T O P I C ��� R E V I E W
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Vortex
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posted
One question that seems to come up quite a bit is exactly how the economy of the Federation works. I called up some of my notes from my economics courses, and started applying data from Star Trek to economic principles. I've tried to stick as close to GR's ideas as I could (as far as I understand those ideas), and I hope that I can shed some light on this confusing subject. Maybe latter I'll address interstellar trade. The model that I will postulate could be referred to as the High Technology Cooperative Model, where rational, mutually interested agents interact with social-utility maximizing firms. The economics of the United Federation of Planets seem to indicate that in the Twenty-third and Twenty-fourth centuries there has been a change in basic assumptions of modern economics, which makes economic analysis difficult, but possible at a basic level. The most important change in economic thought in the era of "Star Trek." In "The Neutral Zone (TNG)", Captain Picard mentions that human beings no longer aim for the continual acquisition of more material possessions, but rather to mental and spiritual self-improvement. In essence, mutual concern replaces self-concern, meaning that everyone is willing to agree to an equitable division of resources, products and services. Private property still exists, but the fruits of production are available to everyone without prejudice. Since people do not care about material wealth, they will not take more than they need for their own sustenance. The distribution and allocation of goods and services is based on need, not the ability to pay. Furthermore, those that are motivated by greed effectively steal from all the people of their region, planet and the entire Federation. While the point at which greed becomes theft is probably a point of legal wrangling for Federation lawyers, it is important to consider that a system like this requires that everyone participate, or it will degenerate into anarchy with na�ve producers and parasitic consumers. Resource extraction continues, but elemental resources are more in demand, because replicators make molecular manipulation a useful industrial process. Widespread warp travel and advanced mining equipment (i.e. phasers, exocomps) creates the ability to extract elements and transporting raw materials low cost. "Star Trek" demonstrates that a high level of mechanization which most likely extends to manufacturing, large-scale agriculture, and waste management as well as resource extraction. Most citizens of the Federation work jobs that they find rewarding -- material compensation is not a factor in the decision to accept or decline a job. Doubtless, the educational methods of the Federation are very advanced, and these methods must be tailored to bring out the natural likes and talents that help guide the citizen to their job. The Federation's population is no doubt in the hundreds of billions, if not the low trillions, and out of all these diverse sentients, the desires of particular sentients will rise forth so that they entire the jobs that they will find most rewarding. The disposition of capital is uncertain in the "Star Trek" era. Doubtless, the capital must be distributed so that the needs of the people are accommodated. The decision to produce is based on need -- in effect, production occurs because the producers realize the needs of population and produce to fill those needs. Once basic needs of survival are met, the energies of production are redirected are turned towards improving the quality of life by increasing production, or focusing these energies on art, science, or exploration. In a similar vein, the exact mechanism that allows for the production decision is mysterious. It is possible that the Federation Council (or a branch thereof) creates central plans and all economic production is determined by committee. It is also possible that individuals gauge the market on their own (with the assistance of computers) and produce to meet the needs of the people. We are aware of the existence of various corporations (the Dytalix-B Mining Corporation is mentioned in "Conspiracy (TNG)"); these are most likely collectives organized to make resource extraction (in this case) or another form of production -- manufacturing, research, distribution or transportation. The most likely explanation is that there is some combination of the two -- central guidance by Federation and planetary economists, while specific decisions are left to the firms and organizations. Demand for products is not dictated by price, but rather by needs of those who require the goods. Beyond a level of sustenance, individuals based on utility maximization and their own personal tastes -- the individual selects the goods and services that he or she perceives will provide the greatest level of self-improvement. Taste will drive decisions based on opportunity cost -- some things will be given up in order to get other things, and these decisions are first based on need, and then on taste. Another key to the theory of mutually interested agents is a level of obligation. Due to the tremendous variety of goods and services available, there is no overwhelming demand or overtaxed supply. With entire planets available for farming, there is ample space to grow thousands of different crops and warp travel allows for low transportation costs. This same principle also applies to manufacturing. Goods in the "Star Trek" era a most likely produced by highly automated processes including resources extraction, molecular manipulation, mechanical fabrication and duplication, and dispersal. Shopkeepers still exist the capacity to distribute goods from producers to consumers. The role of distributors is a very important one, and is one that protects the entire Federation system from exploitation by materially motivated sentients. Shopkeepers and "salesmen" are obliged to insure an equitable distribution of goods and services. Due to highly developed communications and transportation networks, consumers can easily reach any market and products can easily reach consumers. Thanks to these same