Space colonization as a 'safety valve'

In addition to Solar Power sattalites there are two aditional sources
of revenue for the Space Island habitats both related to solar power
satallites they construct.

The Oceons are full of water.

Solar powered desalinization plants can cheaply purify sea water into
potable water for both agriculture as well as human use. In drought
prone places like California that can be a good source of revenue.
Especially if they have large populations or agriculture areas.

Water heated super hot by cheap solar power can be seperated into
hydrogen and oxygen. With sources of oil being used up Liquid
hydrogen would be a good replacement fuel.

Both could be profitable enough to support the Space Colony
enterprise without being a burden on transport.

--- In spacesettlers@yahoogroups.com, "Dan Wylie-Sears"
>
> > In what currency will the debt be issued?<
>
> I did think of that question, but I was getting long-winded enough
> already. I don't see any reason to rule out the possibility that
> there will be such a currency, one way or another. So debt went on
> the list of possible mechanisms.
>
> Maybe the technical details will come out so that having the first
> colony build more colonies, and then having the second-generation
> colonies build the solar power systems, will work better than
having
> the first one ever return anything to earth. If so, I think people
> will set up a means by which Island One can cover its launch costs
> and ongoing imports from earth (incurred in extant currencies) off
> of the benefits that the second-generation habitats provide to
> earth. If the means is grossly unjust, or if it gets to the point
> where the dependence is entirely one-way, it will break down
> eventually.
>
> > So, let's say that this group promises to pay you a Billion
dollars
> > per year for the next 40 years. You Habitat of 10,000 does import
> > items from Earth but will they need a Billion dollars of goods or
> > services per year in addition to what they are already buying with
> > their own export earnings?
>
> Need? Why would it be limited to need? It would be nice to have
> various luxuries, and if they can get an extra B$/yr worth by
> building new colonies, why wouldn't they?
>
> As for their own export earnings, my point is that they don't
> necessarily have to have any *direct* export earnings: if it's more
> efficient for them to specialize in producing new colonies, having
> them do so is compatible with having the setup be a good deal for
> everyone involved.
>
> > In the meantime, the cost your Habitat incurred in building that
> > other Habitat that you sold to the buyers had to be paid for and
> > salaries and fuel costs in orbit, etc also had to be paid for.
> > Where did that money come from?
>
> Well, what did it cost, in real terms?
>
> It cost some of the labor of the people on Habitat1: directly that
> came from those people, but they had to have their food and air and
> so on in the meantime. Those came from various sources who
expected
> to be paid back with interest and risk premiums when Habitat2
starts
> exporting. (Or maybe part of it came from the Bill and Melinda
> Gates Foundation, or from the taxpayers of some earthly
government.
> There are lots of scenarios.)
>
> It cost some raw materials: they came from the moon or asteroids.
> Getting them cost some of the same as everything else costs.
>
> It cost some capital: it required the use of equipment that could
> have been doing something else instead. Once again, the people who
> provide that probably expect to be paid back with interest by
> Habitat2.
>
> The bottom line is that there has to be something in it for
everyone
> who puts something into it. As long as what people will get out of
> it is at least as valuable to them as what they would have gotten
> after the same delay by leaving their money in a leveraged index
> fund with the same risk characteristics, you've got a deal as long
> as you have a means of making sure everyone holds up their end of
> it. At that level of abstraction it doesn't matter whether you're
> talking about widgets on the ground or pie literally in the sky.
To
> show it won't work, you need to show that one of those components
is
> irremediably missing.
>
> --- In spacesettlers@yahoogroups.com, "victoriatangoman"
> wrote:
> >
> > --- In spacesettlers@yahoogroups.com, "Dan Wylie-Sears"
>
> > wrote:
> >
> > > If malcontents on earth want to move to a new colony,
> > > there will have to be something in it for the people on the old
> > > colony. One option is debt: the new colony is obligated to pay
> the
> > > old one.
