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

[Deks]

You know that money was invented because barter like you described was clumsy and impractical. Now we are to believe that the oh-so-progressive 24th century UFP returned to this primitive system - why? Because materialism is the new sin?

Unconvincing.

To you perhaps, but as 'clumsy and impractical' it may be, it's easier for the Feds to barter with races because there isn't any evidence of a 'Galactic based currency'.
In any event ... the barter system (as opposed to the currency based one) was seen on-screen in numerous occasions and is much more productive because goods are directly transferred, and not 'money'.

In the real world, theoretically speaking, money was invented to also regulate resource use ... and it's used for anything BUT that when I see just what the system in question brought (stagnation being one of them as well).

It has been stated that they don't use money, but not how this is supposed to work on a practical, day-to-day level. And I still don't see how it could work, at least not universally. And why it should be plausible, just because the characters say it is so.

Yes, because what the characters say is practically the only thing we can go on with for one thing.
For the other, the UFP is an interstellar organization and the show is supposed to be set hundreds of years into the future, and Roddenberry's intent was that capitalism did NOT exist.
The bit 'we don't use money' which was confirmed on numerous occasions is a clear enough statement to me.

And how can those two systems coexist within the same organisation?

As I said ... internally, UFP doesn't use currency (other posters already provided ample amount of evidence to support a premise for a moneyless society which would work within Trek and on-screen evidence to support the premise has been stated ... if loosely).

I'm only saying that the UFP as a governing body (or SF officers) would use currency based system (by producing a necessary amount of the said currency) with races that still use it and will not accept simple resource exchange.
Janeway had to do it for example in the episode where Torres's violent thought was extracted and she was prosecuted as a result.
Janeway said she was not used to working with currency for one thing, though they had to use it because the race in question did.

On numerous occasions though, we saw trading happening between the UFP and organizations/individuals/whatnot that were not part of it.
This transaction utilized a barter type system which stated that an amount of x resources is to be exchanged with x amount of other resources (in Voyager's case when they were about to get the Isokinetic cannon ... it was 114 Isolinear chips for the cannon itself, with another 5 for Kovin to supervise the installation of the cannon in question - Janeway clearly never utilized currency, but exchanged a generous supply of Isolinear chips for 1 cannon).

 

[JoeFromEarth]

I think it's the difference between "We don't use money" and "We don't have money." They have money, they just don't care about it.

 

[The Castellan]

In the real world, theoretically speaking, money was invented to also regulate resource use ... and it's used for anything BUT that when I see just what the system in question brought (stagnation being one of them as well).

 

[Sci]

You know that money was invented because barter like you described was clumsy and impractical. Now we are to believe that the oh-so-progressive 24th century UFP returned to this primitive system - why? Because materialism is the new sin?

Unconvincing.

To you perhaps, but as 'clumsy and impractical' it may be, it's easier for the Feds to barter with races because there isn't any evidence of a 'Galactic based currency'.

And in the real world, two cultures will establish an exchange rate to determine how much of their currency the foreign culture's currency is worth, because money is a more efficient means of trade than bartering and always will be.

 

[Deks]

I think it's the difference between "We don't use money" and "We don't have money." They have money, they just don't care about it.

'You see ... money doesn't exist in the 24th century'.
Stated by Picard in 'First Contact' movie (further corroborated in TNG, DS9 and VOY).
How much clearer than that you have to be?

And in the real world, two cultures will establish an exchange rate to determine how much of their currency the foreign culture's currency is worth, because money is a more efficient means of trade than bartering and always will be.

In the real world which is governed by idiots and a system that destroys a lot of people's lives in the process while introducing poverty, diseases, re-allocating majority of resources to only 1% of the population while the rest have to do with scarcity, and old tech is being milked for years before something new gets to the market that's supposed to be cheaper to not only produce but also for consumers to buy, ends up with premium prices for time to come.
Oh yes ... a 'superior' system indeed.

In regards to the Federation though ... as far as we know, they abandoned money and prefer the direct transfer of resources when trading goes (which is what we usually saw on-screen).
Of course, if they meet a culture which values currency above all else (such as a lot of people do in this day and age) ... they will merely replicate the needed currency to get the resources in question (if they need them badly enough).

