poly: Re: Why interest rates may stay low

Peter McCluskey writes:
>>... a careful analysis ... needed ... You have to persuade us that tech X
>>would create so many attractive investments that even when well over half
>>of world income is devoted to (prematurely) investing in tech X, the worst
>>investments would still be expected to have a persistently large real ROI
>>(say over 20%/yr continuing over a decade). This must be true even when one
>>considers ... bottleneck property rights, such as patents, LEO slots, ...
>
> Ok, I'll start with a very simplified version of the colonizing probes.
>... capable of reaching 0.99999c and establishing possesion of at least one
>solar system. ... up to 10^10 solar systems massing an average of 10^33 grams
>each at an average distance of 50000 light years ... most value consists of
>ownership of mass/energy. In the reference frame of the probes, the average
>time to the destination is a little over 200 years. I assume that makes the
>average time to destination from today about 300 years. ... rate of return
>to acquiring mass as a function of Mprobe:
>
> Mprobe || Annualized % return
>==================================
> 10^25 || 6
> 10^20 || 10.5
> 10^15 || 15
> 10^10 || 19
> 10^5 || 23

OK, this is a start. But you neglect these crucial issues:
1) Amoritized mass of systems to mine, build, energize, and launch probes.
2) The vast majority of probes will likely be smashed en route.
3) It takes time to colonize a new system, making mass useful there.
   Until a few golf-courses, scenic beaches, and five star hotels are built,
   quality of life may be consider unacceptably low :-).
4) Mass and energy at our and nearby solar systems can become a bottleneck
   resource, and so worth more (and priced higher) than mass far away.
5) I'm not sure the subjective time enroute is the relevant number. Colonists
   might compare going out to colonize and them coming back here to staying
   here the whole time. We may have space-time interest, comparing the
   relative value of resources at each space-time event to that at some
   reference event. (I modeled this in my paper.)

> I expect that the ability to throw a few orders of magnitude more reaction
>mass into a launch than a mass-efficient design requires will allow less
>efficient designs to reach the target speed earlier, producing some of the
>interest rate reducing effects you mentioned. But I expect that once the
>mass used per probe gets up around 10^20 grams, the advantages of using
>more mass will be out be outweighed by factors such as ...

Consider instead premature investment in the sense of launching probes when
probe speed is much less than you've assumed, and probe reliability, hardness,
and efficiency are also much less than I think you've implicitly assumed.

Even assuming people ignored en-route time when considering probe investments,
what if people started launching probes when they first estimated ROI >~10%/yr?
What if they started bidding up the price of mass and energy for probes in
anticipation of future improvements in probe technology, and hence later high
demand for mass/energy? What if in anticipation of high later mass/energy
prices people fought for solar system mass sources, and started fighting just
when, with early near-solar tech, the estimated ROI on such mass grab fighting
was >~10%/yr? Would >70% of world income then be devoted to these first
fights? I don't think so, and if not, this fails to be a break-out technology.

Robin Hanson
hanson@econ.berkeley.edu http://hanson.berkeley.edu/
RWJF Health Policy Scholar, Sch. of Public Health 510-643-1884
140 Warren Hall, UC Berkeley, CA 94720-7360 FAX: 510-643-8614
Received on Fri Mar 20 19:28:42 1998