|ISECCo Home||Sponsors||Space Settlement Act||Meeting Notice||Site Map|
How To Get Private Enterprise To Pay For Permanent Space Settlements
By Alan Wasser
Will people ever live and work on the Moon and Mars?
Will the settlement of space take place in your lifetime?
Could you ever go?
Right now, it doesn’t look like any of this will happen in our lifetime, but it could happen if the U.S. Congress passes legislation which would:
1.) save NASA and the taxpayers the cost of developing affordable space transport by allowing private enterprise to assume the burden,
2.) make it possible for ordinary people to purchase tickets and visit the Moon as tourists, scientists, or entrepreneurs,
3.) create vast wealth from what is now utterly worthless,
It will take billions of dollars to develop safe, reliable, affordable transport between the Earth and the Moon. Neither Congress nor the taxpayers wants the government stuck with that expense. Private venture capital will support such expensive and risky research and development ONLY if success could mean a multi-billion dollar profit.
Today, there is no profit potential in developing space transport, but you have the power to change that. You have the power to create a "pot of gold" on the Moon, waiting for whichever companies are the first to establish a "space line" and lunar settlement by risking their own necks, money and sweat.
How? By bringing free enterprise to the Moon and Mars. By making it possible to claim and own, and re-sell to those back home on Earth, the product that has always rewarded those who paid for human expansion: land ownership.
When it ratified the 1967 "Outer Space Treaty" the U.S. agreed not to claim national sovereignty over the Moon or Mars, etc., but that treaty does not say anything against private property. Therefore, without claiming sovereignty, the U.S. could recognize land claims made by private companies, regardless of nationality, that establish human settlements on the Moon or Mars.
The proposed legislation would commit the U.S. to granting that recognition if those who establish the settlements meet specified conditions, such as offering to sell passage on their ships to anyone willing to pay a fair price.
Entrepreneurs could use that promise of U.S. recognition to help raise the venture capital to develop the ships needed to make the claim.
It would take a really large land claim to be worth that huge investment, of course, but there is an amazingly large amount of land out there waiting to be claimed. For example, a claim of 600,000 square miles, about the size of Alaska, would be only around 4% of the Moon's surface, but would be worth about $40 billion at even a very conservative price of $100 an acre.
The price of the land might, by then, be much more. Under this proposal no one would be able to claim lunar land ownership without having first put into service a transport system going back and forth often enough to support a settlement. Therefore, when they sub-divide and offer U.S. recognized deeds for sale back on Earth, lunar land will actually be accessible. It will finally be understood to be land in the sky, not pie in the sky, and it will be offered for sale after months of maximum worldwide press coverage produced by the race to be the first to settle the Moon.
There will be land buyers with business purposes for buying and using land, but there will be a much bigger speculative and investment market. People will buy so they can leave an acre of land on the Moon to their grandchildren, or put their name on a crater.
Land sale profits will, of course, be subject to taxes, so the Budget Office will score this legislation as a revenue producer, not a cost to the U.S.
It sounds strange because we haven't done it yet, but there is growing sentiment for extending private property and the benefits of free enterprise to space. Former House Science Committee chair Bob Walker has suggested that the Bush administration would like to develop such a legal structure.
Before copyright and patent laws, no one could own songs, stories or ideas. The passage of those laws, creating intellectual property, made whole industries possible and added greatly to the world's wealth from things that had previously been valueless. Creating lunar property could be the incentive to open the space frontier to everyone, thus benefiting all of humanity.
Would you support such innovative legislation? If so, why not tell your Congressman and Senator about the idea and this website? If you live in another country, why not suggest such legislation to your own government?
The answers to the most frequently asked questions, and a rough draft of the proposed legislation are attached.
Finally, I want to thank Ray Collins very much for creating and maintaining this web site, and for inviting me to post my proposal here.
Alan Wasser, AWasser@worldnet.att.net
Questions and Answers:
What is the real purpose of enacting a land claims recognition law?
The objective is NOT the establishment of a property rights regime for space.
It is to enable the expansion of the habitat of the human species beyond the Earth! It is to encourage private investment to develop affordable human transport to the Moon and Mars by offering a huge financial reward for privately funded settlement.
