So how exactly do they set things up so that everyone is equal economically? I mean do you seize mansions and such from the uber wealthy and divy it up? This is never really explained.
Star Trek Economy
- Thread starter AdmiralBruno
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Aside from occasional hints in various episodes, the subject seems to have been left deliberately vague. It was likely too troublesome to bother with in any detail.
From TOS - Star_Trek_Writers_Guide.pdf:
As to money, I'd like to classify various systems of economic exchange. Imagine that A has X and wants Y, and B has Y and wants X. How can A get Y and B get X?
The simplest system is barter. A gives X to B and B gives Y to A. That requires what economists call a "coincidence of wants", and that can be awkward to arrange.
Next up is a gift economy. A gives X to B, and B later remembers the favor and gives Y to A. That requires some mental bookkeeping, and it does not scale very well.
That leads us to a medium of exchange: money. Let's introduce it as M. A exchanges X for M and M for Y. Likewise, B exchanges Y for M and M for X. A's transactions and B's ones are now decoupled, getting around the coincidence of wants, though that will require some dealer(s) to buy and then sell X and Y.
Let's see what kinds of money there are. The first kind of money is commodity money, something traded at its non-exchange value. A variety of commodities have been used in that fashion, like bags of grain, seashells, precious metals, and cigarettes. The latter is what some concentration-camp inmates have used as money (Prisoner-of-war camp - Wikipedia).
Commodity money has a risk of variability of supply. A big increase in its supply can cause inflation, as the people of Spain learned when getting a lot of of gold and silver from the New World only caused prices to rise. "Everything is dear in Spain except silver" noted one traveler.
Commodity money can be awkward to transport, even relatively concentrated commodity money like gold and silver.
The next step is representative money, something traded at much greater value than its non-monetary value. The original forms of it were IOU's for commodity money, like precious-metal coins. Most money nowadays has that form. Paper money is an obvious one, and much money nowadays is entries in banks' computer databases. Coins are nowadays representative money also, often being much cheaper than their monetary value.
Beyond that, there is fiat money, money decreed into existence. It's Latin "let (it) be made", not the Italian car. Central banks have been creating it for decades, and such monetary fraud as debased coinage and counterfeiting are essentially fiat money. In fact, I've discovered some people online who consider *all* fiat money to be monetary fraud.
Short of that, a central bank can recklessly print money, causing galloping inflation. That is why some people like the gold standard, making paper money IOU's for gold or at least pegged to the value of gold. I recall someone stating that that puts monetary policy in the hands of the gold miners. Imagine Canada, South Africa, Russia, and Australia forming an Organization of Gold Exporting Countries.
In other words, they ducked the issue. I don't know if there was anything analogous for TNG, DS9, VOY, or ENT, though I would not be surprised if they ducked that issue there also.
As to money, I'd like to classify various systems of economic exchange. Imagine that A has X and wants Y, and B has Y and wants X. How can A get Y and B get X?
The simplest system is barter. A gives X to B and B gives Y to A. That requires what economists call a "coincidence of wants", and that can be awkward to arrange.
Next up is a gift economy. A gives X to B, and B later remembers the favor and gives Y to A. That requires some mental bookkeeping, and it does not scale very well.
That leads us to a medium of exchange: money. Let's introduce it as M. A exchanges X for M and M for Y. Likewise, B exchanges Y for M and M for X. A's transactions and B's ones are now decoupled, getting around the coincidence of wants, though that will require some dealer(s) to buy and then sell X and Y.
Let's see what kinds of money there are. The first kind of money is commodity money, something traded at its non-exchange value. A variety of commodities have been used in that fashion, like bags of grain, seashells, precious metals, and cigarettes. The latter is what some concentration-camp inmates have used as money (Prisoner-of-war camp - Wikipedia).
Commodity money has a risk of variability of supply. A big increase in its supply can cause inflation, as the people of Spain learned when getting a lot of of gold and silver from the New World only caused prices to rise. "Everything is dear in Spain except silver" noted one traveler.
Commodity money can be awkward to transport, even relatively concentrated commodity money like gold and silver.
The next step is representative money, something traded at much greater value than its non-monetary value. The original forms of it were IOU's for commodity money, like precious-metal coins. Most money nowadays has that form. Paper money is an obvious one, and much money nowadays is entries in banks' computer databases. Coins are nowadays representative money also, often being much cheaper than their monetary value.