networks, anyone dissatisfied with the system can pull up, and thanks to the widespread use of warp drive, move trillions upon trillions of miles away. By the same token, sub-orbital commuter flights could allow a citizen to live in Moscow and work in San Francisco -- or the Moon. The mechanism for determination of what constitutes a basic level of existence is somewhat mysterious. Perhaps there is a Universal Declaration of Sentient Rights (akin to our Universal Declaration of Human Rights) that describes a basic level of sustenance. It is worth noting that the widespread trade between planets within the Federation is largely responsible for the prosperity of the Federation -- rational agents only engage in trade if there is a mutual benefit. The Federation and Starfleet play a large role in regulating and protecting trade between Federation member worlds. The high standard of living in the Federation derives largely from the productivity that this level of technology and this type of society posses. The mysterious credit deserves a brief discussion. It is established in several episodes and films that there is no money in the era of "Star Trek." However, in "Star Trek" (but not to my knowledge, in "Star Trek: The Next Generation", "Deep Space Nine", or "Voyager") a unit called the "credit" his mentioned several times. There are a number of theories, but the one that I will propose falls in line with the above model. Credits are vouchers for extra-Federation trade -- the Federation is likely the only economy working on a co-operative basis (the Ferengi are laize-faire capitalists, while we know next to nothing about the Klingon and Romulan economies.) Whenever an alien trader wants to cash in the credits that Federation citizens have exchanged for his goods, he can exchange them according to guidelines established by the Federation for goods or services. Federation citizens have no use for credits within the Federation, as they all work in the cooperative manner described above.
[This message has been edited by Vortex (edited July 07, 1999).]
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HMS White Star
Member # 174
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posted
Here's a silly question then when Riker and the gang are playing poker what are they playing for...wait a minute I believe I just opened a can worms .
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The First One
Member # 35
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posted
Not bad. Semms to cover the basics. Would you consider breaking that block of text up into some smaller paragraphs? I'll lock the duplicate thread. . .Here's a test case you need to apply your model to - the expenses Starfleet personnel have due to living on DS9 and paying for things at non-Federation venues like Quarks. My theory has long been that there is some sort of joint account accessible to all Federation citizens to put things on - within reason, hence Jake's inability to pay for the baseball card. As for the poker, I doubt they're really playing for anything tangible, beyond their own enjoyment. Riker likes bluffing - and winning. Data - the pre-emotion chip Data - finds satisfaction in the mathematical probabilities of the cards.
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Sol System
Member # 30
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posted
Very nice. One thing I'd add, though you perhaps already said it and my amateur brain skipped over it, is that UFP economics seem to address the inherint value of the individual.For instance, under ideal conditions, I get paid for working at whatever job I have. Money, in our system, is just a convoluted way of keeping track of my value to the society. That is, in a sense, X amount of dollars represents X amount of individual worth. The Federation, or at least Earth, seems to cut out the middle man; the X amount of dollars, and address the "individual worth" directly. How such worth is calculated is, of course, a decision made by the society as a whole. (We all agree that a pound note is worth a pound, for instance.) (See, I said pound. I do have a global consciousness! ) ------------------ "And give me back my evil heart so I can see you as you are." -- John Linnell
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Vortex
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First off, I forgot to credit Boris Skrbic with valued commentary in pointing out some of the weaknesses of the system. Sorry, Boris.Playing Poker for Peanuts: I think that The First One hit the nail of the head -- the poker games in Ten Forward are played for the competition, the social reward, the mental challenge, and reasonable bragging rights. There's also the change that they were playing for some other wage (extra leave time for the winners, perhaps?), but I think that they were aiming for the existential pleasure of the game. Breaking up is Hard to Do: I wrote this is a semi-stream of consciousness style, where I then cut and pasted and edited sentences, which explains the mega-paragraph followed by the credit discussion. I'm a little hesistant to break the paragraph up, since it pretty much comes as a complete structure. I have to admit, it's a lot easier to read on my notepad next to the computer -- I'll try and cut it up later tonight, and repost it. How Much is That Self-Sealing Stembolt in the Window: There is a certain need for exchange between Starfleet personal and the alien merchants aboard DS9 -- not only do Starfleet personal need those goods and services to exist comfortably, but also to encourage goodwil between Bajor and the Starfleet administered station. Because the merchants are not part of the Federation system, there is most likely a "fund" or account of credits available in common to the Starfleet personal. This is most likely under the control of the commander of Starfleet Personal on the station and administered by the station's Starfleet Chief of Operations. Any Starfleet personal can draw from this fund for transactions, with more withdrawl privilages for procurement officers and senior officers. There is probably an agreement between Bajor and the Federation for most mundane transfers (personal replicators, supplies from Bajor to the station, etc.) which covers most expenses. For buying drinks at Quark's, most Starfleet personal would draw from a common fund. The Going Rate for Souls: In economic terms, the wages are determined by the value of the marginal product of labor. In English, this means that the more productive a person is, the more they are paid (in really, really broad terms). People who enjoy and is rewarded by thier job will be more productive, and add more to society (a societies standard of living is often tied to it's productivity). To a certian extent, this would be a guideline to compensation, but I believe that in the "Star Trek" era, the equal distribution of wealth will be the primary concern. After all, many people claim that capitalism already allocates goods to the most productive members of society, but that's an entirely different (non-Trek) can of gagh
