereotypical manufacturing job (of the kind that increasingly does not exist in advanced economies) where someone screws together the same part over and over again for 8 hours a day.

The distinctions are by no means hard and fast. They're subjective, and no person's labor has value except in the context of an economy with all four sectors. It's a mental model.

As far as a book of Martian photos goes, that would unquestionably be a product of the Martian tertiary sector. The actual export, the thing created on Mars and sent to Earth, is photos and/or text. There's plenty of tertiary labor in the Terran publishing house too, of course, but the act of turning the final version into words and images on paper is a secondary activity.

I will discuss your mistaken externalization of costs when I have time to sit down at a computer


-Josh

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#87 2017-10-12 16:52:05

louis
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From: UK
Registered: 2008-03-24
Posts: 5,089

Re: Possible Martian Export Products?

But if the CAD file was produced inhouse, it would form part of the secondary sector...go figure! as they say.

I quite like your quarternary sector as I think that is doing something different from providing services.  I think you could extend it the government which essentially keeps the whole show on the road - property rights, policing, criminal justice, welfare, commercial laws etc.
In some cases government does provide tertiary services e.g. often waste disposal services or road access but a lot of what it does is that sort of meta service.

I think my distinction between secondary and tertiary would be that tertiary does not involve the exchange of significant amounts of worked-on material...which is why I think when someone comes to install a gas boiler, a bathroom suite or PV panel system, they are much more part of the secondary sector, part of the process of exchanging worked-on material. However, I understand that's not the conventional view.

I would hope we can probably agree that however you define them, this idea of the different sectors is important to understanding how you build an economy on Mars. Essentially we are trying to replicate the neolithic, industrial and post-industrial services/consumer  revolutions.  We are basically trying to  recapitulate the whole of human economic history on Earth but less sequentially.  Less sequentially but still we do need to establish food supply early on - that is key -  and we do need to establish mining for raw materials early on...

You were a bit sniffy about the Mars colony producing books, as if clearly the physical books themselves weren't part of the Mars economy. But if it's a Mars Corporation producing them on Earth, and repatriating profits to Mars to aid the colonisation effort, I think in some sense it is an extension of the Mars economy...analogous to Ford opening up operations outside the USA but to some extent still being an American operation while based in other countries.


JoshNH4H wrote:

To respond quickly to your points about the fuzzy distinctions between the primary, secondary, tertiary, and quaternary sectors:  I agree that the distinctions are fuzzy and not always objective. Some occupations definitely straddle the boundaries, and any firm is part of all four sectors to some extent.  It helps a little bit to look at products rather than workers. For example, a 3D printer is a product of the secondary sector while a custom CAD file is a product of the tertiary sector. On the other hand, once you print that CAD file and cast it into metal (this generally works better than printing metal in the first place, depending on application) you're back in the secondary sector.

I think as far as plumbers and electricians go, those are service sector jobs to the extent that no two jobs are quite the same (especially for electricians) and therefore it takes skill and thought to do their jobs correctly. This would be contrasted against a stereotypical manufacturing job (of the kind that increasingly does not exist in advanced economies) where someone screws together the same part over and over again for 8 hours a day.

The distinctions are by no means hard and fast. They're subjective, and no person's labor has value except in the context of an economy with all four sectors. It's a mental model.

As far as a book of Martian photos goes, that would unquestionably be a product of the Martian tertiary sector. The actual export, the thing created on Mars and sent to Earth, is photos and/or text. There's plenty of tertiary labor in the Terran publishing house too, of course, but the act of turning the final version into words and images on paper is a secondary activity.

I will discuss your mistaken externalization of costs when I have time to sit down at a computer


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

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#88 2017-10-12 16:58:00

SpaceNut
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From: New Hampshire
Registered: 2004-07-22
Posts: 16,509

Re: Possible Martian Export Products?

When looking at the work versus production and consumption the colonist can only make a profit on things that others want elsewhere as Mars will require sustainability for the items that they consume and its not until that surplus is suffieceint to survive that we can switch some of that excess to which is a mars requirement to going elsewhere or to even consider shutting down the production of those items.
If we chose to suspend production then we will also have an excess of energy as well to make use of so planning is a must to sustain production ramp of profit creation.

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#89 2017-10-12 17:06:06

louis
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From: UK
Registered: 2008-03-24
Posts: 5,089

Re: Possible Martian Export Products?

I don't really agree with that. From the outset the people on Mars have something that lots of people (well companies) on Earth want and that is media exposure.  What is happening on Mars will be of intrinsic interest to news organisations and many other forms of media on Earth. Advertisers and marketing people will see that immediately.  That's what people who want to market stuff latch on to. For the Mars colony it will be an absolute gold mine. I mean, so far I've focussed on the big spending marketing outfits like Coca Cola and Nike. But there will be literally millions of companies on Earth who wouldn't mind a bit of Mars-associate exposure.  The commercial opportunities are huge. I think it will be more a question of turning down stuff than looking for backers.

SpaceNut wrote:

When looking at the work versus production and consumption the colonist can only make a profit on things that others want elsewhere as Mars will require sustainability for the items that they consume and its not until that surplus is suffieceint to survive that we can switch some of that excess to which is a mars requirement to going elsewhere or to even consider shutting down the production of those items.
If we chose to suspend production then we will also have an excess of energy as well to make use of so planning is a must to sustain production ramp of profit creation.


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

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#90 2017-10-12 18:05:43

IanM
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Registered: 2015-12-14
Posts: 276

Re: Possible Martian Export Products?

Working a bit backward from Josh's work, here are the median (25%-level) wages/salaries for the intermediate level of various professions in the US according to salary.com:
Tailor: $28,715 ($23,031)
Plumber: $53,911 ($46,960)
Surveyor: $45,477 ($36,712)
Electrician: $56,709 ($49,435)
Lawyer: $120,341 ($101,575)
Doctor: $222,012 ($200,874)

For a Martian colony to attract more people to it, these are generally the types of salaries that it would have to be able to sustain. Assuming salaries are relatively normally distributed, the lower the salaries the fewer people it can attract. I would expect as the economy grows, the more in terms of salaries it can support, which in turn would attract more people, creating a positive feedback loop. Of course, we need some export product to start that loop off.

louis wrote:

You were a bit sniffy about the Mars colony producing books, as if clearly the physical books themselves weren't part of the Mars economy. But if it's a Mars Corporation producing them on Earth, and repatriating profits to Mars to aid the colonisation effort, I think in some sense it is an extension of the Mars economy...analogous to Ford opening up operations outside the USA but to some extent still being an American operation while based in other countries.

I think that would make those books part of the Martian GNP, or Gross National Product, as opposed to the GDP. The difference is that the GNP is the production of things owned by Mars or Martian nationals, while the GDP is for stuff produced specifically in (on) Mars.


The Earth is the cradle of the mind, but one cannot live in a cradle forever. -Paraphrased from Tsiolkovsky

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#91 2017-10-13 10:56:20

JoshNH4H
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From: Pullman, WA
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Re: Possible Martian Export Products?

Even in the case where every Martian colony is owned and operated by a single "Mars Corporation", the fate of Mars is not as closely tied to this corporation as you might believe.

Let's say you have two economic control volumes.  One includes Mars but does not include the Terran operations of MarsCorp. The other includes all parts of MarsCorp. Let's say that MarsCorp's accounting department does a good, honest job and uses the real market value for exchanges and resource transfers between the different locations and subdivisions (e.g. their accounting is a real accounting of what works and what doesn't).

Let's say that, in total, the subdivisions on Mars are net importers and are mostly unprofitable. But let's also say that the company as a whole is profitable due to the (unlikely) wild success of its media subdivision. These accountings include the media subdivision paying a fair value for the footage, photos, etc produced on Mars.

In that case, MarsCorp is not a Mars colonizing company, it's a media company. Its core business comes from making entertainment, not colonizing Mars. You would expect it in that case to invest in the media business more than in Mars. That's not the situation were trying to create.


-Josh

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#92 2017-10-13 16:44:36

SpaceNut
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From: New Hampshire
Registered: 2004-07-22
Posts: 16,509

Re: Possible Martian Export Products?

IanM the list of except for the lawyer are good in the first decade with several more additions.
Helper- Brick and Stone Mason = $36,218 ($23,990)
Glass or Metal Foundry Worker = $37,358

Sorry computer issues will add to this list when it starts to behave....

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#93 2017-10-13 17:04:27

louis
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From: UK
Registered: 2008-03-24
Posts: 5,089

Re: Possible Martian Export Products?

Well I think there we have fundamentally different perceptions.  You are sceptical about the amount of money a Mars Corporation might earn from a media division selling products on Earth, but there can be no doubt that there would be billions of dollars from commercial sponsorhip deals made on Earth that could fund Mars colonisation.  I am not sure what your problem is with that. The Mars Corporation's core business remains Mars colonisation.  You seem to be bewitched by this idea that something only counts as a Mars product if it is made on Mars and physically shipped back to Earth.  That's not the way I see it. I see there is a Mars colonisation effort and just as a war is won on all fronts, so too the effort succeeds by generating revenue streams on all fronts.

JoshNH4H wrote:

Even in the case where every Martian colony is owned and operated by a single "Mars Corporation", the fate of Mars is not as closely tied to this corporation as you might believe.

Let's say you have two economic control volumes.  One includes Mars but does not include the Terran operations of MarsCorp. The other includes all parts of MarsCorp. Let's say that MarsCorp's accounting department does a good, honest job and uses the real market value for exchanges and resource transfers between the different locations and subdivisions (e.g. their accounting is a real accounting of what works and what doesn't).

Let's say that, in total, the subdivisions on Mars are net importers and are mostly unprofitable. But let's also say that the company as a whole is profitable due to the (unlikely) wild success of its media subdivision. These accountings include the media subdivision paying a fair value for the footage, photos, etc produced on Mars.

In that case, MarsCorp is not a Mars colonizing company, it's a media company. Its core business comes from making entertainment, not colonizing Mars. You would expect it in that case to invest in the media business more than in Mars. That's not the situation were trying to create.


