Everything We Hold of Value

The company Planetary Resources, and their plans to mine asteroids for gold, platinum and water, have been all over the news and the blogosphere the past few days. Now that I've stopped jumping up and down in excitement, here are a few thoughts I've had.

I) This is yet another piece of evidence to counter Tom Murphy's idea that the space age is over. As such, it's also another piece of evidence against his idea that growth must stop.

II) The announcement came just days after the space shuttle Discovery's last flight over DC on her way to the Smithsonian, and while the other shuttles are still being sent out to their final resting places. I can think of no better timing-- and indeed, maybe this was intentional-- to symbolize the transition from public to private. Space exploration is no longer the sole domain of government. As the private sector takes over, the industry will grow like never before.

III) The venture very well may fail. As the New York Times notes, it wouldn't be the first time a company had aimed to mine asteroids only to fail before getting there. That kind of thing happens in the private sector. It also happens in the public sector, with one very important difference. When Solyndra failed, it took with it my money, as well as yours, if you're an American taxpayer. The continuing failure of the United States Postal Service keeps taking taxpayer money with no end in sight. But if Planetary Resources fails, the only people who will lose money are those who are running it.

IV) One piece of evidence cited by reporters and bloggers as a reason they'll fail is NASA's upcoming OSIRIS-REx mission, which is spending a billion dollars to bring back just two ounces of material from a near-Earth asteroid. If they succeed, it will be an amazing example of the private sector's ability to do the same thing government does only cheaper. And even if they fail, they will surely develop some technologies along the way that will make things easier and cheaper for NASA's next asteroid mission, as well as the rest of the private space industry.

V) If they succeed, the added supply of gold will wreak havoc on any country using gold as a base for their currency. Anyone who still wants to go back to the gold standard needs to convince themselves that Planetary Resources-- and any successor companies-- will fail.

VI) In related news, a Canadian company recently got its first customer for material mined from the bottom of the sea near Papua New Guinea, with what they say is the "world's first commercial sea-floor mine." They're planning to begin operations in 2013. With mining on the bottom of the sea and in space, in a couple decades everything we now think is rare will be plentiful.

I'll close this with a quote from Peter Diamandis, one of the billionaires backing this enterprise: "If you look back historically at what has caused humanity to make its largest investments in exploration and in transportation, it has been going after resources, whether it's the Europeans going after the spice routes or the American settlers looking toward the west for gold, oil, timber or land. Those precious resources caused people to make huge investments in ships and railroads and pipelines. Looking to space, everything we hold of value on Earth - metals, minerals, energy, real estate, water - is in near-infinite quantities in space."

The Myth of Border Security

There is no such thing as border security, not in the United States. Most people who talk about border security focus on the southern border, but the northern one counts too. We could spend hundreds of billions of dollars securing the Mexican border, and the terrorists would just cross the much longer, much more open Canadian border.

Last week, Saeton Kevin Grant showed just how easy it would be. Admittedly, Grant was travelling into Canada, out of the United States. But crossing the border in either direction is easy, so long as you avoid the legal crossings, as Grant did. From The Province:

Grant, who rode a bicycle across the Manitoba-North Dakota border near Boissevain, Man., just after dark on Saturday, had been deported from Canada twice before — the last time in the summer of 2010.

A Canadian resident heading home spotted Grant on the North Dakota side of the border around 8 p.m., Saturday, [RCMP] Sgt. Line Karpish said. She said the resident saw the man again on the Manitoba side of the border, still riding his bike.

"It didn't seem right and they contacted us," Karpish said, adding a check with the Canada Border Services Agency at the Boissevain crossing revealed they hadn't cleared anyone through riding a bike.

Grant was found in Boissevain, but ran away from the mounties and ended up in Winnipeg, where local police found him several days later. No word yet on where he'll be deported to (it's not clear from the news reports whether Grant, a Jamaican, was legally in the US in the first place). But the real story here is the complete lack of border security. Border patrol only realized this man had illegally crossed the border when an eagle-eyed (get it?) citizen told them he had. Even then, he still got away, and was only found days later at his girlfriend's house in Winnipeg-- the same girlfriend who had impersonated an immigration officer in order to prevent his previous deportation. (In other words, any good movie character would dismiss her house as "the first place they'd look.")

Ultimately, this guy actually was caught, but what would he have had to do differently in order to succeed? Not much:

1. Travel in an inconspicuous car instead of on a bike so Eagle Eyes didn't notice.
2. Make the crossing in the middle of the night after Eagle Eyes had gone to bed.
3. Not cross at a highway where he could be seen. Carry the bike through a field if necessary.
4. Not leave his ID behind when he ran from the mounties.
5. Once across, figure out the first place they'd look for him, and go somewhere else. Anywhere else.

