Go to the profile of Rick Webb  by Rick Webb

I’ve been reading a lot about robots lately. When I read about robots, and the future, I can’t help but think about it in economic terms. And that inevitably turns my mind to the branch of economics called post-scarcity economics. Traditional economics, of course, deals with the efficient allocation of inherently scarce materials. Post-scarcity economics deals with the economics of economies that are no longer constrained by scarcity of materials — food, energy, shelter, etc.

The thing that never sits quite right with post-scarcity economics, though, at least the very little that I’ve read, is that it’s always sort of an all or nothing affair: you either don’t have enough of anything or you have enough of everything. Thinking of this as a mental exercise is kind of fun, I think, but in reality it seems to me that getting from point A — a scarcity economy — to point B — post-scarcity — is going to be a long, complicated journey as some things become more abundant in some places, while other things are still scarce.

What is needed is some sort of interim—or proto-post scarcity economics.

More and more I find myself thinking we are, as a race, constrained by the economic models we have. We have capitalism, of course, the proverbial worst model except for every other one that dominates much of our planet right now. It’s definitely a scarcity-based system. Then we have the centrally planned systems of Communism and Marxism, not particularly effective, as it turns out. We have European-style socialist capitalism, but that’s still capitalism, and scarcity-based, albeit with a much more robust safety net than we have here in the US. Some Americans seem to think that a robust safety net somehow nullifies the distributed planning of capitalism. I’ll listen to them again when our schools are decent and our life span starts increasing again magically.

The key here, to me, is to start thinking about how economics would work when we decouple labor from reward. Does that make a system inherently communist? I don’t think it does. People work. They get paid. It is market driven, and not centrally planned. In reality, the market already basically dictates this, for who can claim that a Wall Street banker works more than a teacher? The only thing we really need to do is take this to a logical extreme: that people can still get paid doing zero work. This fear seems to be at the heart of most people who say that Europe is communist: if we give people so much welfare, some of them might stop working! Quelle Horreur!

It seems to me that with the rise of machines and robotics, advances in mining technology, energy technology (both fracking and green energy technologies), the obesity epidemic in the US, etc., that there are plenty of reasons to believe that we may be at the beginnings of a post-scarcity economy. We have a surplus, no doubt. Of course, we still have legions of people in the world that are starving, and even people still here at home. But we actually have the capacity to feed them, to feed everyone, even now, even if we don’t have the will. It’s not a matter of scarcity; it’s a matter of the organization of labor and capital.

Take a mental journey for a moment with me: what if, one day, technology reaches the point that a small number of humans — say, 10 million — can produce all of the food, shelter, and energy that the race needs. This doesn’t seem like insanely wishful thinking, given current trends. There’s no rational reason why the advances in robotics, factories, energy and agriculture couldn’t continue unabated for long periods of time. Of course, I’m not saying they will, but rather, they could.

So, then, take that journey. What, then, of labor? In today’s terms, a ‘healthy’ economy now is one at or near full employment. A healthy economy now is one where everyone has a job. But in our mental exercise, those jobs are actually unrelated to a healthy economy, at least from strict economic terms. Everyone’s fed and housed and tons of people simply don’t need to work. Right now, we have them working making shit we don’t need. Is that any better than them not working?

I give you we’re in some fringe areas of economics here, but I have always wondered: is there any economic proof that we need full employment to reach full satisfaction of needs? To my knowledge, there isn’t. There’s a body of economics that goes into standards of living, and the increased standard of living. And here we get to our shitty world of unabated consumerism, Thorstein Veblen’s conspicuous consumption and George Bataille’s accursed share — the inevitable destiny of all economies to eventually produce more than they need, and, thus, waste it.

Seems to me that if we could think beyond capitalism and think of a new model, we could break out of this pointless cycle of more and more consumption of shit we don’t need and model things in another way.

Yes yes, of course. We all know that. The problem seems to me that the minute we leave capitalism behind, we only look at the past alternatives of communism, marxism and pure socialism and pooh-pooh them. Few people seem to be able to look beyond capitalism without regressing to the other failed economic models of the early 20th century as if they are the only alternate possibilities for man.