> >
> > In what currency will the debt be issued? Transposing Earth-based
> > financial assumptions to orbit is tricky. If I gave you 1,000
North
> > Korean Won, what would you do with them (starting a campfire
> doesn't
> > count)?
> >
> > So, let's say that this group promises to pay you a Billion
dollars
> > per year for the next 40 years. You Habitat of 10,000 does import
> > items from Earth but will they need a Billion dollars of goods or
> > services per year in addition to what they are already buying with
> > their own export earnings? In the meantime, the cost your Habitat
> > incurred in building that other Habitat that you sold to the
buyers
> > had to be paid for and salaries and fuel costs in orbit, etc also
> had
> > to be paid for. Where did that money come from?
> >
> > International trade works pretty well on Earth because most
> currency
> > instruments are fungible and liquid. If you have a surplus of
Euros
> > and you have had your fill of Frnch wine and cheese, you can sell
> that
> > currency in exchange for Japanese Yen and buy some Playstations
> then
> > sell the remainder of Yen for Dollars and buy some Intel CPUs. The
> > buying and selling of currency works because goods and services
> can be
> > shipped across borders quite easily. Now take a country like North
> > Korea which is striving to perfect autarky. It has closed its
> borders
> > to trade. Now somehow you've gotten a hold of 1,000 NK Won and you
> > don't want them, so you try to sell them. Who wants to buy them?
> Maybe
> > the person lucky enough to go on their dream vacation to
Pyongyang
> but
> > there are no businesspeople out there looking to buy NK Won
because
> > they need to pay a bill for importing NK sports cars. The trade
> flow
> > between NK and the world is quite restricted so that makes NK
> currency
> > illiquid.
> >
> > A Habitat is orbit will have transportation costs that are far far
> > higher when it imports goods from Earth than any two countries on
> > Earth trading between themselves or through intermediaries.
> >
> > So, we hope that the first Habitat will be selling SPS power to
> Earth
> > customers and thus earning currency in exchange. It will also be
> > importing stuff like nail polish, hard drives, etc. These items
> will
> > be expensive because they are limited by shipping costs and
> shipping
> > capacity. Alongside this import/export economy will be one that is
> > entirely domestic. Someone will fix plumbing and use their chits
to
> > buy an apple pie and the baker of the pie will use the chits to
pay
> > for his kid's haircut, etc. Give one of these people a US dollar
> and
> > what can they do with it? They can trade it amongst themselves
> until
> > it finally reaches some group that is needing to import something
> from
> > Earth. Those Earth goods will be expensive, no matter how
efficient
> > the shipping methods become.
> >
> > So, there is a limit to how dominant a role imported goods will
> play
> > in the economy. Everything can't be sourced from Earth. The
> incentive
> > to develop the domestic economy to produce substitute goods will
be
> > immense. The efficiency of the industry producing import-
> substitution
> > goods need not equal that of the Earth-based manufacturer. All
that
> > the orbital industry need do is sell a good for less than the
cost
> of
> > the Earth good + shipping. That shipping is going to be a killer
no
> > matter how low launch costs fall. Remember we're not shipping
just
> to
> > LEO here, but to somewhere in cislunar space and the delta-v from
> LEO
> > to higher orbits is not as insignificant as the cost of shipping
> via
> > ocean freight from Singapore to Los Angeles. Therefore there will
> be a
> > foreign exchange account of either surplus or deficit developing.
> If
> > you accumulate way too much foreign capital and can't find a way
to
> > translate it into the domestic economy then the Earth money you're
> > holding devalues.
> >
> > So, back to the original question. As you're building your
> > Habitat-for-sale you have to pay for your orbitally sourced raw
> > materials, your orbitally sourced human resources, your orbitally
> > sourced manufactured goods, your orbitally sourced incidentals,
> etc.
> > What good is there in fronting $25 Billion of goods and services
> from
> > your domestic economy in exchange for a promisary note of $1
> Billion
> > per year for the 40 years after you sell the Habitat? Where will
> they
> > generate the $1 Billion per year? Where will you come up with the
> $25
> > Billion in domestic wealth to front the costs of construciton?
> Sure,
