Dumb Econ Question: Interstellar Trade

Factual Questions
1

If we had either interstellar trade OR the ability to mine asteroids, is it safe to assume that most mined commodities would fall (or rise) to one common price? My thinking is that things like gold, copper, uranium, etc. would be so abundant with the endless supply of asteroids and planets (some of which are likely to have a given material at a much higher concentration than on earth) the cost would essentially level out at the cost of acquiring & transporting them

Is this logical? If not, please explain where I have gone wrong

(and I accept that some commodities, like oil, may require such specific conditions for formation that they would fall outside this, so I am asking generally not absolutely)

2

The thing with interstellar trade and commodities/wealth is that the scenarios can be very different depending on HOW the interstellar travel is happening.

Does everyone have some sort of easily-designable and implementable “warp drive” or “hyperspace engine” like star trek or star wars? Then things ought to stay roughly in the same paradigm as they are here: looking at abundance vs ease of access/processing vs cargo space vs time to mine and deliver vs utility (or perceived utility). Unless there’s some element “unobtanium” or whatever that powers that speed, in which case that is likely to be either state secret or really hella expensive regardless of the production/mining process.

Or, do we end up with something like warp gates or hyperspace tunnels? If THAT’s the case, the rich people are going to be the lucky/smart ones camped on the exits to the fast lanes, charging transit fees to everyone who is interested in using their limited number of “tunnel-of-get-there-before-your-grandkids-die” speeds. In that case, it doesn’t much matter **what **you’re hauling, and the base elements (along with anything or everything else) may (or may not) all fall to a single use category.

However, even then, I would imagine that as we’re developing and learning, we’re going to keep having individual things rise and fall in importance and expense (aluminum is a really shocking example, as is the difference between industrial and fashion diamonds) regardless of the amount of space and time we have to mine them in. As long as we’re humans with a finite stellar reach and a finite lifespan, the truly unimaginable distances and quantity of things aren’t really likely be an economic determinant in any sort of overarching regulating manner. But that’s just my opinion.

3

The costs of transporting materials between planets is huge. Moving a ton of gold from Mars to Earth or from the asteroids to earth takes an incredible amount of energy, especially if you want a controlled descent. The cost of moving materials between stars is so astronomical that there’s really no way to have meaningful interstellar commerce in commodities. Even if you use typical science fiction magical cheap drives, various commodities are going to be more or less expensive to get to and extract, and demand for them would vary a lot. I don’t see why you’d expect costs to extract and demand for materials to be the same, which means the prices would vary.

There’s already vastly more mineable material on earth than we have used, it’s just a matter of the cost of acquiring and transporting them - but the cost gets uneconomical very quickly.

4

Indeed - the factoid I heard and has always stuck in my mind is that if there was a stack of pure gold bars, refined, ready and waiting for us on the moon, it would not be nearly cost effective to go and get them.

5

With respect, and I admit I wasn’t clear, let’s not fight the hypothetical. If we have interstellar trade and asteroid mining, then let’s also assume that the costs of transit are reasonable.

6

Is there alien life in this hypothetical? Because I reckon alien pets, seashells, foodstuffs, perfumes, music, literature, etc is going to be more valuable than metals.

7

But reasonable is not a precise enough measure. Travel by commercial jet liners is reasonable for transporting people and mail and small parcels but you don’t see bulk cargo being transported in jets. If interstellar travel got as cheap as commercial air travel, we might see people visiting other planets on vacation but you wouldn’t see gold being shipped between stars.

8

There’s a deep fallacy embedded in your hypothetical: that the price of a commodity reflects the costs of producing, transporting, and selling it.

Those factors are there, but that just sets a floor price. The supply and demand – what the market will bear – sets the final price. So if asteroid mining floods the commodities market, the price will drive down. If it doesn’t, it will remain high regardless of how the minerals are sourced. And that’s the key: how much does this source of commodity distort the market?

If the prices don’t stay high enough, the least efficient (most expensive) means of production will shut down first, by being driven out of competition by the lower costs/higher profits of the less expensive production sources. (Cf. North Dakota shale oil v. Middle Eastern crude).