Yet there have been some other attempts to leave capitalism behind that attempt to also leave the baggage of communism, marxism, and socialism behind. The most notable is participatory economics or parecon. This is a worthwhile attempt, I think, but to me, it doesn’t quite pass the smell test of being sufficiently un-communist, what with its worker’s councils and lack of any sort of ruling class. All very un-American, and in any case, a bit preoccupied with “workers” and “individual need” to really work in any post-scarcity economy where the very concept of a laborer is iffy. When you start thinking this way you start getting into the dodgy world of heterodox economics and, well, that’s a world of a lot of crackpots. Some good ideas, sure, but a lot of crackpots, and more to the point, it’s a world devoid of empirical research, which is a serious problem. Economics is really at its worst when it’s just making up theories. It’s a lot more noble when there’s some real data to back it up.

Parecon does have some awesome concepts, though, by the way. I don’t hate it completely. I especially like that people’s say over any issue is proportional to the amount that issue affects them. It also has some states’ rights-ish aura similar to “laws being made at the level closest to those affected.” It’s a worthy school of thought to consider when looking for a pure alternative to capitalism in a vacuum, though probably not very practical in reality for reasons similar to communism (despite not being centrally planned, it still very much hinges on some third party deciding the relative worth of each job — a messy business). More to the point, it doesn’t help us in thinking about our mental picture: a world where a small number of people can produce enough for everyone.

Then I got to thinking. Screw the dodgy world of heterodox economics. Let’s go full-on fantastical and look at sci-fi. There IS actually a model out there that deals fairly realistically with a post-scarcity economy. Not only that, it actually takes into account the difficulties of migrating from a capitalist society to a post-scarcity society incrementally. It’s not just a theory in a vacuum.

It’s called Star Trek.

Stay with me here.

Star Trek and Economics

The Previous Theories

When looking at the economics of Star Trek, there have been three broad approaches in the past:

  1. Trying to shoehorn Star Trek’s economics into the model of parecon. This is problematic because of the obviously hierarchical society of Starfleet, with Admirals, captains, commanders, chancellors, governors and whatnot, and the clear existence of a relatively strong Federation president, who is democratically elected. Plus we never once see a labor meeting, and it’s pretty obvious personal freedom and enrichment are important to society.
  2. Calling the Federation Communist, based on comments from Kirk in Star Trek IV on not having any money in the future and Picard’s speech about the economics of the federation being significantly different than 21st-century economics and people pursuing personal enrichment rather than the accumulation of wealth. The problem with this definition is it’s lazy — just because they don’t pursue the accumulation of wealth, it does not mean the Federation is communistic. There is obviously, still private property in the Federation: most obviously Joseph Sisko’s restaurant in New Orleans and Chateau Picard, evidencing that not just small possessions are allowed but that the land itself is still privately owned. One could argue that these aren’t really Sisko and Picard’s to own, but they are routinely referred to as “his” restaurant and vineyard so we gotta go with Occam’s Razor here and assume they do, in fact, own them.
  3. A sort of guessing game based on the various mentions of Federation Credits and trying to glean knowledge of the system from every single mention of money or payments within the series. This is always a pain in the ass, especially given the original series sometimes did things that were pretty out there according to later firmly established canon, and later firmly rejected by Roddenberry himself before his death. Additionally, many of the assumptions about Federation Credits seem iffy: are they really currency? Do they have to be? Are they scrip? Rations? We simply don’t know. And in any case, trying to define the entire economy of the Federation — and perhaps even learning something from it — should be more than a matter of resolving obscure trivia references (though of course, it’s fun).

None of them seem correct. None of them seem realistic. And yes, let’s go for realistic here, why not?

Let’s take a different approach here.

What we know

Let’s start with the facts.

