Funding Colonisation

How do we pay for the grand ambition of populating the solar system?

I often encounter people incredibly dismissive of the enterprise of space colonisation. Typically, they’ve had the argument in their head already, with a straw man version of space colonisation - often presented to them through some bad pop science article - and defeated it handily. They expect you to slip into that role whilst they scold you for being stupid enough to disagree with them, and are often put out when you argue back and disprove their points.

A quite common form of this goes something like “Space colonisation will never happen, because there is nothing worth bringing back!”, as if the entire enterprise hinged on mining materials for sale on Earth. For sure, there are some asteroid prospectors looking to get rich by flooding the market with platinum group metals from space, but the number of people that will work for is either 0 or 1. I don’t know anybody serious about this topic who thinks this is a broadly applicable long term funding strategy.

Back in the 1970s, Gerard O’Neill wanted to fund free flying habitats by manufacturing space based solar power. As the space economy has matured, it has become apparent that modulating the energy you beam back to Earth with data is far more profitable. Lately this has turned towards the prospect of build massive AI data centres in space - a topic I am going to cover in detail this month.

But what if there was another way entirely?

The Colony Endowment

So you’ve decided to leave it all behind, back a minimal bag of personal items, and head out for the new life that awaits you in the off-world colonies. The chance to begin again in a golden land of opportunity and adventure.

You won’t need your terrestrial possessions, so you’ll sell them. Any savings you have are likewise of minimal direct use in space. You’ll have a pile of cash then, some of which must be spent on your ticket, but if you’re a reasonably successful middle class person you’ll have some left over. You and everybody who is going puts this together into one big endowment, so that it can be managed professionally at minimal cost.

Let’s say you put in $100,000, and that the endowment has an annual return of 7%. You can get $7,000 a year without touching the principal, and if your per kg transport costs to wherever your colony is are $1,000/kg, you’re getting 7kg a year sent to you. You obviously aren’t living on this alone; you use 1kg of oxygen per day, and around 100kg of water. That is before you start on food and other things. The key is to manufacture as much as possible at the colony - water and oxygen are heavy items, but easy to make. If you can do that, you can ship up the things a colony can’t make. Updating a 300g smartphone every couple of years, for instance, is no problem within this budget.

If all your needs could be met in this way, no trade with Earth is required. But this approach does make colony growth, if limited by Earth supply, dependent on a constant stream of new colonists.

Avoiding a Ponzi Scheme

There are many infamous schemes throughout history whereby you are promised returns based purely on how many more people you invite in. From Charles Ponzi’s “Securities Exchange Company” to modern multi-level marketing schemes, they are interested exercises in the nature of exponential maths and human gullibility.

Famous con artist Charles Ponzi selling you a totally legit space colony opportunity

If a space colony were only able to grow as long as new colonists kept coming, it would fall into that category. But that doesn’t mean it will fall into that category, and in fact it is should be possible to determine which ones are viable and which are not.

For this I am going to construct a simple model which depends on three things

1. The closure rate of the colony i.e. what fraction of its inputs are derived from its own waste products (or from in situ resources)

2. The pool of potential colonists

3. The distribution of wealth in the society launching the expedition

The third one might seem out of place here, but is actually fairly relevant, as we shall see.

Starting with closure however, let us say that the amount of stuff a human needs to live comfortably is 200kg/day, or 73,000kg per year. For our colonist depositing $100k in the endowment, they can only ship 1 part in 10,000 of that from Earth. In other words, the total closure across all products needs to be 99.99%. Even with the low hanging fruit of water, oxygen and staple foods - a large portion of the mass that is relatively easy to make - this is still going to be tricky.

If we were to start off the colony with wealthier people - who could for instance put $1 million down - then matters get easier at 99.9% closure. If each colonist puts down $10 million, they need 99% closure. This is starting to intersect with existing technology.

Because we also include in space resources, and to help with the calculation I’m about to do, it may be helpful to switch back to discussing the mass leverage - i.e. if you have 99% closure you have a mass leverage of 100, as you get 100kg of new materials for every 1kg of Earth input. This gives a more hopeful picture already - in the case of Biosphere 2, for instance, problems with the gas mixture led to oxygen being introduced from the outside, which is a resource that can be found in many places in the solar system and so doesn’t undermine overall self sufficiency.

Provided that the wealth of the colonists coming and the leverage of the habitat meet, you’re fine. But here is where wealth distribution comes in. If you assume that the number of people who in principle want to go to your colony is distributed evenly across the classes of society, then that subset of the population will have the same wealth distribution as society at large. The richest of those will be able to live on the colony with relatively low leverage, but as more colonists come the wealth of each colonist will drop according to a power law. Economists typically use a Pareto distribution to model this. To support these colonists the leverage would have to improve over time - which you would expect it would, as there are more people working at the colony now and specialising.

This now gives a strict criteria for sustaining the colony without exports to Earth; the leverage must grow at least as quickly as the wealth of new colonists falls.