Beyond that, there is fiat money, money decreed into existence. It's Latin "let (it) be made", not the Italian car. Central banks have been creating it for decades, and such monetary fraud as debased coinage and counterfeiting are essentially fiat money. In fact, I've discovered some people online who consider *all* fiat money to be monetary fraud.
Short of that, a central bank can recklessly print money, causing galloping inflation. That is why some people like the gold standard, making paper money IOU's for gold or at least pegged to the value of gold. I recall someone stating that that puts monetary policy in the hands of the gold miners. Imagine Canada, South Africa, Russia, and Australia forming an Organization of Gold Exporting Countries.
Most likely "they" don't, and people's position economically within their society depends on themselves, and their abilities and efforts, and what was passed down to them.
The thought that the people would be regularly stripped of all their belongings, so those belonging could be "redistributed" would hardly be my idea of a fair future society.
One of the things I believe about the Federation, is that it has a dizzying number of different types of economic system, governing styles, cultures and societies, what I would reject is the Federation having in some fashion simply one type of economic system from one end to the other.
Each of the Federation's member worlds would have their own internal system, Federation members would have everything from oppressive dysfunctional central planning, all the way through to laissez faire and caveat emptor capitalism.
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I'm extremely skeptical of the premise that a large-scale high-tech society can operate without money. If nothing else, it is a convenient means of accounting. It can be a way of signaling how easy or difficult it is to make some item, or how available or scarce some item is.
Let's say I want to outfit a spaceship with weapons, and I've allocated 10,000 credits for that job. Let's say that it's much more difficult to make long-range phasers than short-range ones. The phaser makers translate this difficulty into different prices: 1,000 credits for short-distance phasers and 5,000 credits for long-distance ones. So you can either buy 10 short-distance phasers, 5 short-distance ones and one long-distance one, or 2 long-distance ones. You then decide what to buy from how you expect to fight. But each order that you place has roughly equal difficulty for the phaser makers.
However, there are various ways to game that system, ways that have often been used.
Increased prices of luxury and status-symbol goods and services. Such pricing is a way of making such items seem very valuable.
Economic bubbles. These have a long history, from the Dutch Tulip Mania to the recent dotcom and housing bubbles. A lot of people try to buy something that they cannot all buy, pushing up the item's price. That gets more people trying to buy it, because it seems so valuable. As it becomes evident that it does not deliver enough return to justify its pricing, the bubble bursts.
Speculation. I'll use another example. Let's say that you live in a place on some planet, a place with seasonally-variable climate, a place where all the farmers are outdoor farmers. The farmers have to grow their crops when the climate is warm enough, or else wet enough, or else their crop plants will not produce much, if they survive. This is what most Earthling agriculture has been like for all of its history. During harvest time, a speculator can buy up all the crops and then resell them until next harvest at a greatly higher price.
Moneylending at interest. Charging for the use of one's money is a legitimate business practice, and interest (some fraction of the lent money) is a common way of doing so. It can be a good way of financing the building of a business. If I want to get into phaser making, and if I have to buy some expensive manufacturing equipment to make these weapons with, I can either save up my money, something that can take a long time, or else I can get a loan from a bank and buy the equipment right away. I can then repay the loan, interest and all, from my income from selling phasers.
A downside of moneylending is that it produces widespread indebtedness, draining money from the rest of society. Some societies have gotten around this problem by having various debt-forgiveness mechanisms, like jubilee years and bankruptcy laws. However, creditors have not liked to be deprived of their income.
Economic elites. There are several ways that wealth can get concentrated.
If a society can have money while avoiding economic pathologies, then it would be a great achievement.
Let's say I want to outfit a spaceship with weapons, and I've allocated 10,000 credits for that job. Let's say that it's much more difficult to make long-range phasers than short-range ones. The phaser makers translate this difficulty into different prices: 1,000 credits for short-distance phasers and 5,000 credits for long-distance ones. So you can either buy 10 short-distance phasers, 5 short-distance ones and one long-distance one, or 2 long-distance ones. You then decide what to buy from how you expect to fight. But each order that you place has roughly equal difficulty for the phaser makers.