The Federation is clearly not a centrally planned economy, and therefore obviously not communist. Individual freedom of choice is very obvious. Everyone chooses their careers, and there are many mentions of this throughout the series — witness every single time someone waxes nostalgic about why they chose to enter Starfleet. Witness Bashir going on about why he wanted to be a doctor instead of a tennis player. Witness Wesley dropping out of Starfleet. Witness Vash being an archeologist and Kasidy Yates being a cargo ship captain.

Private ownership still exists — the biggest examples, to me, are Sisko’s restaurant and Chateau Picard, but many other examples abound from all the trinkets everyone owns in their quarters. Crusher’s family owns a (haunted) cottage on some old-Scottish settlement planet. The Maquis routinely refer to “our land,” which they presumably owned, and while an individual tribe may have collectively owned the land through a corporation, like the Alaska Native Land Claims Settlement Act, or through a co-op, they clearly “owned” the land, just like anyone else owned land, while the Federation was the superseding government that could give that territory away to another sovereign party, much like the ceding of the Sudetenland or Guam. Any alternative situation (the government owning the land and renting it to the settlers?) is never alluded to and in any case the words stated (“our land”) clearly indicate private ownership is still very much part of the cultural zeitgeist. Then we have JJ Abram’s Star Trek and it’s pretty unlikely that, what? The Federation owned that shack Kirk grew up in, that sweet Corvette or that roadhouse bar? Those items sure looked privately owned. Some spaceships were privately owned. Finally, let’s not forget Star Trek: Generations when Kirk says in the Nexus “This is my house. I sold it years ago.”

Next: The Federation is not true post-scarcity economyfamines routinely still exist, transportation lines are vital in moving goods within the Federation. Transportation is a whole gray area in most post-scarcity economic works, at least the few I’ve read. The Federation might have enough food, but at any time some planet may well be starving or in need of medicine that needs to come from somewhere else.

It seems pretty clear cut that jobs are optional. They explicitly state on many occasions that the Federation is based on a philosophy of self improvement and cultural enrichment, and in any case we sure do run into a lot of “artists” in the Federation. I particularly love those hippies in TOS. The Federation seems a bit like Williamsburg — a lot of artists who don’t need to work. Or maybe more like the UK at the height of its social programs supporting artists. Let a million JK Rowlings bloom. It’s a bit weird, to me, that we’ve never seen people who sit around and literally do nothing, but then why would we? And, of course, we’ve certainly seen more than a few societies that are all chilled out and not doing much (Risa, etc).

Next: The Federation doesn’t use money. This is basically absolute. Kirk says it in Star Trek IV. Picard says it several times. Quark mocks it to RomRoddenberry put it down as a hard and fast rule. No theory of Star Trek economics can be real while ignoring this fact. It has to be addressed. It is the basis of all confusion and, honestly, interest in figuring it out at all.

Money still exists, so do banks. Crusher buys fabric at Farpoint. DS9 makes mention of theBank of Bolias, on a Federation planet. Nog loans Jake latinum.

We also know there exists such a thing as the Federation Credit. This presumably causes some confusion since they are routinely referred to as a form of money (Kirk mentions that the Federation has invested 122,200 credits in Spock), and things are purchased for credits (Uhura buys a tribble, Quark occasionally accepts them at his bar).

This would seem to be a giant contradiction to the lack of existence of money. We’ll get to that in a bit.

There is still a ruling class, or classes — it is not perfectly egalitarian in a communist manner. We have admirals and presidents and governors and colony leaders. There is enlisted personnel in Starfleet and officers. Some are elected, some are appointed. Some Federation members were even hereditary nobilities.

There is still commerce (and even Vulcan commerce), tradetrading vessels, and, we can assume, corporations, in some form (though this may not be 100% definite — Dytallix is mined for the Federation. It isn’t 100% clear it is in the Federation).

Some thought exercises

Let’s do a couple thought exercises.

