The Theory of Interstellar Trade (1978)
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> This paper extends interplanetary trade to an interstellar setting. It is chiefly concerned with the following question: How should interest on goods in tranist be computed when the goods travel at close to the speed of light? This is a problem because the time taken in transit will appear less to an observer travelling with the goods than to a stationary observer. A solution is derived from economic theory, and two useless but true theorems are proved.
Such comparative advantage would likely disappear overtime, unless a given solar system actively keeps its technological know-how secret in some way, or controls the travel of skilled people (as in nuclear tech today). Or, perhaps, some solar systems may fail to create the institutional context necessary for building such a system — if, for example, they keep nuking themselves. In any case, it's not too hard to imagine scenarios in which such trade would be necessary.
The first colonists will of course need to bring stuff with them, but it doesn't make sense to assume they won't plan on building most of what they need once they get there. It is a lot easier to setup manufacturing when you don't have to invent the assembly line.
I can maybe see trade of one of a kind things. It hard to believe the Mona Lisa would ever leave earth, but that type of thing where the original is the thing might be worth it. Not enough to sustain trade though, the time line is far too long.
IMHO, first thing sent will be a universal Assembler, which will produce stuff and clone colonists. If a woman can give birth to a baby in 9 months, we can create a "3D printer" which will self assemble other "3D printers", which then produce mechanisms, computers, and colonists.
The "protomolecule" from the Expanse series is an even more effective if frightening version of the idea, an interstellar virus that hijacks any local biochemistry to bend it to its purposes.
> It is at least possible that a manufacturing ecosystem would be so difficult to develop that it would require fewer decades to transport products than to develop that ecosystem.
Or there are multiple desired products whose manufacturing ecosystems place such a burden on a system that a single system can't support them all.
Edit: come to think of it, interstellar trade might become necessary once we start building at larger scales - moon sized space stations, asteroid-sized interstellar ships, etc. That's a lot of material to mine, and it might be easier to import it.
If you restrict the discussion to worlds that are basically human habitable, also any trace elements that humans need. (According to this [1], humans are known to need 25 elements to live so that would be a good place to start.)
[1] https://www.sciencelearn.org.nz/resources/1728-the-essential...
https://www.nature.com/articles/s41467-020-17649-9
Another one might be uranium.
https://en.wikipedia.org/wiki/Project_Orion_(nuclear_propuls...
That’s an energetically impossible claim.
*Not unlike it's current-day counterpart, Macroeconomics.
In certain respects, macroeconomics is wildly successful, so successful that people take it for granted. It's bad at forecasting recessions, but good at telling us how to react to them. It was bad at predicting 2008 would happen, but was good at preventing 2008 in turning into 1929. There's no way macroeconomics could predict COVID would happen in 2020, but aggressive fiscal and monetary policy kept the economy from being completely wrecked by the pandemic.
That is such an unfair comparison. You don't know that 2008 wasn't as bad as 1929 because we have a better food supply chain and food productivity (norman borlaug and all that), and healthcare technology, and not because of macroeconomic guidance.
Macroeconomic guidance, after all, is what has got us to a state where we bail out the rich by stealing from the productive value of the poor.
In 2008, governments prevented the banking system from collapsing, and were able to rapidly expand the money supply because there's no gold standard. The US was the epicenter of the crisis, but recovered faster than Europe because it was more aggressive. In 2020, the response was even more aggressive, and the recovery faster.
The US hasn't pursued the ideal policy, but the policy it has pursued has made recessions shorter than they would be, otherwise. If anything, the lesson of 2020 is that governments should follow the advice of macroeconomists more than they already do.
Classic case of correlation != causation. Also, it's very selective memory. Why did you not include the data point of 1920/1921 contraction where they did not go off the gold standard and the economy snapped back? In relative terms, the contraction bottomed out worse than the '29 contraction.
This "recovered faster" talk is all insane. All of the metrics you are using are basically metrics that apply to the top maybe 10% of income earners. The only metric that maybe applies to the rest of us is "employment", but who can know anymore, as the real returns to labor have been totally distorted, and in a lot of ways employment numbers are measured in a funny fashion (we don't count people not seeking work). The rest of the population is not necessarily doing as great.
> the lesson of 2020 is that governments should follow the advice of macroeconomists more than they already do.
Don't forget the lesson of King Edward II, who was discovered to have debased the currency and funnelled the funds to political cronies (mostly Hugh Despenser). Who knows if the account of the exact method of his death were true, but what is true is that the people got so angry at the real returns to their income that they triggered a civil war to depose him.