There are alternative space property rights schemes being proposed by some lawyers that would, instead, make settlement even harder than it would be now. They would require that, if you do pay to develop space transport, you would then have to pay the UN or some other body even more for the land you want to settle.
Property rights legislation should be judged by how well it encourages space settlement, not on how elegant the resulting property rights system is.
Property laws could be left to evolve after settlement, except that settlement just isn't happening without them, so we need something like this legislation to jumpstart it.
What does international law say about private property ownership in space?
Early in the negotiations for the Outer Space Treaty, the USSR suggested that the treaty ban private activities in space but, at the insistence of the Americans, all such provisions were dropped from the final treaty. According to the New York Times report of the U.S. Senate ratification hearings for the Treaty, (March 7, 1967) Senator Albert Gore (Senior) worried that the "benefit of all" provisions of Article 1 of the treaty might inhibit space activities. The Times says Arthur Goldberg, who negotiated the treaty for the U.S., reassured Gore by describing "the article as a 'broad general declaration of purposes' that would have no specific impact until its intent was detailed in subsequent, detailed agreements."
The one serious attempt to establish such a follow-up agreement was a disaster that the U.S. Senate refused to ratify, specifically because it attempted to ban private property. It was the 1979 "Agreement On The Activities Of States On The Moon And Other Celestial Bodies" generally referred to as "The Moon Treaty". It would have replaced the "benefit of all mankind" language with the drastically different "common heritage of mankind" doctrine. Some third world countries have claimed that the "common heritage" doctrine would mean that anyone wanting to establish a lunar settlement might have to pay off the leaders of every nation on Earth.
Fortunately, since it wasn't ratified by the U.S. or any other spacefaring nation, the Moon Treaty is generally regarded as a dead letter, and is not binding on the U.S. or its citizens. Thus, as things stand now, private entities can claim ownership of land on the Moon "on the basis of use and occupation" although nations cannot.
Resistance to this idea in the State Department comes from those who sincerely believe only governments and government employees belong in space at all, ever, as a matter of principle and safety.
Can there be property ownership without sovereignty ?
In countries like France, which follow what is called "civil law" (as opposed to "common law" which the U.S. inherited from the U.K.) property rights have never been based on territorial sovereignty but on the "Natural Law" theory that individuals mix their labor with the soil and create property rights independent of government, which merely recognizes those rights.
Throughout history, actual settlement, – "occupation and use" – has been the traditional basis for claims of ownership of land that had no sovereign. Columbus claimed the land he discovered by leaving a garrison on it, not by planting a flag. We want the U.S. to treat the settlement, itself, as having one of the attributes of a sovereign: the right to claim private ownership of unowned land by right of use and occupation.
For property rights on the Moon, the U.S. will have to recognize Natural Law's "use and occupation" standard, rather than the common law standard of "gift of the sovereign", because the common law standard cannot be applied on a Moon where sovereignty itself is barred by international treaty. The U.S. will have to say that, because there can be no government on the Moon, a true settlement can give itself title, just as though it were a government, and its property deeds, for land under its control, will be recognized by U.S. courts of law, (subject to specified limitations) just as titles issued by France, China and even Iraq, are recognized by U.S. courts.
Why not give smaller, limited land grants for easier steps than settlement?
Where the U.S. has sovereignty, and is the source of ownership, the government can give ownership of land, or limited rights to its use, for whatever reasons it chooses. But, since no nation can claim sovereignty on the Moon and Mars, the only thing governments can do is to recognize, or not recognize, a claim made by a private entity.
Since actual settlement has always been the traditional basis for a claim of ownership of new land, space claims, even limited ones, based on less than settlement would be much harder to justify to the courts and the world.
More important, human settlement of space is our real goal! We are a lot more likely to actually see it happen if it is the required condition to win anything. Giving limited ownership for less could reduce the incentive, for both the winners and losers of the first round, to keep going full out toward settlement. Only when there is a live human being waiting on the Moon for the return flight can we be really sure that there will be a return flight, even if the accountants say, "put it off for a few years, or more."
But the most important reason to reserve grants for actual settlement is the following:
Can lunar land really be worth enough to make a real difference?
