10 ms·

The Theory of Interstellar Trade (1978)

messe 6y ago
Abstract: > This paper extends interplanetary trade to an interstellar setting. It is chiefly concerned with the following question: How should interest on goods in tranist be computed when the goods travel at close to the speed of light? This is a problem because the time taken in transit will appear less to an observer travelling with the goods than to a stationary observer. A solution is derived from economic theory, and two useless but true theorems are proved.
- jagged-chisel 6y ago
  Without having read anything but your comment: The economic impact to the attendant ('observer travelling with the goods') is not diminished by his own experience of the passage of time, but is affected by the reduction in his own ability to take on other tasks during the same [external] time frame. In other words, it doesn't matter that he experienced the travel as five minutes. What matters is that his options were limited for five days.
  - gravitas 6y ago
    Without having read anything but your comment: What about the actual vs. perceived wear and tear on the ships(?) transporting the goods, do they experience 5 days worth of repair/upkeep (fuel?) needs, or 5 minutes? Maintaining the transport (vehicle, ransible, teleporter, whatever) has some sort of cost - TANSTAAFL.
    - the_af 6y ago
      The passage of time is the same for the transport and its crew, i.e. 5 minutes. It's only the stationary observer (not travelling with the ship) who experiences 5 days.
    - elil17 6y ago
      Most of the paper assumes zero fuel and maintenance costs
  - vnorilo 6y ago
    I think it is more complicated as they will presumably also age slower, thus trade the time lost right now to gain more later. It is all too fantastical for me to speculate on the market value of that transaction.
  - dmurray 6y ago
    But his needs (food, shelter,...) only had to be met for 5 minutes, while he could have invested money and earned interest for 5 days. This is a minor plot point in Orson Scott Card's Ender series, and in Futurama.
    - deleted 6y ago
      [deleted]
  - vsareto 6y ago
    We can turn this on its head and ask a similarly tricky question: Should a human that can live for 1000 years be allowed to access interest rates that 100 year humans get? A 1,000 year human has many more opportunities, and compounding interest will only grow his wealth further. Here's only an initial $1000 investment over 1000 years: https://www.calculator.net/interest-calculator.html?cstartingprinciple=1000&cannualaddition=0&cmonthlyaddition=0&cadditionat1=beginning&cinterestrate=5&ccompound=annually&cyears=1000&ctaxtrate=3&cinflationrate=3&printit=0&x=60&y=8#interestresults https://www.calculator.net/interest-calculator.html?cstartin... At the end of it, they have $358,816,... a huge amount of money. By year 730, they're quintillionaires. Then they have roughly 270 years to spend it, and on top of that, they can hand some of that wealth off to their offspring if inheritance rules don't change. (So really, it's the subsequent generations you really have to worry about) Near light travel time dilation is essentially life extension relative to planetary populations. So any interest paid to the traveler should be calculated at the fraction of time experienced, so 5 minutes to 5 days would be 1 / 1440. As for any opportunity cost, well, there really isn't any greater opportunity cost than being able to extend your life by that much and wait for interest to accrue. So by virtue of being able to travel at near light speed and dilate time, you're quite happy to forgo every other opportunity.
    - ryandrake 6y ago
      > In other words, it doesn't matter that he experienced the travel as five minutes. What matters is that his options were limited for five days. > Near light travel time dilation is essentially life extension relative to planetary populations. So any interest paid to the traveler should be calculated at the fraction of time experienced, so 5 minutes to 5 days would be 1 / 1440. Why should either the lender's clock or the borrower's clock be considered more valid for the purpose of calculating interest? Why is one privileged over the other?
      - qndreoi 6y ago
        I think the lender's clock would be most valid. If I go to the bank for a loan, they usually aren't open to negotiation. They say "Here are the terms. Want the money?"
- koheripbal 6y ago
  I'm trying to imagine a physical product that is worth transporting on an interstellar level, rather than locally manufactured. It seems to me that the only thing that would ever be exchanged between solar systems, would be information.
  - baxtr 6y ago
    Depends on the shipping costs I guess...
  - simonh 6y ago
    Possibly people, or biological goods depending on the state of development of synthetic biology and in vitro tech.
  - amelius 6y ago