Unemployment responds to increases of the money supply. This pattern is quite visible in the macroeconomic data we have. Also, "employment" includes everyone who has a job, so there's nothing funny about the metric. "Unemployment" requires some restriction, because there are people who have no plans to enter the work force in the near future, such as college students, the retired, or the fraction of spouses that plan on staying home. If you don't like the definition the media reports, there's a whole spectrum of alternate measures that the BLS computes that you are welcome to look at, instead. Over short time intervals they tend to march up and down together.
I may have forgotten the lesson of King Edward II, but I remember the lesson of the Great Depression, which caused Adolf Hitler to come to power. He took Germany off the gold standard, and engaged in large fiscal stimulus, albeit for the grim purpose of conquering Europe. I also remember that Karl Marx predicted that the internal contradictions of capitalism meant that it was doomed, and how those claims looked like they were being vindicated in the 1930s, because macroeconomic stimulus was applied so late.
Not much that’s going to worth the high cost. Assume the cost could ever even be paid.
Another answer for the Fermi Paradox, maybe.
Information itself does not have inherent value. If you send a colony information on how to create an advance polymer, but the colony lacks a use for it, the requisite knowledge, the requisite tools, the requisite knowledge to craft the tools, or the requisite materials, your transmission isn't 'worth it'. You'd be better off not sending the information (possibly in favor of sending the requisite information).
The second part of the question is 'How do we know what will be worthwhile in advance?' It's easy to look back X years and say "Yes, this information was worth carrying forward into the future." (On Earth, it's even easier, because carrying that information forward is dirt cheap.) It's a much harder problem to figure out what information is worth carrying forward at the time you have to make the decision and when the costs are much higher.
But I got to imagine that by the time interstellar trade would be an option, there would be some very valuable blueprints of autofactories and other goods, operating systems and other software with centuries of real-world proofing, and other stuff you’d like to get without doing all the trial and error yourself.
Trial and error might actually be faster depending on how long a round trip takes. Imagine waiting fifty years for the blueprints to arrive only to learn some packets got dropped along the way.
You could buy up a bunch of junk and sell it off as curios. I'm sure people would line up to have the only blanket made off world.
On other hand new "new old stock", is quite interesting proposition. As items would be old stock, but still in brand new non-aged condition. So spare parts with limited life-span and lowish demand or complex manufacturing process might be the answer...
There would effectively be a ripple pattern on what counts as new, originating from the source. This ripple pattern would not only apply to physical goods, but also the information about how they were manufactured.
As someone's who has gotten into 3D printing lately (it's super cheap now...), I'm still wrapping my mind around all the things I can just make at home, vs having them fabricated elsewhere and going to pick them up or having them shipped to me.
> It seems to me that the only thing that would ever be exchanged between solar systems, would be information.
Maybe Thingiverse is onto something here?
That said, I can't imagine a terrestrial economy - much less interstellar one - built on trade of paintings and sculptures.
To get to the highest velocity you need a very low mass fraction. You need your ship to be mostly propellant. All the mission equipment would be constructed at the destination out of ship structures and raw materials at the destination.
If you've got nanobots that can directly construct anything you want you live in a post-scarcity Soviet so economics aren't terribly meaningful anymore.
[0] https://en.m.wikipedia.org/wiki/Self-replicating_spacecraft#...
The presence of natural resources is not the same as having the craftmanship able to best utilize them.
And when scarcity of resources are not a problem, craftsmanship becomes even more important to people.
To make use of the materials and other benefits the system does have; the same reason we settle such places on Earth.
> Moving nontrivial amounts of mass around the universe is extremely expensive.
This amount of energy is a smudge on a ledger in comparison to the energy even a solitary, planet-less red dwarf puts out in its lifetime.
Unless we develop a method for fusing the materials we need from hydrogen and helium, the only chance of becoming a type III civilization is to learn to move mass around and make these trade offs.
The next global pandemic?
The economic impact to the attendant ('observer travelling with the goods') is not diminished by his own experience of the passage of time, but is affected by the reduction in his own ability to take on other tasks during the same [external] time frame.
In other words, it doesn't matter that he experienced the travel as five minutes. What matters is that his options were limited for five days.
A 1,000 year human has many more opportunities, and compounding interest will only grow his wealth further. Here's only an initial $1000 investment over 1000 years:
https://www.calculator.net/interest-calculator.html?cstartin...
At the end of it, they have $358,816,... a huge amount of money.
By year 730, they're quintillionaires. Then they have roughly 270 years to spend it, and on top of that, they can hand some of that wealth off to their offspring if inheritance rules don't change. (So really, it's the subsequent generations you really have to worry about)
Near light travel time dilation is essentially life extension relative to planetary populations. So any interest paid to the traveler should be calculated at the fraction of time experienced, so 5 minutes to 5 days would be 1 / 1440.
As for any opportunity cost, well, there really isn't any greater opportunity cost than being able to extend your life by that much and wait for interest to accrue. So by virtue of being able to travel at near light speed and dilate time, you're quite happy to forgo every other opportunity.
