

The Economics of Science Fiction - eru
http://hanson.gmu.edu/econofsf.html

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Tycho
One thing I believe sci-fi seems to always miss is the 'information economy.'

Sci-fi typically depicts contact with other races through spacefaring on FTL
ships, and then trade being established through that channel. But I think it's
exponentially more likely that rather than developing the means to travel into
the stars, we (first) develop the technology to allow FTL or instantaneous
communication. And from there we'd pick up other civilizations' signals, and
soon we'd work out the protocols and have access to some sort of galactic
internet. Communication technology has been advancing faster than locomotive
technology for a long time now.

People always talk about the internet reaching a point where we all work from
home - well there should be a corresponding 'work from your home planet'
notion.

~~~
hartror
You've just been reading the wrong science fiction.

One of the great concepts in _Fire Upon the Deep_ by Vernor Vinge is a galaxy
wide internet and the malevolence in it is effectively just a super virus.
_Snow Crash_ by Neal Stephenson has something what you describe also with a
great "information economy", albeit earth based.

~~~
wildwood
Also, in _Deepness in the Sky_ , it goes into the Qeng Ho's practice of
broadcasting an encyclopedia of general technology throughout known space, to
accelerate planets' development until they were advanced enough to trade with.
It's sub-light, but so is travel, at least in that zone.

~~~
hartror
Oh yes forgot that!

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bane
People usually think of money as a symbol for "stuff" because we trade money
rather than stuff (yay! no more barter system!). But really, if you think
about it, stuff is merely a symbol for energy. Wheat, or some sheep, or a
sword or whatever is really a symbol for the energy that goes into producing
such a thing.

When we talk about vast interstellar empires of thousands of starships
travelling faster than light, we really should think about the vast expense of
that. No doubt, the amount of energy required to build and maintain a fleet of
such things would be tremendous, therefore it would be _expensive_. Consider
this, the vast energies required for even a single ship to approach c (I
believe I read someplace it would take the mass of Saturn to drive a resonable
size ship to those speeds), now multiply that by any notional fleet. We have
no modern notion of how to even convert that much mass (and drag it around).

In other words, sci-fi economy:modern economy::sci-fi energies:modern energies

Sci-fi economics could be truly fascinating as a sub-genre, but I don't know
of any texts that do a decent job of it.

~~~
arethuza
I'm rather fond of the Culture - forget resource allocation through messy
things like economics and rely on manners and good taste (not to mention the
indulgences of God-like AI entities).

<http://en.wikipedia.org/wiki/The_Culture>

~~~
bane
Added to my reading list! Thanks!

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Locke1689
Previous posting and discussion:

<http://news.ycombinator.com/item?id=819449>

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loganfrederick
Not directly related but topically relevant link to Nobel Prize-winner Paul
Krugman's paper on "The Theory of Interstellar Trade":

<http://www.princeton.edu/~pkrugman/interstellar.pdf>

~~~
jacques_chester
It's linked to in the article.

------
athom
If you want to talk economics and science fiction, maybe we should ask
ourselves how relativity affects compound interest?

Like, suppose you deposit your money in a bank account at, say, a couple
percent interest, then head off for about ten years at something near the
speed of light. You only age five years, and return looking forward to ten
years' worth of interest on your priciple, only to learn that the bank
"adjusted" the compounding rate, so you only got the five years' worth
reflecting the time you yourself experienced.

Who's right? What if it were a loan you took out, instead?

It's kind of interesting, if a little contrived. Relativistic effects between
stock exchanges might be a _little_ more relevant at the rates computers are
starting to trade, these days.

~~~
gwern
I would expect arbitrage between timeframes to force interest rates to be
calculated from the point of the slowest timeframe.

Fundamentally, interest is set by what can be done with some capital - what
high yielding investment can be made with it in the allotted time period for
the loan. If there's some booming technology which offers returns of 12%
(because it's just that awesome) per year, but my factory only offers 3%, why
would the banker lend me money at <3% when he could make his loan to someone
in the tech field and get <12%?

Similarly, if I'm hopping on a rocket to go mine on Alpha Centauri and time
dilation cuts my years in half to just 5 years of work, then why would the
banker give me money when he could give it to someone who will stay home and
get 10 years of work done? I might be the better deal, but if so, I had better
return with some awfully expensive rocks 10 years later.

Of course, this implies that investing and then going on a relativistic cruise
is a good idea. But why not? That capital you are investing came from
somewhere. Where did it come from? It came from someone working hard and then
_not_ consuming. Someone(s) chose to work hard and generate $1 million of
value, say, but then chose not to go out and hold an orgy of buying $1 million
of chocolate and flatscreen TVs. That $1 million of value remains and
presumably circulates and supports further investment and growth, which
themselves will compound and compound. When that investor returns centuries
later, he deserves whatever is left of his investments.

(Given the past few centuries, I wouldn't place high odds on his investment
growing to Bill Gates sizes, or there being anything left at all. So such
investors would be doing us an even bigger favor than it seems.)

~~~
btilly
If you think that there is a slowest timeframe, then you do not understand the
theory of relativity.

That said it is obvious that the reference frame that will be chosen is the
fixed reference frame of the distant stars.

~~~
Robin_Message
I thought I did, and I would see the fixed frame of the distant stars as a
"slowest timeframe," although I suppose there is obviously a slower one. Is
that what you meant, or am I missing something entirely? Give us a clue!

~~~
gwern
No, it has to be the slowest timeframe with actors/agents/people in it,
because they're the ones who are setting limits on what interest can be by
being the most productive.

Let's take an example - imagine our slowest timeframe is at X and our fastest
timeframe Y is dilated to 1/10 of X. And let's say the current ROIs per man-
year in X are at 3% (it's a mature well-developed economy, the home planet)
but ROIs in Y are an amazing 20% per man-year. X bankers will _still_ prefer
to lend to Xers rather than Yers. Imagine they lend to a Yer. 10 X years later
(1 Y year later), Yer repays the loan with 20% interest. Great. But imagine
they had lent to a Xer. 10 years later, the Xer repays the loan with 34.39% in
interest! (3% compounded annually.)

And the exact same logic applies if the banker lives in Y. Xers are _still_
better investments. A Y banker loans to an Xer for 1 Y year, and a year later
gets the loan back with 34.39% interest, as compared to the best his fellow
Yers can do, which is just 20% per year.

So interest rates need to scale with the dilation. If they scale too little,
then all money will flow to the slowest timeframe. If they scale too much, the
money flows to the fastest timeframe. Modulo the cost of moving between
timeframes. (Imagine if Yers got returns of 40% per Y year/per 10 X years.
Then X bankers would be clamoring to lend to Yers.)

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narag
It's disappointing to see a lot of highly speculative interstellar mentions,
but nothing about solar system commercial development, that we have started
seeing in our lifetimes.

The link about doomsday nonsense seemed promising, but it was some
mathematical speculation the kind the article started criticizing.

~~~
shadowfox
> but nothing about solar system commercial development, that we have started
> seeing in our lifetimes

Is this really happening right now?

~~~
narag
Artificial satellites. Next steps will take longer...

