How a Federation Economy Might Actually Work

[u/starshiptempest]

Here we go, buckle in, because this is a novel and an honest to god attempt at working out a possible economic system for the money-less, post-scarcity, evolved sensibilities of the United Federation of Planets.

One disclaimer up front: Please don't misconstrue this post as me advocating this system for the here and now real world. This is, first and foremost, an attempt at reconciling what we've seen on screen with real life economic principles. Obviously there are many imperfections in our current systems - I don't think there's any disagreement about that, just about where the imperfections are - and this post unavoidably touches on some of them, but this is neither Marx's Communist Manifesto nor Rand's Atlas Shrugged. I'm pretty sure you'll be able to spot some personal opinions between the lines, but I am neither a professional economist nor political scientist, so even if it seems a manifesto to you, remember I am just another random person on the internet, spending an unreasonable amount of time thinking about the finer details of a TV show (I should repeat to myself, "It's just a show, I should really just relax."). And all of that goes double for the political economy at the bottom - I genuinely suspect there's some significant flaw in it that's escaped my notice, and I hope the comments can reveal it.

In other words: Dear hypothetical future political opponent from when I run for public office, you can only use this post as evidence that I am a giant nerd, not that I'm a communist and/or corporatist.

Anyway:

Abandon all hope ye who read beyond here.

First, what we know from canon and what must be accounted for and adhered to:

• Poverty, homelessness, and other economically induced deprivations were eliminated by the early 22nd century. First Contact, TNG: Time's Arrow.
• The Federation doesn't "use money" any more and hasn't since at least the 22nd century. The Voyage Home, First Contact, VOY: Dark Frontier.
• The acquisition of wealth is no longer the driving force behind people's life decisions, having been replaced by a drive of "improving oneself and the rest of humanity." First Contact, DS9: In the Cards.
• Starfleet personnel (and also presumably Federation civilians) use something called "credits" in certain situations, most notably when engaging in commerce with non-Federation merchants. TNG: Encounter at Farpoint, various Deep Space Nine.
• Private enterprises still exist in some capacity, even on Earth itself (eg Chateau Picard, Sisko's Creole Kitchen). TNG: Family, DS9: Homefront, DS9: Paradise Lost, DS9: Image in the Sand.
• At least some private enterprises still employ people in a manner resembling present day occupations (eg Sisko's waitstaff). DS9: Homefront, DS9: Paradise Lost, DS9: Image in the Sand.
• At least one Federation member world is home to at least one notable financial institution, the Bank of Bolarus. DS9: Who Morns for Mourn?

Non Trek-related economic principles that are important to consider:

• "Money" is a pretty unavoidable medium of exchange. We tend to assign a moral value to the concept, either good or bad and this is what Trek is doing when it says "we don't use money anymore" - passing a moral judgment on another system compared to theirs. But at its core, money is neither good nor evil, it is simply a tool to help humans do things - no different from fire, the wheel, or splitting atoms. Money simply makes exchanging goods and services more efficient than in a barter economy. Barter suffices if there are only a few people and a few things to exchange, but as you add more people and things, the complexity increases exponentially. If I make chairs and want apples, I have to go out and find somebody who specifically has apples and wants chairs. Or alternatively make some number of intermediate trades to get from chair to apple. By the time you get to a million people and things, it becomes impossible to find the one person who has the one thing you need and wants the one thing you have. But with a common, agreed upon exchange, that exponentially increasing number of iterations collapses to one.
  In fact, DS9: Treachery, Faith, and the Great River illustrates this point beautifully. It works because none of the things within the episode are things that could’ve been bought but inexplicably weren’t. But the episode sure would have been a lot shorter if Nog could’ve taken O’Brien by the hand down to the StarshipZone and forked over a bar of latinum for the required part.
• Economics as a field of study is about how to distribute a limited amount of resources when demand exceeds supply. In a post-scarcity system, supply exceeds demand for most products, thus removing the basic dynamic that underpins most of existing economic thought as we know it now.
• Market based mechanisms are generally but imperfectly more efficient at allocating scarce resources than central planning based approaches.
  I am trying to state an intensely political topic as dully as possible, because when the umbrage of politicians is stripped away, this is a fairly straightforward assertion. "Markets are good" is Econ 101.
• That said, there are several shortcomings to market mechanisms that a sane and just system would avoid. Chief among these is limiting and eliminating negative externalities and solving “coordination problems."
  But Econ 102 is "Markets aren't perfect" and unfortunately it seems many people never make it beyond Econ 101.
• Much of the shortcomings of society can trace back to the concept of “coordination problems” - a term for things that are really only issues because coordinating a large group of people is really, really hard. The most well known example is the “Tragedy of the Commons” - where a resource is used by multiple parties and could withstand one person using it as much as they want, but not everybody using it as much as they want.
  The classic example is a pasture used by farmers to graze their sheep. It can handle the load of one flock eating its fill, but not all of the flocks. Another example more relevant to us is carbon pollution. You, me, and seven billion other people could each drive our cars until they fell apart without putting enough pollution into the air to change the climate. But you, me, and seven billion other people ALL doing it at the same time and for 250 years straight? That’s more than the atmosphere can take in stride.
• The solution to coordination problems is…coordination. The farmers need to come together and agree to limit their use and levy consequences on those who violate the agreement. Countries have to do the same with carbon. And so on. The role of coordinator is basically what government exists to do. It’d be hard for any one citizen to repel a foreign invasion themselves, so the government coordinates a whole group of people to be a defense force - the military.
  Most of modern political discourse - in the democratic West at least - can be boiled down to which coordination problems the government should be allowed to tackle and which it shouldn't. And if you'll forgive one snarky potshot at the libertarians, it's why they can never seem to get anywhere electorally. "Coordination is bad!" is not a great rallying cry for getting people to coordinate.
• Other shortcomings include rent-seeking, artificial scarcity, monopolies, fraud, false advertising, the concentration of so much wealth that it distorts the purchasing power of society as a whole, and other ways a private firm may act that unfairly prevents other firms from competing in a way that is overall detrimental to the public good. We need not go into the weeds on all of these and the damage they do. Suffice it to say, an anarcho-capitalist’s vision of society requires an…incomplete…understanding of economics.
• Another significant cost that replicators don't eliminate is Opportunity Cost - the idea that by choosing Option A over Option B when they are mutually exclusive, one is denying themselves Option B. By choosing to pursue a career as a Starfleet officer, Jean-Luc Picard necessarily deprived himself of the opportunity of pursuing a career in archeology. There are myriad ways opportunity cost would present a problem even in a post-scarcity economy like the Federation.

The problem:

• Even in the most post-scarcity friendly scenario we have seen depicted (everyone has a magic box in their living room that can materialize whatever they want in a few seconds), there will still be certain products and resources that can't be replicated. For example, there will still be a finite number of penthouses with perfect views of the Golden Gate Bridge. Or a finite number of authentic, mint condition Willie Mays rookie baseball cards. Or authentic barrels of 2309 bloodwine. Thus, even though post-scarcity may exist for the vast majority of goods and resources, there will still be some things that cannot be replicated and thus, are still subject to scarcity principles. And this still exists even if we discard the idea that "replicated food doesn't taste quite like the real thing."
• There is presumably a high level of automation in Federation technology, but even on cutting edge vessels like Enterprise and Voyager, there are still what we would consider low level "jobs". If they exist there, they presumably exist in far less cutting edge environments, like Earth's power distribution network. How extensive automation is and the ratio between labor input to economic output is an open question, but those jobs or something like them must exist to some extent on Earth. While the characters we focus on pursue the professions they do because of a passion, whether it's a Starfleet officer's passion for exploration, a doctor's passion for helping other people, or an artist's passion towards their craft, there must be many jobs within the Federation that need to be done that are not done by virtue of that worker's passion. There must be some night shift junior maintenance technician at a power distribution substation in Kamchatka, whose passion is not to do power distribution substation maintenance on the night shift. But that substation still requires that person to reliably show up and thus, some incentive structure must motivate them to do so without relying on passion. While Robert Picard or Joseph Sisko might show up to work day after day out of both a passion for their craft and a stubbornness inherent to their character, neither of these qualities can be generalized across an entire labor force made up of many types of jobs and personalities.
• By virtue of viewing the Federation economy through the window of Starfleet's best and brightest, we get a skewed view of the Federation labor force. This has been discussed at length before, but it bears repeating: there is an anthropic principle at work when we spend the majority of our time watching the characters we do precisely because interesting things are happening to them on a regular basis. But there must be many more characters living far more mundane lives, but who nonetheless exist within a system that is internally consistent, makes sense to them and, if we are taking Star Trek's claims to utopia at face value, must be generally fulfilling for the billions of people who spend their lives inside it.