Note that had Grant done just one of these things, he would not have been caught. That he was caught at all was only the result of a fantastic chain of coincidences and stupid mistakes. Of course, his entire reason for crossing was to see his girlfriend and daughter*, so #5 was out of the question, and maybe he simply didn't own a car. But those aren't going to be problems for terrorists, at least not if they have any funding. And even if they did make all the same mistakes, if they have days in-country before being caught, that's more than enough time to carry out whatever dastardly plan they have.

The fact is, border patrol only stops two kinds of people-- the law-abiding and the unlucky idiots. Every single person who crosses legally is stopped by the border patrol, no matter who they are or their reason for crossing. Criminals are only stopped when they make stupid mistakes like Grant did. The border patrol is going to catch the rookies and the ill-prepared, but a well-funded, trained terrorist isn't going to have any problem crossing the border if they really want to.

People who say we can solve this by simply securing the border a) don't have any idea just how costly that would be and b) usually ignore the Canadian border anyway. We could spend tens or hundreds of billions of dollars building the highest double fence ever conceived across the 1,969 miles of the Mexican border, and it would do jack squat to secure the 5,525-mile Canadian border. If your goal is merely to restrict trade and immigration with Mexico but not Canada, that's fine. If your goal is to stop terrorists, you're kidding yourself and wasting the taxpayer's money.

Those who want more border security need to admit that it's not going to do a thing to stop terrorists. If they want to justify a fence, they need to do so on the grounds of restricting trade and immigration with Mexico, without resorting to the specter of terrorism.

*His daughter is about a year-and-a-half old. I could write a whole separate post on the ethics of breaking up this family again, but I won't. At least not right now.

The Undiscovered Country and the Final Frontier

Tom Murphy at his Do the Math blog recounts a conversation between an "Exponential Economist" and himself, a "Finite Physicist" (ht Marginal Revolution). Murphy's basic point is this:

Earth’s physical resources—particularly energy—are limited and may prohibit continued growth within centuries, or possibly much shorter depending on the choices we make.

As the discussion continues, Murphy settles on something of an upper limit to growth at around 400 years, which roughly corresponds to two limits. First, in about 400 years the waste heat from our energy use will be so great as to raise the average temperature of Earth to the boiling point. Second, in about 400 years, the energy we use will reach the "total solar input striking Earth."

There are a few specific problems with his argument that need to be countered.

I) The economist in Murphy's discussion says that economic growth is not equivalent to energy growth, and that growth in both GDP and utility can continue even if energy use stagnates. Murphy hand-waves this away by insisting that energy underpins the entire economy and that it will drag down the rest of the economy when it stagnates. Robin Hanson at Overcoming Bias and the commenter Vaniver on Hanson's post both raise direct critiques of Murphy's point. Vaniver points out that even with a constant quantity of energy, the price and therefore percentage of real GDP of energy can continue to rise. Hanson shows mathematically that even if one economic factor is held constant, the economy can continue growing as long as any other factor continues to grow. Hanson agrees that exponential economic growth will eventually cease, but only because he expects "diminishing returns to everything," not just energy or other physical resources.

II) Both of Murphy's above limits rest critically on the assumption that the discussion remains "grounded to Earth," that there is no "exodus to space, colonizing planets, living the Star Trek life, etc." When the economist for whatever reason accepts this assumption, Murphy says he sighed in relief that he wasn't dealing with "a space cadet." Indeed, in a previous blog entry, Murphy had derided the idea that we'll leave Earth as "escapism." You can read his full argument for why we won't go into space at the above link, but it basically amounts to two ideas: space is really, really big ("You just won't believe how vastly, hugely, mindbogglingly big it is," as Douglas Adams would say), and all the good stuff is here on Earth, so why would we even want to leave?

In other words, if we never leave Earth, we'll be doomed to economic stagnation; but we'll never choose to leave Earth, because there's no reason to. Well call me a space cadet, but the counterargument is obvious. If the only way to achieve economic growth is to go into space, why would we ever stay on Earth? Indeed, the more we find ourselves constrained by Murphy's energy limits, the more we will want to go to space and the more resources the market will make available to do so.

His two constraints on energy are easily overcome by a space-based civilization. First, the waste heat of energy use is far easier to get rid of in the depths of space than in Earth's atmosphere; here, the bigness of space works to our advantage. Waste heat is only a constraint if we stay on Earth, which no doubt is why Murphy is so keen to stay on Earth in the first place. Second, there's no reason at all to think that a space-based civilization would be limited to the amount of energy in the sunlight that strikes Earth. The total energy output of the sun is about 2.2 billion times the amount that hits Earth. Even if we don't leave the solar system, and even if we don't become any more energy-efficient than we are right now, that would give us quite a few centuries of extra growth. Even modest gains in energy efficiency will add millennia of extra growth before we hit the limit, and non-solar sources of energy will extend that even further.

