

Krugman’s Theory of Interstellar Trade - RougeFemme
http://blogs.scientificamerican.com/life-unbounded/2013/10/28/krugmans-theory-of-interstellar-trade/

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shmageggy
If this sort of thing fascinates you as it does me, you might be interested in
the latest Charles Stross book that features relatavistic finance as a major
plot point. Here's a preview chapter:
[http://www.tor.com/stories/2013/06/neptunes-brood-
excerpt](http://www.tor.com/stories/2013/06/neptunes-brood-excerpt)

Mr. Krugman himself thinks it's "the best thing by far written on the subject
to date" ([http://krugman.blogs.nytimes.com/2013/05/20/the-theory-of-
in...](http://krugman.blogs.nytimes.com/2013/05/20/the-theory-of-interstellar-
finance/))

~~~
gjm11
> Mr. Krugman himself thinks it's "the best thing by far written on the
> subject to date"

I'm a big fan of Charles Stross, but it may be worth pointing out that Krugman
goes on to say that this is partly because it's the _only_ thing written on
the subject to date.

(In particular, he's distinguishing "interstellar finance" as in _Neptune 's
Brood_ from "interstellar trade" as in his own earlier paper.)

------
bladedtoys
If it we were discussing a greater interstellar human civilization, (and let's
face it, the idea of aliens is silly) there is one additional interesting
problem: the time dilation colonist experience will mean they will be
permanently behind the Earth by a number of years equal to the distance they
travel. And their knowledge will be double that obsolescence.

For example: they leave at the speed of light for a star 50 light years away.
On Earth 50 years pass but no time passes for the colonist. So when they
arrive they are technically where the earth was 50 years before. They set up
shop and transmit their wonderful ideas and technology, which takes 50 more
years to be received. Which means it's 100 years out of date.

Meanwhile the Earth beams its ideas to the colonists. Even on they day the
land, the colonist can tune into their favorite sitcom without missing an
episode (because of course they were traveling side by side with those
transmissions and the subsequent fifty years were following behind in a lovely
tail of vapid entertainment). So the Earth's information is still quite useful
to them.

And this disparity in value can never be corrected. If the Earth moans about
the uselessness of the colonist 100 year old ideas and sends suggestions, the
colonist will have been listening to the Earth for 100 years anyway before
they hear those suggestions and will already moved far beyond them. Yet still
be 50 years behind.

So a trade in ideas also seems unworkable.

~~~
ceejayoz
> and let's face it, the idea of aliens is silly

Care to elaborate?

~~~
bladedtoys
I conjecture the odds that humans will colonize other stars is close to 100%
(it's what living things do, expand maximally)

But the odds that we will find an alien species that happens to be on a level
of development interesting to either party looks less likely. We don't carry
on commerce with chimps or dolphins and they are obviously much closer to us
than any alien would be. Of course we may as well look for them, but I
wouldn't hold my breath.

Also, I enjoy using the word silly at every opportunity.

~~~
ceejayoz
> We don't carry on commerce with chimps or dolphins and they are obviously
> much closer to us than any alien would be.

It's a little odd to compare non-technological species with those capable of
interstellar travel. We don't do commerce with chimps/dolphins because they
don't have anything of value to us (at least, not that we can't just take
ourselves w/force).

Plus, encountering aliens isn't the same thing as encountering aliens we'd
trade stuff with. You never mentioned that qualifier until the follow-up.

~~~
bladedtoys
I mean we, chimps and, dolphins evolved on the same planet at the same time
and have vast tracts of DNA in common yet the gap is huge.

So anything evolving at a different time period in a different environment (in
the unlikely event it developed intelligence at all) would be so far beyond
us, we would be, at best, as interesting as dolphins. Even if their
development were ahead of us by only 1/100 of one percent of the time stars
have been around, that still put them a 1.3 million years in advance of us.
About the divergence time between us and a chimp. And chimps do make things,
they clean twigs to scoop edible bugs and use leaves for umbrellas. But we
have no interest in these things and they have no understanding of our idea of
commerce even if we did.

But aliens per se? Sure. Indeed there maybe even bacteria as close as Mars and
Europa.

------
gjm11
The opening of Krugman's paper is wonderful (though it has nothing to do with
interstellar trade):

" _Many critics of conventional economics have argued, with considerable
justification, that the assumptions underlying neoclassical theory bear little
resemblance to the world we know. These critics have, however, been too quick
to assert that this shows that mainstream economics can never be of any use.
Recent progress in the technology of space travel, as well as the prospects of
the use of space for energy production and colonization (O’Neill 1976) make
this assertion doubtful; for they raise the distinct possibility that we may
eventually discover or construct a world to which orthodox economic theory
applies._ "

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Scienz
Haven't had time to read the paper yet, but the blogger seems to miss the
obvious. We could probably assume civilizations capable of interstellar trade
would have advanced enough genetic engineering and biological 3D printing such
that trading lifeforms and their by-products between planets wouldn't be
required. Different planets, with different atmospheres, geologies and
ecosystems, would lead to comparative advantages in production though, which
is the primary incentive behind trade relations. However the net benefit of
trading would be at least partially offset by the cost of transporting goods
over such long distances. With low thrust, high efficiency engines attached to
the cargo the cost could be low enough to make trading an economic benefit,
but that would require even longer time periods between the production of a
good and its being put to good use. Civilizations would have to plan ahead and
estimate the supply and demand many years, centuries or millenia into the
future. You could really have a lot of fun with this kind of analysis. Looking
forward to reading the full paper later.