 

[The Castellan]

I think it's the difference between "We don't use money" and "We don't have money." They have money, they just don't care about it.

'You see ... money doesn't exist in the 24th century'.
Stated by Picard in 'First Contact' movie (further corroborated in TNG, DS9 and VOY).
How much clearer than that you have to be?

And in the real world, two cultures will establish an exchange rate to determine how much of their currency the foreign culture's currency is worth, because money is a more efficient means of trade than bartering and always will be.

In the real world which is governed by idiots and a system that destroys a lot of people's lives in the process while introducing poverty, diseases, re-allocating majority of resources to only 1% of the population while the rest have to do with scarcity, and old tech is being milked for years before something new gets to the market that's supposed to be cheaper to not only produce but also for consumers to buy, ends up with premium prices for time to come.
Oh yes ... a 'superior' system indeed.

In regards to the Federation though ... as far as we know, they abandoned money and prefer the direct transfer of resources when trading goes (which is what we usually saw on-screen).
Of course, if they meet a culture which values currency above all else (such as a lot of people do in this day and age) ... they will merely replicate the needed currency to get the resources in question (if they need them badly enough).

Woot, awesome post!
~Gives you a cookie~

If the system our world still reigns into Kirk's time, there's be no Starfleet, Kirk would be working 14 hour days to pay his bills, debt, and taxes.

And when it comes to trade, I'd rather barter. Especially since the dollar is backed by NOTHING. Just ugly pieces of cotten and linen fibers with ugly dead guys on them. I remember hearing Greenspan, when asked when he retired, if he wanted to be paid in dollars or euros, he said, gold. He knows money is worth the papers they are printed on.

 

[Anticitizen]

\
If the system our world still reigns into Kirk's time, there's be no Starfleet, Kirk would be working 14 hour days to pay his bills, debt, and taxes.

Why do you say that?

 

[Sci]

And in the real world, two cultures will establish an exchange rate to determine how much of their currency the foreign culture's currency is worth, because money is a more efficient means of trade than bartering and always will be.

In the real world which is governed by idiots and a system that destroys a lot of people's lives in the process while introducing poverty, diseases, re-allocating majority of resources to only 1% of the population while the rest have to do with scarcity, and old tech is being milked for years before something new gets to the market that's supposed to be cheaper to not only produce but also for consumers to buy, ends up with premium prices for time to come.
Oh yes ... a 'superior' system indeed.

I am in no way defending modern American Corporatism -- which really is a better word for how our system works than "Capitalism." It does indeed have plenty of those flaws you just cited, and I'll be the first to agree that in American Corporatism, the game is rigged to redistribute wealth upwards.

However, the continued existence of modern American Corporatism is not inherent to the continued existence of currency. Currency existed long before Corporatism or Capitalism were developed as concepts, and it will continue to exist long afterwards.

Why? Simple. People are always going to need goods and services, and people will always be better at some things than at others. As a result, specialization of labor will always occur -- if you're good at music and like it, and I'm good at writing fiction and like it, then it won't take long for both of us to see that the best way to use our time and resources is for you to compose music and me to write fiction. So trade is inevitable. But I just cited two products that can't be bartered, even though people value them. I can't just give the shoe-maker a novel in exchange for a shoe, you know? So instead, we use money.

As P. Gardner Goldsmith argues:

Money allows all participants to employ a universally recognized medium of exchange. No longer will you have to find a third or fourth or fifth party to trade your lumber to in order to get goods from the farmer. You can use money.... The flexibility of money, with its ability to let disparate persons work in harmony, is (far from Roddenberry's view) one of the most glorious developments in the history of mankind. Money is the machinery of peace, not war.

Furthermore, without money, it is impossible for the value of consumer or producer goods to be expressed in a practical way. Prices reflect the countless subjective valuations of sellers and buyers engaging in peaceful exchange. Prices are the result of each participant's decisions--the essential carriers of informationa nd the indispensible elements of economic calculation.

