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Theory of interstellar trade (1978) [pdf] (princeton.edu)
157 points by mooreds on Aug 16, 2023 | hide | past | favorite | 51 comments



Charles Stross has written at least two full-length novels that are, at their core, about interstellar economics:

- Neptune's Brood (https://en.wikipedia.org/wiki/Neptune%27s_Brood)

- Singularity Sky (https://en.wikipedia.org/wiki/Singularity_Sky)


And note that Krugman and Stross are friends, or at least friendly with eachother. Stross has referenced this paper and Krugman has talked positivly about both those novels and the Merchant Princes, which is about a group of people who can travel between parallel worlds and make money doing so. They have also appeared on panels together at conventions.


also the weirdo cordwainer smith novel "the planet buyer" with its concepts of how near money is to earth.

https://gutenberg.ca/ebooks/smithcordwainer-boywhoboughtolde...


Charles Stross, Neptune's Brood, 2013 gives us an exhuberant and ambitious tour of interstellar finance and fraud when the speed of light is still the limit for data transmission and interstellar ships are massive commercial endeavors on a massive time scale involving a massive amount of debt.It's part 3 of Saturn's Children series but I don't remember it being necessary to have read the first two.


What's part two then? Bit Rot is just a short story.


That is the one I noted as part 2. Yes a short story - now found online.

Saturn's Children, 2008; Bit Rot, 2010; Neptune's Brood, 2013

http://www.antipope.org/charlie/blog-static/2013/06/short-st...


To understand the bogus funding acknowledgement, it helps to remember that this was written during the era of Proxmire's Golden Fleece awards, which picked random government-funded academic researchers and held them up for public ridicule based on highly slanted and selective descriptions of their research.



"National Institute on Drug Abuse (NIDA) funded project by psychologist Harris Rubin for $121,000, on developing "some objective evidence concerning marijuana's effect on sexual arousal by exposing groups of male pot-smokers to pornographic films and measuring their responses by means of sensors attached to their penises".[26][27]"

One of the prize winners


"Only Difference Between Screwing Around and Science Is Writing It down" - Myth Busters

Edit: I originally misquoted. A quick search corrected what I'd misremembered.


That’s tremendous, can you imagine the initial conversations?


I suspect the initial conversation was along the lines of, "holy shit Harris are you fucking with me? You can get money for this?! Dude!"


I'd be even more interested in how the initial conversations about the alcoholic sunfish were like.


"A solution if derived from economic theory, and two useless but true theorems are proved."

What more can you want from a paper?


"It should be noted that, while the subject of this paper is silly, the analysis actually does make sense. This paper, then, is a serious analysis of a ridiculous subject, which is of course the opposite of what is usual in economics."


That's great, it sounds almost like a Pratchett Discworld footnote.


"Among the authors that have not pointed this out are Ohlin and Samuelson."

This is a thing of beauty.

"In fact, I will assume that investors, human or otherwise, are able to make perfect forecasts of prices over indefinite periods."

I'm crying here.

Figure II is indeed puzzling.


I wrote about this article a few years ago [0]. It's a fun read, but I'm still not entirely convinced by its critique. Here was my conclusion at the time: At its worst, this article is the amusing grumblings of a disgruntled researcher; at its best, it’s an interesting take on methodology.

This was one of my favorite papers I've found through Fermat's Library [1].

[0] https://bcmullins.github.io/top-articles-2020/#the-theory-of...

[1] https://fermatslibrary.com/journal_club


https://www.yanisvaroufakis.eu/2014/01/30/war-spikes-in-the-...

Yanis Varoufakis' view on the economics inside Eve Online. If you can't trade interstellar in the real world, modelling it inside a digital virtual world is the next best thing...


People like to say it's a problem that we can't run experiments in macro-economics (and it would be hard to observe an interstellar economy). With large scale games I feel we are probably past that point. That article is relevant. I am also reading front to back

Virtual Economies - Design and Analysis, Vili Lehdonvirta and Edward Castronova, 2014.

It's an overview of real-life economics interactions, internal economics, influences on playability, etc. Clear, well written, broad. There seems to be plenty more in that direction by now.

If one thing is the "problem", it's that designers and publishers are pushing games as games - and to make a profit. Which means they rightly should be less than enthusiastic toward experiments that have the potential to completely change their games. ... And so in a way we are still in that situation of people not wanting to run macro-economic "experiments" - even on their large scale games - except with a much broader range that we can observe.


Except EVE really isn’t interstellar. I can instantly see market data for anywhere and move a hauler across the galaxy in a day.


This is without a doubt the most sensible thing I have ever read from Krugman.


I heard about this from this Odd Lots podcast: https://www.bloomberg.com/news/articles/2023-08-11/paul-krug...



I was commenting in the Discord that this is where this had to have come from.


Great podcast


We are all sheeple.


Ha! Lol. I almost got kicked out of business school when I referenced this paper.


>"A solution is derived from economic theory, and two useless but true theorems are proved".

Nice.

Any idea if this has been used in a video game? maybe like Eve?


There was a better take on interstellar trade in the Traveller boxed set. And it relied on FTL travel to make any sense.


