prior probability

The Atlantic’s first-ever Progress Summit took place at the NeueHouse in Hollywood, where the original CBS Studios in Los Angeles were located. (The Neuehouse was also world’s first structure built intentionally for television broadcast.) I invited two of my college-age children, Kleber and Aritzia, to tag along. Below are some pictures of our Hollywood sojourn:

One of my favorite parts of Derek Thompson’s Progress Summit was the session on “How Artificial Intelligence Can Revolutionize Art and Creativity“, where Don Allen Stevenson III (pictured below) demonstrated “DALL·E 2” (see here), a new AI platform that can create realistic images and art from a description in natural language. I also liked Astro Teller’s talk on “moonshots”, which I will discuss further in my next post; in the meantime, below are some highlights from Mr Stevenson’s talk.

According to this report via Business Insider (see also the Tweets posted below), it looks like Elon Musk has secretly attempted to “shadowban” (i.e. censor) a popular Twitter account called @ElonJet, which tracks the movements of Musk’s private jet in real time using publicly-available data. The creator of this automated account is a super-smart and charismatic college student, Jack Sweeney, and as of today, his @ElonJet account has over 518,000 followers. (As an aside, Sweeney attends the University of Central Florida, where I have been teaching since 2014.) About a year ago, if I recall correctly, Musk had DM’d Sweeney and offered him $5,000 to stop tracking his private jet, while Sweeney countered with $50,000. (See here, for example.) So, how much does Musk value his privacy? Rather than cough up the $50,000 or bargain with Sweeney in good faith, in January of 2022 the world’s richest man ghosted the student and began buying shares of Twitter instead. (See here.) Coincidence?

Derek Thompson, a staff writer at The Atlantic (see here) and the host of the “Plain English” podcast (here), has assembled an eclectic group of scientists, entrepreneurs, CEOs, and artists to exchange ideas on a wide variety of topics at a day-long “Progress Summit” in Los Angeles, California on 12/13. I will be attending in person and will report back in the next day or two. In the meantime, pictured below is the first part of the agenda as well as the conference logo. (FYI: The full agenda is available here, and there is also a virtual attendance option.)

Today 12/12 is the feast day of Our Lady of Guadalupe, so I am posting a brief ballad in her honor, the song “Indita”. The version posted below is sung by Miriam Solis, who was born in Guadalajara, the birthplace of Mariachi music. Solis sings traditional Mexican “ranchera” songs (rancheras are rural folk ballads that originated in Mexico); here is a link to her YouTube channel.

But what should we replace the penalty kick phase in football (soccer) with, you may riposte? Glad you asked! I found this proposal by Jim Pagels (via Forbes). Below is an extended excerpt

At the conclusion of regulation, there will be the following extra time sessions, with golden goal (i.e. the game ends following a score) in effect:

1. 10 minutes of 11-on-11 (Team A starts with ball)*
2. 10 minutes of 10-on-10 (Team B starts with ball)
3. 10 minutes of 9-on-9 (Team A starts with ball)
4. 10 minutes of 8-on-8 (Team B starts with ball)
5. 10 minutes of 7-on-7 (Team A starts with ball)
6. 10 minutes of 6-on-6 (Team B starts with ball)
7. 10 minutes of 5-on-5 (Team B starts with ball)
8. 10 minutes of 4-on-4 (Team A starts with ball)
9. 10 minutes of 3-on-3 (Team A starts with ball)
10. 10 minutes of 2-on-2 (Team B starts with ball)

Fewer men on the field would result in more wide-open spaces, increasing the likelihood of a goal—a goal scored via passing and soccer-related team play against a team of defenders rather than via the artificial, foreign situation of a single player kicking a stationary ball from point-blank range on a single defender.

*If a team had been playing with 10 men during regulation, then that will only be enforced for the first extra time session, which would be 11-on-10. After that, only the team with 11 would remove a player, and it would be even strength for every session until a goal is scored. It’s simply too big a punishment to play a man down when you get to 8-on-7 situations, and having played all that time in regulation and the first period of extra time a man down seems like more than penalty enough.

