Economic Systems and their Relation to a Mars Colony
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Economics is about the production, consumption, and distribution of goods and services. Money is included in the study in as far as money is used as a tool in most national economies. Primitive societies had producers mostly consume what they produced or give it to a spouse or child. Community defense as a service was handled by command of respected authority. Money has allowed people to specialize in the goods and services they provide. They can exchange these goods and services without concerning themselves with more than being sure that their customers have money and that their vendors have quality goods.
There are exceptions to money based economic exchanges. It is necessary that children be provided support without being able to pay for it. Military service is often still provided by command of respected authority, and the amount that soldiers are paid for their efforts is often less than what would be required to hire a fully volunteer force. Wealthy societies typically pay to provide food and shelter for those unable to afford to pay for themselves.
There are advantages to the command economy in some instances. For military forces eating G.I. food, wearing, G.I. clothes and fighting with G.I. weapons simplifies supply lines. For the poor, ration coupons or their electronic equivalents are not subject to economic vagaries. The whole society is more secure when such distribution systems exist for the poor, especially if contingency plans are made to distribute necessities in this way for the whole population if the for-money distribution system should collapse. Monetary collapse is a definite, if remote, danger for money based economies. A reason money based economies are subject to monetary collapse is that the market system of regulating prices is subject to intrinsic chaotic variation. For long times prices can go smoothly up and down as needed to distribute goods efficiently, then suddenly there is a panic and people start hoarding a scarce commodity as its price shoots upward. It is like the weather. People can make limited predictions about the weather but cannot say more than a few days ahead of time when a hurricane will strike. Additionally, since people have more control over money than they do over the weather, they sometimes alter markets in harmful ways because of their ignorance or because of perceived political necessity. For instance, governments sometimes try to make up budget deficits by printing enough money to cause massive inflation.
For a Mars colony in its initial form a command economy is likely. Most people would not be able to pay for their own transportation to Mars and ability to pay for transportation would be a poor criterion by which to select colonists. We should not have the market select who will be the first colonists. When colonization is possible, the colonists are likely to be selected for youth, good health, cooperative attitude, dedication, ability to fill more than one economic niche in the colony and a good evaluation report in years of training. Shipping colonists to Mars will be expensive. Earth will want to pick the best we can get. The goal is a colony that survives. Colonists will be picked to serve that goal. Provision of necessities is likely to be by a command economy on Mars for the same reason as it is in an army at war. The first colonists might expect to have all they want to eat of nutritious meals without paying for them, but a limited selection of kinds of food and meal times. After some time money should come into use. It may start as trading ration coupons or there may be a planned introduction of retail sales. Money is so useful that it is employed in every nation on Earth, so it is likely to be used on Mars. Money is particularly useful when the economic choices to be made become more complicated than a command economy can efficiently handle.
Self developed economy
The possible advent of much cheaper transportation to Mars, such as the SpaceX Starship, opens up the possibility of a different economical and social structure for Mars. In this scenario the colonists can pay their own way to Mars. In such a system there is no central control of who gets to go to Mars, the main factor is capacity to pay a large, but finite, amount for transportation and personal motivation. People going to Mars will already have money on Earth, and will probably conserve ownership of their properties on Earth. So they can have a revenue and spend it on Mars. A lower cost for transportation to Mars also means it can be afforded by research institutions, Universities and various government agencies. Some people will be able to live on Mars without working, and these people will be willing to pay for much cheaper local goods rather than still expensive imports