Money in the Federation - let's try and settle this!!

[Lazarus]

To begin, a few quotes for reference:

"Don't tell me they don't use money in the 23rd century.

"Well, we don't."

"A lot has changed in three hundred years. People are no longer obsessed with the accumulation of 'things'. We have eliminated hunger, want, the need for possessions."

"The economics of the future is somewhat different. You see, money doesn't exist in the 24th century... The acquisition of wealth is no longer the driving force in our lives. We work to better ourselves and the rest of Humanity."

"It's not my fault that your species decided to abandon currency-based economics in favor of some philosophy of self-enhancement."

When the New World Economy took shape in the late 22nd century and money went the way of the dinosaur, Fort Knox was turned into museum."

Is there any way to reconcile the numerous and infamous references to there not being money in the Federation, or at least the core part of it, in the twenty third and twenty forth centuries?

Taking the twenty-forth century Earth as the example. Essentially a utopian society, possibly one that other Federation worlds aspire to, where no one appears to want for anything. Essentially limitless power is presumably provided by matter-antimatter technology. Replicators provide ample food, water, clothing and anything else people wish for.

The problem I have with the entire concept, possibly because I'm hamstrung by my twenty-first century mindset, is the overriding question "Why do people work in jobs if everything is handed to them for nothing?"

Without making too much social commentary on today's society, and also not to offend people who genuniely require benefits from the government, I personally feel that too many people today "sponge" off the state - avoiding work because they are handed money each week, faking injuries and illnesses because they prefer not to have jobs.

I personally have a job, but I only have one to get money. If the power to run my house cost me nothing, and a replicator in the house provided all my food, drink, clothing etc, I wouldn't have a job and be quite happy living a life of leisure. I'm sure the rest of you feel similar.

So my question is, will people really work in relatively mundane jobs, even in the twenty-forth century, when they don't need to? Yes, people would probably be Starfleet captains or senior staff for nothing because everyone can see the appeal, but what of other jobs? Public service jobs for example?

Do average people really go out to work to "better themselves"?

Or do machines take care of it all?

If so, is Earth effectively just a leisure resort where people are born, given everything they need for life and are free to pursue whatever existence they wish with no real responsibilities or requirement to 'give something back?'

Surely the often used 'credits' are not just a replacement for money, since if you're paid credits for doing a job and then use those credits to pay for your power and replicator bills, then this is money by any other name.

Apologies for the long post! What are people's opinions?

 

[Jefferies]

I believe to understand how the moneyless and communist economy of the Federation might function, one needs to take into account that, ideologically, Star Trek is utopian. It is blindly optimistic about the essential goodness of humanity. It thus believes that given sufficient resources, equal resource distribution and broad education of every citizen, all the basic needs of humans will be satisfied and people will start to strive for higher goals.

Personally, I have always wanted to believe this myself and I find myself striving for such goals, i.e. I have applied myself without economic need to be trained in a vocational profession. I'm still young of course and have not really started to work properly yet, as I'm still at University. So, I might find myself disillusioned sooner or later, but that would probably be the result of having to work in a system (the NHS in my case) that is so constrained by the limit of resources that it is undermined in ways that health care in the Federation would not be.

Was it not Sisko in "The Marquis" who argued that it is easy to be an angel in paradise. I believe he was referring to humans living on earth opposed to those living in the Demilitarised Zone on the Cardassian border who had become terrorists.

 

[Pavonis]

"Why do people work in jobs if everything is handed to them for nothing?"

Who says people do work in jobs in the 24th century society of Earth? I mean, do we have any evidence that humans of that era need to work? I don't think we do.

It's entirely possible that most of the human population on Earth is doing exactly nothing productive. Hard to imagine, but it's a logical consequence of a the technology depicted in Star Trek.

I suspect that for the portion of the population that would find such an existence boring, there are numerous outlets. Starfleet, for one. Colonization projects, for another. And for the people who don't feel the need to leave Earth, but want to do something, I think there must be a great deal of art being produced. Paintings, sculptures, music, plays, art of all sorts of would be produced for enjoyment, both in making and viewing. For instance, I think it's likely that Joseph Sisko runs his restaurant in New Orleans simply for the pleasure of producing dishes for people to eat, like a museum or gallery for traditional Cajun food, or whatever it is that Sisko's serves.

