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I invite your speculations: How could an interstellar economy work? Assume FTL travel is possible, but not instantaneous.
(Given that our own economies seem, from my point of view, to work on a principle of not being examined too closely, feel free to propose outrageous possibilities.)
EDIT: To answer questions, mostly about the parameters of FTL...
FTL does not rely on a constructed infrastructure, but does rely on naturally occurring, unevenly distibuted features of space-time.
The economy is the several-kinds-meeting type.
FTL has more in common with a train than a hand-pushed cart, but sailing ships are a better analogy.
Travel is expensive, but not ludicrously so - think sun holidays now; you can't do it all the time, but once a year is ordinary. More importantly, it requires a skilled pilot. Certain routes have size limitations on traffic. Space tourism is definitely a happening thing.
Travel time is about one to four hours to a neighbouring star system at the very best (local conditions may increase that greatly, but never reduce it below a theoretical optimum) and about a year and a half to cross human-occupied space one way. [Actual numbers subject to change, but about that feel.]
(Given that our own economies seem, from my point of view, to work on a principle of not being examined too closely, feel free to propose outrageous possibilities.)
EDIT: To answer questions, mostly about the parameters of FTL...
FTL does not rely on a constructed infrastructure, but does rely on naturally occurring, unevenly distibuted features of space-time.
The economy is the several-kinds-meeting type.
FTL has more in common with a train than a hand-pushed cart, but sailing ships are a better analogy.
Travel is expensive, but not ludicrously so - think sun holidays now; you can't do it all the time, but once a year is ordinary. More importantly, it requires a skilled pilot. Certain routes have size limitations on traffic. Space tourism is definitely a happening thing.
Travel time is about one to four hours to a neighbouring star system at the very best (local conditions may increase that greatly, but never reduce it below a theoretical optimum) and about a year and a half to cross human-occupied space one way. [Actual numbers subject to change, but about that feel.]
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You should read Freakonomics, and write Freakonomics II.
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Pretty much as detailed in Traveller. Or in Peter F. Hamilton's books. You don't ship stuff in if it can be acquired locally. So raw materials don't figure (much). Unless there are huge bulk carriers. Are they spacebound or can they make planetfall? Acquiring ships will be expensive and require huge loans. Trade would tend to be high tech stuff moving to lower tech worlds, with return journeys carrying easily-transportable materials that can only be acquired from that planet - e.g., Norfolk Tears (from Hamilton's Night's Dawn trilogy - an extremely rare and valuable alcoholic drink).
Megacorporations would definitely appear.
How cheap is travel? Do you have to sell your soul to get off-planet, or is it like hopping on a bus. Space tourism. How prevalent is "justice"? Is it dependent on distance from "civilisation". Space piracy.
Suitable topic of conversation for an hour or so in a pub some night!
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If you can make an FTL phone call, then you probably get end up with something like the current global economy.
If you can’t, but you can FTL courier documents overnight, it probably won’t be too different from what we have now, either.
If it takes a month for your letters to be delivered to another star system, you have major problems operating a single company over multiple star systems. Multi-system conglomerates would no doubt come into fashion at some point, but they wouldn’t be able to operate as a cohesive whole, they’d just be a group of companies that happened to share the same owner and couldn’t talk to each other very well. So maybe like the global economy c. 1850?
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I'd think how fast I can let you know that I want to buy X or have lots of Y to sell would have a big impact on the economy. With near-instantaneous communications, you could probably have an economy not too dissimilar to our modern one. If it takes days or weeks or more to transmit information, you might end up with something more equivalent to a pre-Industrial-Revolution economy.
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There isn't a conversion between kudos and the main economy. Their culture is pretty separate and they help if they feel like it. But they will trade information.
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Introduce 'subspace telephones' and traveltime might still be a factor, but the Emperor's flunky knows he now needs instant answers...
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in the Roman Empire's trade and travel with/to India and China.
And update it, filling in all the new variables.
Just an idea :)
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As far as exchange goes, I've been reading a little too much on primitive economics lately, so you're getting a detailed answer. I don't think you'd have a truly free-market economy between planets, for all that individual planets themselves may be dominated by market economies. Some of them would be characterised by "mobilisation" economies, like the former Soviet Union, where resources would be collected into the hands of a chosen few in order to further the ideological goals of the collective. I imagine Vulcans would go for that option.
Even with incompatible standards of currency (silver in one area, and salt in another, e.g.) you'd probably have "administered trade", whereby two governments agree to exchange fixed quantities of commodities at a fixed rate by agreement. Trade then isn't subject to regular demand-market price fluctuations, but I imagine this is the sort of thing OPEC does in our world. I imagine that trade federations and other multi-national/multi-planetary blocs would emerge to protect such interests.