9

Assuming that transport costs are uniform, no matter the distance that the ores come from… it still doesn’t quite work. Even if it ends up being the case that it costs the same to ship one kilo of bauxite as it does to ship one kilo of pitchblende (or yellowcake), that doesn’t mean that you’ll get the same amount of useful aluminum or uranium (respectively) out of them once they’re refined back on Earth.

Now, if it were the case that transportation costs were so incredibly high that it was more cost-effective to refine the materials on the asteroids and then ship them back to Earth in their refined form, you might see a kind of leveling of costs of the type you’re describing. But in this scenario, it would probably still be cheaper to mine some of the more common commodities here on Earth (such as iron or aluminum), precisely because transportation costs would make the off-world stuff that much more expensive.

10

It’s almost always going to be more cost efficient to refine the materials where they are mined.

11

Take a lesson from the Good Old Days of oil. Heck, all you had to do was drill down and pump it from the ground, and it was all over the world so not exactly rare. The net result - until 1973 and geopolitics intervened - was that oil was in the neighborhood of $1.50 a barrel, mostly the cost of transport and refining were relevant. Gas was 40 cents a gallon. Those tugboats from Detroit got 15mpg on a good day. Areas like Europe - no oil - were worse off than that, and areas like Arabia and Venezuela were floating in money by siphoning a tiny amount from each barrel flowing by. The only problems were (a) Americans couldn’t restrain their consumption and (b) middle east geopolitics.

The same with any commodity, any system. Gold will still be rare. The only thing changed will be the need for environmental impact statements, and the portability of refineries. You can find a floating asteroid, search it for traces of gold, and then melt the whole thing to extract them.

The next question is - where does the vein of gold come from? Is this an Earth gravity thing, creating differentiated groups of minerals? Or is there some other process at work, creating concentrations in floating asteroids? OTOH, some asteroids are allegedly high in nickel and iron, useful minerals. Others are plain rock. Biological valuables - water, nitrogen, assorted elements like potassium, sodium, calcium, carbon, etc. - will still be needed and will have assorted availabilities.

Regardless, the big deal will still be energy. Presumably your interplanetary/interstellar civilization will have fusion power and the ability to store unlimited quantities of energy perhaps as anti-matter. Melting an asteroid and spinning it in a centrifuge to extract assorted minerals may not cost anything, but the infrastructure will; the guys with the refinery separating deuterium from the Jovian atmosphere will have an unlimited motherlode, and if they charge too much someone else will join in the competition.

In one novel, Poul Anderson posits an interstellar fight over a rogue planet. As it swings by a star, it melts and heats up, so as it swings back into the depths of space, it has the gravity and temperature to be hospitable but without solar input, it can serve as a massive heat sink for giant industries. After all, modern industries and especially resource extraction, consume massive amounts of power and use a lot of peripheral resources like coal or coke, and water for cooling.

So (a) extraction tech will still be the bottleneck, (b) resources may be unlimited, but they will still be the “needle in the haystack” need extraction tech; ( it’s unlikely there are pure gold asteroids out there) and © most polluting industry and extraction would be not on or from habitable planets. And (d) anyone who does find a high value motherlode will still get rich and - final word - (e) never underestimate the ability of humans to exhaust a resource into scarcity, like we did with cheap oil.

12

The moon is about the last place we’d get them from. Asteroids have no escape velocity. Assuming you didn’t mind the wait, if you could refine the resource in the belt, you could collect them. attach a small mass driver, and send them to Earth orbit quite cheaply. Getting them down is a lot cheaper than getting things up.
Of course you might want to hire a guy with a shotgun and a junkyard dog to protect your gold on the way to Earth.
That’s for asteroid mining. I can’t imagine many things (besides people) worth shipping at interstellar distances. Unless someone really, really wants an original I’d think that 3d printing artwork would be a lot more useful. Agricultural products would be cheaper to grow in a reproduction of the home environment, unless the stuff was more valuable than saffron. But it depends on how expensive ftl travel is.