So, frankly, I don't think most of the people of Earth do work at all. If people do anything all day, it would be activities that would be considered hobbies or leisure activities nowadays.

 

[Jefferies]

Pavonis, just because someone's an artist or artisan cook doesn't mean you aren't a hard worker. In fact in most cases this would be quite the contrary. If you want to become good at anything, be it painting, singing, cooking or scientific research you will have to invest loads and loads of study and practice. Otherwise, the products of your ventures would most likely be rubbish and very few people would be interested in them. However, I do accept the other part of your argument in which you contend that large parts of the population would probably not be in traditional professions and choose other outlets for their productivity.

 

[Pavonis]

I didn't say being an artisan wasn't hard work. I certainly didn't mean to imply anything like that. But in the 24th century, it would certainly seem easier to be an artist, especially if your art is bad. You'll still be able to feed and clothe yourself even if your art is terrible and unnoticed.

I suspect that, with a longer lifespan, humans of the 24th century may end up going through multiple careers. Perhaps people spend a few decades perfecting this or that skill, then move into something completely different when they're bored, just because they have the time and no constraints to earn money.

 

[Jefferies]

In that case, I'm sorry I misunderstood you. Also, your idea of multiple careers sounds very plausible indeed. I suppose, people might also go through phases where they will work for some time and then take time out to persue other elements of their lives, like raising a family.

 

[Traveller]

I think that the idea was, if you don't have to work for money, you're free to do the work you love, and it won't feel like work at all. Cmdr. Sisko's father was a good example of this. And I can think of a lot of other examples, scientists, teachers, artisans, all being engrossed in their work because it gives them satisfaction, not primarily because it earns them money.

In an ideal world I would have studied linguistics, because I love languages, and the way their structure reflects how the mind structures its impressions. But linguistics won't feed me, so I turned away from it.

I don't think that people would do nothing. They'd be bored very quickly.

 

[Timo]

Is there any way to reconcile the numerous and infamous references to there not being money in the Federation, or at least the core part of it, in the twenty third and twenty forth centuries?

Why "reconcile"? It's all "conciled" already - all the sources agree that the moneylessness is the real deal.

It doesn't need to have any sort of a real economic significance. Perhaps the future folks just decided that while capitalism fostered evil, its most prominent symbol was money - so they banned money, declared it nonextant, and developed workarounds to keep the economy going in the usual, well-working capitalist manner, now deprived of its evil connotations. It would be no different from the fact that some current religions forbid the taking of interest on loans, so workarounds are invented but de facto loans and interests still exist.

Timo Saloniemi

 

[Horga'hn]

My initial thoughts:

- Dabo. We know Riker dabbled (daboed?) and the DS9 crew played as well - but how did they pay? We can presume that the thrill of gambling still exists in the 24th centrury, but the thrill comes from having something to lose.

- Holosuites (again, on DS9).

- At the end of The Measure of a Man (TNG), when Picard offers to buy Phillipa Louvois dinner, she asks "You buying?". Bear in mind also that this was a Federation starbase. I suppose the term could have endured as an idiom...

- Risa. Do they let just anyone there? It seems like it would be overwhelmed with visitors if it didn't cost money. We must wonder... do they allow Starfleet officers to visit as a gesture of goodwill or some sort of protection pact? The only other option I can think of is payment, be it by the individual or the Federation itself.

 

[Timo]

I don't think a planet could be overwhelmed by visitors no matter what. Nor do I think that business deals on DS9 need tell us anything about the UFP economy, since they are part of non-UFP economy (Ferengi or Bajoran). Our Starfleet heroes could play make-believe to keep Quark happy: give away some of their money for looks, then go replicate more, or whatever.

However, from "Q-Less", it sounds like travel between stars within the UFP is not free; Vash needed to purchase her trip, and it clearly involved her giving up some possessions of hers. That mechanism alone would be enough to keep people from flooding Risa...

It's perfectly possible that part of the economy is free, while another part is not. Perhaps what we now consider "consumer economy", with its transactions on food, housing, luxuries, services and planetary transport, is a charity operation in the 24th century, something that can be easily done for free because it's inconsequentially small peanuts compared with the real businesses. But star travel is no longer quite so inconseqential, and needs to cost at least a little bit. And the things that really are of consequence are so big that no consumers are involved in them in any manner. Perhaps no people of any ilk are involved, and the "real" economy runs completely on automatics. No need to give any money to the ordinary citizen, then.

