Star Trek Economics

Star Trek: A Child of its Times

Gene Roddenberry, the creator of Star Trek, was a short-term pessimist and a long-term optimist. The reasons for short-term pessimism were clear. When it first aired in 1966, President Lyndon Johnson had been given the power to declare war in Vietnam "if necessary," the American air force had been intensively bombing North Vietnam for a year, and the first U.S. troops had been in South Vietnam for about as long. The Cuban Missile Crisis of 1964, which had brought the world to the brink of nuclear annihilation, was a recent memory. Two popular movies with essentially the same plot of universal atomic destruction were both released in 1964, Dr. Strangelove and Fail Safe, showing that knowledge of the world's precarious state was widely spread.

Given the time it was created, it is no surprise that nuclear standoffs and proxy wars feature in a number of Star Trek episodes; these include Balance of Terror and A Private Little War. Other episodes illustrate a subtle balance of good and evil in the human soul and the potential for one to become the other. These include Mirror Mirror and The Enemy Within. These encouraged Americans to question their righteous self-image.

In contrast, 1965 was the time of Lyndon Johnson's "Great Society" plans to eliminate poverty and racial inequality. Linus Pauling had won the Nobel Peace Prize in 1962 for his work to end the atmospheric testing of nuclear weapons. Subsequently, the "Ban the Bomb" movement spread throughout the United States as well as in other countries. The Civil Rights Movement was reaching its peak. Martin Luther King had led the March on Washington in 1963 and given his "I Have a Dream" speech. He had received the Nobel Peace Prize in 1964.

Hopeful alternatives to a threatened world were as much in the air as fears of nuclear war. Star Trek had elements of both the hope and the fear.

Ch-ch-ch-changes

However, the future history that Roddenberry plotted for Star Trek shows things becoming much worse before they get better. Accordingly, we learn in different Star Trek episodes that Earth survives the Cold War only to fight the Eugenics Wars of 1993 to 1996, which cause 30 million casualties. Later Star Trek series distinguish the Eugenics Wars from World War III, which lasts from 2026 to 2053. After this war, with its 600 million deaths, radiation poisoning, and nuclear winters, members of the Vulcan race make contact with humans in Brozeman, Montana (though Vulcan, Alberta, also celebrates the meeting).

The Vulcans are evidently what humans need: a race that had abandoned war in the fourth century and would provide the Earth with massive technological and humanitarian support. They help to bring it into recovery by the early 22nd century, though earlier in some parts than others.

As well as poverty and disease, war is conquered. A United Earth comes into being in 2150, followed by the United Federation of Planets in 2161. This is the historical and political background to the famous "five-year voyage" of the U.S.S. Enterprise that is the subject of the first Star Trek series. The voyage begins in 2265, so the Federation is a well-established fact at that time. Still, no-one knows its potential, but everyone senses that it is great.

Star Trek had to answer a question, though, or at least assume that an answer exists: if mankind had conquered war, want, and disease, what kind of economy would it have?

The Industrial Base in Star Trek

I don't believe that Roddenberry had any specific economic theory to push in Star Trek, but he did have the goal of presenting an economic system of universal affluence. His fictional universe included technologies that could enable this, though they would not guarantee it:

• The replicator allows almost any object, from a machine to a meal, to be created from a template or pattern that is stored in a computer. A family with access to a replicator would have food and clothing, both basic and luxurious, at any time.

• Matter and antimatter collisions would provide cheap energy that, eventually, might prove "too cheap to meter."
• Although living space would remain a scarce good, competition for it would be lessened by the opening of colony worlds.
• Holographic recreations of places and activities would decrease demand for access to unique locations and activities, since they could be experienced in perfect simulations. The potential for this technology in improving educational opportunities is, of course, immense.

Despite these technologies, skilled labour is still required for many specialized jobs, such as building or refitting spacecraft. The labour and the technologies, together, might allow a life with necessities as well as many luxuries being "too cheap to meter."

