Paul Krugman…space colonist?

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My favorite Krugman-esque image.

Six years after the last Apollo moon mission, a young assistant professor at Yale wrote about the economics of…interstellar trade. If the economist hadn’t been Paul Krugman, I doubt we would remember the attempt. But while his 1978 essay – “The Theory of Interstellar Trade” – was intended to be somewhat of a joke, its combination of some basic physics and economic theory turns out to have some serious points.

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Cover page of Krugman’s essay; note the “credit line.” More on this in my post…

self-professed science fiction buff, Isaac Asimov’s Foundation stories helped launch Krugman’s entry into economics. He wrote the short paper when he was “an oppressed assistant professor, caught up in the academic rat race.”1 (This was years before he won the Nobel “for his analysis of trade patterns and location of economic activity.”

Despite the essay’s absurd-sounding title, it presented an economic analysis of the kind that Asimov would have appreciated. As the paper’s introduction states, “while the subject of this paper is silly, the analysis actually does make some sense.” The result is a “serious analysis of a ridiculous subject” which, Krugman notes, is “the opposite of what is usual in economics.” (Ah – so jaded and yet still an assistant prof.)

Let’s Assume We Have a Can Opener” is classic joke about how professional indoctrination encourages people to make unreasonable assumptions. The butt of the joke is an economist. So – to paraphrase the punchline somewhat – let’s assume we have an interstellar starship that can travel close to the speed of light. Krugman wrote his essay in 1978 – a year after Star Wars appeared in theaters – so probably what he had in mind looked something like this:


So – if one is an interstellar trader shuttling, say, dilithium crystals and ‘droid parts around the galaxy, “how should interest charges on goods in transit be computed when the goods travel close to the speed of light?” After all, the time of transit will appear less to the space pilot transporting them than it will to the person waiting  to receive them on some faraway planet. This makes calculating the true value of our (hypothetical) space commodities quite difficult.

In his essay, Krugman used physics and economics to prove “two useless but true theorems.”

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Krugman concluded that one should use clocks on a planet’s surface, not on board the traveling vessel, to calculate interest costs. The reason is obvious – a trader on Trantor (Krugman’s choice) could have invested her money in a bond. Instead, they invested it in cargo. Therefore, the opportunity cost of trade should be based on the passage of time on Trantor. As Krugman phrased it: “When trade takes place between two planets in a common inertial frame, the interest cost on goods in transit should be calculated using time measured by clocks in the common frame.”

Krugman’s second point concerns “interstellar capital movements.” Krugman’s “First Fundamental Theorem” assumed equal interest rates on the two planets. But wouldn’t interstellar movement of capital distort interest rates because “simultaneous arbitrage is not possible”? In other words, while goods move slowly, information about their circulation moves at the speed of light.

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Krugman’s “Second Fundamental Theorem of Interstellar Trade” concluded that this needn’t be a problem: “If sentient beings may hold assets on two planets in the same inertial frame, competition will equalize the interest rates on the two planets.” (Another economist read Krugman’s essay and concluded that “in such worlds the real interest rate cannot exceed the costs at which more fuel can propel you into the future through time dilation…as The Economist interpreted this: “Better buy antimatter futures while they are cheap.”)

So — we now have what the future Nobel winner called a “foundation for a coherent theory of interstellar trade.” It’s a picture of the universe that is “not a lunatic vision; stellar, maybe but not lunatic.” The double entendre here is a nice touch as Krugman’s theorems are less relevant for more “mundane” financial transactions between traders on the earth and the moon. Krugman’s conclusion: space might be “the Final Frontier of economics.”

OK – so I’ve been having some fun with Krugman’s essay (in the same spirit in which he wrote it.) But scattered throughout it are hints which point to some other interesting possibilities. First of all, Krugman – like many people his age – was aware of the public interest in space settlements stirred up by Gerard O’Neill’s visioneering. His essay, in fact, cites O’Neill’s book The High Frontier. (Of course, Krugman also cites Lawden’s Introduction to Tensor Calculus, Relativity, and Cosmology so we probably shouldn’t read too much into his bibliography.)