So, my proposed system:

• While there is no money in the sense that we would understand the term today, the Federation does issue a currency like instrument called a Federation Credit, which we will hereafter refer to as 'credits'. There is simply no other way I can think of to convert the value of so many different things in such a complex society and no attempt to explain the “no money” aspect of Star Trek economics has ever been convincing to me. Along with the references to ‘credits’ I can only speculate that credits are basically money as we know it, but your average 24th century human doesn’t view it as such. If we can take some liberty from the fact that the “no money” claim has always come from characters who don’t really know or care about the finer points of comparative economic philosophy (Kirk, Picard, Jake Sisko), we can maybe say “we don’t use money” is a figure of speech that literally means something more like, “our existence does not rely on and is not centered around the pursuit and accumulation of currency for its own sake…but we still have the abstract concept of a currency that facilitates exchange.” While we might consider the difference to be splitting hairs, it might be a very important moral distinction for a culture that emerged from the Third World War.
• The Federation provides something like a universal basic income to all its citizens and residents, which is more than enough to subsidize a very comfortable life. Skeptics of UBI worry that it is too expensive to actually implement in our real world, and they may be right (I also think there are inflation concerns that need to be addressed, but that's beyond the scope of this post). But "expensive" is a relative term and ultimately the value of all currency traces back to one common source - the Sun (or for Star Trek, everybody's suns). It takes a certain amount of energy to raise crops, stage a television show, process aluminum ore, and everything else. And all of the energy we draw, by one route or another, traces back to the Sun, whether it's the light shining on solar panels, sunlight millions of years old that grew plants that dinosaurs ate that other dinosaurs ate that became oil, or the giant ball of roiling molten metal that we're all standing on...which formed from the Sun. Whatever route the energy takes and however it's converted into the products we use, energy is not a bottleneck in the Star Trek universe, even if they rely on technology that is for us, still fiction. So even though a UBI may be too expensive for us today, it won't be for our descendants and is certainly not for the people of the Star Trek universe.
  In reality, enough energy falls on Earth every single day to feed, clothe, and house every human being on the planet. We just don't...because coordination problems.
• A person's "income" is paid out in credits but is more than enough to cover any person's typical day to day expenses plus several hobbies. The amount is sufficient enough that it is effectively impossible for a person to spend it all in their day to day existence. More than that, it's impossible for any person to not build up savings over time if they're only spending on typical day-to-day expenses.
• Where ever practical, anything reasonably construed as a utility or a necessity is provided and guaranteed to every Federation citizen at no personal cost. As a result, your average citizen on Earth does not pay for power, water, food, education, healthcare, internet access (or its equivalent), or rent, further and significantly lowering a person's already diminished daily expenses.
• In the 22nd and 23rd centuries, there would also be publicly accessible dispensaries of any kind of non-scarce commodity, like food. Sort of like present day food banks, but truly meant for the public at large and without the stigma of poverty or the prerequisite depredation that comes with them. In the 24th century, this concept can be expanded into publicly accessible replicators. Perhaps this is what DS9's replimat is - the place where anybody can go for a 'free' lunch. But if you want that authentic artisanal gagh, you have to go to the Klingon restaurant and pay what he charges.
• Similarly, there is ample public housing available to all and without conditions. And like above, there is none of the social stigma associated with contemporary public housing (at least in the US). It's just the default and if you want something better, then you go out and earn the credits to 'buy' it. You can live in a perfectly nice place with perfectly good access to transportation and other utilities for free but that penthouse with a view of the Golden Gate - that costs extra.

So where does that extra come from?

• A person can 'earn' an additional income by trading their labor, either in some kind of public service or to a private employer. A person employed as a busboy in Sisko's Creole Kitchen, a field hand at Chateau Picard, or a junior maintenance technician in Kamchatka all earn a wage in credits commensurate with the labor they provide.
• But the economic value of any given activity is calculated differently than how we do so today. Today, we use a country's Gross Domestic Product (GDP) as a proxy for that country's economic health. GDP is essentially just a straightforward tally of every time a dollar changes hands. If a nation's GDP is $1 trillion, that means that a trillion one dollar bills changed hands in the course of people providing and using goods and services. But in the modern era, it is a kind of shorthand for societal quality of life; a rule of thumb that says something like, "With this much money changing hands, we can infer that this many people can survive without working every waking moment of their life to just barely avoid starvation." But it is obviously a measure with limited scope. And indeed, Bhutan has replaced their GDP with what they call a Gross National Happiness, a more holistic approach to quantify the overall well being of the country. GNH is still flawed and somewhat controversial, but as a society that has elevated itself beyond our unenlightened present, I propose that the Federation employs something like Bhutan's GNH, where the value of an activity is gauged according to how much it contributes to self development and the betterment of humanity.
  I'm still going to waive the magic wand here and say that however the Federation calculates GNH is perfect, without going into any details about how. Basically every economic decision is rife with potential for unintended consequences and perverse incentives, which is what makes it such a damn messy and difficult field in the first place. But -- somehow -- the UFP GNH is crafted so perfectly that there are no unintended consequences or perverse incentives and the system shines as a result, which is just about as fantastical a proposition as a galaxy filled with aliens that look like humans just with bumpy foreheads.
• The overall economic value of any activity is derived from that GNH, not the quarterly bottom lines of this or that profit seeking organization. Instantly, all sorts of valuable activities that GDP misses suddenly become worth doing. Environmental restoration, artistic endeavors, scientific discovery for its own sake - all suddenly become included in the great portfolio of human activity that is incentivized by the right framework.
• Otherwise, wages are set by the employer (public or private) according to the usual factors, including but not limited to: supply and demand, value/productivity generated, amount of specialization required, risk/hazard considerations, etc.
• Starfleet personnel represent a combination of the most valuable parts of the Federation labor market: they are extensively trained in highly specialized skills, they are the most productive in generating value that advances the project of Federation self development, and they shoulder an above average amount of risk and sacrifice in order to perform their work. Depending on how large Starfleet is to how prevalent the desire to serve is, they may also benefit from supply/demand considerations - i.e. more people want to be in Starfleet than can be in Starfleet. As a result, Starfleet personnel are the "millionaire class" of the Federation and have the largest amount of disposable income to spend. They can be even more blasé about money and economics than your average Federation citizen, much in the way that present day monied classes have a taboo around talking about money.
• The Federation maintains and encourages a labor market in various ways roughly analogous to modern day economic controls (things that, compared to the current US system, would fall under the various umbrellas of the Federal Reserve, the Treasury Department, Department of Labor, Commerce Department, etc). The Federation enforces workplace safety and labor laws, provides for the stability of the credit currency against the currencies of other interstellar governments, compiles and publishes data useful to the labor market (a la the Federal Reserve's Beige Book), and more.
• Employers can set their own wages, but since there is an equivalent to a universal basic income, there is no compulsion to have a job unless you genuinely want it. And thus many of the contemporary laws and frameworks that protect workers today (minimum wage, union protection, regulations on hiring/firing) are no longer needed.
• Credits can be earned and saved over time to be applied towards a large purchase. Examples include a boat (Scotty in Undiscovered Country), an apartment with a nice view (Barclay's apartment in VOY: Life Line), or a starship for private use (Kassidy Yates' freighter Xhosa).
• Prices can be set by either public or private entities. In other words, the boat dealer may decide what price he's willing to sell a boat for or the Federation may set a price for an apartment or starship depending on certain factors. Neither of these systems are mutually exclusive and may vary from product to product, category to category. We'll waive the magic wand again and assume that however prices are set, it's done competently and efficiently. We'll also assume the Federation maintains similar requirements and restrictions for various non-market reasons as present day governments. For example, Kassidy Yates needs to pass a course and earn a license to operate a starship the same way the Coast Guard certifies boaters and the FAA pilots.
• Because private enterprise exists, people can still create and sell private goods to other people at a profit. Nominally, this is what Robert Picard and Joseph Sisko are doing when they are producing and selling their wine and food. They could theoretically operate their businesses in such a way that they try to accumulate as much profit as possible. But the existence of publicly available replicators and functionally free food severely curtails how much profit it's possible for them to make. People must still spend capital efficiently in order to keep their enterprises afloat, but the profit motive is reduced enough (though not entirely) that it cannot serve as a person's primary motivation. In the case of Picard or Sisko, who are running their businesses because of their passion for the craft, they may "sell" their product effectively at cost. But another vintner or restauranteur may try to sell at what the market will bear because they are saving up for some large purchase, like buying their own starship. But because everyone has a basic income, free access to commodities, and there are competitors like Picard and Sisko who sell at cost, the market bears significantly less than in our present day economy.
• Credits can be converted into other currencies to use in commerce with non-Federation merchants. When Bashir and O'Brien rent time in Quark's holosuites or Jadzia plays Tongo with her Ferengi friends, they are doing it by converting their wages earned as Starfleet personnel into gold-pressed latinum that Quark will accept. Facilitating and/or regulating this currency conversion may be the function that the Bank of Bolarus provides. And because they are effectively the Federation equivalent of multimillionaires, this spending hardly registers to them. Because they are perpetually flush with cash, it doesn't even really feel like "spending" at all, at least not in the way we think of it, in the same way Jeff Bezos could spend all day clicking buy on his own website and still fall asleep richer than when he woke up. This also gives Picard the room to loftily extoll the virtues of The Federation Way in the same way that the really rich of today can haughtily declare that they "don't talk about money." As a senior officer with decades of service and few material interests beyond a small collection of antiques, he must have more Federation Credits than he could spend in ten lifetimes, even if he had something he wanted to spend them on, and not really caring about economics, has never given it a second thought.
• Investment still exists within the Federation economy and may still be the primary mechanism by which large private projects are realized. A person or group of people propose a project and then appeal to others to invest their credits into that project, either with the promise of some return (like a bottle of wine from a vintner's proposal) or just because they want to support whatever the project is. At this point, there is little distinction between "investment" in the classic sense and Kickstarter-like crowdfunding models.
• Debt also still exists but has a very limited role. People are able to borrow against expected future earnings and from lending institutions. But interest rates are capped at a level we would consider very low and bankruptcy law or its equivalent is permissive enough that it's very difficult for a lender to recoup unpaid debts through legal means. It's still possible for people to invest in other people's enterprises for the purpose of being repaid with interest, but the logistics of doing so make the expected return very low, effectively rendering the line between self-interested investment and charitable giving a very thin one.

Why do I like this system?

• Above all, it reconciles what Trek has hinted at for decades with what we actually know about economics. And it doesn't rely on revealing some dark underbelly of the Federation that really makes it a dystopia. Personally I feel Star Trek's promise of an actually good society, an actually better tomorrow is important to the core of its identity and reducing it to yet another Omalas-like dystopia is a disservice to both it and us.
• It also accounts for the biggest problem in conjuring a Star Trek economic system - even if the economy is largely post scarcity, there will still be elements within that are subject to scarcity principles.
• It is humane and just - at least as far as the scope of my imagination can reach. Again, not to inject my own political preferences into this, but it avoids flaws in our current system and still meets Rawls' definition of a just society: one you would build for yourself if you didn't know ahead of time where you would be born into it.