Star Trek and Money

If most goods are too cheap to charge for, though, why would we have money? In fact, Roddenberry was adamant that we would not. As a Star Trek writer and producer, Ronald D. Moore, said in an AOL chat in 1997,

By the time I joined TNG [Star Trek: The Next Generation], Gene had decreed that money most emphatically did NOT exist in the Federation, nor did 'credits' and that was that. Personally, I've always felt this was a bunch of hooey, but it was one of the rules and that's that.

(Source).

So, the movie Star Trek IV: The Voyage Home (released in 1986) has this exchange:

Dr. Gillian Taylor: Don't tell me you don't use money in the 23rd Century.
Kirk: Well, we don't. 

Captain Picard (in Star Trek: First Contact) could be quite self-righteous on the lack of money.

The economics of the future is somewhat different. You see, money doesn't exist in the 24th century... The acquisition of wealth is no longer the driving force in our lives. We work to better ourselves and the rest of Humanity.

Nevertheless, other species continued to use money of one form or another, and this difference could cause difficulties in exchanges between the parties, as this conversation between the human Jake Sisko and the Ferengi Nog makes clear.

Jake: "I'm Human, I don't have any money."
Nog: "It's not my fault that your species decided to abandon currency-based economics in favor of some philosophy of self-enhancement."
Jake: "Hey, watch it. There's nothing wrong with our philosophy. We work to better ourselves and the rest of Humanity."
Nog: "What does that mean exactly?"
Jake: "It means... it means we don't need money!"
Nog :"Well if you don't need money then you certainly don't need mine."

To alleviate the problem of exchanges with species who do use money, Federation citizens have some access to Federation-backed "credit" on places like Vulcan and to gold-pressed latinum everywhere that the Ferengi trade in order to make exchanges happen. (I should mention that gold-pressed latinum cannot be created by replicators, nor can the dilithium crystals used in starship engines, so both remain scarce resources).

A few references exist of humans using "credits" with each other, especially where some scarce resource is being rationed. For example, Captain Sisko, Jake's father, tells us that he used up a month's supply of "transporter credits" because he was homesick after he entered the Starfleet Academy.

For those who want more detail on money in the Star Trek universe, this site has an exhaustive collection of quotations.

The two "facts" we know about Star Trek's fictional economy--there is universal abundance but  no money--have attracted a great deal of attention and criticism. Many state that such an economy is contrary to human nature; many others, that it is contrary to economic science. A few add that, even if it could be achieved, it would only be a new form of some well-known and widely-despised economic system. Let us look at these criticisms in order.

Human Nature vs. Star Trek

There are two versions of the idea that Star Trek economics is contrary to human nature.

1. The first objection is that people are naturally lazy so, if everyone were guaranteed a comfortable life, no matter what, then no-one would work. "A universe of unlimited resources would be packed with lazy slobs -- not intrepid explorers," says one site.
   
   The argument can be extended to include the idea that, even if people do work without financial incentives, they do not work hard. They certainly would not work to better themselves. In other words, "When a doctor and a garbage man are given the same paycheck, what could possibly motivate someone to go to college, get their masters, then their MD?"
   
   I find it interesting that money is considered the only motivator in the posts I've linked to. I cannot see, from my own life and motivations, that the posters are right. For example, I am working quite hard on this post, but expect no financial reward. I love my wife and son without reasonable expectation of financial profit. I'd happily spend much of my life back in university, if I could afford it, without hoping that the expense could be recouped. That last example shows, in fact, that the need for money kills dreams (since I can't afford to go back to university) just as it can inspire them.
2. The second objection is that people are naturally greedy or, as William Blake puts it, the human heart is "a hungry gorge." This implies that, even in the presence of abundance, the desire to acquire objects and wealth in excess of one's neighbours' would remain. In fact, "There's no real bottom to human greed for more."
   