~~~
gabemart
> Different planets, with different atmospheres, geologies and ecosystems,
> would lead to comparative advantages in production though, which is the
> primary incentive behind trade relations.

Not just advantages - some organisms rely on extremely complex symbiotic
relationships and environmental stimuli (e.g. fungi in the genus _Morchella_
). Reproducing these conditions, even with advanced technology, could be
extremely challenging or impossible, which could create enough demand to
justify physical transportation of goods. (This is essentially the plot to the
science fiction novel I'm writing.)

~~~
eli_gottlieb
Tell me, have you read the original _Dune_ and the accompanying _Dune
Encyclopedia_? They're basically the foundations of the fictional science of
terraforming ecology.

~~~
gabemart
After a long period of meaning to, I'm currently about half-way through _Dune_
, and enjoying it.

------
alextingle
> maybe some lovely Picasso’s for GL581, or perhaps a couple of Caravaggio’s?

Depressing to see even Scientific American's sub-editors failing to catch
grocer's apostrophes.

------
jerrya
Customer service stinks. I've been on hold for 12 parsecs.

~~~
javert
That's funny because the parsec is actually a unit of distance. :)

~~~
crntaylor
That's the joke -

[http://en.wikipedia.org/wiki/Millenium_Falcon#Depiction](http://en.wikipedia.org/wiki/Millenium_Falcon#Depiction)

A reference to the Millenium Falcon completing the Kessel Run in "less than
twelve parsecs"

~~~
Scienz
Relativistic physics often measures the passage of time in units of distance,
though I doubt Han spent ~39 years making that Kessel run.

~~~
jerrya
_Relativistic physics often measures the passage of time in units of distance_

The explanation or rationalization of this 36 year old joke explains that so
does driving in Los Angeles....

How much longer till we get to Disneyland? Just another 10 miles honey.

Regardless, I always preferred 'less than 12 parsecs' as a measurement of the
maneuvering within a gravitational well.

------
mtdewcmu
You would have to be extremely patient even for electromagnetic communication.
A single round trip to the nearest star would take 8 years.

~~~
rurounijones
Turn based games strategy games have a resurgence in popularity and become
things passed down the family.

"See this knight? My great-grandfather recruited it into this CIV V game 72
years ago. Now it is time for it to fulfil its destiny and crush the archer
built by the Bob's great uncle"

~~~
eli_gottlieb
The future is diplomacy through play-by-post RPGs over interstellar Usenet.

~~~
mtdewcmu
I think the interstellar protocols would have to be redesigned around UDP,
because a reliable protocol would have too many round-trips and would be
intolerably slow.

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jl6
You might wish to physically transport key material for a one-time-pad-based
interstellar crypto system.

