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Krugman’s Theory of Interstellar Trade

The views expressed are those of the author and are not necessarily those of Scientific American.

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To seek out new markets....(Credit: adapted from NASA image, Les Bossinas)

Everyone needs a little light relief sometimes, including the Nobel winning economist and writer/blogger extraordinaire Paul Krugman. A few months back he reminded the world of a short paper he’d written some years ago on the rather unexpected topic of interstellar finance. You can teleport a copy to your automated reading device by clicking here.

It’s a lot of fun, with a satirical slant lurking between the lines. But it’s also quite serious, because the specifics of sub-light-speed interstellar travel do pose some rather unfamiliar and intriguing conundrums: Krugman points out that transit times for goods are of course extremely large, and the passage of time itself is a function of inertial frames and the acceleration of frames. Relativity says that you can keep your roses fresh for Alpha Centauri, but your first customers may dead by the time you get there. Electromagnetic communication is naturally far faster than the transmission of material goods (although that’s a situation we already encounter here on Earth), which allows for trade to be set up. And having one-way transport, rather than round trips, of cargo vessels or merchants is okay for stable economic function on an interstellar scale.

He also shows that, in terms of capital, interstellar arbitrage and competition will tend to equalize interest rates between two locations (planets, ring-worlds, Dyson spheres, whatever) as long as they’re in the same inertial frame. This, as far as I can see, is astrophysically tenable. Typical relative motions of stars in our bit of the Milky Way are of the order of 10-40 kilometers a second. Although large by terrestrial standards, these velocities introduce a time dilation factor between systems of no more than 1.0000000089, or barely a millionth of a percent.

Are we all the same? (Credit. C. Scharf, original LeCire/Wikipedia)



This is all lovely stuff, but it leaves me asking one simple question. What would sentient beings actually want or need to trade across interstellar space?





Despite the lore of so much science fiction, I don’t think anyone (erm… anything) is going to be hauling metal ore, minerals, water, beryllium spheres, dilithium crystals, helium-3, or for that matter any kind of raw material. 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.

The better options are ‘native’ products. I suspect these would fall into two broad categories. The first is biological. A few billion years of natural selection and evolution on any given planet will produce an array of wonderful and useful lifeforms, as well as biologically formed structures (I’m thinking seashells and honeycombs here), that could be unique enough to be of interest elsewhere. No matter how clever a species is at genetic manipulation or creation it will be hard to muster enough imagination to match what springs out of nature’s vast playground. Bunny rabbits and butterflies could be very, very cool for young aliens from all corners of the galaxy.

The second product would, I think, clearly be a combination of technology, knowledge, and artistry. Again, native goods are what will have value. Interstellar Intel Corporation could have a glittering future ahead of it, as would Google Galactic, selling on some kind of informational essence, the intellectual scent of a species. But pure art could work too; maybe some lovely Picasso’s for GL581, or perhaps a couple of Caravaggio’s?

In fact here might be a hint of the biggest market, those items that can be transmitted rather than transported. Ideas, software, mathematics, scientific theories, literature (all those original Klingon versions of Shakespeare), music, and images. A vast trove from any civilization, assuming there’s nothing dangerous about ideas themselves (a notion I explored way back here).

But wait! What are we doing!? We’ve been unwittingly giving away our most valuable assets for free during the past century! Radio shows, TV shows, all manner of communications have been spewing outwards to interstellar space – at least for a few decades, before we started adopting low-power digital transmissions and dimmed the signal.

Have we messed up our cosmic economic future? Perhaps not. We may have unwittingly invented the freemium sales model long before we used the term. There could be billions of sentient beings out there hanging on our every word, every second of Happy Days re-runs and knife-set infomercials. Now we just have to figure out how to get them to pay for upgraded service.

Luckily we already have a theory of interstellar trade to tell us what we should charge.

Caleb A. Scharf About the Author: Caleb Scharf is the director of Columbia University's multidisciplinary Astrobiology Center. He has worked in the fields of observational cosmology, X-ray astronomy, and more recently exoplanetary science. His books include Gravity's Engines (2012) and The Copernicus Complex (2014) (both from Scientific American / Farrar, Straus and Giroux.) Follow on Twitter @caleb_scharf.