Murphy might counter that the space age is over; we once went to the moon but haven't been back for decades, and now even the shuttle will never take flight again. This, of course, ignores the continuing advances being made by other countries and even private organizations, at a time when the only real economic value in space comes from tourism and national bragging rights. By the time Murphy's constraints begin to come into play, there's no reason to think that we'll still be constrained to Earth. A few centuries from now, we could easily be more of a space-based species than a planet-based one, especially once you consider likely advances in genetics and cybernetics that will help us adapt to life in space.

III) In contradiction to Cowen's and Hanson's summaries, Murphy's point is not that exponential growth will stop, but that all growth will stop. He doesn't say our limited resources may prohibit exponential growth, but rather, they "may prohibit continued growth." His epilogue makes it clear that he foresees "a model in which GDP is fixed—under conditions of stable energy, stable population, steady-state economy."

Other commenters on Hanson's post suggested that space only provides linear expansion opportunities, and that we would eventually outpace the speed of light if we grew exponentially. Once our civilization becomes large enough, this is true. If the speed of light is as fundamental a constraint as physicists believe, we will eventually run up against it. But once we've extended our growth limit to the speed of light itself, I think it's fair to say that Murphy's limit of "centuries, or possibly much shorter" has been soundly defeated. Moreover, growth even at some fraction of the speed of light is still growth! We're not going to hit that "steady-state economy" until the accelerating expansion of space pushes all other galaxies beyond the edge of the visible universe in a trillion years or so. Maybe I'm just short-sighted, but that's far enough in the future that it's not gonna keep me up at night.

(Translated from Trek-ese, the title of this post is, of course, The Future and Space.)

New Open Borders Website

A new website, Open Borders: The Case, started up a few weeks ago (ht Bryan Caplan). The site, run by one Vipul Naik, gathers many of the arguments for and against open borders in one place. Naik's viewpoint is clear-- he supports open borders, and much of the site is dedicated to various arguments for that position. The pages featuring arguments against open borders sometimes include counter-arguments, though not always. Despite his viewpoint, Naik seems to take a special interest in overcoming his own bias, even including a specific feedback form to let him know whether he's treating the other side fairly.

Some highlights:

• Doubling world GDP: Various studies have found that removing barriers to labor mobility would increase world GDP by at least 67% and possibly as much as 147%. [For comparison, world GDP increased about 67% from 2003-2010, and about 147% from 1993-2010. In other words, with open borders we could see an extra decade's worth of economic growth, bringing new meaning to the term "lost decade."]
• Competitive government: Free movement between US states allows Americans to "vote with their feet," putting a check on state and local government power. Open borders would do the same to national governments.
• The Gumball Video: Since I wrote my own response to Roy Beck's gumball video last year, I found it interesting to read Naik's response, which is somewhat more kind to Dr. Beck than I was.
• Interesting analogies: In making the moral case for open borders, Naik raises some interesting thought exercises, such as Starving Marvin, which asks whether it's right to use force to keep a starving man out of a grocery store; John and Julio, which asks what level of force is appropriate to keep a competitor out of a job interview; and the Drowning Child, which asks whether we can use force to prevent someone else from saving a drowning child.

On the whole, the site is still very new. Many of its pages are just short blurbs, especially in the list of objections. Bryan Caplan quotes also dominate quite a few pages; at times, you could be forgiven for thinking Caplan set up the site himself. But websites unfortunately don't spring forth fully formed from the internet ether, so hopefully both of those issues will fade away as the site matures.

The case presented is explicitly based on libertarian, utilitarian and egalitarian reasons to support open borders. Those with strong objections to one or more of those philosophies might not find the site as interesting as I did. Either way, the site certainly has the potential to become a valuable resource to anyone who wants to learn more about the issue, and I will definitely be keeping an eye on it as it grows.

Great Recession Optimism

Art Carden at Forbes (ht Cafe Hayek) says things aren't that bad:

Even though “worst ___________ since the Great Depression” has made the rounds a few times, the sheer economic cataclysm we would have to suffer in order for average people to return to the standards of living of the 1970s—to say nothing of the Great Depression—would be many times more severe than the Great Recession.

Arguing against the notion that capitalism is in crisis, he points to some of the same data that I've pointed to in the past, saying "Real per-capita Gross Domestic Product is a lot higher than it was in 1960, 1970, 1980, 1990, or 2000." He also appeals to observations about technology, including his ability to write the article on a plane, the near-ubiquity of smartphones, and even Robert Reich saying things aren't getting better in a Youtube video.

Carden's message that things are pretty good despite the cries of a "crisis of capitalism" reminded me of this bit on Conan where Louis C.K. says basically the same thing: "Everything is amazing right now and nobody's happy."

Utilitarian Ethics

From SMBC, an effective argument for why economists generally assume the second derivative of the utility function is negative: