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Paul Krugman's 1978 Theory of Interstellar Trade
jerryasher recommends Paul Krugman's blog at the NYTimes, where he introduces a paper he wrote, The Theory of Interstellar Trade, with tongue very much in cheek. Some packrat academician was kind enough to send him a scan, because "back then academics did their work with typewriters, abacuses, and stone axes." Abstract: This paper extends interplanetary trade theory to an interstellar setting. It is chiefly concerned with the following question: how should interest rates on goods in transit 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 traveling with the goods than to a stationary observer. A solution is derived from economic theory, and two useless but true theorems are proved... This paper, then, is a serious analysis of a ridiculous subject, which is of course the opposite of what is usual in economics."
Just flush them out now. Mark me -1 flamebait for this, but this post will bring out the people insisting on the strict superiority of gold over other forms of investment. While in this case, gold in a safe place (or any other precious metal) would be a better choice over a possibly unmanaged and eventually insolvent investment fund, THAT DOESN'T MEAN that gold is always better or what not.
First -- if the player is traveling near the speed of light _with_ the cargo, then he won't notice that the people who are not moving have aged. If the cargo is something useful and rare (fusion fuel, perhaps) or from a far-advanced culture (fusion reactors, perhaps) then he's reasonably assured of finding a market upon arrival even if he didn't get a chance to set up a deal ahead of time.
Second -- I'm not sure that a transaction that takes longer to complete than the life of any trader is necessarily impossible. People make investments they know will outlast them, largely because they hope to sell to somebody younger when they need the money. If I set cargo in motion that will return a $100 million payment in 100 years, I know that I'm not going to live long enough to ever see the return. But, in 50 years I can probably sell the right to the value of the cargo for $5 to $20 million, depending on interest rates (see present discounted value). Some young whippersnapper (or an institution with a long horizon, or somebody else who hopes to trade again) would be happy to take the deal. It doesn't matter that I'll personally never see the dividends; if the payment down the line is certain enough then somebody will be happy to buy it from me.
No, I am saying it would not be there in the first place because the people who would have originally made the deal to transport the titanium would be dead already and thus they would not have made the deal in the first place.
If the transporters were "traveling salesmen" who flew around the galaxy buying and selling, they would need to be both long-lived and long-sighted since the demand for product X is entirely dependent upon time. Let's say they were selling a brand new Earth. 6000 years ago, such a thing would not have been necessary, while today it would be quite attractive at the right price. How could those beings know and prepare such a product 6000 years in the past in anticipation of demand 6000 years into the future? It wouldn't be trade so much as gambling.
... are quite common. We call them "stocks", which are in principle supposed to function in perpetuity, and on the timescales of most investing humans (begin investing at age of majority or shortly thereafter, begin selldown at age of retirement), a suprising number of them are. (Companies older than 80 years old are not terribly uncommon. If you count all the various mergers, divestures, and restructurings that didn't result in common stock investors taking a total bath, there are probably more companies around today that "remember" commitments made in 1899 than there are living people who were alive in that year.)
This is largely just a pointy headed clarification: interstellar trade would be impossible for a host of other reasons. We'll start with "There is nobody to trade with, and finding somebody to trade with would require the 12th century Catholic Church making a deal with Microsoft on behalf of the 28th century Catholic church, without of course knowing that Microsoft exists, what form it takes, or what it values."
Help poke pirates in the eyepatch, arr.
This reveals the fundamental flaw in the analysis: it ignores the possibility of the trader living on the ship. considereing only traders that live on one planet or the other (or that travel between, but settle on one or the other).
The time taken to travel in the reference frame of the ship might be short enough to make trade worthwhile.
The best novel I've read that considers interstellar trade seriously is Vernor Vinge's A Deepness in the Sky. The only items proposed as valuable enough for trade are technologies and crewmembers. Mostly, the trade ships would give planets important technologies in return for the ability to recruit new crew, but occasionally a ship would encounter a new technology to acquire.
Socialism: a lie told by totalitarians and believed by fools.
The first merely requires a heck of a lot of energy. The other requires massive control ov entropy in a very complex system: it's a rather different type of problem.