In "frontier" economies, especially those supported by administered trade, the parties involved will most often prefer politically neutral trading grounds upon which to make their transactions. You may end up with large neutral zones, then, dedicated particularly to trade. The transport companies may become large NGOs, then, kind of like McCaffrey's FT&T remains politically neutral but still connected.
Mining, btw, is probably going to be one of the biggest physical interstellar industries.
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Just kidding, love.
Bigger post coming based off that exact concept, for reference. ;)
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Also if the trading is based on certain things that can only be produced in certain planets, that would leave the possibility for some great conflict with planets that have nothing for interplanetary trade and that are in poverty, and possibly minor wars as well.
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Here's my few thoughts on the question.....
The real shift will be the FTL leap outwards, to habitable planets with designated permanent human presences. Presuming that a suitable planet can be found for settlement on a wide-scale within a month's FTL travel, the manufacturing burden should and likely will be shifted to the new planet, and Earth will be converted to an Agrarian focused role in an interstellar economy. It makes long term sense-- most of the 'eggs' are in the Earth basket, and for the good of the species, it makes sense to have the area with the greatest population focus on producing agricultural surplus, to sustain rapid short-term population growth. Since expansion will occur in all directions, the raw mathematics of stellar colonization will demand a population expansion of an order of magnitude. After establishing a number of permanent colonies of sustainable size [10 colonies of 100 million or more], the Earth will move towards an administrative/cultural capital society -- this presumes that Earth will be approximately the celestial midpoint between the extremes of exploration, and therefore a sensible seat of government. Likewise, humans born on other worlds will likely want to seek out their species roots. It makes sense for Earth to be *the* vacation destination once expansion has reached critical mass for large sustainable colonies.
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So, here's the First and second Installment, and if that doesn't generate some thought, let me know and I won't post the other 3, 4, 5, whatever it comes out to. Otherwise, expect continuing replies to this with the other points, and you've only yourself to blame. ;)
Ramblings on Interstellar Trade: Volume I.
Disclaimer – I am neither an economist nor by any means a student of economics.
Addendum – any culture sufficiently advanced to synthesize products from raw elements (ie, base elements go in one end, Kobe Beef comes out the other) will have very little need to import. The factor will be prestige goods (“Yes, I serve Organic Earth Beef for all of my soirees”) and raw material (Iron, carbon, etc) only. The truly valuable, tradable commodity in such a setup becomes knowledge, in terms of scientific/technological advancement, maps of travel routes, etc.
Codicil – This is, as [Bad username or site: ”graylion” @ livejournal.com] pointed out, a topic better suited for bullpenning over a pint some evening. Being that I’m in the wrong country, this is as good as I can do.
That out of the way, I have to repeat the query I see a lot above – is near-instanteous communication possible? If so, interstellar banking becomes feasible, almost inevitable. There most likely arises an interstellar “currency” based not so much on a physical good, but a purely abstract and quantifiable concept, the “standard credit” or whatever you like to call it that exists solely in the database of a Zebulon Mutual’s First Interstellar Bank.
At the very least, lacking instantaneous communication, but allowing for reasonably priced travel, operations could be run under auspices not unlike the letters of credit of the Knights Templar – some group that has outposts in common destinations maintains internal trade and will, for a fee, let you turn over commodities in location Y in return for a document, passkey, etc good for a similar value of local commodity in location X. The whole thing would be privatized and profit-mongering, and could at will be a restrictive secret-society thing, a hereditary obligation/privilege, a civil service…
The other question is political. I assume we have multiple governments interacting, at least, in this universe, rather than a Known Space Government arrangement. If we assume heterogeneous government to a significant degree, then we can assume conflict between trade “partners” over time – bringing with it all the interesting ideas of embargoes, smuggling, privateers… Interstellar warfare might be impracticable, but hurting enemy governments through their trade could be doable. Eventually, I suppose the incentive of maintaining good interstellar trade is valuable enough to that an agreement would be reached to work together to support the overall trade.
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I’m going to run with the sailing analogy for travel, based on what I’m hearing. The assumptions and conclusions I get from that are as follows, maddeningly presented in no particular order and with only bare coherence:
#1) Starting up in the business of transport or travel requires a very solid investment (purchase of the ship in question) and a search/wages for potentially rare skilled manpower (navigators, pilots, “ships’ carpenters”).
#1a) Ownership of a transport (freight or travel) is approachable for only the extremely wealthy, or a consortium of those of lower means, a corporation under any other name.
#1b) Training and experience in space travel is an exceedingly useful, and valuable, skill. Those with the talent don’t lack for opportunity.