    Live performances?
  - SeanLuke 6y ago
    Well, there's the spice.
    - AlgorithmicTime 6y ago
      The Spice must flow.
  - m463 6y ago
    spherical cows come to mind (although they might be oval due to relativistic effects).
  - phreeza 6y ago
    I've probably read too much sci-fi, but high-density computronium left behind by a fallen civilization might make it worthwhile?
    - tachyonbeam 6y ago
      I hope it's ARM or RISC-V, and not x86-based computronium.
nabla9 6y ago
The article was written in 1978 but it references paper: Krugman, P.,"Theory Capital and Travel Light-than-Faster", prosessed, Yale University, 1987 (The writer also received a Nobel for his contributions to the theory of international trade and economic geography).
- gravitas 6y ago
  Paul Krugman: https://en.wikipedia.org/wiki/Paul_Krugman https://en.wikipedia.org/wiki/Paul_Krugman
  - samizdis 6y ago
    As a Brit who reads the NYT and knows Krugman mainly by his writing there, I found that Wiki piece enlightening and fascinating. I will make an effort to read him more widely. Thanks. FWIW, I also enjoyed reading his latest NYT piece for its substance, observation and its humour: https://www.nytimes.com/2020/12/28/opinion/reagan-economy-covid.html https://www.nytimes.com/2020/12/28/opinion/reagan-economy-co...
    - dustingetz 6y ago
      You should also read his critics, there's a whole podcast dedicated to picking apart his weekly column
      - jaybrendansmith 6y ago
        They do that podcast because they know he's right about most everything ... and it angers them and their patrons.
- throw0101a 6y ago
  > The article was written in 1978 but it references paper: […] 1987 The author used a slingshot maneuver around the sun à la Star Trek IV: The Voyage Home.
- credit_guy 6y ago
cdogl 6y ago
Cool paper. I dig the premise. But this passage from the introduction left an eyebrow raised: > [Recent progress raises] the distinct possibility that we may eventually discover or construct a world to which orthodox economic theory applies. This really strains credulity for me. Whatever you think of various heterodox economic theories, their objections tend to come boil to some combination of: class analysis; "human nature"; the second law of thermodynamics; conservation of energy; justice; the environment and ecology. To my knowledge, no one in the scientific community is suggesting that other solar systems will contain environments that take those factors off the table (and nor were they in 1978). Resources are finite and people are people wherever you go (unless our species itself is transformed - but interstellar travel is neither necessary nor sufficient for that to happen). What's the deal? Am I missing something? Am I reading too much into the fanciful introduction to an interesting paper?
- jointpdf 6y ago
  Krugman was being sardonic here, along the lines of “assume a spherical cow”. The whole introduction is dripping with sarcasm. The paper was partially intended as a satire.
  - cdogl 6y ago
    D'oh. Thanks.
  - microtherion 6y ago
    I think the entire paper was intended as satire, even though the math applied is serious. Another joke: “Among the authors who have not pointed this out are…”
hsnewman 6y ago
This seems to be a joke, it says it was funded with a grant from William Proxmire, an american politician that started the "Golden Fleece awards".
- cultus 6y ago
  It's probably just that they wrote this for fun because I can't imagine anyone would fund it. Economists use a surprising amount of dry humor like that, I've noticed. An old one: Remember the unfortunate econometrician, who, in one of the major functions of his system, had to use a proxy for risk and a dummy* for sex. *(a discrete dependent variable)
- baking 6y ago
  Proxmire had a well-known reputation attacking hard-working scientists with perfectly valid scientific research simply to get a reaction to a press release. His intent was to target government waste, but he found he could get much more publicity by making fun of scientists just because the public didn't understand their work. As an example, I remember Marvin Minsky walking into 6.034 one morning in 1978 completely apoplectic over an article in that morning's "Ergo" (A MIT/Harvard libertarian free student newspaper distributed on campus) criticizing some research on homosexual behavior in ducks. I can't find any current reference to Proxmire, but I recall he was involved and it would have been up his alley. Anyway, as I remember, Minsky spent most of the morning explaining the research and it's importance with a real passion. It's one of those things you don't forget. EDIT: I found a reference that says how Proxmire had his staff compile constituent responses to his endless press releases to find subjects sparked the most interest. He was pretty much seen as an idiot in academia but he could easily ruin careers.