1. Specific elements/particles according to supply and demand.
2. Knowledge of what can be done with said elements.
When you have post human super AI and nano-tech then the cost of making things is zero once the elemental materials and energy are accounted for, that folds into just elements because energy is derived from elements (fusion or fission feed stock)
Knowledge can travel at light speed, or perhaps faster if quantum coherence becomes usable over interstellar distances, then the coherence of particle pairs will be consumed to provide instantaneous knowledge over any distance. Spreading particle pairs over such distances will take time but can be done in advance of their use.
The cost of knowledge will be proportional to the computational time required to create it, this will be determined by the size and speed of the logic engines assigned to the task.
Finding a means of trading knowledge for access to QC network bandwidth will be interesting. Perhaps knowledge will be free, but the cost of getting it in real time will not be, otherwise you would need to wait for it to propagate at light speed.
So in the future galactic commerce may be centered around access to quantum coherence bandwidth.
I remember that one. They somehow completely forgot to factor in that though cryosleep may help in shortening the travel-time to acceptable levels, it'll do nothing to the deprecation of investments, thus the entire thing would never pay off.
I seem to recall that the medical research was a little sloppy too.
In the end, if you want to run an operation like this, you end up doing something like the Qeng Ho in Vernor Vinge's excellent "A Deepness in the Sky".
Your fleet *is* the company. From what little information you gather, you take things with you that are probably tradeable at destination, and as well you take tools that can work on a wide variety of raw materials, in case you have to do this work yourself (if the locals aren't friendly, aren't at the right tech speed, or just aren't). If you're running to and from a base in the middle, you'll end up having to work out what home base might find useful when you get back from extrapolation of your current trends, while being aware that commodity consumables probably won't cut it.
... and today's pet project has
(And even then it doesn't necessarily solve it completely. A colony of robots can still spend most of its energy and resources just repairing the robots and building new ones, so that cost can still remain. Or worse yet, it may need more goods sent from Earth than some colonists would, because such robots would presumably be high tech and require lots of energy and a lot of different factories to produce. So it might still be cheaper to send a 20km ship full of colonists, which only need a couple of farms to live there.)
Ok. Here is the deal about space that makes trade a moot point.
Space is huge and has almost unlimited resources compared to earth and is quite ubiqutous.
Need energy? Put up solar panels.
Need water? Go mine a comet.
Need metal? Go mine an asteroid.
The key point is that space exploration will be pretty much like early colonization of America. You can't rely on shipments from a far away land and if its there you can take it if no other locals complain. And if they do... Well it depends on who brought their space gun.
I suppose Earth governments may dole colonial charters, but what happens if one of the colonists breaks the charter and starts taking more than they were granted? I suppose you could send an army and a governor up there, but often times with travel times of years and possibly decades... By the time the army gets there the situation would have changed or the other colonists would have suffered the tyrannical rule of whoever had sway over the colony.
Even then, you might even get "space pirates" who aren't colonialists but have no problem showing up at the local water mining facility to take something off the top and since space is so big, it will be difficult to find much less catch.
After a while, trade might be viable, but like the Americas in the 1500s you didn't get trade as we know it until the late 1700s when the Colonial governments were well established and the high seas were well patroled by the Royal navy.
Now, I don't see a dystopian future with pirates roaming the vast regions of space, but given human nature we will see plenty of humans taking advantage of other humans far away from home.
"I am the king of the Romans, and am superior to rules of grammar!"
-Sigismund, Holy Roman Emperor (1368-1437)
This is a pretty optimistic assessment. I mean, just look at what goes in to mining and extraction of resources on THIS planet in order to make them viable. How much infrastructure is required to turn iron in the ground into HY-80 steel? I'll answer: a shitload. That's even assuming the iron is good enough in the first place. The "mine it yourself" idea works great on Gilligan's Island and Star Trek but doesn't make any sense when you REALLY think about it. How would you design a probe short of magic to extract, refine, test and smelt an arbitrarily large number of metals without those pieces taking up a significant portion of the payload? Even optimists on that front (like Bob Zubrin) realize that you need to pick specific materials to look for and design for the low hanging fruit so to speak.
And your first point that space has unlimited resources compared to earth is absurd. Compared to earth space has practically zero resources. None. In comparison to earth, the resources of space over any volume are effectively zero. There is 4-15 light years of not a whole lot between us and anything else. You have to go 30-40 MILLION miles even in this solar system to get to someplace that isn't the moon. Where on earth do you need to go 40 million miles to get something? The problem with space travel is that resources are astonishingly scarce. Part of the work of designing craft is in addressing that scarcity.