Now, I think Goldsmith doesn't take into account the existence of what I tend to think of as economic extortion in some exchanges; there are certainly situations, especially in American Corporatism, where goods or services are more highly valued (or, at least, priced) by the producers than they are by customers, but the customers lack sufficient economic clout to force producers to lower their prices. A prime example of this is gas, while I'll certainly agree is often made artificially highly-priced in the quest for maximum profits and which screws over millions of people every year when they find themselves having to choose between putting gas in the car or food on the table.

But while you and I are both skeptical of American Corporatism and Capitalism, I really think you're letting your disdain for those systems influence your understanding of economics. I firmly believe that it is possible for wealth to be distributed in such a way as to eliminate poverty, give everyone a middle-class lifestyle, and ensure that greed is kept in check. But the simple fact is that trade will always occur, and that money will always be used for trade, because bartering -- which would necessitate having to involve multiple parties to barter for things you don't have but your desired trading partner values in order to trade with him, or which has trouble trading abstract products like music in exchange for solid goods -- is simply a waste of everyone's time and energy.

 

[UssGlenn]

Of course, if they meet a culture which values currency above all else (such as a lot of people do in this day and age) ... they will merely replicate the needed currency to get the resources in question (if they need them badly enough).

That's counterfeiting and highly unethical and I seriously doubt the federation would engage in such a practice.

 

[Sci]

Of course, if they meet a culture which values currency above all else (such as a lot of people do in this day and age) ... they will merely replicate the needed currency to get the resources in question (if they need them badly enough).

That's counterfeiting and highly unethical and I seriously doubt the federation would engage in such a practice.

Indeed. That sort of practice could badly destabilize the foreign culture's economy, leading to untold hardship and suffering. It would be the very definition of a violation of the Prime Directive to engage in counterfeiting when trading with a foreign culture.

 

[Traveller]

It's art - it's useless by definition.

This statement is wrong on so many levels. Art is useless?

You forgot to quote the smiley I put after the sentence. But of course it's not so plausible then, to be so indignant over something that was clearly stated with tongue in cheek.

 

[Anticitizen]

Let's not forget that communist states still use money, too. Money isn't unique to capitalism.

 

[USS Triumphant]

Let's not forget that communist states still use money, too. Money isn't unique to capitalism.

I think that pure, working Communist states would NOT use money. But since we've never seen one of those on Earth (and I think it might be impossible for us to do so with more than a population of maybe 12 or 13 in the whole "state" in question without rewiring humanity to a fairly significant degree), that's a tough call to make, really.

 

[Mirror_Barclay]

1. It's clearly stated they don't have money. Unless they're deliberately misleading the people they say this to, this encompasses credit etc, not just physical cash and coins.

2. They frequently purchase things; they have whole eps based around corporations, complete with the Orion Syndicate moving in, demanding a high-paying job for the widow of a dead criminal, extending loans on extortionate terms, etc. (A system of humans and Trills, from which at least one Starfleet Officer comes, seems pretty Fed to me.) The EMH was more interested in making profits than spreading his message of holographic rights, although doing both at once was his preference.

So the canon is clear after all. The Federation alternates, perhaps on a regular weekly schedule, between having money and not. For certain undesirable jobs, they probably only get done on capitalism weeks; fun jobs are probably done all the time, with the pay every other week providing added incentive when people start to get slightly bored. All the main characters, as Starfleet Officers, do the kind of fulfilling and interesting jobs that get done either way.

 

[USS Triumphant]

So the canon is clear after all. The Federation alternates, perhaps on a regular weekly schedule, between having money and not.

I like this. It would also explain the apparent government structure. Mondays and Wednesdays, the government is ruled by a Democratically elected capitalist government. Fridays and Sundays, a Communist totalitarian regime is in control. Thursdays, it's a monarchy. Saturdays are potluck. And Tuesdays are when Starfleet rules by military junta - which is why the Enterprise-B was having to wait until Tuesday for some things to get installed. They were held up by bureacracy under the totalitarians and the democrats on Sunday and Monday, but when the junta is in control they can do what they want to do, when they want to do it.

 

[Ometiklan]

I have always thought the depiction of currency/money/credit use in Star Trek was understandable and reasonable if not always clearly or consistently depicted (which is what you would expect given that it has been written by hundreds of writers over 40+ years, 5 (or 6) series, and 11 movies). This discussion is the most pleasant and reasonable one I have seen on the topic and I think has provided many good points. My summary of my understanding is as follows:

Within the Federation:

- 99% of goods and services are not scarce, anyone can get them or have them.