notthegov 6y ago
Oh great, maximizing alpha intergalactically. Time is money, space is time and the universe is infinite so why do I need to invest? The physics of heaven would invalidate everything you think is true. Oh and I vote we change this to Cracker News since this place is full of stale minds and clueless coders who are experts at protocols and interfaces except when it comes to the ultimate device, iGirl.
mmhsieh 6y ago
I realize that Krugman was being tongue in cheek in this work, but a lot of the work in theory-heavy areas of "mathematical" economics are similar exercises in obscurity and dubious scientific value. Krugman, in one of his autobiographical essays, described economics as the field that people get into when they can't hack it in math, physics or some other high-rigor STEM field. Part of proving one's intelligence as a junior economics faculty member is doing a lot of mathematically-heavy fireworks and then moving on to "real" research that matters. We can laugh at this one but what is not laughable is the huge resource cost in supporting an academic economics establishment (at least in the theory area) whose product is actually not that much different from this.
- bschne 6y ago
  Do you happen to have a link / title for this essay?
  - mmhsieh 6y ago
    I would welcome someone to help me look for this. I read many of his online essays around 2001, and don't think they were part of any formal publication.
- nabla9 6y ago
  Maybe you refer to this: How Did Economists Get It So Wrong? https://www.nytimes.com/2009/09/06/magazine/06Economic-t.html?em=&pagewanted=all https://www.nytimes.com/2009/09/06/magazine/06Economic-t.htm... Soon Krugman wrote another piece because people misunderstood what he said: Mathematics and economics https://krugman.blogs.nytimes.com/2009/09/11/mathematics-and-economics/ https://krugman.blogs.nytimes.com/2009/09/11/mathematics-and... >I’ve been getting some comments from people who think my magazine piece was an attack on the use of mathematics in economics. It wasn’t. ... What I objected to in the mag article was the tendency to identify good math with good work.
  - mmhsieh 6y ago
    It's somewhat the same thinking, but it was a much more candid essay from an earlier part of his career. It was a frank recollection of why he went into economics as a field; he talks about the Asimov Foundation series, and a practical reflection that he was not really cut out for something like physics. It was back when people had janky self-hosted html sites, and the like; probably written in the late '90s.
papito 6y ago
If we all practiced isolationism and protectionism on the global level here on Earth, we would be much better off.
- xanth 6y ago
  Except for every small nation (think Australia) that can't produce semiconductors and heavy industry.
paulpauper 6y ago
who would have guessed that a paper he wrote as a joke would turn out to be one of his most important and influential. I have seen this paper cited and referenced online more than his serious papers. It shows the value of side projects and divergent thinking. Twitter began as a side project too.
vonnik 6y ago
A lot of Krugman's academic work on economics, before he became an NYT columnist, was focused on transport costs: https://www.nobelprize.org/uploads/2018/06/krugman_lecture.pdf https://www.nobelprize.org/uploads/2018/06/krugman_lecture.p... https://pr.princeton.edu/pictures/g-k/krugman/krugman-increasing_returns_1991.pdf https://pr.princeton.edu/pictures/g-k/krugman/krugman-increa... The interstellar element feels like an extension of that.
ryandrake 6y ago
Previous discussion was interesting, too: https://news.ycombinator.com/item?id=17534950 https://news.ycombinator.com/item?id=17534950
- dang 6y ago
  That one was 2018. Also 2018 (1 comment): https://news.ycombinator.com/item?id=18216631 https://news.ycombinator.com/item?id=18216631 2016: https://news.ycombinator.com/item?id=13064504 https://news.ycombinator.com/item?id=13064504 2015: https://news.ycombinator.com/item?id=8937197 https://news.ycombinator.com/item?id=8937197 2009: https://news.ycombinator.com/item?id=818706 https://news.ycombinator.com/item?id=818706
tw25592285 6y ago
In terms of the overall market process, a lender and a borrower experiencing different time spans is equivalent to a lender and a borrower having different time preferences [1]. Those with the shortest time preferences will borrow at higher interest rates; those with the longest time preferences will lend at lower interest rates. All the math about clocks and reference frames is just scientism. [1] https://en.wikipedia.org/wiki/Time_preference https://en.wikipedia.org/wiki/Time_preference
pseingatl 6y ago
Interest is not a component of every financial system on earth; it is silly to presume that it will be an essential component of extraterrestrial economic systems.
deleted 6y ago
[deleted]