Alternative title: Review of Katherine Mangu-Ward’s “The case for space billionaires” and Mike Riggs’s essay on space insurance

This week, I have devoted most of my blog to several new essays about outer space that were published in the December 2022 issue of Reason magazine. Today, I will conclude my series with “The Case for Space Billionaires” by Katherine Mangu-Ward, who is the editor in chief at Reason, and “As Private Space Travel Grows, so Will the Insurance Market” by Mike Riggs, Reason‘s deputy managing editor.

Let’s start with Ms Mangu-Ward’s excellent essay, which responds to two well-worn objections to the efforts of “space billionaires” and their private companies to commercialize outer space. One objection is what Mangu-Ward calls “the ‘there are problems here on Earth’ complaint”. The other objection is what I shall call “the Bernie Sanders’s argument”: space billionaires like Amazon’s Jeff Bezos, Virgin’s Richard Branson, and Tesla’s Elon Musk are able to invest in space because they are not paying their fair share in taxes.

Mangu-Ward easily refutes the first objection by noting how small the commercial space industry is relative to the rest of the economy. She links to this infographic prepared by Space Investment Quarterly, which shows that the total private investment in the space industry is about $264 billion, or in the words of Mangu-Ward: “Not chump change, but also not enough to definitely end poverty, injustice, or other terrestrial troubles ….” For my part, I would add the following observation. If these space critics were serious about reducing poverty and income inequality, they could start in their own backyards, so to speak, by calling for the repeal of onerous zoning laws and occupational licensure restrictions.

What about the other objection: Bernie Sanders’s tax argument? Here, Mangu-Ward simply concedes that Bezos, Branson, and Musk don’t pay their fair share in taxes, but then presents a kind of thought-experiment in their defense. Imagine that these space billionaires did pay more money in taxes; let’s say $X more. Who do you think would more wisely or effectively spend those $X: Bernie Sanders or the space billionaires? Q.E.D.!

In addition to responding to these standard objections, Mangu-Ward also mounts a compelling defense of the private space sector in general and of Bezos et al. specifically. Among other things, she highlights the benefits of competition: “The billionaires are not duplicating each other’s efforts, each is building different tech to pursue different goals.” See, for example, the image pictured below. Moreover, as Mangu-Ward correctly notes, this characteristic of competitive marketplaces–i.e. Schumpeterian creative destruction–“has served us well when it comes to cars, snacks, and phones, so it’s no surprise [creative destruction] would happen in the space sector as well once entrepreneurial private actors are involved.”

Another benefit of competition is that open markets tend to expand economic opportunities by creating demand for new products and services. Here is where Mike Riggs’s essay on space insurance, the shortest piece in Reason’s December 2022 collection of outer space essays, comes into play. As Riggs notes, liability insurance for space flight did not exist during the original Apollo lunar missions of the 1960s and early 1970s. Today, however, space insurance “is now close to standard.” Citing this report prepared by the Aerospace Corporation, Riggs observes that as of 2018 about 2/3rds of all man-made satellites launched into orbit carried some form of insurance.

Why is this insurance market example so illuminating? Because the best argument in defense of billionaires (space or otherwise) is that well-functioning markets generally make everyone better off, one of the most original insights made by Adam Smith when he published The Wealth of Nations in 1776. In the spirit of Adam Smith’s invisible hand theorem, I will close with my favorite sentence of Mangu-Ward’s essay: “The beauty of functioning markets … is that sometimes they take one person’s frivolous dream and make it come true for tens or hundreds or millions of people who, it turns out, share the same dream.”

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.

I just noticed that Larry Solum, an eminent and highly-regarded contemporary legal scholar, recently shouted out my forthcoming paper “Coase’s Parable” on his influential Legal Theory Blog: see here or below. Although some (but not all!) of my previous work (see here, for example) has been featured on Professor Solum’s scholarly blog before, this is the first time that one of my papers was stamped “Highly Recommended“. Suffice it to say I am super-elated for this recognition, especially coming from Professor Solum! Now, back to grading …