- This means, like STR and others have said, that the collection of money or things is no longer the driving goal in life. If it is universally easy to aquire things, aquiring things has no value in itself.

- Those items that are limited (e.g., art, SanFran bayside earth property, a vineyard) can either be compensated for (via the Atlantis project, or living in another country, only a transporter’s trip away from anywhere) or will be used to the greatest benefit of many people (loaning or donating the original artwork to a museum).

- For other items, instead of costing more money, might cost more time (an excellent example was given as a trip to Risa, there might only be X million visitor spots open this season, so you get on the waitlist or go to another pleasure planet).

- Menial jobs are mostly/entirely automated or done artificially through robots or holograms (silly idea to use holograms really, but whatever Voyager). Then again there are those people who win the lottery but still go back to being a school janitor.

- People do the jobs they want or like to do, regardless of pay. People do this now in volunteer work, or those who work as a poor starving artist or actor for their craft.

- For those jobs that are less than prestigious (like working the lower decks on a starship) they still require much training and ambition, are where people want to be (working in space/exploring new worlds), and are crucial to gaining experience and maturity before getting a higher placed position. Uhura in Trek XI worked in the bowels until Kirk dragged her to the bridge, where her skills got her the bridge position. (Currently people work less than glamorous or entry level jobs in their professions to learn and prove themselves before they can move up. This is true for plumbers, to architects, lawyers, and doctors.)

- For bookkeeping purposes within the Federation there could still be a system of credits. This facilitates tracking supplies of raw materials and energy, helps in efficiency analysis, social or economic studies, and many other tasks – they just aren’t used in everyday transactions, regular people never run into them.

Outside the Federation:

- Each government might have their own system based on money or not – credits or gold-pressed latinum – whatever.

- For interaction with the Federation, these alien cultures (which might and reasonably do include cultures with ethnically Federation beings like an old Earth colony, or a trill mining corporation) would exchange goods and services for Federation credits which would have an accepted exchange rate with gold-pressed latinum or other unreplicatable items.

- When individual Federation members interact with these foreign bodies, they would rely on the Federation to provide the monetary backing needed. Star Fleet officers are supported by their “employer” Star Fleet. Evidence for what civilians do is less forthcoming. Jake was the only civilian I can think of right now who wanted to buy something, but he also wanted to keep it a secret so he couldn’t just ask the Federation for some money. My thought is that civilians who want to take on an investment or purchase outside of the Federation would get a loan. For longer term “loans” (i.e., leaving the Federation with a ship, etc.) there would probably be tighter caps on what the Fed would give out.

I think a good example of the Federation’s economics is Bashir’s dad. He seemed to skip from job to job, trying to do what he wanted to do to help society. He just wasn’t very good at any of it. But there was no indication that they faced any kind of economic or social hardship, they weren’t forced to take certain jobs, nor did they just laze around. I can see everyone else doing exactly the same thing, except they would be better at their chosen professions and would succeed somewhere way before he did.

One remaining question I have is about the Orion Syndicate or other criminal outfits. Now it is not clear to me that the Syndicate was operating on Federation worlds (I will have to go watch Honor Among Thieves again sometime), but even if it was, I think it is reasonably clear that where they were operating didn’t have complete Federation benefits/security, so they could operate outside of Federation norms with violence and greed and money.

 

[STR]

Right, because it's completely plausible that people will ever hold a uniformity of opinion on an issue that harms no one.

1st, sorry for the late reply. My notebook's monitor went out a week ago.

You don't need to. If 90% of the potential market agrees, you only have 10% that's chaffing under the system. Also, don't think that any economic issue harms no one. We've picked a benign example, but our trade-off may have life or death consequences elsewhere depending on the choice made.

Replicators can't even get basic foods to taste right. I'm deeply skeptical of the idea that they'd be able to make perfect forgeries of artistic masterpieces.

That's just crappy writing that compares a replicator to a microwave. It's expressing the conceit that food made quickly and easily must be inferior to a plate that's been slaved over for a day. Note that no such remarks were made until DS9, or at least until DS9 aired. TNG episodes (at least the first half of the show) had characters commenting on how good the food tastes, with the occasional comment that every time you order a dish it tastes exactly the same as the last plate. Which is either good or bad depending on your tastes.