The dollar value of an acre of lunar land goes up exponentially the day buyers can actually buy a ticket and go there, or send a representative or a customer. That means the value of the grant goes up exponentially if we hold it back until there is a space line going back and forth.
The value of the land claim can be similarly increased if we capitalize on the media coverage of a space ship taking off to try to win the race to establish the first human settlement on the Moon. The day people land on the Moon, set up permanent habitation, and stay there while the ship goes back for more people, they will be the whole world's heroes. At that very moment, back on Earth, their representatives will finally be free to start selling, at huge prices, seats on subsequent trips, … and, at prices people all over the Earth can afford, valid deeds for land around their base. People will even buy land as a way to support, or just feel part of, the project.
Then, and only then, will a lunar land claim reach the multi-billion dollar value that would make a real difference, … enough to justify even the billions it took to win it.
What conditions should the U.S. set for recognition of a claim?
It should set an appropriate limit to the amount of land that can be claimed, (and it will be easier to increase the size of a grant, later, than to reduce it). It should require the settlement to behave by international norms. It should require that the settlement be open to all and prohibit anti-competitive behavior. Regulations could even include protection for sites of historical or other special importance.
Why must the space line and settlement be open to all paying passengers regardless of nationality?
International law clearly requires that opening the space frontier must "benefit all mankind" and that there must be "access to all areas of celestial bodies".
The 1967 "Treaty On Principles Governing The Activities Of States In the Exploration And Use Of Outer Space, Including The Moon And Other Celestial Bodies", in its very first article, says, "The exploration and use of outer space, including the moon and other celestial bodies, shall be carried out for the benefit and in the interests of all countries ... and shall be the province of all mankind. ...and there shall be free access to all areas of celestial bodies."Article XII says: "All stations, installations, equipment and space vehicles on the moon and other celestial bodies shall be open to representatives of other States Parties to the Treaty on a basis of reciprocity. Such representatives shall give reasonable advance notice of a projected visit, in order that appropriate consultations may be held and that maximum precautions may be taken to assure safety and to avoid interference with normal operations in the facility to be visited." All settlements and property owners will have to accept that rule unless the Treaty is ever changed.
Establishing a space line and settlement open to all paying passengers, regardless of nationality, would certainly benefit all mankind, thus making it both necessary and sufficient to meet these conditions of international law.
Do Land Grants work?
Much of the United States was developed by the use of land grants, from large parts of the original 13 colonies through the settlement of the West. Congress, not wanting to use government funds, used land grants to encourage the building of the transcontinental railroads.
Fortunately, the application of land grants to space has a big advantage over their use for building railroads. To get a railroad built, someone (usually whoever has the best political connections) must be selected and given a monopoly over the right of way before they have proven that they can and will deliver on their promises. Railroad companies' promises were often broken. In space the grant can be structured to promote real competition, rewarding only those who have actually gotten the job done, by requiring actual "use and occupation" for all property claims
Could this law produce a new "space race"?
Clementine and Lunar Prospector have demonstrated that the poles of the Moon have many potential advantages over other areas of the Moon, especially frozen water deposits and mountain tops that are not cursed with 14 days of darkness every month. The team that is first to find a way to build affordable human transport to the Moon would get first choice of the Lunar poles. The second would have to settle for the less desirable pole. Claims after that would be worth much less. That should provide a powerful incentive to race to be the first.
Will other sources of revenue be needed?
Even if land sales can pay most or even all of the initial cost of developing a space line and establishing a settlement, other sources of revenue will have to pay for the continuing operating expenses. Among the many such possible sources of revenue are tourism, government and university research stations, the production of entertainment such as movies and televised low-gravity sports, etc., mining of resources like Helium 3, power generation, and even the sale of lunar souvenirs such as jewelry made from Moon rocks. But we can't possibly predict, now, all of the future sources of revenue. The opening of frontiers always leads to the development of new businesses that would have been impossible to foresee in advance.
Could other sources of revenue be enough, without land claim recognition?
All these years after humanity first landed on the Moon, no one is investing serious money in going back to stay. That fact alone is proof that the currently possible sources of revenues are not enough and must be augmented somehow.