Well in the context of the paper, the fact that the interstellar drive in Traveller manages to avoid the relativistic affects of lightspeed travel makes things much easier.


Much. To me, the thing that really needs to be more realistically considered is interplanetary (not interstellar) trade. Lightspeed-grade goods and services (media, data) have one "cost," and inorganic atomic-structure goods and services (gaseous/liquid/solid matter) have another "cost", and organic biological matter — especially living matter — will have an even greater cost still.

Getting information to Mars will be far cheaper in energy and currency than getting a crate of parts there; and that will be far cheaper still than getting humans or their biological foodstuffs back-and-forth.


There should be no problem except the machine travelling at light speed. Shit just takes a long time to get to interstellar places. Think items by shipping taking 3-6 months. Same equation


Interestingly enough if you can get enough 99.999s in your speed for the ship itself there is almost no time that passes at all, which then pushes the question of how fast can you speed up and slow down. If in this magical world it was quickly you could ship goods that have pretty short shelf lives without issues.


Even if you could somehow do this technically (without the ship blowing up when it hits a micro-asteroid), the fact only a short time passes inside the ship isn't much help when it takes decades or centuries for the ship to get to its destination. Even at light-speed with no accel/decel time, a ship would take 4 years to get here from the nearest star system (Alpha Centauri).


The premise that two star systems could have some imbalance in goods worth trading is rather shaky. You'd think once you get to interstellar travel energy is the only thing you need.


some discussion from 3 years ago:

https://news.ycombinator.com/item?id=25592285


Thanks! Macroexpanded:

The Theory of Interstellar Trade (Paper) [pdf] - https://news.ycombinator.com/item?id=29834636 - Jan 2022 (1 comment)

The Theory of Interstellar Trade (1978) - https://news.ycombinator.com/item?id=25592285 - Dec 2020 (103 comments)

The Theory of Interstellar Trade - https://news.ycombinator.com/item?id=25548440 - Dec 2020 (2 comments)

The Theory of Interstellar Trade - https://news.ycombinator.com/item?id=18216631 - Oct 2018 (1 comment)

The Theory of Interstellar Trade - https://news.ycombinator.com/item?id=17534950 - July 2018 (180 comments)

The Theory of Interstellar Trade (1978) - https://news.ycombinator.com/item?id=13064504 - Nov 2016 (47 comments)

The Theory of Interstellar Trade (1978) [pdf] - https://news.ycombinator.com/item?id=8937197 - Jan 2015 (57 comments)

Krugman’s Theory of Interstellar Trade - https://news.ycombinator.com/item?id=6632381 - Oct 2013 (82 comments)

The Theory of Interstellar Trade, Paul Krugman (1978) - https://news.ycombinator.com/item?id=818706 - Sept 2009 (6 comments)


Is there a similar economics paper on interplanetary trade? The abstract seems to mention one.


In the Intro he cites a paper by Frankel, "Is there trade with other planets?"

https://scholar.harvard.edu/sites/scholar.harvard.edu/files/...


OMG somebody just listened to the OddLots podcast. We are all sheeple.


[flagged]


All part of the great conspiracy of course...


this is the kind of thing that, I wish chatgpt could ocr, read and summarize


I admit I didn't RTFA but please, Hypothesis of interstellar trade.


> I admit I didn't RTFA but please, Hypothesis of interstellar trade.

This is a very interesting comment because it tries to nitpick the difference between "hypothesis" and "theory" without either understanding the difference, or checking which one applies to OP. A theory is a logical framework with initial assumptions (axioms) and rules of inference. If one creates a model for interstellar trade and discusses its assumptions/implications it is then a theory. I don't know what "hypothesis of interstellar trade" would even mean. This would be like seeing "Group Theory" and saying it should be "Group Hypothesis"... It doesn't seem clear to me what you're implying the article may even be about.

I know that many people will consider this comment snarky, but I truly think one of the issues in human communication is attempting nitpick something without comprehensively understanding it. Human communication is flexible, nebulous and ambiguous. Nitpicking communication willy-nilly does more harm than good, imho.


a theory explains all the data you have gathered, including tests that the theory predicted. When you collect data that the theory fails to explain, you look for a hypothesis that makes some predictions that you could test. If the new data you collect is according to your hypothesis, then your hypothesis is on the way to being part of the theory.

stop calling an earnest effort to choose the right word "nitpicking".

If our theories of matter, energy, space-time and relativity rule out the hypothesis for interstellar trade, that is not a theory of interstellar trade. If our theories of matter, energy etc. rule in interstellar trade, that's an interstellar trade hypothesis.

methinks you are guilty of the problem I was pointing out?


No, this is an actual theory. That interstellar trade between humans isn't likely ever (even at the speed of light it takes too long), that doesn't mean we can't make theories about how it would work. This is based off of basic economics theory.


till it's tested, it's a hypothesis. Hypotheses are not random ideas, they need to incorporate all the theoretical knowledge you have so they are not disproven a priori. Then your hypothesis is "according to theory" and incorporating the previously unexplained data, but it will not be a theory till the predictions it makes are tested.


You are confusing science with math.


no I'm not, if I were i would have used the word theorem. sheesh, it's getting sloppier in here.


Err, economics. Theory is the term they use for this type of work there.




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