Abstract: > This paper extends interplanetary trade to an interstellar setting. It is chiefly concerned with the following question: How should interest on goods in tranist be computed when the goods travel at close to the speed of light? This is a problem because the time taken in transit will appear less to an observer travelling with the goods than to a stationary observer. A solution is derived from economic theory, and two useless but true theorems are proved.

jagged-chisel 6y ago
Without having read anything but your comment: The economic impact to the attendant ('observer travelling with the goods') is not diminished by his own experience of the passage of time, but is affected by the reduction in his own ability to take on other tasks during the same [external] time frame. In other words, it doesn't matter that he experienced the travel as five minutes. What matters is that his options were limited for five days.
- gravitas 6y ago
  Without having read anything but your comment: What about the actual vs. perceived wear and tear on the ships(?) transporting the goods, do they experience 5 days worth of repair/upkeep (fuel?) needs, or 5 minutes? Maintaining the transport (vehicle, ransible, teleporter, whatever) has some sort of cost - TANSTAAFL.
  - the_af 6y ago
    The passage of time is the same for the transport and its crew, i.e. 5 minutes. It's only the stationary observer (not travelling with the ship) who experiences 5 days.
  - elil17 6y ago
    Most of the paper assumes zero fuel and maintenance costs
- vnorilo 6y ago
  I think it is more complicated as they will presumably also age slower, thus trade the time lost right now to gain more later. It is all too fantastical for me to speculate on the market value of that transaction.
- dmurray 6y ago
  But his needs (food, shelter,...) only had to be met for 5 minutes, while he could have invested money and earned interest for 5 days. This is a minor plot point in Orson Scott Card's Ender series, and in Futurama.
  - deleted 6y ago
    [deleted]
- vsareto 6y ago
  We can turn this on its head and ask a similarly tricky question: Should a human that can live for 1000 years be allowed to access interest rates that 100 year humans get? A 1,000 year human has many more opportunities, and compounding interest will only grow his wealth further. Here's only an initial $1000 investment over 1000 years: https://www.calculator.net/interest-calculator.html?cstartingprinciple=1000&cannualaddition=0&cmonthlyaddition=0&cadditionat1=beginning&cinterestrate=5&ccompound=annually&cyears=1000&ctaxtrate=3&cinflationrate=3&printit=0&x=60&y=8#interestresults https://www.calculator.net/interest-calculator.html?cstartin... At the end of it, they have $358,816,... a huge amount of money. By year 730, they're quintillionaires. Then they have roughly 270 years to spend it, and on top of that, they can hand some of that wealth off to their offspring if inheritance rules don't change. (So really, it's the subsequent generations you really have to worry about) Near light travel time dilation is essentially life extension relative to planetary populations. So any interest paid to the traveler should be calculated at the fraction of time experienced, so 5 minutes to 5 days would be 1 / 1440. As for any opportunity cost, well, there really isn't any greater opportunity cost than being able to extend your life by that much and wait for interest to accrue. So by virtue of being able to travel at near light speed and dilate time, you're quite happy to forgo every other opportunity.
  - ryandrake 6y ago
    > In other words, it doesn't matter that he experienced the travel as five minutes. What matters is that his options were limited for five days. > Near light travel time dilation is essentially life extension relative to planetary populations. So any interest paid to the traveler should be calculated at the fraction of time experienced, so 5 minutes to 5 days would be 1 / 1440. Why should either the lender's clock or the borrower's clock be considered more valid for the purpose of calculating interest? Why is one privileged over the other?
    - qndreoi 6y ago
      I think the lender's clock would be most valid. If I go to the bank for a loan, they usually aren't open to negotiation. They say "Here are the terms. Want the money?"
koheripbal 6y ago
I'm trying to imagine a physical product that is worth transporting on an interstellar level, rather than locally manufactured. It seems to me that the only thing that would ever be exchanged between solar systems, would be information.
- baxtr 6y ago
  Depends on the shipping costs I guess...
- simonh 6y ago
  Possibly people, or biological goods depending on the state of development of synthetic biology and in vitro tech.
- amelius 6y ago
  Live performances?
- SeanLuke 6y ago
  Well, there's the spice.
  - AlgorithmicTime 6y ago
    The Spice must flow.
- m463 6y ago
  spherical cows come to mind (although they might be oval due to relativistic effects).
- phreeza 6y ago
  I've probably read too much sci-fi, but high-density computronium left behind by a fallen civilization might make it worthwhile?
  - tachyonbeam 6y ago
    I hope it's ARM or RISC-V, and not x86-based computronium.