This project will not only cost a lot, it will take a lot of time, pushing the limits of how long investors will wait for a return. The other ways to make money will all take additional time and investment to start paying off. Only land sales can produce returns as soon as the settlement is established, and therefore they will be the first dollars earned by the investors. That would make land sales particularly important in the business plan of any private settlement effort.
What if the settlement does not produce enough operating revenue to pay off its debts and make a profit?
Land grant railroad companies went bankrupt, but the new owners kept operating the trains. This legislation must be structured to be sure that, if a settlement company goes bankrupt, its ships and settlement will be sold, if need be, for pennies on the dollar, to others who will keep them operating.
Is this only for Americans?
The legislation cannot claim U.S. sovereignty and should grant equal opportunities to citizens of all nations to invest in settlement projects, to purchase tickets on the space line, and to purchase land. It should offer reciprocity to all other nations that pass similar laws.
Given today's global economy, it is likely that all entrants in the race to establish a settlement will be multi-national consortia. The investor/owners will be drawn from all around the world, and the teams of aerospace companies cooperating to build the ships will, too. It is just too big a job for one company, or even one nationality, to undertake alone.
One of the benefits of this legislation is that it will probably lead to the negotiation of a new space treaty providing international recognition of property rights in space in return for providing non-discriminatory access to all. At the moment, the diplomatic community, much of which would prefer space remain open only to governments anyway, sees much higher priorities than a new space treaty. If this legislation passes, and nothing further is done, the U.S. will have created the de facto property regime for the Moon, and settlement will seem imminent. That should give the diplomatic community a strong incentive to start negotiations toward a new treaty.
Why is U.S. legislation so important?
Because the U.S. is where the money and the media are, the U.S. will be the first and most important market where the land deeds will eventually be sold to the public. Therefore, it is the U.S. courts that will rule on whether lunar land sales are valid transactions or frauds. What this legislation does is tell the courts what standard to use in making that ruling.
What about Mars and the asteroids?
The same principle should work for Mars as for the Moon, only the size of the grant should be much larger, because the cost of getting there will be higher and also because Mars itself is larger than the Moon. We propose a Martian claim be 3,600,000 square miles, roughly the size of the United States, worth 230 billion dollars at even $100 per acre. Land on large asteroids should come under a similar system as land on the Moon. Small asteroids might be viewed differently.
Could the U.S. withdraw from the Outer Space Treaty, claim national sovereignty on the Moon, then award property rights to whomever it pleased?
The Outer Space Treaty says any nation can withdraw from the treaty on one year's notice. Some suggest this would be a simple route to establishing private property on the Moon, but it is a dead end. There is no chance at all we will withdraw from the treaty because, in some ways, it provides a sound framework for activities in space, and it includes provisions, such as banning weapons of mass destruction from space, that are considered much too important to tamper with.
That may actually be a blessing in disguise. If the U.S. did have sovereignty, land grants would undoubtedly be handed out on the basis of political connections, not on the basis of actually having opened the space frontier. Those who had received the land grants could then charge those who wanted to establish a settlement, rather than funding them. Thus, private property established that way might delay settlement, rather than hasten it.
Does recognizing a land claim obligate the U.S. military to defend the settlement?
No! U.S. recognition of land ownership means its courts, not its military, must defend ownership. At the most, the U.S. might impose economic sanctions against any aggressor, if there ever were one. But stolen land would be very hard to sell, so it makes overwhelmingly better sense to buy land from the first settlement than to try to develop a transport system capable of mounting a war of aggression against it. Anyone who had such ships could use them to establish a whole new legitimate settlement, rather than fighting to steal some of the 4% of the Moon in the first settlement. In later years, settlements will establish their own defenses.
What effect would this have on NASA and the aerospace companies?
This legislation would create a huge demand for space ship design ideas and expertise, greatly benefiting the companies. NASA would continue to do basic research and design that would help everyone, and individual centers might well be allowed to contract to work on specific problems on a proprietary basis. NASA could also play a role in helping to determine whether ship designs are safe and reliable and whether a genuine permanent settlement has been established.
Who came up with this idea?
Alan Wasser is a former broadcast journalist at ABC News and CBS News, who then owned and operated a successful international business, which he sold. He was the Chairman of the Executive Committee (CEO) of the National Space Society and is now a member of its Board of Directors. He was a member of the Board of Directors of ProSpace, and is an Advocate of the Space Frontier Foundation.