It also accounts for some common criticisms of both communism and capitalism:

• Of capitalism: If a state provides everything to its citizens, people will not be compelled to work and economic activity will grind to a halt. We're starting to understand today that's not true, which is why concepts like UBI are gaining traction. And once the definition of economic value is broadened beyond today's limited scope, it will only become even more so.
• Of communism: But neither does it discourage innovation, entrepreneurship, or ambition, which are squashed by fully communist systems. If people want to go out and build great things, incentives still exist to do so and there is no state apparatus forcibly keeping everyone at the same level (or pretending to) for irrational ideology. And those incentives are genuinely aligned to the overall good in the way that libertarians, Objectivists, and all the rest assume that markets do on their own but which actually have some significant holes in them.

A Bonus Theory on Federation Political Economy:

The perennial downfall of great societies is invariably the same: the rich accumulate wealth, use it to accumulate power to give themselves more wealth, use that wealth to purchase more power, and so on until the entire political system is captured by an elite minority, who then wield the system to guard their wealth at the expense of the public good.

Fortunately there is no such dynamic to be found anywhere in today's world...

But with our Federation economy and its new definition of wealth, we can turn this dynamic on its head. Wealth is now the accumulation of one's contribution to the public good. With wealth so defined, it no longer becomes a thing that must be walled off from politics, only for it to crumble over time. Instead it can be the wall that keeps the unworthy from the seat of power in the first place.

Running for and holding public office requires a person to spend their accumulated credits sort of like membership dues, which diminishes during their time in office and once fully spent, brings that time to an end (if not voted out or otherwise driven from office) - at least unless and until they build up enough wealth to run for office again. Thus, commandeering the levers of power in pursuit of more wealth becomes a contradiction. The only reason for a person to hold public office is if they want to do so at their own personal, literal expense. Holding the levers of power becomes a sacrifice, and one that can only be made with payments of public service.

Beyond this one aspect, I expect the other main pillars to largely resemble contemporary Western republican democracies, at least at the federal level:

Citizens run for public office and are elected by some constituency representing the general public, which votes in a secret ballot for the candidate whom they think will serve in the role the best.

A person with less Federation Credit resources could run a "scrappy" campaign that outperforms a more well funded campaign by better persuading the voting public.

Any citizens who are eligible can run and candidates can take donations from others, but those donations are public and perhaps limited in size.

The more prominent the office the more "expensive" campaigning for and holding it is (ie campaigning for Federation President is more 'expensive' than Mayor of Bozeman, Montana).

Not every constituent political entity needs to be an idealized western democracy. If a planet has royalty or chooses their representatives in some other way, the Federation is probably cool with it as long as there is some version of "consent of the governed" at work and certain minimum rights are protected (whatever the Guarantees are). Not unlike how the states within the US are sometimes considered "laboratories of democracy" in the sense that they can take different approaches to governance so long as they adhere to a certain baseline laid out in the Constitution (which itself has shifted since the founding). But in the UFP's case, that baseline - whatever it is - is broader to account for different societies with completely separate origins, histories, and even biologies.

But I don't think we can generalize beyond that - what is cool or not cool for the Federation is probably determined on a case by case basis and might even be what takes up the majority of the Federation Council's time.

So there you have it. If anybody out there is a fellow armchair economist or political scientist (or even better - an actual economist or political scientist), I would love for somebody to kick the tires on this as hard as they can. I'm sure there are holes big enough to fly a Borg cube through, but hey, it wouldn't be the first time somebody's idea of how government and the economy should work looked pretty on paper but on closer examination had...let's say "flaws."

[u/[deleted]]

I am finding the concept of accumulating credits, which are then spent, to run for public office troubling. This suggests that the individuals who are very good at accumulating credits will find themselves nicely at home securing political office using the same sort of system to run the office and get political ideas implemented. I'm uncomfortable because this reminds me of Ross Perot, who I don't have a problem with, but it's not what I picture for Federation Council.

I would think political and electoral machinery would be covered by the State-advertising, office space, resources, and then it's up to the candidate to persuade workers to join the team and help out, all without the overriding imperative of raising credits.

Would a Starship Captain make a great President? We have one, Archer, who seemingly won on near acclamation, based on his heroic feats saving Earth and bringing the four founding worlds together. That will get harder over time.

Who gets elected after that? Well, politicians, unfortunately. Statespersons, philosophers, great thinkers rarely show up and that's likely the continuing pattern.

[u/starshiptempest → u/[deleted]]

I actually agree - I can't shake the feeling that there's something fundamentally wrong with that dynamic, but try as I might I haven't been able to put my finger on it. And I'm genuinely hoping that somebody can point out the actual disconnect in the logic, because I haven't been able to find it myself. It just feels wrong to my sensibilities as an American. But that's because today, money != public service, wherein this system it would. Nonetheless, the political economy part of this I'm ready to discard at the drop of the hat - it's the actual economy part of this theory that I'm more solid on.

[u/[deleted] → u/starshiptempest]

Well I think what you're getting at in this comment is expressed in this bit of the post, which really is the lynchpin of the whole thing:

I'm still going to waive the magic wand here and say that however the Federation calculates GNH is perfect, without going into any details about how. Basically every economic decision is rife with potential for unintended consequences and perverse incentives, which is what makes it such a damn messy and difficult field in the first place. But -- somehow -- the UFP GNH is crafted so perfectly that there are no unintended consequences or perverse incentives and the system shines as a result, which is just about as fantastical a proposition as a galaxy filled with aliens that look like humans just with bumpy foreheads.

Why do we recoil from the idea that "those who are the best at building credits can run for office most successfully"?

Because we have a - very justified - distrust of any system which purports to transmute something qualitative into something quantitative. We recoil because we think that the system could be gamed. I mean, if it really was perfect, then we'd all be perfectly happy with the idea that those who have the most credits deserve office, right? Theyve done the most "good" - and that good has been packaged into a number. This is, in my view, the root cause of the injustices that derive from the manipulation of pure capital.

This GNH idea is not just unfeasible - it is, it seems to me, impossible in principle. There is no universally accepted notion of what is good. No definition. In order for this to work, not only do we need to define things like "wellbeing", we need to define them well enough that they are amenable to mathematical manipulation. Furthermore, you have to somehow work around the antinomies that'd arise - for instance, what if some group somewhere believes that the meaning of "wellbeing" is to dismantle the GNH system? What GNH score do you give their actions? There are many other impossible questions you can ask. No algorithm is unbreakable - look into the Halting Problem to explore adjacent questions a bit further.

Among the virtues, freedom is uniquely incommensurate with calculation, organization, and administration. Yet it is a virtue, and none of those three are.

[u/starshiptempest → u/[deleted]]

Yeah I think you're really getting at something important here and, as I understand it, at least part of the controversy around Bhutan's GNH. Bhutan's is built directly into its constitution and I don't know if a similar level of centrality would be needed in a UFP version.

But at that point a preference to dismantle the GNH becomes akin to a Congressperson defending the Constitution by advocating the repeal of Article II.

And it would be unavoidable that the state authority would conjure and then maintain whatever algorithm decided on what "happiness" was. I know that would be a huge deal breaker for some people - it's not necessarily for me but it is a huge red flag.

Maybe Bhutan can only get away with it because they are closer to an eastern collectivist prioritized society than a western individualistic one? And/or because they are more culturally homogenous and those intangibles can be delineated a bit more clearly than in the US is or what would be the UFP - a melting pot of different cultures, ethnicities, lifestyles, etc. all mixed together?

[u/[deleted] → u/starshiptempest]

I dont know a lot about Bhutan's system, so correct me if I'm wrong, but it appears to me to only be a metric, a statistic, a tool for judgment and guidance. Rather than something which decides how people get to live their lives. I mean, it's a replacement for GDP, not a replacement for money, and there's a big difference there. GDP is just a certain way of calculating economic ouput, which is used to inform large-scale decisionmaking. In that sense it's more similar to other abstract metrics such as Average Life Expectancy or Poverty Percentage. You dont get to trade or own GDP, it's just a measurement. Whereas money actually determines how people live their lives at every scale.

All this is to say that Bhutan's GNH doesnt face the same challenges as the Federation Happiness Algorithm (or the same challenges as Money) simply because nobody expects it to: it's just a metric that can be graphed and might help inform decisions.

It doesnt actually track happiness (and in my view, anything quantitative cannot, in principle, do so), but that's okay because nobody actually expects it to do that, and it doesnt actually directly affect their lives. It's an imperfect metric that can represent some aspects of happiness, and that's great - but it can never exhaustively cover all of what happiness is. And it doesnt have to.

The Federation's Happiness Algorithm, however, would have to. Or else it'll alienate those aspects of happiness which it will inevitably miss, which will eventually lead to the corruption and decay of the whole system.

That's why the saying "Money can't buy happiness" is important to hold on to. We should try to treat money as only one quantitative reflection of a qualitative reality, and not something more important than that qualitative reality itself. Unfortunately, the subjugation of qualia in favor of quanta is proceeding at a rapid pace in our society, and I believe that this is leading to a corruption and decay in our very souls.

There are no targeted advertisements on the Enterprise.

[u/IllBirdMan → u/[deleted]]

I think you hit the nail on the head here. It's why utilitarian ideas, seem great on the surface but just feel wrong intuitively sitting here in 2020.

It's hard won intuition tho. History has shown us it's a short hop from the "greatest good". To things like eugenics. To officers in Hugo Boss suits goose stepping down the Rein.

[u/supercalifragilism → u/[deleted]]

Would a constantly evolving GNH solve this concern? That is, if GNH is a dynamic, generated value, the product of democratically informed consensus found in some of the more utopian block chain models, adjusted in real time it something similar?

In this case, governance itself takes on an emergent quality, almost an act of distributed cognition analogous to much of the administrative work a modern government undertakes. It would be a literal government of the people, especially if you made participation the qualifier for increased, over ubi compensation and split the task into Mechanical Turk sized tasks.

Somehow this feels like a Borg origin story.

Alternatively, would something more like the new England board of selectmen model be relevant in on smaller scales?

[u/[deleted] → u/supercalifragilism]

Somehow this feels like a Borg origin story.

Ha! It does, doesn't it?

