The Economics of a Stellar Civilization

A Theory of Infinite Supply

There will come a time when humanity must choose between interplanetary colonization and extinction. Humanity’s shift to an interplanetary species may seem science fiction but it is both inevitable and undergoing. There is no question that this gargantuan shift will change our perception of the endless cosmos.  However, something that we don’t intuitively think about is how this shift would change our conventional models for the global economy.  

Let us first understand the existing space ventures and infrastructure before delving into our ‘New World’ economic theory. The current space industry is largely a privatized sector characterised by individuals having a seemingly endless pile of money and a driving passion for the cosmos. This has created an oligarchy which is both a boon and a bane. Future generations will view our current space programs as the founding blocks that will provide the fundamental tools in developing humanity’s stronghold on other planets. With the adequate focus and optimum resources for better functioning and specialization, a well-established commercial space infrastructure could be achieved. This is where the industry’s oligarchic nature presents itself as an advantage for the cash flows that it brings in. Moreover, these few founding companies have an instrumental role in reducing the cost-price analogy through economies of scale and oligarchic competition. However, to ensure dominance on other planets, collaboration between the private industrialists and international government organization is a prerequisite. All the aforementioned factors combined with exponential technological advancements hold the potential to propel us to a dynamic interplanetary civilization. 

To better understand the  ‘Cosmic Economic model’, we need to explore the works of  astrophysicist Nikolai Kardashev. He proposed a model called the Kardashev Scale which classified the development of all intelligent species, including ours, based on their energy consumptions. This classification is widely used and qualifies as a staple measure to categorize the development of all self-conscious and rational beings. 

  • Type 1 Civilization (Planetary Civilization) – can use and store all of the energy available on its planet.
  • Type 2 Civilization (Stellar Civilization) – can use and control all the energy of its surrounding planetary system including its host star.

  • Type 3 Civilization (Galactic Civilization) – can control energy at the scale of its entire host galaxy. 

According to this, humanity is currently a 0.73 in the Kardashev Scale. To qualify as a stellar civilization, it is pivotal for humanity to master asteroid mining, allowing us to obtain the rarest of elements in abundance without any harm to the ecosystem of our home planet. A type two civilization is also expected to completely harness the energy of its own star- The Sun in our case. A dyson sphere- a megastructure encompassing a star to capture a large percentage of the emitted energy- is the ideal source for this feat. Achieving this would not only be revolutionary but it would also prove to be a  stepping stone into a world with infinite energy resources. 

NEW ECONOMIC THEORY OF SPACE COLONIZATION

The ‘New World’ economic model, like any economic model, is based on a set of assumptions:

  • Humanity has established itself as a Type 2 civilization with the construction of the Dyson Sphere.
  • It has a seemingly infinite supply of energy.
  • Asteroid mining has made rare and useful metals (especially Platinum-group elements)  completely abundant.

Today’s global economy exists as a result of demand and supply equilibriums. Goods and services are traded upon a price decided by the market as a whole. 

For this model, let us first consider energy and its related sectors as a basic reference and analysis tool (being in line with both the Kardashev scale and being a good indicator of development).  Cheap, safe and infinite energy would transform the economic process driving this sector. Conventionally, the scarcity of resources and limited energy poses a great economic and challenge for both producers as well as the consumers in terms of supply. However, a space integrated economy,  owing to its monumental technological advancements, would witness an infinite energy supply. As a result, supply would replace demand as the dominant economic force, i.e, demand would move in response to supply and not vice versa. Furthermore, an infinite supply would mean that the quantity supplied would be indifferent to price in the long term. In other words, the elasticity of supply would tend to infinity and be represented as an almost horizontal line on a Price-Quantity graph. Demand however will continue to maintain its convexity.  


An abundance of energy would propel growth. This will induce raised income and better living standards which would further facilitate a rise in people’s demand for resources. As a result, the demand curve will continue to shift to the right mirroring the growth of the global economy through this self-fulfilling prophecy. Nonetheless, it is important to note that unlimited supply would not instantly translate into an increase in demand. Demand would increase incrementally during each period (delta T) as the never-ending circle of growth, income and demand repeats.

Apart from this, a question of determination of minimum price level arises. The costs of energy would decrease monumentally despite the enormous costs of building structures like the dyson sphere. With every passing year, the utility of the megastructure will increase and costs per unit of energy extracted would keep on reducing. Eventually the only costs associated will be the ones relating to the general maintenance and upkeep of the megastructure.

[Illustration by Vrunda Tipnis]

Our transition to a type 2 civilization will also change the composition and characteristics of global trade. Space Trade and asteroid mining will increase the quantities of metals like Terbium, Neodymium, Germanium, Silver and tantalum which are essential components in electronic devices, solar panels, specialized machinery and precision instruments. This combined with the cheaper energy sources may lead to large-scale discounting of costs. Imagine buying the new iPhone 12 for just 50$ or your brand new television for under 100$. This may seem absurd but is an undeniable possibility and has even happened before. Once the ‘metal of monarchs’- aluminium saw a similar drop in its prices with the invention of the Hell Heroult process of extraction. On account of this, aluminum went from being the metal of the elites to being one of the most common and widely used elements for human development.

Since the very first Apollo missions our perception and objective of space travel was to explore and expand our horizons and feed our curiosity for the mysterious cosmos. More often than not we question the validity and worth of spending billions of dollars just to quench our thirst for knowledge and/or expansion. The answer to that question however, is still quite vague and unclear. However, the uncertainty of the future is far too less a reason to miss out on a profitable and vast economic agent like space. The above economic model highlights just a few of the many cases where benefits of space infrastructure could be utilized. In the coming decades the space industry is bound to witness a massive commercialization which will set in motion the largest quest ever undertaken by mankind and when the time comes to choose between extinction and interplanetary existence, we shall hopefully choose the latter.

– Samarth Khanduri (Writer, Econ Declassified)

References:

A.Crawford, I., 2020. The Long Term Scientific Benefits Of A Space Economy. Research Gate. Available at: https://www.researchgate.net/publication/305401151_The_long-term_scientific_benefits_of_a_space_economy

Komerath, N. and Reichert, U., 2020. Economic Interaction Modeling For A Space Economy. Research Gate. Available at: https://www.researchgate.net/publication/266882246_Economic_Interaction_Modeling_for_a_Space_Economy

Koshyaran, M., 2020. A New Economic Theory For Space Exploration. Research Gate. Available at: https://www.researchgate.net/publication/294276533_A_New_Economic_Theory_for_Space_Exploration

Kurzgesagt, 2020. How To Build A Dyson Sphere- The Ultimate Megastructure. Available at: https://www.youtube.com/watch?v=pP44EPBMb8A

Kurzgesagt, 2020. Unlimited Resources From Space- Asteroid Mining. Available at: https://www.youtube.com/watch?v=y8XvQNt26KI&t=17s

Youngberg, D., 2020. What That Giant Asteroid Of Gold Would Really Do To The Economy | David Youngberg. [online] Fee.org. Available at: https://fee.org/articles/what-that-giant-asteroid-of-gold-would-really-do-to-the-economy/

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