Opinion | Elon Musk, Mars and the Modern Economy

 

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

OK, I’m being unfair. (Am I about to obtain a poop emoji?) While Musk’s resolution to talk up a scheme to ship one million colonists to Mars might replicate a want to alter the topic, his plan requires doing so by 2050 — and he has been speaking about that concept for years.

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

What’s your response to that quantity? Does it appear absurdly excessive? In phrases of the logistics of truly getting individuals to Mars, it in all probability is. But my unique dwelling area in economics was worldwide commerce. And if you recognize something about commerce, or for that matter the realities of trade, you understand that a million is definitely an absurdly low variety of individuals — far too few to assist a contemporary financial system.

Let’s as an alternative deal with the SpaceX chief’s Mars fantasies as a teachable second — an opportunity to speak about the economics of globalization extra typically.

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

Stross’s reply was that given the complexity of contemporary society, you’d want a lot of individuals. In reality, writing again in 2010 — when Musk’s Tesla was nonetheless a struggling firm that had solely survived the Great Recession because of an Obama administration bailout — he defined how Musk’s present plan is considering far too small: “Colonizing Mars may nicely be sensible, however provided that we are able to begin out by plonking 100 million individuals down there.” I agree — if something, that’s on the low aspect. To perceive why, it’s essential take into consideration why nations have interaction in worldwide commerce.

One motive is that international locations have completely different sources and climates: It’s onerous to develop pineapples in Norway. But another excuse is that in the trendy world there are sometimes enormous economies of scale in manufacturing. These economies of scale make it environment friendly to produce the total world marketplace for some items from solely a handful of places — generally only a single location — with worldwide commerce delivering these items to prospects in different international locations.

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

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

These economies of scale imply that nobody nation can fairly produce the full vary of products required to function a contemporary, high-technology financial system. International commerce is important, and extra important the smaller the financial system — which is why Canada is much extra depending on imports than the United States, Belgium much more dependent than Germany, and so on:

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

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


Just to be truthful, Musk is doing so much to create space journey cheaper.


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