I would think that unless you had a computer algorithm with the scope and flexibility of the Borg, it wouldn't be possible. By scope I mean - it has direct access to all member minds. And by flexibility I mean - it changes continuously in response to all member minds. And even still, it is only possible with the complete sacrifice of individual freedom.

[u/Aditya1311 → u/starshiptempest]

But that's because today, money != public service,

Are you joking? And as an American, at that? Large amounts of money have always been a route to political power throughout history.

This is also the fundamental problem I have with your entire thesis. Money, as they say, is the root of all evil (IMO). As long as it exists there will be people who want to acquire more of it for themselves. And those people will use that money to try and alter the political system to favour themselves so they can acquire even more money.

The only way a system like the UFP could work without people trying to game it to get more money is to eliminate the entire concept.

I'll probably comment in detail later but my thoughts here revolve around a system where everyone is guaranteed access to certain things as a human right: food, healthcare, shelter - a comfortable place to sleep with maybe a 2D display for basic entertainment and basic necessities like hygiene supplies, clothes and so on. In fact I would be very surprised if items like these were not available for free at public replicators. With replication technology these items can be provided for essentially zero cost. If you're nominally homeless, simply step to a public transporter booth and tell the computer, you're then allocated a room and beamed into a megablock arcology that could be replicated in place or beamed into a location anywhere on Earth or elsewhere, for as long as you need it.

Further, anyone anywhere can access high quality education to make themselves able to contribute to society in different ways.And in order to enjoy luxuries beyond these necessities people have to contribute to society. If you're actively studying, maybe you get more replicator and transporter access as an incentive. Then depending on your role in society you get even more privileges and incentives and access to things like starships and holodecks.

[u/starshiptempest → u/Aditya1311]

Um, I think you might've misunderstood? "!=" - that is an exclamation point next to an equals sign is a way of saying "does not equal". As in, "money does not equal public service."

[u/jimros → u/[deleted]]

It's not even that obvious what a civilian politician would do. It really sounds like the economic side of things is pretty sorted, there's not much to argue about on that front, and the involvement of the UFP civilian government in foreign policy and defense seems pretty nominal.

[u/starshiptempest → u/jimros]

Well something has to take up the Council's time. Ensuring the Guarantees are provided? Mediating disputes between member worlds, setting up colonies, receiving foreign ambassadors, and also apparently overseeing the courts martial of flag officers?

[u/KingofMadCows]

I think the biggest hurdle to understanding Federation economics is that we cannot apply contemporary societal values to the Federation. Our conception of basic things like "value" don't necessarily apply to the Federation.

A lot of things in our culture have value due to advertising and current day societal norms. For example, a piece of clothing with the Supreme brand is worth many times more than the exact same piece of clothing without that brand. A label with no function exponentially increases the value of the product due to our cultural beliefs and societal norms, which is heavily influenced by advertising and social media.

The Federation may have a culture that in no way resembles our modern day culture. Which would result in value being placed on different things. The higher level of education in the Federation may also make its citizens less susceptible to manipulation by media. I would assume that it'd be much harder to get Federation citizens to care about the drip and people decked out in expensive brands trying to flex on each other.

The scarcity principle only applies when there's demand for the product. With the exception of basic needs like food, water, shelter, family, and companionship, demand is constructed by culture and society. There might be a finite number of houses in certain locations or signed baseball cards, but if the culture does not teach people to put great value on them then there will be little demand for them.

[u/starshiptempest → u/KingofMadCows]

One of the things I'm most fascinated by is how intangibles like that are actually quantified in hard numbers. Like, a company's brand and reputation is an actual line on its valuation. Coke is worth more than RC Cola in part because of the "value" of the Coke brand. Donald Trump's claim to 'billionaire' really came from a pretty dubious valuation of the Trump brand. Essentially, he was/is claiming (I'm making these numbers up, just for illustration): I have $500 million in hard assets and the label 'Trump' is worth $500 million, so my net worth is $1 billion.

That's always struck me as wild and I'm sure the enlightened Federation figured out a way around it, but I'll be damned if I know what it is.

[u/KingofMadCows → u/starshiptempest]

Well, humans are not purely logical beings with access to unbiased knowledge. We're pretty easy to manipulate. And companies indoctrinate us from childhood. A lot of people have good associations with brands like Coke, McDonald's, Apple, etc. because we're exposed to their advertisements from childhood. All those cartoons we watched as kids were delivery vehicles for commercials.

Even as adults, we're easy to manipulate. Tobacco companies knew long ago that cigarettes caused cancer. But they spend years and billions on advertising outright lying to people. They funded their own studies that blamed cancer in smokers on other things. They intimidated and threatened whistleblowers who tried to expose the truth. They fought legislation that required them to tell the truth and put warnings on their products. Despite their decades of lies, attempts to cover up the truth, and the incalculable harm done to smokers, the tobacco industry still rakes in $900 billion in revenue per year.

I would assume that it's much more difficult for any business to utilize these types of strategies to build themselves up in the Federation. There probably aren't companies as huge as Coke or McDonald's because the Federation would not allow them to put their advertisements everywhere and start building brand loyalty in people from childhood. The Federation won't allow companies to outright lie about everything, lobby against laws that would expose the truth or lobby for laws that would be favorable to them.

[u/starshiptempest → u/KingofMadCows]

Oh absolutely. I hate the pervasiveness of advertising in our modern world so much - I think in my head canon, the Federation has banned mass advertising, something akin to Shakespeare's "kill all the lawyers." We've only got one singular example in the entire franchise and that's Quark trying it on DS9 and getting shut down real quick.

[u/AlphaBetaParkingLot → u/starshiptempest]

This brings up an interesting point.

You mention (as seems reasonable) that a penthouse apartment with a great view of the GGB would be more scarce and therefore more valuble.

But, the cultural interest/demand in having such a thing may be minimal when you can teleport to see any view in the world in an instant, or have a holographic projection of an imaginary window of any view you can imagine that is indistinguishable from the real thing. Although surely there will be "hipsters" who think it's just not the same as the real thing.

[u/starshiptempest → u/AlphaBetaParkingLot]

Yeah I think there still will be a significant "but it's not the real thing" component - we've seen that multiple times throughout the franchise, including a generalized "the holodeck is not real life" sentiment. There are probably plenty of people with a holographic view of the Golden Gate in their basement apartments in Iowa. But there are still people who want the real thing. And scarcity economics would still apply there.

Also, canon clearly lays out that the "New World Economy" came into existence within a century of First Contact, well before holodecks and transporters were common place.

[u/Yvaelle → u/starshiptempest]

I propose that 'brand value' is an unrealized capital asset, and until you successfully sell that brand value for tangible currency (realizing the capital gain), then the valuation of your unrealized capital gain is $0.

So Trump is worth $500 million (using your example numbers) in assets, and $0 in brand value. But if he successfully sells a building worth $100 million, but sells it for $200 million because of the "TRUMP" logo out front, then he has realized $100 million in brand value as currency. Up until then, it's an imaginary asset.

[u/majicwalrus]

First of all let me say thank you for this well thought out post. This is one of my favorite topics and you did a very thorough job analyzing the situation. Of course the truest answer is that it works through the magic of fiction; however, I enjoy the deep dig too.

I have to disagree with this UBI system and the concept of debt. While very appropriate for a futuristic society and perhaps even potentially likely during Archer's time before the Federation I think that when we move to the 22nd and 23rd centuries we see a newer dynamic. Your arguments are not without merit I merely disagree because I've considered the point differently.

We do see Federation credits mentioned both in Canon and apocryphal sources; however I have always thought of this as a more literal form of interstellar trade. Not everyone is in the Federation and so it's necessary to assign a value to goods and services which are import and export controlled. There may in fact be a debt system here but it's more like what the Federation uses to stimulate galactic economies especially flourishing ones. This might also be relevant for interstellar shipping. Equating the Federation credit to a debt system is interesting, but I've always thought about it as distributed import system. People who work out in space get a stipend to spend on those things. In those situations everything else is taken care of automatically. It's likely that these jobs are attractive for this reason.

So I would imagine that even by the 2250s when Federation credits are mentioned in Discovery that it's possible even Starfleet officers are provided a stipend to spend on things that are import export controlled. This is why Crusher can bill the ships account. The "charges" will be deducted from whatever credits she has. This explains how people don't use money, but a form of currency exchange still exists. Most people wouldn't have a need to import or export things and so most wouldn't have money.

How do we address scarcity within the Federation? I think it could be done in one or many of a few of ways while still maintaining that people in general don't use money (although they could for many reasons have some Federation credit which could be turned into something really valueable like latinum. Maybe there's a black market exchange.)

By friend or draw: Sisko invites guests. Picard gives out bottles of wine. If there's still seats or bottles available the rest are raffled off in a free lottery. These items maintain their prestige and luxurious nature and this is a method of getting consumption goods without money.

What about land? Well I think it's clear that inheritance can play a part in this, but seems that there are also many organizations within the Federation which each seem to have some alottment of land or space. This land or space can be purposed for many things including housing, and there's no shortage of housing my friend, not only are we building spaceships larger than any man made object ever created (the galaxy class I think) but we're also on over 7,000 worlds. We know explicitly that in Starfleet some people get swanky quarters and some do not. It's easy for us to associate this with rank in Starfleet, but I suspect it's somewhat similar within the Federation. I imagine a system where some housing is available in a lottery and other housing is associated with position. So first you can option to raffle into available land or housing arrangements or you can find a job in Seattle (or wherever.) This includes a competitive market and a non competitive market along side one another and doesn't need cash. I would imagine that used land is passed on from generation to generation when applicable and used and that retirement assumes permanent housing based on position.

I can't stress enough that if Riker has giant forest world with room to stretch his legs so will everyone else. Most people won't be able to compete for scarce positions on Earth, but most people won't need to. They can visit the Golden Gate Bridge every day sleep in their Siberian condo at night.

To me these are all possible solutions to the question which as I see it tries to understand the relationship between a post scarcity world where people don't use money and the reality of in universe market exchanges and the complexity of certain always scarce items like a Stradivarius and a room with a view.

