Thursday, September 24, 2015

What is the minimum population for a modern society?

Elon Musk's push to send a million people to Mars (a plan which I think is misguided) highlights an interesting question: How many people do we need to operate a modern society?

I'm writing this article on a computer made from components that were built in a dozen different factories. In turn, these components were made from materials from all over the world. The plastics were likely made from Middle Eastern oil, copper probably came from Chile, silicon from China, lithium from Australia, chromium from South Africa, nickel from the Philippines, etc...

Currently, the modern world is built on a complex web of global trade that relies on tens of millions of people. Simply reproducing basic pieces of critical technology on a new planet would take numerous mines, refineries, and factories spread all over. Each of these factories would need to be staffed and would require local communities to provide them with basic services.

The minimum number of people a new planet would need to be capable of building computers, tractors, phones, antibiotics, and other basic necessities of modern life could easily be in the millions or tens of millions.

This creates a serious problem for any possible colony, on a new planet either in this solar system or a nearby one, with relatively few solutions:
  1. Send a truly massive number of colonists at once.
  2. Pay the expense of constantly providing a colony with new technological supplies for decades.
  3. Have colonists willing to lose access to modern technology for possibly generations until the population grows to a minimum level. (Not really viable on a planet without a breathable atmosphere.)
  4. Find a way to make necessary equipment extremely durable while the population grows.
  5. Come up with a way to make advanced technologies on a small scale using few elements, like super advanced 3D printing.
A good planetary colony proposal or science fiction story about a colonization really needs to think about how to solve this problem of scale.

Thursday, September 10, 2015

Colorado's accidental experiment on legal marijuana taxes

Thanks to the unusual set of rules governing taxes in Colorado, the state is about to perform a natural experiment to test how much marijuana taxes matter to consumers. On September 16th there will be no adult use marijuana excise taxes in Colorado. From Time:

Colorado’s Taxpayer’s Bill of Rights requires voter approval for new taxes. In 2013, a year after legalizing recreational pot, voters approved the 25 percent taxes. But the law requires that any new taxes be waived and refunded if overall state collections exceed projections given to voters when they approved the new taxes.

In this case, the pot taxes were projected to raise $70 million in 2014. They actually raised $58 million, but because overall tax collections that year exceeded projections, Colorado must ask voters for permission to keep the money. And to comply with the requirement that the taxes revert to zero, lawmakers settled on a short one-day tax waiver.

That day is Sept. 16, one day after the state’s books for the previous fiscal year are made final.

One of the biggest policy questions for marijuana reform is what tax rate to set. Many jurisdictions and legalization proposals are focused on trying to find the sweet spot which maximizes revenue but remains low enough to undermine the black market. So it will be very interesting to see by how much legal adult use marijuana sales increase in September and compare that with a few weeks before and after.

There is almost guaranteed to be some spike in sales during this one-day tax holiday, but it would be very informative to look at the data to try to find out why. Does it mainly come from regular customers delaying their purchases a few days for a tax break, or will a significant number of people who have been purposely using the black market to avoid taxes take advantage of this opportunity to go to the legal stores?

If the total sale of legal adult use marijuana for all of September and October simply average out to be roughly the same as other months, then it would probably be safe to conclude any spike in sales on September 16th was mainly caused by people who would have used the retail stores anyway. The net effect would be the same amount of legal weed being sold over this time period. On the other hand, if this one-day tax holiday causes an even larger spike in sales than that, it would indicate the tax holiday caused a significant number of people to at least temporarily use the legal market instead of the black market. That would suggest marijuana excise taxes need to be even lower to really drive out the black market.

Obviously, a one-day tax holiday isn't the best experiment for answering this question, but given how little data we have on legal marijuana tax policy, it deserves some serious attention.