Land on the Moon?

Believe it or not, some people have tried to sell land on the Moon. The most famous example is American Dennis Hope, who turned lunar real estate into a business. Hope argued that the Outer Space Treaty prohibited nations – but not private individuals – from acquiring celestial bodies. What he could never explain, however, was the legal basis for him declaring every celestial body in the solar system as his own.

Space law expert Virgiliu Pop has written an entire book on the subject with the evocative title Unreal Estate – The Men who Sold the Moon, in which he demonstrates how, from the 1890s to the present day, numerous individuals have claimed ownership of the Moon or other celestial bodies – and found willing buyers. It should be clear: claims to property in space without actual possession do not establish ownership. As Pop states, “Claiming does not mean owning.”

But apparently, the desire to claim ownership of property in space is so strong for some that it overrides their reason. Hope has reportedly sold plots to six million customers, including Tom Cruise, Nicole Kidman, and John Travolta.

While these transactions are symbolic, they offer hope that there will be sufficient interest when plots of land on the Moon or Mars do actually become available for purchase. Projects such as establishing a base on the Moon – and later on Mars – or even mining on asteroids are becoming more realistic due to the drastically reduced costs of launching rockets. Elon Musk’s company SpaceX has managed to reduce the cost of sending one kilogram into space by more than 90 percent.

Today, there are more legal than technical obstacles to such visionary plans becoming reality. This is because governments will not be able to finance such ambitious undertakings, or will at least not be able to finance them alone. What it will take are strong economic incentives – and a secure legal framework.

Without private ownership, there will be no successful space economy. Most countries on Earth permit the private ownership of land. And where this does not exist, it is at least possible to buy usage rights from the state for 50 to 70 years, which can also be resold – as in Vietnam and China, for example. North Korea is the only country where even that is not possible. But a space economy based on legal conditions such as those in North Korea will never work.

The basis of space law is the 1967 Outer Space Treaty (OST), which has since been signed by 139 states and ratified by 117, including all major spacefaring nations, including the United States, China, and Russia.

According to Article I, the exploration and use of outer space “shall be carried out for the benefit and in the interest of all countries, irrespective of their degree of economic or scientific development, and shall be the province of all mankind.” Article II outlines another key principle: “Outer space, including the Moon and other celestial bodies, is not subject to national appropriation by claim of sovereignty, by means of use or occupation or by any other means.”

Is it possible to own property on the Moon, Mars, and asteroids? There is a consensus among lawyers that nations cannot claim ownership due to the prohibition of appropriation in Section II of the Outer Space Act. Opinions differ as to whether this prohibition also applies to private individuals and companies.

Some lawyers argue that the acquisition of property by private individuals would impair the freedoms of access, exploration, and use guaranteed for all states in Article I. If private ownership was allowed, they say, these freedoms would be restricted and the legal status of outer space as a “global commons” beyond territorial sovereignty would be jeopardized.

In contrast, other lawyers argue that private corporations are not barred from acquiring ownership rights over celestial bodies. This interpretation rests on the legal doctrine expressio unius est exclusio alterius: the explicit mention of one element entails the exclusion of those not explicitly referred to. Although the OST states that nations may not acquire property in outer space, it does not expressly forbid governments from allowing their citizens to do so.

The Commercial Space Launch Competitiveness Act, which U.S. President Barack Obama signed in 2015, gave all U.S. citizens and companies the right “to possess, own, transport, use, and sell [any] asteroid resource or space resource obtained in accordance with applicable law, including the international obligations of the United States.” Countries such as Russia and China see this as a violation of the Outer Space Treaty.

So, what would make economic sense (regardless of the legal status quo)? Without full private ownership, there will be no colonization of Mars, and the economic exploitation of asteroids and the Moon will also be problematic. In any case, who should be allowed to own land on Mars, the Moon, or the asteroids first? My answer: Those who have the financial means to get there, develop, and utilize the land. For instance, if SpaceX succeeds in reaching Mars and starts to build permanent settlements on the Red Planet, then the ownership of land should go to SpaceX first. Not of the entire planet, of course, but of a practicable area, for example the size of Singapore.

SpaceX could fund its flight and development costs by listing the land on Mars as a real estate investment trust (REIT). The price would be determined by the market. Most people buying shares would not want to live there themselves, but in the hope of value appreciation. As an incentive for people to settle on and develop Mars, colonists could be offered stocks at a preferential price as a “welcome” once they reach Mars and spend at least five years there.

Rainer Zitelmann’s book Weltraumkapitalismus will be published in March. Pre-order now and you will be entered in a prize draw: www.weltraumkapitalismus.de