> > we can get into banking theory here, but that just reduces the
> scope
> > of the problem and introduces some other complications, but it
> doesn't
> > eliminate the problem.
> >
> > Maybe you think the $1 Billion per year payment will be paid in
> > domestic chit and that a portion of the future productive
> capability
> > of the 2nd Habitat will be devoted to wealth transfer from one
> Habitat
> > to the other. I'll address this lower down in this reply.
> >
> > > Yet another possibility is that some of the residents
> > > of the old colony will move to the new colony, in a better
> > > socioeconomic position than they held in the old one, while
both
> > > colonies receive an influx of indebted new immigrants.
> >
> > This scenario makes much more sense to me than the alternative I
so
> > often see floated of Habitats coming off an assembly line and
being
> > sold to groups so that they can all form independent social and
> > government experiments.
> >
> > If the initial group that built the first Habitat had to develop
up
> > the torturious bootstrapping curve and build up the entire
> industrial
> > infrastructure in orbit they've effectively created a HUGE
barrier
> to
> > entry for competitors. If some other group wants to build SPS or
> > Habitats, or whatever, and they don't secure the cooperation of
the
> > group already in orbit, then they've got to lay down their own
> launch
> > initiative (or contract for it), their own presence in LEO, secure
> > their own orbital fuel and oxidizer, their own source of raw
> > materials, their own source of oxygen, their own source of food,
> their
> > own source of power, their own source to refine, their own source
> to
> > fabricate, etc. Basically they've got to lay down a duplicate
> > infrastructure. That's a huge impediment to competition. Let's
just
> > say that they do undertake the effort to establish themselves in
> > orbit. What can we expect at the end state? Competition, and this
> will
> > put downward pressure on key export industries possessed by the
> > initial Habitat, such as SPS. That's good for the Earth based
> > consumers of SPS but not so good for the two Habitats that need to
> > maximize their export earnings to offset the costs they incur in
> > importing goods.
> >
> > So, what can the initial group do to discourage a rational actor
> that
> > wants to set up a competitor? They can try to raise even higher
the
> > barriers to entry, but that might be hard to achieve. More likely
> > though, they can lower the expected gains that can be achieved
from
> > selling SPS by expanding their own capacity from their already,
> > partially or fully, amortized orbital infrastructure. They can
> build a
> > 2nd Habitat for far less than the competitor group can build
their
> own
> > Habitat by duplicating the whole orbital infrastructure
> arrangement.
> > This means that they can lower the price that they sell SPS units
> or
> > power from the SPS. This will certainly lower the gains to be
> achieved
> > from independently building a 2nd Habitat.
> >
> > The difference here though is that they still remain the
monopolist
> > with respect to SPS and only need price it competitively against
> > terrestrial substitutes. Further, rationalization of industry can
> be
> > achieved across the two Habitats so that they aren't duplicating
> > processes and ignoring others. The key here is that political-
> societal
> > control of the two Habitats is unified. This small orbital
country
> is
> > growing without "breeding" its own competitors who, once in
orbit,
> and
> > having bypassed the intimidating barriers to entry, would have an
> > easier time duplicating an independent sourcing of materials and
> > refining/fabricating capacity and going after the export earnings
> of
> > the first Habitat.
> >
> > What rationale can be offered to the first Habitat to set up, by
> > selling a 2nd Habitat, a competitive and independent nation? Why
> > wouldn't the 1st group simply build a 2nd Habitat for themselves,
> > under their control, and expand the industries, especially those
> > needed to grow the domestic economy, so as to prevent disruption
to
> > their big export industry? This of course doesn't imply a wholly
> > controlled economy because the domestic economy can grow in a
> > completely unplanned organic fashion, but it does imply that "new
> > political units" that would compete with the first group won't be
> > aided in establishing themselves.
> >
> > Sorry for the long ramble, but I too often see assumptions taken
> from
> > Earth-based situation being translated to our orbital
deliberations