#2) Liability for ships, due to the investment and potential for things to go wrong, is huge. The risk on one transport is individually fairly high, therefore, you either need to be operating in serious bulk, there need to exist insuring agencies of an interstellar nature, or you just live in fear that you’ll pull an Emperor Norton. So, most interstellar travel will be run by large organizations or governments, increasingly so as you attempt to travel longer stretches.
#3) The supply of necessary material for travel will be finite on any given planet/system, but the demand will continue to require more and more transports.
#3a) As long as shipping is profitable, people will continue to make ships. Ships have to be made of something. Demand for the component materials will increase, and the threshold may be reached at which using a transport to bring raw materials to production sites will be profitable, which may mean investment in further freighters to bring in those materials, etc, etc, until diminishing returns are achieved. As long as ships wear out/become lost/are stolen, demand will always be present.
#3b) Stealing from the “train” analogy, I assume FTL travel is powered by some consumable resource. As travel picks up, demand for fuel increases, but quantity is finite. Given entropy, you always lose energy, therefore there should be continuous demand for power in whatever form it is collected and distributed. This “fuel” might even be the basis of interstellar trade, if all FTL systems, regardless of origin, require it – it would be the one commodity of value to any and all spacefaring peoples alike.
#3c) Since raw materials must somehow be collected, and travel is expensive, it’s unlikely that transports simply jump out, collect unrefined product, and carry both the substance and the impurities back. It will likely be more profitable to set up outposts capable of removing impurities to improve the profit margin on any given trip. Regardless of whether collection is mechanized, sentients will have to be present to oversee the operation and to operate the machinery.
((More on #3c in our next exciting installment))
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To which I look forward greatly - all this is excellent stuff!
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I'm enjoying reading this and will contribute once I've gotten some ideas together (and possibly had a nap.)
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So I don't have much in the way of Grand Pronouncements. However, two assumptions strike me as possibly fun to destabilise.
Assumption 1: Earth's economy, and the process by which it developed to its current state, is based on some kind of abstract set of laws (as opposed to being rooted in location and circumstance), such that the development of similar economies elsewhere is fairly inevitable.
Assumption 2: An economy develops towards an optimal state wherein the greatest number of people are benefited.
Regarding assumption 1, in our modern manufacturing model, for instance, the deal is that RAW MATERIALS are procured from {elsewhere} and made into PRODUCTS, which are then exchanged for money and pass on {elsewhere}. There's little requirement that manufacturers know - or care - what happens before or after their involvement with the materials. Could we, instead, posit a model based on sustainability, where a manufacturing enterprise would as a matter of course (and leaving entropy aside for a moment) balance the sourcing and processing of raw materials with a commensurate input to the system, and where each product had a long-term strategy for reuse, recycling or reabsorption, which the manufacturer was responsible for administering? So, for instance, you might have vegetation that happened to grow faster than, and produce substances more versatile than, any of Earth's flora; manufacturers would replant a suitable quantity every time they used some, and would take - or buy? - back their products when their owners no longer wanted them. What kind of society would be likely to have such an economy? What implications would space exploration have on the economic balance? (I've a suspicion that modern capitalism still carries in some measure the attitudes of Empire - which might be very hard to avoid in a Space Is Big And Teeming With Abundance scenario, if that's what you're going for - whereby those handy {elsewheres} will just go on producing our RAW MATERIALS for cheap, without our having to witness - let alone suffer - the consequences of our exploitation, won't they? Course they will.) How would corruption work in such a set-up? What would happen in the encounter with our more familiar expand-or-die style of doing business?
As for assumption 2, it is of course trivial to refute (some commenters above have described possible set-ups that "make sense", but Earth's set-up, in several respects, makes no sense to me at all: see under food miles, petroleum dependence, non-bio-degradability of everyday commodities, unfair trade, etc.). Economic decisions are influenced by politics, and the powerful get to skew pretty much everything you care to mention in their own favour. So you'll probably be wanting to devise a "rational" or "sensible" model, and then go at it wholesale with the Lump-Hammer of Power 'n' Influence.
Reading over this, I'm not convinced that it's coherent at all. But there's a chance that it might spark some useful speculations in your mind.
Finally, two book recommendations, if you're interested: the abovementioned Freakonomics, by what's-his-name and that-other-fella, and Clive Hamilton's Growth Fetish, a polemic critique of Third Way politics and neo-liberal economics, which I'll shortly finish and can lend you if you like.
Oh, and finally-finally, unrelated to this post at all at all, let me express the heartfelt hope that "Starbound: Gender Politics" is on your list of things to work out...
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Well, you asked for it, so I'll get the rest of the tome up tonight. Just remember, it was your idea to keep going. ;)
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#3c-ii) Colonies become a great place to export human beings. If local government doesn’t maintain a ZPG policy, in fact, colonization is the only way to allow pressure release for an ever-increasing population. You might see colonies being put together for brief periods, but eventually taking on life of their own, and increasing to the stage that they instead become a trade hub for materials gathered “farther out” along the same “trade route”. They will, in turn, require increasing resources, demanding even more expansion… etc, etc.
