Georgism is cool and all, but it was invented in 1879, and I prefer my ideologies to be more futuristic. Unlike the Network State, Georgism doesn’t require blockchains, and unlike Scientology, it lacks aliens.
So lets make it more exciting by taking Georgism into space.
Its not a terrible idea, space has a vast amount of resources that nobody owns. How should they be shared? Can we design tax policy to encourage stable, equitable growth across the universe?
Taxation … in Space!
Space can be broken down into three types of economic land: useful energy, matter, and physical space.
Let’s start with energy. Since there is a fixed amount of useful energy in the universe, it’s an exhaustible resource. In this case, the Georgist framework would suggest a severance tax, where people that extract energy from natural sources pay a fee that goes into a citizens dividend.
Matter is a little different. Since it can be recycled, it’s more like land that you borrow from everyone else. The Georgist tax would be proportional to the value of certain types of matter. Note that the tax cannot depend on the arrangements of that matter, only the basic elements it’s composed of.
There are some difficulties with taxing matter. First, it may be feasible to transmute some elements into other elements. The elasticity of supply of different elements means that it taxes will have to remain low in order to avoid distortions. Second, it may be possible to convert matter into energy in the future, which creates elasticity of supply in both matter and energy, meaning that the taxes on both will have to be reduced to avoid distortions.
Physical space is more straightforward to tax. It’s analogous to land, and people can be taxed for owning particular swathes of space proportional to the rent they can charge for it. It is slightly trickier to implement Georgism on physical space since ownership will have to reconcile relatively stationary swathes of empty space with plots of land on a spinning planet. I think the solution will involve some sort of ownership of space-time where owners of pieces of space in orbit possess the land at its current location and at all future times.
There’s a grab-bag of other things space-Georgism would tax, like spectrum rights, transit routes, and local externalities like debris production, but I expect revenues from these will be smaller than the main sources.
The Elasticity of Colonization
There are some subtleties to implementing this policy. It’s important not to set taxes too high to ensure that there are incentives to search for new sources of energy, matter and land. In particular, since some parts of the universe can end up outside our light cone if we colonize space too slowly, it’s important that these taxes do not slow the rate of colonization. Faster colonization means more total resources and a larger citizens dividend.
These policies have to strike a careful balance; if colonization is taxed heavily, then it will slow growth, if colonization is rewarded too much, then excess capital will be devoted to expansion, which also slows growth.
Notes on Implementation
The taxes on energy and matter will likely be quite low and I suspect they will only be relevant for entities controlling entire stars or solar systems. It will be impractical to tax each individual’s energy use; instead, these taxes will focus on the largest users.
Practically, this could be implemented by estimating the amount of matter and energy in a volume of space and taxing it proportionally. It’s pretty easy to estimate the amount of mass and useful energy in a volume, even from far away, making it possible to implement a sort of cosmic window tax.
For physical space, a sophisticated structure will be needed to record ownership and raise taxes. Its possible that the tax burden will again fall on the largest owners. This would require a massive, secure ownership registry which takes relativity into account (relativistic blockchains anyone?).
It’s also possible that large swathes of space will be exempted from ownership due to common use. For example, empty passages between solar systems should have common ownership since anyone possessing these would mostly engage in rent seeking rather than create new value.
Because of the time it takes to send anything over interstellar distances, these taxes will be exchanged in a local manner. The net balance of payments will be computed for each star system and those systems will exchange with their neighbors so that the net flow of payments across the network matches the taxes each should pay. Fortunately, taxes shouldn’t change much each year since they are only based on the mass-energy in a region and the land value.
Why Do This?
Space Georgism can achieve several important goals for interstellar civilization.
For one, it creates a more equitable market system in space. Set correctly, land value taxes can increase the growth and size of the economy. In fact, maximizing growth should be a key design goal for space Georgism. This economic growth leads to benefits for everyone (even those that don’t colonize space). In addition, Georgism has a built-in system for redistribution, ensuring that the gains from colonization are shared.
This kind of system is crucial to ensuring a peaceful society with diverse agents that share and utilize resources appropriately. Specifically, I see properly enforced taxation as a way to ensure that we share space with AI and other minds. This is one way to deal with the problems that arise when sharing resources with immortal agents. These taxes might also prevent colonizers from burning the cosmic commons.
In addition, land value taxation can catalyze the transition into space. By giving people the right to tax sections of space, it gives them incentives and capital to colonize those areas. For example, it may be possible to finance the colonization of Mars by giving futures to people who can speed up the growth of a Martian colony.
The revenue raised can also be used to fund public goods such as research into faster space travel, efficient energy harvesting, and other challenges for interstellar civilization.
Extending the Georgist paradigm into space neatly solves problems with sharing resources and ensures that colonization proceeds at an appropriate pace. There are still important challenges regarding how to design these policies to optimize the growth rate, encourage utilization of natural resources, and adapt them to the physical limitations of tax technology.