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Another little puzzle is found on the title page of Krugman’s essay – he notes his research was supported by a “grant from the Committee to Re-Elect William Proxmire.” Famed for his Golden Fleece awards given to protest government waste, the former Wisconsin senator became known as “Darth Proxmire” to O’Neill supporters. In fact, after CBS’s 60 Minutes ran a segment featuring O’Neill and his ideas, Proxmire was so incensed that he promised “not a penny for this nutty fantasy” and suggested instead that an irresponsible NASA should instead have its budget cut. (The CBS piece implied the agency was seriously considering O’Neill’s ideas. It wasn’t.) Why did Krugman single out Proxmire? Was he making a joke because of Proxmire’s dislike of O’Neill-style space settlement ideas? Or did Krugman sympathize with them?

Krugman’s foray into the economics of interstellar economics aside, there actually was a small community of people writing about such things circa 1978. Although most people realized that they would likely not be able to actually build a space colony (or an interstellar spaceship), the participants in the summer studies that NASA helped sponsor (and Gerard O’Neill helped organize) considered what living on a space settlement might be like. This demanded taking anthropology, sociology, and, of course, economics into account.

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Cover (badly pixelated) of the 1985 book Space Colonization: Technology and the Liberal Arts

Given the fondness that many in the space settlement movement had for libertarian thought, it’s not surprising that a good deal of attention was given to what sorts of future financial and economic systems would/could be enacted. At MIT, the Department of Aeronautics and Astronautics offered a new undergraduate course on “space systems engineering”. For an entire semester, undergraduate and graduate students studied the engineering needed to build a small, industrial space settlement.2 Other schools used the “Colonization of Space” topic to introduce undergraduates to “current topics in science and technology.”3 This attempt to jumpstart the curriculum reflected a more general trend of drawing students to science through nontraditional approaches such as the “Zen of physics.”

So, while Krugman’s essay might have been only semi-serious, it connected to other ideas circulating at the time, some of which the economist/science fiction fan was aware of. For me, the best convergence happened in 2000. This was the year Krugman left MIT for Princeton University, the same school where Gerry O’Neill spent his academic career.



  1. []
  2. MIT published the class’s final product as “A Systems Design for a Prototype Space Colony,” Spring 1976. []
  3. For example, see the essays collected in Charles H. Holbrow, Allan M. Russell, and Gordon Sutton, F., eds., Space Colonization: Technology and the Liberal Arts (New York: American Institute of Physics, 1986). []

Technological Bi-Partisanship

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There has been a lot of debate and media coverage lately about the potential use of drones to surveil – perhaps even to kill – American citizens located on U.S. territory. The highlight of this was Sen. Rand Paul’s 13 hour filibuster on March 6. Ostensibly, Rand’s speech was to oppose the nomination of John Brennan as the new head of the CIA. He started his “filiblizzard” by stating “that no American should be killed by a drone on American soil without first being charged with a crime, without first being found to be guilty by a court.”

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Rand Paul, looking a little peaked after 12 hours on the House floor

But Rand’s “dumb publicity stunt” (as labeled by a scholar at the Brookings Institution) received some interesting coverage not just for what the senator said but also for the reaction it prompted from both the left-wing and right-wing. As one New York Times headline described it, the current debate over drones “scrambles politics both left and right.” The images Sen. Paul put forth of drones hovering over American backyards and city streets armed and legally permitted to either spy or kill touched nerves across the political spectrum. (However, the legality as well as potential blowback for drone killings in general were not explored nearly enough) “How soon are we going to have drones overhead with tasers on them,” asked the Florida-based owner of the right-wing Whether one is a civil libertarian or a Tea Partier, images of this possible future stirred fears of governmental overreach and the menace of an unrestrained government. Over on the right, the Times reported, “defenders of the Constitution” welcomed Paul to their “less-is-better government club” while members of Code Pink sent Rand a liberal helping of flowers and chocolate.