Timo Saloniemi

 

[Joshua Howard]

Regardless of what anyone says, the financial aspects of Star Trek are most simply explained as Communistic. The theory suggests that it works then because of a psychological awakening in people's understanding of higher purpose, and because of an increased flow of technology. It is also worth remembering that only certain parts of the galaxy are currency free. It is very likely that a great deal of industry still engages in transactions which are basically currency-based. In relation to big business - such as spaceship building - there is no doubt some kind of credit system which is used to monitor the flow of resources. In many ways, saying that there is no money in the Federation is probably, even in accordance with Trek Canon, a slight stretch.

It is probably more accurate to suggest that fiat currency, and paper currency are essentially outdated at that time; and that instead of gold/precious-metal backed securities, a universal credit system (subject to certain regulation nevertheless) is employed.

The idea of a utopian society basically reverses the ratio of purpose-driven people to those who have no apparent higher purpose. Instead of most people being bored with their work, and having no connection to the real value of their labor beyond dollar value, most are proud to be able to contribute. Essentially, the gardener is a gardener because he actually cares about the plants looking nice for visitors - not because he has to have the job.

Ultimately, competition is an important part of the human psyche, and that is why Capitalism is usually the most fair and realistic system. It makes good people better, and keeps the bad ones from becoming infectious. Star Trek, however, is not as much a political statement of how we should handle economics as it is a human aspiration of what we should seek to become.

 

[STR]

Ultimately, competition is an important part of the human psyche, and that is why Capitalism is usually the most fair and realistic system. It makes good people better, and keeps the bad ones from becoming infectious. Star Trek, however, is not as much a political statement of how we should handle economics as it is a human aspiration of what we should seek to become.

Capitalism is a system for allocating scare resources (in the economic sense of the term). Perhaps the best method. What happens when nothing is scarce anymore? When ANYONE can have a giant mansion replicated? When conspicuous and excessive consumption is in the hands of everyone? Basically, what happens when competing for material wealth becomes meaningless?

The answer is that you compete for something else. You compete for recognition of your brilliant theories, or your courageous starfleet adventures, or your amazing holophoner skills. Picard had it wrong. Humans didn't evolve some higher level of maturity. They're the same needy, petty jerks they've always been. It's just they want jealousy for their achievements, rather than the material gains of their achievements.

I think "Trekonomics" (TM) is a natural evolution of Maslow's Hierarchy Theory, or ERG theory.

Having said that, on a macroeconomic level, you need a medium of exchange to obtain and trade raw materials. A universal currency and credit system is necessary. Barter is too cumbersome. So money does exist, but mainly as a way to value various commodities. Not necessarily labor. Domestic commodities might not need to be paid for either, if they are mined, process and delivered to the construction site entirely by robots, and never passing a border.

Therefore, when Picard said that the economics 24th century was different, I propose that he was at least suggesting that there is no easy way to compare the cost of building the Enterprise-E to the Phoenix.

Frankly, it would be a mess to try and build a business model that exists in the 24th century. The aforementioned domestic mining company would consist of robots than may only need servicing once a year, or even a decade. And that servicing may be done by other robots, which again need minimal service. Eventually you reach the point where there's more people that want to fix your stuff as a "hobby-job," or "jobby" (also TM) than you need. Three guys working part time fix your fleet of 10,000 robots and unmanned starships. Output from the mines barely effects your costs, you could double, and redouble your sales for a 5% increase in costs. Do you think people will pay by the ton? The delivery? The hour?

What about other industries? Basically, the only marketable property is intellectual property, and specialized equipment that produce and transport hazardous materials. Everything else can be replicated and transported by everyone. Even whole planets are mostly worthless, entire worlds are just commodities. Real estate is, with few exceptions, is meaning less. Right now, you'd pay a fortune to live in (say) next to the Empire State Building, or your favorite restaurant. In the future, you're never more than a transporter hop away.

