Speculative Economics

by Henry on July 19, 2004

Dan Drezner makes a highly questionable empirical claim.

The worst aspect of science fiction/science fantasy books is their malign neglect of the laws of economics.

Dan just hasn’t been reading the right science fiction/science fantasy books. For starters, there’s Ken MacLeod’s ‘Trots in Space’ quartet, Cory Doctorow’s and Bruce Sterling’s different takes on the reputational economy; and Steven Brust’s fantasy about a complicated insurance fraud. And those are just the economics-literate books written by bloggers. Neal Stephenson’s gonzo-libertarian novels are all about the intersection of economics and politics – his most recent set of books (which I’ve blogged here and here) is an extended fantasia centered on the birth of the free market economy. Can’t get much more economistic than that. Unless indeed you want to jump to the other end of the ideological spectrum, and read China Mieville’s Marxist account of mercantile capitalism at its nastiest in The Scar (also blogged here and here on my old blog – enter ‘ok’ for both userid and password if you want to read the entries). China has a freshly minted Ph.D. in international relations from the LSE – he’s a Fred Halliday student. And I haven’t even mentioned Jack Vance, or Iain M. Banks’ Culture novels, or Pohl and Kornbluth’s The Space Merchants, or the interesting panel on the economics of abundance that I went to at Torcon last year. Or … or … or … And I don’t even know this stuff that well – I reckon that Brad DeLong could point to many other examples of smart econo-sf if he put his mind to it.

Dan does have a point – yer average Star Trek novelization or ten volume fantasy trilogy about Dark Lords on the rampage probably doesn’t have much in the way of well-thought-out economic underpinnings. Diana Wynne-Jones has some fun with the latter in her cruel, frequently hilarious Tough Guide to Fantasyland. But a fair chunk of the most interesting science fiction of the last few years starts with interesting economic questions and answers them, usually in rather unorthodox ways. It steals as much from game theory and Leontiev matrices as from hard physics. It’s never been a better time to be an academic in the social sciences with a weakness for sf – lots and lots of good, fun literate stuff out there.



Matt Brown 07.19.04 at 1:45 am

I don’t think it is fair to say that Star Trek neglects the laws of economics. Indeed, it takes on a very routine point of Marxist economics. The Star Trek future is a future where scarcity no longer seems to apply to any of the needs (or even wants) of most people. And of course, Marx points out that this sort of world would be the end of capitalism and the beginning of true egalitarianism. That’s how I understand it. And it seems pretty likely that at that point, you wouldn’t have much use for things like paychecks and income.


Robert Merkel 07.19.04 at 2:02 am

Another example of a very popular piece of science fiction with extensive speculation on economics is Kim Stanley Robinson’s Mars Trilogy. There’s a “gift economy” that develops in the Martian underworld in a period of political instability, then a system that features co-ops as the fundamental organizing unit of economic activity in the new Martian republic.

Who knows whether it’s really feasible or not, but he certainly put a lot of thought and effort into devising a plausible future economic system.


peter ramus 07.19.04 at 2:12 am

The Space Merchants is the perfect science fiction novel: light reading based on a broad yet astonishingly acute satire of the intersection of Madison Avenue and global capitalism. As a satire it holds up even now, nearly fifty years after its publication.

Indiastries, explained in the book as the first vertically integrated subcontinent, has yet to be realized, but, well, give it time.


Sam 07.19.04 at 2:28 am

Terry Goodkind’s “Sword of Truth” series is strongly Randian. “Faith of the Fallen” may be the best fictional presentation of Randian economics since Rand’s own.


Matt McIrvin 07.19.04 at 2:35 am

Does he mean that they don’t treat economics, or that he doesn’t regard the economics in them as believable? Maybe he’s read a lot of lefty economic SF lately and it rubbed him the wrong way?…


digamma 07.19.04 at 2:59 am

Re: Matt Brown’s first post.

My friend and I were discussing the economic ramifications of nanotechnology a while back, particularly the question of, magical nanobots could build us anything we wanted in the world from waste matter, there would be anything for people to fight over.

My response: “Art and ex-girlfriends.”

Artistic ability and exclusive emotional relationships are two commodities that can remain scarce in the face of unprecedented plenty, because they can’t be mass produced. Sure I can copy a CD, and maybe soon a nice-looking robot will sleep with me, but they won’t write songs, and if I’m truly smitten with someone, a robot can’t replace her.

How the scarcity of these goods would affect human behavior, I don’t know, but they would, and often not for the better.


David Sucher 07.19.04 at 3:06 am

Don’t forget Frank Herbert’s Dune.


Walt Pohl 07.19.04 at 3:16 am

“The Space Merchants” is a work of genius (though it does peter out towards the end).