Furthermore, we see replicators produce fantastically complex equipment. Items that cannot have errors on the molecular level. This requirement is incompatible with people whining about quality of the food. If one is a perfect working replica, the other must be.

Actually, that would just drive up the price for any painting that could be verified to be the real deal. After all, everyone and their uncle in Brazil has a replicator copy -- but a painting that can be verified as legit would be inherently rarer and therefore more valuable to the people who care about such things.

Therefore, with or without money, the value of these "legit" items makes them highly illiquid and hard to transfer in the first place. A lot of people will buy a $10M painting, but a $1B? You have a lot fewer takers. Nevermind that your item's value will drop to exactly zero if it turns out that somebody was lax for just long enough to scan and replace the painting (which could be done in 2 minutes tops). That's a lot of risk

There is a such thing as a chain of custody, y'know.[/QUOTE]
Chain of custody isn't good enough anymore, and not just because somebody could have forged the papers. Like I said, if that painting is unaccounted for 2 minutes, it's worthless. You would literally have to observe the painting for every second of everyday to guarantee authenticity and avoid someone pulling a switcheroo.

Well, on the one hand you seem to think humanity will be so evolved that materialism will be frowned upon,

We look down on excessive materialism now. Or do all your friends think living a rapper's lifestyle is the way to go? Hell, look at all the people passing judgement on the people with sub-prime mortgages. "They should have known they couldn't afford it." Evolved? It happens now.

Strategic resource management would require a massive bureaucracy (and considerable oversight and rotation of staff to prevent favoritism),

so you think people won't be above such base character traits.

Communism was based on the premise that materialism is the source of inequality. It tried to spread resources justly, utilizing the methods you mentioned, waiting in (endless) lines, or being on a waiting list (for forever). It had that massive bureaucracy, and it was infested with favoritism.

In short, it didn't work - not because it was technically impossible, but because it didn't take into account human nature.

Communism didn't work because people had to wait in line for every day needs. (Okay, it didn't work for a lot of reasons, but recall I'm not espousing a communist economy, but a hybrid that currently doesn't exist) You don't wait in line, you don't eat ANYTHING. It's far different from what I'm talking about, which is waiting for this season's wine, which is done today. It happens anytime there is more demand than supply, and the seller is unwilling or unable to raise the price of his good until demand equals supply. The only difference is that there's no deposit in the beginning or collection at the end, therefore you can't constrain supply with price, so you ration using the waitlist.

 

[Traveller]

Okay, I can see how this could work within the Federation. What I don't understand is how the deal with outside parties that do have a money-based economy. How do they define an exchange rate? How does the Federation acquire their latinum deposits?

I never gave much thought about the technicalities of international trade on Earth, today. Never asked myself how it actually works, until I stumbled over this thread. And they still tell me that Star Trek is escapism...

 

[Anticitizen]

Well, they mention credits, which are some sort of monetary substitute. And, as mentioned in this thread, people buy stuff, be it boats or whatever. A barter system wouldn't work - when you can replicate all you need, what could you possibly offer as a trade? There's SOME sort of monetary system.

I once read about something interesting in Japan - health care credits. Basically, you volunteer for health care - taking care of the elderly, etc for so many hours. In doing so, you earn health care credits, which are spent receiving such care in the future.

It's an 'alternative currency' to the dollar (or yen, as it were).

Maybe an extrapolation of this could explain Trek's wishy-washy stance on money.

 

[Klaitu]

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."

"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?

It's difficult to imagine a universe that doesn't operate on currency, but here's how I have always felt about it:

When the everyday things that you use and want can be provided to you at no cost by seemingly limitless technology, you get really bored and decide to do things just for the sake of doing them.

There was a time where horseback riding was an important skill for anyone to have, but now people who ride horses do so because they enjoy it.

While the Federation might not use a traditional currency system internally, there are many times when characters in Star Trek barter goods and services... and it would seem that the Federation does have some sort of monetary system for use with worlds outside the Federation.

At least, that's the closest I've gotten to understanding it.