What the "Trekonomics" Fantasy Gets Wrong About the Economics of the Future

Manu Saadia takes on Peter Thiel, as a proxy for Donald Trump, for saying that he prefers Star Wars over Star Trek because the setting is more capitalist.

There's a lot of over-reading going on here, particularly because this all takes off from a short throwaway comment in an interview with Thiel where he comes across, frankly, as a pretty casual science fiction fan. It's hard for people in the technology media to grasp, but not everyone is as obsessive about overanalyzing science fiction as we are.

Yet the author of this piece is an expert at such overanalysis, because he has written a whole book on "Trekonomics," the economics of the fictional society in the Star Trek franchise. This strikes me as odd, because Star Trek is very conspicuously not about economics. Most installments of the franchise take place on government-run ships devoted to non-commercial endeavors like space exploration, diplomacy, and—more often than its creators would probably like to admit—war. We know that the fictional future of the Federation is fabulously prosperous and full of technological luxuries, but with the exception of a few vague references here and there (usually reflecting Gene Rodenberry's woozy utopian liberalism) virtually all of the production and trade in that future society happens off screen.

Writing about economics in Star Trek is like writing about politics in Star Trek. We know the Federation isn't a dictatorship, but we never see political media or any mentions of political parties or elections. The crew of the Enterprise doesn't obsess over some future equivalent of Twitter, though that might just be proof that we are dealing with a more advanced civilization. We assume they must be active and engaged in politics, just not when the cameras are running, so to speak. And that's fine. Politics and economics are not what the show is supposed to be about.

But a lot of people find this persistent over-reading of Star Trek irresistible. It's their way of projecting into a seemingly realistic, benevolent form—by means of a franchise that it is familiar and well-loved—some persistent errors, myths, and fantasies about the economics of the future.

Saadia sums up that projection pretty succinctly.

As even quasi-fans will recall, the TV shows and films feature a machine called the replicator, which can produce any inanimate matter on demand—food, drink, warp-drive parts.... The replicator solves, albeit fictionally, what John Maynard Keynes once called "the economic question"—that is, the imbalance between supply and demand, and the resulting need for markets and price mechanisms to allocate scarce resources. The society of "Star Trek" has decided not to exact a fee for the use of the machine. Thus the replicator can be an engine both for the equal distribution of wealth and for personal enrichment. It does not bring about social change on its own. The post-scarcity world in Star Trek is the result of a political decision, not of pure technological progress.

What is anathema to Thiel in Star Trek is the notion, drawn from Isaac Asimov's fiction, that the market is but a temporary solution to imbalances in supply and demand, and that technology and plenty will eventually make it obsolete. Star Trek replicators are nothing but Asimov's robots disguised as coffee machines, let loose on the world as a public good. They dissolve the need for a pricing mechanism. They represent the logical endpoint of the Industrial Revolution, when all human labor has been offloaded onto machines.

You hear this sort of thing quite a lot, particularly from advocates of the basic income, who somehow think that the world of "Star Trek economics," where robots will do all of the work for us (despite the fact that there are hardly any actual robots in the Star Trek franchise), is just around the corner.

The obvious error is in projecting the viability of a whole economic system based on a fictional technology that is nowhere near to being available. The less obvious error is the misuse of the term "scarcity." Saadia and other boosters of this school of economic futurism use "scarcity" to mean something like "poverty": the inability to afford certain basic necessities of life. So they look forward to a society that will be so technologically advanced that such poverty is unnecessary. It will be a "post-scarcity" economy.

But this is not what "scarcity" means in economics. "Scarcity" means the existence of an economic good in a finite, limited quantity. This is pretty basic economics and can be figured out in about five second on Google. As the Wikipedia entry for "scarcity" explains, "The notion of scarcity is that there is never enough...to satisfy all conceivable human wants, even at advanced states of human technology." Make a note of that phrase, "all conceivable human wants." I'll return to that later.

The main thing to note about this economic definition of scarcity is that scarcityt is not a temporary product of some kind of unjust or primitive social organization. It is a metaphysical condition of existence. Everything exists in a finite quantity, even the air we breathe—a fact science fiction helps us keep in mind. In space, after all, breathable air is a rare and precious commodity.

Let's take, if we must, the fictional example of the Star Trek replicator (or the transporter and holodeck, which supposedly work on similar principles). The replicator is a tool for converting energy into matter. Let that roll around in your brain for a moment. If all you know about physics is E=mc²—which is, after all, a formula for the conversion of energy into matter—then you know that this requires a spectacular amount of energy. ("E" stands for energy, "m" stands for mass, which implies matter, and c² is the speed of light squared. It's a very large number.)

All of this is to say that replicators may seem like magic, making them an example both of Clarke's Third Law and of Tracinski's Corollary to Clarke's Third Law. But behind the operation of this modest little appliance that looks like a microwave oven, there has to be a massive energy infrastructure. From what we can tell, it seems to involve large quantities of antimatter and rare, highly valuable dilithium crystals. Which, in turn, requires massive structures like starships that we see being manufactured by crews of workers in giant orbiting shipyards. So this is a little bit like someone looking at a present-day house and assuming that electricity is "free" because he doesn't see the billion-dollar power plants and massive distribution system required to bring it to the socket in your wall.

Certainly, the economy of the fictional Star Trek future is far wealthier and more prosperous than today's and is able to supply many thing in far greater abundance—particularly the sorts of things, like food, that are provided by the replicator. But remember that line about how resources are limited compared to "all conceivable human wants." This is particularly relevant when looking to the economics of the far future, where human wants will expand to include amazingly expensive things that are conceivable to us today only in science fiction—like, oh I don't know, maybe building giant starships for galactic exploration.

We don't have to go to science fiction to see this. Most of our needs today were barely conceivable for most of human history. The vast majority of the population in the developed world does not struggle with obtaining enough calories to sustain life. We have since moved on to a whole other series of fantastic needs and wants: on-demand automotive transportation, high-speed wireless Internet access, robot servants, virtual reality entertainment, air travel—heck, how about supersonic air travel? RealClearFuture is basically a chronicle of this unlimited expansion of "all conceivable human wants."

We can achieve a future with virtually no absolute poverty, and the world is in fact hurtling toward that end. But no matter how wealthy we become, we will always have to choose how to allocate finite resources among an unlimited number of alternative uses, so we will always need markets and prices, ambitious entrepreneurs, and capitalism.

If we understand the real economic meaning of "scarcity," we understand that "post-scarcity" economics is nothing but fiction.