This rare and probably short-lived confluence of political agreement made me wonder about other examples of particular technologies eliciting some political agreement from both sides of aisle…

Short for “transitional human,” the word transhuman was suggested decades earlier by Julian Huxley, a British evolutionary biologist and brother of Brave New World’s author, to reflect what would happen when humanity as a whole decided to “transcend itself” through the “zestful but scientific exploration of possibilities.”1 An essential idea among transhumanists is that new technologies might enable individuals to augment their physical and mental powers and thereby transcend inherent biological limitations. As one early advocate told a journalist in the early 1990s, “I enjoy being human but I am not content.”2

Over the next several decades, the valence of the term shifted. A key difference was that a Bernal or a Huxley imagined transformations occurring throughout society or even the entire human species. In contrast, the new transhumanism favored improving the individual via mind and body enhancement (and maintaining a legal right to do so). By the late 1990s, some transhumanists began to embrace a radical unifying concept called the “Singularity.” Its proponents gathered together a wide range of technological ideas – space exploration, nanotechnologies, life extension, artificial intelligence, biological enhancement – into a broader vision for the technological future.

Liberal as well as conservative critics of transhumanism have spoken out against it. Jonathan Moreno examines this in his recent book The Body Politic. Moreno quotes three scholars from the left who argue that the new posthumans will view the old models – that’s us – as “inferior, even savages, and fit for slavery or slaughter.” As a result, transhumanism will open the door to a “genocide that makes species-altering experiments” serve as “potential weapons of mass destruction.”3

Over on the right, as I described in The Visioneers, political philosopher Francis Fukuyama claimed that human enhancement technologies posed a grave threat to democracy – he called it, in one forum, “the world’s most dangerous idea” – while conservative bioethicist Leon Kass warned that “human nature itself lies on the operating table.”4 In response to Fukuyama as well as leftist critics, libertarian writer Ronald Bailey responded by saying “bring on those genetic bulldozers and psychotropic shopping malls to help people live healthier, smarter, and happier lives.”

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Transhumanism as depicted by Time, 2011

I guess the happy news is that much of the technologies central to transhumanism don’t exist yet. This stands in stark contrast to drone technology. However, what’s interesting in both cases is the centrality of democracy and equality. Opponents of transhumanism claim that it will eliminate equality or, as Fukuyama says, “what rights will these enhanced creatures claim and what rights will they possess when compared to those left behind?” The use of the term “left behind” is curious and I couldn’t help but wonder if this might be a reference to the “Left Behind” novels by Tim LeHaye and Jerry Jenkins that are so popular with evangelical Christians. Of course, one can always rebut Fukuyama by asking about the state and distribution of equality in today’s pre-posthumanist world. Hmmm…not looking so good. By the same token, we certainly haven’t needed transhumanism as an excuse or a goad to annihilate tens of millions of our fellow unaltered humans (who presumably were seen as inferior too) in the past century alone. But, as with these left/right critiques of transhumanism, debates about drones revolve around questions of legality, equality, and democracy as well as the potential they have reaping death.

The bipartisan coalescence of support against drones also reminded me of the ways in which the political left and right came together c. 1980 around a different technological issue. Instead of standing together in opposition, however, a small coalition of lefties, libertarians, and conservatives stood together to support an enhanced program of human space exploration coupled later on with calls for the militarization of space.

Stirred by Gerard O’Neill’s ideas for the humanization of space” and his depictions of space colonies free-floating in the inky blackness of space, devotees of O’Neill started the L5 Society in 1975. The name came from O’Neill’s proposal to put a space colony at one of Lagrangian points where gravitational forces are balanced so that objects there remain in relatively stable positions. L5’s membership was relatively small, never more than 10,000 people or so. But it was a vocal – at times argumentative and prone to internal disagreements – group with a strong California-based membership bolstered by local chapters in the Bay Area, San Diego, and Los Angeles. “L5 in ‘95” was an unofficial slogan the group adopted to express its determination to settle space and end their group with a mass disbanding in orbit.

L5 members weren’t shy about getting involved in the political process. During its eleven year existence, L5 members debated a range of space-related topics including lunar mining, space colonies, missions to Mars, and the Strategic Defense Initiative. The group played a role, for instance, in defeating U.S. senate support for the Moon Treaty in 1980.5

Screen Shot 2013-03-14 at 2.44.04 PMThe pro-space movement produced unusual political bedfellows. For example, Republican politician Newt Gingrich displayed considerable support for space, especially its private business opportunities, as did libertarian outlets like Reason magazine. One sign of the pro-space movement’s struggle over its agenda can be seen in a report put together in advance of Reagan’s 1981 inauguration by the “Citizens Advisory Council on National Space Policy.” This informal group, led by science-fiction writer Jerry Pournelle who served on L5’s board of directors, first met in Tarzana, just outside Los Angeles. It eventually assembled a membership that defied traditional political boundaries – Freeman Dyson (Princeton physicist), Barbara Marx Hubbard (spiritualist and futurist), and Larry Niven (science fiction writer) were on the membership list with former astronaut Walter Schiarra and Lowell Wood (physicist, Edward Teller protégé, and Star Wars advocate). The committee’s report advocated a “vigorous space program” that combined exploitation of space-based resources with entrepreneurial activities in space and space-based weaponry.6