The views expressed are those of the author and are not necessarily those of Scientific American.

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  1. 1. Looie 11:59 am 10/28/2013

    What it comes down to, ultimately, is that the only thing that is really worth transporting is information. Native products are really just data containers — dense packages of information. It’s hard to imagine that transporting data containers physically could be more efficient than transmitting their information content electromagnetically.

    Best regards, Bill Skaggs

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  2. 2. Kevbonham 3:30 pm 10/28/2013

    Probably won’t make any sense to send life forms either, since it’s far easier to send a digital copy of the genetic code and then re-create the life form from scratch on the other end. We puny humans are pretty close to this technology already, by the time we’re interstellar, it should be trivial (see for instance:

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  3. 3. RSchmidt 3:34 pm 10/28/2013

    Agreed, we could trade technology at the speed of light, even if it means sending the genetic code of a interesting life form. Can’t imagine anything else would be worth the cost. But imagine if the could send us virtual reality walk-throughs of their world. That would be worth quiet a bit.

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  4. 4. Amacha 4:14 pm 10/28/2013

    Ideas, etc. can be transmitted. About the only thing worth transporting would be entangled particles to allow transmission of data. This could of course be done by drones. Probably biologicals as well, since the genome to produce them and the effort to produce them from scratch probably would not be worth the effort.

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  5. 5. dougom 4:49 pm 10/28/2013

    In this brave new world of 3D printers (which totally need a new name), I think the information portion of your argument needs expansion. If Biff Bigglestein on Rigel IV develops a new product, he can simply transmit the 3D printer instructions to Earth or wherever, and that planet can use its own resources to build the new gizmo. Thus you would have societies competing via information. Yes, at interstellar distances, transmission time would definitely be a hinderance, but if you have a genuinely unique product, the possibility that Balerephon doesn’t have it yet, is reasonable.

    Now, as to how you would get payment for it . . .

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  6. 6. newbob 5:23 pm 10/28/2013


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  7. 7. David Cummings 6:56 pm 10/28/2013

    Interstellar trade means interstellar contracts, which means interstellar contract law… which means interstellar lawyers.

    And they will probably receive the largest portion of interstellar revenue… whatever that will be.

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  8. 8. jimmy boy 9:08 pm 10/28/2013

    for all we know there might be interstellar foodies, always looking for a new taste (baked leg of human) and they would give us advanced tech for the DNA code.

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  9. 9. letxequalx 12:01 am 10/29/2013

    The question posed by the author of this article and suggested more humorously by Krugman is: what would you trade with another intelligence across interstellar distances? I think the the only practical (future) answer to that would be comets- by affecting a comet with very little additional moment at the furthest distance in their orbit from Earth i.e., in a solar system inhabited by someone else, you could change the comets trajectory for the convenience of future asteroid/ planetary body miners over here. The same could be done for them from here.

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  10. 10. rkipling 12:40 am 10/29/2013


    So, you think it would be possible to nudge some alien civilization one of the sun’s comets?

    The Gliese 581 system is the closest potentially habitable planetary system at a bit over 20 light years away.

    Yeah, that would be some long, long term planning. At any speed you might expect from the comet, it could take several hundred thousand years to get there. Also, if you could slingshot a comet their way, your aim should be real good.

    Go to the Gravity movie. Cinematography is great and you will not have the difficulty many of us have regarding the technical aspects.

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  11. 11. Kaleberg 10:29 pm 10/29/2013

    It’s even worse than that. Project Seti has been trying to decipher any alien messages for the last several decades. If there is an interstellar RIAA and Digital Millennium Act, we could be in deep trouble.

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  12. 12. bucketofsquid 4:36 pm 11/15/2013

    Far as I can tell there is no need for interstellar trade until FTL is possible (if it ever is). For interplanetary or interstellar, the most common transport will be people, shelter and supplies until such time as the destination is self sufficient. After that there isn’t much point beyond knowledge exchange.

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