Let us assume we start with a leverage of 50 (98% closure, currently achieved in the Chinese Lunar Palace 1 experiment), and the first colonists are wealthy enough to self support at that rate i.e. a deposit of $20m. We then plot how the colony evolves as at each decile of the income distribution, given a growth rate per decile. A travel price of $250,000 is subtracted before calculating the amount of payload each person can send. Note this is not the growth rate per year - but it would be if the colony took 10 years to populate.

The situation here seems hopeless. At this rate, even with high growth rate the colony cannot survive without exports. If we take the same distribution of colonists though, and have them start at a leverage of 1000, the picture looks much rosier. Its reasonable to believe such leverage is possible with current technology - real space colonies will be able to source two of their most massive inputs, water and oxygen, from in-situ resources. And part of the lack of closure in Lunar Palace 1 was the need to introduce external food to give the occupants a balanced diet, as what was grown inside could not do this alone. Contrast with Biosphere 2, which while encountering many difficulties, was able to grow a wider range of crops and raise animals (chickens and pygmy goats) to provide a full diet to the crew for part of the experiment.

Still, a daunting task remains - continuous improvement of the leverage over time. Bear in mind that, with each decile, thousands of new colonists may be arriving. The population of moderately wealthy people in western countries is large enough to support this even if only a small fraction want to go. Only the 20% growth per decile line here stays within the zero export region, which would be a very fast rate of productivity growth. Can we mitigate this?

It turns out, yes. In the above example, I’ve given the source population a fairly high level of inequality - a Pareto distribution with α=2 and a minimum value of $500,000 - if we more evenly distribute it so that α=1.2, then the wealth of the colonists drops off slower and consequently the required growth rate is lower.

Now 15% growth is roughly enough to stay within bounds. It is still hard, but we can see the variables which make it easier. Other things that can shift the line are having a benefactor put in an initial amount to buffer early colonists, or by having some exports to Earth, even if primarily the colony functions through the endowment. The strict need to pay for the enterprise by exports is still shown to be unnecessary.

Capturing everything above in a formula, it would be something like this:

W(t) is the wealth of the next colonist at time t. L0 is the initial mass leverage, g the growth rate with respect to time, E the exports value (set to zero in the above example), C the launch cost and R the annual requirements of each person. Note that here I have reverted to using time instead of income decile; that was a simplification to avoid complicating the plots.

If this condition is met, then the colony can survive and is not dependent on any more colonists coming, so is not a doomed Ponzi scheme, as long as the endowment on Earth remains functioning. This does not make an independent colony in case of some catastrophe on Earth; that is a bit further off. This is about getting a working colony of any kind.

One thing this shows as well is that, contrary to the narrative of “greedy billionaires in space”, a colony would do best if it was from an egalitarian society that is very good at recycling.

Making new Real Estate

Although it may seem like this is a trick, and the colony must export something to survive, it can help to think of it as exporting real estate deeds. The established members of the colony would work to enclose more volume, providing space for new colonists to live, work and grow crops. Newcomers would pay for this out of the allowance they get from their contribution to the endowment.

This does give a considerable advantage to first movers, but they also have the disadvantage of living a much harsher frontier existence. There is also a disincentive to rip off new arrivals too much, as it would reduce the number of people coming.

Hostile Action

All of this depends on a colony endowment on Earth being able to produce reliable returns over time. Such funds if well managed can endure for a very long time, albeit with variations on their returns. But a problem might come from governments.

It is impractical to impose taxes directly on a space colony, but having one dependent on the Earth bound financial system would give governments and handy point of leverage from which to extract money. If done at a low level, this would just shift the line a bit and may not be a problem. However, bitter experience shows that governments greed for revenue is insatiable, especially when extracted from those who, due to being off planet, can’t vote against them.

A sufficiently punitive raid on a colony endowment could destroy the colony, and it might be done for that express purpose. If such colonies became a magnet for productive, enterprising individuals - as you would expect from an exciting frontier - then nations might want to stem the loss of their talents by shutting down the entire thing. The politics of envy would also likely be involved, alongside the tendency of politicians to make extravagant promises at election time without any sense of how to pay for them.

So any such endowment must be designed with defences. The mobility of capital helps, and there are always more reasonable countries to base in. What is less mobile is the launch capability that must be purchased. We should hope that a healthy international launch market develops, and so one intransigent country can be bypassed.

It is in the interests of those on Earth to protect such projects from political sabotage, even if they themselves do not wish to go to space, because voting with your feet is a far better way to discipline governments than the ballot box, and functions even where there is no democracy. The flight of people from East to West Germany undermined that state fatally, and ultimately that was to the benefit of even those who never left East Germany.

Getting Started

There are no colony endowments yet. Despite SpaceX recently announcing their first Starship customer to Mars - the Italian Space Agency - there are no regular cargo flights to colony destinations. So this idea is theoretical for now.

However, if people were to put money aside, the returns from it could be kept within the fund to grow it until such a time as it could be used for this purpose. I am not sure how to structure such a thing. What options would there be for withdrawing money? How would it be guaranteed over the long term? What would entice aspiring colonists to use it?

Again, this could easily fall into scam territory - I think back to the “Mars One” debacle a decade ago. It can be done legitimately though, and I’m interested to hear if anybody has any thoughts on how to accomplish this, or generally building on the model I’ve presented here.

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