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Article by liberal author/educator John Holt reprinted in the L5 News

Pournelle’s enthusiasm for military and corporate-backed space ventures was resisted by some left-leaning space enthusiasts and L5 members who still supported the original idea of communal space settlements and space-based solar power. Many other space buffs supported the Reagan space agenda in the hopes that military activities might jumpstart more peaceful citizen initiatives, much in the same way that 19th century military forts preceded civilian settlements.

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Image from 1979 L5 News article

These disputes presaged 1990s-era debates about Silicon Valley’s cyberculture and its libertarian leanings when left and right wing writers and political leaders united briefly in support of the electronic frontier’s new opportunities.7 Like space commercialization in the 1980s, enthusiasm for the internet and the World Wide Web a decade later was tinged with similar utopian and libertarian aspirations as well as hopes for profits. Social critics once described the internet and dot-com inspired “California Ideology” as “promiscuously combin[ing] the free-wheeling spirit of the hippies and the entrepreneurial zeal of the yuppies…a profound faith in the emancipatory potential of the new information technologies. In the digital utopia, everybody will be both hip and rich.”8 Where else but in the go-go years Clinton years would you find ex-hippies like Stewart Brand and Timothy Leary sharing bandwidth with Kevin Kelly, Esther Dyson, Newt Gingrich and George Gilder?

What’s interesting in all of these cases is that the discussion and debates didn’t break along traditional party lines. When the smoke and fog from Rand’s filibuster had dissipated, Sen. John McCain dismissed him as just one of the “wacko birds of the right and left that get the media microphone.” I’m curious to see how the drone debate continues and whether any sort of coalition forms around the issue. Perhaps this is all just a flash in the Rand…er, pan. Or maybe we’ll see more cases where a shared political nest is built by other wacko birds.

  1. Julian Huxley, Religion without Revelation. 1967 ed. (London: Harper & Brothers, 1927).195. []
  2. Ed Regis. “Meet the Extropians.Wired, October, 1994 []
  3. G. Annas, L. Andrews, and R. Isasi, “Protecting the Endangered Human: Toward an International Treaty Prohibiting Cloning and Inheritable Alterations.” American Journal of Law and Medicine 28: 2&3, 2002: 162. []
  4. Francis Fukuyama, Our Posthuman Future: Consequences of the Biotechnology Revolution (New York: Farrar, Strauss & Giroux, 2002); Leon Kass. “Preventing a Brave New World: Why We Should Ban Human Cloning Now.” The New Republic, May 21, 2001, 30-39. []
  5. The United Nation’s plan declared that “the moon and its natural resources are the common heritage of mankind” and claimed that “neither the surface nor the subsurface of the moon, nor any part thereof or natural resources in place, shall become property of any State, international intergovernmental or non- governmental organization, national organization or non-governmental entity or of any natural person.” From the “Agreement Governing the Activities of States on the Moon and Other Celestial Bodies.” These phrases struck some private space development enthusiasts possibly preventing opportunities for private space manufacturing and settlement. []
  6. Pournelle later claimed that this group’s activities helped catalyze Reagan’s SDI initiative; see Andrew J. Butrica, Single Stage to Orbit: Politics, Space Technology, and the Quest for Reusable Rocketry (Baltimore: The Johns Hopkins University Press, 2003). []
  7. My thanks to Peter Westwick for stimulating discussions about places in which the left and right coalesced around particular technologies. Peter also kindly shared a paper he presented at a conference on Envisioning Limits that we attended together last year in Berlin. Titled “From the Club of Rome to Star Wars: The era of limits, space colonization, and the origins of SDI,” Peter’s paper digs deep into some of the left-right space connections I glossed over here []
  8. Richard Barbrook and Andy Cameron, “The California Ideology,” Science as Culture, 1996, 6, 6: 44-72. []