Trekonomics only sounds silly if you judge it by the needs of today. If you think about it, it's not hippy/pinko idealism and wishful thinking that creates this "utopia," but the reality that has entirely different fundamentals. Transport costs almost nothing. Production costs practically nothing. Labor is in so little demand, that the working wage is less than zero. People would pay the robot owner (assuming the owner cared about obtaining money) to fix them and learn more about them. Oh, and Kirk really doesn't need $10 when he wants to take a girl out for pizza.

 

[Guardian Bob]

I think we can agree somewhat that the Federation has some funds (probably a ton) they use to barter with races/factions who still use currency.

 

[STR]

^It's more complicated than that. A modern economy has to have a system of credit. It just solves so many problems.

Unless you want to figure out how many pizzas a dilithium crystal is worth, and then figure out how many crystals you need for a replicator...you see where this goes. Point is that once you have that replicator, there's little benefit to having more than one. You can make a lot of pizzas with it, or even a dilithium crystal. You can replicate yourself a 5,000sqft mansion, but what do you need that for? Your neighbor can have one three times bigger by Tuesday. You could double him by Friday. Consumption would reach the point of absurdity, and then people will stop using it as a yard stick for their personal worth. The challenge is gone, the gain is pointless. And people will start mocking you for wasting all your time building a bigger house you're never going to fully use. Why? Because they want status and recognition, and because they can't beat you materially, they'll use the pulpit to enhance their station if society by becoming a paragon of the environment.

The other interesting part of this scenario is exploring alternatives to Trekonomics.

Ferengi-style capitalism makes sense as "arcade psychology." Basically, say I have 1,000,000 bars of latinium, but that guy with the initials "ASS" has 10,000,000. I want more than he does. I can't really spend all this latinium, but I want to beat him. So I amass more points, err, bars then he does. Basically, Ferengi arcade-capitalism is about having the highest score at the end of the game. It's the runaway consumption the Federation would have had if someone never stood up and said "This is getting supid." Ferengi buy whole moons, planets, star systems for no other purpose than to say they do.

Klingon imperialism is another flavor of runaway consumption, yet has an edge of Federation meritocracy . I will be the greatest warrior ever. I will conquer more world than any Klingon before (which is probably some insane number like 100 inhabited systems), I will enslave their people to build me a bigger fleet. I will use than to strong-arm my way on to the High Council, where all will recognize my greatness.

Romulan Imperialism is a paranoid version of Federation meritocracy. The primary goal is for the entire empire to out-expand, out-think, or as a last resort, outfight the Federation. (Why else would you have a map of the Neutral Zone in the floor of your senate?) The real motivation for individuals is to out-do each other in furthering the imperial goal.

The Borg go further than Fed/Earth utopia. They believe that removing inequality between individuals material standing is only the first step. You next need to eliminate the differences caused by the meritocracy. Since merit is based on work and intelligence, you equalize that by equalizing everyone's intelligence and give everyone the same job.

I could probably write a book on the philosophy and theoretical economics of this, but I'll leave it as is.

 

[Lazarus]

What brilliant replies from everyone!

STR I'm assuming you're tackling the issue with more than just a passing knowledge of economics? Fantasic couple of posts, really interesting.

Do you all think we have trouble making sense of how the economy of Earth would function as depicted by Star Trek because the economy in which we live is so different?

I wonder what my day would consist of if this was the 2nd of December 2379? Just a regular guy, regular job with no particularly usefull skills or desire to better myself or the rest of humanity? If my life was just one long holiday with my needs provided by a replicator, surely that would become boring after a few years? Yes I could travel anywhere on Earth in moments using a transporter, but even that would start to lose its appeal eventually.

Unless you work effectively as a voluneer, like many people today do charity work for example, I still can't escape the notion that you'd basically have nothing to do with your time and become bored. So are we to believe that the hundreds of thousands of Starfleet officers are volunteers?

As I've said I can see the appeal for the senior staff, but what of the 'grunt work' like sitting monitoring the antimatter pods in the lower decks? Transporter operators like O'Brien who appear to just stand in an empty transporter room waiting for someone to turn up? Volunteer for jobs like that just out of a sense of bettering humanity? I'm not so sure.

 

[Joby]

Well we saw what a young alternate reality Kirk was doing in the 23rd century of Trek XI. Just boozing around and being a loser hanging out at bars all day. He seemed to be nothing productive.