#3c-iii) This would lead you down the Colonial Empire route. If you have near-instantaneous communication, you could possibly maintain a democracy if desired. If the time for information to travel from one end of the Empire to the other is measured in months, that becomes increasingly unlikely. Maybe you can manage a representative republic, or perhaps you end up with hegemony, or even just a loose confederation of stellar “states” with enough common ground to maintain friendly relations, and a need for continuous trade flow throughout. There exists an interstellar “governing body”, but the vast majority of laws and enforcement etc are handled locally with minimum oversight.
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#4a – If these paths are conduits, in the sense of limited capacity pathways from point A to point B, there will need to be some system regulating how many ships are “in the pipe” at any given moment. This may require a regulatory body, and if traffic can only travel in one direction at one time, near-instantaneous communication becomes mandatory, or else attrition from colliding transports becomes a major factor.
#4a-i) Conduits can be easily captured and blockaded with debris – exploring this would be an article in itself. Jump points can still be commandeered, but require more defense. Take it to the pub and talk.
#4b) If we’re discussing something more open than specific anomalies (wormhole-tech), whereby given paths/locations just allow faster travel, then we see something much more like the High Seas. Near-infinite options, but only a small fraction make for profitable routes per se.
#4b-i) Travel routes will become fairly standardized. Certain paths will provide for faster travel (favorable “head winds” or what have you), while keeping the likelihood of stranding/catastrophic failure containable.
#4b-ii) Early attempts will “hug the coast”, i.e. stay within non-FTL traveling distance of inhabited planets. This will be profitable for established stellar economies along the most well-traveled routes, which will fuel them to provide more and more services for the ships passing through.
#4b-iii) Entrepreneurs will take risks for gain, moving farther from established bases to save time/fuel when transporting. As these shortcuts become well-known to navigators, they will have increasing traffic.
#4b-iv) The transporters will need to resupply for long voyages, they’ll want spare parts near where they might break down, the ability to refuel on long trips, take on new rations... Think Canary Islands for sea trade, Pacific Islands for the USAF in WWII. Or, less poetically, think of a truck stop on a major highway with a mechanic shop.
#4b-v) Once newer, shorter routes are well-known, former travel hubs will see decreasing commercial traffic. Potentially these economies can attempt to focus on tourism – “See the Scenic Old Transmegellanic Tradeways!” Otherwise, having an economy already in place to support travelers, perhaps they begin setting up colonies to service the new routes.
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#5a) If voyages can last up to or over a year, logistics for food and waste become important. This goes back to the “synthesizing food question” above – if it’s possible for the ship to recycle waste products and elements cheaply and efficiently, you don’t need as much re-supply support on a route.
#5a-i) If food can be synthesized, how much of an investment does it take to make the system portable? How energy-intensive is the process? What’s your supply of energy? Does it come from the same resource from which your FTL engines are run? How much mass would it add to include the machinery, is it less than an equivalent rationing of food for a voyage from one “station” to the next?
#5a-ii) Potentially, is “food recycling” viable at one of our “truck stop”/”canary island” installations, even if not on the ship? Might one service offered be dumping off your waste (to be recycled locally, for a result that’s just a net loss in energy) and picking up rations for the next leg of your journey? If so, then transporters are probably devoting a lot of computational power to figuring out exactly how much mass in food they’ll need to get from “rest stop” A to “rest stop” B so as not to waste fuel.
#5a-iii) If food can’t be synthesized, what’s the cheapest way to produce it? Is it cheaper to grow it planetside and transport it to your “rest stops”/”mining colonies” etc, or is it actually more efficient to set up hydroponics and sustainable artificial ecosystems where the food is needed most? Is one cheaper short term, but one a better investment long term? If you have portable “mining colony ships” as outlined above, is it more or less efficient to add the mass of a food-generating ecosystem as opposed to shipping in staples/unspoilable food or terraforming a nearby planet to grow crops?
(That's about as far as I got in the first sitting. Might come back to revisit such topics as barter in the absence of Interstellar Banking Guild, or privately/corporately backed currency in specific systems. No way to be sure. For now, feel free to assimilate the above, and open up any further discussion ya like.)
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Of course we'd put all the knowledge from the Age of Hippy-Green-Gaia into use while terraforming or (possibly) while travelling interstellar, but for the most part it'd be party time and damn the consequences.
Against that, there might well be non-human civs which do practice your suggested economics. They could either be very old and wise or very primitive and backwards. Or, maybe humans would have lots of arguments among themselves about which of these desciptions is more apt.