New Trade Theory

March 11, 2008 12:38 PM

Where no economist had gone before. Paul Krugman posts a type-written paper on interstellar trade which he wrote as "an oppressed assistant professor" in the '70s. I do not propose to develop a theory which is universally valid, but it may at least have some galactic relevance. [pdf link]
posted by grobstein (25 comments total)

Ha! Nice dig at William Proxmire there.
posted by nebulawindphone at 12:48 PM on March 11, 2008

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, however, have 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 discover or construct a world to which orthodox economic theory applies.

All hail Krugman, King of Snark!
posted by Ironmouth at 12:52 PM on March 11, 2008

Awesome!
posted by dazed_one at 1:04 PM on March 11, 2008

I do not propose to develop a theory which is universally valid, but it may at least have some galactic relevance.

I am so stealing this line.
posted by Zinger at 1:09 PM on March 11, 2008

In a year when so many of Krugman's recent newspaper writings just strike me as so, well, depressing, I'm delighted to stumble across such a gem. In his discussion of which time frame to use in calculating the "present value" of the goods in interstellar trade, he sets forth this little treasure: "This is an inertial problem -- which becomes a weighty problem in a gravitational field -- requiring an economic analysis, provided in the next section" (3).

As an "oppressed assistant professor, caught up in the academic rat race," well, it seems as if he knew how to have a bit of fun with it, no?
posted by deejay jaydee at 1:21 PM on March 11, 2008

You an me both, Zinger. That's t-shirt material. <3 Krugman.
posted by cortex at 1:22 PM on March 11, 2008

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

Heh. But he ignored the work of G. Harry Stine, particularly The Third Industrial Revolution .... Yes, yes, it was published one year after the paper, but you have to take time compression near lightspeed into account.
posted by dhartung at 1:32 PM on March 11, 2008

Interested readers might also like Greg Costikyan's The 11 Billion Dollar Bottle of Wine. Also Robin Hanson's collection of articles The Economics of Science Fiction.
posted by wobh at 1:38 PM on March 11, 2008 [1 favorite has favorites]

In space nobody can hear you scream ABOUT BARGAINS!
posted by Artw at 1:39 PM on March 11, 2008 [3 favorites has favorites]

The dismal science... goes super-nova!
posted by fearfulsymmetry at 1:44 PM on March 11, 2008

Oh, I promise, there are fans of Carrot Top. Back in the day of the Fametracker boards, someone had the insane sadistic genius to post some link to a chick who got his signature tattooed on her body.
posted by mckenney at 1:45 PM on March 11, 2008

Haha, mckenney is in the wrong thread (or is he???)
posted by Mister_A at 1:50 PM on March 11, 2008

So, we're outsourcing to Proxima Centauri now?
Man, the guys in Bangalore are gonna be pissed. No way are they going to be able to match Centauri hourly rates.
posted by Thorzdad at 1:52 PM on March 11, 2008

"The modern starship commander is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for anthropocentrism."
posted by cog_nate at 1:52 PM on March 11, 2008

Cortex said: You an me both, Zinger. That's t-shirt material. <3

You make it, I'll buy one, cortex!
posted by arnicae at 1:53 PM on March 11, 2008

Shipping costs may be prohibitive.
posted by Artw at 2:04 PM on March 11, 2008

Hmmmm. I think he did not deal with the issue of the effects of coupons for cheap OJ at light speed effectively (lol).
posted by never used baby shoes at 2:21 PM on March 11, 2008

This paper, then, is a serious analysis of a ridiculous subject, which is of course the opposite of what is usual in economics.

Now that's worthy of a t-shirt.
posted by Jakey at 2:54 PM on March 11, 2008

Interplanetary trade ... can be treated in the same framework as interregional and international trade. Among the authors who have not pointed this out are Ohlin (1933) and Samuelson (1947).

I don't have my Samuelson handy, but I'm sure it's in there. Damn near everything else is.... Fun post - he's got some good jokes in there.
posted by dilettanti at 3:31 PM on March 11, 2008

Considering how many geeks are hard-core free-marketeers, this may be the only possible way for Krugman to increase his Geek Cred. But it works!
posted by wendell at 3:48 PM on March 11, 2008

In the references he cites a paper called "Theory Capital and Travel Light-than-Faster" which of course is published 10 years after he wrote this paper.
posted by JackFlash at 4:39 PM on March 11, 2008 [2 favorites has favorites]

Metafilter: a serious analysis of a ridiculous subject
posted by spaceman_spiff at 6:39 PM on March 11, 2008

I will assume, then, that future futures markets are, well, futuristic in their development. In fact, I will assume that investors, human or otherwise, are able to make perfect forecasts of prices over indefinite periods.

yeah, this one's a keeper.
posted by jason's_planet at 6:53 PM on March 11, 2008

interesting to see how the seriousness of age can blunt such a fine sense of humor.
posted by metasj at 9:55 PM on March 11, 2008

Fine work in this important field was also done in the book Far Trader, although unlike Krugman's paper it assumes the use of the jump drive
posted by moonbiter at 2:47 AM on March 12, 2008