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Louis: Member from UK
Registered 2008-03-04: Posts: 5,198
I’ve just been reading a book on economic theory called 30-second economics (it’s actually a more in-depth study then that title might suggest). I thought it might be interesting to work through the theories and ask how they relate to a future human society on Mars since I don’t think anyone here or elsewhere has ever attempted to do that…
Classical economic theory This theory has evolved out of Adam Smith’s original writings which indicated that the rapidly adjusting market ensures equilibrium, stability and prosperity.
My comment: The free market will be largely absent from Mars for at least a couple of decades following the arrival of humans in my view. This partly reflects technology (the need to ensure that life support technology is in place) and partly the way missions will be structured (under the control of a centralised planning team). There will be a market between Mars and Earth e.g. over science experiments, where I anticipate demand will exceed supply.
Marxism Marx predicted the inevitable evolution of a classless society based on the principle of “from each according to their ability and to each according to the need”.
My comment: In a sense the early missions to Mars will probably reflect these principles. All the participants will be highly dedicated to giving their all to the project and financial motivation will not be required. Equally, they will be happy to help a fellow pioneer who may be in need – e.g. in need of medical treatment. But Marxism is not an organising principle that works well with larger and more sophisticated societies.
Keynesian economics. Keynes argued that the business cycle was driven by aggregate demand and suggested that government could intervene to smooth out the ups and downs of the business cycle by manipulating aggregate demand for goods and services.
My comment: The business cycle is a reality in all markets but it is worth pointing out that we have, on Earth, had steady growth in world GDP year by year virtually every year since World War II. This is due to technological innovation, improved transport and communications and a growing population.
The Mars economy will be growing from a tiny colony into an economy based on substantial human populations possibly millions within 100 years. So I think we will not see major business cycle dips. There is perhaps a risk of investment “bubbles” going forward which may cause economic dislocation.
To be continued…
Last edited by louis (Today 09:46:57)
Louis added additional posts to his topic. These may be viewed at the links below:
Post #1 http://newmars.com/forums/viewtopic.php?pid=163436#p163436
Post #4 http://newmars.com/forums/viewtopic.php?pid=163447#p163447
Post #5 http://newmars.com/forums/viewtopic.php?pid=163449#p163449
Post #6 http://newmars.com/forums/viewtopic.php?pid=163456#p163456
Post #7 http://newmars.com/forums/viewtopic.php?pid=163472#p163472
