Currency systems for self-sufficient Martian colonies

Mark Friedenbach · 2013-06-29 10:27:08

JoshNH4H wrote:

I also like the idea of setting up a not-for-profit Space Investment Bank/Chamber of Commerce to lobby governments and invest where possible, as well as to manage the dollar assets of the company. (I like the idea of space-based currency from the get-go).

For many ventures, especially one-way permanent settlement missions I see an in-situ currency as a necessity. Colonial economics will be mostly isolated and divorced from the home economies on Earth, and it does not make sense for swings in the interconnected global economy to influence pricing and availability of credit on an isolated Mars colony, for example.

New digital currencies like Bitcoin and Open-Transactions give us the tools to do better. A new Martian settlement can launch it's own currency, giving an equal number of currency units to every settler every month for the initial distribution period, as well as equal provisions from the ship's stores. Both the absolute and relative value of the currency would decline over time, and people would naturally fall into capitalistic roles of producer, merchant, consumer as the ship's stores are depleted and local commercial agriculture and industry takes over. If demurrage is used, the new coinage minted to offset demurrage could be used for basic services, providing a minimal safety net.

These digital technologies also provide or enable market tools, allowing currencies to float against each other. So two different settlements on Mars could each have their own currency with a fixed monetary base, and the relative value of each determined by the free market, but obviously correlated with their economic success.

JoshNH4H · 2013-07-01 22:03:42

As a counterpoint, one could argue that the space-based and Earth-based economies would be so separate that use of dollars would effectively provide the colonists with independent currencies. I personally don't believe this.

However, capitalism in the sense that we normally mean it seems unlikely to develop in Earth Orbit for a good bit of time. Because the capital costs for entry into the space market are so high, and the dependence on pre-existing infrastructure so important, I wouldn't expect there to be very many truly separate entities up there. My hope would be that by setting up some form of bank/chamber of commerce/lobbying organization/space consortium one would be able to make the development of space the goal of whichever organization is in charge of doing so, rather than sucking it for profits.

But I digress; A separate currency system for space makes a lot of sense, whether it be used as a simple method of accounting or as a more meaningful medium of exchange.

Mark Friedenbach · 2013-07-01 23:23:04

Well fundamentally economic systems are the processes we choose for making decisions about scarce resources. I don't think that Martian colonies will be venturing into the realm of post-scarcity any time soon. As for capitalist vs. socialist / free-market vs. central planning, that's venturing into ideological debate that may be on-topic for this subforum, but probably not this thread.

But if there are capitalistic / free-market elements to colonial life, having control over one's currency is a powerful political and economic tool, as many European states are just now finding out. Using the U.S. dollar on Mars may be analgous in significant ways to using the german / french euro in Greece and Spain.

louis · 2013-07-02 14:43:12

In my fictional work which I put up here, I envisaged that currency on Mars would begin as a rationing points system. The points would be allocated to individuals and they might use them up terms of food, clothes and other consumption. But I think it's pretty clear that a lot of things: accommodation, heat and lighting, basic hygiene products, exercise equipment, water and other life support etc will be provided free as a in a command economy.

The points system (the points usage being recorded on computer systems) may naturally develop into a proper currency for a self-governing community on Mars.

I think economic activity on Mars will become significant much more quickly than many people who post here. I think in particular there will be a race between universities to establish research facilities on the planet which will stimulate economic development.

When you look at space tourism we are already there in a primitive way and that can only grow very significantly in the next decade or so.

JoshNH4H · 2013-07-02 20:32:45

Mark, no argument there. However by the same token it's important to prevent unproductive currency wars from breaking out.

Mark Friedenbach · 2013-07-02 23:29:35

If you have system of rationing points which are unregulated so that people can trade them, then you effectively have a currency by another name (backed by physical goods: the rationed consumables). Of course if you actually rationed to individuals directly instead of issuing points, or if the points were somehow protected from transfer (can only be redeemed by the colonist named), then that'd be a different story.

If I were designing an initial colony mission, I would definitely empower them with a self-issued currency. Initially it would be distributed in at least two ways: basic income (an equal amount to all colonists regardless of means), and merit based / competitively selected subsidized business loans & contracts to jumpstart local industry. The basic income should start out as some multiple of the number of units necessary to cover cost of living, initially from the rationed colony stores, but later baskets of home-grown goods on the free market. It then declines over a short couple of years until eventually people have to work to get by, and then eventually reaches zero.

At first the only property will be the dwellings, possessions, and consumables brought from Earth. Rent or consumption of these stores will effectively be returning the money back to the colony (destroying it), but more income will be received than could reasonably be spent through cost of living, and the excess will be saved or invested on an individual basis. The loans & supply contracts provide the seed and direction for starting an in-situ industry. As healthy industries are setup, the machinery brought from Earth is privatized and colony spending (by means of printing money) is wound down. In the long run, the economic goal would be to set demurrage rates to achieve zero interest, and to set spending rates (printing money) equal to that required of GDP & population growth. The percent of the economy due to this "government" spending would be less and less over time, but sufficient to provide a minimal safety net and communal services.

