econlife - Why Now Is the Perfect Moment for a Mars Mission by Elaine Schwartz

Now is the perfect time to go to Mars. Otherwise we have to wait another 26 months.

Every two years or so, when the Earth and Mars are on the same side of the sun, it’s the ideal time to schedule a visit. Just 35 million miles apart, the (relatively) short distance creates a window that the U.S., the U.A.E., and China will use to learn more about Mars.

Mars Missions

Launching between July 30 and August 15, NASA’s Perseverance projects a February 18, 2021 Mars landing. During a mission that will last approximately one Mars year (687 Earth days), they hope to find evidence of ancient life and to try out a Mars helicopter. The rover also will collect rock and soil specimens that a future flight will pick up and take back to Earth.

This 2 3/4 minute video describes their rather complicated plans for the pick up:

Meanwhile, the United Arab Emirates expects a take off tomorrow for its Mars mission. But, rather than land on Mars, their Hope probe will orbit the planet. The goal is to collect data about Martian weather that will let them compare daily and seasonal changes. While it’s a U.A.E project, they collaborated with U.S. scientists at the University of Colorado and will take off from Japan.

China has said that they will launch their Mars mission during the next several weeks. Called Tianwen-1, the name of their Mars explorer means “heavenly questions” and comes from a 2,000 year old poem. Its goal is to orbit, land, and collect data from the planet. (NPR said the specifics are sparse.)

On July 17, the rocket carrying Tianwen-1 was photographed on its way to the launch pad:

Our Bottom Line: Outer Space Property Rights

As economists, we can ask who will own the specimens that NASA and perhaps China collect from Mars.

Looking back, we could find a parallel in 17th century New England where the legal right to private property unfolded gradually. Many of the settlers had come from English manors when the land and tools were communally owned. In towns like Sudbury (currently Massachusetts) they continued sharing their land and tools. Soon though, with people moving westward and claiming their own land, private ownership evolved. By the end of the 18th century, we have Alexander Hamilton defending the sanctity of contracts. He knew that the success of capitalism depended on respecting individual property rights.

For outer space, we have a UN agreement from 1967 that precludes nations from declaring sovereignty over planetary possessions and from engaging in military activity. Long after, in the Commercial Space Launch Competitiveness Act (2015) the U.S. Congress said “exploration” and “exploitation” were okay.

You can see that it all is rather vague. Outer space property rights have not been clearly established nor do we know who can make them.

So, when a future Mars mission brings back the rocks that Perseverance left for it, we won’t have definitively established who owns them.

My sources and more: The NASA, the NY Times and NPR are good places for facts about this summer’s Mars missions.  The perfect complement, Politico’s “Who Owns the Moon” discusses outer space property rights.

Our featured image of Perseverance is from NASA.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.

econlife - A Global Look at the Rule of Law by Elaine Schwartz

During the 1790s. Alexander Hamilton told us that our economy needed to recognize the sanctity of a contract. At the time, Revolutionary War bonds had been sold to speculators by the investors who had supported the War. When the bonds appreciated in value, those speculators benefited–not the patriots who initially purchased them. Hamilton told us that legal transfer of ownership had to be respected. Our economic future depended on contractual rights being preserved.

He was right.

Still today, a rule of law that includes contractual rights exists as the foundation of a viable economy. Let’s see where.

The Rule of Law

The World Bank says that its rule of law (ROL) indicator includes property rights and contract enforcement. It also extends to the police, the courts, and the likelihood of crime and violence. It involves the extent to which “agents have confidence in and abide by the rules of society.”

The brighter green countries are the most committed to a rule of law. They include New Zealand, Canada, Australia, Greenland, the Scandinavian countries, Denmark:

Again, for the control of corruption, using the above color scale, you see similar shading:

According to the World Bank, the United States ROL rank has sunk during the past several years:

Our Bottom Line: Incentives

In Why Nations Fail, economists Daron Acemoglu and James Robinson explain why the rule of law matters. Early in the book, they set the scene by comparing Nogales, Sonora and Nogales, Arizona. They tell us why the rule of law made Nogales, Sonora so much less affluent than its Arizona namesake. In Mexico, you can ascend economically by untangling red tape, paying for expensive licenses, and bribing politicians. In Mexico you have an amparo–the right to appeal that a law does not apply to you. On the World Bank map, you can see Mexico is a bright pink, placing it high on the corruption scale.

Somewhat similarly, we can think of China’s lack of intellectual property protection. We also can look at Poland and Hungary where independent judiciaries are in question. With a weaker rule of law, political influence rather than the market can dominate decision-making.

Returning to where we began, Alexander Hamilton’s sanctity of contracts takes us to economic development in the U.S., Mexico, China, and Eastern Europe. But here we have to add one word: incentive. When we have the rule of law, the incentives encourage financial investment, entrepreneurship, and business formation. They form a foundation of legal guarantees that we need for economic development.

My sources and more: Although it is a bit complex to navigate, the World Bank is a superb source of governance data. I also recommend the insight offered by a Harvard scholar in this Marketplace podcast and a BBC lecture from Niall Ferguson. But, if you have lots of time, do read Why Nations Fail and The Narrow Corridor by Daron Acemoglu and James A. Robinson.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.

econlife - Celebrating the Economic Independence That Alexander Hamilton Created by Elaine Schwartz

The United States declared independence from Great Britain on July 4, 1776 and won the American Revolutionary War. But still, we were not truly independent. Our agrarian economy depended on Great Britain. They had the banking system, they had the factories, they had the knowhow.