~~~
Houshalter
Could you direct a signal of some kind in a way that only people in the
direction you send it could receive it?

~~~
mtdewcmu
I believe that's a laser. But you would have to make sure somehow that it
wouldn't reflect off of any particles en route. Which would likely be
impossible... unless the wavelength was very, very long, I think.

Also, the laser would spread out, but it would still be mostly in one
direction.

------
inetsee
There's a post by Robin Hanson
("[http://hanson.gmu.edu/econofsf.html"](http://hanson.gmu.edu/econofsf.html"))
that discusses this issue with more references on the topic (including the
Krugman article).

------
userulluipeste
"The fact being that almost any cargo along these lines (made of the elements
produced across the universe by stellar nucleosynthesis and supernovae) is
going to be a) most likely available in any system already, b) definitely
available for the taking from billions of unoccupied regions of space."

Yet, for example in Australia (at least Tasmania) under British colonial
period, raw materials such as wood for housing was imported from Carelia
(through Britain), although local better materials (e.g. rooting-resistant
Huon pine trees) could be found in abundance. Sometimes the logic is defied by
other human behavioral factors, sometimes the simple economical reasoning does
not tell the whole story, so I wouldn't be surprised if water will be traded.

"A few billion years of natural selection and evolution on any given planet
will produce an array of wonderful and useful lifeforms, that could be unique
enough to be of interest elsewhere."

Considering our history in messing up the natural habitats and ecosystems, and
also considering that we ended up with restrictions on introducing living
organisms in many places here on Earth, I'm also not surprised if stronger
restriction will be set up for trading such things on even more separate
environments such as planets. I see instead good prospects for interstellar
tourism, with clients willing to travel vast distances just to see those
living "Bunny rabbits and butterflies" in their natural environment.

------
auggierose
For some of the ramifications of interstellar trade, see:

[http://en.wikipedia.org/wiki/Citizen_of_the_Galaxy](http://en.wikipedia.org/wiki/Citizen_of_the_Galaxy)

------
dimitar
Please read the paper itself, please. It is very funny, and the author rarely
misses an opportunity to make a clever pun.

------
Houshalter
Biological things can be transmitted just as raw information through a radio
broadcast or something. Just upload the genetic code. Same with most art. Even
physical things, you could upload the data necessary to replicate them.

~~~
TeMPOraL
> _Just upload the genetic code._

Yes, though you'd still need to have a biological assembler from the original
biosphere, for the genetic code is just a set of instructions for
nanomachinery common on Earth, not a XYZ blueprint. Most of the information
that form living creatures is embedded in the workings of replication
machinery, not in the DNA itself.

(see also GEB for more detailed discussion about where exactly the
"information" lies in systems)

~~~
Houshalter
That would be a one time transport though, not a continuous trading
relationship. Also the biological assembler can still be transmitted as
information. We are talking about futuristic and alien civilizations with far
more advanced technology, certainly it would be possible.

------
Tarang
Damnit how will I keep all my software up to date now! It's not too nice being
several galactic rotations behind.

Also my beryllium futures contract's electromagnetic time latency premium is
too high!

------
ck2
Why would such an advanced species "trade" ?

They would just mine planets directly via robots.

Hopefully if they were nice aliens they would only mine uninhabited, lifeless
planets.

~~~
mtdewcmu
Why do people always assume that aliens would be smarter than us?

~~~
NhanH
Not all aliens, but generally we're only concerned with aliens that could
potentially affect us. Since we can't travel that far away from our planet
right now (and we know that there seems to be no life capable planet nearby -
with a loose definition of "nearby"), any alien that we can meet right now
would have to be quite a bit more advanced to us.

~~~
mtdewcmu
The aliens haven't found us. I think the best hope of contact is if we develop
interstellar travel first and go looking for them. I think the premise of the
paper depends on mankind possessing this technology.

------
eli_gottlieb
The nastier issue isn't interstellar trade but interstellar conquest. Trade
between stars is _very_ expensive, even for a fairly sophisticated
civilization (think of the opportunity costs of waiting decades for a package
from interstellar Amazon to arrive!). It's usually much cheaper to make things
from local materials and swap data packets with your stellar neighbors.

The problem, of course, is that eventually you might well exhaust the
resources of your local solar system. A sufficiently long-lived civilization
_will_ do so, no matter _how_ sustainable they are, unless they manage some
kind of trick to conquer entropy or basic conservation laws.

Which means you'll need a worked-out interstellar legal framework for laying
claim to uninhabited solar systems as destinations for colonies when the time
comes to "move house".

And all of this is presuming you're operating at a high enough level of
technology _and_ civilization to even gain entry to the Interstellar Club in
the first place.

~~~
Tloewald
To quote an Applied Math professor from college (Thomas K. Donaldson):

"When we reach the stars, we won't need planets."

The kind of competition and resource exhaustion you're talking about is on a
scale where interstellar conquest is kind of a moot point.

~~~
eli_gottlieb
I disagree. Even stars run down, and there's also the issue of drifting debris
clouds and various other "Natural Disasters IN SPAAAACE!". Though, yes,
admittedly, a star-faring civilization might be developed enough that "moving
house" becomes an applicable metaphor: if your old star runs down, just move
to a new one that's unoccupied, and since life is rare there will be plenty of
those.

Hmmmm... Now I'm imagining a huge set of future Highly Developed Civilizations
conducting some kind of scientific conference to share their progress on the
matter of the Last Question, since they all _realize_ the bind they're in and
would rather work on the problem scientifically _now_ to get increased or
unlimited resource sustainability rather than pillage the universe and end up
fighting wars with relativistic weaponry in a few billion years.