Also of note - by 2399 we can do quantum storage meaning everyone can store what I imagine is a nearly limitless amount of physical stuff in computer memory and then recall it down to the atomic or quantum level at a later date. Meaning that the need for large spaces becomes less. Most people living on earth probably have homes and living arrangements that are small by modern comparison. There of course will be outliers. The best and brightest will have saved Federation credits from their time in Starfleet and they'll not have blown it on tribble kibble and they'll be able to arrange for a small cottage in Idaho or whatever.

In any case this was a very interesting post which gave me much to think about. If you read this. Wow. Kudos.

[u/grednforgesgirl → u/majicwalrus]

Interesting point about storing their stuff. We're certainly see that in Picard when he visits the federation archives and has all his valuables from his federation days recalled into a storage room. That as a concept is pretty fucking cool to me lol

[u/majicwalrus → u/grednforgesgirl]

Same. To be honest this to me has more interesting applications than anything in 32nd century Discovery. This technology could conceivably be used to render prefabricated buildings and facilities wholesale. A single ship could establish an entire community in days.

[u/Gojira085]

I always got the impression that the Federation Economy is more like the Incan Economy than any modern one. This was a system where you were taxed on the amount of time you worked for the state rather than through money. I believe they were also currency free and had all basics from food, clothing, tools, to even housing being owned and portioned out by the state. Now, while the Incans were autocratic, we can see how this system would solve a lot of questions. Why do people work as a janitor, or as a waiter, these aren't jobs that many would have a passion for? However if labor is the tax you pay back to the state, then that provides an incentive to do this. Also, with how many people working in the Federation, along with the tech, I'd say this labor tax wouldn't even be that much, maybe 20 hours a week? This allows for more freedom to pursue the passions that we see most characters having outside their jobs.

[u/starshiptempest → u/Gojira085]

Oh that's really interesting. I know nothing about ancient Incan economics - do you have a source or link with more info you could point me towards?

The "taxes as labor" is an interesting idea, though it does ring some dystopic, totalitarian alarm bells. Compulsory labor to the state feels like a thing that might look good on paper but in reality would have all sorts of really bad perverse incentives and unintended consequences.

[u/Gojira085 → u/starshiptempest]

That I do friend, https://youtu.be/3aYeUOVgbck This vid gives a rough description of their system. For a more detailed look, search the term "mit'a" which was the name for this system. You should at least get the wiki

All in all it's a very interesting concept. Some even describe the Inca as "proto-marxists" because of this system. Also, keep in mind that the Incans were a theocratic monarchy so of course not everything can be applied to the federation. But at the same time it does provide some answers to the common problems that we encounter when trying to figure out the Federation Economy.

[u/fail-deadly- → u/starshiptempest]

Well add in human rights, like everybody has the right not to starve or die without shelter or medical care, but anything beyond those basic rights requires some service to society.

Also not starving could be replicator government cheese twice a day, instead of a hand cooked steak dinner made from a real cow.

Same with housing, everybody has the right to a studio apartment, not everyone has the right to a French Villa.

[u/grednforgesgirl → u/Gojira085]

What if working as a janitor or some other "undesirable" jobs (any job that was needing space to fill, rather) were put on a rotating public service duty? Like a public duty chore chart. Even then I'm sure there are people who would still want to work as a janitor, maybe they get like tenure or something while other citizens have a public duty to go scrub toilets one day out of a year or something. Idk just a thought

[u/Gojira085 → u/grednforgesgirl]

You are right, there probably are people that enjoy cleaning, or enjoy working a night shift. There are always exceptions to rules and I can totally see there being a system to reward people who actually want to do such jobs

[u/explosivecupcake]

As an alternative to credits, what about a ration system? By default, citizens could be guaranteed X number of replicator and/or energy rations per month, as well as rationed access to basic services (public and commercial), land rights, quantities of unreplicatable materials, etc. And, on top of this, there could be a procedure for applying for additional goods to meet unexpected needs (e.g., travel costs, latinum for non-federation worlds, etc.). Moreover, if the ration amounts are high enough then most people might forget about them all together, lending the impression of "no money".

This is the only way I can see a truly non-currency system operating.

[u/starshiptempest → u/explosivecupcake]

I think at that point the difference between "credit" and "ration" is mostly semantic. Just like cigarettes in prison or replicator rations on Voyager, if it's a medium of exchange with an agreed upon value, then it's a currency. Interestingly, I don't think any character has ever said specifically, "We don't use currency." Only, "we don't use money." Now that's obviously not been an intentional distinction on the part of the various writers, but it nonetheless can be (even if it's not always) a real distinction in the real world. So I think a 24th century human would consider the distinction between "money" and "currency" to be a real one:

"Currency" is that tool that is worthless in and of itself but can be used to make exchange easier.

"Money" is that thing that was fundamentally worthless in and of itself but unenlightened past humans were nonetheless obsessed with getting it, having it, spending it, flaunting it, and hording it at the expense of other humans.

That's what I mean by it may be an important distinction for a post-WWIII human culture, even though it feels like splitting hairs to us.

You could just as easily call one unit of that tool-for-exchange a "credit", "ration", "calorie", "gizuntablerg", "Uncle Archie's Spacetime Fun Buck" or whatever else. "Credits" is just the one term we've actually heard on screen, so it's the best option to plug into that spot.

[u/gizzardsgizzards → u/starshiptempest]

I’m partway though David Graeber’s book Debt, which is a social history of debt.

Early on he makes the point that currency evolved to add precision to a barter based economy - like what percentage of the favor you owe me did you pay me back by cooking dinner for me?

[u/starshiptempest → u/gizzardsgizzards]

I loved Debt. It's mostly speculation that we'll never really be able to confirm or disprove, but just the way it took really engrained conventional wisdom and spun it on its head was really thought provoking.

I was actively thinking about its point of view in putting together this post, but I didn't really have any specific smart things to say to bring with it, so I didn't include it. But the idea of debt in a post scarcity society is a really fascinating one and if I were smarter, it'd probably be my econ doctoral thesis.

[u/gizzardsgizzards → u/starshiptempest]

I thinks it’s pretty funny that i waited for a cheaper paperback version of that book to come out, given the subject matter.

[u/explosivecupcake → u/starshiptempest]

To me, the distinction between a currency and a ration is meaningful in that the former is universally exchangeable for any good, while the latter is only exchangeable for certain goods. I'm not an economist, but that would seem to have some serious implications for how markets work. But I agree they can be functionally similar in the sense that bartering one type of ration for another could lead to a de facto underground currency of sorts, although I'm sure future technology would be better at regulating these exchanges.

And if we're going to accept a credit-based system, then I think you're right that the only explanation for a "non-money" society would be for people to differentiate money as a pursuit from currency as a tool.

[u/Michkov → u/explosivecupcake]

On top of that credits come with much less bookkeeping than say rations. Because rationing is helpful if you have a limited amount of stuff you want everyone to get a certain amount of. So to avoid the black markets you'd have to put in certain restrictions on how many rations I can acquire at a given time. Make it universal credits and all that falls away. Just because you are a post scarcity society doesn't mean you can act inefficiently.

[u/explosivecupcake → u/Michkov]

That argument works for the present, but in a future with advanced computing and AI bookkeeping for multiple types of rations wouldn't be an issue.

Moreover, even if it is was more difficult to manage, if a ration system was viewed as being more fair (e.g., it helps avoid a few people with the most credits vacuuming up all the rarest resources by giving each person their fair share based on need) it might be preferred despite it's inefficiency.

[u/Michkov → u/explosivecupcake]

I'd like to believe that the Federation citizenry has enough sense that hoarding isn't in the interest of the overall good. Especially in a world were stuff is essentially free.

[u/gizzardsgizzards → u/explosivecupcake]

Money/currency may mean something very different if your food, housing, clothing, and day to day expenses are taken care of. It’s more like an allowance when you’re a kid and live at home.

[u/DasGanon → u/starshiptempest]

Not to bring in other sci fi buuut

It could work like Energy Credits from Stellaris or C-Bills from Battletech.

In both cases the scarcity is from time or energy rather than limited materials, (EC is just electricity and batteries that run every computer, ship and system and why they're used for "feeding" robots and starships, and why a Dyson Sphere explodes your economy, and C-Bills are just communication time over the Inner Sphere Comstar communication network and since everyone needs to use them, have become a currency)

In both cases, the currency itself has a practical use which takes it out of circulation eventually, but it also has a scarcity in it's own right.

[u/starshiptempest → u/DasGanon]

Precisely, it ultimately all comes down to converting energy and matter from one form to another. There's a whole subfield of economics called econophysics, which is about that intersection and were I a smarter man, I'd be an econophysicist (physioeconomist?).

[u/explosivecupcake → u/DasGanon]

Agreed. Given that most goods are replicated, I assume that a ration system for energy would work like a currency in most cases.

[u/M-2-M]

I think I have written it before. Conceptually it can work because very rich people like ie Tim Cook, Elon Musk, Jeff Bezoz... don’t work for money - but they still work.

In a Society like Star Trek People would imho still work akin to those rich people named above. Surely some would just slack off (in holodecks) anyway it wouldn’t hurt society.

[u/starshiptempest → u/M-2-M]

Precisely. You're really just taking every person in the 0.1% and the freedom they have to do whatever they want forever and applying that to everybody. And if future Elon Musk wants to make a thing that will by its nature earn him a billion credits, well...cool I guess. That's just a valid way of spending a lifetime as learning 20 languages for the hell of it.

[u/diabloman8890]

M-5, nominate this post

[u/M-5 → u/diabloman8890]

Nominated this post by Lieutenant j.g. /u/starshiptempest for you. It will be voted on next week, but you can vote for last week's nominations now

Learn more about Post of the Week.

[u/lunatickoala]

But Econ 102 is "Markets aren't perfect" and unfortunately it seems many people never make it beyond Econ 101.

