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What kind of currency will they use? Is it possible, logical or desirable to establish a Martian dollar or does it depend on the size of the city?
There is no particular reason not to have long-term Martian currency, even if it's a small town. In the short term, however, to avoid the costs and complications of its own monetary policy, I think Mars will use US dollars.
What can we learn from previous experiences? You mention the railroad in your essay "Space, the last economic frontier" as offering lessons on government incentives, as this has stimulated development but also the concentration of economic power. These stories also remind me of the colonization of North America and the founding of the United States. Is there a useful historical precedent to help us understand how the Martian economy would develop?
No historical example is a perfect analog – NASA historian Roger Launius has written a report on this. One trick is that Mars probably has no value as a source of natural resources, unlike most of the Earth's colonies. It is therefore probably better to think of a settlement model rather than a colonization model.
Science fiction has written a lot about how our physical body would change with the gravity of Mars (which is lower than Earth's). And the recent study of twins Kelly on twins suggests that our genes will also respond to the presence of space. The implication is that we could really become a different human type on Mars over generations.
I also think that the Martian colonies will give us an opportunity to try some political and economic systems impossible to achieve in the existing states on Earth. For an economist, this is perhaps the most exciting thing about regulation in space!
What type of system comes to your mind?
Various thinkers and visionaries have long presented utopian economic models, ranging from egalitarian socialism (where, for example, you could imagine that each settler is given an equal share of the land and product of the colony) to libertarian capitalism (where, on the contrary, you can imagine a minimal state with maximum confidence in the market). On Earth, our stories make it difficult to follow one or the other of these "pure" patterns – among others – but if you had settlers who chose a colony to join and conceived from scratch, maybe we could really try them. We would certainly learn a lot if yes.
This Q & A has been modified for brevity and clarity.
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