History of the Emergence of the Earth’s Global Economy
The focus of this article is to encourage and promote the wonders of discovery, trade, and commerce with an alternative economic financial system for space businesses and entrepreneurs – a financial system that is not based on the current global financial model. The current system is proven to be a problematic financial model, that leaves nations, businesses and its populations in financial dire straits (massive debt) for centuries on end.
Understanding how the solar system economy might emerge and eventually grow, it’s important to have a basic knowledge in economic history of how the Earth’s global economy was formed and developed.
History clearly shows that exploration and economic incentives are not mutually exclusive. Exploration and economic incentives occur together, they go hand in hand, the one complements the other. Western European explorers and their investors were motivated by economic gains which contributed to a greater level of knowledge of the world, resources, the stars, and technological advantages.
The Age of Exploration (also known as the as the Age of Discovery) was instrumental in allowing Western Europeans to gain an understanding about the world, such as the location of continents, how oceans and waterways connect, location of natural resources, importance of trade routes, and of course the creation of accurate mapping. This advantage eventually allowed them to control and conquer 84% of the Earth.
Leaders of the Earth’s Global Economy
What do Portugal, Spain, The Netherlands, France, England and the United States of America all have in common with regard to the Earth’s global economy? They all had or currently have the fortune or misfortune (however you may want to look at it) in having their nation’s currency serve as the world’s reserve currency.
You may ask, what is a reserve currency and how does it contribute to the global economy? Basically, the reserve currency serves as a global currency for global trade and this currency is backed up by global trade agreements, treaties, banks, nations, and businesses. Without the absolute global confidence of a global reserve currency, international trade would not be possible. Lifestyles and purchase options as we know it would not exist without access to goods and services from nations around the world.
It does not make economic sense to use Earth’s reserve currency as a model for the space economy. History shows that once a nation has achieved the reserve currency status, which might last a little more than a century, the nation declines with massive financial debt. Their end is worse than their beginning.
For example, Spain had the reserve currency status from 1530 – 1640; 110 years in total. England had the reserve currency status from 1815 – 1920; 105 years in total. Both nations have never financially recovered once the sought-after reserve currency status was obtained. Over the course of time, it appears that all nations that gain this status share in financial ruin and their populations experience massive financial servitude. This history should be a warning for all nations hoping/fighting (such as China) to obtain the status of holding the global reserve currency title.
Introduce New Best Practices to Promote and Establish a Stable and Solid Space Economy
According to Collins dictionary, “an economy is a system according to which the money, industry and trade of a country or region are organized.” The definition of a solar system economy is reflective of the general definition of an economy. That being said, a solar system economy is an independent off-terrestrial, self-supporting trade system designed to benefit and sustain governments, corporations, cultures and people that use space resources to further the goals for humankind expansion beyond Earth’s solar system.
Today we are witnessing partnerships being established between governments, organizations, private space businesses, and space entrepreneurs, including: ESA, NASA, Space Resource.lu, SpaceX, Blue Origin , The Hague Resource Governance Working Group , China, and others. They all have an objective to contribute to the space economy via trade and commerce.
Blindly and continuously following the current global financial model is financial suicide. The current Earth’s global financial system should not be introduced or used to establish or nurture the space economy. It is imperative to create a healthy, sustainable, and business friendly space economy and not introduce or use the current Earth global financial model.
Therefore, in order to foster the emergence and growth of a stable, solid, and trusted space economy, stakeholders must consider sustainable stability when developing the inner solar economy. Once economic stability is established, then branch out to the outer solar system and beyond with a solid space economy. There must be a reserve currency that is recognize by Earth’s citizens, as well as the citizens in the solar system and beyond. As a reminder, “true” reserve currencies must be backed by trade agreements and treaties representing all trading partners that pledge their absolute truth and confidence, to promote sustainable trade, commerce, and prosperity. Currently, we do not have a real-world example of what a solid space economy may look like.
This article is a first of several series of articles, written with the space entrepreneur in mind. The objective is to provoke, investigate, explore, promote, encourage and assistance in establishing a healthy and sustainable space economy; within the solar system and beyond.
Posted by Michael Clanton