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The_Tom
Member # 38
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Vortex: Finally someone with some sense. Over the past two years, you have no idea how many bloody threads I've waded through on how there has to be a capitalistic Federation because we've heard of credits.The funny thing that people can't grasp is that Roddenberryomics are more closely related to communism than capitalism. Communism is a fine and dandy dogma when one lives in a perfect world. Unfortunately, people being people, communism wouldn't work in the modern (imperfect) world and the only way communist states managed to survive in this century was through the entire evil oppression-squish-students-with-tanks-abduct-people-in-the-heat-of-the-night. But in the saccharine-sweet Federation, people can work in a form of techno-communism (neo-Trotskyism?) where the machines do the work and all animals are equal, but some animals are still as equal as others. The oppression is unneccessary because people like the system so much that they'll only elect parties that will maintain the Fed-o-nomics, and capitalism seen as savage and archaic. ------------------ "I... love you more... than I did the week before... I discovered Alcohol"" -The Barenaked Ladies
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Sol System
Member # 30
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posted
Well...not communist, as the Federation is constantly growing as a society, which is counter to the communist ideal.------------------ "And give me back my evil heart so I can see you as you are." -- John Linnell
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Cargile
Member # 45
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Now explain insurance in the Trek universe. That I'd like to read.------------------ I was right in the middle of a gnikcuf reptile zoo. And somebody was giving booze to these goddam things." Fear and Loathing in Las Vegas
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The First One
Member # 35
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posted
Another test case: land ownership. I don't think that the ownership by the Picards ofntheir vineyards has ever been stated absolutely - do they 'really' own them? Does Joseph Sisko own the building his restaurant is in? Or that guy who runs the cafe in San Francisco in. . . uh, that episode, FReidns title "The One With The Yellowstone" - if he was the proprieotr but not the owner, then how did he get the 'job?'
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Kosh
Member # 167
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posted
I wanted to reply to this, but I can't seem to get my thoughts in order. Quark, greedy little guy that he is, loves Federation credits. He may be able to trade them to someone else for latinum, or back to the Feds for goods and services, like the space his bar takes up on DS9. Pay Bajor in Fed credits, and Bajor in turn uses the credits for goods and services with the Federation. There more to say, but I can't think of how to ask it now. But as with the rest, your theroy is impressive.------------------ WHO ARE YOU
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Vortex
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Hmmmm...Commrade Spock?: While I'm familiar with The Communist Manifesto, I've never read "Das Kapital", the more technical work of Marx. We have established from episodes like "The Neutral Zone (TNG)" that the Federation is not a capistalist state. The key component of communism is the disposition of capital, and in "Star Trek", that is up for debate. In my opinion, judging from what I know about GR's ideas, human beings in the "Star Trek" era are closer to freedom from any sort of "-ism" than we are in the modern world. As far as the nature of the Federation being condusive to this kind of economy, after watching "Crusade" last night, this type of economy would fall apart in the "Babylon 5" universe -- except for maybe the Minbari, but there's no role for Minbari who want to be barbers... Who needs Life Insurance when you have an EMH: I have no idea about insurance in the twenty-fourth century. I'd have to dig through my economics texts to find a reply. Since I don't have access to those texts now, I can't really formulate anything right now. When I get back to school, I'll crack my books and try and find out about insurance. This Land is your land, this land is Picards land...: There are two possibilities that I could postulate. First, there is the theory that no one really owns the land, they simply use it. The land is distributed as fairly as possible, but should there be a need to re-allocate land, the people might have to be shuffled. Land is best considered as communal property, and is allocated in a method like capital. The Second possiblity is considered to be private property, but the issue of location is less important -- after all, the Federation is composed of over 150 member worlds, plus an unknown number of colonies, outposts, and unsettled class-M worlds. Warp travel allows for easy transportation and subspace communication means that settlers will not have trouble keeping touch. I realize that there are a lot of hazy areas in my orignial theories and replies, but I don't have anything on tape, and there no TNG re-runs at a decent hour where I live.