Let me point out the obvious reason why Star Trek or Lord of the Rings don’t replicate the capitalist economy: it would make for boring reading. Capitalism is an utterly pervasive aspect of our lives. People don’t want to read about it for the same reason they don’t want to read novels about traffic jams on the way to work. While it would make Dan happy if every work of fiction was a didactic exercise in Capitalist Realism, in an actual capitalist marketplace noone’s buying.


Nabakov 07.19.04 at 3:30 am

As well as “The Space Merchants”, Pohl and Kornbulth also wrote “Gladiator At Law “which deals with, amongst other things, violence as organised infotainment and how to rig the stock market and take over holding companies.

And going back even further, quite a few of Heinlein’s early stories in his “future history” series, or whatever it was called, are driven by economic and political factors raised by new technologies. eg: “Blowups Happen”, “The Man Who Sold The Moon”, “The Roads Must Roll” etc.


bob mcmanus 07.19.04 at 3:58 am

I have never understood the Star Trek universe as that economically complicated or different. Simple technology.

Restaurants and bars are often seen on the Enterprise. You walk thru the door, a camera recognizes your face, you make your order and your account is charged. You order a beer thru the replicator, your account is charged. I don’t see it as a Marxist paradise, for the Captain has better quarters than the crew, just a fully digitized one.


Matt Brubeck 07.19.04 at 4:25 am

Iain M. Banks’ “Culture” stories feature thoughtful exploration of economics in a post-scarcity future.


Ian Whitchurch 07.19.04 at 4:54 am

You have to remember that Frederick Pohl was an Marxist back in the 1930s … his stuff is reasonably economically literate.


Matt Brown 07.19.04 at 7:01 am


It is of course a good point that some things would remain scarce, but if they are quite exotic things, that doesn’t seem to be enough to sustain a capitalist economy. And of course, while there is a sense of scarcity for girlfriends, they don’t seem to be a matter for the market.


cac 07.19.04 at 7:03 am

Lord of the Rings seems to have a reasonably well described functioning economic system, at least for hobbits and men. It is essentially an idealised pastoralism, the middle ages minus disease and famine. We know there are inns and trade in high value, low bulk goods such as pipeweed. There are a lot of references to farming and associated activities. The dwarves make a pretty good living out of mining gems and metals to sell to their neighbours. I’ll concede though that the economic life of the elves is a mystery. They seem to spend most of their time poncing around in forests without any visible means of support. Perhaps as the immortal elder children they were all given substantial annuities before going to Middle Earth. Which raises an interesting issue, how do you value an annuity for an immortal being with an average existence of at least 10,000 years? An alternative theory is that, like artists today, they are subsidised by grants extracted from the long suffering taxpayers of Middle Earth. In this case, their departure to the Undying Lands may not have been quite the tragedy the books make it out to be.


Kimmitt 07.19.04 at 8:59 am

Which raises an interesting issue, how do you value an annuity for an immortal being with an average existence of at least 10,000 years?

I’m probably being facile when I point out that mathematically, it is extremely similar to an annuity for a being with an average existence of fifty years for any sensible real interest rate.

I just finished the second book in Stephenson’s Baroque cycle. I’m starting to understand his larger theme (I think), which is that this whole globalization thing happened once before with very similar kinds of results then and that perhaps we could take lessons from this fact. In between, of course, simply revelling in the joy of reading his work.


Tracy 07.19.04 at 11:33 am

How can anyone say that there is no economics in SF, when the whole Star Wars series starts off with a trade dispute? (see Episode 1, the scrolling letters at the start)


Duane 07.19.04 at 12:31 pm

I’d like to second Kim Stanley Robinson. Aside from the Mars books there is also Pacific Edge, great SF whose plot revolves around local-body politics and a planning dispute.

Economics is one of the many things that contribute grist to the fantasy-humour mill that is Terry Pratchett. For example there is his aside (I forget which book) on government attempts to minimise the fly problem by offering a bounty. IIRC it was very successful for a short while; then came the fly farms…


Ian 07.19.04 at 12:48 pm

Didn’t the fly farms come from the Great Leap Forward under Chairman Mao?

On the wider question [pedant mode ON]why should we expect fantasy to be realistic about anything – that’s why we call it fantasy. [pedant mode OFF]

Science Fiction on the other hand is about ‘what if’ – it takes an idea or ideas and examines what would happen if they were true. Sometimes those ideas are social, sometimes scientific. The exploration is – more or less – realistic but we shouldn’t expect every SF story to cover every potential issue in equal depth – any more than we expect Dickens, Chandler or Zadie Smith to do.

If a particular aspect of life comes over badly that is more to do with the quality of writing than the genre – above all else, good fiction should allow the willing suspension of disbelief while you are reading it.