   It's true enough that we are a competitive species, but that competition is not always expressed in terms of wealth or possessions. When two young men compete for a young woman's affections, it takes a warped mind to think of her as a "possession." People compete for respect. People compete to leave a greater legacy. I compete to write a more convincing blog post than others have left on the same topic.

Response to the "Human Nature" Arguments, or Abraham Maslow to the Rescue!

The answer to the "human nature" arguments against a Star Trek-style economy lies, I think, in Maslow's "Hierarchy of Needs."

The psychologist Abraham Maslow postulated that needs (and therefore motivation) comes in levels. The most basic needs are physiological, meaning food, shelter, and so on. If these are not met, an individual would die. Over these are the psychological needs for esteem, friendship, and love. If these are not met, the individual will feel anxious and tense. If all these lower levels of need are met, the individual will find motivation to achieve "self-actualization," which means to accomplish some latent potential for its own sake: to "be all that you can be." Here, from the Wikipedia page on the Hierarchy of Needs, is a representation of his theory.

The argument that "a universe with infinite resources would be packed with lazy slobs" implies that only the first two levels supply motivation to work. The argument that, without differential access to money, no one would work harder than necessary implies that all the levels up to esteem are at work. (A doctor would see his higher esteem in society reflected by a higher paycheque). However, the need for esteem may be met by means other than money, such as rank, honours, the confidence of others, and self-confidence.

Once the need for esteem has been met, the need for self-actualization, meaning self-development or self-improvement, kicks in as a motivation. We see it beginning in the young James T. Kirk in this clip from the 2009 Star Trek film.

The needs for esteem and self-actualization may not be as well-publicized as money, but they may be enough to power an economy.

Economics vs. Star Trek

If human nature allows a Star Trek style of economy, does the discipline of Economics also allow it? Perhaps not.

Economics is typically defined as "The science of how people make choices for the allocation of scarce resources to satisfy their unlimited desires," so there are those whose suspension of disbelief stalls before the idea that goods may not be scarce. When the cost of an article is zero, standard Economics has a literal or figurative "divide by zero" problem that prevents any analysis of production and distribution. As John Waring states (quoted here)

Economics in any and all forms rests on the assumption of conditions of natural or artificially enforced scarcity, far less than enough to supply everyone. The study of economics and its everyday business control and transactions tells you how each variation of the Price System makes an ideology of how to divide up that scarcity. You will find economics defined in terms of scarcity in every textbook on the subject, usually in the opening chapter. Without scarcity, some of them candidly admit, there would be no need for economics.

And yet there are portions of the economy, and important ones, that approximate a post-scarcity economics. One example is the Free Software Movement, which has produced the operating system on my computer, the web browser which I am using to type this, and much of the programming infrastructure of the Internet, all at no cost to the user. This is achieved through gratis labour. Some of it is genuinely altruistic labour from individuals, and some is enlightened self-interest of corporations.

 The discipline of Economics must simply expand to include post-scarcity economies. The only alternative is to hobble an increasing number of non-scarce goods with artificial scarcity and the "deadweight" loss to the economy this would imply.

What sort of Crazy Economic System is This? 

There have been a few suggestions that Star Trek exemplifies some type of economy that we have already experienced. Each explanation has its reasons, and each has its problems.

• Communism--This is the most popular candidate. This is despite the fact that private property exists, such as the Picard family farm and the restaurant run by Captain Sisko's father.
• Fascism--This is a less common argument, but it exists. The arguments are that only the state (in some versions, only the military) allocates resources and can direct their use. This is an assumption that the lack of money necessarily implies a command economy. It may not. 

Another View. It's Social Credit.

I am not an economist, and I have no idea if the economic theories of C.H. Douglas could achieve the goals he intended. It is quite clear, though, that the goals of his theory, called Social Credit, are consistent with those of Star Trek economics.

