What would Adam Smith think of the fictional world of Star Trek?

Alternative title: Review of Rebecca Lowe’s “Space is an opportunity to rethink property rights”

Thus far, I have reviewed several essays from the December 2022 issue of Reason magazine on various aspects of outer space. My favorite piece by far, though, is the essay by independent scholar Rebecca Lowe, which is titled “Space is an opportunity to rethink property rights”. (FYI: here is a short bio of Dr Lowe.)

In brief, what I loved the most about this essay is that it grapples with the following controversial question head on: Should we extend property rights to outer space? Dr Lowe begins by describing the existing legal framework: the Outer Space Treaty of 1967, which has been ratified by all the major spacefaring nations of the world, and the 2020 Artemis Accords, which are still gathering steam. (Neither Russia nor China have joined the Artemis Accords.)

Among other things, the Outer Space Treaty (or OST, for short) appears to prohibit state ownership of outer space. Article 2 of the 1967 treaty (see here) explicitly prohibits “national appropriation” of outer space. (“Outer space, including the moon and other celestial bodies, is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means.”) The terms “national appropriation” and “use or occupation”, however, are nowhere defined in the OST.

The Artemis Accords, by contrast, attempt to modify the scope of the OST by excluding space mining from the definition of national appropriation. (Specifically, Section 10 of the Artemis Accords (see here, page 4) states that “the extraction of space resources does not inherently constitute national appropriation under Article II of the Outer Space Treaty.”) Alas, while this provision might be a step in the right direction, it does not go far enough. What about space settlements, like NASA’s proposed lunar outpost (see here) or China’s future moonbase (here)? Or what about the dwindling supply of geostationary and non-geostationary orbits in an increasingly “crowded and contested frontier” (see here, for example)?

In any case, as Lowe herself notes, it is not clear whether the OST prohibits private firms from claiming property rights in outer space. Treaties obligate nation-states, not individuals. Either way, after surveying the existing legal framework, Dr Lowe proposes a novel and intriguing solution for outer space governance; or to paraphrase the Star Trek motto, she goes where few men have dared to go before. In summary, she takes an important “classical liberal” idea–Lockean property rights based on “justified acquisition” or first possession–and then modifies this tried-and-tested idea to make it workable for outer space. To simplify, Dr Lowe would allow individuals and private firms to rent plots of land on the moon on a temporary basis–a novel proposal that could be extended to other scarce space resources like geostationary and non-geostationary orbits!

But who would collect these rents, and how would their value be calculated? In the alternative, if we are going to champion property rights in outer space (a big “if” given the letter and spirit of the Outer Space Treaty), why not try Coasian auctions instead? As it happens, Dr Lowe’s excellent essay includes a link to a far more detailed “white paper” she wrote earlier this year; see here or here. In her report, she spells out the details of her “land value tax model” based on the innovative ideas of Henry George, a political economist who proposed to replace existing systems of taxation with a single tax on landlords, the “land value tax“. Suffice it to say that I will study Lowe’s 71-page white paper during the Christmas break. In the meantime, I propose the following thought experiment in defense of Lockean property rights in outer space. What if Adam Smith could time travel and visit the fictional world depicted in the popular series Star Trek? What would Smith think? (For some possible answers, see here as well as Rick Webb’s beautiful book, pictured below, on The Economics of Star Trek.)

Note: I will conclude my series of reviews in my next post.

About F. E. Guerra-Pujol

When I’m not blogging, I am a business law professor at the University of Central Florida.
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