Dave F 07.19.04 at 1:05 pm

A notable addition to the list here would be Britain’s Stephen Baxter, whose novels of solar system conquest focus on the cut and thrust of economic and political factors involved in getting such ventures literally off the ground, drawing on real-world relations between, for example, Nasa and the US Congress. he favours, it would be fair to say, a venture capitalist approach — and interestingly enough, that is now well under way with the first near-space flight by a private enterprise successfully completed.

It goes without saying that if payloads can be delivered into orbit at a fraction of the current cost (a lot of it plain government overpricing and bureacratic spending), huge fortunes stand to be made. Many are already hot on the trail.

Those interested in this area might also investigate the web site of the Mars Society and others. If anything, science fiction has erred on the conservative side.


dave heasman 07.19.04 at 1:34 pm

“The Midas Plague”, “Buy Jupiter”, the Dorsai series, “Citizen Of The Galaxy”, “If All Men Were Brothers Would You Let One Marry Your Sister?”

Well, maybe not that last one..


John Isbell 07.19.04 at 2:34 pm

“the interesting panel on the economics of abundance that I went to at Torcon last year.”
Remind me what star system Torcon is in…


Henry 07.19.04 at 2:48 pm

Ah, “The Midas Plague” – I still have vague plans to write a paper on that story and budget-maximization theory in public choice. I greatly preferred the original short to the fix-up in “The Years of the City.” Pohl was and is a bit of a genius.

>A notable addition to the list here would be Britain’s Stephen Baxter

Dave Langford invented some imaginary Baxter novel somewhere or another in which the Vikings succeeded in getting into space, unimpeded as they were by NASA bureaucracy.

bq. Terry Pratchett. For example there is his aside (I forget which book) on government attempts to minimise the fly problem by offering a bounty. IIRC it was very successful for a short while; then came the fly farms

Does anyone have the exact reference for this. Rather a topical issue according to “Tyler Cowen”:http://www.marginalrevolution.com/marginalrevolution/2004/07/markets_in_ever_1.html


Richard 07.19.04 at 2:58 pm

It was rat farms, IIRC, and related to a penny bounty on rats’ tails during a period of rat infestation.

The exact quote is something like “The Patrician’s first words on taking office and having the situation explained to him became infamous; ‘tax the rat farms.'”

I think it can be found in the Discworld Companion, but can’t remember if it was unique to it, or merely repeated the joke from another book.


Richard 07.19.04 at 3:01 pm

Of course, two seconds on Google…

“Shortly before the Patrician came to power there was a terrible plague of rats. The city council countered it by offering twenty pence for every rat tail. This did, for a week or two, reduce the number of rats — and then people were suddenly queueing up with tails, the city treasury was being drained, and no one seemed to be doing much work. And there still seemed to be a lot of rats around. Lord Vetinari had listened carefully while the problem was explained, and had solved the thing with one memorable phrase which said a lot about him, about the folly of bounty offers, and about the natural instince of Ankh-Morporkians in any situation involving money: “Tax the rat farms.” “

From Soul Music, apparently.


asg 07.19.04 at 3:53 pm

See, I would view Robinson’s Mars trilogy as Exhibit 1 in Drezner’s argument… a series whose author has clearly thought through the physical-science elements, but whose economics is horrific. All those speeches by the jolly Russian character… ech.


bellatrys 07.19.04 at 4:19 pm

Actually, cac, a friend of mine in fandom and RL, fellow blogger Anglachel, has done a *lot* of work investigating the base economics implicit in LOTR via the main text and the Appendices, with lots of map references. And factoring in things like the effects of the Great Plague (yes, there have been plagues, but since there isn’t urbanized crowding, there wouldn’t be the same levels of proximity-caused disease) on society and politics and economics (which aren’t really separate things.)

What kinds of smuggling and trade routes are implicit in the getting of rare goods like coffee, how wars isolated areas and disrupted trade, the capitalistic impulse that leads some of the elite families of the Shire to sell out to Saruman to guarantee better pipeweed sales, or to take over property to increase milling monopolies – all of which reflect real issues in the middle-ages and early industrial eras (incl. the Renaissance) such as the eviction of farmers by early capitalists to replace them with more profitable sheep, until the sheep economy collapsed due to overproduction and other problems like diseases, in England. I recommend the Gieses’ books, Life in a Medieval Village and Life in a Medieval City, for some eye-opening first-hand looks at how socio-economical-political stuff played out in RL back then.

