The settlement of the American West was not primarily a story of Washington-directed central planning but of rugged individuals who moved onto unclaimed land, improved it, and later secured legal title. As economic historian Rainer Zitelmann argues in his forthcoming book 'New Space Capitalism,' this history offers a blueprint for humanity's expansion beyond Earth. Rather than awaiting comprehensive international treaties, 'space squatters'—private companies and entrepreneurs—may create irreversible facts through settlement and development, forcing legal systems to adapt afterward.

The 1967 Outer Space Treaty, ratified by major spacefaring nations, prohibits national appropriation of celestial bodies 'by claim of sovereignty, by means of use or occupation, or by any other means.' However, it is notably silent on private ownership. Legal scholars remain divided: while states bear responsibility for nongovernmental activities under Article VI, the treaty's explicit focus on state actors leaves room for private claims under the legal principle of expressio unius est exclusio alterius. Recent developments like the Artemis Accords, signed by the United States and partners including Japan and the UK, further clarify that resource extraction and utilization do not constitute national appropriation, explicitly supporting commercial activity and safety zones around operations. These zones function as practical, limited property-like mechanisms without full territorial claims.

This creates a pathway for companies like SpaceX to establish initial settlements on Mars—perhaps an area comparable in size to Singapore on a planet with vastly more surface area—and develop infrastructure, habitats, and resource utilization systems. Much like 19th-century squatters who cultivated farms before the Preemption Act of 1841 granted them purchase rights, these actors would demonstrate productive use, generating economic value that lawmakers eventually ratify. Academic analyses note that domestic laws in countries like the US, Luxembourg, and Japan already recognize property rights in extracted space resources, suggesting customary international law is evolving through state practice rather than top-down consensus.

Mainstream coverage of space exploration emphasizes geopolitical rivalry between NASA, ESA, and China's CNSA, yet often overlooks deeper patterns of frontier privatization. Historically, frontiers have served as laboratories for heterodox economic models where property rights emerge organically from use and mutual recognition, as seen in the work of scholars studying bottom-up institutional development. In space, this could manifest as entrepreneurs financing missions independently—bypassing slow multilateral negotiations—and establishing de facto norms for trade, dispute resolution, and land improvement. The absence of indigenous populations on Mars or asteroids removes a key ethical complication present in terrestrial colonization.

Critics warn that such privatization risks exacerbating inequality or sparking conflicts, with some legal experts arguing the Outer Space Treaty constrains even private colonization because states cannot evade responsibility. Yet the trajectory is clear: private capital from figures like Elon Musk and Jeff Bezos is already driving launch cost reductions and reusable technology at rates governments never achieved. If these efforts yield permanent off-world communities, the 'squatter' dynamic may prove unstoppable, compelling updates to space law that legitimize private holdings. This represents not just technological progress but a philosophical return to pioneer individualism, where those who bear the risk and invest the capital earn the rewards—potentially unlocking exponential economic growth across the solar system. As with the American West, the state may arrive late to formalize what bold actors have already built.