nabla9 6y ago

The article was written in 1978 but it references paper: Krugman, P.,"Theory Capital and Travel Light-than-Faster", prosessed, Yale University, 1987 (The writer also received a Nobel for his contributions to the theory of international trade and economic geography).

gravitas 6y ago
Paul Krugman: https://en.wikipedia.org/wiki/Paul_Krugman https://en.wikipedia.org/wiki/Paul_Krugman
- samizdis 6y ago
  As a Brit who reads the NYT and knows Krugman mainly by his writing there, I found that Wiki piece enlightening and fascinating. I will make an effort to read him more widely. Thanks. FWIW, I also enjoyed reading his latest NYT piece for its substance, observation and its humour: https://www.nytimes.com/2020/12/28/opinion/reagan-economy-covid.html https://www.nytimes.com/2020/12/28/opinion/reagan-economy-co...
  - dustingetz 6y ago
    You should also read his critics, there's a whole podcast dedicated to picking apart his weekly column
    - jaybrendansmith 6y ago
      They do that podcast because they know he's right about most everything ... and it angers them and their patrons.
throw0101a 6y ago
> The article was written in 1978 but it references paper: […] 1987 The author used a slingshot maneuver around the sun à la Star Trek IV: The Voyage Home.
credit_guy 6y ago

cdogl 6y ago

Cool paper. I dig the premise. But this passage from the introduction left an eyebrow raised: > [Recent progress raises] the distinct possibility that we may eventually discover or construct a world to which orthodox economic theory applies. This really strains credulity for me. Whatever you think of various heterodox economic theories, their objections tend to come boil to some combination of: class analysis; "human nature"; the second law of thermodynamics; conservation of energy; justice; the environment and ecology. To my knowledge, no one in the scientific community is suggesting that other solar systems will contain environments that take those factors off the table (and nor were they in 1978). Resources are finite and people are people wherever you go (unless our species itself is transformed - but interstellar travel is neither necessary nor sufficient for that to happen). What's the deal? Am I missing something? Am I reading too much into the fanciful introduction to an interesting paper?

jointpdf 6y ago
Krugman was being sardonic here, along the lines of “assume a spherical cow”. The whole introduction is dripping with sarcasm. The paper was partially intended as a satire.
- cdogl 6y ago
  D'oh. Thanks.
- microtherion 6y ago
  I think the entire paper was intended as satire, even though the math applied is serious. Another joke: “Among the authors who have not pointed this out are…”

hsnewman 6y ago

This seems to be a joke, it says it was funded with a grant from William Proxmire, an american politician that started the "Golden Fleece awards".

cultus 6y ago
It's probably just that they wrote this for fun because I can't imagine anyone would fund it. Economists use a surprising amount of dry humor like that, I've noticed. An old one: Remember the unfortunate econometrician, who, in one of the major functions of his system, had to use a proxy for risk and a dummy* for sex. *(a discrete dependent variable)
baking 6y ago
Proxmire had a well-known reputation attacking hard-working scientists with perfectly valid scientific research simply to get a reaction to a press release. His intent was to target government waste, but he found he could get much more publicity by making fun of scientists just because the public didn't understand their work. As an example, I remember Marvin Minsky walking into 6.034 one morning in 1978 completely apoplectic over an article in that morning's "Ergo" (A MIT/Harvard libertarian free student newspaper distributed on campus) criticizing some research on homosexual behavior in ducks. I can't find any current reference to Proxmire, but I recall he was involved and it would have been up his alley. Anyway, as I remember, Minsky spent most of the morning explaining the research and it's importance with a real passion. It's one of those things you don't forget. EDIT: I found a reference that says how Proxmire had his staff compile constituent responses to his endless press releases to find subjects sparked the most interest. He was pretty much seen as an idiot in academia but he could easily ruin careers.