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Cargile
Member # 45
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posted
I wasn't going to divulge my 2 cents into this thread as I have placed it here before. But not all may have read my earlier opinions on Star Trek money. The following is an essay I wrote several months back, and it reads a bit aggressively. It's basically some unrefined ideas and an alternative approach to this debate.Money: Madness. There are so many conflicting exchanges of dialogue to say who is most correct. But can a Space Empire survive without money? Yes. They can survive and flourish without physical money, but the concept of money has to exist. What is the state of Federation money in the 24th century? Electronic currency. To better understand money we must look back in out own history and when money was first invented and why. Before money economy relied on the trade and barter system. No one had a job. Living was your job. A person had to build their own home, their own furniture, make their own pots, make their clothing, and grow their own food. If someone was better at making shoes than you were, you had to trade something to get those good shoes you wanted. The shoemaker might take three geese and a calf, and possibly dicker the "price" down to maybe one goose and a calf. But I'm sure the shoemaker wants the calf. Why? To make more shoes in the future. Now perhaps someone else wants some shoes but the shoemaker doesn't need a calf or geese, but could use a new table. This new person agrees to make a table in exchange for shoes. But does a table equal in value one goose and a calf? Some may say yes, other will argue no. The point is there is no set value for goods and services rendered and its all up to the parties trading. No doubt this started wars about "overpricing." The invention of money, or using spiral coils, and later coins, of precious metals, and jewels changed all this. Gold and silver could be weighed, and its weight set its value. So now shoes could cost one pound of gold, and one pound of gold might also get you one each goose. Gold, or rather money established value for goods and services. Money organized trading, and allowed for specialization in the crafts. The shoemaker can now exert all his talent to shoemaking and not worry about building a shoddy table for himself . Now he can buy a table from someone specializing in table making. And what happens when people start to specialize in their trade? They get real good at it. It generates innovation, new techniques of doing things, and spawns advances in technology. Had money never been invented I would not be using this computer to lay down my opinions. I'd probably be telling you about it as we hoed our fields. The next step in money is no doubt an electronic version. I believe the Federation uses e-money. It has to. Lets look at what we have seen from the episodes and movies: In "Encounter at Farpoint", Dr. Crusher is seen shopping for garments. She finds ones and instructs the clerk to bill it to her account on the Enterprise. Starfleet personnel seldom need money because the ships are designed to accommodate everything via replicators. However, there is nothing like owning the genuine article. And on planets that have such articles available, they aren't going to give anything away for free, nor accept a trade if there is no established value set, hence the account on the Enterprise. We have heard Picard tell Lilly that Federation citizens don't strive for wealth and the cost of the Enterprise was based on economics she wouldn't understand. Its common for people to impress upon the whole their own ideas. I believe Picard was saying the he doesn't strive for wealth. I find it hard to imagine there is no human or other alien that does not strive for wealth. Someone out there is greedy and tries to accumulate all the wealth possible. People have been the same for thousands of years. Take away the settings and people from the 1490s are no different from the people of the 1990s, and the people of the 2470s aren't going to be much better. There is going to be evolution of civilization, but that can't get rid of all the greedy people out there. I don't think a First Contact will make us better people. What is the cost of the Sovereign class these days? Given e-money and diverse economics across the Federation, I think explaining the cost of the ship would entail far to many details that perhaps Picard himself doesn't fully understand it. He couldn't tell Lilly that it cost 47 million credits, because it doesn't just cost that. Its a complicated web of e-money, latnium (which some planets probably use with the introduction of Fereginar economics into the structure), trade contracts, imbursements for man-hours, and God knows what else. It was far easier to brush her off than go into details. Would you want to explain the concept of "buying" to a people that never invisioned the concept, or would you rather say, "We don't trade." That's what Picard went through. Good thing she didn't ask about the insurance on the Enterprise. Picard would have died from an aneurism. Captain Sisko and his son Jake have stressed that the Federation doesn't use money. They are on a space station that accommodates them so they don't need money. When dealing with aliens one often takes the role of representative for the whole of humanity, Starfleet