Curious that you've framed the question in non-market terms (allowed by whom?).
> A 1,000 year human has many more opportunities
No more so than 10 generations of 100 year humans. People can and do coordinate over long time spans and multiple generations. Heck, that's basically what a corporation is.
> compounding interest will only grow his wealth further
Only insofar as they have deferred consumption for longer. This is how interest works.
> At the end of it, they have $358,816,... a huge amount of money.
Signifying the economic benefit from deferring consumption and instead putting those resources to productive use. This is a Good Thing.
> So any interest paid to the traveler should be calculated at the fraction of time experienced, so 5 minutes to 5 days would be 1 / 1440.
As you've described it, those travelers will already be more inclined to accept a lower interest rate than non-travelers. What's the problem?
> Near light travel time dilation is essentially life extension relative to planetary populations. So any interest paid to the traveler should be calculated at the fraction of time experienced, so 5 minutes to 5 days would be 1 / 1440.
Why should either the lender's clock or the borrower's clock be considered more valid for the purpose of calculating interest? Why is one privileged over the other?
What about the actual vs. perceived wear and tear on the ships(?) transporting the goods, do they experience 5 days worth of repair/upkeep (fuel?) needs, or 5 minutes? Maintaining the transport (vehicle, ransible, teleporter, whatever) has some sort of cost - TANSTAAFL.
It's only the stationary observer (not travelling with the ship) who experiences 5 days.
Krugman, in one of his autobiographical essays, described economics as the field that people get into when they can't hack it in math, physics or some other high-rigor STEM field. Part of proving one's intelligence as a junior economics faculty member is doing a lot of mathematically-heavy fireworks and then moving on to "real" research that matters.
We can laugh at this one but what is not laughable is the huge resource cost in supporting an academic economics establishment (at least in the theory area) whose product is actually not that much different from this.
Soon Krugman wrote another piece because people misunderstood what he said: Mathematics and economics https://krugman.blogs.nytimes.com/2009/09/11/mathematics-and...
>I’ve been getting some comments from people who think my magazine piece was an attack on the use of mathematics in economics. It wasn’t. ... What I objected to in the mag article was the tendency to identify good math with good work.
It was back when people had janky self-hosted html sites, and the like; probably written in the late '90s.
And it's definitely the case that a great deal of very accomplished people (including in areas like software development and chemistry) are also not really cut out for a career in physics.
Krugman, P.,"Theory Capital and Travel Light-than-Faster", prosessed, Yale University, 1987
(The writer also received a Nobel for his contributions to the theory of international trade and economic geography).
The author used a slingshot maneuver around the sun à la Star Trek IV: The Voyage Home.
FWIW, I also enjoyed reading his latest NYT piece for its substance, observation and its humour:
https://www.nytimes.com/2020/12/28/opinion/reagan-economy-co...
https://www.nobelprize.org/uploads/2018/06/krugman_lecture.p...
https://pr.princeton.edu/pictures/g-k/krugman/krugman-increa...
The interstellar element feels like an extension of that.
> [Recent progress raises] the distinct possibility that we may eventually discover or construct a world to which orthodox economic theory applies.
This really strains credulity for me. Whatever you think of various heterodox economic theories, their objections tend to come boil to some combination of: class analysis; "human nature"; the second law of thermodynamics; conservation of energy; justice; the environment and ecology. To my knowledge, no one in the scientific community is suggesting that other solar systems will contain environments that take those factors off the table (and nor were they in 1978). Resources are finite and people are people wherever you go (unless our species itself is transformed - but interstellar travel is neither necessary nor sufficient for that to happen). What's the deal? Am I missing something? Am I reading too much into the fanciful introduction to an interesting paper?
Another joke: “Among the authors who have not pointed this out are…”
Those with the shortest time preferences will borrow at higher interest rates; those with the longest time preferences will lend at lower interest rates.
All the math about clocks and reference frames is just scientism.
2016: https://news.ycombinator.com/item?id=13064504
As an example, I remember Marvin Minsky walking into 6.034 one morning in 1978 completely apoplectic over an article in that morning's "Ergo" (A MIT/Harvard libertarian free student newspaper distributed on campus) criticizing some research on homosexual behavior in ducks. I can't find any current reference to Proxmire, but I recall he was involved and it would have been up his alley. Anyway, as I remember, Minsky spent most of the morning explaining the research and it's importance with a real passion. It's one of those things you don't forget.
EDIT: I found a reference that says how Proxmire had his staff compile constituent responses to his endless press releases to find subjects sparked the most interest. He was pretty much seen as an idiot in academia but he could easily ruin careers.
An old one:
Remember the unfortunate econometrician, who, in one of the major functions of his system, had to use a proxy for risk and a dummy* for sex.