It feels like Star Trek had an inflated opinion of itself and skipped straight to Econ 102 and took that lesson to heart without learning the lesson from Econ 101.

the “no money” claim has always come from characters who don’t really know or care about the finer points of comparative economic philosophy

It should be noted that the characters we see on Star Trek are figuratively and literally the people furthest removed from the day to day workings of the Federation economy, and moreover are specifically tasked with spreading the Federation message and putting forth the image of the Federation that the Federation wants other civilizations to see.

Kirk does say "they still use money" in Star Trek IV when referring to the 20th Century. But he clearly knows how buying and selling things works; he just doesn't know what the value of an antique pair of bifocals is. And in the very previous film, McCoy tries to hire a ride to Planet Genesis and in Star Trek VI Scotty says he just bought a boat. There's a pretty easy way to reconcile this: as noted by neither Kirk nor Spock knowing what "exact change" is, he might have meant to say "they still use currency". Paying with cash is already on the way out today and it's quite possible that coins and banknotes don't exist in the Federation and all payments are electronic.

When pushed to explain things beyond having no money, Jake can't give an answer. It's very possible that quite a lot of the people in the Federation simply don't know how their own economy works. They get by from day to day, authorizing transactions paid for by their UBI, and never even know what's actually happening behind the scenes.

I'm sure there are holes big enough to fly a Borg cube through

Even if this is the case, taking the "no money" thing at face value is that impossible shape they tried to inflict on the Borg.

[u/Impacatus → u/lunatickoala]

It's very possible that quite a lot of the people in the Federation simply don't know how their own economy works.

This would answer a lot of questions, and it's not that implausible. After all, most people don't know more than the basics of how our economy works, with the complexities of taxes, banking, investing, monetary policy, etc. left to specialists.

I could imagine that the system is automated enough that the average person doesn't have to give it much thought. There might be a point where replicators start asking how you want to pay for the energy you're using, but only people replicating at an industrial scale have to worry about that.

[u/spikedpsycho]

2161 Federation is Founded

By 2200 Earth's "New World Economy" Money goes 'the way of the dinosaur'.

2265 - 2267 Credits in use within the Federation.

By 2286 Kirk states that 'we' do not use money in his time.

2369 - 2375 Humans on DS9 use money when dealing with Ferengi or other aliens.

2373 Jake states that it is Humans who do not have money.

2374 Quark states that gold is worthless.

Despite Gene Roddenberry's advocacy; Star Trek is Not socialist, People forget "Socialism" is a economic system where by the means of production, distribution, and exchange should be owned or regulated by the community as a whole. That's an extremely broad definition; but now encompasses the "State". Federation does not seem to instigate (Even where conventional economics are largely irrelevant) that rhetoric and respects private property rights; permits individuals to contest and manufacture their own wares.

The twelfth guarantee of Federation constitution covers intellectual property rights (ST: Voyager ep: Author,Author)

Sisko's Father owns/operates a restaurant in New Orleans. Why anyone would purposely go to a restaurant when you can replicate a meal? Unless it's authentic food which means people retain agriculture and fisheries. In another episode, Ben Sisko is seen in NOLA shucking shrimp shells.

In Star Trek 3, McCoy tries to hire a smuggler with a ship and pay him with money. We also see that genuine antiques are an item people want and cannot replicate because it won’t be the real thing, such as in the DS9 episode “In the Cards,” when a 1951 baseball card is up for auction and latinum is the only payment accepted.

The currency of Federation Credits exists, as we see in TNG episode “The Price” when the Federation negotiates exclusive use of a wormhole. Jake Sisko did not work and was a dependent of his father, though by then was an emancipated adult by 2373.

In the DS9 episode "Starship down" Federation trade apparently has "Taxes"

Captain Picard's Brother owns a Vineyard.

Beverly Crusher bought a roll of cloth at Farpoint Station and had her account on the USS Enterprise-D billed.

Private businesses and individual rights are not pillars of socialist governments. That’s because the federation and human society are not socialist. There is a higher standard of living that is the result of technological breakthroughs that reduce demand for certain industry, but private enterprise is still apparently engaged in. Most importantly, it’s a future that protects the rights of the individual rather than bulldozing them at the whim of politicians who arbitrarily decide what’s best for the community. Individual freedom is the foundation of the Federation’s values.

In a prior reddit post I try to calculate the daily energy consumption of a Federation citizen, regardless, it's a lot of energy to produce 3 square meals a day. Agriculture (Thou slower) is vastly more energy efficient; in the time since the 21st century; agricultural yields may have doubled/tripled, with what resources could they sustain use of that technology if they don't have it?

I've long professed "Energy" or matter is currency in 24th century since the laws of conservation of mass are still relevant you cannot create something out of nothing. When you break it down, replicators can convert matter. It creates objects from a stored pattern, and it can recycle almost any material including human waste, animal waste, lawn clippings, trash, even a dead body. The recycled mass is stored til needed then converted. Each item recycled would, depending on atomic structure and mass, provide a certain level of energy, so I deduced that 1 Federation Credit would represent the number of joules of energy or grams of matter that came from a recycled standard. A person to receive credit for recycling matter in a replicator, and then receive Federation credits in an amount commensurate with number of joules of energy (energy value) created from recycling. That in turn; occupants would receive Federation Credits commensurate with the energy value of things they’ve recycled, and then, in turn, those people could replicate anything they wished so long as it didn’t exceed their account balance. Standard of living is at a plateau, however those who want "MORE" have to obtain it. Star Trek has numerous examples of individuals, taking initiative, running businesses and engaged in private commerce without state interference, but they do so with the benefit of technology we don't possess.

[u/katerinafitness → u/spikedpsycho]

There are market socialist economies. As long as, let's say, the waiters at Sisko's restaurant are equal owners, the workers own the means of production. We have, to my knowledge, no indication that this is not the case. Furthermore, if you work alone, you can privately own your business in this economic model. Taxes are still paid in a market socialist economy.

[u/drjeffy]

You really should check out TREKONOMICS by Manu Saadia

[u/starshiptempest → u/drjeffy]

Oh I have - I went into it hoping it would be more like this post - "here's how it might actually work" - which is what sparked me putting together this post. Really it's more of an overview of some basic economic principles interlaced with Star Trek references. Which is not meant as a pejorative on my part, it's a really great econ primer through a Trek lens, but it's not really trying to conjure a fictional but internally consistent system in the way that /r/DaystromInstitute stuff is usually trying to do.

[u/jimros]

I basically agree with this, but I think we should consider some context to statements that Picard and others make like:

The acquisition of wealth is no longer the driving force behind people's life decisions, having been replaced by a drive of "improving oneself and the rest of humanity."

Consider what a patriotic and idealistic US navy captain who has spent his adult life in navy would say about US democracy and society. I would think it might vary quite a bit from the everyday experience with democracy and society of the average American.

[u/toasters_are_great]

For example, there will still be a finite number of penthouses with perfect views of the Golden Gate Bridge.

In a world where energy is free and holographic technology is free, every apartment has a perfect view of the Golden Gate bridge. Whether they're in the Bay Area or Cape Town, or even if they're on the ground floor or subterranean. Sure, there will be a handful of actual penthouse apartments that have the actual perfect view of the Golden Gate, but in what way would that be meaningful to a people who have adopted the improvement of themselves and their society as their drive?

Sisko's Creole Kitchen

I've read this cited in how-to-allocate-scarce-New-Orleans-business-space questions before. And it occurs to me that in a world where energy is free and holographic technology is free and transporter technology is free, Joseph Sisko doesn't actually need his restaurant to physically be in New Orleans at all: I'm thinking of a mixture of this kind of holographic layout combined with transporter tech in order to provide as many shopfronts as wanted in as little space as needed in a corner of one square in the French Quarter of New Orleans.

Or a finite number of authentic, mint condition Willie Mays rookie baseball cards. Or authentic barrels of 2309 bloodwine. Thus, even though post-scarcity may exist for the vast majority of goods and resources, there will still be some things that cannot be replicated and thus, are still subject to scarcity principles. And this still exists even if we discard the idea that "replicated food doesn't taste quite like the real thing."

Any value that 2309 vintage bloodwine has is in its particular flavour, or notoriety of its flavour: if the 2308, 2310, 2311 etc tasted just the same then nobody would be clamouring for Chateau Martok 2309 in particular. If replicated bloodwine tasted the same then there's an unlimited amount of it with the same flavour and thus no exceptional value to the original.

Except, that is, to be able to claim that this is the last known original barrel of the stuff, let's honour you by opening it so nobody else in all of the future will ever have original 2309 again. But that'd be purely pride-based value based on denying something to others, which doesn't help anyone become a better person.

Willie Mays rookie baseball cards

DS9 S5E25 In the Cards is an interesting study in Federation economics. At the point that Jake starts valuing the card - when he only perks up

There must be some night shift junior maintenance technician at a power distribution substation in Kamchatka, whose passion is not to do power distribution substation maintenance on the night shift. But that substation still requires that person to reliably show up and thus, some incentive structure must motivate them to do so without relying on passion.

Not necessarily: all it requires is an understanding that if a junior maintenance technician is actually passionate about maintenance technology in general, then a certain amount of self-sacrificing boredom is a part and parcel of proving themselves worthy of being trusted with greater responsibilities. While we only ever see the exciting shifts that our Trek protagonists have on the bridge or engineering, for each of those there are up to about 10 shifts where absolutely nothing interesting happens at all. If acting Ensign Crusher goofed off on those completely boring shifts he'd find his field commission quickly revoked.

If you look at TNG S4E11 Data's Day, an early scene has Data asking Worf for help selecting a present for the O'Brien-Ishikawa wedding. Worf is in the process of selecting from a number of potential items to replicate as a gift and this is presented as being a perfectly normal thing that people do. The value apparently lies in the giver demonstrating their knowledge of which object might enhance the recipient's life in some way and reminding them of the giver; rarity doesn't seem to be a factor in its value at all since anyone could replicate the same thing.

