Saturday, June 25, 2022
HomeEconomics NewsOpinion | Elon Musk, Mars and the Fashionable Economic system

Opinion | Elon Musk, Mars and the Fashionable Economic system


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

OK, I’m being unfair. (Am I about to obtain a poop emoji?) Whereas Musk’s determination to speak up a scheme to ship 1,000,000 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.

Nonetheless, the Mars speak caught my consideration, largely due to the road about a million folks (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? When it comes to the logistics of really getting folks to Mars, it in all probability is. However my authentic residence subject 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 folks — far too few to assist a contemporary financial system.

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

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

Stross’s reply was that given the complexity of recent 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 Nice Recession due to an Obama administration bailout — he defined how Musk’s present plan is pondering far too small: “Colonizing Mars would possibly nicely be sensible, however provided that we are able to begin out by plonking 100 million folks down there.” I agree — if something, that’s on the low aspect. To grasp why, it is advisable to take into consideration why nations interact in worldwide commerce.

One cause is that nations have totally different sources and climates: It’s exhausting to develop pineapples in Norway. However one more reason is that within the trendy world there are sometimes enormous economies of scale in manufacturing. These economies of scale make it environment friendly to produce your entire world marketplace for some items from solely a handful of areas — generally only a single location — with worldwide commerce delivering these items to prospects in different nations.

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 expertise is indistinguishable from magic.) The world marketplace for these it seems, is dominated by a single agency within the Netherlands, ASML, which has an entire monopoly on the newest era 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 moderately produce the complete vary of products required to function a contemporary, high-technology financial system. Worldwide commerce is important, and extra important the smaller the financial system — which is why Canada is much extra depending on imports than the US, Belgium way more dependent than Germany, and so forth:

Now, given entry to world markets, even small nations can have full entry to the advantages of recent expertise; life in Luxembourg is fairly good. However except 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, lower off from the remainder of the photo voltaic system financial system. And it wouldn’t have sufficient folks to drag that off with something like a contemporary lifestyle.

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. Sure, there are downsides to globalization, particularly to fast change that may disrupt complete communities. However you actually wouldn’t need to reside in a world with out in depth worldwide commerce. And you actually, actually wouldn’t need to reside on one other planet, lower off from the globalization we’ve created on this one.


Simply to be truthful, Musk is doing loads to create space journey cheaper.


Suggestions
Should you’re having fun with what you’re studying, please contemplate recommending it to associates. They will enroll right here. If you wish to share your ideas on an merchandise on this week’s e-newsletter or on the e-newsletter basically, please e-mail me at krugman-newsletter@nytimes.com.


RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

Recent Comments