EDIT: I should mention that I don't think this has been adequately studied. What's the ideal monetary structure for a Mars colony? I think this is still an open question and deserves looking into.

Last edited by Mark Friedenbach (2013-07-02 23:33:31)

Terraformer · 2013-07-06 11:29:07

Obviously, any viewpoint on Martian currency will be decided by the political and social viewpoint of the one holding it. For example, I'm a post-scarcity near-anarchist who believes that advanced automation will mean only a few hours of work will be needed from each person, at most everyday, That could be provided by a command economy, though I'd much prefer it if it was provided by means of a gift economy. Unfortunately, the full realisation of my vision on Mars will have to wait for it to be Proteroformed...

Still, if the basics of life are provided for free, save for the time tax (i.e. people having to "volunteer" some of their time), and a set amount of raw resources are provided to each citizen... it's got a lot of problems, I'll admit, mainly to do with the need for skilled labour. But, if rent, utilities, and a set amount of energy are provided for free, then the rest can sort itself out on the free market. Indeed, the energy credits could be a potential currency, as could raw resources. Take enough steel and copper to the machinist in his highly automated machine shop, and give him enough energy credits, and you get your electric motorbike in return.

Mark Friedenbach · 2013-07-06 11:51:49

Terraformer, I think we are in more ideological agreement than you might think, however I have more faith in humanity's capability to want/“need” more and more as resources become less and less scarce. #firstworldproblems. Take the 20th century: we've seen much of the populous of the western world move out of poverty / serfdom (sometimes literal serfdom!), and into the middle class. And yet we've seen working hours and reported stress levels increase in the same groups, as the Jones' have so much more for them to keep up with. And for the most part this will become the new norm ... except for us crotchety old guys sitting in chairs on the porch talking about how when we grew us we didn't have the Internet, and you actually had to buy stuff in stores instead of 3D print it, and then yell at the kids to get off our lawn.

Of course advanced A.I. or transhumanist technology could through a huge wrench into that picture. Take any theory of the future which a huge grain of salt.

Terraformer · 2013-07-06 16:20:35

I'm forking this, before it goes too far off topic to recover easily - http://newmars.com/forums/viewtopic.php … 62#p116662

SpaceNut · 2021-10-10 13:35:59

Seems like we in the US have been printing and making coins for special occasions and for mars one could just design and make them there and give it the same precious metal or oxygen for the holder of the value.

Its good that we are recognizing
Pioneering astronaut Sally Ride will appear on a limited-run US quarter
AAPlvRH.img?h=533&w=799&m=6&q=60&o=f&l=f&x=480&y=252

kbd512 · 2021-10-10 17:28:35

America has the Greenback, Britain has the Pound Sterling, Canada has the Loonie.

I propose we use "Sterling Loonie Redbacks" on Mars.

We're going to have that angry duck on the money, from the movie "Convoy". Now that, would be awesome.

kbd512 · 2021-10-10 19:16:10

I have a new motto for our new currency as well:

Ye Gettonzebus and Colonizum

Mars_B4_Moon · 2021-11-30 10:31:35

Extending cryptocurrency networks via satellite
https://spacenews.com/extending-cryptoc … satellite/

As cryptocurrencies gain adherents on Earth, companies and universities are conducting tests to figure out how to perform cryptocurrency transactions in space and share data via satellite.

New Mars Forums

Announcement

#1 2013-06-29 10:27:08

Currency systems for self-sufficient Martian colonies

#2 2013-07-01 22:03:42

Re: Currency systems for self-sufficient Martian colonies

#3 2013-07-01 23:23:04

Re: Currency systems for self-sufficient Martian colonies

#4 2013-07-02 14:43:12

Re: Currency systems for self-sufficient Martian colonies

#5 2013-07-02 20:32:45

Re: Currency systems for self-sufficient Martian colonies

#6 2013-07-02 23:29:35

Re: Currency systems for self-sufficient Martian colonies

#7 2013-07-06 11:29:07

Re: Currency systems for self-sufficient Martian colonies

#8 2013-07-06 11:51:49

Re: Currency systems for self-sufficient Martian colonies

#9 2013-07-06 16:20:35

Re: Currency systems for self-sufficient Martian colonies

#10 2021-10-10 13:35:59

Re: Currency systems for self-sufficient Martian colonies

#11 2021-10-10 17:28:35

Re: Currency systems for self-sufficient Martian colonies

#12 2021-10-10 19:16:10

Re: Currency systems for self-sufficient Martian colonies

#13 2021-11-30 10:31:35

Re: Currency systems for self-sufficient Martian colonies

Board footer