He was the first to propose that the first human settlement on the Moon might use a permanently sun-lit mountain top at the moon's south pole, the existence of which was only later confirmed by the Clementine mission. Much of Ben Bova's novel "Moonrise" takes place on that lunar mountain, which Bova named "Mt. Wasser".
He is the originator of the idea of using land claim recognition to make privately funded space settlements potentially profitable, and therefore possible in our lifetime. He is the author of numerous articles on the subject of space property rights, most recently in "The Explorers Journal", the official magazine of the Explorers Club, "Space News", "Ad Astra", "Space Governance", "Space Times" and "Space Front" among others. "Space Governance" published a rough draft of the actual legislation being proposed in this letter, which is reproduced below. His email address email@example.com
First draft of "An Act to Promote Privately Funded Space Settlement"
The expansion of the habitat of humanity through the establishment of space settlements will be of inestimable value for America and all mankind. Because the government needs to limit expenditures, it will be even better if financed by private capital rather than the taxpayer's money.
Unfortunately, the potential short term profit sources are much too small to attract the billions of dollars of private capital necessary, and so, a new incentive is badly needed. The potential value of land on the Moon, Mars, or an asteroid can provide that economic incentive for privately funded space settlement. It is the only possible incentive which will not cost the government anything.
As far as the U.S. is concerned, there is currently no international law on private land ownership in space because the U.S. (and most other major nations) deliberately refused to ratify "The Agreement Governing the Activities of States on the Moon and Other Celestial Bodies", 1984, (hereafter called the Moon Treaty). The U.S. Senate's refusal to ratify means that the Moon Treaty's provisions are not "the law of the land" in US courts, and therefore need not inhibit the actions of US citizens or legislators.
Even more important, the very fact that the framers of the Moon Treaty felt it necessary to attempt to write a rule forbidding private ownership of land on the moon, can itself be taken as a clear confirmation that that objective had not already been accomplished by "The Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial Bodies", 1967, which the US did ratify, (hereafter known as the Outer Space treaty), nor by UN resolution GA/res/1962.
Thus the failure of the Moon Treaty means there is no legal prohibition in force against private ownership of land on the moon, Mars, etc. as long as the ownership is not derived from a claim of national appropriation or sovereignty (which is prohibited by the Outer Space treaty).
Congress presumes that it is only a matter of time until new treaties are negotiated, establishing a functional private property regime and granting suitable land ownership incentives for privately funded space settlements. The US will, of course, abide by such new international law when it has ratified such a new treaty. But, given the urgent need for privately funded human expansion into space, as soon as possible, Congress feels something must be done immediately, on a provisional basis, to correct the present inefficiencies in the international standard on property rights in space and to promote privately funded space settlement.
For property rights on the Moon, etc, the U.S. will have to recognize natural law's "use and occupation" standard, rather than the common law standard of "gift of the sovereign", because the common law standard cannot be applied where sovereignty itself is barred by international treaty.
U.S. courts already recognize, certify and defend private ownership and sale of land which is not subject to U.S. national appropriation or sovereignty, such as a U.S. citizen's ownership (and right to sell to another U.S. citizen, both of whom are within the U.S.) a deed to land which is actually located in another nation. U.S. issuance of a document of recognition of a settlement's claim to land on the Moon or Mars, etc. can be done on a basis analogous to that situation.
This legislation concerns only the issuance of such a U.S. recognition and acceptance of a settlement's claim of private land ownership based on use and occupation, regardless of the nationality of the owner, and nothing in it is to be considered a claim of national appropriation of, nor sovereignty over, any outer space body, or any part thereof. The U.S. does not claim the right to "confer" private land ownership and the U.S. states it is most definitely not making any claim of "National appropriation by claim of sovereignty, by means of use or occupation, or any other means" as prohibited by the Outer Space treaty.
Private entity: An individual, corporation or consortium of companies, which is not controlled by a sovereign state or government.