First: if you eat a meal at Sisko’s Creole Kitchen, do you pay? It seems almost definite that you don’t pay. If you paid, with anything, including Federation Credits, that would be money. You could barter, but it seems if the entire economy was a barter economy, we’d hear it. No, it seems almost certain that you go to eat at Sisko’s, you don’t pay, and Joseph Sisko doesn’t pay for his supplies, and his suppliers probably don’t pay for theirs.

Next: Can everyone have anything? Anything at all? Is the Federation a perfect post-scarcity society? The answer seems almost certainly no. If you went to a replicator, or a dealer, or the Utopia Planatia Fleet Yards and asked for 10 million star ships, the answer would be no. More concretely, when the Borg attacked, and during the Dominion War, the Federation suffered from a serious starship shortage.

Next: Imagine there’s some level of welfare benefits in every country, including America. That’s easy. That’s true. Imagine that, as the economy became more efficient and wealthy, the society could afford to give more money in welfare benefits, and chooses to do so. Next, imagine that this kept happening until society could afford to give the equivalent of something like $10 million US dollars at current value to every man, woman, and child. And imagine that, over the time that took to happen, society got its shit together on education, health, and the dignity of labor. Imagine if that self-same society frowned upon the conspicuous display of consumption and there was a large amount of societal pressure, though not laws, on people that evolved them into not being obsessed with wealth. Is any of that so crazy? Is it impossible?

I think that is basically what’s going on on Star Trek.

A Theory of Star Trek Economics

I believe the federation is a proto-post scarcity society evolved from democratic capitalism. It is, essentially, European socialist capitalism vastly expanded to the point where no one has to work unless they want to.

It is massively productive and efficient, allowing for the effective decoupling of labor and salary for the vast majority (but not all) of economic activity. The amount of welfare benefits available to all citizens is in excess of the needs of the citizens. Therefore, money is irrelevant to the lives of the citizenry, whether it exists or not. Resources are still accounted for and allocated in some manner, presumably by the amount of energy required to produce them (say Joules). And they are indeed credited to and debited from each citizen’s “account.” However, the average citizen doesn’t even notice it, though the government does, and again, it is not measured in currency units — definitely not Federation Credits. There is some level of scarcity — the Federation cannot manufacture a million starships, for example. This massive accounting is done by the Federation government in the background (witness the authority of the Federation President over planetary power supplies).

Because the welfare benefit is so large, and social pressure is so strong against conspicuous consumption, the average citizen never pays any attention to the amounts allocated to them, because it’s perpetually more than they need. But if they go crazy and try and purchase, say, 10 planets or 100 starships, the system simply says “no.”

Citizens have no financial need to work, as their benefits are more than enough to provide a comfortable life, and there is, clearly, universal health care and education. The Federation has clearly taken the plunge to the other side of people’s fears about European socialist capitalism: yes, some people might not work. So What? Good for them. We think most still will.

However, if they so choose they can also get a job. Many people do so for personal enrichment, societal pressure or through a desire to promote social welfare. Are those jobs paid? I would assume that yes, those jobs are “paid,” in the sense that your energy allocation is increased in the system, though, again, your allocation is large enough that you wouldn’t even really notice it. Why do I say this? The big challenge here is how does society get someone to do the menial jobs that cannot be done in an automated manner. Why would anyone? There are really only two options: there is some small, incremental increase in your hypothetical maximum consumption, thus appealing to the subconscious in some primal way, or massive societal pressure has ennobled those jobs in a way that we don’t these days. I opt for the former since it grounds everything in market economics, albeit on a bordering-on-infinitesimal manner, and that stands to reason since that’s how people talk in Star Trek. They talk about individual fulfillment, buying, selling, etc. No one was ever guilt-tripped into joining Starfleet, save by maybe their family.

There is almost zero mention of central planning. It’s a capitalistic society, its benefits are just through the roof. Also, market economics = crowdsourced. That is, it’s not centrally planned. It’s democratic. It’s the only mechanism we know of to allocate resources that isn’t centrally planned. The alternative is that all allocations are done algorithmically through a computer and the economy is completely decoupled from market forces, but that’s still basically central planning, and infinitely more complex than assuming there is still some semblance of market underpinning, much like we stayed on the gold standard for far longer than we needed to and we still have pennies even though we don’t need them. It’s a vestige of the past. It’s the constitutional monarchy.