and the Federation. It is more common to say "The Federation" doesn't do this or believes this, than to say "I" don't. Yes Nog isn't stupid and knows about the Federation, and he and Jake have been friends for some time, but I think its a human character flaw that makes us believe that aliens will never understand humans. There remains a subtle discrimination against aliens and people with lesser knowledge, that it allows persons to substitute their own ideals for the ideals of the whole Federation, and to explain a complicated process such as the economy of the Federation with a little white lie. For instance if I went to Japan and was offered squid and kelp, I'd be inclined to say that "Americans don't eat that." I'd mean that I don't eat it and have never seen anyone else eat squid and kelp, but do I really know that no one in America eats it? Of course not. I'm telling a falsehood. Money, or rather its decendant has to exist in the Star Trek universe despite the ultimate utopia idea indicating otherwise. Reverting back to a trade system is a step back, not progress forward. I won't venture to say that money in whatever form is backed by gold or latnium, but the concept of money and the use of that concept must exist for the Federation to remain a viable power. No money expresses a commune and communes revert back to a trade system and the system of specialization disentergrates to one based on jack-of-all-trades. This means the halting of technical advancement. Cultures eventually dissovle to become isolated tribes. And that is not the current state of the Federation.
------------------ I was right in the middle of a gnikcuf reptile zoo. And somebody was giving booze to these goddam things." Fear and Loathing in Las Vegas
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Aethelwer
Member # 36
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posted
People in the Federation can probably choose what economic system they want to live under. I suspect that most prefer the Sisko/Picard-style ideals, and get their food, clothes, and other stuff via replication or other sources from the Federation, and in turn get to do whatever they want for their occupation. If someone prefers capitalism, they can go outside the Federation, or perhaps to certain planets within the UFP that still have that sort of economy.------------------ http://frankg.dgne.com/ RB: "'Get a life' is a phrase heard a lot, though I have never known exactly what kind was implied. Seems a lot of shallowness and greed is the rule." CS: "I guess that it means the kind of life led by the characters of 'Dawson's Creek' or 'The Simpsons'."
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Vortex
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I briefly considered the e-money aspect while working on my theory. However, I disregarded based on the fact that I have never seen an episode where a charater says "We have no physical money" or "We have no cash", but rather "We have no money" or "They're still using money." While the argument that the officers we see in the seires are generalizing thier beliefs to the entire Federation, I haven't seen any evidence to the contrary.With regards to e-money is particular, I took the "We have no money" aspect and applied it to the definition of money that is used in basic macroecnomics; Money is split into three (but usually two) catagories, divided on the basis of liquidity: M1 (Cash and demand deposits), M2 (Savings accounts), and M3 (Bonds, Bills and other money market type accounts.) Now, as far as I understand, e-money is effectively a demand deposit -- the debit card that I use is, in economic terms, identical to a checking account. So, working with the fact that there is no money used as a means of exchange, I worked on the co-operative (saccrine-sweet) model. When I came accross references to Crusher having her account on the ship billed when buying the bolt of cloth (IIRC), I began to work out the idea of the credit as an exchange voucher, re-deemable for Federation goods and services. Again, IIRC, the planet where Farpoint station was located was not yet a Federation memeber, or at the very least, not integrated into the Federation economic system. This would mean that some unit of exchange was nessecary. Enter the credit. As for the shift away from greed, I assume that the Federation has safeguards to protect the majority of the citizens who just want to lead fufilling lives. I have no idea how the nature of human beings shifts away from self-interest, but damn it man, I'm an economist (in training), not an astrologer.
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Cargile
Member # 45
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posted
Vortex, I agree with you. I think your approach makes a lot of sense. Furthermore I believe that any future civilizaton's economics will be hard for us to explain in our terms, like a trade culture trying to explain the concept to money when that person has no full understanding of it. It is difficult for me to break the paradigm that money--in any form--does not have to exists. But in reality money's future depends on the people using it, or needing it. ------------------ I was right in the middle of a gnikcuf reptile zoo. And somebody was giving booze to these goddam things." Fear and Loathing in Las Vegas
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