notthegov 6y ago

Oh great, maximizing alpha intergalactically. Time is money, space is time and the universe is infinite so why do I need to invest? The physics of heaven would invalidate everything you think is true. Oh and I vote we change this to Cracker News since this place is full of stale minds and clueless coders who are experts at protocols and interfaces except when it comes to the ultimate device, iGirl.

mmhsieh 6y ago

I realize that Krugman was being tongue in cheek in this work, but a lot of the work in theory-heavy areas of "mathematical" economics are similar exercises in obscurity and dubious scientific value. Krugman, in one of his autobiographical essays, described economics as the field that people get into when they can't hack it in math, physics or some other high-rigor STEM field. Part of proving one's intelligence as a junior economics faculty member is doing a lot of mathematically-heavy fireworks and then moving on to "real" research that matters. We can laugh at this one but what is not laughable is the huge resource cost in supporting an academic economics establishment (at least in the theory area) whose product is actually not that much different from this.

bschne 6y ago
Do you happen to have a link / title for this essay?
- mmhsieh 6y ago
  I would welcome someone to help me look for this. I read many of his online essays around 2001, and don't think they were part of any formal publication.
nabla9 6y ago
Maybe you refer to this: How Did Economists Get It So Wrong? https://www.nytimes.com/2009/09/06/magazine/06Economic-t.html?em=&pagewanted=all https://www.nytimes.com/2009/09/06/magazine/06Economic-t.htm... Soon Krugman wrote another piece because people misunderstood what he said: Mathematics and economics https://krugman.blogs.nytimes.com/2009/09/11/mathematics-and-economics/ https://krugman.blogs.nytimes.com/2009/09/11/mathematics-and... >I’ve been getting some comments from people who think my magazine piece was an attack on the use of mathematics in economics. It wasn’t. ... What I objected to in the mag article was the tendency to identify good math with good work.
- mmhsieh 6y ago
  It's somewhat the same thinking, but it was a much more candid essay from an earlier part of his career. It was a frank recollection of why he went into economics as a field; he talks about the Asimov Foundation series, and a practical reflection that he was not really cut out for something like physics. It was back when people had janky self-hosted html sites, and the like; probably written in the late '90s.

papito 6y ago

If we all practiced isolationism and protectionism on the global level here on Earth, we would be much better off.

xanth 6y ago
Except for every small nation (think Australia) that can't produce semiconductors and heavy industry.

paulpauper 6y ago

who would have guessed that a paper he wrote as a joke would turn out to be one of his most important and influential. I have seen this paper cited and referenced online more than his serious papers. It shows the value of side projects and divergent thinking. Twitter began as a side project too.

vonnik 6y ago

A lot of Krugman's academic work on economics, before he became an NYT columnist, was focused on transport costs: https://www.nobelprize.org/uploads/2018/06/krugman_lecture.pdf https://www.nobelprize.org/uploads/2018/06/krugman_lecture.p... https://pr.princeton.edu/pictures/g-k/krugman/krugman-increasing_returns_1991.pdf https://pr.princeton.edu/pictures/g-k/krugman/krugman-increa... The interstellar element feels like an extension of that.

ryandrake 6y ago

Previous discussion was interesting, too: https://news.ycombinator.com/item?id=17534950 https://news.ycombinator.com/item?id=17534950

dang 6y ago
That one was 2018. Also 2018 (1 comment): https://news.ycombinator.com/item?id=18216631 https://news.ycombinator.com/item?id=18216631 2016: https://news.ycombinator.com/item?id=13064504 https://news.ycombinator.com/item?id=13064504 2015: https://news.ycombinator.com/item?id=8937197 https://news.ycombinator.com/item?id=8937197 2009: https://news.ycombinator.com/item?id=818706 https://news.ycombinator.com/item?id=818706

tw25592285 6y ago

In terms of the overall market process, a lender and a borrower experiencing different time spans is equivalent to a lender and a borrower having different time preferences [1]. Those with the shortest time preferences will borrow at higher interest rates; those with the longest time preferences will lend at lower interest rates. All the math about clocks and reference frames is just scientism. [1] https://en.wikipedia.org/wiki/Time_preference https://en.wikipedia.org/wiki/Time_preference

pseingatl 6y ago

Interest is not a component of every financial system on earth; it is silly to presume that it will be an essential component of extraterrestrial economic systems.

deleted 6y ago

[deleted]