13

There may be an “endless supply of asteroids and planets”, but it will take a very long time to find the one where gold is abundant. I think you are going into this venture with too much optimism.

14

If we assumed a plentiful supply of all elements at zero cost, the cost would then depend entirely on who controlled it. Diamonds are plentiful and very cheap to transport, but they are ridiculously expensive because the people who mine them simply stockpile them to keep the price up.

Oil is cheap because there are many suppliers and OPEC failed to keep production down. OldOlds’ Interstellar Inc. would have a virtual monopoly on whatever they chose to mine, therefore they would ration it to keep the price profitable.

An analogy might be the giving of food aid to poor countries: Send then a few hundred tons of free grain and you put all the local farmers out of business. If the free grain stops coming, there is no local supply to fill the gap.

15

Ignoring transport costs, the question comes down to practical use and how that use is undertaken.

For example, steel tends to be reused. Gas is blown up into waste materials and heat. Some things have a wide variety of uses in many industries, that need it in large quantities. Other things are going to have niche uses and maybe only have a small, finite need.

Ultimately, we would expect to see the prices to range from a high for things which are both not reusable and which are required in large quantities, and a low for things which are reusable and only needed in small quantities.

Of course, we would expect the market to adapt and instead of sending things back in equal quantities, they would use the mining and transport resources in ratios equal to the demand. Once demand equalized, we would expect the prices to equalize. Though, any technological breakthrough which changed the usage patterns - finding a way to not destroy an element, finding new uses for an element, etc. - would disrupt this until the supply chains had reconfigured. During the transition, we would expect to see prices go up and down accordingly.

16

“Interstellar” is a red herring, here. We have asteroids right here in our Solar System. And while we don’t yet have the technology for cheap (as in: most of the cost is in hiring the dockworkers to unload it) cargo transport within the Solar System, we do know what that technology would look like, and it’s actually not all that far distant.

Gold and uranium will continue to be scarcer and harder to find than other minerals, and so will retain some value, but iron and nickel would plummet, and even the rarer metals will still drop a fair bit. It’d be interesting to see what effects that would have on industry.

17

Heck, even trade within the solar system is a red-herring. There is little to no reason to think any asteroid has a concentration of anything useful that is better than an ore deposit here on Earth. md2000 hinted at the issue. Concentrations of useful minerals don’t happen by chance. They happen because of a set of processes in the Earth that acts to concentrate rare elements into areas where the concentration is much higher than the general abundance. Asteroids, so far as we know, don’t have the conditions to make such processes possible. Perhaps the single most important part of the processes is the presence of very hot, high pressure water. Given enough pressure and temperature, water will dissolve just about anything. Get a hot intrusion into the crust, some serious heating and some faulting, and you get superhot water channelling dissolved goodies up to near the surface and creating commercial grade concentrations of all sorts of nice stuff. All you have to do is go and dig it up and put in a truck. This is always going to be cheaper than space travel.

The idea that there might be asteroids that have concentrations of good stuff that beats these processes is little more than fancy. At least for the valuable stuff. Even for the common stuff, like iron and nickel, you would be working pretty hard to beat the Earthbound concentrations.

Our only real problems on the Earth is finding them - and digging a hole deep enough when we do. We are very lazy, and tend not to dig very far. We are also in the stone age (pun intended) when it comes to our capabilities for mapping what is in the ground. Access to cheap intra-solar system travel would suggest that we may well have worked a few of the issues out about how to cheaply dig a hole in the ground.

18

My understanding is that most of the heavy elements sank into the core of the planet, so anything heavy in the mantle is likely to be right at the top, thanks to asteroids. Digging deeper down won’t get you access to more stuff (unless you have some way to go all the way to the core, without melting or starting a volcano).

Though, true, geologic processes could have folded stuff down to whatever arbitrary depth.

19

In a sense, most of the world’s nickel production is already due to asteroid mining. We just mine an asteroid in a very convenient location, in the Earth’s crust.

20

Didn’t we just have a thread that quickly hijacked into this, about buying off aliens who wanted to take over, and going over our options in an extremely unknown marketplace?

Admittedly the topic comes up a lot in SD.