Sunlight And Asteroids

Ajay Menon Law & Economics October 27th, 2009 1st Paper: Sunlight & Asteroids Sunlight and Asteroids In order to conceive of a future where there are property rights to asteroids and sunlight some assumptions need to be made. The first assumption is that when people do start to leave the Earth for other planets (or asteroids in this case), it will be an internationally coordinated event much like the creation of the International Space Station. The second assumption is that there will still be people on earth, so the sun can't be completely enveloped, blocking it out from the whole world. The third assumption is that we haven't encountered any aliens that have already claimed the asteroids as their own or something like that. The last assumption is that every asteroid will be identified and named. When it comes to property rights and asteroids, transaction costs should be very high as a result, the international community would be wise if they went about minimizing these before they allowed the asteroids to be owned. In order to facilitate this, I imagine that an international space agency, or something equivalent will be established. The first step that would need to happen is that any asteroids that are abjectly inhospitable to human life, because they are made out of a material that is too dangerous to live or work on, need to be identified. If someone wants to own them anyway, they will not be prevented from doing so, but they should have full information, otherwise resources are just being wasted. Next, the agency will have to identify and name or number all asteroids, as well as ascertain a rough approximation of their size. This is important because it will make assigning property rights easier, if the buyers are able to easily identify what asteroids they are bidding on. Now, they need to be assigned to their respective owners. Historically, there have been more than a few ways of initially assigning property rights. In the state of Oklahoma, they decided to let people race for the land, but the people that followed the rules found out that some people had cheated. People used to just move to where no one owned land, and

then they claimed that as their own. In the case of space, both of these could prove cost prohibitive. If the agency decided to follow the Oklahoma model and go with a mad dash for asteroids, a lot of resources would be wasted when people inevitably chiseled, just like the sooner did. The best system for assigning property rights in the case of asteroids would be that of an auction. An auction circumvents the problems that were faced by settlers in Oklahoma, but does create some new ones. The first one is how do you know what you're buying. In the case of auctions today, potential buyers have the chance to inspect the good that they are contemplating purchasing, and then deciding how much they want it. In the case of an asteroid, the information that was accumulated by the international space agency will have to serve that role. The best part of an auction based system is that the asteroid will go to whomever values it the highest. If one individual is not capable of raising the funds necessary to buy the asteroid that they desire, they are free to go in with a group. The percentage of the asteroid, and what part of the asteroid that they own will be discussed with the other members of the group, transaction costs being low, and with the power to negotiate they should have no trouble doing this. Now that the property rights have been assigned, the next question is what rights do the owners of these asteroids in fact have? Without a doubt, the most important right is the right not to be hit by other asteroids. Without this right, their investment could be damaged, if their property is dented, or potentially destroyed should another asteroid crash into theirs, smashing it to smithereens. They also have the right to move them around. To fulfill both of these rights, thrusters exist which allow asteroids to be maneuverable. Aside from this right, you retain the traditional rights to possess, use, improve, consume, deplete, sell, donate, transfer, lease, and exclude it. The traditional right to destroy it on the other hand is abridge, because if you tried to destroy it, you would adversely effect your neighbors. You can only destroy you property here, if you can negotiate compensation with your neighbors before hand, or are able to use your thrusters to move it somewhere where it's destruction will not effect anyone.

The next case is sunlight, how we can own it, and who gets it. The scenario that this plays out in is one on which a future earth has become overpopulated and as a result, some people have moved to other planets, such as Mars, Neptune and Uranus. While humankind has solved the problems created by gravity as well as atmospheric problems through technology, the solutions require a massive amount of energy, and the preferred energy source is that of sunlight. The problem is the distance of these planets from the sun. The proposed solution to this is the creation of sunlight catchers positioned around the sun that are able to transmit the energy back to the planet in question. The question we are now faced with is how to assign the right to station these sunlight catchers. The first thing that must be considered is that there are still people living on earth, so one can't simply wrap the sun and transmit all of it's energy it the outer planets. The second thing is that if the sun catchers orbit the sun, they could interfere with each others ability to collect sunlight. This would violate the property rights of the owners of the other sunlight catchers. The proposed solution to this is the creation of a slotting system. The orbit of each slot should be at an angle to each other to minimize the amount of time of any overlap. They should also be placed at varying depths to minimize the odds of them crashing into each other. Each slot, would also come with it's own energy wave that is used to send the energy waves back home. The slots for the sun light catchers would also be auctioned off. The owners of each slot would have the traditional property rights to possess, use, improve, consume, deplete, sell, donate, transfer, lease, and exclude. In the future being envisioned here, each individual or family would not own their own sunlight catcher (unless they were very wealthy), rather the equivalent of power companies would bid on and purchase the slots, launch their own sun light catcher, be responsible for maintenance, transmitting the energy back to the planet in question, and then sending it to their customers houses. In the future when property rights are needed for asteroids and sunlight there are going to be many ways to distribute them. It is contended here that a system of property rights that are assigned via

auction will be the most efficient way distributing them. Under a system of auctions, the transaction costs of attaining the property are vastly reduced as someone else has already accumulated the information costs. Once the property rights have been assigned, the Coase theorem should kick in and they should be able to negotiate the nitty gritty details among themselves. An example would be that once the asteroids are assigned and the thrusters have been installed, they can negotiate any loss that comes from temporary sunlight, or if one asteroid nudges another while the thrusters are being used. The important thing is that the property rights will have been assigned, and that they are clear.