But yes, it is boring if you have too much of it in a novel. (Just like can you imagine a modern novel where the author stopped to explain how, in pages of detail, microwaves and the power grid worked? It’s called doing an ‘infodump’ in SF, and it’s not a compliment.)


bellatrys 07.19.04 at 4:32 pm

Martha Wells’ excellent City of Bones also deals very specifically with economics, on many levels, – including the value of art and rare artifacts – in a post apocalyptic setting. (The heroes are all struggling lower-middle class types, contending with the facts of immigrant prejudice and race prejudice (one of them’s a gengineered mutant) and how hard it is to get a job in that situation, and how having to buy things like drinking water can really wreck your life…)

But all of this is both peripheral and integral to the problems of political intrigue and organized crime and the question of whether or not there’s going to be an Apocalypse II, and where these all intersect in the daily lives of ordinary humans (or mutants) scrabbling to make a living above and below the table…


ian 07.19.04 at 4:45 pm

In terms of SF which deals with economic issues, (I leave it to others to comment on how well) look at The Dispossessed, Ursula Le Guin; The Great Explosion, Eric Frank Russell; Coventry, Robert Heinlein; The Syndic, C M Kornbluth.


kevin 07.19.04 at 6:38 pm

I would L. E. Modesitt to the list of sf/fantasy authors (he? she? writes both) whose work spends quite a great deal of time on economics. Modessit’s conflicts are very often economic in nature, and economic — and the play of economics on society and ethics — are at the core of almost everything of his/hers that I have ever read.


Nick W. 07.19.04 at 6:59 pm

As an aforementioned “social scientist with a weakness for SF”, I would add a simple point here: whether star trek does or does not function in a post-scarcity society clearly depends on which incarnation of star trek you’re talking about. I seem to recall lots of plots in Deep Space 9, for example, revolving around ‘gold pressed latinum.’

(However, also to be fair to the original post, the emergence of scarcity economics roughly correlates with Gene R’s death and the consequent darkening of Trek’s moral tone.)


Bob Smith 07.19.04 at 8:04 pm

Ugh, the Mars series by Robinson? I couldn’t even finish the first book, it read more like a DIY book on colonizing Mars than a good SF book.
Do the later books get any better?


novalis 07.19.04 at 9:13 pm

And who can forget John Holbo’s classic commentary on fantasy economics:

Miéville should seriously consider writing a thumping great historical political economy of his world – Marx’s Das Silmaril, if you will. It would be huge fun to read. It should be a multivolume affair that, ideally, he never manages to finish. ( ‘What I have to examine is the magical mode of production, its supernatural laws and tendencies winning their way through and working themselves out with necessity as hard as mithral.’ A long and careful analysis would follow of how power in Middle Earth is a function of – and race relations are inescapably mediated by – silmarills and, in later stages, ring ownership; value and use-value; importance of control of the means of ring production. “A spectre is haunting Middle Earth – no, really, a spectre!”)


Sigivald 07.19.04 at 11:21 pm

Nick: Ah, but wasn’t latinum just a cheap hack by the writers to re-introduce scarcity, once they realised that they needed things for people to have conflict about?

(Though why latinum should be valuable at all merely because it cannot be replicated is beyond me. It has no explained use-value, that I recall, and in an economy with no other scarcity of goods to speak of, what good is it? Why exactly anyone would want latinum at all, is not very well explained. (Except perhaps for trade with outside groups who have scarcity, but why would they want it? At least dilithium is useful and scarce. And no, I’m really not quite as geeky as this sounds. And I don’t really like Trek.)

Here on Earth we have actual scarcity of goods to drive things, and the value of Gold is attributable both to tradition (not to be underestimated in monetary affairs) and some use-value (aesthetic and industrial).


Nick W. 07.20.04 at 2:01 am

Sigivald: well, my answer is yes and no. You are right that latinum is a poorly expressed symbol for the reintroduction of scarcity. However, it was accompanied, both in the later years of TNG and roughly the second half of DS9, by a variety of economic factors that generally point to scarcity. For example: the energy costs of replication are more heavily emphasized, meaning of course that energy itself, or the ability to produce it, is a form commodity. (As you suggest with your comments on dilithium.)

A clearly explained economic foundation? No. Certainly not. But I think the more interesting point here is the way that the reintroduction of scarcity economics (at least symbolically) correlates with the general emergence of Trek’s later self-avowed “noir-ish” feel. Star Trek’s allegory up to that point had been “Wagon Train to the Stars,” but after this shift it seems closer to “Maltese Falcon.” Why that shift occurs is a topic for fascinating debate.


Dave F 07.20.04 at 9:39 am

I regret having forgotten to mention the socialist SF writer Mack Reynolds, whose work explores utopian worlds based largely on centrally run economies. His most memorable idea for me was a society in which each individual is given an equal birthright of a certain number of credits, to make of what he or she will. This has been described as a meritocracy, but I don’t think that is quite adequate.

Best known work: “Looking Backward from the Year 2000” although the best read is the pulpier “Gladiator at Law”. No great prose writer, however. Still, nor were Asimov or Clarke.


ian 07.21.04 at 5:02 pm

Gladiator at Law was Pohl and Kornbluth, not Mack Reynolds. I had forgotten him however, I remember one of his stories was based around the idea of the Soviet Union outproducing the US on everything from consumer products to big engineering.

I think he used the ‘universal basic’ idea in several stories.

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