Oh crap. Looks like I managed to come across as a relativist again. While I appreciate the fundamental truth behind moral relativism, I can only agree with you in that it's utterly useless... sad that truth has no use, while manichaean postures are far more effective. Or maybe I'm just making an interested interpretation based on my severely lacking historical notions.
That's beside the point, anyway. I do not make value judgements, what is "logically superior", and what isn't. I only point to the holes in the structure, and the double standards used to cover them. If the current premises (human life is sacrosanct, #1 priority should be to preserve it, etc) prevent us from enacting necessary reforms to improve things like quality of life, stability, security, happiness... then perhaps it's time to re-examine those premises, and reassess their worth, as well as their foundations and implications. The time isn't right for a revolution, yet.
I'm talking out of my ass here, but there must be mining operations somewhere that aren't cost-effective if exploited by conventional means. Having indentured servitude should seriously slash costs, making an otherwise unsustainable venture into something the state may get something out of. And I don't think Laogai is reserved only to punish the most hideous and reprobable of crimes - everyone who does time, works some... as it should be.
Of course the most desirable alternative would be the Martian equivalent of the British penal colony system, that didn't turn out all that bad in the end.