All U.S. courts and agencies shall immediately grant recognition, certification and defense to land ownership claims based on use and occupation, of up to the specified size, from any private entity which has, in fact, established a permanently inhabited settlement on the Moon, Mars or an asteroid, with regular transportation between the settlement and the Earth, open to any paying passenger.
For a land claim to be granted such recognition and certification, the settlement must be permanently and continuously inhabited. Deliberate abandonment of the settlement shall be grounds for invalidating land ownership derived from that settlement, but there shall be no penalty for brief unintentional absences caused by accident, emergency or aggression. The location and the population of the settlement may change, as long as there continues to be an inhabited settlement within the claim.
The claimant must commit to consistently make good faith efforts to promptly offer, or arrange for, safe convenient transportation to and from the settlement to all, regardless of nationality, who are willing to pay a fare sufficient to cover expenses and a reasonable profit. If demand for transport exceeds supply, and the claimant is making a good faith effort to increase the availability of transport, it may give preference to passengers and cargo offering the largest financial inducement. It may set appropriate standards of behavior and safety, etc. for passengers and cargo and the use of its facilities, but it may not act in an anti-competitive manner. It may not unreasonably deny landing rights, and the right to transport passengers and cargo, to any other safe and peaceful vehicle willing to pay a reasonable fee for such landing rights.
The private entity that establishes the first such settlement on the moon, and meets the other conditions of this law, shall be entitled to be granted full and immediate U.S. recognition and certification of its claim of ownership of up to 600,000 square miles in a contiguous, reasonably compact shape which includes its base.
Given the greater distance, expense and amount of available land on Mars, the private entity that establishes the first such settlement on Mars shall be entitled to be granted full and immediate US recognition and certification of its claim of ownership of up to 3,600,000 square miles in a contiguous, reasonably compact shape which includes its base.
The private entity that establishes a permanently inhabited base on an asteroid shall be entitled to be granted full and immediate U.S. recognition and certification of its claim of ownership of up to 600,000 square miles in a contiguous, reasonably compact shape which includes its base, or the entire asteroid if its surface area is smaller than 600,000 square miles.
Recognized ownership of land under this law shall include all rights normally associated with land ownership, including but not limited to the exclusive right to mine any minerals or utilize any resources on or under the land, as long as it is done in a responsible manner which does not cause unreasonable harm to the environment or other people. If the requirements of this law continue to be met, all rights, privileges and responsibilities shall be immediately transferable by sale, lease or other appropriate means to any other private entity.
As long as the required conditions continue to be met, U.S. recognition documents shall remain valid for 100 years or until the U.S. ratifies a treaty that establishes an international property rights regime which gives comparable reward to privately funded settlement, whichever comes sooner. If, after ten years, these limits prove to have been insufficient to get privately funded settlement efforts started, Congress or some national or international authority it delegates, shall consider whether the maximum size of grants should be enlarged.
The U.S. urges other countries to adopt similar laws and the State Department is hereby instructed to try to negotiate a new multi-lateral treaty, or bi-lateral treaties with individual like minded nations, making the same land grant rules into international law. All rights and privileges conferred by the law shall be available equally to the citizens (individual and/or corporate) of any nation which passes laws or ratifies a treaty offering similar rights to U.S. citizens.
If need be to secure international agreement, the State Department is authorized to agree to treaties which require that all claimants must be consortia which include companies or citizens from several different countries. It can even be required that at least one of the partners in each consortium be from a developing country.
The U.S. pledges to defend recognized extraterrestrial properties by imposing appropriate sanctions against aggressors, whether public or private.
Each successive settlement on a body may receive recognition for a claim of up to fifteen percent less than the preceding one was entitled to. No entity (nor two entities which are effectively under the same control) shall receive recognition for a controlling interest in two land claims on the same body. An entity which controls one settlement may, however, sell services such as transport, to a genuinely independent entity which establishes a different settlement and makes a second claim on that body. In the event it cannot be established which of two settlements on the same body was established first, each may claim seven and one half percent less territory than it would have been entitled to if it were clearly the first of the two. If, in such a case, the land claims of the two settlements overlap, and the claimants are unable to divide the land between themselves through negotiation, the court shall allocate the land between them as it sees fit, before recognizing the claims.
Alan Wasser, 5/01, AWasser@worldnet.att.net