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

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#94 2017-10-13 17:15:16

louis
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From: UK
Registered: 2008-03-24
Posts: 5,089

Re: Possible Martian Export Products?

I can't see how it makes any sense to talk in terms of these trades and professions in an early Mars colony.  People will in my view be multi-tasking.  We can imagine a Mars colony with 1000 residents. Of those 400 might be researchers whose employers (universities and the like) are paying their way. The rest will be employees of Space X or a specific Mars Corporation.  Those 600 will in my view have to be multi-taskers. A doctor may also be an administrator and a gym instructor. An engineer may also be a farmer and a dentist. A metallurgist may also be a miner and a documentary film maker.  Labour will be in such short supply and the cost of shipping people to Mars will be so high that it makes no sense to have strict divisions of labour.  We need high achieving multi-taskers.

I don't know why American salaries are being referenced particularly.  The Mars colony can draw from the whole of the planet, finding people who have the right skill sets and personality traits.  I think the Mars Corporation will be high paying but that will be more about overcoming people's reluctance at leaving friends and family behind I think.  Particularly when one gets towards a six year contract on Mars, then that is a long time for people to be away from Earth.

IanM wrote:

Working a bit backward from Josh's work, here are the median (25%-level) wages/salaries for the intermediate level of various professions in the US according to salary.com:
Tailor: $28,715 ($23,031)
Plumber: $53,911 ($46,960)
Surveyor: $45,477 ($36,712)
Electrician: $56,709 ($49,435)
Lawyer: $120,341 ($101,575)
Doctor: $222,012 ($200,874)

For a Martian colony to attract more people to it, these are generally the types of salaries that it would have to be able to sustain. Assuming salaries are relatively normally distributed, the lower the salaries the fewer people it can attract. I would expect as the economy grows, the more in terms of salaries it can support, which in turn would attract more people, creating a positive feedback loop. Of course, we need some export product to start that loop off.

louis wrote:

You were a bit sniffy about the Mars colony producing books, as if clearly the physical books themselves weren't part of the Mars economy. But if it's a Mars Corporation producing them on Earth, and repatriating profits to Mars to aid the colonisation effort, I think in some sense it is an extension of the Mars economy...analogous to Ford opening up operations outside the USA but to some extent still being an American operation while based in other countries.

I think that would make those books part of the Martian GNP, or Gross National Product, as opposed to the GDP. The difference is that the GNP is the production of things owned by Mars or Martian nationals, while the GDP is for stuff produced specifically in (on) Mars.


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

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#95 2017-10-13 17:56:09

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

The idea is that MarsCorp needs to offer salaries that are competitive in order to attract workers, including transit costs.  Really the comparison should be to wherever the highest wage for a given profession is, since anyone who is willing to move planets will also be willing to move countries and continents for a better wage.


-Josh

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#96 2017-10-13 19:52:32

louis
Member
From: UK
Registered: 2008-03-24
Posts: 5,089

Re: Possible Martian Export Products?

You do know that wages for professionals vary hugely across Planet Earth don't you?  You're assuming that someone not willing to relocate from India to the USA will also  not be willing to undertake a 2, 4 or 6 year contract on Mars. That makes no sense. The two propositions are entirely different. 




JoshNH4H wrote:

The idea is that MarsCorp needs to offer salaries that are competitive in order to attract workers, including transit costs.  Really the comparison should be to wherever the highest wage for a given profession is, since anyone who is willing to move planets will also be willing to move countries and continents for a better wage.


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

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#97 2017-10-14 08:54:52

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

Well, one is a substantially more disruptive and substantially less reversible than the other. A one-year transit time (I discussed somewhere else why that is probably what it would take) each way, no ability to return at will due to launch windows, and (if you have your way) working conditions on-planet that resemble a labor camp are all reasons why people might prefer India to Mars.

Also, I don't think this "return flight" business makes much sense. It's a huge waste of time and resources.

Just for the record, given transit windows, people will be able to leave Mars every 26 months, starting with one month (eg at month 1, month 27, month 53...) and every 26 months starting at the 18th month (eg at month 18, month 44, month 70...)


-Josh

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#98 2017-10-14 08:57:29

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

There will definitely be some true believers (myself included) willing to go under any circumstances but I don't think there are really enough of us to make that a viable employment strategy


-Josh

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#99 2017-10-16 03:32:39

louis
Member
From: UK
Registered: 2008-03-24
Posts: 5,089

Re: Possible Martian Export Products?

Dubai obviously think there's money to be made from Mars...

https://www.engadget.com/2017/09/28/dub … tian-city/

Might be interesting to see how they build their dome structures.


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

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#100 2017-10-16 08:40:29

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

I wouldn't cite Dubai as a place that has invested their money wisely in things that will pay off in the future.  Dubai has giant artificial useless islands, empty skyscrapers, a huge permanent underclass of migrant workers exploited in near-slavery conditions, a city of boondoggles, and all of this funded by declining oil wealth.

No, Dubai is no model for Mars, and their approach is not one worth emulating.  Incidentally, it is a bit of a warning to those who want to use a tourism/branding model to make Mars successful.


-Josh

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