Either way, presumably, you take whatever job you want, and your benefits allocations are adjusted accordingly. But by and large you just don’t care, because the base welfare allocation is more than enough. Some people might care, some people might still care about wealth, such as Carter Winston. More power to them. They can go try and be “rich” in some non-Federation-issued currency. But most people just don’t care. After all, if you were effectively “wealthy” why would you take a job to become wealthy? It pretty much becomes the least likely reason to take a job.

So, behind the scenes there is a massive internal accounting and calculation going on — the economics still happen. They just aren’t based on a currency unit, and people don’t acquire things based upon a currency value. People just acquire things from replicators, from restaurants such as Sisko’s or coffee shops like Cosimo’s, or, presumably, get larger things from dealerships or (more likely) factories. This could still be called “buying,” as a throwback.

Two points here: first, the accounting is done in energy units, so that there is no need for currency. And why not? Resource allocation is mainly about energy anyhow, doubly so if it’s only robots building most things. And secondly, if you never had money, never saw it, and it didn’t physically exist to measure things, you’d pretty much tell people, like a certain 20th-century oceanographer, that you don’t have money in the 24th century, regardless of some automated accounting. This jibes with Federation people knowing what money is — because other societies have it — but saying they don’t use it. Because they don’t.

However, you could still buy and sell things. You could take a thing from a replicator and go to someone else and “buy” something else with it. Why couldn’t you? It’s a free society. It is essentially barter. Kirk may well have sold his house for a year’s supply of Romulan ale.

Or Federation Credits.

It is tempting to argue here that the massive accounting system uses a unit called the Federation Credit, but i don’t believe that’s the case. If it were, the credit would be too much like money because a) accounting is done in it, b) it is issued by a governing body (like a fiat currency) and c) it is fungible, i.e. you can already buy things with it and if you could buy things with it AND a and b were true, it would pretty much be a currency. This would fly in the face of Roddenberry’s absolute diktat that the Federation has no currency.

I’m gonna make a bold new theory here. Federation Units are “Federation” the same way that American Cheese is American. It is simply descriptive. Currency was invented long before capitalism as a means to disintermediate trades: you wanted my grain, I didn’t want your cows, I wanted farmer Ted’s grapes. Rather than make every trade a 3, 4 or 5-way trade, we made a little certificate we all agreed was worth something to us and us only. This need would still occasionally crop up in the Federation, even without money. I believe the Federation Unit is a private currency, developed by third parties to facilitate complex trades or trades outside the Federation. I believe that the Federation Unit is not actually underwritten or issued by the Federation. I think it is more akin to the Calgary Dollar or the Chiemgauer. Or bitcoin. This would solve so many problems. It would make it unequivocally true that the Federation doesn’t use money. It would give people a unit to use as a reference when they say things are expensive. It would be a thing citizens could acquire, if they wanted to, through barter originally, then allowing them to use them to purchase things (like Tribbles or Holosuites) from people who elected to take them, since taking them is optional (witness Quark’s vacillations on whether he accepts them or not). It would make a nice proxy for talking about investment levels, such as when Kirk said how much the Federation had invested in Spock.

Foreign Reserves

Additionally, I believe that the Federation acts like any current sovereign nation state and holds foreign reserves of currencies of other nations. It’s assumed that not all foreign trade is done through barter. The federation itself probably holds foreign reserves in foreign currency just as China holds US dollars and England keeps a reserve of Euros. Sisko at one point tells Quark he could have charged rent for the bar, but he chose not to. Presumably, that would have been paid in latinum. Presumably, the Federation would have just held onto it as foreign reserves. All evidence, in fact, points to the fact that the Federation operates as a nation and uses foreign reserves exactly as we do now. The Chinese government holds US Dollars but you don’t hear a Chinese person say “we use dollars.” This is a bit confusing by the episode in which the Federation offers 1.5 million Federation Credits for use of the Barzanian wormhole, but it doesn’t have to be contradictory. Federation Credits had value to the Barzanians, so the Federation could simply procure them from the issuer with its foreign reserves of other currencies at market rate.