But we had Alexander Hamilton.

Alexander Hamilton’s Development Plan

As Secretary of the Treasury, Alexander Hamilton’s goal was to expand the U.S. banking system, our transportation infrastructure, and technological innovation. He wanted factories that would process what our farms and plantations grew. So, in Hamilton’s development plan, he explained to the Congress what they had to do.

1. Establish Public Credit

• Hamilton said a national debt is a blessing if it’s not too large. Borrowed money had helped the U.S. finance the Revolutionary War. Also, though, those lenders had to know we would pay them back. With European creditors, the U.S. had to pay back the money that was due them while domestic creditors needed to know we had a viable plan. Only then could Hamilton establish the good credit that was necessary for a government to borrow the money it needed.
• Since then, the U.S. has been borrowing money and paying it back. However, some of us are worried that the debt is becoming too large. Just like your own income determines the wise amount for you to borrow, so too does the GDP for our nation. Below you can see that recently the debt is an increasingly bigger proportion of the GDP. Almost equal to World War II highs, the debt is projected to balloon from 78% of GDP for this year to 92% in 2029:

2. Create a Banking System

• By establishing the First Bank of the United States, Alexander Hamilton generated the beginning of a banking system that pumped money around the U.S. economy. His goal was a network of financial intermediaries that connects savers to borrowers. He knew that banks loan money to business start-ups and help firms finance inventory. They expand and contract the money supply and purchase the bonds that nations sell to raise money.
• Now, while there are close to 4,600 banks in the U.S., the large ones predominate. Below, you can see how the system has consolidated:

Among the 10 largest U.S. banks, the four with the most assets are JP Morgan Chase, BOA, Citi, and Wells Fargo:

3. Encourage Economic Diversity

• Economic growth through diversity was the third leg of Alexander Hamilton’s plan for independence. Recognizing that the U.S. in 1790 was a farming economy, he sought tariffs and subsidies to protect a young manufacturing sector. He supported a system of tariffs to encourage innovation. Correct again, Hamilton knew that the combination of agriculture, manufacturing, and invention could form an economic foundation from which we could build.
• Looking back, we can say that Hamilton created our springboard. About a different kind of independence, Hamilton’s foundation facilitated the leap beyond our borders to globalization. It let us evolve from an agricultural economy to a productive behemoth that needs world markets and global supply chains to feed our growth.

The huge volume of goods and services that each U.S. state produces can be compared to these countries:

Shown above, the four largest state GDPs would equal the value of the goods and services produced by UK, Canada, Korea, and Mexico:

Our Bottom Line: Déjà Vu

Hamilton’s goals are timeless. We still need to manage sovereign debt wisely, support a vibrant banking system, and encourage economic growth.

My sources and more: This Fortune article sums up the Hamiltonian legacy ideally.


Please note that this post is an updated version of what we have published on past Independence Days.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.

econlife - The U.S. Army’s War Against the Vegas Golden Knights by Elaine Schwartz

A college and the U.S. Army are trying to prevent the Vegas Golden Knights from getting a trademark. About much more than a hockey team, the dispute involves how much we control our name.

The Three Golden Knights

As an expansion team, the Vegas Golden Knights just played their first year and astoundingly made it to the Stanley Cup finals. You can see below that the pre-game excitement and pageantry are connected to their name:

The Vegas Golden Knights’s trademark application at the USPTO (U.S. Patent and Trademark Office) has been opposed by the College of Saint Rose whose Division II NCAA teams are called Golden Knights. Similarly, the U.S. Army’s Parachute team says it would be harmed if a hockey team had the trademark rights. They remind us that they have been known as the Golden Knights for close to 50 years.

The college teams’ logo:

Responding, the Vegas Golden Knights point out, “we are not aware of a single complaint from anyone attending our games that they were expecting to see the parachute team and not a professional hockey game.”


You can get a sense of what will unfold during the next year from these deadlines:

Our Bottom Line: Intellectual Property
We can say that a trademark dispute is a battle over intellectual property. Just like a bond or a house, you can own your name. And just like all property in a market economy, the government has to be willing to guarantee those ownership rights.

The debate over intellectual property rights dates way back to Alexander Hamilton during the 1790s. As Secretary of the Treasury, Hamilton hoped to foster invention and protect infant industries through a patent system. The tough part though is identifying the boundaries of your intellectual property. Deliberations at the USPTO reputedly will relate to the potential for confusion and name dilution. They also will consider whether people will mistakenly perceive a connection between the Vegas team and the others.

So where are we? We can imagine a boundary line around some intellectual property. If the U.S. Army and the College of Saint Rose get a favorable resolution, that property line will be much larger than what the Vegas Golden Knights believe it should be.

My sources and more: Thanks to Michael Katz for alerting me to the Golden Knights case. If you just want more of the facts, SBNation and sportslogos have the perfect summary and some fascinating details. Meanwhile, the Washington Post has the basics about the team.


Do note that tonight is Game 1 of the Stanley Cup final between the Knights and the Capitals.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.