Landing on the Moon Won’t Be Easy for Unicorns
This post originally appeared in Money Stuff.
Well, here is a story about moon unicorns:
As these companies go where no businesses have gone before, they raise questions only fuzzily addressed by the Outer Space Treaty: What are private companies allowed to do in space? Can a company mine the moon or an asteroid and then sell what it has pulled out? How are countries to regulate these businesses?
Internationally, countries have been discussing how to answer these questions. In the United States, Congress has begun tackling regulatory issues. Some warn that if the United States does not set up business-friendly policies and policies, then the start-ups could move elsewhere — including such seemingly unlikely places as Luxembourg.
There is something satisfying about the fact that the path to conquering the moon runs through Luxembourg. Sure there are lots of real physical engineering problems to be solved, in putting your startup on the moon. You have to build a rocket and fly it to the moon. But there are problems of financial engineering, regulatory engineering, tax engineering to be solved as well. You have to build a legal entity and put it in a friendly regulatory jurisdiction.
It is conventional to think that the physical engineering problems are the hard and interesting ones, and the regulatory engineering problems are the dull red tape. Flying a rocket to the moon is literal rocket science; it expands mankind's knowledge and capabilities. Setting up a limited liability company in Luxembourg in order to take advantage of favorable tax treatment does not capture the imagination in the same way. A society that spends more time and energy on financial engineering than on rocket engineering is a society in decline.
And yet. I want to suggest that conquering outer space -- building a rocket to fly to the moon -- is in some ways a less impressive human accomplishment than is altering the fabric of reality in such a way that the (fine, a) great challenge of space exploration becomes the choice of regulatory jurisdiction. The impressive thing is not setting up a Luxembourg legal entity; the impressive thing is setting up a world in which even our grandest and most improbable accomplishments depend on the social choice of regulatory systems. It is the purest imposition of human categories on physical reality, a form of transcendental idealism in which everything is mediated through legal entities and regulatory regimes. You can do anything you can imagine, as long as you first get the tax treatment right.
Anyway I look forward to the moon as an offshore financial center. They can't tax your bitcoins if you earn them in space!
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