Someone here once posted a link or article about this subject, and it was one of the best written pieces I've seen on the matter. Basically it asserted that the people of Star Trek gain attention and respect by doing someting to give back to society as a whole, since there is no money or other means to gain. People will still want to up the guy next door, so the only way to do this is to do something good for the Federation and give out your talents, be the best cook you can be, painter you can be, or Starfleet officer you can be. This is how those people compete with one another, since there is no way as we understand it to gain more possessions.

 

[Traveller]

I could probably write a book on the philosophy and theoretical economics of this,

I wish you would, because this aspect of Star Trek has always puzzled and fascinated me and I don't know a lot about economics, so I can't even begin to formulate theories about it.

 

[EmperorTiberius]

There are still limits that people are not talking about.

It's questionable as to weather energy is free. I don't know why it's assumed that everyone has a fusion reactor in their house. Even if they built that many, wouldn't there be safety issues?
I'm not sure you can go around building houses from your microwave-sized replicator either. We know there are industrial replicators available and a only a dozen or were considered a significant help from Federation to Cardassians. So large projects seemed to be handled by large replicators. And where would you get the material for your replicators, and who would deliver it? There are 5 billion people that need material for their replicators, but only 5 ships available to mine the materials from an asteroid field and transport it to Earth, so who gets "refills" first?

Even if that energy is cheap, there are always restraints of time and space. 1 billion want to go to Reesa for vacation, but there are only 10 transports, who gets to go? But, Seeing that Starfleet doesn't have 1 million starships, there are apparently some restrictions, and I can only think of energy as being a realistic restriction.

There has to be a credit system in place, and we know Feds have them. Was it Sisco who used up his transporter credits because he was being home for lunch? Berzans were given a certain amounts of credits by Federation for the proposed use of the wormhole, etc. People assume just because there is no money, you can do whatever you want and have what you want.

And I don't think they are same old humans competing for something else, may be they were that in 22nd century. But by 24th C. they are clearly a new race of people. Having been raised in a different system than their 22nd century predecessors, they have a completely different mentality. They don't need to work to live well. They don't care about material wealth, they do things so that they can look back at the end of their life and say to themselves they did something useful. They do it to explore and expand their horizons. Sometimes I'm curious about something and learn everything about it (hobby?). I don't think they try to up one another in intellectual fields or something like that, if they compete against anyone, it's only against themselves, to see how much they can push themselves and what they can achieve.

 

[Timo]

Was it Sisco who used up his transporter credits because he was being home for lunch? Berzans were given a certain amounts of credits by Federation for the proposed use of the wormhole, etc.

Neither of those describes the UFP economy. Sisko would probably have had SF Academy credits, because that organization would have an interest in artificially imposing hardships on its members. And the Barzans would have been foreigners; the UFP could use shiny baubles in interacting with those savages even if it didn't use money internally at all.

Indeed, all mentions of credits in the UFP refer to UFP/alien monetary interactions, not internal UFP ones. There are some less definite references regarding UFP-internal monetary interactions: our TOS and VOY heroes do buy and sell stuff for a price. But credits are never mentioned in that context.

Timo Saloniemi

 

[EmperorTiberius]

Was it Sisco who used up his transporter credits because he was being home for lunch? Berzans were given a certain amounts of credits by Federation for the proposed use of the wormhole, etc.

Neither of those describes the UFP economy. Sisko would probably have had SF Academy credits, because that organization would have an interest in artificially imposing hardships on its members. And the Barzans would have been foreigners; the UFP could use shiny baubles in interacting with those savages even if it didn't use money internally at all.

Indeed, all mentions of credits in the UFP refer to UFP/alien monetary interactions, not internal UFP ones. There are some less definite references regarding UFP-internal monetary interactions: our TOS and VOY heroes do buy and sell stuff for a price. But credits are never mentioned in that context.

Timo Saloniemi

I never liked that theory. If Federation credits are not used to allocate resources withing the Federation, then what use would they be to Berzans? Berzans can't spend them anywhere else, so if they wanted to purchase a science ship from Starfleet, how would they know how many credits a science ship is worth? If they wanted to buy delithium, how many tons could they get for the credits if there isn't already a fixed value for them?