However, there are various ways to game that system, ways that have often been used.
Increased prices of luxury and status-symbol goods and services. Such pricing is a way of making such items seem very valuable.
Economic bubbles. These have a long history, from the Dutch Tulip Mania to the recent dotcom and housing bubbles. A lot of people try to buy something that they cannot all buy, pushing up the item's price. That gets more people trying to buy it, because it seems so valuable. As it becomes evident that it does not deliver enough return to justify its pricing, the bubble bursts.
Speculation. I'll use another example. Let's say that you live in a place on some planet, a place with seasonally-variable climate, a place where all the farmers are outdoor farmers. The farmers have to grow their crops when the climate is warm enough, or else wet enough, or else their crop plants will not produce much, if they survive. This is what most Earthling agriculture has been like for all of its history. During harvest time, a speculator can buy up all the crops and then resell them until next harvest at a greatly higher price.
Moneylending at interest. Charging for the use of one's money is a legitimate business practice, and interest (some fraction of the lent money) is a common way of doing so. It can be a good way of financing the building of a business. If I want to get into phaser making, and if I have to buy some expensive manufacturing equipment to make these weapons with, I can either save up my money, something that can take a long time, or else I can get a loan from a bank and buy the equipment right away. I can then repay the loan, interest and all, from my income from selling phasers.
A downside of moneylending is that it produces widespread indebtedness, draining money from the rest of society. Some societies have gotten around this problem by having various debt-forgiveness mechanisms, like jubilee years and bankruptcy laws. However, creditors have not liked to be deprived of their income.
Economic elites. There are several ways that wealth can get concentrated.
- Selling something with a low cost to make but with lots of buyers, like a book.
- Investment of one's wealth in wealth-producing assets. This can cause exponential growth. If one has a lot of wealth, then one can easily spare a lot of wealth for that.
- One's wealth can make one less vulnerable to both internal and external troubles. One survives economic slumps and one's mistakes better, and by some standards, one buys a right to be irresponsible, a right to escape the consequences of one's actions.
- Gaming the social, economic, and political system that one inhabits.
If a society can have money while avoiding economic pathologies, then it would be a great achievement.
Trek has always talked more about eliminating poverty than actual economics. That was their main message; poverty has been eliminated.
But one idea that is practical is that everyone is gainfully employed and if not, employment is readily available for anyone.
Wages are spent on replicator priviledges, where everyone has the same access to the most luxurious foods and items.
No credits or ran out? The replicator won't work, or only in a limited way.
But that idea would never work in Trek. It would never fit in with the utopian style it promoted.
So it's basically an interesting, yet weird economy, at least by our standards.
But one idea that is practical is that everyone is gainfully employed and if not, employment is readily available for anyone.
Wages are spent on replicator priviledges, where everyone has the same access to the most luxurious foods and items.
No credits or ran out? The replicator won't work, or only in a limited way.
But that idea would never work in Trek. It would never fit in with the utopian style it promoted.
So it's basically an interesting, yet weird economy, at least by our standards.
I don't know where that is supposed to be stated, but I think that that extreme would be inappropriate. Downward-redistributive taxation would be more appropriate, especially if it leaves rich people with plenty of wealth left over, so they don't have very much to whine over.
A high universal basic income would be more appropriate. Everybody would have enough to have what we would consider an upper-middle-class lifestyle. That would require technology advanced enough so that one does not have to work very much to have that standard of living. I say upper-middle-class because some studies show that it should be enough to satiate most people. (Study: Money Buys Happiness When Income Is $75,000 - TIME
Here is an alternative to a UBI, or an alternative way of implementing it. Isaac Asimov wrote "The Naked Sun", a novel about the colonists of a planet named Solaria. The Solarians lived in physical isolation from each other, preferring to "view" each other with two-way TV (nobody anticipated generalized data networks like the Internet). Every Solarian lives on a big estate that is tended by robots who provide a comfortable lifestyle for them.
One can do that in a virtual way, by having everybody own stock in manufacturing companies and the like.
One thing I recall is when Sisko's father said that his son used up a month's worth of transporter credits in a week or something....
But also, how does he run a restaurant without money in the society?
But also, how does he run a restaurant without money in the society?