[Social Credit's] policies are designed ... to disperse economic and political power to individuals. Douglas once wrote, "Systems were made for men, and not men for systems, and the interest of man which is self-development, is above all systems, whether theological, political or economic." Douglas said that Social Crediters want to build a new civilization based upon "absolute economic security" for the individual, where "they shall sit every man under his vine and under his fig tree; and none shall make them afraid." In his words, "what we really demand of existence is not that we shall be put into somebody else's Utopia, but we shall be put in a position to construct a Utopia of our own."

Social Credit Theory approaches those goals through a comprehensive theory of economic production. It includes the traditional elements--capital and labour--and adds the collective experience, wisdom, and knowledge which comprise our culture. For example, we see Walt Disney combine capital and labour to create the first full-length animated film, Snow White, which was released in 1937. Of course he is economically rewarded for his investment of capital and labour, but he did not create the story. He took it from a book by the brothers Grimm, published in 1812. Of course they were economically rewarded for their investment of capital and labour, but they did not create the story, either. They collected it as a folk tale from people who had heard it from their parents and grandparents and told it to their children. The story on which the Disney empire was founded is a collective possession of the culture. Douglas says, in effect, why don't we all, as collective possessors of this culture, get paid for it. Let's say, a cheque every month, a guaranteed basic income, with which we can order ("buy") whatever we want.

Social Credit does not, therefore, renounce money, though it redefines it. Instead of thinking of money as a commodity, a thing valuable in itself, that is used as a "medium of exchange," Social Credit thinks of it as a "ticketing system" with which consumers place orders for products. If more consumers can order more products, it says, then the entire economy would benefit.

If we add pervasive computing to a Social Credit economy, though, it is possible that money would become less meaningful. The consumer would have access to purchasing power, as would everyone else. The producer would receive orders for a good and receive, behind the scenes, without his intervention, purchasing power for all the resources he needs to create the product. Eventually, as a rule, neither the consumer who orders a good nor the producer who supplies it would have to handle, or even think about, money. It would "wither away."

Conclusion

Star Trek provided an image of a society that is more egalitarian and more humanitarian than our own. C.H. Douglas provided an economic theory that was designed to achieve the same goals. I am not saying, in any way, that Star Trek is based on the theories of Social Credit, but I am saying that it could have been.

Social Credit, by the way, is not a discredited theory. A theory that has never been tested cannot be discredited. I was interested to discover, though, that the United States came close to trying out something very similar, a "Guaranteed Annual Income" (GAI) proposed by Richard Nixon but never passed into law.

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Update: An article on Salon.com ("The Utopian Economics of Star Trek" by Andrew Leonard" begins:

There are many clever moments in the thoroughly satisfying new “Star Trek” movie, but the one that has economists chattering is more than just smart: It strikes right to the core of what the Star Trek future is all about.

The scene comes early, when a pre-pubescent Spock is undergoing the formidable educational process inflicted on all Vulcan children. We see and hear him say the words “nonrival” and “nonexcludable” (and we can imagine his computer tutor nodding encouragingly).

And then we move on, without explanation. To my children, and, I imagine, to most Trekkies, the moment was just one more jargonistic outburst in a franchise that has always delighted in excessive indulgence in meaningless techno-gibberish. But the economists in the audience all started high-fiving each other: Whoa, who could have expected a shout-out to economist Paul Romer’s breakthrough paper, “Endogenous Technological Change,” in a “Star Trek” movie? Awesome!

A "nonrivalous" good "can be shared without losing anything. An apple, say, is a rival good: If one person eats it, the other person can’t." Knowledge is nonrivalous, as Thomas Jefferson illustrates in a letter:

If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.

On the other hand, Leonard says, "Excludability refers to whether you can prevent someone from sharing, as with, for example, copy protection or a jail sentence."

Leonard has another article, an interview with David Warsh, author of "Knowledge and the Wealth of Nations," that says that Romer's mathematics has been greatly influential in the field of economics. That's something to look into. To start, here's a Paul Rohmer TED talk on his concept of "Charter Cities." Here's an article in The Atlantic on his views: "The Politically Incorrect Guide to Ending Poverty" by Sebastian Mallaby.