About Those Golden Asteroids...

     Asteroid mining is one of the current buzzwords of interplanetary capitalism.  In 2017, an asteroid estimated to hold $50 billion worth of precious metals such as gold and platinum passed about four times the distance to the Moon from Earth.  Venture gurus are already salivating at the chance to lay hands on such wealth.  US-based Planetary Resources and Deep Space Industries,  as well as Britain's Asteroid Mining Corporation, have started to plot out the feasibility of reaching, capturing, and exploiting the metallic asteroids that whiz by our planet.  Of course, most asteroids are of the stony variety and offer much less attractive prospects for instant enrichment.  But Harvard astrophysicist Martin Ellis has estimated that there may be about 10 near-Earth asteroids rich enough in precious metals to invite large-scale mineral exploitation.

     The stakes are dauntingly high.  Cal Tech sources have proposed a cost of $2.5 billion to construct an asteroid-mining spacecraft, as opposed to the $1 billion cost of opening and operating a new platinum mine on Earth.  Yet there is something about the shimmer of precious metals that has always lured humans into even the most dangerous and high-risk enterprises.  The scale of imaginative greed is mind-boggling: MIT scientists have estimated that a single 500-meter asteroid could produce up to 175 times the entire Earth's annual output of platinum. In particular, the body with the designation  2011UW158 is thought by some to offer a profit of $2 billion in platinum.  Some other metallic asteroids are evaluated at over $1 trillion.

     There is supposed to be some legal framework to prevent the neighboring sections of the solar system from becoming a new Wild West.  The United Nations is mandated by treaty to make sure that space is administered fairly for the benefit of all humankind.  Yet, American courts have already handed down decisions that effectively vitiate this oversight, claiming that anything in space is the property of whatever people or corporations lay claim on it.  The USA has effectively claimed ownership of all the asteroids it can land on and is preparing to do just that.  Moreover, Trump's recent proclamation of a completely American Space Corps shows that our nation plans to militarize space, in contravention of other existing international treaties and agreements.  When ore is at stake, history shows us that even the treaties recognized by the United States mean little.  When gold was discovered in the Black Hills of South Dakota, solemnly deeded by the government to Native American tribes in remuneration for previous land-grabs, Gen. G. A. Custer quickly contrived reasons to annihilate the Sioux people.  Though he was punished at the Little Big Horn, plenty of other generals and politicians lined up to complete the scheme.  Antarctica is already a lesson in point.   Despite statutes guaranteeing its non-partisan preservation, our nation has led a slew of greedy powers rushing to stake out every inch of the continent, polluting it with nuclear reactors even as the first buildings go up.  There is no doubt that as soon as an opportunity presents itself, capitalist powers will put the solar system up for grabs with no holds barred.  

     There are more than just ethical reasons to pause and give thought to this scenario.  There is the cold, hard fact of economic history that has unrolled here on Earth already.  Within less than a decade after Spain "discovered" the New World, conquistadores began pumping out unbelievable quantities of gold and silver that startled specie-starved Europe.  Just as modern wealth accrues directly to the CEOs and stockholders, bypassing a dwindling middle class, Native American treasure, redubbed Spanish, was not the property of the Spanish people, but was personally owned by the King.  Like our current congress, he had one favorite destination for this money -- armies to allow him to conquer the world.  The USA has bases in 170 countries.  The Spanish crown was the early modern equivalent, lavishing budgets on forces that made war on the entire world.  From their throne in Madrid, the monarchs gobbled up the Holy Roman Empire, Germany, Austria, Italy, the Low Countries, the islands of the Mediterranean, the coast of North Africa and dreamed of going further still.  The waste was unprecedented in the course of time.  Yet, with all of this expense, Spain could not conquer London, Paris, Amsterdam, or Istanbul.  Where are all those armies, all those fortresses, now?

     With this in mind, one might be tempted to think that worst case scenario for asteroid mining might be the danger of universal war, but one would be wrong.  The most insidious effect of the influx of Spanish gold was not on the front lines, but behind them, in Spain itself.  It operated not by the bloody laws of war, but by the inexorable processes of wealth itself.  Between 1500 and 1600, in the heart of the siglo de oro, when Spain might have been expected to achieve paradise on Earth, its economy collapsed.  A 300% inflation in prices impoverished the majority of its inhabitants.  The tide of too much cash drove up prices for the limited products and means of life available.  Money was spent by the rich on foreign luxury goods, while Spanish businesses could not compete and folded -- perhaps an early analog to today's outsourcing.  At the same time, an instant and unshakable severe trade imbalance grew and the outflow of wealth stifled local initiative.  Bedazzled by the temptation to borrow on its seemingly limitless bonanza, the Spanish government itself became insolvent.  Between 1557 and 1596, Spain defaulted four times due to military costs and the impossibility of taxing its penniless population.  

     What would happen to our world economy if, within only a few years, Earth was flooded with many times the accumulated mass of precious metals now on the planet?  As with Spain, Earth would be in danger of seeing precious metal itself start to lose its value.  Gold would be the most critical culprit, for most of the world's major countries support the value of their currency to some degree with it.  What if the vaults of Fort Knox, dwarfed by quantities of interplanetary gold, suddenly became like Deutschmarks in the 1920's, enough to buy a handful of potatoes?  Fine, you say,  ban the gold or stock it up on Mars and we will be fine.  It is true that no existing governments are leveraged on platinum or even less flashy minerals like cobalt, magnesium, rare earths, copper, or aluminum, but a massive influx or these or other extraterrestrial materials could wreak untold havoc on markets.

     The time to start planning for a panic is before the panic happens.  To rely only on "affected industries" would be folly.  The are and will continue to be blinded by what George Soros calls the Speculative Function (seeing what you yearn to see) rather than by the Analytical Function (seeing what is).  We will need the best kinds of glasses to read into the secrets of this future, and they had better not be rose-colored.  Otherwise the Gold of the Asteroids might follow the Gold of the Indies, right into the dustbin of history.