Then there is the question of what everybody does all day in a society where everybody has a high standard of living without anyone needing to do a lot of work to sustain it.
That question may have been addressed a bit in some episodes, like DS9 "Let He Who Is Without Sin..."
But the upper crusts of human societies have sometimes approached that state of affairs. From Nobility - Wikipedia:
But nobles did have to put in some work, like Cavalry - Wikipedia:
A cultural thought experiment - Charlie's Diary
Charlie Stross then mentions the law of "diminishing marginal utility". The more that one has of something, the less useful each added bit of it becomes. He then considers what our society looks like to someone who makes $5 million a year. Just about everything that's a part of our everyday activities is essentially free.
Food, clothing, housing, household tasks, transport, education, law -- even combined, they won't make much of a dent on one's budget.
He then notes that there are some things that great wealth still cannot buy much of. Health, collective security, extreme dreams like colonizing Mars.
That question may have been addressed a bit in some episodes, like DS9 "Let He Who Is Without Sin..."
But the upper crusts of human societies have sometimes approached that state of affairs. From Nobility - Wikipedia:
But nobles did have to put in some work, like Cavalry - Wikipedia:
This seems a bit like Captain Kirk in TOS often endangering himself, but that's what they did.
A cultural thought experiment - Charlie's Diary
Space travel continues to remain expensive, barring greatly increased overall wealth, or else greatly improved technologies like in Star Trek.
Charlie Stross then mentions the law of "diminishing marginal utility". The more that one has of something, the less useful each added bit of it becomes. He then considers what our society looks like to someone who makes $5 million a year. Just about everything that's a part of our everyday activities is essentially free.
Food, clothing, housing, household tasks, transport, education, law -- even combined, they won't make much of a dent on one's budget.
He then notes that there are some things that great wealth still cannot buy much of. Health, collective security, extreme dreams like colonizing Mars.
So it's only partially a post-scarcity economy (Post-scarcity economy - Wikipedia).
Beats me. As I posted earlier, I'm very skeptical that a high-tech, large-scale society can do without some form of money. When concentration-camp inmates use cigarettes as money, one can be sure that something does not quite fit.
Is it possible that Joseph Sisko is subsidized by the Earth government to run his business? Basically, perhaps he's paid a larger than normal amount of (transporter/replicator/shuttle-fare) credits in exchange for operating a free-to-all restaurant in the heart of New Orleans.
Presumably, the restaurant would operate on a reservations basis, to control the influx of patrons and make sure they have enough supply on hand. Sisko's restaurant is arguably a cultural icon that the government might have an interest in promoting.
Alternatively, everyone could just transfer their credits to Joe's business in exchange for food and service, and he could use those credits to pay for his supplies, employees, and lifestyle. But that seems awfully familiar.
Presumably, the restaurant would operate on a reservations basis, to control the influx of patrons and make sure they have enough supply on hand. Sisko's restaurant is arguably a cultural icon that the government might have an interest in promoting.
Alternatively, everyone could just transfer their credits to Joe's business in exchange for food and service, and he could use those credits to pay for his supplies, employees, and lifestyle. But that seems awfully familiar.
It's possible that line might represent an artificial scarcity imposed by Starfleet Academy. Like the old payphone rules that (formerly?) applied on military bases during training, Academy cadets are only given a small allowance for way-off-campus transporter usage (probably intraplanetary) during a regular month.
Not that transporter credits don't make sense in general for such a high-energy consuming mechanism.
D
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There are a dozen posts in this thread, but not one imagines a possibility where the person who owns the mansion opens it to anyone who needs a home.
The answer to your question is that you build a society where people who have choose give it to those who do not.
The answer to your question is that you build a society where people who have choose give it to those who do not.
Yeah.... well nowadays that's VERY rare.
economics are pretty important in DS9
Is it? Wasn't something I noticed outside of references to "Latinum" as a currency and Quark's wheeling and dealing. Nor do I recall any details about how Federation economics worked.
The Ferengi are important. Three major characters and numerous recurring ones are.
Yes, but how does that tie into the economics of the 23rd/24th Centuries, especially in the Federation? All we know is Ferengi are greedy Capitalists that would put Scrooge McDuck to shame.
even Quark has moments where he puts aside his greed for the greater good.
He's a flawed hero.
He's a flawed hero.
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