The Individual Can Have Money

An individual of the Federation can procure latinum by barter for goods, labor or, presumably Federation Credits if they had them. I assume that there’s probably some black market value for Federation Credits just like any other currency, sovereign issued or not (you can buy aLewes Pound on eBay right now for $7.98). Perhaps it is more legitimate and the Units are traded on a commodities exchange. It really doesn’t matter. As a Federation Citizen, I can have gold pressed latinum, Federation Credits, FrangsDarseksIsiksLeks, or Quatloos in my wallet. I can have a wallet. I can buy things with Self Sealing Stem Bolts if I want. But none of that is in conflict with the fact that the Federation has no unit of currency, has no money, and my society is predominantly concerned with societal good and self-improvement.

Then there’s the matter of Quark’s bar. What’s up with that? He never seems to charge anyone for drinks but is obsessed with money, and you can buy holosuites in latinum or Federation Credits, and you can bet on the Dabo table with Latinum. At first, I thought there was a whole complex thing where Quark doesn’t charge Starfleet personnel because he made the mental calculation it was cheaper to give them drinks for free and keep accepting free rent from Sisko, but then I realized that doesn’t really work because he charges them for the Holosuites and Dabo tables. Then I realized: Quark’s is like any other casino. The drinks are free: they are a loss leader against the higher profits of the Dabo Table and Holosuites.

The Proto Post-Scarcity Economy

The thing I love most about this theory is that it seems plausible for our future. Tom Paris said that a new world economy takes shape in the 22nd century. That might be a smidge optimistic but we already have a world economy, in one sense, so the new one could be something only incrementally different from this one. Money went the way of the dinosaur, he said, and Ft. Knox was turned into a museum. Most of us are already off the gold standard, and it’s certainly not inconceivable in another 180 years we don’t use paper money at all, and a single currency has dominated the planet — the Dollar is already close — and it slowly fades into the background.

From there, perhaps a cultural shift takes place as we realize that “everyone in a job” isn’t the same as a full economy, and we start to look for models beyond capitalism that aren’t all communist hoo-ha.

I sort of love that Star Trek forces us to think about a society that has no money but still operates with individual freedom and without central planning. I love that democracy is still in place. I love that people can still buy and sell things. It’s real. It’s a more realistic vision of post-capitalism than I have seen anywhere else. Scarcity still exists to some extent, but society produces more than enough to satisfy everyone’s basic needs. The frustrating thing is that we pretty much do that now, we just don’t allocate properly. And allocating properly cannot be done via central planning.

The only real “out there” requirement in all of this is a governmental layer higher than the nation, and indeed, higher than the planet. This doesn’t seem insane, I suppose, if we were to suddenly find ourselves not alone in the universe. And indeed we already have some measure of international government now. Moreover, the Federation clearly adheres to the “laws made as close to home as possible” routine, since as far as we can tell the Federation president really only has authority over Starfleet, Foreign Relations and power allocation and accounting. Virtually every other law we encounter in the Federation happens at the individual planet or colony level.

It’s interesting to me because these are things we’re going to have to reckon with, I believe, in my lifetime. If robots do all the dirty work, and the US is hugely rich, does every single person really need a job? Are we going to let all of that money pile up in the 0.1% ruling elite, or can it be distributed to everyone? Does wealth being distributed to the people in an equal manner mean communism absolutely? Of course, it doesn’t. The US isn’t communist. The UK isn’t communist. Denmark isn’t communist. What happens when the surplus is more than enough?

Go to the profile of Rick Webb

Rick Webb

author, @agencythebook@mannupbook. writing an ad economics book. reformed angel investor, record label owner, native alaskan. co-founded @barbariangroup.


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