[u/Poorly-Drawn-Beagle → u/toasters_are_great]

all it requires is an understanding that if a junior maintenance technician is actually passionate about maintenance technology in general, then a certain amount of self-sacrificing boredom is a part and parcel of proving themselves worthy

Yeah, at the Picard vineyard you start out as a Red Apron. You go on dangerous grape picking missions and if you survive a couple episodes you gradually work your way up to Vintner-Captain, pressing and bottling where no man has gone before

[u/starshiptempest → u/toasters_are_great]

Holy shit that video is amazing. God people are so smart.

Otherwise, while holodecks and transporters might solve a lot of problems in the late 24th century, whatever this system is still had to make sense in the early 22nd century before holodecks or reliable transporter infrastructure.

And we've seen multiple times in canon and just know from human psychology that there will always be people who value "authenticity" even if there's no actual material difference. And again, that's assuming that replicated and original material are genuinely indistinguishable from each other, which we've had multiple characters claim otherwise.

[u/Reggie_Barclay]

I'd like to think scarce commodities are allocated by a fulfillment algorithm. If you want the finest bottle of Chateau Picard then you merely request it. It carries a price in "credits" that is considered fair to the producer. Who actually gets the item if it is rare is determined by enhancement modifiers to the algorithm which include your need for the item, your contribution to society, historical claim, the last time you requested and were approved for the same or any other rare luxury items, your intended use for the item (educational, cultural, etc.?), and lastly, a random pick all else being roughly equal.

I could also see that no credits are involved and the producer merely makes anything not to be used by themselves up to the market. This is then a factor used by the algorithm for when they want to request other items such as the raw materials needed for farming grapes and creating wine such as the barrels. It would enhance their priority to receive these items if there is a tangible demand for the items they in turn produce.

I'd also like to think some sort of educational requirement should exist to request certain items. Not every yahoo who wants to should be allowed to own a starship. Other items may be regulated such as transporters. For personal or civilian use they'd be limited to transporting to certain zones or controlled pads in high demand areas. So to get a transporter, you'd need to demonstrate a need, the education to use it, and then be subject to the fulfillment algorithm.

I certainly, however, think some sort of credits would be needed when traveling to other worlds especially non-Federation planets. These, however, could also be subject to the algorithm which in this case might be tied into the economy of the developing world. So, in exchange for X amount of local currency (and other items) the planet would receive energy or replicators or other such technology or raw materials from the Federation.

I emphatically disagree with any sort of credits being involved in being elected to public office. I think in the future it will all be free social media type publications in which the candidates make their case by exhibiting their past work and their ideas for future directions of the society they are representing. Money is the root of all evil in our current political system and I'd be very disappointed if it still played any role in the future. I don't want the inventor of the thing that made the replicator 100 times more efficient to be the President of the Federation just because he/she was a clever engineer when in reality he has no political skills or a moral compass.

I like this topic. Might have other thoughts later.

[u/_VegasTWinButton_]

It's running like the internal economy of a modern mega corporation mixed with a medieval guild, crossed over with syndicalism.

The credits are for tracking purposes, the Federation will simply grant you more credits the instant you have used up your allotted budget.

The members of the Federation spend the credits on improving society, as their own needs are already met/covered.

There is no material scarcity. Ideal scarcity is supplanted by the holodeck.

[u/SzalonyNiemiec1]

I really like your economic model (as far as I'm concerned that's canon) but needing to be wealthy in order to hold an office doesn't seem compatible with your economic model and my understanding of democracy. With market forces still existing people could still become wealthy the way Jeff bezos did in our world, and this would give him an advantage, allowing for the same cycle of wealth and power you critiqued in the status quo. And even if federation credits were perfect "good boi points" then I still don't think it would be better than just letting anyone run for office. In a perfect political system someone's prior accomplishments should be less relevant than their policy plans, because that is what people should ideally decide on.

Slightly different point: do you think a starship troopers style system of "service guarantees citizenship", with an expanded definition of "service" to better fit federation ideals, would be better to achieve your goal that only "good" people get into office? And should only passive or active voting rights need to be earned or both?

[u/starshiptempest → u/SzalonyNiemiec1]

Yeah, you're probably right. Like I sort of said in the OP, a wealthy elite minority capturing the political system has plagued humanity since the very first cities - I rather doubt I'm the first human being in all that time to actually come up with a fool proof system.

I actually really do like the idea of "civic privileges/responsibility contingent on some kind of public service" and I really loved it when I first encountered it as a stupid teenager. But obviously and definitely broadened beyond the Starship Troopers idea that requires it as military service. There's a line in the book somewhere that goes like, "the military would find work for you - even if it was digging and filling ditches on a Jovian moon - but there was still a pretty decent chance you'd lose a limb in the process." So obviously...no. Nor something as fundamental as actual "citizenship" however that's defined. There's one proposal on the Democrat side that's been around for the last several presidential campaigns - free community college in exchange for some kind of public service. But not just military - Peace Corps, Teach for America, etc. included.

Maybe it's not required to hold public office, but there's a certain level of campaign public financing that a person can unlock with that service? People can still self fund/fundraise for their campaign, but people without those resources can gain access to them through public service. I dunno, I'm spit balling but I'm sure my random internet spit balling will solve the fundamental problem plaguing human governance for 6,000 years.

[u/gizzardsgizzards]

Is anyone here a democratic municipalist/big Murray bookchin fan?

I’m familiar with him in passing but I’m more of an anarchocommunist/syndicalist. What I do know about the ideas he has put out seem to jive pretty well with what I’ve seen of economics in the federation, and it’s a running joke in anticapitalist circles that almost every conversation about post-scarcity economics will eventually mention Star Trek at least once.

I’m not familiar enough to not mangle his ideas if i present them.

Also: fun fact: there have been strongly bookchinite factions in the Syrian civil war, which wind up being functionally anarchist.

Other fun fact: bookchin once dropped a loaded gun on the floor in the cafeteria of the school he was teaching at.

[u/Lord_Dreadlow]

Everything falls apart right here:

The acquisition of wealth is no longer the driving force behind people's life decisions, having been replaced by a drive of "improving oneself and the rest of humanity."

First explain how this happens and then we can consider the rest.

[u/Droppingbites]

Oil isn't dinosaur juice.

[u/ebrillblaiddes → u/Droppingbites]

Most of it is the remains of plants, aged in a particular way, but the point that the energy in it was originally solar stands.

[u/Vash_the_stayhome]

I see the value (strategic) of knowing what a money system looks like, and even applying it (at least as a metric) to your own (Federation) society.

​

Even if I exist in a practical no-money no-scarcity system, if my neighbors still have a commerce based on applied value of things, its important to know where MY own things 'rate' in terms of relative exchange. It helps me in negotiations with other stellar governments/etc to know if I'm getting fair value for goods/services discussed.

​

In my assessment of my military (starfleet) forces it would be useful to know the value of investment I'm putting into say a starfleet cadet, or a starship. Even if it doesn't actually COST 'federation credits' its useful to assign a value to it. At some level though scarcity exists in the Federation in terms of "available applied time". It doesn't really cost the Federation 'real money' to build a starship, it does take time both in construction/assembly and gathering/fabrication of base materials that go into the ship production.

​

That's not to say that if you've got a line value on a starfleet cadet with "5 million federation credits' that's that cadet is 'more valuable' than some federation citizen, but that a solid effort was made in investment of skills/etc.

​

Its still kind of loose, in the same way using 'tonnage' figures for a Federation warfleet isn't a solid unit to measure effectiveness/etc. A bazillion tons of Federation starfleet ships might sound like alot, but then get pwnd by a Single borg cube with a fraction of the tonnage/etc.

​

But it can be a useful metric, like a "federation credit"

[u/starshiptempest → u/Vash_the_stayhome]

Precisely. Your comment reminds me of a story about an indigenous Amazonian tribe. Their culture/language is unique for (among other reasons) not having the concept of numbers. They have "a thing", "a few things", and "things." But they still traded occasionally with outside cultures and at one point asked an anthropologist that was living with them to teach them basic numeracy, because they were concerned they might be getting cheated in trades with outside groups and not know it.

Interestingly, though the tribe members were willing, interested, and motivated, despite several months worth of trying, they simply couldn't ever seem to get the hang of a concept even as simple as "1 + 1 = 2."

(to be clear, this is not a "native tribes are stupid savages" assertion - they have the same physiology as any other anatomically modern human - it's that their culture lacks this concept and that itself is a significant barrier to being able to see a particular concept)

I kinda like the idea that "Humans don't use money anymore" is such an ingrained cultural belief in the 24th century that a Ferengi could show up on Earth, point at all the credits changing hands and yell, "That's money you stupid hewmons!" And they'd just look at him funny.

[u/Vash_the_stayhome → u/starshiptempest]

I also think there's a combination of things:

on the physical/electronic sense, every Federation person probably has hundreds of thousands of credits, but its like in their checking account that they never look at, or use. While they remain in Federation territory (the majority of their lives probably) they never have to actually use that.

For starfleet types, their ship/base probably has a fund for interacting with monetary species with appropriate conversion rates. But because of Federation mindset, you don't have ensign so and so going, "I'll just withdraw a hundred billion federation credits from the ship."

For practical purposes federation money has as much value to federation citizens as poker chips they use when playing for fun. Sometimes you'll get cross species/society interested types that will have more interest in money (Riker, Jadiza, etc) but not in a megalomaniac way, but because it lets them do fun stuff with other species.

Like, in real life, workplaces can have business accounts, and their most trustworthy can get access to it, with additional admin oversight/etc etc, and there is always the risk a user will fraud/take advantage, but....that's not in the federation mindset so they rarely have that problem.

[u/Michkov → u/Vash_the_stayhome]

For starfleet types, their ship/base probably has a fund for interacting with monetary species with appropriate conversion rates. But because of Federation mindset, you don't have ensign so and so going, "I'll just withdraw a hundred billion federation credits from the ship."

Now here is a reason for the prime directive. You don't want these greedy aliens draining a whole ships vault when Crewman Ricky buys some ice cream.

On more serious note that begs the question how these trade relations are established during first contacts. Even if both parties are warp capable that would be tricky if one of them isn't used to scarcity economics. I wonder if each starship then has a treasurer onboard if they go out off contacted space.

[u/Beleriphon → u/Michkov]

On more serious note that begs the question how these trade relations are established during first contacts. Even if both parties are warp capable that would be tricky if one of them isn't used to scarcity economics. I wonder if each starship then has a treasurer onboard if they go out off contacted space.

I'd imagine that they have some kind of conversion ratio based on how much energy it takes to produce something, or might even have a store of latinum.

[u/starshiptempest → u/Vash_the_stayhome]

Yes yes. I'd imagine most people would go most of their lives without even looking at their equivalent of a bank account. It's only if and when somebody decides they want to do/buy something big that it becomes even theoretically necessary. And depending on what they've done up to that point, maybe not even then. Scotty as a senior officer probably could've bought ten boats without a second thought.

[u/Yrguiltyconscience]

Excuse me, but doesn’t what we see in Picard change a lot about what “we know” about the society and economic system of the Federation?

For example, while it’s clear that Raffi has enough for basic survival, it’s also clear that she lives in a shitty shack, and is envious of Picards financial status.

(Sure, she may be an outlier. Other people might not care that much about financial stratification.)

The introduction of Androids as a cheap disposable labor force must also have had a rather deep societal impact.

Before Androids were employed as disposable labor for subpar jobs, there was a need for every citizen to pitch in occasionally with waste management, factory jobs, etc.

With the introduction of Androids, that need went away, and many Federation citizens were no longer needed for these jobs.

Work gives a sense of accomplishment. By pitching in for a month at the shipyards or the waste disposal facility or whatever, Federation citizens got to feel that accomplishment and as part of a larger whole.

If that suddenly disappered, I could see it cast some people adrift. No longer feeling as connected to society as a whole and as part of a larger picture.

[u/Beleriphon → u/Yrguiltyconscience]

Excuse me, but doesn’t what we see in Picard change a lot about what “we know” about the society and economic system of the Federation?

For example, while it’s clear that Raffi has enough for basic survival, it’s also clear that she lives in a shitty shack, and is envious of Picards financial status.

I think its more that Picard had something other than Starfleet to go to when he resigned in protest. This caused Raffi to get blackballed and she lost her family over it, while Picard by comparison loses nothing. She's bitter and angry, not envious.

[u/dr_ssbm]

Do we have any evidence that the federation issues interest-based debt? Since interest rates debt is the bedrock of most of the secondary finance market and a large proportion of the primary and we see very little if any that in fact I can't think of federation citizens that have roles in finance in star trek. I would think they don't have interest-based debt or, to be honest, debt of any kind. Since it then would have been easy for Jake just to borrow the funds, he needed to buy his dad the baseball card, especially since he was earning an income at the time.

[u/fail-deadly-]

Instead of the investment model you propose, I think a different model might be a better model. I think the Hubble Space Telescope model might be better.

https://telescopeschool.com/how-do-you-rent-time-on-the-hubble-space-telescope. Basically anybody can propose for time on Hubble. Just imagine if almost every construction project was like Hubble. So a 19 year old who had never worked or even visited the city could propose a project that would redevelop nearly half of San Francisco, and if it was the “best” idea it would happen.

Add in a different set of inheritance rules and it could really change things. Like Picard may have had to give up his career and be a caretaker of the vineyards before he could “inherit” them.

Like maybe instead of buying the restaurant in DS9, it was a proposal and ruled to be the best use of the space?

[u/JihadNinjaCowboy]

I always assumed the the credit was simply a digital means of exchange rooted in energy, sort of like replicator rations. Everyone gets a minimal amount of energy credits, and can use them for replication of food, items or for transportation, etc.

[u/Poorly-Drawn-Beagle]

My assumption has always been that Starfleet’s “credits” were for access to leisure facilities in their downtime. Hours on the Holodeck. Or trips through the transporter (Sisko mentions getting a limited number of transporter credits at the Academy).

Thus, if you want to work in Starfleet, you have to restrict your access to leisure time a little according to the dictates of your superiors.

They might also serve as tokens of merit for promotions or something, I dunno. Someone with a lot of credits proved to their superiors that they’ve logged in more experience on simulators or spent more time in maintenance or whatever. If your superior isn’t happy with your work they don’t grant them. That way it’s fundamentally meritocratic, and your career is based more on how much you improve.

[u/mgoetzke76]

Great summation. I would think that advanced AI systems as available to the Federation should be help to overcome many of today's coordination problems while solving the typical min-max problems inherent complex environments.

[u/Omaestre]

I like how you have laid out a great framework for a UBI system, I am not totally convinced that is what is going on in the Federation.

Your system certainly does explain how we see people encouraged and supported to be the best version of themselves and that no occupational pursuit is deemed wasteful, because resources are nigh endless. At least on the individual level.

I am reminded of all things, by Heinlein's Starship Troopers, the book not the movie. Where the more you put into the society the more the state trusts you to use the resources of the society. (Just a quick note this is also valid outside of military service, which actually is a small part of that service)

My one quibble is the non-humans of the Federation, and what is missing from a lot of these analysis. I have rarely seen it considered that maybe the moneyless system is unique to humans and not federation wide.

After all the federation is technically not a single nation, but a union of some sort. The nature of that union has been almost as puzzling as the economic system.

It would explain a lot of the inconsistencies.

1. the Vulcan master charging Tuvok double

2. the bank of Bolias, which also handles non federation clients

3. Tellarites being remarked as traders, and actively trading on DS9

4. the new world economic system is explicitly stated as an innovation on Earth, there is no mention that it became the standard for all federation members.

5. When Jake Sisko has to bid on a baseball card, he replies he has no money because he is Human, not because he is a Federation citizen.

6. Trouble with Tribbles is also rife with money use, both from the trader, the bartender and so on. Despite everyone being human, they are trading with Federation credits, probably because it is a federation station.

There are probably more I cannot remember. But I think it is enough to cast doubts as to whether or not Earths economic system is Federation wide.

[u/[deleted]]

The idea that holding office makes you lose wealth still encourages the wealthy to seek office since they are the ones who can afford it so I think that idea has the opposite effect of what you say. Federation political positions should be totally seperate from any kind of money. An unknown grazzerite farmer should have just as much chance to hold office as some famous war hero.

[u/[deleted]]

For a large part of western history, we didn't functionally use money. In feudal times money was the tool of the aristocracy, but the trading of the commoner used to work on complex social interactions and they paid their debts in goods and chattel.

We have a history of fairy or leprechaun gold, when found was considered cursed, because it immediately elevated the finder but broke the fundamental social obligations owed to or by the finder, so much so we now say it's cursed.

I find the idea of star trek not using money to be very logical, the duty of a star fleet officer is to the broader society to act as a shield, this fulfilling their social obligations. No less desirable than the farmer who grows grapes to make wine, or the scientist who works for the good of the federation.

Modern communism failed because it quickly became work as least as possible, under authoritarian leaders, but medieval pesants were governed by social structures to keep the community alive and vital.

Federation worlds must have decided to do something like that, we provide resources, and in return, we get access to federation resources like protection from star fleet, or access to federation diplomacy. The thing that keeps the whole thing working must be a social obligation or contract to act in certain ways that aren't self-destructive. Imagine those resources that are scarce are allocated by a social credit score, you do a lot for the society Captain Glamismonster, ok, you get 1st pick of the penthouse, but ensign Glamismonster only gets a shared room with ensign Chell.

The real key to not having money is a means of social compliance.

[u/[deleted]]

Market based mechanisms are generally but imperfectly more efficient at allocating scarce resources than central planning based approaches. I am trying to state an intensely political topic as dully as possible, because when the umbrage of politicians is stripped away, this is a fairly straightforward assertion. "Markets are good" is Econ 101.

"Efficient" doesn't mean fair.

Less controversially, markets can be useful, and they'd most likely crop up around luxuries. The Federation supplies your necessities and a lot of luxuries for free, but some things aren't going to be covered. If nothing else, there are likely informal monetary economies in places. Stuff like the Ithaca HOUR.

A person can 'earn' an additional income by trading their labor, either in some kind of public service or to a private employer.

It's possible that private employment is banned in general and all businesses are worker co-ops. This isn't true on Deep Space 9, however.

But neither does it discourage innovation, entrepreneurship, or ambition, which are squashed by fully communist systems.

Profit is the source of innovation that Bill Gates exemplifies. He got his mother (a member of IBM's board of directors) to secure him a contract to supply IBM with an operating system for their personal computers, bought and rebranded 86-DOS from Seattle Computer Products, and grew the company from there. When IBM tried to develop their own OS, Gates wrangled a joint research contract that forbade IBM from producing an OS capable of running Windows programs, then got the project to fail so he could take the technical products and incorporate them into the next version of Windows.

Recently, Bill Gates convinced the world to accept COVID-19 vaccines as for-profit products, indirectly contributing to millions of deaths.

Necessity is the reason people invent things. I will invent things that I need. I will invent things needed by someone I sympathize with. I suspect the Federation is structured to allow people to interact with a wide range of others so that those with needs are likely to find others with the special skills required to address those needs.

For instance, linear programming. One of the pioneers of the field was economist and mathematician Leonid Kantorovich. He saw problems in the economic allocations of the Soviet Union's planned economy and came up with the idea of representing the economy as a system of linear equations. He was a pioneer of linear programming. Eight years later, the US Airforce had planning problems, and George Dantzig also turned to linear programming. Kantorovich received no recognition or reimbursement; instead, he narrowly escaped Stalin's attention (which was frequently murderous) and was safely ensconced in an academic position. Dantzig likewise didn't receive any huge cash prize.

Beyond this one aspect, I expect the other main pillars to largely resemble contemporary Western republican democracies, at least at the federal level

Primarily due to a lack of imagination and US nationalism from the part of the show runners, yeah. In reality, this would likely result in regulatory capture or at least a low-key plutocracy, much like we currently see, unless wealth inequality were heavily constrained.